The E.W. Scripps Company Q4 FY2025 earnings call

• Announced transformation plan to grow enterprise EBITDA by $125 to $150 million by 2028, expecting $20 to $30 million in-year EBITDA impact in 2026 and $60 to $75 million annualized run rate by 2027.
• Exercised option to reacquire 23 ION-affiliated TV stations, expected to be accretive to segment profit and margins.
• Sold Core TV, accretive to segment profit and margin, found fitting owner.
• Progressing on station swaps and sales, expecting gross proceeds from Fort Myers and Indianapolis sales.
• Scripps Network Division exceeded 2025 margin guidance by nearly 700 basis points, driven by live sports, streaming, and expense management.
• Local media kept expenses flat while adding growth-driving sports rights, shifted network affiliate dynamic.
• New company vision 'We Create Connection' focuses on local communities, sports, journalism, and entertainment to drive engagement and growth.

Local Media Division: Q4 revenue was $360 million, down 30% due to absence of political advertising revenue, but core advertising was up 12% with all five top categories growing. Q1 expected low to mid-single digit revenue growth, core ad mid-single digit growth; full year expected low single digit gross revenue growth and low teens percent growth in net distribution revenue. Scripps Networks Division: Q4 revenue was $199 million, down less than 8%, Connect2TV revenue up nearly 10% Q4 and 30% full year, expenses down 13%, segment profit $64 million, margin 32%. Q1 expected high single digit revenue decline, expenses low single digit decline. Other: Q4 loss $8 million, Q1 expected about $27 million due to higher medical claims and insurance premiums.

• Local media Q1 expected low to mid-single digit revenue growth, core ad mid-single digit growth; full year low single digit gross revenue growth, low teens net distribution growth.
• Scripps Networks Division Q1 expected high single digit revenue decline, expenses low single digit decline.
• 2026 cash interest $180 to $190 million, cash taxes $15 to $20 million, cap ex $60 to $70 million, D&A $140 to $150 million, minimum pension contribution $4.5 million.
• Aim to meaningfully reduce net leverage ratio by end of 2026 through EBITDA improvement, midterm election cycle, M&A, and debt paydown.

• Macro uncertainty impacting advertiser spending and buy timing.
• Regulatory changes and FCC approval needed for station acquisitions and reacquisitions.
• Employee concerns and potential resistance to AI and automation changes.
• Uncertainty around lifting of TV station ownership cap and negotiations with virtual MVPDs.

Q: Dan Kernos asked about FCC cap elimination impact on M&A and organic growth.

A: Adam responded on transformation positioning for M&A, organic growth from current and new opportunities.

Q: Michael Kapinski asked about interest-sensitive ad categories, political visibility, and EBITDA growth breakdown.

A: Adam and Jason responded on category performance, political race visibility, and EBITDA growth from revenue and cost initiatives.

Q: Stephen Cahill asked about 2026 EBITDA impact and employee management in transformation.

A: Jason and Adam responded on EBITDA in-year and run rate, employee engagement in transformation.

Q: Craig Huber asked about cost savings via AI, ION transaction, and FCC cap.

A: Adam responded on AI cost and revenue opportunities, ION transaction benefits, and FCC cap and MVPD negotiations.

Q: Shanna Chung asked about Court TV sale proceeds and asset sales.

A: Adam responded on Court TV sale details and asset sale strategy.

Q: Ken Silver asked about Core TV guide impact and affiliate fee decline.

A: Adam responded on guide inclusion of Olympics and Super Bowl, and affiliate fee declines with networks.

Q: Craig Hoover asked about ad environment comparison.

A: Adam responded on general softness with sports strategy driving success.