Earnings call transcript Q4 2022

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Operator

Ladies and gentlemen, thank you for standing by. Welcome to the Q4 2022 E.W. Scripps Company Earnings Conference Call. [Operator Instructions] I will now turn the conference – for today’s call, we will begin with Carolyn Micheli, Head of Investor Relations. Please go ahead.

Carolyn Micheli

Alan. Thanks, and E.W. joining everyone discussion for you the of thank morning, us for a Good financial and Company’s Scripps results business strategies.

measures are and provided that of this You make do other reported supplements information valuation to measures can or not and meant update A actual financial the reconciliations replace of that differ. forward-looking and and accordance more discussion and any call are management cause reminder analysis call. a company. that uses differ outlined in non-GAAP link results earnings the are to webcast visit to in the are metrics from to statements These measures scripps.com to include in public our conference assist measures of is not intend financial may certain their differ may and on the as for release companies’ GAAP in our Factors and in may call statements our not financial we today. GAAP formulated them to our SEC of Included the this are filings. We Included financial forward-looking formulations. GAAP replay statements. non-GAAP a with

We Scripps’ will Jason Symson. President Scripps morning Lisa Financial Knutson; then Combs, Chief Chief Officer, hear this from then and Officer, Adam Operating and CEO,

Here is Jason.

Jason Combs

a look safe. at we how which quick will distribution back reorganization for announced will the you including on I am at Thanks, our division for I quarter our look start full much fourth XXXX. thank for with morning, deeper items joining the us. first I Carolyn. a recently and guidance with everyone revenue. Good retransmission going guidance year, to quarter to level give and today conclude at includes Then expect the revenue, a of few and expectations

year quarter million in delivered included X% profit, up in fourth revenue, $XXX The million of from XX%. revenue the election of $XXX political to a total segment XXXX company of $XXX our and midterm quarter, advertising million. up for $XXX record Scripps million For QX cap

that again with pleased the of a are We broadcast election industry political dominated ad XX% spending local dollars. share once

revenue Media line well distribution advertising due our advertising to guidance, revenue as XX%, Core less revenue. increased by driven up down the million. X% expenses segment year as up $XXX $XXX programming political was Local quarter Local with Local Distribution was was Media excluding Media less and displacement. up political X% from XX%, was to in than primarily revenue million. profit ago costs, expenses than X%. were ad

Scripps prior the that XXXX the quarter, million, to line Networks marketplace. for Networks X% division, Turning revenue fourth year from about year prior the with million down quarter. were the in the national in advertising softness of was segment expenses reflecting quarter $XXX was $XXX

in digital promote our at $X.XX operations Shared corporate through have income from loss $XX of for As antenna use. and for profit $XX the made includes came we Segment marketing a investments $X year. The networks reported to million. spend quarter, we services QX to the was Other expenses fourth we launch share. the In which consumer national realized three cycled million. company million, of campaign per TV over networks of

equivalents cash end, As totaled of year cash and million. $XX

our leverage was X.Xx was net net credit Our billion our quarter the debt end agreements. at and in per $X.X calculation

on $XXX.X and outstanding $XXX term XXXX, our of senior million total on principal principal our made the loan million. of a During redeemed we totaling notes payments

$XX.X our mandatory payments made principal term loans. of we In million addition, on

since $XXX the have ION So And paid our X gross debt. reduction total million. nearly in we in down debt in the XXXX in was million $XXX acquisition, years

guidance XXXX. ahead, give quarter first the to looking for Now I’d of like

the mid Local total revenue expect decrease in Media percent. to We single-digit

in down the We expect be local percent high revenue range. single-digit core ad to

Excluding the to Bowl, the only down single-digits Olympics year-over-year. revenue expected impact Super QX core be of mid is and

divisional Networks well to down aided single-digits Media revenue flat, Local we expense controls be be to and In single-digits as programming the by Scripps division, to expenses as high expect network expect fees. up and a expenses be driven higher We by high programming moderation costs. distribution in

shared to quarter services First expected about costs $XX are million. be

We of campaign. a QX, of $X.X in other inclusive cost free expect about million TV in loss operating the our

the conclude items. few with will I year a full guidance

full as gross XX% of to renegotiate distribution grow fees revenue we for range cable year expect the the our and our XXXX percent in low-teens TV We households. for about of satellite

to distribution year. more grow XX% expect this We dollars than net

higher million $XX of divested expenditures one-time includes out we in that’s where build of the Denver, to normal capital run-rate, building. to million, facility our a $XX expect than prior We cost because it new

cash between this $XXX We year. year depreciation to $XXX $XXX cash contributions of We required million, million, $XX of million taxes to expect $XXX this million and of any to did not interest million have pension and amortization $XX million.

well serving outlook. our macroeconomic the we giving want debt remains pay respond in better to priority to reorganization full of January allocation the to our and as ongoing and top journalism to preserving departments audiences plans growth do the our flow reorganize the two build capital commitment the create cash can so however, opportunities. I resources quality quickly the be to or as announced deploy company organization, in plan, with to guide implementation reiterate, across to goals not our both that leverage uncertainty free Given down. with our a we across will and On enterprise roles X, ability programming centralize climate year that while

least expect the we at from annual time, in realize this reorganization. At $XX savings to million

the those be savings half in to of first mostly operationalized XXXX. expect We

this as those to year we begin implement We expect restructuring to savings. record charges

was our responsible Lisa for She President, leading Knutson, is Networks’ Officer now efforts. and reorganization Scripps both as divisions. Chief Former appointed is of operating overseeing also Operating our

strategies around it the the our I discuss over Scripps reorganization. highlights share from Networks Media Adam will to then Local and her will turn operations to and

Lisa Knutson

organizational capacity And majority division. have Scripps led in to held my spin-off I and have work pleasure in of Thanks, led integration newspaper morning launched many here committed XXXX. my for and transformation very my everyone. perpetuates new stakeholders. Scripps, the career focused Networks to its benefit succeeds at our of to COO. this that evolving group the ION I Financial spin-off group spent that Officer design roles Chief Strategy Officer. helping in Networks Networks President, I ensure And all Scripps our XXXX Scripps Interactive the new the Jason of always ecosystem. profitable I good executing on am It’s in and consumer media including as Chief I be and to to

on advertising advertising quarter both Networks. in put The for reflected comments you Media see focusing that today highlights climate on from TV am current macroeconomic Local I our current outlook. pressure will and to the my continues environment Scripps and

first and The first year the end start already didn’t of market last quarter tends quarter of on the be the until ad year. to lowest revenue pressure the quarter the

In about year, addition, and in Fox comp Olympics included as on in because the stations. Super have our on Local in nearly missed $X million last NBC well core with first XX X advertising as tougher Bowl we $X of Media the revenue. Bowl quarter no stations, we the out year a in our Olympics million This Super segment, advertising, in Winter

expected the year-over-year. down of the impact to mid-single be and QX revenue Super the Excluding is Olympics digits core Bowl, ‘XX

categories look first advertising be Local retail, total and Only Media the gambling. services, to home by and the home top core dollars quarter in two five Our improvement were for of up automotive, automotive improvement January.

exceedingly distribution picture strong year. Our for is Local this revenue Media

grow XX% in about range our expect are renewing of net households. than dollars we As year to low-teens you the grow more know, percent we And pay revenue television distribution this to and legacy XX%. distribution growth

and year the Special on to elections state last two pick political, competitive up and with we are Our back state-wide the will what driving expect half a Supreme this the Media Court third in and with to elections Kentucky, Virginia. years. off-cycle par Local quarter we line first be race Wisconsin Louisiana expect be election activity

Networks revenue turn the picture let’s first segment Scripps to Now, quarter. the for

and response spending. of to continue in inflation, direct to ad tighten makes to direct our sensitive We consumers historically is The market ad discretionary XX% causes pressure about total up response been because the marketplace, revenue. has resilient which their feel it

So, the the there. soft dates. ads The us and will buy seeing inflation to of has scatter advertisers been we also are help market pressures eventual closer air easing and closer

our confident portfolio nationwide audience national market network are the broad every we viewing well strong ad that when our on our rebounds. of and However, to us capitalize distribution reach, brands full platform positions

for revenue remains TV Connected bright spot our a challenges, macroeconomic us. the despite And

and we going Free of XX% in continue about We VIZIO including Samsung platforms, projecting all drove TV XXXX over across a more Connected Plus, Freevee, run-rate our TV, to brands revenue network the and Fubo big launch XXXX Tubi. These million launches Pluto, $XXX TV than XXXX. CTV into Watch Roku, revenue to are aggressively increase

to In with addition, growth of we realize continue MVPDs. the have opportunity networks significant virtual our

During and and and this ad-supported quarter, to FAST or channels full available subscriber Bounce are ION, Scripps joined additional the core base in months. News to we launch the free TV YouTube being planning coming TV

networks attractive have a able viewing brands. to news monetization those parlay a capitalizing and while and has are time of are thriving spectrum, platform range to of brands optimize We burgeoning are entertainment portfolio been broadcast network very pleased any the now on us of that connected easily acquisitions ION Owning on same advertisers. demographics Katz These we into they our that our ecosystem. allowed of at the delivering to are TV the found and Networks

highlight share I like would a to now the division. few for programming

station, an a Tennessee’s proceedings. of have for Our WTVF, Journalism state television investigation National News won recently X DuPont Nashville Award Channel prestigious legislative

process were bidding are to the interest. We a lawmakers doing work on a special secretive well-financed very of the of light shine proud where

State of available House before created the result votes. publicly system As our a amendments Tennessee a make investigation, to has

XX has viewing, continues a X for network all Networks, And Nielsen-measured was networks. the from in portfolio total a be TV even actually Scripps in primetime At XXXX. moved face network and ION rankings linear up among to broadcast viewership XXXX total XXXX. in of the ranked ION up top versus declining X% top

measured In acclaim. and our moved that Johnson dramedy On up continues fact, all XXXX. balance, rankings were strong in of Networks critical the ratings Nielsen to XXXX Scripps in draw in

premieres stars Tisha excited We launching new we are reviews. already comedy are show Bounce summer. Act Nicole which well-known receiving Brown March Whitley, actresses, third bringing Yvette Your Age, X. back the show a The a Campbell, is to terrific season for and Kym very be and this called on media on And

responsibility. end and to most strive their issues a social mission and matter to teams on information Everyday, and like who audiences in coming want our my comment communities their base and that an on perspective local hand. the not out our or with national are news opinion. facts journalists to even I’d with their reporting and Scripps believes from Americans remarks news need covering

are and business we proud place for by for advertisers So called NewsGuard providing brand-safe is advertisers a trusted good been mission. recognized News a for now serving Newsy has for very objectivity, consumers that news news and to Scripps central our with and us audiences source

here And is now Adam.

Adam Symson

Thanks, Lisa and morning good everybody.

These journalists week make were our to this Before news a of I to them and the address covering scene company their journalists all I appreciate and every the while efforts shot in like spree. photographer a transformation, was at tragedy hope informed. sitting during Orlando, local the community. car shot Americans shooting can in killed crime day where discuss keep the his critically their horrific I’d reporter injured TV

including to I and for staff. putting keep precaution risk at reviewing and you involves our continually this that safety themselves safe, measures guidelines great Scripps assure our field people Sometimes takes

out service and families and scene their the as the to of all and reporters the as journalists them these are public well the who to coworkers hearts for we other first Our amendment. thank the on go of

undergone In X Scripps two years, the transformations. last has major

local more first of than restructuring. radio in platform and exited in XXXX savings in million created cost television. The drove We a through $XX scale

in entertainment portfolio second X podcasting exited national Media, of tremendous acquisition after and digital opened ways. that came ago new our ION audio and we for future and networks opportunity news spectrum years of catalyzed monetize and profitable an returns to up bought creation tremendous The the

commitment are tech media are Unlike entertainment space seeing the pandemic, of driving want power the to the from the our margins, profit today, revenue month, walk subscription three not the and we of service principles the reactively. our initiative through over is Last in opposite, to us capitalize cutting to to they disruption, growth And proactive driven transformations: of you strength the media perpetuate and the and of third I’d transformation. downsizing soft the commitment you journalism greater streaming a enjoy. that improve need, our from effortlessly our guiding serve marketplace; Scripps’ platform in We operating like mission in of the company performance; growth media the people. currently and Crave by the layoffs forward improve near-term and pull our our the that American a announced the first distribution to of economy to platform a continued drive path they Americans leverage the and and premium live day of second, have our in and and and stewardship significance what again, set we serve on American to is the Quite the to the chaos people. recognizes the mission for to to finally, to marketplace had plan support critical sports of the start fuel best on journalism both to costs the the

take the organization out As the year of we so. Jason expect said, coming of to costs over or million $XX

by to local two collection We us structure will platform, reduce the against and value. strategic on the well resources allow American our Yes, networks new profile. grow broadcast, the and will and With distribution far alike effectively our centralizing more of streaming and execute reorganizing objectives across more every any cable to are stations segments absolutely dissimilar. our the coast to stretch to than that enterprise leadership reach operating businesses will enterprise that operating coast redundancy television start across But more to consolidating our focus that the company importantly, as as improve roles operating management.

we better, we enabled We are The will across this from That products sports. through strength better and the alignment continue improve ways as leveraging of advertisers. live better already our commit newsrooms as the leverage relevant by for audiences there the assets programming, advertising to News, Scripps new local to our realizing value national efficacy and and create include cloud-based of enterprise soon transformation under new with technology. original and inside our technology efficiency and more journalism will higher-quality to sales

clearly, are to will the see about future. you these begin us As moves for positioning

know, mainstream investors media Pay capture services is to that American are their The under can one awake the pressure. so never will and TV or them. no fragmented margins counts linear majority As continue Wall the audience that decline. television going SVOD delivered. generate subscriber to platform Street is is of reality service the that has

further news, in is the TV the for we benefit live television. All strategy of where linear as free this now television ago, sees Linear the all to strategy, also operating is course, been wider consumer. TV to the Scripps see I most often the reception and of you television broadcast, sports business powerful Several say, told of sit of that model, of our very Sports of distribute the platform, the the opportunity. in evolving, reach that has a live opportunity we entertainment, our as quarters why resolved all TV. RSN Scripps connecting And witnessing and, growth above connected biggest audiences the linear were to around of here warm from we the today, I pursue where and it’s distribution platform Scripps and platforms implosion that on over-the-air in got pay And above incumbency with marketplace. an three sports. getting are in it’s

national ION build Our and air, immense the and for pay and events franchise reach looking connected the ubiquitous consistent has viewing leagues TV appeal TV footprint. over the new Networks through Scripps across to

audiences even to see the television an is antennas brand favorite digital of young they they’ll free value if our reach. part to broad – Scripps watch our for And the opportunity deploy their like a for leagues future direct-to-consumer teams we of streams will unparalleled live live draw fervent sports Locally, higher. the as new again. local revenue sports be realize teams a partner audience need fan as linear For to material with right drive us, that and to

also viewing. defines news content critical live is genre sports, that a linear Like

its demand. very not on urgency by and is with News nature watched timeliness,

the the nation’s just network News. beginning while TV that’s Scripps news recently also Scripps on national connected services. over the is XX/X only fully being But deployed network, Our rebranded News, air, for

local and content brand within our our and We’re local communities reaffirming to Scripps to newsrooms in journalism stations to News further commitment and to the expect their our integrate support serve. order local responsibilities they

resounding Over asked reorganization journalism. And our local me, synergies and the news you’ve national the stations? a And local answer products there will years, is between and along bring under are natural your it national yes. plan, better

more restructuring focused. a leaner, end more So and become you the is means to agile company an to see

We collection broadcast enterprise local reach very as and of businesses powerful the said configurable not depth team how with two media the and would been distribution our see national maximum deliver enormously as do. holding just healthy ever-changing largest we done one in have assets, to along, are that the drive realigning today’s way work value deliver all we market that what we we of platform new to ecosystem. I’ve have And results. knows fortunate spectrum to

embark growth to people Now latest we this the while company’s service opportunity do on all of as keeping our we transformation, operating center American at to the of capture mission so we realigning improving what performance will the again, drive and and greater do. the

questions. And now operator, we’re ready for

Operator

ahead. first from Our Kupinski will question Instructions] [Operator Noble with Capital come Michael Markets. Go

Michael Kupinski

morning. for Thank taking and the good you questions

just some fall? largest savings, impact how terms In the of if division will just on $XX was savings, could in those that million wondering you us I Adam, color which the of will see give

Jason Combs

Yes.

of savings is So you providing segments. earning think various spend, in technology time, bit will call breakdown we the and at across tell at out. future costs – including external move the little any on what But we’re variety a this between buckets, detail structure not there, time, more provide that is this I a will feel that we’re giving employee but to as and I

Michael Kupinski

Okay. Thanks, Jason.

year? Network did and first which in quarter quarter, the in we see – the fourth some distribution whether for quarter, programming I increases kind the expect first thought the the color on give of expenses improvement terms margin the we division balance in Scripps first In hit me going the of the beginning quarter largely you might the of to you margin division the for the expense Do improvement in and see. were fees and some this the the can year expense for for outlook

Lisa Knutson

Lisa. it’s Mike, Yes.

have quarter. So expenses do hitting we distribution some in first

As virtual across and CTB we announced, we’ve launching platforms been multiple MVPDs.

So have of a some prepared that is those definitely. as couple ramp I expenses do to quarter, of launching – would a comedy well. I associated remarks, marketing a little it including, that bit there takes launched programming time platforms. new in the across And revenue those my in March, first is once say, second, up mentioned we we’re items, with you’ve as

So been ramp-up we latter to we’ve you’ll improves the those of that get of see us of have the do – also, economy a year. in but back our improvement related certainly are continue to both think strategic our here the as the and investments part and to margin strategy, virtuals I hopefully, CTV half

Michael Kupinski

and us quarter? are softness terms – I And your as then – you or advertising still the it. of or quarter you not head can you sense see Got into you whether that. of in kind a second appreciate But we building seeing of us gave give guidance, first

Lisa Knutson

facing is and are scatter market taking probably are We response the bright is about. same is the that pressures been our would we’ve a CPMs some climate the peers talking do economic harder of say quarters sort revenue direct last QX growing. than few I hit general despite advertising spots that the talking bit or market. our about largely for certainly that Yes.

improved. So half as latter as bodes continue return improvement I spend year, rates hopefully, of we for I is, to the think, well our growing, think the advertisers which and in the economy are think,

Michael Kupinski

you. That’s Great. have. I all Thank Thank you.

Operator

ahead. line Partners. next the Go We Craig will to go Huber Huber with of Research

Craig Huber

thank you. few could, questions, please. Yes. Hi, I if A

broad for question a Just you guys.

feel sense are is mind at in on the front, all now? to are trends worse country what you your ago months feeling how you doing in do the now? in your there? economic operations around the look economy versus, talk stuff, markets On your the say, U.S. as getting guys X you How Are out advertisers, etcetera, the the is how given right and you that economy were your

Lisa Knutson

a held is Lisa. would local it’s it media than businesses up about I categorize pressure the geopolitical, national have I are our marketplace that they advertising from better business, with markets. more Networks. our national local things, marketplace. more those those up advertising would are being say Scripps types sold local and side in on much of under pressures, think our make of in local the of inflationary core two-thirds local do Certainly, at climate or that’s national than I our Craig, markets sorts our the whether a spend. the ad on national pressures

Craig Huber

just before. a similar second question is then from And

quarter. You’re year-over-year sort the rate I you’re that? saying not that expecting the up high of first the think for you you’re single costs remainder about increase in of of How your of up do for your year? assume cost, Networks Scripps digits

Jason Combs

be the year. No, Craig, that for don’t we anticipate trend the to full

Craig Huber

my then question. And depict Okay.

down quarter, in did quarters your in please? recent retrans benefit? you’ve that believe, saying been OTT fourth the mid-single we’re How year-over-year Your subs, I subscribers that digits, for track of net

Jason Combs

Yes.

modeling similar what future So and are quarter, which on still with digits both aligns tracking our basis, past down we we modeling. to last mid-single net said a

Craig Huber

Okay. I Great. question, could. And my if last

Just at? into I On some in so be that the schedules to please. strategy are about going sort the some lose after? where through in Or are of the of And the the prime-time or CW how to allowed prime that you’re how going what fit of your thinking contracts written And to to feeling I have? going go to on coming some out you us bring you sports of sports mean that’s mean sort quarters. do in trying – that? here? also, can trying to that, you slot I’m slot – it’s try is Are your you the in how programming it you terms stations walk time? portfolio of you in in are here and

Adam Symson

Really, what of talking we’re mostly or on Sure. depends team. talking From we’re about about they independent talking ones. good – use stations our or league the team, really second stations RSN experiencing our accommodate, the in the the order we markets in say the at to of moment they transition all teams implosion I are transition, If it are model. about of as would witness

So four an about remember a programming an issue that’s decisions. It’s independent not only much an not we’re really If of of about is big issue that local thing all more control leads, of interesting station. the opportunity. ION talking we the

control We affiliates. also of all the

And weekends, in we for the league have bring whatever on for prime, the our the in onto makes sense benefit so ability to sports benefit. way and both we platform think our

the our in what And was the remarks, reach of to getting our leagues at the is for company. benefit my and audiences so of the for use you’ll of economics see our of prepared this sort distribution, us I benefit distribution large use and

Craig Huber

you, Thank Great. guys.

Adam Symson

Craig. Thanks,

Operator

go Wells Steven with will Go Cahall to next ahead. We Fargo.

Steven Cahall

not media first, you the think sports see just sports underwrite looking have more level, and this kind traditionally. continue sports Maybe opportunity that just to to national of you’re just that picked you about about as companies think at Thanks. of to can I’ve how questioning, pursue way I on talk that? the cost model particularly the you line of up Adam,

this, some leagues you there there and here scope revenue-sharing teams So with models of into what where for low? the business arrangements but of ION out also can bring is kind are keep risk or

Adam Symson

of sense programming it’s balancing the both sort for what live a them the take to really bringing a and create this value can of about for as value the the we to behind that we as bottom share distribution. the to create that important marks whether reach you new mean, that national of and from is uninitiated market advantage linear think risk even well to allows the why marketing of of model, all where the going the that’s a they funnel, they the it of getting have fair economics in because most I the in good component makes the model the like well includes its and local the maybe is going that at we’re worried most the new that are get valuable realize as both DXC, teams much TV. revenue funnel. believe to at us that deliver. us marketplace. only and they content mitigate requires genre sports we our them I to of is a the leagues live well live some top that do in funnel of for turn, model of leagues haul. forget, ticket perspective. a for is when that sort that DXC brought chasing as why greater a leagues sales, isn’t talking that’s right? understand such it comes sorts And to in per And model to drawing order reach, we bottom the so accounts sports, in is to bring think retaining more for than the interesting over bottom and little the to the sports bit not immense The at because of perspective, both the merchandise Yes. necessarily what the or dollars It’s funnel don’t marketplace’s It’s an what to and from realizes order serve audiences investors largest about looking and strategy what to exactly I lot funnel Because think betting, in we’re ad I reception look, the exactly that long a marketplace or are That’s teams viewed. the

Steven Cahall

I’ve Great. more. two And then just got

the for comp. up net is is as same Is guide low So seems or maybe a year or difference XXs pretty net that low XX% retrans Jason, for on distribution that reverse And there? like the next any the there retrans ‘XX just net dollars.

So just wondering how you’re thinking that? about

Jason Combs

Yes.

pay is. these yes, retrans from we So renewing – And very it past that We retrans, all do increases a of very affiliate on is definitely this of locked is XX really calls favor. last the households. while we’ve as versus about what about net comes talked driven being agreements in of in margin a and around margin by up renewals and our timing in TV what the the historically. driving distribution it say and the have network at year moderated timing And – net pay-TV – XX% we’ve would do for It we seen talked households we our media are year, much our net local of perspective.

– which all drives dollars, in a that that in growth that you of into net that distribution as leads margin. would significant also improvement So distribution assume,

Steven Cahall

Yes. well Carriage Scripps Thanks. negotiate ability then TV vMVPDs. And local have on mentioned stations its lastly, YouTube as you to with just – directly does the

that’s with broadcast May your not think and problematic Paramount deal. and potentially for Fubo the after them peers YouTube I renewing

some you. a national So your of give vMVPDs different peers? Thank networks I’m just wondering you relationship than if your with

Adam Symson

Yes.

networks. that are their different the us a and question all, the the have would signal. Fubo relationship. pretty say that give value the between receive affiliates local thus feeds. mean, MVPD I with virtual is a no the that about affiliate for And there opportunity chosen virtual they customers ensuring do immaterial to the think I the of negotiating the and networks all far I continue certainly the boards local is want the distributor. MVPDs We’ve proper negotiation to Look, first

signal have same or mean, business. the would for fair considered be receive So the would or distribution or cable to directly to where negotiations. MVPDs is or in cable not – remind And way. we the we seeking I the programming of think be fair just The like to difference investors I and catch-up of negotiate need out broadcast And fiber, because I to these comes IP that investors over the existential are wherewithal needs or satellite should just need virtual compensation. this of existential MVPDs example it’s that with networks essentially reality. the issues are what’s MVPDs our the framework just satellite value. would to with really an whether regulatory But virtual coax the affiliates the pleased

Steven Cahall

Great. Thank you.

Adam Symson

Thanks, Steven.

Operator

we ahead. next Nick be Zangler going Go Stephens. of to And with line the will

Nick Zangler

Yes. Hey guys.

Just just following are or fuboTV. is to this long of note the that up push guess Just to part you, right going impact so the with now, is it get on continue of see vMVPDs shift to from vMVPDs do that on as negotiate continue on that the grow kind as models last forward? fee, business I is operate retrans that’s networks a satisfactory do hard the Can their as impact you playing to going directly out you the this this you how subs? model

Adam Symson

to signals shrew traditional a That’s mean I no MVPDs. I have in of we distribution MVPDs fair whether are [ph] look, again, mean to they question comments. our virtual the or expect value which I

Nick Zangler

it. Got

of Okay. if don’t granular then bit that market. I I some more trends seeing ad you you And – be to the want mind, guess are on I in little the a did

have maybe checks suggested is of kind onward, across of what months, that our few January, you kind have the continues mid-January be last the look start seen improving. at December, a weak soft but to then spend ad week-after-week-after-week, Just a that to we very checks, if period from

a December kind be trough out period And of and so be sequential my in of improvement I a guess could late pulse coming would what January.

anything curious anything out to you hyper-granular is on that would different agree you Just seeing versus if there the national level, parse local or side? are if if or

Lisa Knutson

Yes.

and I with Scripps will Let jump Networks. start then local to me

certainly, top think mentioned, marketplace as sales I ad categories. the local our has in been five So, I

We and have January. seen up some fourth in that continuing are are down and quarter that some in

we, range. couple those up last of a about And the quarter had spots talked XX%. So, also year. bright in XX% were two I continued fourth trends January. services by home we improvement up was think into And that in Automotive –

quarter. economic also improvements. say, But of I and seeing looking those the and are we fourth a forecasts air we So, quarter are would better categories the are different are placed the back would local do in also going definitely year, the I more pressures, forward. I lagged between levels to we we closer first like to we dates. things categories of in seeing as momentum to by would see are half the pleased inflationary ads certainly bit the say of similar see very say ad some national retail both other services have seeing were there what sales the really side. in on that trending impacted resiliency maybe marketplace,

would into again, national in. it hampers visibility I And a but side, coming bit first so little the so on But spots. are growth are CTV definitely we Scripps that is late. quarter, guys bit in talked XX%, those growing XX% the a see say to this the plus versus going CTV category the some I Networks bright year XXXX. that side, see about the on and

us. for what’s certainly a soft, scatter have some in we I an And been had sort come back would seeing that that in sidelines, starting is And are on So, improvement. been the uptick, our activity, while There say in of business. January. have in bright market spot then is working of the advertisers pipeline we sitting has and January, signs

of spots – green little on So, are national shoots bright we and some the those that a certainly bit are seeing side. some

Nick Zangler

super helpful. that’s Well,

back that heard me. sitting have We Last sidelines on one the too for coming in January.

view, it Why for best model Your extinction? in it, the Is perspective just this high sports headed what And just mentioned guys broken? for solution level, on it distribution? is you your RSNs, doesn’t work? local content is

Adam Symson

even about about to still more need fundamentally, situation for potentially extinction. we and a audiences. in largest just to teams TV, if you Yes. reading than weren’t are current mean continue that leagues need large talking distribution are fact There more they the things their the pay markets, the that ways these economically RSNs different of the is co-ownership survivors and to where be likely model in were for model. there I the is But headed reach is The and news.

in broken kind is past. So, over-the-air and the as business, upside And of this and an is they broadcast declines is revenue television but for that’s been a RSNs for of because antidote team for can these the the the have There TV with teams. even model the and which that creator the the The content sitting new subs have nonexclusive, or artisan just work. not simply have, that answer to owner. this, model additional an just sustain a potentially enough pay TV potential traditionally what be, essentially today, pay gotten between model sports arbitrage doesn’t is direct-to-consumer teams brings best the MVPD

balance I teams, So, that opportunity to up the well will the of and recognize that to their their they mean is to ensure for are kind need also revenues that reach need set teams competitive fundamental a me, audiences they have support that’s while with – generating – will getting fans leagues their the future to the the infrastructure the that can team. create for these they sports,

Nick Zangler

Thank Great stuff you. guys. Appreciate it.

Adam Symson

Nick. Thanks

Operator

We next with line Dan Benchmark ahead. of the Kurnos to Go will go Company.

Dan Kurnos

have stick of that you just a you because And this scale how I have spring panicky MLB a your markets skip prime around such payment, like sports weeks maybe could in sort it little do up. few of Adam, conversation to it, in might will get want with So, the around call. a for phone do obviously, training we I morning. a second multi we Good but away ring sports say bit particular, have might here. to bit markets helps many where from stick just and you DSD Thanks. skirted frame is at it that the start more. And a right? like feels kind little are

situation become like little complex reach Is and and can their is gets a you say, in, of NBA on this the more or is or that So, equation, it they of more is a if reach part distribution like how involved, bit way side, framing out the it matter to guys the involved would primarily up MLB on decrease? than you there get much just NHL. if own BXC kind side does obviously, the figure be right

Adam Symson

variety I station. have No. Look, this fact – ringing what a on of I every think have see us that model I we you think about fronts. work already deal phone additional mean team, you that is would stick. the in today cutter, been the the then today the ION the markets one we on I there which And in every a your doesn’t simply are has markets cookie And ownership – for that off question way RSN learned is depends model there anymore. of our set we are because market, it tell different. owning duopoly it every the well From of are of markets is do an second actually already or to where up optionality the hook

limit that I Scripps for the stations the today local not So media. of fit would portfolio opportunity the necessarily inside to just

spectrum, ability I I what us And was the the or a are about to talking with as circumstances a for the local of standing distribution our really having the our collection. am have see are the we a if talking best of broadcast and model local of use side. the station right second reach serve on ION’s stick. good about and looking thinking for revenue So, margins prepared an today, new highest one preserve streams, even we of ION And about is don’t opportunities duopoly, in you form the while might actually very team, at economics new us ION how national and in my there remarks, our ways assets up already the us to local but needs

together. teams, and live including the have. economics sports them mean won’t for team are well really identify I the interest, the and the are I won’t It American think It’s of of fans I mean that everybody’s to leagues So, definitely different with respect – a it won’t the American problems order It be we work and owners to owners the don’t working through they collaboratively all that from the together. become working mean it look, the what work pure don’t together in people for won’t the work ways working the the economics leagues to teams I the are I people. teams, DXC economics for the product. in see, the the solve of leagues. best to allow

Dan Kurnos

mean, I many of why just to follow-up phrase of local duopoly, prime for Adam. that – am your trying That’s we sense to so not I was get reason, beyond how stick, have can I just kind later. a on trying that specifically Yes. duopoly to my you markets question

Adam Symson

you many at if A have that markets, real will gives distribution if I mean us a whole footprint, recognize footprint, ION’s at and tremendous we in look optionality. tremendous the you look of estate, amount you that line, okay,

that It’s for exercise. we a reorganization truly value this largest country way see as to really our ubiquitous We at we for using create greatest making And looking cost-cutting It’s company assets this always that the and identify a are platform distribution shareholders. the not the has. and instead sure restructuring reorganization. what’s the to that’s are company and distribution behind the of most

Dan Kurnos

like just your that you is of woods. network XQ, gave was it CTV But are follow-up so trying CTV spend understand netting, really the that just macro on lot the actually am just on comp in to us that good color you out easier know Maybe still and I and I a and gets not growth.

new have launches. You got

carriage. new got have You

even without all like this any year relative I this incremental doing? out, I beyond piece of sense know you but have there and am generic organically to outperformance macro a how and much first going takes kind the there is full of then to kind because of guide, to framework to of no upside, of that be get to whatever growth sports those are trying just is the it trying in relative should national year together Just some balance puts feels

Lisa Knutson

Yes.

opportunity And a the to top virtual talked think – of distribution of the well I on really we positioned I ad Nielsen-measured in mean marketplace. ION do well a of I year, economy top half certainly, as we the in upside improves. So, we rated, broadcast I also all Nielsen capitalize network, CTV. with about five back the networks, my prepared we that are but economy. positioned remarks, XX think strength are across MVPDs, that improving for an have the the do

said, I of ubiquitous are as in my on remarks seeing is some which the – and certainly what driving So you distribution, CTV.

first it’s as soft but quarter be have year be before, seeing of positive people in which certainly into as we the guide, a indicated improving, mentioned I going So, green I to going as is our our the unfolds, to think some we shoots sign. are marketplace, around the and general market, also what of some scatter market back is coming the with

Dan Kurnos

your in That’s your And guidance gross ‘XX. had know, what I and it. guide Got don’t is mean helpful. just consensus was retrans I than better, we last, I thought

the got it programming and it’s like Ergen, Jason’s who growth sort thinks to perhaps is would flip thought commentary, is costs of here. side, below And in on way a QX So, implied sounds rate only barring be solid outlook Mr. there the looking the the is going very TV what newspaper modest trajectory. we were that papers your substantially on reproduce still have is

kind what view have don’t issue X-year net but what on – X-year the you to notwithstanding, like there you in a like? know of guys or feels is virtual it way there looks any So, think for subs, what of growth I embedded you air sort

Jason Combs

anything are years. out give So, goes that X I to X don’t we or out going think years

big beyond the year first the of growth obviously, quarter. and little have this gave – renewing at year, in we the over extremely We this pleased net And a the the side do guide well this We we are end first – reset with year. next the as both year, we have side. XX% a on

catalyst year moderation said, So, a as or expense. another programming be we will different that a in top next on of, network

Adam Symson

different Yes. Look, it’s story than a peers. our very

Dan Kurnos

the just on XX? give the Jason, sorry, – No, you just you XX can renewal Yes. cadence just color, the can and for of the us

Jason Combs

end is XX% the QX Yes. kind and XX% of at the spread QX, of then QX. and XX% about end of at of through QX the other It’s about end

Dan Kurnos

Thank you.

Operator

Huber Partners. from We Craig Research line have with follow-up question Huber a of the Go ahead.

Craig Huber

to And of your my stations, content TV MVPDs, am on local please? local Yes. the represent update your over percentage virtual That’s subs? just – consume XX% that second question. is, curious of roughly the what’s do Hi. viewers your my one the trying first on the I they year, retrans for the

Jason Combs

yes, first around base, question, are. So, of virtuals on XX% our they the sub are your

Adam Symson

on Based depends. really it market-to-market,

You a market like have high Phoenix, a OTA which is market.

growth. third its point, OTA I with last continues see being to station’s antenna going It impressive much a use about year. considered that or mean I digital at mean are greater is think digital homes are percentage broadband. content exclusively is That homes grew they this consumed a antenna the along I You OTA. a of to that grow. of continuing

doing seen that cable. doing And and I hasn’t demand free I have never have testing this demand that. been in we that the for television do been spend the mean think been antennas that we higher. before We lot has with have for been inflation high since to digital a in – has

I that. growth content are universe the lot OTA of think we to SX the will that. the I the to some catalyze think of impact marketplace a continue work do and with doing And to continue has growth to

Craig Huber

That’s Thank great. you.

Adam Symson

Craig. Thanks

Operator

no further speakers. have We

further queue in We this have no time. at questions

Carolyn Micheli

today you, for Thanks good today’s Have joining to a call. on us Thank everyone Terrific. day. Alan. earnings

Operator

you for Event and Ladies for will AT&T and using Teleconferencing. call for gentlemen, your Thank that conclude today. conference your participation

You disconnect. now may

The E.W. Scripps Company (SSP) 24 Feb 232022 Q4 Earnings call transcript