(Feb. 20, 2009) CINCINNATI: E.W. Scripps is freezing salaries and retirement benefits after posting a $19.4 million 4Q loss that was aggravated by a $31 million write-down on the value of its TV properties.
“It became apparent toward the end of the year there’s nowhere to hide from the national economic crisis,” said Rich Boehne, president and CEO of Scripps (NYSE: SSP). “Despite our geographic diversity and multiple sources of advertising revenue, we’re feeling the pain as the recession rolls its way through our local markets and media businesses.”
Employees of Scripps were notified yesterday of pay reductions ranging from 3 to 5 percent across the newspaper and corporate offices. They come on top of cuts between 5 and 15 percent absorbed by TV station management, newspaper publishers and corporate executives effective Jan. 1. Additionally, 401 (k) contributions will be suspended and bonuses “drastically reduced,” SSP said.
“Other changes were implemented as well, differing by location, division and, where applicable, collective bargaining agreements,” Scripps earnings release stated. “It is expected that these measures will reduce the company’s expenses in 2009 by approximately $20 million.”
The 10 TV stations in the E.W. Scripps group held their own in 4Q, posting revenues of $93.4 million, up more than 2 percent over 4Q07. Net income was $31.1 million, up more than one percent over the comparable period.
Political ad sales offset the rest of the ad market implosion. Political was $26 million, compared to $1.3 million a year ago. Local spot fell nearly 27 percent to $41.5 million; national fell 27 percent to $20.8 million.
For the full year, TV revenues were flat at around $327 million. Net income fell 4 percent to $80.6 million. Full-year political totaled $41 million, compared to $42 million during the 2004 presidential election.
Cash expenses for the station group were $62.3 million, up 2.5 percent from $60.8 million in the 2007 quarter, “despite a 15 percent increase in programming costs,” Scripps (NYSE: SSP) said.
For the full year, consolidated newspaper, TV and print syndication revenues from decreased 7.2 percent to $1 billion. For the quarter, revenue fell 6 percent to $265 million. Income fell into the red to a pre-tax and interest loss of $19.4 million, pressured by a $31 million write-down on TV assets.
SSP had $61 million in bank debt as of Dec. 31. Capex in ’09 is expected to be $52 million. SSP was trading at around $1.50 in mid-afternoon, continuing a slow downward trend from this year’s peak of around $2.34 on Jan. 2.
