Business Context and Reporting Period
Company: The E.W. Scripps Company (Scripps)
Filing Type: Form 10-Q (Quarterly Report)
Period Ended: June 30, 2026
Business Overview: Scripps operates a diverse media portfolio including over 60 local television stations (Local Media segment) and national news and entertainment networks such as ION, Bounce, Grit, and Scripps News (Scripps Networks segment). The company generates revenue through advertising sales (core and political) and distribution fees (retransmission consent).
Key Financial Metrics
| Metric (in thousands) | Three Months Ended June 30, 2026 |
Six Months Ended June 30, 2026 |
|---|---|---|
| Total Operating Revenues | $490,401 | $1,007,269 |
| Operating Income (Loss) | $(1,157,539) | $(1,132,774) |
| Net Loss | $(1,151,250) | $(1,153,040) |
| Net Loss Attributable to Shareholders | $(1,167,805) | $(1,185,786) |
| Diluted EPS | $(12.68) | $(13.04) |
| Cash and Cash Equivalents | $13,046 | $13,046 (Balance Sheet) |
| Restricted Cash | $11,305 | $11,305 (Balance Sheet) |
| Long-Term Debt (Net) | $2,493,889 | $2,493,889 (Balance Sheet) |
| Net Cash Provided by Operating Activities | N/A | $17,096 |
Material Changes vs. Prior Period
- Revenue Decline: Total operating revenues decreased 9.2% ($49.7 million) in Q2 2026 and 5.4% ($57.2 million) year-to-date compared to 2025. Core advertising revenue declined significantly, partially offset by a $26.6 million increase in political advertising revenue due to the election cycle.
- Significant Impairment Charge: The company recorded a non-cash impairment charge of $1.14 billion ($967 million goodwill, $169 million intangible assets) related to the Scripps Networks reporting unit. This was driven by lower-than-projected financial results, weak national advertising markets, and Nielsen methodology changes.
- Restructuring Costs: Restructuring costs surged to $35.8 million in Q2 2026 (vs. $0.6 million in Q2 2025) and $36.5 million year-to-date. This includes $12.1 million in asset losses, $4.5 million in severance, and $13.7 million in consulting fees for an enterprise-wide transformation plan.
- Asset Sales and Swaps: The company recognized $38.9 million in pre-tax gains from the sale of Court TV, WFTX (Fort Myers), and WRTV (Indianapolis). Additionally, a station swap with Gray Media was completed with no cash consideration.
- Segment Performance: Local Media segment profit remained flat at $55.8 million for the quarter but increased 13.0% year-to-date. Scripps Networks segment profit dropped 54.4% to $25.5 million for the quarter and 40.2% year-to-date.
Guidance, Outlook, and Risks
- Transformation Plan: Management announced an enterprise-wide transformation plan targeting annualized enterprise EBITDA growth of $125 million to $150 million by 2028, leveraging AI and automation. They anticipate $100 million in annualized EBITDA improvement by the end of 2026.
- Liquidity: As of June 30, 2026, the company had $13.0 million in unrestricted cash and approximately $221 million in additional borrowing capacity under revolving credit and securitization facilities. Management believes cash flow from operations will meet needs for the next 12 months.
- Debt Covenants: The company is in compliance with its financial covenants, including a maximum first lien net leverage ratio of 3.50 to 1.0 through September 30, 2026.
- Preferred Stock: The company has $782 million in redemption value for Series A preferred stock. Cumulative undeclared and unpaid dividends totaled $150 million. Common stock dividends and repurchases are prohibited until preferred shares are redeemed.
- Risks: Key risks include continued pressure in the national advertising market, ratings challenges due to Nielsen methodology changes, and the impact of macroeconomic uncertainty on the Scripps Networks segment.
Investor Verification Checklist
- Impairment Validity: Verify the assumptions used in the $1.14 billion Scripps Networks impairment test, specifically regarding future cash flow projections and discount rates.
- EBITDA Targets: Monitor the progress of the enterprise-wide transformation plan against the stated goal of $100 million in annualized EBITDA improvement by year-end 2026.
- Preferred Stock Status: Confirm the timeline and strategy for addressing the $150 million in accrued preferred dividends and the $782 million redemption obligation.
- Debt Maturity Profile: Review the upcoming maturity dates for senior notes (2029, 2030, 2031) and term loans to assess refinancing risks in a high-interest-rate environment.
- Political Ad Revenue Sustainability: Assess the sustainability of the political advertising revenue spike in 2026 (an election year) versus non-election year baselines.