Scripps(US:SSP)2022-05-06 18:28Financial Data and Key Metrics Changes - In Q1 2022, the company's free cash flow was three times higher than the comparable quarter in 2020 [10] - The company expects free cash flow for the year to be between $400 million and $450 million, representing the highest amount since the spin-off of cable networks in 2008 [27][23] Business Line Data and Key Metrics Changes - Local Media core advertising revenue increased by 3.4%, with total revenue up 4.5% due to strong sales execution and retransmission revenue growth [20] - Scripps Networks revenue for Q1 2022 was $239 million, an increase of 8.5% from the prior year, while segment expenses rose by 23% [21] Market Data and Key Metrics Changes - Political ad revenue in Q1 was approximately $6 million, about 70% higher than the first quarter of 2018 [20] - The company reported a significant increase in pay TV subscriber households and lower churn year-over-year [14] Company Strategy and Development Direction - The company is focused on an "all of the above" strategy, leveraging both traditional and connected TV platforms to meet consumer demands [11] - Scripps is investing in the transition to ATSC 3.0 NextGen TV, positioning itself as a leader in broadcast spectrum monetization [15] Management's Comments on Operating Environment and Future Outlook - Management anticipates a record-breaking national political spending season, contributing to expected free cash flow growth [17] - The company is optimistic about capturing a significant share of political ad spending, with projections of $270 million in revenue from its footprint [35] Other Important Information - The company is experiencing a shift in advertising booking patterns, with clients booking closer to air time due to supply chain issues [104] - Scripps Networks is producing the National Spelling Bee in-house for the first time, expanding audience reach and retaining advertising revenue [44] Q&A Session Summary Question: Outlook for 2Q core ad revenue for TV stations - Management expects core ad revenue to be about flattish compared to a year ago [54] Question: Performance of the auto category - The auto category was down over 20% in Q1, with expectations for improvement in the second half of the year [55] Question: Impact of sports betting on advertising - The timing of sports betting legalization affects advertising spending, with aggressive initial spending followed by a moderation phase [57] Question: Signs of recession in markets - Management does not sense a recession but acknowledges challenges from supply chain and labor shortages [60] Question: Recovery signs in the advertising market - Early May shows a slight pickup in advertising activity compared to the end of Q1 [65] Question: Direct response advertising trends - Direct response advertising remains strong, with a mix of general market and direct response around 50% each [93] Question: Performance of Newsy - Newsy's CTV viewership is up 40% year-over-year, with a focus on quality journalism [99] Question: Local advertising visibility - There is less visibility in local advertising bookings, with clients booking closer to air time [104]