File photo: EW Scripps Co. sign is displayed on a monitor on the floor of the New York Stock Exchange (NYSE) on Friday, June 3, 2016 in New York, USA.
Michael Nagle | Bloomberg | Getty Images
E.W. Scripps The company is launching what it calls a broadcast company transformation plan aimed at driving growth for both revenue and local TV stations.
The company announced Wednesday that it aims to grow annual corporate earnings before interest, taxes, depreciation and amortization between $125 million and $150 million by 2028. To get there, Scripps plans to take a number of cost-cutting and revenue-boosting measures that rely on technology, namely artificial intelligence, CNBC exclusively reports.
“This is essentially a reorientation of the entire company, resulting in a more nimble and efficient cost structure,” CEO Adam Simson said in an interview with CNBC. “We have to act like a media startup. We have to act like the company EW founded, because the market cannot stand traditional pace or traditional thinking.”
The company plans to explain the details of its efforts during its next earnings call with investors on Feb. 26, but Simson said the company will make changes to its newsroom to relieve journalists of administrative duties and allow them to focus more on gathering and reporting news.
The company declined to comment on the specific impact of cost cuts on staffing levels, saying the potential impact on employment would be known in the coming months.
“Everything is on the table, but our goal is to always maintain the two elements of our customer relationship: journalism and sales,” Simson said.
Scripps owns more than 60 local affiliate stations across 40 markets, including Ion, which broadcasts WNBA and other professional sports games.
The company’s stock price has fallen 70% over the past five years, a decline similar to that of many of its media peers.
The turnaround for the nearly 150-year-old Scripps comes at a time when not only the company, but the broadcasting industry as a whole, finds itself in a historically challenging time.
Broadcasting industry – Also includes listed companies such as. nextstar media group, Tegna, sinclair and gray media — The company faces the same challenge as its cable TV and content studio peers: the exodus of pay-TV bundle subscribers to streaming alternatives.
As a result, the industry has pursued consolidation pending major regulatory changes. Scripps itself has been the target of M&A, with Sinclair recently taking a hostile approach toward merging with the company. Mr. Scripps rejected such offers.
Meanwhile, print, digital and television media have been in the midst of massive layoffs over the past year. paramount skydance The company has cut thousands of jobs across the company, including at CBS News, with the Washington Post recently reporting that it told staff it would cut a third of its newsroom jobs.
The rise of AI is also fueling fears about mass layoffs, especially in newsrooms.
In 2024, Scripps announced the creation of an AI team reporting to Laura Tomlin, Scripps’ chief transformation officer. Simson said her first task will be to “integrate technology across the company.”
Simson said Scripps’ move to introduce new technology is not intended to replace journalism jobs with AI, but rather to help newsrooms work more efficiently and ensure the longevity of local news.
“This should not be a cost-cutting exercise to try to gradually improve margins by cutting products. That has proven to be the beginning of the end,” Simson said. “This really has to start with understanding what consumers want from us, both in terms of news products and sales products.”
Commitment to change
Mr. Simson gathered 200 leaders from across the company at Scripps’ headquarters in Cincinnati this week to outline his latest plans. The plan will be widely announced to Scripps employees and investors on Wednesday.
The company also reaffirmed its latest revenue outlook and said it expects its 2026 financial performance to improve due to the midterm elections (local stations rely heavily on political advertising) and the coverage of the Winter Olympics and the upcoming World Cup on its affiliates this year.
Harini Logan, 14, from San Antonio, Texas, receives a trophy from Scripps CEO Adam Singson after winning the annual Scripps National Spelling Bee on June 2, 2022 at National Harbor in Oxon Hill, Maryland, USA. Reuters/Jonathan Ernst
Jonathan Ernst | Reuters
The transformation, with the vision tagline “We create connections,” is the latest step in recent years for Scripps to find new avenues for revenue growth.
“Scripps’ transformation efforts are not unique in and of themselves. Everyone in the space is cutting costs,” Benchmark analyst Dan Karnos said in a recent interview. “Last I checked, broadcast television wasn’t the fastest growing segment of the media ecosystem. It’s not as bad as cable.”
During a November earnings call with investors, Simson hinted at further initiatives his team was working on, emphasizing a focus on “expense management.”
Scripps said that in its local media division, expenses were down more than 4% in the third quarter compared to the same period last year, and in its network business, expenses were down 7.5%, both driven in part by “lower employee-related costs.”
But Mr. Cournos said Scripps is departing from its peers with other moves, such as acquiring local media rights to grow Scripps Sports. Scripps’ network currently has the rights to air WNBA games, and the company is also picking up the rights to NHL teams leaving regional sports networks.
“I think Scripps has had to reinvent itself several times,” Cournos told CNBC.
EW Scripps Company President and CEO Adam Simson poses for a photo with WNBA Commissioner Cathy Engelbert.
Provided by: Scripps
Scripps has rejected a merger with Sinclair, but the company has made smaller deals of its own, including offloading stations and replacing stations with Gray Media, which is still pending approval. The company also agreed this week to sell the Court TV network for less than $125 million, said a person familiar with the matter who asked not to be identified discussing internal matters.
Mr. Simson recognized the need for consolidation as the industry moved into a new era. But as some of my colleagues said in recent hearings, that’s not what Scripps needs, at least not at all.
“There’s no question that responsible consolidation is important for the industry. But make no mistake, this is financial engineering,” Simson said. “This creates a tailwind for our business, which investors should appreciate, and we chase the tailwind, but it doesn’t create the kind of organic growth we’re talking about here.”
Simson’s history at Scripps runs deep, starting in the newsroom. He joined the parent company in 2003 as executive producer of research and special projects at a Scripps affiliate in Phoenix and became CEO in 2017.
The latest transformation efforts follow similar changes in 2023, including Scripps eliminating some anchor roles, adding reporters in smaller markets and increasing reporter pay.
“This is very personal for me. I think I’m the only CEO of a broadcast company at this point who comes from a journalism background and a newsroom background,” Simson said. “What we’re doing is so important that we can’t be aggressive and proactively transform the company to ensure we’re a growing company.”
Disclosure: CNBC’s parent company, Versant, broadcasts Olympic coverage produced by NBC Sports on its networks, including USA Network and CNBC.
