CINCINNATI – The E.W. Scripps Company (NASDAQ: SSP) delivered $528 million in revenue and $72.4 million in segment profit for the first quarter of 2023, both down from the prior-year quarter as inflation and consumer uncertainty continued to contribute to softness in the advertising marketplace.
Loss attributable to the shareholders of Scripps was $31.1 million or 37 cents per share. Restructuring costs for the quarter increased the loss attributable to shareholders by 15 cents per share.
From Scripps President and CEO Adam Symson:
“In the short time since we launched Scripps Sports, we are very pleased to have already announced two significant deals – the creation of the WNBA Friday Night Spotlight on ION and an exclusive local distribution partnership with the National Hockey League’s Vegas Golden Knights. We are thrilled to be working with the WNBA, whose popularity is growing exponentially. Last season, WNBA viewership was up 22%, and this new distribution on ION will give the league even greater reach while allowing fans to find the games with the consistency of a franchise event, every Friday night through the season.
“We’re also very pleased to have signed the Golden Knights as our first local partner. Scripps Sports and our Las Vegas stations will be the exclusive local TV distribution for the popular and successful NHL team. The agreement allows Scripps to televise Golden Knights games with full distribution on cable, satellite and over-the-air TV from our station KMCC, while our ABC affiliate, KTNV, will provide a strong marketing platform to support the telecasts. Live sports is the most valuable content genre in linear television, and we established Scripps Sports to work with leagues and teams to leverage the power of our platform for mutual financial benefit. We are taking a disciplined approach to the marketplace and look forward to more partnerships ahead.
“Launching Scripps Sports was one important component of the reorganization we began at the start of the year. The reorganization is aimed at positioning the company to capture opportunities in the industry growth areas of news, sports and entertainment; TV distribution platforms including over the air and connected TV; and datacasting and other businesses enabled by ATSC 3.0. We also expect to realize savings of at least $40 million through centralization of some services and the consolidation of layers of management.
“Like sports, news is central to the value of live linear television. Centralizing all national news resources and establishing Scripps News has created a powerful news operation that informs and engages audiences through our over-the-air and connected TV network while feeding our local newsrooms journalism our audiences can trust. The result has been greater efficiency and high-impact journalism.
“Despite the ongoing macroeconomic challenges, Scripps had several bright spots in our first-quarter financial results. First, as we renew the majority of our pay TV subscriber households this year, we saw a 1 percent sequential increase in subscriber households in our most recent reporting period. Second, we continue to maintain strong partnerships with both legacy and virtual pay TV services as they recognize the value created for them by local stations. Third, we also are benefitting from the rise in connected TV viewing now that our Scripps Networks are carried by all the major players. Being distributed on cable, satellite, virtual MVPDs, CTV and over the air is Scripps’ all-of-the-above strategy to create enterprise value on every viewing platform.”
Total first-quarter company revenue was $528 million, a decrease of 6.7% or $37.9 million from the prior-year quarter. Costs and expenses for segments, shared services and corporate were $455 million, up from $451 million in the year-ago quarter.
Loss attributable to the shareholders of Scripps was $31.1 million or 37 cents per share. The pre-tax costs for the quarter included $16.5 million in restructuring costs, increasing the loss attributable to the shareholders by $12.4 million, net of taxes, or 15 cents per share. In the prior-year quarter, income attributable to the shareholders of Scripps was $9.8 million or 10 cents per share. Pre-tax costs for the prior-year quarter included $1.6 million of acquisition and related integration costs as well as a $1.2 million gain on extinguishment of debt for the redemption of senior notes.
First-quarter 2023 results by segment compared to prior-period amounts:
Revenue was $312 million, down 4.5% from the prior-year quarter.
Segment expenses decreased 2.3% to $266 million, reflecting lower rating services costs.
Segment profit was $45.8 million, compared to $54.4 million in the year-ago quarter.
Revenue was $216 million, down 9.5% from the prior-year quarter, reflecting continued weakness in the national advertising marketplace.
Segment expenses were $165 million, up 7.1% from the prior-year quarter, attributed to higher distribution fees.
Segment profit was $51.5 million, compared to $85.1 million in the year-ago quarter.
On March 31, cash and cash equivalents totaled $16.5 million and total debt was $2.9 billion.
During the first quarter of 2023, we made mandatory principal payments of $4.7 million on our term loans.
Preferred stock dividends paid in the first quarter were $12 million. Under the terms of Berkshire Hathaway’s preferred equity investment in Scripps, we are prohibited from paying dividends on or repurchasing our common shares until all preferred shares are redeemed.
Comparisons for our segments are to the same period in 2022.
The senior management of The E.W. Scripps Company will discuss the company’s quarterly results during a telephone conference call at 9:30 a.m. Eastern today. To access the live webcast, visit http://ir.scripps.com and find the link under “upcoming events.”
To access the conference call by telephone, dial (844) 867-6169 (U.S.) or (409) 207-6975 (international) and give the access code 4229660 approximately five minutes before the start of the call. Investors and analysts will need the name of the call (“Scripps earnings call”) to be granted access. The public is granted access to the conference call on a listen-only basis.
A replay line will be open from 1:30 p.m. Eastern time May 5 until midnight June 5. The domestic number to access the replay is (866) 207-1041 and the international number is (402) 970-0847. The access code for both numbers is 8752910.
A replay of the conference call will be archived and available online for an extended period of time following the call. To access the audio replay, visit http://ir.scripps.com/ approximately four hours after the call, and the link can be found on that page under “audio/video links.”
This document contains certain forward-looking statements related to the company’s businesses that are based on management’s current expectations. Forward-looking statements are subject to certain risks, trends and uncertainties, including changes in advertising demand and other economic conditions that could cause actual results to differ materially from the expectations expressed in forward-looking statements. Such forward-looking statements are made as of the date of this document and should be evaluated with the understanding of their inherent uncertainty. A detailed discussion of principal risks and uncertainties that may cause actual results and events to differ materially from such forward-looking statements is included in the company’s Form 10-K, on file with the SEC, in the section titled “Risk Factors.” The company undertakes no obligation to publicly update any forward-looking statements to reflect events or circumstances after the date such statements are made.
The E.W. Scripps Company (NASDAQ: SSP) is a diversified media company focused on creating a better-informed world. As one of the nation’s largest local TV broadcasters, Scripps serves communities with quality, objective local journalism and operates a portfolio of 61 stations in 41 markets. The Scripps Networks reach nearly every American through the national news outlets Court TV and Scripps News and popular entertainment brands ION, Bounce, Defy TV, Grit, ION Mystery and Laff. Scripps is the nation’s largest holder of broadcast spectrum. Scripps runs an award-winning investigative reporting newsroom in Washington, D.C., and is the longtime steward of the Scripps National Spelling Bee. Founded in 1878, Scripps has held for decades to the motto, “Give light and the people will find their own way.”