In This Article:
Release Date: May 09, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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The E W Scripps Co (NASDAQ:SSP) outperformed financial expectations in Q1 2025 despite economic headwinds.
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Successfully completed re-transmission negotiations covering 25% of legacy pay TV households.
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Connected TV revenue increased by a strong 42% in the quarter.
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Scripps Networks division achieved a significant 16% decrease in expenses, leading to the highest margins since Q4 2022 at 32%.
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Completed refinancing transactions, extending debt maturity and positioning the company well for the near term.
Negative Points
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Local media division revenue was down 7.8% from the previous year.
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Core advertising revenue decreased by 3% due to economic uncertainty.
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Local distribution revenue declined by 5% year over year.
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EPS for the quarter was a $0.22 loss, impacted by preferred stock dividends and restructuring charges.
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Net leverage at the end of Q1 was 4.9 times, indicating a high level of debt.
Q & A Highlights
Q: How is Scripps positioned to take advantage of potential regulatory changes by the FCC? A: Adam Simpson, CEO, explained that Scripps is well-positioned to benefit from regulatory changes that may allow for greater consolidation in the local broadcast industry. This could enhance their scale both nationally and in local markets, allowing them to better compete with larger media companies. They are prepared to leverage swaps and select asset sales to capitalize on these opportunities.
Q: Can you provide insights into the performance and future expectations for the Scripps Networks division, particularly regarding sports and connected TV? A: Jason Combs, CFO, highlighted that the Scripps Networks division saw strong performance, particularly in connected TV, which grew by 42%. The division's margins reached 32%, the highest since Q4 2022. The growth is attributed to effective sales strategies and the popularity of women's sports, such as the WNBA and NWSL. They expect continued strong performance in the upcoming quarters.
Q: What is the outlook for advertising revenue in the local media division, and which categories are performing well? A: Jason Combs noted that core advertising revenue was down 3% in Q1, with automotive and retail being the weakest categories. However, categories like gambling showed growth, driven by local sports deals. For Q2, they expect core revenue to be down in the low single digits, with some positive impact from sports events.