• Leverage Ratio: Reduced to 4.8 times by the end of 2024, nearly a full turn below the end of 2023.
• Scripps Networks Division Margin Improvement: Improved by 400 to 600 basis points in 2024.
• Fourth Quarter Margin: Reported at 28% for Scripps Networks.
• Political Advertising Revenue: Record $343 million for full year 2024, with $174 million in Q4.
• Local Media Division Revenue: Increased 34% in Q4 2024 compared to the previous year.
• Core Advertising Revenue: Decreased 11% in Q4 2024 compared to Q4 2023.
• Local Media Segment Profit: Nearly $200 million in Q4 2024, up from $86 million in Q4 2023.
• Scripps Networks Revenue: $216 million in Q4 2024, down 6% from the previous year.
• Connected TV Revenue: Increased 16% in Q4 2024.
• Fourth Quarter Income Attributable to Shareholders: $80 million or $0.92 per share.
• Total Debt at Year-End: $2.6 billion.
• Cash and Cash Equivalents: $24 million at December 31, 2024.

• Warning! GuruFocus has detected 5 Warning Signs with SSP.

Release Date: March 12, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• The E W Scripps Co (NASDAQ:SSP) reported strong fourth quarter and full year 2024 results, with significant progress in performance improvement for the Scripps Networks.
• The company successfully reduced its leverage ratio to 4.8 times by the end of the year, nearly a full turn below the end of 2023.
• Scripps achieved a record political advertising revenue, almost 30% higher than the 2020 presidential election year revenue.
• The refinancing of debt, including a two-year extension on the 2026 term loan and a one-year extension on a portion of the 2028 term loan, was completed at favorable economics.
• Scripps Networks division margins are expected to improve by 400 to 600 basis points in 2025, with aggressive expense management contributing to this improvement.

Negative Points

• Core advertising revenue was down 11% in the fourth quarter compared to Q4 2023, impacted by political advertising displacement.
• Local Media division revenue is expected to be down in the high single-digit range for the first quarter of 2025.
• Scripps Networks revenue was down 6% in the fourth quarter compared to the previous year, consistent with guidance.
• The company continues to face challenges from streaming services growing advertising inventory, impacting revenue.
• Automotive and retail advertising categories are experiencing significant declines, contributing to overall core advertising weakness.

Q & A Highlights

Q: Can you elaborate on the impact of FCC deregulation on your business strategy? A: Adam Symson, President and CEO, explained that the appointment of Brendan Carr as FCC Chairman signals a shift towards reducing regulatory constraints, potentially relaxing ownership limits for local TV stations. This could allow Scripps to strengthen its operating performance through consolidation, enhancing local journalism and live sports offerings, and unlocking greater shareholder value.

Q: How are you addressing your debt refinancing and leverage reduction? A: Jason Combs, CFO, highlighted that Scripps executed a transaction support agreement with term loan holders, extending maturities and securing a new AR securitization facility. This refinancing increases the blended cost of debt by less than 1% and helps maintain liquidity. The company aims to use free cash flow to further reduce debt, having already lowered its leverage ratio to 4.8 times by year-end 2024.

Q: What are the trends in your Local Media and Scripps Networks divisions? A: Jason Combs noted that Local Media division revenue rose 34% in Q4 2024, driven by record political advertising. However, core advertising was down 11% due to political ad displacement. Scripps Networks revenue fell 6%, but connected TV revenue grew 16%. The company expects Networks' margins to improve by 400-600 basis points in 2025.

Q: How is the EdgeBeam Wireless joint venture progressing? A: Adam Symson stated that EdgeBeam Wireless, a joint venture with Nexstar, Sinclair, and Gray, aims to leverage broadcast spectrum for datacasting. The platform reaches 97% of US TV households, and while revenue is not expected in 2025, the venture is gaining traction with companies seeking alternatives to 5G networks.

Q: What is the outlook for your sports rights and advertising strategy? A: Adam Symson emphasized the success of Scripps' strategy in women's sports, particularly with the WNBA and NWSL, which has attracted a younger, diverse audience and higher advertising rates. The company is committed to disciplined financial management in pursuing additional sports rights to ensure profitability.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.