At E.W. Scripps, television accounts for the bulk of revenue even though it owns about the same number of radio stations as TV. During its Thursday second quarter 2017 investor call, the company trained most of its focus on its acquisition this week of a new TV network asset, the shedding of its heritage comic strip syndication division, and marked growth in digital.
In terms of the earnings big picture, for second quarter, net income was down to $8.5 million from Q1’s $11.5 million; while revenue saw a 2% uptick to $232 million, compared to $228 million year-over-year. The Scripps radio division was down $1 million, posting $17.2 million in Q2, compared to Q1’s $18.2 million. Expenses were flat year-over-year. Segment profit in the radio division was $2.9 million in the second quarter, down from $3.9 million in the 2016 quarter.
But during the Thursday morning call, Scripps chairman, president and CEO Rich Boehne, (who retires next week, following what he said is his 121st earnings call since taking the company pubic in 1988), emphasized that, “Scripps is a former newspaper company that has more than doubled the size of our local television business, added radio stations, launched four original television programs and acquired and built three national digital content businesses—now joined by four expanding multicast networks. As we have for nearly 140 years, we focus on building value and expanding these media marketplaces.”
Cincinnati-based Scripps’ portfolio comprises 34 radio stations in eight markets; 33 TV stations in 24 markets; national digital platforms such as Cracked and Newsy; and ever-growing podcasting advertising network Midroll Media.
And on Tuesday, the company made a $302 million investment in multicasting, with the purchase of Katz Broadcasting’s four networks—Bounce, Grit, Escape and Laff. And in June, the company sold rights to popular comic strips and assigned other syndication rights to longtime partner Universal Uclick, including “Big Nate,” “Marmaduke” and “Nancy.”
Tucked in with the latest news, Scripps senior VP of Broadcast Brian Lawlor said, “Radio revenue was down about 5% in line with our guidance; and expenses were about flat, which was better than guidance, of up mid-single digits.”
The company’s bright spot, as is typical, was digital, with a 27.2% surge to $19.3 million. Expenses for the digital group were $23.5 million, an increase of $3.6 million from the prior-year period. Lawlor said both figures were in line with guidance. Newsy saw a 25% increase in revenues, while podcast company Midroll added several dozen new shows to its distribution and ad sales network.
Adding color to the acquisition earlier this week of the Katz properties, Boehne explained that the four networks are distributed primarily through local station digital sub-channels: “We like this opportunity because we see a growing number of viewers turning to over-the-air viewing as a complement to cable, satellite and over-the-top subscriptions.”
Each network, he added, has a “content strategy focused on specific audience segments.” Bounce targets African-Americans, Grit is aimed at men 25-54, Escape focuses on drama and documentaries appealing to women, and Laff is, of course, humor focused.
On Aug. 8, COO Adam Symson assumes the role of CEO at Scripps, as Boehne steps exclusively into the chairman role. Boehne, 61, has led Scripps since 2008, adding the chairman title four years ago. During the call, he noted, “I’m not going very far. My commitment and accountability to you, our partners in this business, will remain as strong as ever. However, it is time for the next generation of leaders with long runways ahead of them to take this company forward into its next adventures.”
As Inside Radio previously reported, his tenure may best be remembered for his 2015 deal with Journal Communications that merged Journal’s broadcast operations into Scripps and spun off both companies’ newspapers into a separate publicly traded company, Journal Media Group, which has since been sold to Gannett.
That deal returned Scripps to the radio business for the first time in decades. Boehne also steered the company to expand its digital operations with Midroll and Newsy.
Symson, 42, was promoted to COO last November, overseeing day-to-day operations of the company’s radio, broadcast television and digital media divisions. He joined Scripps in 2002 and held a variety of roles in the television and interactive divisions before being tapped to lead digital operations in 2011.