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What were the key takeaways from The E. W. Scripps’s earnings call?

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Did The E. W. Scripps beat or miss consensus estimates last quarter?

- **Revenue Growth Driven by Sports**: Q3 sports advertising up 30%, Connected TV revenue +41% YoY, with plans for double-digit growth in 2026.
- **Debt Reduction and Efficiency**: $123M from station sales used to deleverage, net leverage down to 4.6x. Networks margin target: 400-600 basis points improvement.
- **Strategic M&A**: Sold stations at 9.2x and 8.5x EBITDA multiples, exploring further portfolio optimization.
- **Political Advertising Momentum**: 2026 midterms expected to drive record spending in 7 competitive races, with Scripps' portfolio well-positioned.

**【CEO Summary Section】**
- **Scripps Sports Strategy Success**: Q3 revenue growth driven by 30% increase in sports-related advertising, including new NHL partnerships and women's sports inventory. Connected TV revenue up 41% YoY, with plans for double-digit growth in 2026.
- **Expense Management**: Local Media expenses down 4% YoY; Scripps Networks expenses reduced by 7.5% due to operational efficiency. Targeting 400-600 basis points margin improvement in Networks.
- **M&A and Portfolio Optimization**: Sold WFTX (Fort Myers) and WRTV (Indianapolis) at 9.2x and 8.5x EBITDA multiples, generating $123M cash to deleverage debt. Exploring further station swaps and sales for strategic portfolio optimization.
- **AI and Transformation**: Early AI adoption in newsrooms and sales teams to enhance efficiency and journalism quality. Full details on transformation initiatives to be shared in Q1 2026.

**【CFO Financial Commentary】**
- **Q3 Financials**: Local Media revenue down 27% (due to political ad absence), but core advertising up 2% YoY. Networks revenue flat at $201M, with Connected TV contributing 20% of viewing. Segment profit for Networks at $53M (27% margin).
- **Debt Reduction**: Refinanced $750M in senior notes at 9.875%, reducing cash interest by $15M annually. Paid off $200M of 2028 term loan and full revolver balance, lowering net leverage to 4.6x.
- **Q4 Guidance**: Local Media revenue expected down 30% YoY, but core up 10% driven by sports. Networks revenue down low double digits due to political ad absence and Medicare open enrollment delays.

**【Q&A Key Highlights】**
- **Disney-YouTube Dispute**: Scripps remains dark on YouTube TV but sees minimal impact on revenue due to diversified distribution (OTA, streaming). Focus on direct negotiations with virtual MVPDs.
- **Political Advertising 2026**: Expect record spending in 7 competitive governor and Senate races, with Scripps' portfolio well-positioned in key markets (AZ, CO, MI, NV, OH, TN).
- **Advertising Environment**: Local core advertising strong (up 2% Q3, +10% Q4 guide), but national networks face challenges in DR and pharma due to macro uncertainty.
- **M&A Strategy**: Management-led, Board-supported approach with family trust alignment. Prioritizes accretive station sales and swaps, with $123M from recent deals used to deleverage debt.

The E.W. Scripps Company(SSP)-20251107-2025 Q3 Earnings call transcript

- **Debt Restructuring Success**: Retired $1.7B debt, reducing leverage to 4.4x. New 9 7/8% notes mature 2030, extending maturity by 60%.
- **Sports-Driven Growth**: 4 NHL deals add 1-3% annual ad revenue. CTV revenue up 57% in Q2, 15% of total viewing on streaming.
- **Q3 Outlook**: Local Media revenue -20-25%, Networks flat to -low single digits. Focus on debt paydown over dividend.
- **Strategic Moves**: First industry station swap with Gray Media; ION's unique CTV distribution drives premium ad rates.
- **Risk Factors**: Auto ad weakness persists; regulatory changes may enable portfolio expansion but face regulatory hurdles.

**【CFO Financial Commentary】**
- **Refinancing Update**: Issued $750M senior notes at 9 7/8% to retire $1.7B of debt, extending maturity by 60%. Cost of capital increased <1%.
- **Local Media Q2 Results**: Revenue down 8% (political ad absence), core advertising outperformed peers (+$7M from NHL/NBA playoffs). CTV revenue up 57% in Networks, driven by WNBA/NWSL.
- **Q3 Guidance**: Local Media revenue expected -20-25%, Networks revenue -low single digits. Segment profit margin improved to 27% (vs. 18% YoY).

**【CEO Strategic Remarks】**
- **Portfolio Optimization**: Announced first industry station swap with Gray Media, targeting 3 Mountain West duopolies. Renewed Fox affiliations for 4 stations.
- **Sports Strategy Success**: 4 NHL deals contribute 1-3% annual core ad growth. ION's CTV viewership up 40%, 15% of total viewing.
- **Debt Reduction Focus**: Reduced leverage to 4.4x (down 1.5 turns YoY). Targeting debt paydown with cash flow, prioritizing over dividend reinstatement.

**【Q&A Highlights】**
- **Ad Environment**: Auto sector weakness persists, but sports (e.g., NFL) expected to drive Q3 recovery. CTV growth offsetting linear ad decline.
- **Regulatory Outlook**: FCC rule changes (Big 4 ownership, national cap) could enable portfolio expansion. Station swap with Gray likely closes by year-end.
- **AI Impact**: Implementing anti-scraping tech to protect content. Long-term, video ads may benefit as search traffic shifts to AI answers.
- **Preferred Equity**: No plans to redeem pref shares (due 2026). Focus on debt reduction until rate environment improves.

The E.W. Scripps Company (SSP) Q2 2025 Earnings Call Transcript

- **Networks Outperformance**: Q1 Scripps Networks margins hit 32%, up 870bps YoY, driven by 16% expense decline and Connected TV growth.
- **Debt Progress**: Leverage reduced to 4.9x (from 5.9x YoY), $63M in asset sales, and $1.5B debt refinanced with minimal cost impact.
- **Sports Growth Engine**: Women's sports partnerships (WNBA, NWSL) and CTV expansion driving Q1 revenue beats, with Q2 guide flat vs peers' 10-15% declines.
- **Regulatory Catalysts**: FCC reforms could enable consolidation and fairer negotiations with virtual MVPDs, unlocking new revenue opportunities.

**【CFO Financial Highlights】**
- **Local Media Division**: Q1 revenue down 7.8% YoY, core advertising revenue down 3% due to economic uncertainty. Segment profit $35M vs $66M in Q1 2024. Q2 guide: revenue down high single-digits, expenses up low single-digits.
- **Scripps Networks Division**: Q1 revenue $198M (-5% YoY), Connected TV revenue up 42%. Segment profit $64M vs $49.7M YoY. Q2 guide: flat revenue, expenses down low double-digits.
- **Balance Sheet**: Total debt $2.6B, net leverage 4.9x. Completed $63M in real estate sales. Refinanced $1.5B debt with <1% cost increase.

**【CEO Strategic Priorities】**
- **Debt Reduction**: Reduced leverage by 1x YoY, targeting further deleveraging. 
- **Networks Growth**: 32% margins in Q1 (highest since Q4 2022). Women's sports partnerships (WNBA, NWSL) driving CTV growth. 
- **Regulatory Reform**: Advocating for FCC changes to enable consolidation and fairer negotiations with virtual MVPDs. 
- **Sports Expansion**: New ION partnerships (Vegas Aces, SI Women's Games) to enhance local market relevance.

**【Q&A Key Takeaways】**
- **Regulatory Outlook**: Expect FCC action to support consolidation and fairer compensation for local stations. Virtual MVPD parity could unlock new revenue streams.
- **Ad Spend Trends**: Auto and retail categories lagging, but sports-driven scatter inventory (e.g., NHL playoffs) offsetting weakness. Q2 core revenue guide better than peers.
- **EdgeBeam JV**: Early-stage; potential for spectrum monetization but no material revenue expected in 2025.
- **Debt Management**: Focus on free cash flow for debt reduction; no immediate refinancing plans beyond completed transactions.

The E.W. Scripps Company (SSP)-9 May 25-2025 Q1 Earnings call transcript

- **Record Political Ad Revenue**: $343M annual political ad revenue drove 34% Local Media growth, best-in-class leverage reduction to 4.8x. 
- **Women's Sports Dominance**: ION's unique distribution reach commands 2x+ sports ad rates, with WNBA/NWSL renewals poised to expand margins. 
- **Debt Management Excellence**: $330M debt paydown and $1.5B refinancing extend maturity, positioning for FCC deregulation upside. 
- **CTV Growth Offset Weakness**: Core ad down mid-single digits due to macro, but CTV revenue up >30% YoY, signaling long-term resilience. 


**【CEO Strategic Overview】**
- **FCC Policy Shift**: Emphasized potential deregulation opportunities to consolidate local TV stations, enabling cost efficiencies and investment in local journalism. 
- **Debt Refinancing Update**: Announced $1.5B debt refinancing, extending maturities and maintaining low cost of debt (~1% increase). 
- **Political Advertising Dominance**: Q4 political ad revenue hit $174M, full year $343M (record), driving 34% YoY Local Media revenue growth. 
- **Sports Broadcasting Strength**: ION's women's sports inventory commands 2x+ rates vs. non-sports, with WNBA/NWSL renewals expected to enhance margins. 

**【CFO Financial Highlights】**
- **Leverage Reduction**: Year-end leverage 4.8x (down 1.0x YoY), debt paydown of $330M via political ad cash flow. 
- **Networks Margin Improvement**: Q4 Networks segment profit $61M (28% margin), targeting 400-600bps margin expansion in 2025. 
- **Core Ad Weakness**: Q1 core ad down low-mid single digits due to macroeconomic uncertainty, but CTV revenue up >30% YoY. 
- **Real Estate Sales**: $70M+ in tower/transmitter sales, freeing capital for debt reduction. 

**【Q&A Key Themes】**
- **Debt Strategy**: Prioritizing debt paydown over M&A, with $175-185M interest guidance for 2025. 
- **EdgeBeam Wireless**: JV with 3 peers covers 97% US households; expects material revenue contribution post-3.0 transition. 
- **Ad Market Trends**: Auto/retail ad weakness offset by CTV growth; sports rights renewals expected to maintain premium pricing. 
- **Subscriber Decline**: Mid-single-digit sub churn expected, but Charter's streaming-PAYTV bundling could stabilize trends. 


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