E.W. Scripps Revenue Slightly Up to $193M in Q2

A drop in core advertising mitigated gains in retransmission revenue

With core advertising down, E.W. Scripps Thursday reported broadcast group revenue edging up to $193 million during the second quarter of 2017.

That figure is roughly 1% higher than it was during the same period of time in 2016.

Retransmission revenue rose by $12.6 million, or 23.6%, to $66.1 million year-over-year, according to Scripps. The gain, however, was mitigated by a 4.4% drop in core advertising.

Local ad revenue dropped 3.8% to $85 million. National declined 5.8% to $36 million. And political dropped to $2.5 million from the $8.4 million spent during political-year Q2 2016, Scripps said.

The Scripps earnings report comes on the heels of the group on Tuesday announcing a $302 million investment in over-the-air television with its purchase of four Katz Broadcasting multicast networks—Bounce, Grit, Laff and Escape.

The group also is prepping the launch of a new daily talker, Nashville-based Pickler & Ben, in September and continues to further the reach of its video news channel Newsy, most recently with its rollout on Layer3 TV.

In their Thursday earnings call, Scripps execs said the decline in ad revenue is due to a range of factors – auto being down 5%, banks spending down and the disappearance of a few big spenders.

“When you have almost a million dollars of non-returning accounts, that’s hard to overcome,” said senior VP of broadcast Brian Lawlor. “A year ago we had a couple of advertisers, specifically Amazon and eBay, did a test of more than a half a million dollars and now they are completely gone.”

Scripps leaders, however, said they expect ad revenue to rise steadily, forecasting increases in core advertising in both Q3 and Q4.

Execs also stressed the growth potential of the myriad of Scripps investments – the new Katz networks, Newsy and the podcast platforms Stitcher and Midroll among them.

“We are very focused on that these businesses are on track to create value for the shareholders,” said COO Adam Symson, who will replace retiring CEO Rich Boehne on Aug. 8, adding that it takes “some time” for those business to get to that point.

“Watching those businesses evolve and tracking growth on the top line gives us confidence of what we expect of a business like Katz,” he said.

In its earnings report, Scripps said the group’s total expenses increased 3.7% to $144 million, primarily due to increases in network affiliation fees. Q2 segment profit was $49.8 million, versus $53.3 million in Q2 2016.

Scripps’ overall Q2 2017 revenue rose 2% to $232 million. The rise in affiliation fees and increased costs in digital operations drove expenses to $196 million, up from $186 million a year ago.