SSP - Earnings call transcript Q4 2017 | The E.W. Scripps Company

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Operator

Ladies and gentlemen, thank you for standing by. Welcome to the Scripps Fourth Quarter Earnings Call. At this time all participants are in listen-only mode, later we will conduct a question-and-answer session and instructions will be given at that time. [Operator Instructions] Also as a reminder, today’s teleconference is being recorded. And at this time, I’ll turn the call over to you host Vice President of Investor Relations, Mrs. Micheli. Carolyn ahead. go Please

Carolyn Micheli

and morning, them of thanks Company’s The A our Factors conference XXXX Good actual filings. statements, for may SEC differ results fourth joining are a results. differ. call our that discussion E. may reminder include everybody Tony. forward-looking for and cause and that us quarter webcast to Thanks, W. in Scripps outlined

as visit today’s information, release scripps.com tables. financial can You such for and more

Officer, Media disclose up this available You up Treasurer, and receive to Local and of Lisa Brian to financial Lawlor; this also first Vice Laura room, and we an SVP, of information, afternoon for can President, Controller Knutson; anytime and replay the sign Doug hear We’ll Adam call. from to listen morning and can President week. Financial and there Media this National Scripps be you Also Steve Wexler; e-mails President CEO, link our a Lyons. replay audio in will Tomlin. Radio, the Chief Symson; then The

Now, Adam. here’s

Adam Symson

aimed everybody. effort began Last we a and creating performing a August more comprehensive company. morning, higher stronger Good streamlined at

said with near-term alongside value superior consistent company energy on performance long-term before creation. strategy I’ve of a our equal As

that Our few course of play results. months tangible have plan the and key has out five components last to begun over the already delivering

the is to The cost plan component work we’re doing first this of key reduce our structure.

and gives than a cash yield margin million finished by to expect annual our more them. time $XX executing toward improvement. goal meaningful these us reductions cost move We we’re the flow in boost of This savings

will station a in us to buy-sell component to the get and strategy is performing swap where This our aggressively best assemble allow stronger television acquisition, we what refer in possible. key as markets operate. even The portfolio to deeper we engaging the new approach second to

us and national engine Media focused owner. Selling their growth to this opportunity these the in growth sale our component radio employees local The our core by our focus further stations long-term plan allowing TV plan in and a radio Katz refine also the fourth on Last initiating and is of of segment. asset our Escape radio the portfolio third gives creating investing by for with is year, a division, we our to of the The Laff. our Broadcast stations National home a Bounce, component audience businesses. niche Networks, acquired Grit, industry better opportunities

the as added expect the over-the-air Networks to be in the said the satellite cable the growing and about of And at strong to space and around we we We established took over-the-top. Newsy, OTT marketplace. dominant future was capitalizing Because of we’ve in which viewership. cable a expect and same television trajectory resurgence distribution over-the-air growth the maintain well time in Katz on already before,

Our fifth they component by and has company’s restructuring marketplaces the serve. been reorganizing businesses the

Our focus the operating goal efficient support and is and to our more effective on consumer philosophies. enhance

a We of reach division national and serve growing businesses media local scale platforms with the have local reach. comprised our And a made where of fast we all advertisers. brands created of audiences division and up media national on

the their our strategies the Scripps well Their moves decision underway the making state the and equal long-term. for If our dividend with our Board strong With you’ll right to two a business company These the of initiate in are local for performance at setting create short-term September, significant outlined priorities joined operating our last the consistent effort; XXXX. first our improved that commitment. five in this against confidence steps quarterly or to time work future. I Day growth up through you remember for executing was us we reflects were value decided company’s value with that stable Investor and business building since

our We looking laser in And remain that’s of our shareholders. plan, on commitment sizing portfolio, while are podcasting to of is ahead. and improved execute to Scripps advertisers, we one we sale and radio this And multicast to to is the a our strong well through TV today this to news to wide network while will for and a the capture local the revenue financial the through important for quality sheet national strong profitability while lot position enterprise and our capital election us right focused leader well and really balance of still dividend our year High division return structure regular ahead work which characteristic our mission have known. a have us of mission. maintaining the flexibility ahead journalism we service our our efforts DNA. well a business. station audiences Scripps positioned dynamic media Today And of strengths, our firepower our our networks, and opportunities Scripps cost

Lisa. here’s Now

Lisa Knutson

hope, segments. everyone. to the Adam in for made We it how we morning reporting you Thanks, new results about our good easy think of company terms and

historical cash advertising. up on allocation, local revenue our that ad of highlights, as our These impact have guidance walk national what prior is and have about we included And local quarter local have periods. supports that digital forward-looking adjusted positions, digital talk comparisons basis, division first reporting The to laid out clean the help you in with these quarter through the provides Scripps. your been fourth includes model. in as then well I’ll new press core to prior and segments dollars to tax Our tables release XXXX TV the the that our make briefly so assets. quarters you new media advertising the capital are law

national revenues with reporting reach. businesses and as to complete national business The includes news Broadcast and network line. Katz our Network, also retransmission media are podcast well of Newsy few political media revenue results We the local division Midroll advertising a our division national our as other Media

able you’ll you as We’re the their comparisons Newsy historical with to and with for strong growth Midroll for providing well. time revenue see first be and

other segment and includes Scripps the Spelling Our Bureau. Bee the Washington Scripps National

and discontinued the sales nicely. and operations Our is are presented are our ahead by radio stations moving being way as sold process

On the to work. of million discussed $XX we’ve savings due cost our side, restructuring

roughly of million expect in XXXX. year the million the $XX this $XX savings can and full You

we reminder just issued our quarter third reporting the that a basis. last on Finally, old guidance in the given press was releases November

So it see estimate. what be to consensus you will to not comparable today the

X% are total XX% few election presidential the $XX to quarter absence quarter prior the division In up our our year. million full media year about fourth of of local and expenses here compared Turning Local of Pickler driven in a XX% for due Ben. about about by as X.X% was fees up cost producing increase fourth were was programming revenue the as quarter down revenue to the the that’s well network results, highlights. media year spending. Retransmission up & to in an

the ever which of to and for acquired quarter side XX%, On impact I’d the expenses including the that the Newsy. media from revenue $XX was you if profitable $X million segment the quarter million million Networks, $X.X this we out fourth national media Katz in like Katz profit was first was were fourth point from Fourth million $X national $XX quarter Division exclude up for segment. from million Midroll and quarter.

incurred our to cost effort $X QX. we restructuring million of ongoing Turning in

in with charge You continue QX. can of expect coming restructuring $X the million XXXX largest charges about through to

For $XX.X or per the net operations quarter million was continuing $X.XX from share. income

Journal X.X December last with shares of quarter debt deal million. our the of million, million Friday, closed million XXXX, XX, million From have $XXX repurchased since As cash the total XXXX, grew acquisition of we to while $XX through Katz. totaled in in for million $XXX X.X $XX we buying X, shares. back spent stock about the January And

ability for of This of $X.XX payout flexibility record as and per share repurchases. our dividend will opportunistic for M&A over TV leads to share time, quarter grow first ratio shareholders X. of dividend The maintaining payout while the us be quarterly March the

always in of capital capital. acquisition to a As disciplined business to investment, and balancing to how approach return considering, allocate Scripps best take

I would to Turning like a quarter. for things point to out the guidance, first few

to are should four of about been forward reasons expect line that QX. that. models, line two has revenue other media it in going Regarding in beginning half local There you for be year what

second, longer services, agreement, markets. have where we services included payments in we for incentive And service shared provide no news produce certain quarter understand stations payment fourth provide of receive an affiliate XXXX our from other Katz. First, the and

not In QX typical line year our shared the our X% corporate run rate, cost, and be If include about below services those some addition, for prior shared does for higher guidance little anticipated services the contest. quarter. is proxy than it cost for would because a

the normalized our ahead is the with good largely Finally, and course signed news law statutory Overall, the and into rate legislation tax changes rate tax out to XX%. be effect for new This result. in as Scripps asset. December of XX% in sale radio of of by between a driven apply additional rate come stands We is range. our XXXX to realize to Scripps, will estimate since our cash will was flow and the

Now here’s Brian.

Brian Lawlor

program wrap our morning, Katz our the Pickler Good and with Media Ben Networks. everybody. up Lisa. about the Thanks, our original and the advertising & segment political of I’ll some from start success Local highlights with from results and outlook, talk

advertising XXXX, comparison would Our for quarter better of our to when X.X%, core national our up the course, advertising regular expectations we from a have caused million quarter, fourth some bit of for local fourth $XX the advertisers. results of political and were than benefited displacement the

second services Our slightly the with was XX% off decline. more a our grew largest in X% than quarter, just auto largest category category,

category, as telecommunication our nice a largest in We retail, improvement also our saw well home which third strong as categories. is rebound growth in and our

well political what midterm to ahead be election, year’s ad spend. capture this is is to expected to positioned Scripps robust Looking

U.S. very we the believe year. was at XX to and be every races races strong both stake have footprint. in a governors’ It for much parties XX have We reason Senate Scripps to

the successful our original announced, Ben & the ratings. recently show launch daytime And On we’ve show season. programming to we a the Pickler committed second front, for new

having in success selling show syndication. We’re tremendous the

XXX time similar last audiences and season. success we show just is stations we The markets. in these growing new periods the on our fact, passed forward to markets the Scripps committed XXXX-XXXX to In look week in

Now I’ll National report Laura turn Media to about then me. rest talk segment. it of to let’s which to over Katz segment. the the And to turn about the the talk Networks,

we the of are on now we Networks expectations. acquisition know, Media fourth to fully say a in on this so X, quarter you results meeting As have pleased segment. October our I’m the full Katz National closed that

that celebrating the Bounce, the distribution grow four as their outstanding a Awards additional Just U.S. well. air. audience. And are Laff. million reach of XX% accomplishments the and there’s They of And cable aired people more the continuing XX, kind expansion Annual of then Media of program. the airs viewed programming TV now Bounce with air distribution about that One which grows over and multi-cast to This market of African-Americans, the it that, helps networks than when the revenue the recent households rest continue X.X Laura these just over of reminder weekend that the about Escape They of attract each advertisers, talk Grit, profitability. combined example Trumpet general targeted here’s to exactly February division. now ultimately National ad is

Laura Tomlin

everyone. what start morning, Good up makes Brian. new Thanks, Media our sharing National by division. I’ll

segment I segment marketplace. collection the Katz And that other into brands internationally of Well and this businesses. Brian, a Our the include some Katz other oversee Midroll, Newsy, financials national Networks operate reports brand. is

bands strong returns national national and demographics attract investment we a fast of growing reach expect. are them have and the to All These significant leverage reach advertiser require base. target now to

us allows revenue possible greatest growth profitability. ultimate capture the investment Our both to and

most networks accelerated Newsy on negotiated our successfully nation’s had is audience. XX Last services, And the gross next top the and over the national network, our we most of our television cable major systems. combine younger relevant end Newsy, homes. of as news of the cable. the year, gives fall, fast Newsy agreements one growing that with million covering This carriage footing broad by news distribution the the strong most generation the and distribution of major we on for by expanded Newsy, For

growing quickly, and streams, MVPD advertising is revenue carriage OTT digital and fees, multiple revenue. virtual thanks advertising cable ad Newsy to revenue and

on The Day Our has including evolved Why can be shows The seen to channels. the these new programming multi-platform With. Newsy’s and XX upcoming and launches cable Minutes serve consumer show Ahead, and These as launch

up Midroll distribution reach. which is format for The its record nearly to to Stitcher our creates listeners just service. and as a for storytelling. to of powerful the And are like just Gamble. see journalism as Coca-Cola Americans how QX partnerships Midroll. leader formed is staying podcasting and impression and how are. an than ad shows, the we’re plan, major podcast XXX verify compelling as At on served podcast podcasting new leader Marvel continues Microsoft, Comics, in turn and affluent episode. important XX% growing and four that [indiscernible] the audio to expand one helping of revenue is network of and about draw with runs are I’d subscription has at to national future this and Midroll Procter as and Apple’s seeing a podcast medium We growing and listening such industry podcast from in its of NFL, listeners one advertisers of to a Now advertising a under it monthly. QX. analytics continues the industry that’s in podcast & industry its had engages had X.X recently billion listening platforms to brands Midroll most younger national for own audience. three podcasts grow our serves because breaking Midroll XX% more Midroll, given and

to the world. podcasting tap attractive this want listeners these following we engage audience into into or So

that businesses. see ready And are can years many questions. strong performance continue to Newsy expect And their each we are for high come. we You for and to growth operator, now Midroll

Operator

from very go question John first Thank comes much. with Please Our you Jefferies. ahead. Instructions] [Operator Janedis

John Janedis

piers underlying call better and Thank with market market that service I’ve on the was affiliation it’s as the category. want the else an or looks is in you, I appreciate assume out it good out guess well. of partially than But because I there to growth morning. the ad to head also is looks assuming start specific front, the of transparency your anything retailers exposure and the that auto revenue. It I coming due revenues like local to I like

past then that. So any years. bigger over in work And to color shifting couple there of digital there secondly, would did the lot be you helpful picture a of

can Adam, start around confidence so the your to you level talk businesses XXXX. about And relative those of

Brian Lawlor

Brian. it’s Good John morning,

legal relative categories up I of was. quarter on our that take couple pleased than were really of But a was with Let insurance. our were results your group was really strong of real medical A me XX%, to categories that think inside driver first question biggest driver Services couple up big drove of obviously inside success. fourth sub then where that. just the really XX% We our our was and and more estate categories of that. the

and categories XXXX You’ve that six been following us for or now category in for a about five XXXX and western especially remember soft, really was talking almost back In insurance XX%, we you insurance being in while were inside strong. about region insurance come Las Phoenix. health million. has $X and the up almost really that Tusayan and of subcategory that It up was alone Vegas

driver So that of there a success. our and part big was our

auto, mentioned quarter. pretty You auto good

a lot continue – on retail really groups local individual I retail, along that dealers And television. to continues consistently quarter. category and work. the sales that of and And focus to them meeting with continue dealer you up in just was trying then and mentioned almost it’s our to X% teams on think about

of last So their seeing that the with that’s of a the of year first good really I the following fluctuated that’s out holidays. the retail back played over last some category think And obviously half itself and a into quarter. had we year we’re results years. couple continue But

Adam Symson

digital Newsy reason part we about is common Katz take the all the as and business to John, around around we specific and businesses. marketplace. don’t role. ad you company Midroll of and national really those have the Hey them actually When your platform a question I’ll the see about the of necessarily three thread because reach them the marketplaces Actually strength refer reorganized they second I in and the scale businesses is with to think national playing the respect

cable continue to and with cable booing marketplace developed piece delivered the advertising by provides the general online. such see we’re growth into them new with what the that And Midroll the in this are and growing we tremendous driven really with you into audiences MVPDs they’re Newsy lot and sub confident but moving out reliance OTT because seeing, bring to Newsy. of on the opportunity growth higher to flipped to the of growing. marketplace audiences distribution, that’s done on Obviously networks DVR ahead growth audiences a and market of and for brand lot grow a us to revenue non-cable Newsy we And And already higher through these Katz cable MVPDs really so signed good as to over-the-air upside the side table rates to with the on as cycles bringing respect of because will continue podcasting are as I’m We’ve significant a and continue lot opportunity and that of the and programming more marketers. see year mostly a the in with with Newsy transition rates ability go those these got from comes but well. ramp for significant the know, to switch opportunity historic ratings contracts service so and expect obviously we of continue advertisers

John Janedis

Thank Great. you.

Operator

Thank you.

will that Kupinski from NOBLE Capital Markets. come Please Our next question ahead. Michael with go

Michael Kupinski

here. have fourth come you I stations couple quick the Has of company the had in the ABC last view trends reverse I the a that think year? questions of completed you. Thank for quarter

Brian Lawlor

with Brian. and an finalizing agreement. on extension we’re No, Mike still Hey, that it’s them

Michael Kupinski

station just company be is a the as station have And market. appears But focused seems problematic to on I uniquely so year. company you company they the thinks your swaps little this going position then can if speak. be to in the station was can wondering and color the And everybody discussions the doing doing the that swaps prettiest swaps. It Okay. to do likelihood on swaps might complete how the just that give stations might child

Brian Lawlor

spending Adam, lot time I’m and on of a others. it, Well I

think to synergies hope but be going be assets a we’re the attractive look gained Look I’m not at able in So deals have others sure numbers you attractive we some the bring I can year. have assets some that deniable. to this the conclusion are results when

thing to think same durable they folks the been we’ve companies. I more – the market make the chatting market for and so individual And advance the bigger get with opportunity see to other

And at good for think rules thing moment of so supports open forever, we’re as but would mindedness our to really take communities it now I that right and this a advantage how that a journalism, result an serve as us the That And to get deals these that’s this Mike. will around stay some in allow do a I time. is we’re to sure we’ll not better a this we we’re think there’s And deeper at result we’re this with done business, it. commitment. certainly looking time expect I trying think year

Michael Kupinski

are anticipate those can sales further it. that don’t bigger and going to – to smaller and if go stations them? swap markets. might rather of bigger well, at trying those than we market you assets double your you have those asset selling one look not If well, some swapping up And go Got trying are discussions out to that probably I understand maybe TV

Brian Lawlor

goal the to really and more a stronger the Mike. our I portfolio as portfolio. able day to bigger swaps profitable through not think said more of not think the we’re is hopefully be our I I years end to our realign That’s durable at I smaller. But plan mean,

Michael Kupinski

it. Got

XXXX cadence just can retrans, terms the negotiations? us like that in was in revenue if seems retrans the some So Comcast give you now the some of guidance through especially visibility you wondering terms growth can completed of guys In I provide of you there.

Brian Lawlor

XXXX resets in our XX%. subs have about XXXX XX% So price of XXXX, we XX% about and

the year three that three are months years. may deals cycle of of or so over year of got renewal deals. by an So evenly fluctuate here couple three kind them next were typically but these spread We’ve most

Michael Kupinski

plans it gain to Last to Newsy retrans Newsy. for $XX achieve the question, forward? additional the million in going willing company Will company subscribers be negotiation to subscribers indicated use that for

Adam Symson

Adam, think been the question. a I’ll reading. this Mike of there’s Hey, bit is actually analysts in little I take of we’ve reports confusion this some that been

on carriage the me been to There we’ve this. I’m between SNI let Comcast carriage with with said pay it Last negotiating the what result acquired for are parallels we So work sub when Newsy. MVPDs make I no of from really as sure of how $X.XX now RLTV, really to a reprogram subject would deal in for contracts year and up clear the to Newsy. that I think we the RLTV to for we’re

So is life programming the Newsy of any expense RLTV Newsy’s agreement plan. carriage involved the Newsy amortized from in in flipping to being over

it had to any as that RLTV from lowered our acquisition by have the of if that we of up a result would with do working So MVPDs also flip sub of to expense about programming cost XX%. the

RLTV think up the flow this to when lower that’s in direction So sub most we that to an year up I because last history. was acquisition. there was sub, say, in would I be flip going how and position could efficient if in you MVPD I the Well the amortized with be and a the cost P&L that have of Newsy’s to cable expense to cost. leaves also us of paid an of would would through expense that’s going for the why still that $X.XX acquisition saying

Michael Kupinski

Okay. Thank you.

Operator

you. Thank

ahead. Our with from Benchmark Dan Company. that question go next will come Kurnos Please

Dan Kurnos

shifting lot stuff I Great. morning. of less group, was from bit slightly It from category. on we crowd I quickly the for in you of think also seem of the little And than on local does now investors. what just been kind some of it can people and digital a into back a about of focal been guys, about a for peer there non-NBC a the obviously the advertising is Thanks lack noise down over. and heard better point puts Olympics still little then pacings. channels. yesterday local out Brian, Can automotive you bit good auto talking the mean, it’s have then talk we takes just

how heading think up if of into pick sort early impacted results QX. that seeing QX Just you’re with your in you that and any book

Brian Lawlor

about it’s quarter. in Dan, down we fourth Obviously the was X% Hey, Brian. said auto

pacing I the that than about little first in you part a have softer NBCs, of spoke portfolio. it’s only a probably right now think it’s because the of Olympics. We really our quarter five what small

performing are of performing you back But for do or that well when NBCs well. sitting over $X footprint two NBCs little quarter days. up as and the double CBS FOX, some kind well Super and have digits our XX Our out those as million between against combine or Bowl are a we million a the $X so Olympics see advertisers the those and SBGI five things ABC pulling

so that’s And a been it’s bit been category auto a softer little there.

small like the of being that For our at looking revenue low out But up a is our some look in I part up is here singles, did the categories quarter we’ve mid-singles, first think in pacing that. we a guidance quarter, think we’re quarter. given fourth lot digital I

auto quarter strength improvement home same and of So think I services of – those off little the our well. of as we’re a more of categories first spoke retail, if drive I seeing kind owns bit

Dan Kurnos

give to Thanks helpful. just the guys a with number I That’s it. Got one color. on political. TV, are more not And going sticking know then for probably you

heading you of just feeling the sort on thoughts the year. are of balance maybe So into your how

that talked you But on that how color would of where you to shake – know sort us relative could races sort way you’re could have. the competitive helpful. out about you any you if some feeling there’s XXXX of be I And give

Brian Lawlor

Yes.

there certainly this And we’re then that. really think I money to comes have the believe just benefit if really cycle opportunity your the down in more to you was will from industry races markets be across there they the we are are, XXXX. and in early, than in competitive, the It’s optimistic. year

governor them Michigan, three the it’s of said, races early are now XXXX Florida, right tossups I As Nevada.

races. strong good those stay be those states. those with close are spending So very If financed could races

On within think Missouri, Tennessee. five a that. from to stay really Senate couple the Indiana, I we we’ve tossup races Again opportunity points these got Arizona, and the Nevada benefit have things side, if

half a cadence $XX first this million first of will maybe of the million. on million was in XXXX year and political in XXXX. for quarter Our lot look $X that was probably We like year, our did $XX the

I this I look about think – first of to our first quarter will things quarter, second it’s quarter quarter primaries same. be schedule. then after kind primary that that But really the you first third really And year the third quarter heavy – hit then going and think are kick-off.

We seeing decent activity around this. are

issues Some the Arizona, Senate in probably in Indiana, continue Wisconsin expect point races right of the to now, burst levels second at quarter we to spending are moderate this point.

similarly add just competitive races competitive, past, reserve lay are in activity the got Super a markets to seen if smaller seeing in it. we And the seeing we’ve we’ll kind to of some right PACs that space. on fair amount probably money of So it’s money base. the they’ll a now. as lose that couple lying stay if in the fall we’re We’ve of are But nice a don’t for some races

So, good now a it’s gearing in right year. of active up the we kind be position. close, a really should good for healthy races If stay

Dan Kurnos

some of in Got are as kind continuing you streams I’m bucket the of grab then those to land of straight to last Newsy you the profitable curious, level. go about Adam, it. higher do forward assuming or these are carriage, from at And of market you’re here. not sources? Super want nominal relative revenue line. getting just that fees are least Are greatest the to where sort them. going just revenue get one, just you’re forward effectively incremental sort with sort you there. of sense like going think extent of can you assume revenue And of on more an characterize going helpful. to you of How drive going a since we what to give sort leading But you’re the mode incremental – sort to to us through I the how I’m much – those opportunity carriage of more sort maybe you would reinvesting – dropping bottom to that opportunity. with dollars position – and are whatever

Adam Symson

let bit. question a that unpack So little me

was said, said migrating product around we’ve to already taken As cable, up out and online now sales. in year we’ve stream we’re that we already ramp for things developed OTT, obviously by develop to XX hiring the of to those most And earlier, that that content the going there journalists we’re think we’re was And end it going and cycles. additional into continuing a our come cable. we’ve respect with subs the to a of

will half expect advertising, significantly begin we really grow, materially I to start cable the in space more to the think of year. out second in So DR which the

able annually right expect ramp we’ve on the that to Some have good Southeast start sort of don’t well. fees ahead are profits, to a and both but I think over start businesses with And combined and I would and be lot that good respect this, to these sub obviously, plays as is XX% here. we time. misunderstand That and solidifies some a MVPDs. not it Midroll for early very characterize that you the the keep opportunity Newsy Katz as we both it’s growing of a retrans, Newsy a between on away, the the up obviously, reinvesting place to brand the comparison contracts Newsy pace, I as that of With a call shelf getting nominal. got want of new

into division expect profit from businesses. Media of these continue we growth National that And we’ll the to invest some back so the

Dan Kurnos

Got right, color. thanks for it. All the

Operator

go The you. will from question with Evans Thank ahead. Kyle Please queue next Stephens. come in

Kyle Evans

target Hi, thanks. sale? assuming Could you year-end for the guys give a number leverage radio

Lisa Knutson

Lisa. course, in well. we LA X.X of it’s substantial significant to a we’re radio Kyle, times to a XXXX. proceeds line Hey We tax sale produce – looking cash expect have the the cash of We amount of bottom from today. of as expect operations we hit do QA, our lever amount about net and And

and into think work way today cash I of XXXX. with comfortable really down coming its sort that obviously, So leverages our in we’re it where will

Kyle Evans

your to terms more market do in – can And And maybe I we – track Katz upgrade from get over think are you think so efforts time? on on an just what mix to DR of to that ad update there? and general

Brian Lawlor

Brian. Kyle, Hey it’s

recently, across that of all over they around numbers, XX%. We budget the rating our – one side, we’re can and is I very success our we as on our lot our company. concluded the they A acquire upfront on grew plan track, have their the of four side, much in I hit you which upfront and of the Katz tell that said, portfolio. have expectations target revenue on is meeting side, distribution of XXXX upfront would since the revenue the every strategic networks on We

Laff and and Grit and they’re DR toward Hybrid or DR Escape, building in XX% that either I the So all is what think we’ve a now rest their then networks comes – about behind their they’re that from balance said is they’re one are past right the general newer good – of the obviously, that. at the is but The you’re market. advertising of

market So it’s foundation our year-by-year a but process, general lay of targets all the of which financial hit upfronts in that we advertising. the from

Kyle Evans

But front, you kind think of to you stacking could on our like, that you’re big-four it in lift What end get from the sounds buy at look swaps market. doing a margin you station lot end at work you when believes? – of swap look

Brian Lawlor

really Obviously, our in different X ways. lift and XX CBS points a in ABC really We’ve and whether between even model seeing ABC we’re of couple depending MyNet on you’re an you anywhere done at – margin on and looking it, to or just ABC in in a circumstance. or a at we’ve it depends Fox, looking the modeled it

Kyle Evans

Okay. that about Maybe our last a specific of one, digital growth little you and which models rebuild to Brian, in we’re all we hear was small, be the bit mentioned there rates. since more terms size the to local

Brian Lawlor

– Kyle, think sorry, now. are Hey sharing don’t those Dan I think we’re right numbers – don’t we I

Kyle Evans

Well.

QX? Lastly, back in us could look count retrans you some in a give

Brian Lawlor

Yes.

think of our about included some talked on seasonality. call, we subs. obviously, our about And last I total X% our that decline of

little households. the was by rate the of fourth top about we over additional a bit of talked The but news as new all offset little it we was slowed, quarter bit. think watching a it got it I decline, good So our decline was that

net was to beginning year the is So X%. at point, reported, this about no from beyond what last previously loss X% which of

Kyle Evans

OTT seeing are you and QX largely in offset So door subs on side? traditional revenue through you come the the declines the saw

Brian Lawlor

Yes.

people OTT talked the cord expecting cutting we we were the that were signing we the about waiting fact – that, would we So subs. were that last on the be MVPD seeing on the for call with and there on

being one I hundred shaking seen of are now our that this itself that. now we’re Obviously we that for one have into subs OTT subs paid not a But We new out. still marketplace it’s think for is had thousand that couple that, now factor at point. models.

Operator

will Wells with Thank Please come The from ahead. next Marci you. question Fargo. Ryvicker go

Marci Ryvicker

a post core quarter? the focused Streets for QX but and air, What is year? invisibility say can of the harbinger about noise you first couple there first The the on TV. the in advertising I have Or have I this to Thanks. a do slow on lot anything a you there’s is start know QX? in

Brian Lawlor

Hi. it’s Marci, Brian.

quarter much are we I second quarter, the typically broadcast obviously, cadence think of stronger. know fourth

that. We’re seeing

I and think that of decisions to a there light go their of and clients second, were first automotive kind base third fourth. for made quarter couple on build strategic in then big

in. laid seeing money And that so we

auto. second negotiations in I I to – as And annuals be obviously, that for but we laid have I said, Most our because been insurance of think early. in, point, very basis, quarterly quarter. think needed our on So of at exactly this especially it’s this a is them are where

We that a are year. to lift last – seeing compared beyond

step-up see at we in So normally I we think optimistic would point, remain real. looks this that that be to quarter second

Marci Ryvicker

us anything about us And us the you of talk station you the what perhaps thoughts color timing, maybe for it. our progress could conversations valuation, Got radio you’re any on give to senses, then and sale, low? can having give maybe to

Adam Symson

Marci, Adam. to share results next the pleased the have are now, months. the it’s – mean we’re I of to be. what It I process. we’re I’d two with say going very I really more you we think guess, with we’ll in looks within good, right the Yes. suspect midst

Marci Ryvicker

fair it at as And then cash, you. that national more point? you’re on Adam’s your to that say comes on uses prioritizing when M&A have the this it side to Is local side than the

Adam Symson

Yes. Media for it we’re portfolio. to Absolutely, take capital, That strengthen right opportunity our in now, not an may I where capital. a there’s take moment of think Local may us we think time,

cash right I what leverage was end to the we’ve earlier us need the Local question we Media portfolio. that other ratio might we about to strengthen now, think be one year our for in net because think a got at that aside tough would of order answer, that

that’s priority so our where really is. And

Marci Ryvicker

the last of the then decide of the of board, in me And how guess from come the size percentage increases? it on I we one is think yield, and for terms here flow cash How did dividend. to is on the progression about should potential

Lisa Knutson

pretty which X, We we’ve size was we yield was it’s years about thought, Lisa. XX since Hey it dividend. decent X.X, that X.X a it had it’s a Marci, been initiation,

really faith to the strategy in time, of The perspective ability faith dividend opportunistic that ratio have out. the be share gives our flexibility the board, maintaining repurchase. grow TV from over in us the – payout and laid with we future our – think I to M&A

Marci Ryvicker

you. Thank it. Got

Operator

Please Davis next will with question Hebert go from [Operator ahead. you. Our Thank Instructions] Wells come Fargo.

Davis Hebert

Good morning.

couple sheet a of questions. balance Just

to You want leverage – mentioned radio that of that still average net the and just two-year cash times X.X cash into being include includes flow. confirm the

Lisa Knutson

Yes. does. It

Davis Hebert

sell to bank And then if be debt? you required Okay. down would pay radio you

Lisa Knutson

pretty the obviously is with leverage we’re comfortable today. where Actually,

if radio as to period from Our we to those time. proceeds debt specific to those But use agreement do flop proceeds. through proceeds within of intend intend of earlier, require reinvested Adam net us said the we a buy-sell debt, use pay really down

Davis Hebert

And I Katz announced Okay. the acquisition. think then, when you

had You is on be by X.X that same expect end think I that average, your at expectation? to year it’s the times the leverage based to still the and of

Lisa Knutson

I answered a think, ago. moments that few just I question

the to think likely is it think will that that the I cash sale have of year going with on and really throughout come cash We XXXX. radio. down build hand, the the throughout we

Davis Hebert

Thank Okay. you.

Operator

you. Thank

& Our next question Barry Lucas, Company. ahead. now will go Please come Gabelli from

Barry Lucas

Thank you Brian, will color that months into two a fact a the – way. getting lot of done? situation in deals on year, more morning. these that just little and I’m granting way the and hanging fair trades there delay, is the the Sinclair talked M&A were something good bit get people about and what Tribune, wondering to impediment swaps if fires other does deals the And that

Brian Lawlor

anything don’t head to lot this to do it’s where we’re state the be had Barry, think are else. rulings with waiting going see Brian. A what’s just on FCC, be in do, this Hey deal the these court their from and of with are going I what everybody going to to to complicated.

just I’m activity of lot space And lot a But lot sure, in talking beyond talking. they’re are a on. us. so work, there’s companies there’s going of of a the

into to improve to and are their an that anything result anything people don’t that find as pace I sense and at keeping that than quickly that think other make there’s these going I moving of through have rules read to think to appropriate So changed getting a is deals things from companies. are done work

Barry Lucas

for on for you that of you to to be reach what Great. I content of for to one would Can ask need kind Thanks markets? the & do that. Pickler a What audience breakout Ben said terms and profitability? XXX in commitments to side, preparing have adequate

Brian Lawlor

is that going steppingstone its lot our better we fully it’s A hands. That and time mention Well, beyond X to path Because on look that. hopefully season I XX% want our time, where not and to if on to I distributed don’t season I X done, the we numbers is certainly, X starts hit the a are we’re want this the mean, reach. XX% a got and XXX. reach we’re just lucky XXX the be. than country By to X of where expectation – the season we by think.

performing has So growing the around it in on markets it’s for energy months, ratings, show. it’s certainly now that been a of it’s lot the well five

people forget to of kind and value, fun, that type need family right I show now. life really good it about it’s think enjoy seem and

Barry Lucas

Great. Brian. Thanks for that,

Operator

there’s additional time, very you questions. no Thank much. Please this continue. At

Adam Symson

pleased To making we’re about optimistic operator. the and ahead. progress the summarize, opportunities with are Thanks we’re

profitability our to asset selling of We’re while improve portfolio. non-strategic taking business optimize cash our and flow, cost out a to

television our a improve strategy economies communities M&A mission portfolio. support serve And station our carrying We’re with to advertising. our our journalism local and we’re out to clear pursuing with

our week dollars and a growing a lucrative initiated Thanks shareholders positioning establishing us We’re advertise attract to so our general today. by and in recently investing National everybody. much dividend. engine term good Have returning us Media long market joining for growth to to segment, cash through

Operator

available Thank gentlemen, at replay much, today after conference Time XX:XX running XX be for Eastern you this ladies and March will AM and very midnight. through

today. you dial You We conclude may thank access and XXX-XXX-XXXX your conference XXXXXX. access Once XXX-XXX-XXXX time code of by numbers may AT&T telephone participants using for code does enter dialing any playback at XXX-XXX-XXXX. International And Executive the using participation the teleconference. for access your again, are of and Executive AT&T service that do XXXXXX. call XXX-XXX-XXXX and

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The E.W. Scripps Company (SSP) 28 Feb 182017 Q4 Earnings call transcript