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Scripps Stations Will Never Forget 2004

The presidential race in Ohio created opportunities, but hurricanes in Florida posed challenges 7/22/2005 08:00:00 PM Eastern

Scripps' broadcast stations had it both good and bad last year. The
11th-largest broadcast group, according to B&C's 2005
survey, Scripps enjoyed the political advertising windfall of having stations
in Ohio, a battleground state in last year's presidential race.

It also had that advantage in Florida. But there, Scripps also had the
challenge of owning two stations in a state battered by hurricanes last
season.

The Sunshine State outlets performed heroically, but not without damage
to the stations and equipment. Hurricane Frances zeroed in on WPTV West Palm
Beach, ripping off parts of its roof and flooding editing bays and the entire
second floor—a $2 million hit. WFTS Tampa was luckier, but a
construction crew was on standby to perform emergency repairs.

Scripps owns 15 stations, including outlets in Detroit, Phoenix, Kansas
City, Mo., and Baltimore. Its 10 traditional stations—six ABC
affiliates, three NBCs and one independent—cover about 10% of the
country. Five others are home-shopping channels.

Scripps has been around awhile. Its familiar lighthouse logo, a
carryover from the upper-left corner of its newspapers, is displayed on the
left corner of the building that houses WEWS Cleveland, which signed on in 1947
as the state's first TV station. One of the group's strengths is its regional
pairings: WEWS and WCPO in Scripps' corporate home in Cincinnati, and Florida's
WPTV and WFTS.

Those four stations were an engine in 2004, when, buoyed by heavy
political spending, the group's TV-station revenue soared 12.5% to $342 million
versus 2003. (Of course, the stations still contribute less to the corporate
bottom line than a single cable network. Scripps' top cable network HGTV
recorded $377 million last year, up 26% over the year before.)

Irony in success

Still, the station groups were flush last year. Political monies poured
in: $41.5 million for the year, compared with $31.5 million in 2000, the
previous presidential-election year. In the fourth quarter alone,
Scripps’ stations nabbed $21 million in political-ad spending.

The irony of last year's riches is not lost on anyone at Scrips,
including E.W. Scripps CEO Ken Lowe. "We benefited from having market-leading
stations in the key swing states," he told media analysts recently. "Of course,
it goes without saying, but let me say it anyway: The success we had with
political in 2004 will make for tough comparisons this year."

Also crimping the coffers is that 2005 is a non-Olympics year for
Scripps' three NBC stations. "They call it a Chinese curse," says Bill
Peterson, senior VP of television and the head of the station group.

When political monies are factored in, ad revenue is expected to dip
2%-4% this year. When political dollars are removed, though, that picture
improves to low-single-digit gains.

Facing an odd-numbered year, local broadcasters need to get creative. In
some instances, the stations band together on sales efforts. WEWS and WCPO
co-produced and sold vignettes on the Ohio Centennial celebration. In Florida,
WFTS and WPTV sometimes strike deals, as do the Ohio stations and WXYZ Detroit.
The efforts are paying off. Peterson says non-traditional and new business
bring in about $20 million a year.

Among Scripps' stations, ABC's prime time success is particularly well
timed. With six affiliates, Scripps has one of the network's largest
contingents. When Desperate Housewives and
Lost burst onto the scene last fall, ABC stations received
much-needed salvation. The shows are helping reverse the network's downward
spiral. In recent seasons, ABC languished in fourth place in prime and hadn't
had a big hit since Who Wants To Be a Millionaire (which
the network famously played to death.)

ABC helps when NBC hurts

What a difference a hit or two makes. Now the ABC stations are one of
Scripps’ strengths, says Fulcrum Capital Group media analyst Ed
Antorino: “ABC is on a roll right now, and it is the bulk of the
group’s revenue and cash flow.” Now it’s the NBC
affiliates that could become the problem children.

"When the network starts to soften, it is important that you have other
strengths," says Peterson. Strong local news and top syndicated fare, he says,
give a station attributes to sell even in lean years.

Peterson doesn't consider the Scripps broadcast model all that
mysterious. "We're not a real fancy broadcast group," he says. "We have four
priorities: to increase ratings, maximize revenue, serve our communities and
support the Scripps cable networks."

 

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