Scripps sees continued double-digit connected TV growth while advancing sports-driven ad revenue strategy

Earnings Call Insights: The E.W. Scripps Company (SSP) Q3 2025

MANAGEMENT VIEW

* CEO Adam Symson highlighted measurable progress, stating the company is "delivering exactly what we have promised in recent years. We're growing our Sports and Connected TV revenue streams. We are closely managing expenses, resulting in improved margins. We are executing swaps and station sales to improve our local station group margins and pay down debt with more likely to come."
* Symson emphasized the strategic focus on women's and affordable sports, noting, "Ahead of the market, we saw the opportunity in women's sports, and we carved out a leadership position there for ION."
* On the streaming front, Symson stated, "We created a 9-figure revenue line by being early and aggressive in securing Connected TV distribution. Streaming now constitutes 20% of all Scripps Networks viewing, and we continue to increase our offerings with more streaming content."
* CFO Jason Combs reported, "We are pleased to be reporting a third consecutive quarter of results that met or exceeded expectations on nearly every reporting line, fueled by our Scripps Sports strategy and strong sales execution as well as tight expense controls."
* Combs also referenced key asset sales: "Both sale prices represent multiples well above current local broadcast station transactions, 9.2x to your blended EBITDA for WFTX and 8.5x for WRTV in Indie...These 2 cash sales will total $123 million, creating significant cash inflow that will improve the health of our balance sheet and provide for some modest delevering."

OUTLOOK

* For Q4, Combs stated, "we expect Local Media division revenue to be down about 30%. We expect core revenue to be up about 10%, bolstered by our sports strategy, specifically our newest NHL partnership with the Tampa Bay Lightning as well as the comparison to last year's political advertising displacement of core."
* For Scripps Networks, Combs projected, "we expect Scripps Networks division revenue to be down in the low-double-digit range."
* Combs updated full-year guidance, stating, "We now expect our cash interest paid to be between $165 million and $170 million. This reduces the projected cash we need for interest."
* Symson expressed confidence in the company’s position for 2026: "The midterm election looks to yield record spending across the advertising ecosystem. We will capitalize on our growing portfolio of revenue-driving sports assets and our strategic streaming distribution agreements position us well to capture expanding revenue in the CTV marketplace."

FINANCIAL RESULTS

* Local Media division revenue was down 27% year-over-year due to the absence of political advertising revenue. Core advertising revenue was up nearly 2%.
* Local Media segment profit was nearly $53 million compared to $161 million in Q3 of last year's political cycle.
* Scripps Networks division revenue was $201 million, about flat compared to the year ago quarter. Connected TV revenue was up 41% year-over-year.
* Scripps Networks segment profit was $53 million with a segment margin of 27%.
* The company reported a loss of $0.55 per share, which included a $7.6 million loss on extinguishment of debt, $6.5 million in financing transaction costs, a $1.4 million write-off of deferred financing costs, and $2.7 million in restructuring costs. The preferred stock dividend reduced EPS by $0.18.
* At September 30, cash and cash equivalents totaled $55 million. Net leverage at the end of Q3 was 4.6x, a significant improvement from 6x in Q2 of last year.

Q&A

* Daniel Kurnos, The Benchmark Company, LLC: Asked about further noncore asset sales and the ongoing portfolio optimization. Symson responded, "there's significant opportunity there still for us to identify accretive opportunities for us to buy, sell and swap stations...we'll continue to pursue."
* Kurnos also inquired about CTV and ad mix. Combs explained, "Really strong growth year-to-date. I think we're looking to be for the full year, greater than 35% growth for the full year...we think it's going to continue to be a double-digit growth engine for us."
* Steven Cahall, Wells Fargo: Questioned margin expansion in Networks and M&A process. Symson said, "We're really focused on continuing to expand in sports to drive revenue growth and profit...all of this really leads me to be confident that we'll continue to see growth in the margins for Scripps Networks."
* Avi Steiner, JPMorgan: Sought clarity on YouTube TV/Disney dispute and affiliate renewals. Symson stated, "there's a lot of economic value for Scripps and ABC ahead when that gets resolved" and Combs detailed, "we have 3 of our 9 CBS is up at the end of this year. And then in '26, we have ABC up at the end of Q2."
* Gengxuan Qiu, Barclays: Asked about 2026 political ad expectations. Symson responded, "I think next year is going to be a compelling year for us relative to political revenue...I obviously absolutely expect broadcasting to take the lion's share of the ad revenue spending for the midterm and I think our portfolio is very well positioned."

SENTIMENT ANALYSIS

* Analysts expressed a positive yet probing tone, often seeking clarity on the sustainability of asset sales, outlook for CTV, and ad market dynamics, with several expressing interest in the company’s ability to sustain margin gains and growth.
* Management’s sentiment was confident and assertive in both prepared remarks and responses. Symson repeatedly emphasized ongoing momentum: "We're delivering exactly what we have promised...We're not just talking about improvement, we're delivering it quarter-after-quarter."
* Compared to the previous quarter, analyst tone shifted to more optimism about the company's execution but continued to probe for details on future growth and cost management, while management’s tone remained confident and forward-looking.

QUARTER-OVER-QUARTER COMPARISON

* Guidance for Local Media division revenue for Q4 shifted from "mid- to high 20% range" decline (Q2 call) to "about 30%" decline (Q3 call), while core revenue improved from "about flat" to "up about 10%".
* Scripps Networks revenue guidance shifted from "down low single digits" in Q3 to "down in the low-double-digit range" for Q4, reflecting more cautious expectations due to political and macro factors.
* CTV revenue growth was 57% in Q2 and 41% in Q3; however, full-year growth is projected to exceed 35%, with management reiterating ongoing double-digit growth potential.
* Management’s confidence in sports and CTV strategies remains high, with a slightly stronger focus on delevering and M&A activity in Q3.
* Analyst questions continued to focus on political ad revenue, portfolio optimization, and cost discipline, but with increased attention to asset sale multiples and their repeatability.

RISKS AND CONCERNS

* Management cited the government shutdown's impact on Q4 Medicare open enrollment advertising, ongoing DR pricing weakness, and volatility in pharmaceutical ad demand.
* The YouTube TV/Disney dispute was acknowledged as causing some ratings softness, though not materially impacting revenue so far.
* Analysts probed for risks tied to asset sales sustainability, rate cut impacts on advertising, and regulatory timing around ownership caps.

FINAL TAKEAWAY

Scripps management underscored the success of its dual strategy in sports content and Connected TV distribution, both of which continue to drive revenue growth and margin improvement. The company signaled further delevering with significant cash inflow from premium asset sales and a commitment to disciplined capital allocation. Looking ahead, Scripps expects to leverage its expanding sports portfolio and streaming reach for continued growth, while prudent cost management and technology-driven transformation remain central to its financial improvement plan.

Read the full Earnings Call Transcript [https://seekingalpha.com/symbol/ssp/earnings/transcripts]

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