Scripps(SSP) - 2024 Q2 - Earnings Call Transcript

Financial Data and Key Metrics Changes - For Q2 2024, the company reported a loss attributable to shareholders of $13 million or$ 0.15 per share, with preferred stock dividends negatively impacting EPS by $0.17 [11] - Local Media division revenue increased nearly 4% year-over-year, driven by a record$ 28 million in political advertising revenue, while local core advertising revenue decreased by about 7% [5][6] - Scripps Networks revenue was $209 million, down 9.7% from the previous year, with expenses flat at$ 171 million [8][9] Business Line Data and Key Metrics Changes - Local Media segment profit rose to $88 million, a 9% increase from Q2 2023, with expectations for Q3 revenue to increase by about 20% [6][7] - Scripps Networks division expects Q3 revenue to decline in the mid-single-digit range, with expenses anticipated to decrease in the low single-digit range [10] - The Other segment reported a loss of$ 9 million, with shared services and corporate expenses for Q2 at $21.7 million [10] Market Data and Key Metrics Changes - Political advertising revenue guidance for the full year was raised to between$ 270 million and $290 million, reflecting strong spending in key Senate races [7] - Connected TV revenue was up 11% in Q2, but overall expectations for CTV revenue were lowered from a previous guidance of 30% growth to about 10% [9] Company Strategy and Development Direction - The company is focused on debt reduction and capturing efficiencies to enhance sustainability, with a strong emphasis on political advertising and live sports as growth drivers [13][21] - Scripps aims to leverage its broadcast strength and partnerships in live sports to drive audience engagement and advertising revenue [16][19] - The strategy includes maintaining a balance between sports and general entertainment to attract diverse audiences [31] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the political advertising landscape, noting unprecedented spending levels and a favorable competitive environment [14][24] - The company is optimistic about the impact of the upcoming Presidential election and ongoing Senate races on advertising revenue [15][24] - Management acknowledged challenges in the CTV space due to increased inventory from competitors but expects rates to rise as the market stabilizes [9][10] Other Important Information - The company is pursuing asset sales, including the Bounce TV network and real estate holdings, as part of its debt reduction strategy [11][12] - Cash and cash equivalents totaled$ 27 million, with net debt at $2.9 billion [11] Q&A Session Questions and Answers Question: Can you discuss core trends and the impact of political advertising? - Management indicated that core advertising revenue was down about 7%, with displacement due to strong political revenue and tough comparisons from last year [23][25] Question: What is the outlook for the Networks portfolio and potential growth? - Management highlighted that the upfront results validated their sports strategy, with expectations for low single-digit increases in volume driven by sports and CTV [27][29] Question: How is the company managing its debt and asset sales? - Management confirmed that the process for selling Bounce TV is competitive and progressing well, with expectations to generate significant cash proceeds from real estate divestitures [34]