Scripps closes acquisition of eight TV stations from Nexstar-Tribune merger divestitures

CINCINNATI, Sept. 19, 2019 /PRNewswire/ -- The E.W. Scripps Company SSP has closed its acquisition of eight television stations in seven markets divested from the Nexstar Media Group, Inc. NXST transaction with Tribune Media TRCO.

New Scripps Logo (PRNewsfoto/The E.W. Scripps Company)

The acquisition grows the Scripps local television station footprint to 60 stations in 42 markets, making it the nation's fourth-largest independent broadcaster with a reach of 31% of U.S. TV households.

Since Jan. 1, Scripps has added 27 television stations to its portfolio, and it now expects 2020 company free cash flow to be in the range of $225 million to $250 million.

The stations diversify Scripps' affiliate relationships, expand its political advertising footprint and bring durability and geographic reach to its television station portfolio.

The stations joining Scripps' television portfolio today are:

  • WPIX, the CW affiliate in New York City. (Scripps has granted Nexstar the option to buy back WPIX in New York City. The option is exercisable from March 31, 2020, through the end of 2021.)
  • KASW, the CW affiliate in Phoenix (which joins the Scripps ABC affiliate there)
  • WSFL, the CW affiliate in Miami-Fort Lauderdale (adjacent to the Scripps NBC affiliate in West Palm Beach, Florida)
  • KSTU, the Fox affiliate in Salt Lake City
  • WTKR, the CBS affiliate, and WGNT, the CW affiliate, in Norfolk, Virginia
  • WTVR, the CBS affiliate in Richmond, Virginia
  • WXMI, the Fox affiliate in Grand Rapids, Michigan

The eight stations deepen Scripps' presence in Arizona, Florida, Michigan and New York. Scripps is adding its first stations in the No. 1 ranked DMA of New York City and the states of Virginia and Utah. It will now operate nine markets with more than one station, including in its second-largest market, Phoenix.

Forward-looking statements

This document contains certain forward-looking statements related to the company's businesses that are based on management's current expectations. Forward-looking statements are subject to certain risks, trends and uncertainties, including changes in advertising demand and other economic conditions that could cause actual results to differ materially from the expectations expressed in forward-looking statements. Such forward-looking statements are made as of the date of this document and should be evaluated with the understanding of their inherent uncertainty. A detailed discussion of principal risks and uncertainties that may cause actual results and events to differ materially from such forward-looking statements is included in the company's Form 10-K on file with the SEC in the section titled "Risk Factors." The company undertakes no obligation to publicly update any forward-looking statements to reflect events or circumstances after the date the statement is made.

About Scripps

The E.W. Scripps Company SSP serves audiences and businesses through a growing portfolio of local and national media brands. With 60 television stations in 42 markets, Scripps is one of the nation's largest independent TV station owners. Scripps runs a collection of national journalism and content businesses, including Newsy, the next-generation national news network; podcast industry leader Stitcher; the fast-growing national broadcast networks Bounce, Grit, Escape, Laff and Court TV; and Triton, the global leader in digital audio technology and measurement services. Scripps runs an award-winning investigative reporting newsroom in Washington, D.C., and is the longtime steward of the Scripps National Spelling Bee. Founded in 1878, Scripps has held for decades to the motto, "Give light and the people will find their own way."

ADJUSTED COMBINED SUPPLEMENTAL INFORMATION

Due to the effect that the 2019 television station acquisitions have on our Local Media segment, and to provide meaningful period over period comparisons, we are providing this supplemental non-GAAP (Generally Accepted Accounting Principles) information to present certain financial results on an adjusted combined basis. The adjusted combined financial results have been compiled by adding, as of the earliest period presented, the acquired Waco, Texas; Tallahassee, Florida; Cordillera; and Nexstar-Tribune television stations' historical revenue, employee compensation and benefits, programming and other expenses to Scripps' historical revenue, employee compensation and benefits, programming and other expenses captions historically reported within our Local Media segment. These historical results are adjusted for certain intercompany adjustments and other impacts that would result from the companies operating under the ownership of Scripps.

Management uses the adjusted combined non-GAAP supplemental information for purposes of evaluating the performance of the Local Media segment. The company therefore believes that the non-GAAP measure presented provides useful information to investors by allowing them to view the company's businesses through the eyes of management, facilitating comparison of Local Media results across historical periods and providing a focus on the underlying ongoing operating performance of the segment.

The company uses the adjusted combined non-GAAP supplemental information to supplement the financial information presented on Scripps GAAP historical basis. This non-GAAP supplemental information is not to be considered in isolation from, or as a substitute for, the related GAAP measures, and should be read only in conjunction with financial information presented on a GAAP basis.

The adjusted combined financial results contained in the following supplemental information is for informational purposes only. These results do not necessarily reflect what the historical results of Scripps would have been if the acquisitions of the Waco, Tallahassee, Cordillera and Nexstar-Tribune broadcast operations had occurred on January 1, 2018. Nor is this information necessarily indicative of the future results of operations of the combined entities.

The adjusted combined financial information is not pro forma information prepared in accordance with Article 11 of SEC regulation S-X, and the preparation of information in accordance with Article 11 would result in a significantly different presentation.

 

Local Media segment Adjusted Combined segment profit





2019



2018

(in thousands)



Q1



Q2



Q1



Q2



Q3



Q4



Total































Segment operating revenues:





























Core advertising



$

174,720





$

192,570





$

178,794





$

193,660





$

178,444





$

189,602





$

740,500



Political



1,188





2,452





3,380





22,038





56,694





114,323





196,435



Retransmission



113,700





112,374





100,322





103,525





107,990





107,808





419,645



Other revenue



5,641





5,278





4,907





5,885





5,267





5,222





21,281



Total operating revenues



295,249





312,674





287,403





325,108





348,395





416,955





1,377,861



Segment costs and expenses:





























Employee compensation and benefits



109,587





107,305





109,560





106,507





107,214





111,893





435,174



Programming



85,561





92,879





76,638





87,880





93,887





80,565





338,970



Impairment of programming assets























8,920





8,920



Other expenses



51,051





51,980





51,669





55,067





55,300





63,551





225,587



Total costs and expenses



246,199





252,164





237,867





249,454





256,401





264,929





1,008,651



Segment profit



$

49,050





$

60,510





$

49,536





$

75,654





$

91,994





$

152,026





$

369,210



Non-GAAP reconciliation

Below is a reconciliation of Scripps historical reported revenue and segment profit for its Local Media segment to the adjusted combined revenue and adjusted combined segment profit for the Local Media segment with the 2019 television station acquisitions.





2019



2018

(in thousands)



Q1



Q2



Q1



Q2



Q3



Q4



Total































Local Media operating revenues, as reported



$

203,387





$

236,715





$

192,059





$

213,248





$

230,734





$

281,439





$

917,480



Waco/Tallahassee TV stations acquisition











6,068





6,174





6,190





6,805





25,237



Cordillera TV stations acquisition



35,540





12,412





35,271





41,692





47,700





59,416





184,079



Nexstar-Tribune stations acquisition



64,679





71,349





58,296





68,297





68,079





73,607





268,279



Other revenue adjustments (1)



(8,357)





(7,802)





(4,291)





(4,303)





(4,308)





(4,312)





(17,214)



Local Media adjusted combined operating revenues



$

295,249





$

312,674





$

287,403





$

325,108





$

348,395





$

416,955





$

1,377,861



 





2019



2018

(in thousands)



Q1



Q2



Q1



Q2



Q3



Q4



Total































Local Media segment profit, as reported



$

34,173





$

54,329





$

31,619





$

53,368





$

67,416





$

98,716





$

251,119



Waco/Tallahassee TV stations acquisition











1,770





1,905





1,893





2,265





7,833



Cordillera TV stations acquisition



7,925





2,828





8,632





14,287





19,212





30,338





72,469



Nexstar-Tribune stations acquisition



15,309





11,155





11,806





10,397





7,781





25,019





55,003



Other revenue adjustments (1)



(8,357)





(7,802)





(4,291)





(4,303)





(4,308)





(4,312)





(17,214)



Local Media adjusted combined segment profit



$

49,050





$

60,510





$

49,536





$

75,654





$

91,994





$

152,026





$

369,210





























































(1) Primarily reflects reduced retransmission revenue from CW affiliates under Scripps retransmission agreements in effect during each period.

 

Cision View original content to download multimedia:http://www.prnewswire.com/news-releases/scripps-closes-acquisition-of-eight-tv-stations-from-nexstar-tribune-merger-divestitures-300922019.html

SOURCE The E.W. Scripps Company

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