Scripps Set To Be ‘Opportunistic’ In M&A

After a round of acquisitions that included 15 TV stations from Cordillera Communications, the E.W. Scripps Co. will continue to be “opportunistic in the M&A marketplace,” Adam Symson, Scripps president-CEO, said May 10 on an earnings call.

Earlier today, Scripps reported first quarter revenue grew 14.9% from a year ago to $292 million, with revenue from its Local Media division (its TV stations and local brands on all platforms) increasing 5.9% to $203 million. Much of the Local Media increase was driven by a 21% rise in retransmission consent revenue to $85.4 million. Revenue from the company’s National Media division, meanwhile, grew to $87.3 million from $60.7 million.

Scripps started the year just as it ended 2018 — “meeting and exceeding expectations in both operating divisions,” Symson told analysts. As the company integrates the stations it acquired from Cordillera, Raycom Media and the Nexstar-Tribune merger divestitures, Scripps is “committed to delivering those same strong financial results” in the future, he said.

“Over the past year, we have rapidly executed on our initiatives to reposition the company,” he added, noting that its recent decisions to acquire stations from “three different TV groups were part of a plan we unveiled early last year to grow the company and build value.” As a result, he said, next year will bring “significant upside” for the company.

Scripps will be “working over the next year or so to smoothly integrate our recently acquired stations and those we expect to acquire later this year,” Symson said, stressing that, “for the near term, we’re very focused on integrating” the stations from the deals it announced already.

But, he predicted, “it won’t be long before we’re positioned again to pursue accretive M&A, including smart TV acquisitions that increase our portfolio depth, durability and national reach as we continue to remake the company’s financial portfolio.” Scripps is specifically looking for businesses that “would be accretive to the national segment’s margins that would enhance our margin expansion [and] that would continue to promise an outsize return in the future,” Symson said.

At the same time, it sees “a lot of opportunity in the emerging marketplaces such as digital audio” and over-the-top video streaming, he said. More consumers are listening to audio over digital platforms, while over-the-air, OTT and pay TV are coming together “to represent the future distribution platforms for television,” Symson told analysts.

Providing further details on the company’s plans for those emerging segments, he explained: “We’d be opportunistic with our balance sheet in those marketplaces to enhance what we already have. We know those businesses and I think if we saw something that we felt like would accelerate the plans we already have or put us in an even better position as we see those businesses expand globally, we’d be willing to do that.”

But Symson emphasized Scripps was “committed” first to “adding national reach and in-market depth in the local television station group.”

With the close of its latest transaction, Scripps “will grow to 60 television stations in 42 markets, with 30% U.S. TV household reach,” in markets including Detroit, Miami, New York, Phoenix and Tampa, said Brian Lawlor, Scripps president-local media.