SSP

Business Context and Reporting Period

Company: The E.W. Scripps Company (SSP)
Filing Type: Form 10-K (Annual Report)
Reporting Period: Fiscal year ended December 31, 2025
Business Overview: Scripps operates a portfolio of more than 60 local television stations in over 40 markets and national news and entertainment networks (including ION, Bounce, Grit, and Scripps News). The company serves audiences through broadcast, digital, and streaming platforms. In 2025, the company executed a significant enterprise-wide transformation plan targeting $125 million to $150 million in annualized EBITDA growth by 2028 through cost savings and revenue yield initiatives leveraging AI and automation.

Key Financial Metrics

Note: 2025 results include a $19.5 million non-cash charge related to the sale of Court TV and $44.5 million in financing transaction costs.

Material Changes vs. Prior Period

• Revenue Decline: Operating revenues decreased 14.3% to $2.15 billion. This was primarily driven by a $341 million decrease in political advertising revenue due to 2025 being a non-election year. Core advertising revenue increased slightly by $2.3 million, while distribution revenue decreased by $25.9 million.
• Profitability Shift: The company reported a net loss of $100.9 million in 2025 compared to net income of $146.2 million in 2024. Operating income fell 55% to $184.0 million.
• Segment Performance:
  • Local Media: Segment profit dropped 62.3% to $193.6 million, heavily impacted by the absence of political ad revenue.
  • Scripps Networks: Segment profit increased 24.5% to $236.8 million, driven by cost reductions (including the shutdown of over-the-air Scripps News) and increased Connected TV (CTV) revenue, despite a 3.8% decline in total segment revenue.
• Debt Refinancing: The company completed major refinancing in April and August 2025, issuing $750 million in 2030 Senior Notes and restructuring term loans. This resulted in $44.5 million in non-capitalized transaction costs and a $13.0 million loss on extinguishment of debt.

Guidance, Outlook, and Risks

• Transformation Plan: Management announced an enterprise-wide transformation plan in February 2026 targeting annualized enterprise EBITDA growth of $125 million to $150 million by 2028. Initiatives include leveraging AI, automation, and cost savings.
• Asset Sales and Acquisitions:
  • Sales: Agreements reached to sell WFTX (Fort Myers) for $40 million and WRTV (Indianapolis) for $83 million, expected to close in March 2026. Court TV was sold in February 2026.
  • Acquisitions: Exercised options to acquire 23 stations from INYO Broadcast Holdings for approximately $54 million (subject to FCC approval). Entered a station swap with Gray Media across five markets.
• Preferred Stock: The company holds $600 million in Series A Preferred Stock issued to Berkshire Hathaway. As of December 31, 2025, $117 million in cumulative undeclared dividends were accrued. The company is prohibited from paying common dividends or repurchasing common stock until preferred shares are redeemed.
• Risks: Key risks include the cyclical nature of political advertising, declining linear TV viewership, retransmission consent renewal risks, and substantial debt service obligations ($2.6 billion aggregate principal).

Investor Verification Checklist

• Political Ad Cycle Impact: Verify the magnitude of revenue recovery expected in 2026 (an election year) versus the 2025 baseline.
• Debt Service Capacity: Assess the ability to service $2.6 billion in debt, including the new 9.875% 2030 Senior Notes, given the reduced operating cash flow.
• Preferred Stock Redemption: Monitor the timeline and funding strategy for redeeming the $600 million Berkshire Hathaway preferred stock to unlock common stock flexibility.
• Transformation Execution: Track progress on the $125-$150 million EBITDA growth target and the integration of AI/automation cost savings.
• Asset Sale Closings: Confirm the closing dates and proceeds for the WFTX, WRTV, and Court TV transactions in early 2026.