Scripps Earnings: Radio Off A Bit

The E.W. Scripps Company today reported operating results for the second quarter of 2016.

For the quarter, net income from continuing operations was $11.5 million or 14 cents per share. In the prior-year period, the net loss from continuing operations was $13 million or 15 cents per share, including costs associated with the Journal transaction in the prior-year period of $15.7 million after-tax.

Second-Quarter Highlights

• Revenues from continuing operations were $228 million, up 15 percent from last year.
• Retransmission revenue was up 46 percent in the quarter to $53.4 million. We completed a new agreement in January 2016 with Time Warner Cable covering approximately 3 million households.
• Election-year TV political advertising was $8.4 million in the second quarter. Candidate and political action committee spending was focused in the key Scripps states of Ohio, Florida, Colorado, Nevada and Wisconsin.
• In April, we acquired digital-media humor brand Cracked, which informs and entertains millennial audiences through its high-traffic website, mobile apps, podcast, social media and digital video. In June, we acquired popular podcast listening service Stitcher, which facilitates discovery and streaming for more than 65,000 podcasts to 8 million registered users.

Commenting on the results, Scripps Chairman, President and CEO Rich Boehne said:

“We are now halfway through a political election year that is different and historic in many ways. It’s in defining moments like these when our local television platforms demonstrate their greatest value, both through skilled storytelling and through the delivery of the candidates’ own messaging.

“More than 80 percent of our potential political revenue is still ahead of us over the next 13 weeks – with about half of our total political ad revenue projected in the fourth quarter. The second quarter started more slowly than we had anticipated, with the Democrats’ Clinton-Sanders race running out longer than most people expected and delaying the start to general-election spending. Republican Donald Trump held back spending while the Democrats duked it out. We expect a more normal pace of spending to set in now that we are through the party conventions, the traditional start of the heavy spending season.

“Of course, the presidential race is typically about 30 percent of our presidential election-year political revenue, and meanwhile, many of our U.S. Senate races continue to be highly competitive, particularly in Arizona, Florida, Indiana, Missouri, Nevada, Ohio and Wisconsin. We also have two competitive governor’s races, in Indiana and Missouri.

“The addition of Cracked in April gives us three strong national digital content brands. Cracked, a longtime humor and satire brand, has tremendous appeal with young audiences and is already well-positioned on desktop and social media outlets. Our plan is to leverage the strong over-the-top television relationships we have built with Newsy to create a second OTT channel for Cracked. Cracked and Newsy are joined by over-the-top audio leader Midroll, to round out a strategy to capture younger, organically growing audiences and others drawn by Internet-delivered content.”
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Second-quarter results by segment compared to prior-period amounts were:

Radio

• Revenue was $18.2 million, down from $19.4 million in the 2015 quarter. Expenses were $14.3 million compared to $14.5 million in 2015.
• Segment profit in the radio division was $3.9 million in the second quarter of 2016, down from $4.9 million in the 2015 quarter.