QUARTERLY REPORT

Scripps 2Q Local Media Revenue Grows 6%

The gain to $213 million was driven by retrans plus political advertising revenue of $14.9 million, more than double the $7 million of pro forma political revenue in 2Q 2014, the last midterm election year.

The E.W. Scripps Co. this morning reported second quarter revenue from its Local Media group (its TV stations and local brands on all platforms) of $213 million, up 5.9%  from the same quarter a year ago.

Local Media broadcast time sales were up 3.4%, driven by political advertising revenue of

$14.9 million, more than double the $7 million of pro forma political revenue in 2Q 2014, the last midterm election year. The political ad revenue caused some displacement in core advertising, contributing to its decline of 6.1%.

Retransmission consent revenue grew 12% to $74 million.

In the Local Media segment, the number of subscribers to over-the-top services in Scripps markets grew from zero to nearly 500,000 from last July to March, the latest data available. Including these new subscribers, the company’s total pay TV subscriber count held steady during that period.

Local Media segment expenses increased 4.7% to $160 million, primarily driven by increases in programming fees tied to network affiliation agreements as well as the cost of producing its original syndicated program Pickler & Ben, which launches season two in September.

BRAND CONNECTIONS

Second quarter Local Media profit was $53.4 million, compared to $48.7 million in the year-ago quarter.

The company’s National Media division reported 2Q revenue of $68.2 million, up from $13 million in the prior-year period. Revenue from Katz was $47 million. Excluding the impact of Katz, revenue increased 63%.

Newsy has continued to grow its cable distribution and now has signed contracts covering 38 million cable and satellite households, significant progress toward its goal of 40 million by the end of 2018.

Expenses for the National Media group were $66.2 million, up from $16.6 million in the prior-year period. The increase was primarily driven by the acquisition of the Katz networks, which was completed in the fourth quarter of 2017.

National Media profit was was $2 million, compared to a loss of $3.6 million in the 2017 quarter.

For the company as a whole, total revenue was $283 million compared to $216 million in second-quarter 2017.

Commenting on the quarter’s results, Scripps President-CEO Adam Symson said: “Today we are reporting strong second-quarter financial results that exceeded expectations across the board, including in both our Local Media and our National Media divisions and for both revenue and segment profit.

“We were pleased to see Local Media broadcast time sales up 3.4 percent, buoyed by strong political advertising revenue this early in the year.

“In addition, with our OTT households now at nearly 500,000 subscribers, any losses we’re seeing from cable and satellite platforms are being mitigated, leading to higher-than-anticipated retransmission revenue. And we are ahead of schedule in realizing cost savings in Local Media.

“In the National Media division, revenue excluding Katz grew by more than 60 percent, reinforcing the effectiveness of our investment strategies in these developing businesses.

“Finally, we continue to drive forward with our performance improvement plan, designed to improve our short-term operating performance and foster long-term growth. We are moving faster than expected on our corporate cost-cutting intiatives, have announced two radio station deals and are aggressively pursuing television station acquisition opportunities, all on our path to produce meaningful margin and cash-flow improvement.”


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