Scripps TV Profits Slow as Cable Channels Soar

Political ad revenue—$1.6 million—was weaker than expected due to the lack of primary campaign spending in Florida and Michigan, the company said.
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The newspapers and television stations of the E. W. Scripps Company, bogged by weak local ad sales, cut some costs and turned in smaller profits than last year. The company’s cable properties, meanwhile, are showing strong overall performance.

The company segments split July 1 with a spin-off of Scripps Networks Interactive Inc., which includes the cable channels HGTV and The Food Network.

Weak automotive and retail advertising nudged second-quarter revenue at the company’s television station group down 4.7 percent to $80.5 million compared to last year’s second quarter, with profits of $18.3 million, down from $23.5 million in Q2 2007. Political ad revenue—$1.6 million—was weaker than expected due to the lack of primary campaign spending in Florida and Michigan, the company said. The company expects $40 million to $44 million in total political ads for the year.

At Scripps newspapers, revenue dropped 13 percent to $144 million, led by the drop in classifieds.

At Scripps Networks, the company spent heavily on programming, marketing and employees, bringing in $271 million in ad revenue (up 11 percent) and $69.7 million in affiliate fees (up 19 percent). Profit for the segment grew 9.8 percent over the year-ago quarter to $180 million.

Compared to the second quarter of 2007, revenue at cable properties grew: HGTV, up 13 percent to $172 million; Food Network, up 13 percent to $136 million; DIY Network, up 28 percent to $19.3 million; Fine Living, up 17 percent to $14.7 million. But revenue at Great American Country dropped to $6.8 million from $7.1 million, despite being seen in 54 million homes, up from 48 million homes a year ago.

At the company’s online comparison shopping services, Shopzilla and uSwitch, combined second-quarter revenue grew 13 percent to $66.9 million. Segment profit for the Interactive Media division grew to $15.1 million from $6.8 million a year ago.

Overall, the company’s second-quarter revenue increased 3.8 percent to $664 million compared with a year ago. Income was $51.2 million (94 cents a share), compared with $97.5 million ($1.78 a share) in Q2 2007.

At the broadcast television stations, third-quarter revenue is expected to be up 15 to 17 percent over the prior-year period, buoyed by the politicals.

The company also warned it may take a write down on assets, which would be recorded in the third quarter.

Scripps Television Stations Group includes 10 stations—six ABC affiliates, three NBC affiliates, and one independent—in Detroit, Cleveland, Cincinnati, Phoenix, Tampa, Baltimore, Kansas City, Mo., West Palm Beach, Fla., Tulsa, Okla., and Lawrence, Kan.