Earnings

Driven By TV, Scripps Revenues Up 2.6%

The E.W. Scripps Company today reported television operating revenues were up 5.4% in the first quarter of 2014, driven by strong local advertising and retransmission revenue growth and higher-than-expected political advertising revenue of $2.7 million. Consolidated revenues were $204 million, up 2.6% or $5.1 million, primarily because of television revenues.  
By
NetNewsCheck,

The E.W. Scripps Company today reported television operating revenues were up 5.4% in the first quarter of 2014, driven by strong local advertising and retransmission revenue growth and higher-than-expected political advertising revenue of $2.7 million. Consolidated revenues were $204 million, up 2.6% or $5.1 million, primarily because of television revenues.

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Retransmission fees from cable and satellite providers increased 19.5 percent to $12.5 million. In 2014, the company will renegotiate retransmission agreements covering more than one-third of our subscribers. 

Newspaper operating revenues declined 1% from the year-ago quarter, moderated by increases in subscription revenue. Segment profit increased $2.6 million over the 2013 quarter due to a $3.5 million drop in employee-related costs.

In February, Scripps reached agreement to acquire the ABC affiliate in Buffalo and a MyNetworkTV affiliate in Detroit from Granite Broadcasting Corp. for $110 million in cash.  The Federal Communications Commission has approved the transaction, and the deal is expected to close in the second quarter. 

Commenting on the results, Scripps Chairman, President and CEO Rich Boehne said: 

“The political season already has been good to us. A better-than-expected kick-off from a special election in Florida helped drive up television operating revenues, which also were boosted by a strong local advertising climate and a rise in retransmission revenue.

Brand Connections

 “In the newspaper division, we saw a third consecutive quarter of subscription revenue growth coming from our print and digital subscription bundles along with targeted price increases. Despite the slight decline in operating revenues, segment profit also increased.

“Our digital team oversaw the launch of what could be the first paid digital content service in the broadcast TV industry. Following investments in content, functionality and sales infrastructure, we’re now able to use the WCPO.com Insider service in Cincinnati to better test and model the opportunity for local television brands. This service will let us better meet the needs and desires of our digital-only media consumers. We’re off to a great start and already learning lessons about how to better build value in TV markets through digital services.”

Costs and expenses for segments, shared services and corporate were $188 million, essentially flat when compared to the prior-year period.

The company reported a loss from operations before income taxes of $0.8 million in the first quarter of 2014 compared to a loss of $7.6 million in the year-ago quarter. 

Net loss attributable to Scripps was $0.6 million, or 1 cent per share, in the 2014 quarter and $2.7 million, or 5 cents per share, in the 2013 quarter.  The tax benefit for the 2013 quarter includes $1.1 million, or 2 cents per share, in favorable adjustments to the company’s tax reserves. 

Television

In the first quarter of 2014, revenue from television stations was $102 million, up $5.3 million from the prior-year quarter. The current-year period included $2.7 million of political revenue and $1.7 million in incremental 2014 Winter Olympics advertising on our three NBC-affiliated stations. 

Advertising revenue broken down by category was:

Local, up 3.7% to $55.6 million

National, down 5.5% to $25.4 million

Political, $2.7 million compared to $0.3 million in the 2013 quarter

  • Retransmission fees, up 19.5% to $12.5 million 

Digital revenue increased 17% to $4.4 million. 

Total segment expenses increased 1% to $81.2 million, primarily driven by higher employee-related costs. 

First-quarter segment profit in the television division was $21 million, compared with $16.5 million in the year-ago quarter.

Newspapers

Revenue from newspapers was $98.5 million in the first quarter of 2014, down 1% from the prior-year quarter. The continued decline in advertising and marketing services revenue was partially offset by an increase in subscription revenue. 

Advertising and marketing services revenue was $59.9 million, down 5.4% from the 2013 quarter, in line with the fourth-quarter decline of 5.7%. 

Advertising revenue broken down by category was: 

Classified, down 5% to $17.2 million

̶        Real Estate – up 1.7%

̶        Employment – down 3.5%

̶        Automotive – down 9.6%

Local, down 4.8% to $19.3 million

Preprint and other, down 3.9% to $15.6 million

National, down 26% to $1.4 million

Digital, down 5.6% to $6.3 million 

In the first quarter, subscription revenue increased 6% to $32.3 million, driven by the subscription bundles introduced in 2013 as well as single-copy price increases.

Expenses for the newspaper group were $89.9 million, a decrease of 3.9% from the prior-year quarter.  Employee costs decreased 8%, primarily due to lower employment levels, and newsprint expense decreased 11%, primarily due to an 8.7% decline in price.

Segment profit in the newspaper division was $8.5 million in the first quarter of 2014, an increase of $2.6 million from the 2013 quarter. 

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