E. W. Scripps Company Class A ((SSP)) has held its Q4 earnings call. Read on for the main highlights of the call.
The recent earnings call of E.W. Scripps Company Class A presented a balanced outlook, highlighting significant achievements in debt refinancing and political advertising revenue. Despite these successes, the company acknowledged challenges in core advertising and local media distribution revenue. However, proactive measures in margin improvement and strategic sports investments were cited as positive indicators for future growth.
Debt Refinancing Achievements
The company successfully refinanced its revolving credit facility and 2026 and 2028 term loans, significantly improving its debt structure. This strategic move reduced leverage to 4.8 times by year-end, nearly a full turn below the end of 2023, showcasing a robust financial strategy.
Record Political Advertising Revenue
E.W. Scripps achieved a record in political advertising revenue, which was almost 30% higher than the 2020 presidential election year. Notably, more than 80% of these revenues came from just six states, underscoring the company’s strong political advertising capabilities.
Scripps Networks Margin Improvement
The Scripps Networks division reported a margin improvement of 400 to 600 basis points, achieving a fourth-quarter margin of 28% despite a one-time charge. This improvement reflects the company’s focus on enhancing operational efficiency.
Connected TV Revenue Growth
Connected TV revenue saw a 16% increase in the fourth quarter, with expectations for more than 30% growth in the first quarter of 2025. This growth trajectory highlights the company’s successful adaptation to changing media consumption trends.
Core Advertising Revenue Decline
Core advertising revenue for the fourth quarter was about 11% below the same period in 2023, totaling $147 million. This decline was attributed to the displacement effect of political advertising.
Local Media Distribution Revenue Decline
The Local Media division experienced a 5% year-over-year decline in distribution revenue, primarily due to the absence of pay TV contract renewals during the quarter.
Uncertainty in Core Advertising Categories
Economic uncertainty led to consumer hesitation and delayed spending decisions, impacting key categories such as automotive, retail, services, and home improvement.
Forward-Looking Guidance
Looking ahead, E.W. Scripps is focused on reducing its debt, improving operating performance, and capitalizing on potential regulatory changes that could offer new opportunities for consolidation and growth. The company reported a significant reduction in its year-end leverage ratio and successful debt refinancing efforts, alongside property sales agreements totaling $70 million.
In summary, the E.W. Scripps Company’s earnings call reflected a balanced sentiment, with notable achievements in debt management and political advertising revenue. Despite challenges in core advertising and local media distribution, the company’s strategic initiatives in margin improvement and connected TV revenue growth position it well for future success.