The E.W. Scripps Company (NASDAQ: SSP) delivered $574 million in revenue for the second quarter of 2024. Loss attributable to the shareholders of Scripps was $13 million or 15 cents per share.
Business notes:
From Scripps President and CEO Adam Symson: “During the second quarter, our Local Media political advertising revenue came in much stronger than expected at $28 million, driving 40 percent growth in the first half of the year over the same period of 2020 and creating some local core advertising displacement. That start to the year and our latest back-half outlook led us to once again raise our expectations for 2024 presidential election-year revenue.
“Election spending remains robust for the U.S. Senate races in Montana and Ohio, and at least four states where we have stations have placed reproductive rights issues on their November ballots. We are beginning to see additional upside from Vice President Kamala Harris’s entry into the presidential race. Overall, this year’s political ad revenue performance for broadcast television is a testament to our durability as a brand-safe platform for political candidates and campaigns.
“While the results of last year’s national advertising upfront are still impacting our quarterly results in the Scripps Networks division, we are seeing a better performance in this season’s upfront sales cycle. With commitments from the majority of our advertising agency clients, we have volume increases of low single digits over last year. Sports has been the differentiator. Our WNBA Friday night franchise on ION has so far showcased three games where viewership surpassed 1 million, proving to advertisers that ION can deliver them to significantly large sports audiences. Viewership of our NWSL Saturday night franchise continues to grow as well, and we are optimistic that the Paris Summer Olympics will fuel additional enthusiasm for women’s soccer — and viewership and revenue for us.
“As we move through the second half of the year, this management team continues to see a clear path to significant debt paydown by year end. Our expectations for segment profit are driven by the robust political advertising revenue outlook. We also are exercising prudent expense management, and we are progressing nicely with our efforts to sell the Bounce TV network and some non-strategic real estate assets. All of these factors give us confidence we can bring down our leverage significantly going into 2025.”
Operating results
Total second-quarter company revenue was $574 million, a decrease of 1.6% or $9.2 million from the prior-year quarter. Costs and expenses for segments, shared services and corporate were $479 million, up from $471 million in the year-ago quarter.
Loss attributable to the shareholders of Scripps was $13 million or 15 cents per share. In the prior-year quarter, the loss attributable to shareholders was $682 million or $8.10 per share. The pre-tax costs for the prior-year quarter included a non-cash goodwill impairment charge for Scripps Networks of $686 million as well as an $8 million restructuring charge, increasing the loss attributable to shareholders by $8.01 per share.
Local Media
Revenue was $365 million, up 3.6% from the prior-year quarter.
Segment expenses increased 2.1% to $277 million. Segment expenses in 2024 reflect additional programming expense associated with the sports rights agreements for the National Hockey League’s Vegas Golden Knights and the former Arizona Coyotes.
Segment profit was $88.1 million, compared to $81 million in the year-ago quarter.
Scripps Networks
Revenue was $209 million, down 9.7% from the prior-year quarter. Segment expenses were $171 million, relatively flat from the year-ago quarter.
Segment profit was $37.7 million, compared to $60.3 million in the year-ago quarter.
Financial condition
On June 30, cash and cash equivalents totaled $26.7 million, and total debt was $2.9 billion.
During the first six months of 2024, we reduced the outstanding balance on our revolving credit facility by $40 million and made mandatory principal payments of $7.8 million on our term loans.
We did not declare or provide payment for either of the 2024 quarterly preferred stock dividends. We have sufficient liquidity to pay the scheduled dividends on the preferred shares; however, this action provides us better flexibility for accelerating deleveraging and maximizing the paydown of our traditional bank debt. The dividend rate on the preferred shares, which compounds quarterly, increased to 9% per annum and will remain at that rate. At June 30, aggregated undeclared and unpaid cumulative dividends totaled $27.3 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.
Year-to-date operating results
The following comparisons are to the period ending June 30, 2023:
Revenue was $1.1 billion in 2024 and 2023. Political revenue was $45.4 million, compared to $7.4 million in the prior year, a non-election year.
Costs and expenses for segments, shared services and corporate were $953 million, up from $926 million in the year-ago period, reflecting higher programming expense and production costs associated with the sports rights agreements for both Local Media and Scripps Networks.
Loss attributable to the shareholders of Scripps was $25.8 million or 30 cents per share. The 2024 period included an $18.1 million investment gain and a $6 million restructuring charge, decreasing the loss attributable to shareholders by 11 cents per share. In the prior year, loss attributable to shareholders was $714 million or $8.49 per share. Pre-tax costs for the prior year included a non-cash goodwill impairment charge for Scripps Networks of $686 million as well as a $24.5 million restructuring charge, increasing the loss attributable to shareholders by $8.18 per share.
Looking ahead
Comparisons for our segments are to the same period in 2023.
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