The E.W. Scripps Company reported revenue from its television group down 3% from Q3 2014 to $157 million this past third quarter.
Retransmission revenue more than doubled to $36.3 million, while political revenue fell 80% to $4.3 million compared to its 2014 pre-midterm elections total for the quarter
Local advertising revenue was even at $78.8 million, while national dipped 2.5% to $35 million. Brian Lawlor, senior VP of TV, noted that in the northern part of the Midwest, where Scripps has a heavy footprint, “for whatever reason” national was particularly soft, though that might just be a “one quarter anomaly.”
The television division’s segment profit was down 33% to $31.7 million. Scripps also saw a 51% jump in digital revenue to $10.9 million.
In the quarter, Scripps added new partners for OTT video news service Newsy, which had slower revenue growth than the company expected after acquiring it in January 2014
“Third-quarter performance in our core broadcast television business was aided by a comeback in automotive advertising and a leap in retransmission fees,” said Rich Boehne, Scripps chairman, president and CEO. “The increase in retransmission revenue alone offset the decline in political advertising revenue in the off-cycle year.”
For the fourth quarter, Scripps expects television revenue to be down low to mid teens with another big loss in political revenue. However, the company is optimistic for 2016.
“In our TV markets we’re setting the stage for 2016, when increases in local news ratings, a 50 percent increase in retransmission fees, and presidential election spending across an expanded footprint of potential swing states should come together for a strong performance.” Boehne said.
Analysts on the conference call also asked the Scripps executive team about the upcoming spectrum auction.
“The one thing that’s important to know is for those who choose to participate, whoever that might be, this is going to be a real game of Texas Hold’em,” Boehne said.
Boehne said the auction is more than just a monetary event. “It’s in many ways going to restructure the broadcast business in ways we think will create opportunities for us and others,” he said.
Nevertheless, he did not give hints as to the extent Scripps might participate in the auction, saying that people should expect “radio silence” from most companies. “It would really not be in most anybody’s best interest to disclose what they expect or what markets or anything else,” he said.
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