Core Viewpoint - Sinclair Inc. has acquired approximately 8.2% of the outstanding class A (non-voting) shares of The E.W. Scripps Company, indicating a strategic investment move in the media sector [1] Company Overview - The E.W. Scripps Company is a diversified media company focused on creating connections through quality local journalism, operating over 60 stations in more than 40 markets across the U.S. [4] - Scripps reaches households nationwide with national news outlets such as Scripps News and Court TV, as well as entertainment brands including ION, ION Plus, ION Mystery, Bounce, Grit, and Laff [4] - The company is the largest holder of broadcast spectrum in the nation and serves professional and college sports leagues with a national broadcast reach of up to 100% of TV households [4] Strategic Focus - Scripps' board of directors and management are committed to driving value for all shareholders through the execution of its strategic plan, ensuring alignment with the best interests of shareholders, employees, and communities [2] - The board is actively evaluating transactions and alternatives that would enhance company value and protect shareholders from opportunistic actions by external parties, including Sinclair [3]

Group 1 - Sinclair Broadcast Group (SBGI.US) holds approximately 8% of The E.W. Scripps (SSP.US) and is pushing for an acquisition of the local TV operator, leading to an over 18% pre-market stock increase for The E.W. Scripps [1] - Negotiations between Sinclair and The E.W. Scripps have been productive in recent months, but no agreement has been reached yet [1] - The E.W. Scripps operates over 60 local TV stations across more than 40 markets, with its stock price rising nearly 39% this year due to investor confidence in its sports strategy [1] Group 2 - Following Trump's election and promises to relax regulations, the market anticipated significant consolidation in the local TV sector [2] - The Federal Communications Commission (FCC) announced the repeal of 98 outdated broadcasting rules, some of which date back nearly 50 years, under the leadership of Chairman Brendan Carr [2] - Nexstar announced a $6.2 billion acquisition of Tegna, which, if approved, would unite two major players in the U.S. television industry and local news sector [2]

Core Viewpoint - The E.W. Scripps Company will present its business strategies at three upcoming investor conferences in November and December, highlighting its focus on local journalism and media diversification [1][2]. Group 1: Upcoming Conferences - The Wells Fargo TMT Summit will take place on November 18, featuring a fireside chat with CFO Jason Combs and EVP Carolyn Micheli at 3 p.m. PT / 6 p.m. ET [2]. - The Bank of America Securities Leveraged Finance Conference is scheduled for December 2, with a presentation by CFO Jason Combs and Treasurer Becky Riegelsberger at 8:50 a.m. ET [2]. - The Noble Emerging Growth Equity Conference (NobleCon21) will occur on December 3, including a fireside chat with key executives, time to be determined [2]. Group 2: Company Overview - The E.W. Scripps Company is a diversified media entity, recognized as one of the largest local TV broadcasters in the U.S., operating over 60 stations across more than 40 markets [3]. - The company provides quality local journalism and operates national news outlets such as Scripps News and Court TV, along with entertainment brands like ION, Bounce, Grit, and Laff [3]. - Scripps holds the largest broadcast spectrum in the nation and serves various sports leagues and teams with extensive local and national broadcast reach [3].

Core Insights - E.W. Scripps met Wall Street's revenue expectations in Q3 CY2025, reporting sales of $525.9 million, an 18.6% year-on-year decline, and a GAAP loss of $0.55 per share, which was 72.1% below analysts' consensus estimates [1][6] Financial Performance - Revenue: $525.9 million vs analyst estimates of $523.9 million (18.6% year-on-year decline, in line) [6] - EPS (GAAP): -$0.55 vs analyst expectations of -$0.32 (72.1% miss) [6] - Adjusted EBITDA: $80.43 million vs analyst estimates of $68.75 million (15.3% margin, 17% beat) [6] - Operating Margin: 7.2%, down from 18.8% in the same quarter last year [6] - Market Capitalization: $224.5 million [6] Strategic Initiatives - The company highlighted the success of its Scripps Sports strategy and expansion into connected TV (CTV) advertising, with a focus on women's sports partnerships contributing to performance [3][4] - Management expects continued revenue growth from sports broadcasting deals and CTV expansion while maintaining a disciplined approach to expenses [4] - The company is preparing for significant political advertising tailwinds in 2026 and ongoing margin improvements through operational efficiencies and technology investments [4] Advertising and Revenue Growth - The intensified focus on women's sports, including partnerships with the WNBA and National Women's Soccer League, led to strong advertising demand and increased core revenue [7] - Scripps' expansion into Connected TV generated significant growth, with streaming now accounting for 20% of Scripps Networks viewing, and management projecting double-digit CTV revenue growth [7] Operational Efficiency - Recent station swaps and sales generated $123 million in cash, intended for debt reduction and balance sheet improvement [7] - Operational efficiency initiatives, including reductions in employee-related costs and restructuring, contributed to margin stabilization despite advertising softness [7] Technology and Innovation - Early investments in automation and artificial intelligence are beginning to deliver value, helping newsroom and sales teams operate more efficiently [8]

Financial Performance - Total operating revenues for Q3 2025 were $525.9 million, a decrease of 18.6% compared to $646.3 million in Q3 2024[23] - Advertising revenue decreased to $329.0 million in Q3 2025, down 26.5% from $447.3 million in Q3 2024[23] - Net loss attributable to shareholders for Q3 2025 was $49.0 million, compared to a net income of $33.0 million in Q3 2024[23] - Operating income for the nine months ended September 30, 2025, was $141.7 million, a decline of 35.8% from $220.9 million in the same period of 2024[23] - For the nine months ended September 30, 2025, the net income was a loss of $72,376,000 compared to a net income of $50,831,000 for the same period in 2024, representing a significant decline[27] - Comprehensive loss for the nine months ended September 30, 2025, was $72,268,000, compared to a comprehensive income of $50,933,000 for the same period in 2024[30] - Net income (loss) for the three months ended September 30, 2025, was $(32,959) thousand, compared to $47,776 thousand in 2024, indicating a substantial decline in profitability[58] - Total consolidated operating revenues for the three months ended September 30, 2025, were $525,854,000, a decrease from $646,300,000 in the same period of 2024, representing a decline of approximately 18.6%[116][119] Assets and Liabilities - Total assets as of September 30, 2025, were $5.09 billion, down from $5.20 billion as of December 31, 2024[22] - Current liabilities decreased to $437.4 million as of September 30, 2025, from $482.4 million at the end of 2024[22] - Cash and cash equivalents increased to $54.7 million as of September 30, 2025, compared to $23.9 million at the end of 2024[22] - Total outstanding principal of long-term debt as of September 30, 2025, was $2.701 billion, an increase from $2.605 billion as of December 31, 2024[82] - As of September 30, 2025, total other liabilities amounted to $380.75 million, a decrease from $464.57 million as of December 31, 2024[104] Cash Flow - Cash flows from operating activities provided $7,969,000 in 2025, a decrease of 96.25% from $212,389,000 in 2024[27] - The company reported a net cash increase of $30,813,000 in cash and cash equivalents by the end of the period, compared to a decrease of $677,000 in the previous year[27] - Cash provided by investing activities was $1.5 million in 2025, reflecting $40.0 million from the sale of a television station building and $32.7 million in capital expenditures[191] - Cash provided by financing activities was $21.3 million in 2025, with $1.6 billion in proceeds from new long-term debt issuance and $1.9 billion in long-term debt payments[192] Restructuring and Costs - The company reported a restructuring cost of $2.7 million in Q3 2025, down from $12.7 million in Q3 2024[23] - Year-to-date restructuring costs totaled $7.5 million in 2025, down from $18.7 million in 2024, highlighting a reduction in restructuring activities[67] - Restructuring costs for the third quarter of 2025 were $2.7 million, significantly lower than $12.7 million in the same quarter of 2024, reflecting ongoing efficiency efforts[67] - Employee compensation and benefits for the three months ended September 30, 2025, totaled $105,115,000, down from $111,767,000 in the same period of 2024, a decrease of about 5.9%[116][119] Debt and Financing - The company issued $750 million of senior secured second lien notes on August 6, 2025, with an interest rate of 9.875% and maturing on August 15, 2030[94] - The company has a debt repurchase authorization allowing for a reduction of up to $500 million in outstanding principal balance, expiring on March 1, 2026[102] - The company incurred approximately $13.8 million of deferred financing costs related to the issuance of the 2029 Senior Notes, amortized over the life of the notes[93] - The company entered into a new three-year accounts receivable securitization facility with commitments of up to $450 million, with maximum availability of $360 million as of September 30, 2025[195] Segment Performance - Revenues from external customers for Local Media segment in the three months ended September 30, 2025, were $320,636,000, compared to $440,785,000 in the same period of 2024, reflecting a decline of approximately 27.2%[116][119] - Local Media segment operating revenues decreased by $120 million or 27% in Q3 2025 compared to Q3 2024, and by $178 million or 15% in the first nine months of 2025 compared to the same period in 2024[176] - Total revenues from external customers for the nine months ended September 30, 2025, were $1,576,142,000, compared to $1,768,691,000 in the same period of 2024, representing a decline of approximately 10.9%[123][126] - Scripps Networks segment profit increased by 26.7% to $53.3 million in Q3 2025 and by 33.9% to $173.3 million in the first nine months of 2025 compared to the same periods in 2024[182] Tax and Regulatory Matters - The effective income tax rate for the nine months ended September 30, 2025, was 8.1%, a significant decrease from 34% in 2024, influenced by various tax adjustments[72] - The company has not reported any material changes to risk factors since the last annual report[13] - The company is in compliance with its financial covenants, including a maximum first lien net leverage ratio of 3.50 to 1.0 through September 30, 2026[197]

Financial Data and Key Metrics Changes - The company reported a third consecutive quarter of results that met or exceeded expectations, driven by the Scripps Sports strategy and strong sales execution [4] - Local media division revenue decreased by 27% due to the absence of political advertising revenue compared to the prior year, while core advertising revenue increased by nearly 2% [6] - The company reported a loss of $0.55 per share, which included various costs that increased the loss by a total of $0.15 per share [10] - Net leverage improved to 4.6 times at the end of Q3, down from 6 times in Q2 of the previous year [12] Business Line Data and Key Metrics Changes - Local media segment profit was nearly $53 million compared to $161 million in Q3 of the previous year [6] - Scripps Networks revenue was approximately flat at $201 million year-over-year, with connected TV revenue up 41% [7][8] - Scripps Networks' segment profit was $53 million, with a segment margin of 27% [9] Market Data and Key Metrics Changes - The company expects local media division revenue to decline by about 30% in Q4, while core revenue is anticipated to increase by about 10% [6] - Scripps Networks' revenue is expected to decrease in the low double-digit range for Q4 due to various factors, including a lack of political revenue and lower upfront advertising [9] Company Strategy and Development Direction - The company is focused on optimizing its portfolio through station swaps and sales, with recent transactions yielding strong valuations [4][22] - The Scripps Sports strategy has been a significant driver of revenue growth, particularly in women's sports and partnerships with various leagues [14][16] - The company is pursuing aggressive distribution on streaming services, projecting connected TV revenue to exceed $120 million in 2025 [18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's strategies, highlighting strong performance in sports and connected TV revenue streams [13] - The upcoming midterm elections are expected to yield record spending across the advertising ecosystem, positioning the company well for future growth [22] - Management acknowledged challenges in the advertising environment but remains optimistic about the potential for recovery as economic uncertainties are resolved [72] Other Important Information - The company has been actively managing expenses, resulting in improved margins and a focus on fiscal discipline [20] - The Scripps Transformation Office is leveraging technology and AI to enhance operational efficiency and drive growth [20] Q&A Session Summary Question: What is the outlook for further asset sales? - Management indicated there are still significant opportunities for optimizing the portfolio through buying, selling, and swapping stations [26] Question: Can you elaborate on the impact of the government shutdown on revenue? - Management noted that the government shutdown has affected demand and buying from networks, particularly in the Medicare Advantage space [68] Question: How is the advertising environment compared to six months ago? - Management observed some strength in local advertising but noted challenges in the national ad marketplace, particularly in direct response pricing and pharmaceuticals [55][72] Question: What is the company's strategy regarding AI and cost efficiency? - Management expects to provide more information on the impact of technology and AI on operational efficiency in the upcoming year [78]

Financial Performance - Scripps reported Q3 2025 revenue of $526 million, a decrease of 19% or $120 million from the prior-year quarter[7]. - Loss attributable to shareholders was $49 million or 55 cents per share, compared to income of $33 million or 37 cents per share in the prior-year quarter[8]. - Operating revenues for Q3 2025 were $525,854,000, a decrease of 18.6% compared to $646,300,000 in Q3 2024[26]. - Net income for the three months ended September 30, 2025, was a loss of $32,959,000, compared to a profit of $47,776,000 for the same period in 2024[38]. - The company reported a net loss per diluted share of $0.55 in Q3 2025, down from earnings of $0.37 per share in Q3 2024[26]. Revenue Breakdown - Local Media revenue was $325 million, down 27% from the prior-year quarter, while Scripps Networks revenue was $201 million, down 0.4%[9][12]. - Core advertising revenue increased 1.8% to $132 million, while political revenue dropped to $5.1 million from $125 million in the prior-year quarter[16]. - Political advertising revenue in the Local Media segment plummeted by 95.9% to $5,141,000 in Q3 2025 from $125,213,000 in Q3 2024[35]. - Scripps Networks segment revenues remained relatively stable, decreasing by only 0.4% to $200,956,000 in Q3 2025 from $201,672,000 in Q3 2024[35]. Segment Performance - Segment profit for the Local Media segment dropped by 67.1% to $52,801,000 in Q3 2025 from $160,685,000 in Q3 2024[35]. - Scripps Networks segment profit increased by 26.7% to $53,299,000 in Q3 2025 from $42,061,000 in Q3 2024[35]. Expenses and Liabilities - Total operating expenses decreased by 4.3% in the Local Media segment, totaling $272,655,000 in Q3 2025 compared to $284,868,000 in Q3 2024[35]. - Interest expense for the three months ended September 30, 2025, was $59,219,000, compared to $54,442,000 in the same period of 2024, an increase of approximately 8.3%[42]. - The company incurred restructuring costs of $2,718,000 in Q3 2025, significantly lower than $12,665,000 in Q3 2024[26]. Cash Flow and Debt - Full-year cash interest expense is projected to be between $165 million and $175 million[22]. - Long-term debt (less current portion) increased from $2,560,560,000 as of December 31, 2024, to $2,636,738,000 as of September 30, 2025, an increase of approximately 3%[36]. - Total current liabilities decreased from $482,394,000 as of December 31, 2024, to $437,419,000 as of September 30, 2025, a reduction of approximately 9.3%[36]. Future Projections - For Q4 2025, Local Media revenue is expected to decline by about 30%, while Scripps Networks revenue is projected to decrease in the low double-digit percent range[22]. Other Highlights - The Scripps Howard Fund's campaign raised a record-breaking $1.8 million to provide over 300,000 books to children at low-income schools[3]. - Capital expenditures for the three months ended September 30, 2025, were $15,068,000, compared to $13,451,000 in 2024, reflecting an increase of approximately 12%[43]. - Basic weighted-average shares outstanding increased from 86,067,000 in Q3 2024 to 88,461,000 in Q3 2025[38]. - The company reported a loss on extinguishment of debt of $7,622,000 for the three months ended September 30, 2025, with no such loss reported in the same period of 2024[42]. - Total assets decreased from $5,198,575,000 as of December 31, 2024, to $5,089,588,000 as of September 30, 2025, representing a decline of approximately 2.1%[36]. - Total equity decreased from $1,318,014,000 as of December 31, 2024, to $1,260,448,000 as of September 30, 2025, a decline of approximately 4.4%[36]. - Net leverage at the end of Q3 was 4.6x, down from 4.9x at the end of Q1 2025[3].

Core Advertising Revenue - Local Media division core advertising revenue increased by 2% in Q3, driven by services category and national advertising growth due to strong sales execution and Scripps' sports strategy [1] - The company anticipates strong core revenue growth in Q4, supported by a new agreement with the NHL's Tampa Bay Lightning and growth in live sports markets [1] Financial Performance - E.W. Scripps reported a revenue decline of 18.6% year-on-year to $525.9 million in Q3, meeting Wall Street's expectations [2][6] - Free Cash Flow was -$15.07 million, down from $127.4 million in the same quarter last year [2] - Operating margin decreased to 7.2%, down from 18.8% in the same quarter last year [2][9] Revenue Growth and Projections - Over the last five years, E.W. Scripps experienced a sluggish sales growth rate of 6.5% compounded annually, which is below the standard for the consumer discretionary sector [4] - Analysts project a further revenue decline of 1.5% over the next 12 months, indicating a lack of excitement regarding the company's newer products and services [6] Cost Management and Profitability - The Scripps Networks division achieved a 27% margin, aided by a 7% reduction in expenses [1] - Despite a higher efficiency reflected in the operating margin averaging 7.5% over the last two years, the company still faces challenges with profitability [8] Strategic Moves - Scripps announced the sale of two network-affiliated stations for total proceeds of $123 million, aligning with its strategy to optimize its portfolio and improve local station performance [1] - The company successfully closed on the placement of $750 million in new senior secured second-lien notes, which were used to pay off existing debt [1]

Core Insights - The E.W. Scripps Company reported $526 million in revenue for Q3 2025, a decrease of 19% or $120 million from the previous year [6][24] - The company experienced a loss attributable to shareholders of $49 million, equating to 55 cents per share, compared to a profit of $33 million or 37 cents per share in the prior-year quarter [7][24] - Scripps has successfully reduced its leverage ratio to 4.6x by the end of Q3 2025, down from 4.9x at the start of the year [3][12] Financial Performance - Local Media segment revenue was $325 million, down 27% from the prior-year quarter, with segment profit dropping to $52.8 million from $161 million [8][9] - Scripps Networks segment revenue was $201 million, a slight decrease of 0.4%, but segment profit increased to $53.3 million from $42.1 million [10][34] - Total costs and expenses for the company decreased to $449 million from $472 million in the year-ago quarter [6][24] Strategic Initiatives - The company has focused on expense discipline, achieving a reduction of over 4% in Local Media and 7.5% in Scripps Networks [4][5] - Scripps announced the sale of two stations for $123 million, which is above industry average valuations, contributing to a healthier balance sheet [3][5] - The company is leveraging sports partnerships and programming to drive growth, with core advertising revenue in Local Media up 2% in Q3 [5][14] Future Outlook - For Q4 2025, Local Media revenue is expected to decline by about 30%, while Scripps Networks revenue is projected to decrease in the low double-digit percentage range [18] - The company anticipates strong core revenue growth in Q4, supported by new agreements and continued growth in live sports markets [5][18] - Scripps is committed to optimizing its portfolio and embracing technology to enhance operational efficiencies [6][3]

Group 1 - E.W. Scripps shares increased by 5.7% after forming an exclusive broadcast partnership with Major League Volleyball for the 2026 championship on its ION network [1] - The partnership includes live broadcasts of MLV's two semifinal matches and the championship match, enhancing Scripps Sports' portfolio of women's sports [1] - The move aims to strengthen ION's programming with live sports content to attract dedicated and advertiser-friendly viewers [1] Group 2 - Following the initial share increase, E.W. Scripps shares cooled down to $2.15, reflecting a 1.8% rise from the previous close [2] - E.W. Scripps shares have shown extreme volatility, with 79 moves greater than 5% over the last year, indicating that the market views the recent news as significant but not fundamentally altering its perception of the company [3] - The stock is down 14.8% since the beginning of the year and is trading 48.3% below its 52-week high of $4.15 from July 2025 [5]