E.W. Scripps reported its first-quarter results Monday and tucked into its earnings report some information about virtual MVPDs’ impact on its local media business.
The company said the number of subscribers to over-the-top services in its markets hit 350,000 at the end of 2017. Scripps said the growth, coupled with its stable satellite and cable subscriber totals, is driving retransmission revenue.
“In our Local Media segment, we saw nice growth in our over-the-top service subscribers and stabilization in our legacy contracts. We remain on track to meet our full-year retransmission revenue expectations,” E.W. Scripps CEO Adam Symson said in a statement.
The local media group’s revenues for the quarter totaled $192 million, up 2.7% year over year. Retransmission revenue increased 6.9% to $70.8 million despite the company having to pay out a one-time refund of $2.1 million to an MVPD that mistakenly overpaid Scripps in 2016 and 2017 on out-of-market subscribers.
Core advertising stayed mostly flat, up just 0.2%, and total segment expenses rose 3.7% to $160 million due to increases in programming fees tied to network affiliation agreements. Segment profit fell to $31.6 million, down from $32.4 million in the year-ago quarter.
Overall, E.W. Scripps’s total revenue was $254 million, compared to $198 million in first quarter of 2017. Losses from continuing operations widened to $8.6 million or 10 cents per share, up from $2.7 million or 3 cents per share one year ago. The company took on $3.8 million of restructuring charges during the quarter, which translated to a $2.8 million loss.
“During the first quarter, we continued to see the tangible impact of our plan that improves our short-term performance and positions the company for long-term growth. We began the execution of our cost-cutting initiatives, are exploring potential television station swap opportunities and are divesting our radio stations. The aggressive plan we outlined in September is specific and actionable and will drive meaningful margin and cash-flow improvement,” Symson said.