Scripps 2Q Local Media Rev Dips 4.3%
E.W. Scripps Co. Local Media division (its TV stations and local brands on all platforms) today reported pro forma revenue for the second quarter of 2019 revenue of $$249 million, down 4.3% from the prior-year quarter. The decrease in revenue on an adjusted combined basis was driven by a $19 million decline in political advertising during this non-election year.
The pro forma financials, released this morning, reflects divestitures and acquisitions that the company has made since the start of 2017, most notably its acquisition of television stations from Cordillera Communications and Raycom, which closed in May 1.
Retransmission consent revenue increased 10%.
Core advertising was down slightly from the prior-year quarter but up 1% factoring out the incremental revenue of the Cleveland Cavaliers’ 2018 NBA Finals appearance.
Political revenues declined $19 million during this non-election year.
Local Media segment expenses increased slightly to $191 million, primarily driven by increases in programming fees tied to network affiliation agreements offset by a decline in other expenses.
Second quarter Local Media profit was $57.5 million, compared to $71 million in the year-ago quarter.
For the company as a whole, total revenue was
Commenting on the quarter’s results, Scripps President-CEO Adam Symson said: “We were very pleased to deliver stronger-than-expected financial results in the second quarter, including higher company segment profit and better earnings per share. Improving our short-term operating results has been one of our highest priorities over the last two years, and we have steadily executed on our plan.
“Also instrumental to our short-term performance improvement plan is our aggressive pursuit of a clearly articulated M&A strategy that will help us build a more powerful and durable portfolio of television stations. With the transactions we have announced or completed in the last seven months, we will emerge as the fourth-largest independent local broadcaster, enhancing our financial durability and vastly improving cash flow generation.
“We soon will have 26 television stations in the top 50 markets as well as tremendous geographic diversity, giving us a strong and varied economic base. We added more highly-ranked stations as well as second stations in more of our markets. We positioned ourselves to take further advantage of our expertise in political advertising by forming one of the strongest TV station footprints. We also repositioned ourselves just ahead of renegotiating retransmission household rates for about 50 percent of our cable and satellite households over the next year. With the close of the Nexstar divested stations, we will have accomplished what we set out to do.
“We were extremely pleased with the terms of our financing vehicles for these acquisitions. Both saw strong demand that drove an attractive interest rate for us and allowed us to upsize the facilities. Our highest priority is now on paying down debt – which we expect to be greatly aided by 2020 cash flow – to quickly return to our more typical historical levels of company leverage.
“In our National Media businesses, we have been pleased with the sustained robust revenue growth. Katz, Stitcher and Newsy in particular delivered second-quarter growth that helped drive the segment’s profitability well beyond our expectations.
“Looking to the back half of the year, our focus remains on producing strong financial results and aggressively executing our strategies to build long-term value across our many consumer media platforms while also improving our near-term operating performance.”
Read the company’s report here.