Scripps CEO Hails OTA Renaissance

E.W. Scripps not only enjoyed 5% growth in core TV station ad revenues for the fourth quarter, but revenues for its digital broadcast multicast channels shot up 30% to $64.6 million. That capped a year that saw 22.2% growth for the Katz networks, led by Bounce, Grit and the launch of Court TV — to $277 million.

“What’s old is new again, and broadcast linear television is seen by younger audiences as the perfect pairing for subscription services and virtual MVPDs. They’re plugging in digital antennas and tuning in to free, over-the-air television,” Scripps President-CEO Adam Symson told analysts in the company’s quarterly earnings call Friday morning.

“The combination of our local television portfolio and our five Katz networks uniquely positions Scripps to take advantage of the over-the-air renaissance in the media marketplace,” Symson declared.

Political advertising is off to a strong start, with Scripps expecting a record $200 million or more for its local stations this year, after booking $15 million in 4Q. Brian Lawlor, president-local media, says core advertising is also off to a strong start, with five of the seven largest categories up in January.

Lawlor says any weakness in auto advertising is due to factory spending, while dealers are increasing advertising. For the fourth quarter auto was down low single digits, the best quarter of 2019. “It came out of the gate flat in January. We’re still writing dollars for February and March, but it doesn’t appear to be down the way it had been,” he said.

“Just to drill down a little bit for you, it really comes down to the factory dollars. The dealer groups in fourth quarter were actually up for us, the combined foreign and domestic. Individual dealers were up for us. So it’s really the domestic and foreign factories that are down double digits that is dragging down the entire category,” Lawlor told the analysts.

“But we do see that softening a little bit. I’m not going to tell you that auto is going to be up this year — and a lot of that will probably be due to [political] displacement — but it does appear to be a more stable category,” he concluded.

Retransmission consent revenues were up 42.2% in the fourth quarter — including major station acquisitions — to $110.7 million. But that’s just the beginning and Scripps is not giving any guidance yet on what to expect for 2020 and beyond.

A new deal with the biggest cable company, Comcast, covering 5.5 million households, kicked in with the New Year and Scripps is in the midst of renegotiating 40% of its MVPD footprint in the first half of this year. Symson is telling Wall Street to expect a strong run rate by the back half of this year.