TV Soaring For Scripps In 4Q After Record 3Q
You can hardly tell that the E.W. Scripps Co. owns newspapers from the company’s overwhelming focus on television in its third quarter financial release and quarterly conference call. TV is breaking records left and right for the 90-year-old company while the print business continues to drag.
The election is over, so Scripps already knows that its TV group took in about $57 million in political revenues for 4Q, including about $12 million from the four stations it acquired from McGraw-Hill not quite a year ago. That takes total 2012 political to $107 million.
For comparison, the nine stations that Scripps owned in 2010 took in $48 million from political in 2010, but saw that grow to $84 million this year.
“We loved the wall-to-wall commercials,” SVP-CFO Tim Wesolowski said of the period leading up to the election for stations in battleground state markets, such as Cincinnati, where Scripps is headquartered.
“We certainly benefitted from having two stations in Ohio, two in Florida and a station in Colorado’s capital,” said the CFO. “We had several million-dollar days in the final weeks.”
President-CEO Rich Boehne noted how the Scripps TV markets footprint lines up with states that were not just swing states this year, but tend to be the presidential battlegrounds election after election. “The bottom line is this – for Scripps, elections aren’t windfalls, they’re stepping stones,” he said.
For all of 4Q Scripps is projecting that TV revenues will be up about 80%. Excluding the McGraw-Hill stations, that gain is put at 35%-40%.
Asked how business is pacing post-election, SVP-television Brian Lawlor told analysts “it’s still really early,” adding that a lot of advertisers had been sitting on the sidelines until Election Day passed.
”December will be the first pure month without a political influence. We will be up year-to-year in our spot business in December,” Lawlor said. “Even this week, since the election … our phones are ringing again. We’re seeing people coming in at point levels beyond what we had seen in the past. So there’s still a lot of money to write within the quarter.”
As the TV division delivers record performance again in 4Q, the Scripps newspapers are expected to see revenues decline in the mid-single-digits. Newspaper revenues dropped 3.7% in 3Q to $92.4 million, with ad revenues down 5.3% to $53.4 million. Local, national, preprint and classified were all down for the quarter. Even so, the newspaper segment profit was up $1.2 million to $4.2 million.
That newspaper profit was right at one-tenth of the $41.8 million profit for the television segment.
Scripps officials said things are going well with the two “home-grown” programs that the company launched in September on many of its stations to replace more expensive syndicated fare. One analyst wanted to know whether Scripps wants to put more of its own programs on the air across various dayparts.
“The List and Let’s Ask America are actually the second and third programs that we’ve launched as part of our home-grown focus. We have a program called Right This Minute which we’re partners with Cox and Raycom. That was launched close to two years ago, now. That’s a daytime show, half-hour or hour. It’s cleared in all 13 of our markets, as well as on Cox and Raycom stations around the country,” Lawlor said.
“So we continue to look for the best syndicated product that’s available. But within the DNA of this company – this is the company that started HGTV – I think we still understand what it takes to create programming that will inform and entertain people. And if we felt like there’s some genres or concepts out there that we can develop, that are unique, that can engage an audience that’s not being served by the syndicated market, we would look to develop that as well,” he said.