E.W. Scripps has announced that it is getting closer to selling off its Bounce TV multicast network. This move aligns with the company’s broader strategy to reduce its heavy debt load.
On the one hand, Scripps CEO Adam Symson highlighted this in the company’s second-quarter earnings release:"We are progressing nicely with our efforts to sell the Bounce TV network and some non-strategic real estate assets," he stated.
On the other hand, this sale is particularly significant because Bounce TV is part of Scripps’ national networks division, which has been experiencing challenges. For instance, during the second quarter, Scripps Networks' segment profit declined to $37.7 million from $60.3 million a year ago, with revenue down 9.7% from the previous year.
This decline underscores the pressures Scripps faces, which may be driving the decision to divest from Bounce TV. Notably, Scripps acquired Bounce TV as part of its purchase of Katz Networks in 2017. However, as the company shifts focus, it has been increasingly pushing into the sports domain. This strategy is evident in its recent initiatives, such as featuring women’s basketball and soccer on its Ion network and adding NHL hockey games to its stations in Las Vegas and Phoenix.
Symson pointed out that sports have been a key factor in boosting Scripps’ advertising efforts: "While the results of last year’s national advertising upfront are still impacting our quarterly results in the Scripps Networks division, we are seeing a better performance in this season’s upfront sales cycle. With commitments from the majority of our advertising agency clients, we have volume increases of low single digits over last year. Sports has been the differentiator. Our WNBA Friday-night franchise on Ion has so far showcased three games where viewership surpassed 1 million, proving to advertisers that Ion can deliver them to significantly large sports audiences," he explained.
Moreover, Scripps reported a second-quarter net loss of $13 million, or 15 cents per share, which, although significant, is an improvement compared to the $682.4 million loss, or $8.10 per share, the company suffered a year ago due to a major write-off on Scripps Networks. Additionally, distribution revenue saw a slight dip, decreasing from $195 million to $194 million year-over-year. Core advertising revenues, excluding political spending, were down 6.9% to $139 million. However, political revenue surged to $28.2 million, compared to just $3.8 million a year ago, reflecting the non-presidential election year in 2023.
Looking ahead, the company is optimistic about political ad spending in 2024. Even if spending hits the low end of its forecast, which is now between $270 million and $290 million, Scripps expects to see record levels, surpassing its previous forecast of $240 million to $270 million. This anticipated boost in political ad revenue could provide much-needed financial support as the company navigates its current challenges and strategic shifts.