E.W. Scripps during first quarter earnings touted momentum for its newly formed sports division, having signed deals with the WBNA and more recently the NHL’s Golden Knights. On Friday executives said live sports is a strategy that will boost the value of its linear TV business, serve as a catalyst for continued free OTA growth and give teams and leagues a new model to grow fan bases.
The broadcaster in December announced the launch of a dedicated Scripps Sports division, led by Brian Lawlor. The Scripps Sports creation plays into a broader reorganizational strategy to enhance core assets, scale and distribution that’s expected to result in at least $40 million in annual savings. Since the unit formation, Scripps publicly disclosed two key deals, including with the WBNA – with Friday Night Spotlight coverage on Scripps’ ION network slated to start May 26. And just last week a multi-year deal with the Vegas Golden Knights to televise all locally broadcast games for free to fans in Nevada and surrounding areas within the team’s regional broadcast territory – marking another pro sports team to leave the regional sports network (RSN) model in favor of broadcast in recent weeks.
Scripps will air local Golden Knights ice hockey games on its local station KMCC-TV, which currently airs ION programming. The KMCC channel will be rebranded as an independent station before the 2023-2024 NHL season starts, featuring local and national news, local sports and entertainment programming along with the Knights games. Scripps’ Las Vegas ABC affiliate KTNV will provide marketing and promotion.
Speaking on Scripps quarterly earnings call, CEO and President Adam Symson pointed to two deals as major wins and explained how each are leveraging the company’s assets differently, but both play into the broadcaster’s larger vision for live sports.
“While the WNBA deal takes advantage of our national reach, yesterday's announcement with the Vegas Golden Knights is intensely local. Scripps Sports and our stations KTNV and KMCC and Las Vegas will starting next season be the exclusive local media partner for this incredibly popular NHL team, ending the RSN model in Nevada and bringing hockey to every television platform,” Symson said in opening remarks. “A big win for NHL fans, the Golden Knights, and Scripps.”
As for WNBA, the women’s pro basketball league is using ION (which Scripps purchased in 2021 for $2.65 billion), with Symson saying it brings the team full nationwide reach across free over-the-air connected TV, cable and satellite. The company anticipates announcing a high-profile title sponsor for the Friday Night WNBA franchise this week, he noted, adding there’s a growing interest in women’s sports, with WNBA viewership up 22% last season even with limited reach.
“Now, the vast distribution on ION will give the league maximum visibility so fans everywhere on any television platform will gather together every Friday night for this franchise TV event,” Symson said.
He emphasized that Scripps will be financially disciplined when it comes to live sports, including willingness to walk away if the opportunity isn’t right. The chief executive stressed to investors that “every one of our partnerships will enhance the value of our linear television business” while also helping boost OTA and new models for leagues and teams.
Scripps is seeking an expansion into live sports as a way to not only drive value from the games itself, but to increase audience engagement with its TV stations and news brands, he said, with Symson noting live sports is the biggest driver of linear viewing and commands the highest ad rates in TV.
“The WNBA makes use of ION's existing national reach while the Golden Knights partnership opens up the opportunity for us to launch a new independent station in the growth market of Las Vegas, with valuable live sports as an anchor tenant for programming,” Symson said. “Both cases are examples of us seeking the best and highest use for our spectrum to increase yield.”
RSN collapse opens opportunities
On the call analysts asked how Scripps is looking at the bankrupt Diamond Sports RSN portfolio, which includes Bally Sports and is currently undergoing Chapter 11 restructuring, and if it provides opportunities. The NBA’s Phoenix Suns last month left the RSN model after striking a broadcast deal with Gray Television and Kiswe mobile, but Diamond has filed a lawsuit to block the deal citing breach of contract.
Symson declined to comment on anyone else’s deals but did say that Diamond Sports and in general “the collapse of the RSN model does open up significant opportunity for us and broadcasters.”
“I think there are a number of opportunities continuing to present themselves, whether they be because the RSN is not going to be in a position to continue to carry a team’s sports or because a league is looking for an alternative vehicle to reach more Americans,” he commented.
He said both WNBA and Golden Knights were looking to expand reach, as well as influence to help grow the respective sports. And Scripps’ sees potential for its model beyond just the collapse of the RSNs.
“If you continue on with an RSN or with cable, you’re essentially looking at a declining audience on that platform regardless, because of cord-cutting,” he added.
Live sports bolstering linear, connected TV
Commenting on the connected TV opportunity for live sports, Symson reiterated that bringing sports to ION or any local stations isn’t just about boosting OTA but linear television as well – and Scripps sees distribution in the CTV space as one in the same as linear.
“It’s not on-demand, it’s live, it’s linear, it’s just being delivered over a digital platform versus OTA versus pay TV,” he noted.
Scripps is working with CTV partners “to ensure that they recognize the opportunity we bring to the table when we’re bringing this live sports because “ it’s “not something that has historically been available on FAST platforms.”
On the earnings front connected TV revenue for Scripps’ national networks grew 46% year over year as ION, Bounce, Grit and other Scripps Networks brands expanded distribution across all major streaming services. The company said it’s on track to generate more than $100 million in networks CTV revenue in 2023.
That said, inflation and consumer uncertainty continued to contribute to softness in the advertising market, impacting quarterly results.
Scripps total Q1 revenue of $528 million was down 6.7% over the same period a year ago, against costs and expenses of $455 million. The company reported losses of $31.1 million for the quarter or $0.37 cents per share.
It’s local media and networks businesses both recorded revenue declines amid a challenged ad market. For local media, revenue was down 4.5% to $312 million, including $141 million in core ad revenue – as well as $163 million in distribution revenue, which saw a 2.4% bump over the year prior.
On the networks side, revenue was down 9.5% to $216 million due to weakness in the national ad marketplace.