Summary of E.W. Scripps Company FY Conference Call (November 18, 2025) Company Overview - **Company**: E.W. Scripps Company (NasdaqGS: SSP) - **Industry**: Media and Broadcasting Key Points M&A Activity - Sinclair has reported an 8% stake in E.W. Scripps and is considering a merger, described as a "bear hug" by the analyst [3][4] - E.W. Scripps was engaged in discussions with Sinclair regarding a potential merger but did not reach an agreement, leading to the cessation of talks [4][6] - The complexity of transactions involving family-controlled public companies with highly leveraged balance sheets adds challenges to M&A discussions [7] - There is significant financial benefit to be gained from local broadcast consolidation, with potential synergies estimated at $300 million, representing a 30% uplift to combined forward EBITDA [10][11] Advertising and Market Performance - E.W. Scripps reported a strong Q3 performance with a 2% increase and a Q4 guidance of 10%, attributed to effective sales execution and a strong sports strategy [18] - The company anticipates continued growth in the first half of the next year, although potential headwinds are expected in the latter half due to political crowd-out effects [19] - The company is optimistic about the upcoming political advertising cycle, with a strong competitive footprint in key races [20] Retransmission Revenue - E.W. Scripps is preparing for a significant retransmission renewal year in 2026, with 70% of its subscriber base renewing [24] - The company expects to see a decrease in affiliate expenses moving forward, which could positively impact net retransmission revenue [25] Cost Management and Technology - E.W. Scripps has focused on managing expenses, achieving a mid-single-digit reduction in local media expenses year-over-year [46] - The company is leveraging AI and technology to streamline operations and reduce costs, particularly in production and back-office functions [47][48] Balance Sheet and Deleveraging - E.W. Scripps has completed several asset sales, including a $40 million sale of a Fort Myers station and an $83 million sale of an Indianapolis station, generating approximately $123 million gross [50] - The company aims to reduce leverage from the current mid-four range through cash flow generated from political advertising and growth initiatives [56] Sports Strategy - E.W. Scripps has expanded its sports portfolio, securing rights to women's sports leagues and event-driven sports, which are expected to drive growth [37][39] - The company is optimistic about the stability and growth potential of its local business, supported by additional sports content and a strong local news presence [31] Future Outlook - E.W. Scripps is committed to pursuing transformational M&A opportunities while also focusing on smaller strategic deals [12][13] - The company is optimistic about its ability to manage margins and achieve stable or growing bottom-line performance despite top-line pressures [43][45] Additional Insights - The company is navigating a challenging advertising environment, with national advertising spend impacted by economic factors such as interest rates and tariffs [34] - E.W. Scripps is focused on capturing market share in the connected TV space, which has shown significant growth [36]

Financial Data and Key Metrics Changes - The company reported a third consecutive quarter of results that met or exceeded expectations, driven by the Scripps Sports strategy and strong sales execution [4] - Local media division revenue decreased by 27% due to the absence of political advertising revenue compared to the prior year, while core advertising revenue increased by nearly 2% [6] - The company reported a loss of $0.55 per share, which included various costs that increased the loss by a total of $0.15 per share [10] - Net leverage improved to 4.6 times at the end of Q3, down from 6 times in Q2 of the previous year [12] Business Line Data and Key Metrics Changes - Local media segment profit was nearly $53 million compared to $161 million in Q3 of the previous year [6] - Scripps Networks revenue was approximately flat at $201 million year-over-year, with connected TV revenue up 41% [7][8] - Scripps Networks' segment profit was $53 million, with a segment margin of 27% [9] Market Data and Key Metrics Changes - The company expects local media division revenue to decline by about 30% in Q4, while core revenue is anticipated to increase by about 10% [6] - Scripps Networks' revenue is expected to decrease in the low double-digit range for Q4 due to various factors, including a lack of political revenue and lower upfront advertising [9] Company Strategy and Development Direction - The company is focused on optimizing its portfolio through station swaps and sales, with recent transactions yielding strong valuations [4][22] - The Scripps Sports strategy has been a significant driver of revenue growth, particularly in women's sports and partnerships with various leagues [14][16] - The company is pursuing aggressive distribution on streaming services, projecting connected TV revenue to exceed $120 million in 2025 [18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's strategies, highlighting strong performance in sports and connected TV revenue streams [13] - The upcoming midterm elections are expected to yield record spending across the advertising ecosystem, positioning the company well for future growth [22] - Management acknowledged challenges in the advertising environment but remains optimistic about the potential for recovery as economic uncertainties are resolved [72] Other Important Information - The company has been actively managing expenses, resulting in improved margins and a focus on fiscal discipline [20] - The Scripps Transformation Office is leveraging technology and AI to enhance operational efficiency and drive growth [20] Q&A Session Summary Question: What is the outlook for further asset sales? - Management indicated there are still significant opportunities for optimizing the portfolio through buying, selling, and swapping stations [26] Question: Can you elaborate on the impact of the government shutdown on revenue? - Management noted that the government shutdown has affected demand and buying from networks, particularly in the Medicare Advantage space [68] Question: How is the advertising environment compared to six months ago? - Management observed some strength in local advertising but noted challenges in the national ad marketplace, particularly in direct response pricing and pharmaceuticals [55][72] Question: What is the company's strategy regarding AI and cost efficiency? - Management expects to provide more information on the impact of technology and AI on operational efficiency in the upcoming year [78]

Financial Data and Key Metrics Changes - Net sales for Q3 2025 were $588 million, a decrease of 7% compared to Q3 2024, excluding a 6% impact from the divestiture of European operations [20] - Adjusted EBITDA was $53 million in Q3 2025, down from $59 million in Q3 2024, with an adjusted EBITDA margin improving from 8.7% to 8.9% year-to-date [21] - Adjusted diluted earnings per share increased by 19% to $0.31 in Q3 2025 from $0.26 in Q3 2024, and year-to-date adjusted diluted earnings per share rose by 33% to $0.65 in 2025 from $0.49 in 2024 [22] Business Line Data and Key Metrics Changes - Revenue mix as a percentage of total net sales increased by 2% in targeted print offerings, driven by growth in direct marketing, packaging, and in-store solutions [20] - Direct mail revenue increased by over 6% year-to-date, packaging grew by over 9%, and in-store solutions rose by 11% year-to-date [36] Market Data and Key Metrics Changes - The USPS announced it would not issue a January price increase for market-dominant mail, which is expected to positively impact marketers as they finalize their 2026 media plans [6][39] - High postage rates continue to significantly impact the industry, but the lack of a January increase is seen as favorable for clients [39] Company Strategy and Development Direction - The company is making targeted investments in AI-powered tools, data intelligence services, and retail media networks to diversify revenue and return to net sales growth by 2028 [4] - The strategic focus includes maximizing savings for clients while increasing marketing effectiveness through innovative solutions like co-mailing and audience intelligence [8][9] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future growth of In-Store Connect, citing strong sales lift results from campaigns with major clients [16] - The company is closely monitoring macroeconomic pressures, including inflation and tariffs, which could affect client marketing spend [31] Other Important Information - The company returned $19 million of capital to shareholders year-to-date through dividends and share repurchases, with a 50% increase in the quarterly dividend [25] - The company expects free cash flow in Q4 2025 to be between $137 million and $147 million, following a seasonal pattern of negative cash flow in the first nine months of the year [23] Q&A Session Summary Question: Trends in targeted print categories - Management noted that catalog sales are muted due to postal increases, while direct mail, packaging, and in-store solutions are seeing growth [36][37] Question: Impact of USPS postponing price increase - Management indicated that the postponement is favorable and could positively influence client spending for 2026 [39][40] Question: Updated guidance for net sales - Management discussed variability in direct mail as a transactional area that could impact sales outlook for Q4 [42][44] Question: Adjusted EBITDA and CapEx guidance - The midpoint for adjusted EBITDA was slightly decreased, while capital expenditures are expected to shift towards technology and automation [46][48] Question: Updates on In-Store Connect deployment - Management reported increased interest from clients and a strong pipeline for In-Store Connect, with positive feedback on new digital signage solutions [49][50]

Core Viewpoint - Dividend stocks are attractive long-term investments due to their ability to generate recurring cash flow and the importance of dividend growth to combat inflation [1][2]. Group 1: Dividend Growth Importance - Consistent dividend growth is crucial as inflation can significantly erode the value of dividend income over time, with a $1,000 annual dividend potentially worth only $744 in 10 years and $554 in 20 years at a 3% inflation rate [2]. - Focusing on dividend growth stocks is essential for generating reliable recurring income [2]. Group 2: Coca-Cola - Coca-Cola has a diverse portfolio of brands and products, with its flagship brand remaining a key revenue driver [5]. - The company has demonstrated strong pricing power, allowing it to raise prices in line with inflation without negatively impacting sales, which reached over $47 billion with a 3% year-over-year growth [7]. - Coca-Cola has a solid dividend yield of 3.1% and has increased its dividend for 63 consecutive years, making it a stable investment option [8]. Group 3: Procter & Gamble - Procter & Gamble offers a wide range of essential consumer products, including well-known brands like Pampers and Gillette [9]. - The company has maintained stable sales between $80 billion and $84 billion over the past four years, indicating low volatility [10]. - Procter & Gamble has raised its dividend for 69 consecutive years, with a current yield of 2.7%, significantly higher than the S&P 500 average [11]. Group 4: Johnson & Johnson - Johnson & Johnson has streamlined its operations by focusing on pharmaceuticals and medical devices after spinning off its consumer healthcare division [12]. - The company remains committed to dividend growth, recently increasing its dividend by approximately 5%, extending its streak to 63 years [13]. - Johnson & Johnson anticipates continued growth in the single digits, with a long-term goal of 5% to 7% annual growth, supporting future dividend increases [14].

Social Network Platform - Bounce publicly debuts a tool for account migration between open social networks [1] - The tool supports moving accounts between platforms like Bluesky and Mastodon [1]

Core Insights - The E.W. Scripps Company has expanded its streaming offerings by making six national channels available on Peacock, enhancing its content reach and viewer engagement [1][4]. Company Overview - The E.W. Scripps Company (NASDAQ: SSP) is a diversified media company with a focus on local journalism and operates over 60 stations across more than 40 markets in the U.S. [3] - Scripps is recognized as the largest holder of broadcast spectrum in the nation and serves various audiences through its national news outlets and entertainment brands [3][5]. Streaming Service Details - Peacock, owned by NBCUniversal, provides a wide array of content including current NBC and Bravo series, exclusive Originals, and live sports events, positioning itself as a comprehensive entertainment platform [4]. - The addition of Scripps' channels to Peacock includes ION, ION Mystery, Bounce, Court TV, Court TV Legendary Trials, and Scripps News, which cater to diverse viewer interests [1][2]. Channel Programming Highlights - ION features a broad programming lineup including women's sports and popular off-network series [5]. - ION Mystery offers binge-worthy dramas and docuseries, while Court TV focuses on live coverage and analysis of significant trials [5]. - Bounce targets African American audiences with a mix of original series, movies, and specials [5]. - Scripps News emphasizes objective reporting and in-depth storytelling [5].

Core Insights - The E.W. Scripps Company has appointed Sandy Padula as vice president, head of enterprise research and consumer insights to enhance its consumer insights strategy [1][2] Group 1: Appointment and Role - Sandy Padula will lead enterprise-wide research initiatives that utilize audience and market intelligence across Scripps' national networks and over 60 local television stations [2] - Padula will collaborate with Scripps' sales teams to create advanced advertising tools aimed at optimizing campaign effectiveness and measuring impact in real-time [2] Group 2: Background and Expertise - Padula has extensive experience in media research, having worked with studios, networks, nonprofits, and national brands to convert multiplatform measurement into actionable business strategies [3] - Her previous role was as senior vice president of research and consumer insight at WarnerMedia Entertainment, where she provided strategic insights that influenced major content and marketing initiatives [3] - Most recently, she led a consulting firm focused on research-driven growth strategies [3] Group 3: Company Perspective - Keisha Taylor Starr, Scripps' chief marketing officer, emphasized Padula's expertise in data storytelling and market trends analysis as a significant asset for the company [4] - Padula is expected to enhance Scripps' commitment to innovative, data-informed strategies that yield transformative results for brands and consumers [4] Group 4: Company Overview - The E.W. Scripps Company is a diversified media entity, operating over 60 local television stations and reaching households across the U.S. with national news outlets and entertainment brands [5] - Scripps is the largest holder of broadcast spectrum in the nation and serves professional and college sports leagues with extensive market reach [5]

Core Viewpoint - The E.W. Scripps Company has initiated a private offering of $650 million in new senior secured second-lien notes, maturing in 2030, to improve its financial position and manage existing debt [1][3]. Group 1: Offering Details - The offering is subject to market conditions and is exempt from the registration requirements of the Securities Act of 1933 [2][4]. - The notes will be guaranteed by certain existing and future subsidiaries and secured on a second-lien basis by substantially all of the company's assets [2][4]. Group 2: Use of Proceeds - The net proceeds from the offering will be used to redeem all outstanding 5.875% senior notes due in 2027, pre-pay a portion of existing borrowings under the term loan B-2 facility due in 2028, and cover transaction-related fees and expenses [3]. Group 3: Company Overview - The E.W. Scripps Company is a diversified media entity, operating over 60 local TV stations across more than 40 markets in the U.S. and providing quality local journalism [7]. - The company also operates national news outlets and entertainment brands, and is the largest holder of broadcast spectrum in the nation [7].