Q2 2022 E W Scripps Co Earnings Call

Okay.

Ladies and gentlemen, thank you for standing by and welcome to the Scripps second quarter earnings call for the conference all participant lines are in a listen only mode. However, there will be an opportunity for your questions. If you'd like to ask a question at any point during the call. Please press. One then zero if you should require any assistance. Please press star zero.

And then operator will assist you offline as a reminder, today's call is being recorded I will turn the call now over to Ms. <unk>.

And Michelle Please go ahead.

Thanks, John Good morning, everyone and thank you for joining us for a discussion of the E. W. Scripps company's financial results and business strategies, you can visit Scripps Dot com for more information and a link to the replay of this call. A reminder, that our conference call and webcast include forward looking statements. Actual results may differ factors that may cause them to differ are outlined in our SEC filing.

We do not intend to update any forward looking statements we make today.

On this call will be a discussion of certain non-GAAP financial measures that are provided as supplements to assist management and the public in their analysis and valuation of the company. These metrics are not formulated in accordance with GAAP and are not meant to replace GAAP financial measures and may differ from other companies uses or formulations included in our earnings release are the reconciliations.

non-GAAP financial measures to the GAAP measures reported in our financial statements.

We'll hear this morning from Scripps President and CEO , Adam Simpson, Chief Financial Officer, Jason Combes, local media, President, Brian Lawlor, and Scripps Networks' President Lisa Knutson.

Also on this call as controller, Dan Persky, Here's Adam.

Good morning, everybody thanks for joining us.

Pleased to be delivering second quarter financial results did almost fully met and in some cases exceeded expectations. We set back in may despite the ongoing economic uncertainty demonstrating once again the company we've been transforming is resilient and its performance even in the face of macroeconomic challenges.

And our local media Division Q2, political advertising reached a record level on a same station basis foreshadowing our expectations for the full year political cycle. We are now moving into the heart of the political spending season, when we expect to meet or exceed our 2020 presidential year level.

With well over $8 billion from the nationwide political spending arena. This season, it should be clear that political revenue defies economic trends.

Both scripts as political and retransmission revenue offset a bit of cyclical softness in core advertising.

Driven largely by political we expect local media to deliver impressive second half results for total revenue and profitability.

Our networks group fell a bit short of our revenue expectations due to the national AD market climate.

And yet we were pleased to see the division achieved the same level. It reached in Q2 of last year and perform better not just than other national networks groups, but also better than the AD revenue performance of some major digital and CTV companies.

Profit margin for the Scripps networks Division also reflects the fundamental productivity and durability of that business.

Our Q2 performance illustrates that we have positioned the company well to move through this period because of the work we have done in recent years to strengthen our local media portfolio and improve its financial performance and to create the new high margin networks operating unit.

Both divisions are already capitalizing on growth in various television viewing platforms and once we move past this economic cycle, we expect a rebound in key local core AD categories and a return to networks division margins in the 35% to 40% range.

Every other company will navigate through the macroeconomic environment and in the near term we will benefit from what we expect will be really robust political revenue this year.

However, we also see clearly how this same environment of economic uncertainty will in fact played to our advantage.

We'd all be smart to remember that the majority of Americans still turned to pay TV for their entertainment and we expect we will continue to benefit from growth in Retrans revenue near and long term.

But our company employees and all of the above approach to reaching audiences, including a unique focus on free over the air television.

In this inflationary environment when consumers are already struggling with plus fatigue, we're targeting cord cutters and cord nevers with the benefits they would gain by adding on the free premium programming available from over the air television the best Live Sports network programming.

And local and national journalism, informing and entertaining them for free alongside their increasingly expensive subscription bundles.

The cost of subscribing to streaming services is going up along with everything else Moffett, Nathan and recently reported that the price of most major streaming subscriptions has nearly doubled in the last four years.

According to amaze study by Rick really TV households have an average of five subscriptions, but 31% of respondents also said they plan to cancel some this year.

We think wall Street is already acknowledging this trend.

Maybe what investors haven't caught onto yet is how consumers are watching instead, a recent study by parks associates found that 31% of people, who don't have cable use their digital television antenna for free over the air viewing a population we expect to grow even faster.

During a period of inflation and negative consumer sentiment.

As we have previously discussed Scripps is capitalizing on this free TV movement with our consumer marketing campaign touting the benefits of over the air television.

Last month, we rolled out pay TV traditional and digital campaigns and 13 test markets promoting our educational website, the free TV project Dot org and explaining the quantity and quality of options available for free.

We remind consumers that they can get live sports local news and big four network programming and our premium networks without having to subscribe to half a dozen subscription streaming services and we are working with retailers and installers to make it easy.

Pocketbook concerns and rising subscription prices also are benefiting Scripps is free AD supported connected TV products.

All of our local station brands and most of our National networks are now available across a wide range of CTV platforms and as you can tell from the revenue growth, we've shared gaining traction with audiences.

Because we believe consumers will continue to demand a variety of television viewing options, we see the increasing cost and complexity of streaming platforms as an opportunity to win audiences over to otas and the shift from traditional platforms as an opportunity to advance our brands on.

CTV.

Thats the above that's the all of the above approach I mentioned earlier and it's designed not just to serve audiences, but also to meet the needs of the nation's advertisers.

While we are clearly a big believers in the opportunity in connected TV, we are exceptionally well positioned to benefit from the ongoing attraction advertisers have to the still very dominant and incumbent media marketplace linear TV <unk>.

<unk> TV has maintained its durability because consumer products companies retail big pharma insurance and other big advertising spenders continue to gravitate to the consistent brand safe and premium programming that delivers their messages effectively and efficiently to the law.

Just audiences.

More than 70 year track record leads <unk> to recognize that there is nothing experimental about their spend in television.

Two years ago as the pandemic was shutting down the nation Scripps was quietly making plans that led to the creation of a new free cash flow engine, our highly profitable Scripps networks business.

At the same time, we have continued to steadily grow our legacy local TV revenue through core advertising political advertising and distribution fees.

I hope, it's clear that as we did when the pandemic shutdown the nation Scripps will use this blip in the economy to our advantage and we will again emerge stronger than before.

Now here's Jason.

Thanks, Adam and good morning.

Before I begin reviewing our second quarter results I'd like to point out that everything for the quarter is on an as reported basis. We've now lapped acquisition of ion and the creation of the Scripps networks, which took place in early January of 2021. So we did not have any adjusted combined results for Q2 and.

And a full year or year to date results would still include comparisons on the adjusted combined basis.

Let's begin with the local media Division results.

Local media revenue was up nearly 10% driven by political advertising and Retrans revenue.

Core advertising revenue was down 2% with strength in services home improvement and travel and leisure.

Political AD revenue in the quarter was $24 million that.

Harris to $13 million in Q2 of 2020 and $22 million in Q2 of 2018.

Retransmission revenue was up nearly 10% to $171 million.

Local media expenses increased less than 6% from the year ago quarter, excluding programming costs.

Excluding programming costs expenses were up less than 4%.

Our local media segment profit was $81 million.

Turning to the Scripps networks Division revenue for the second quarter of 2022 was $239 million equal to the prior year quarter, despite weakness in the national advertising marketplace.

Networks segment expenses rose, 26% over Q2 of 2021 just.

Just a reminder, that this quarter included first time cost for producing the Scripps national spelling Bee as well as the cost of watching newsy to ITV and true real over the air.

We made those strategic investments as part of our commitment to our national networks growth strategy.

In the third quarter, we will begin to cycle through those investments.

Segment profit for the networks was $73 million.

And our segment captioned other we reported a loss of $4 million, which includes the spend for our national marketing campaign to promote consumer digital television antenna use.

Shared services and corporate expenses came in $3 million below our guidance at $18 million.

We moderated expenses during the quarter due to the economic conditions.

The company realized Q2 income from operations of 32 per share.

As of June 30, cash and cash equivalents totaled $58 million.

Our net debt at quarter end was $3 1 billion and our net leverage dropped from four seven times to four five times per the calculations in our credit agreements.

Now I'd like to give guidance for the third quarter of 2022.

We expect total local media revenue to increase in the low to mid 20% range from the third quarter of 2021, when our core advertising revenue benefited from the Summer Olympics and the late NBA finals.

We expect local media political AD revenue to be about where we were in Q3 of 2020, which was the $90 million range.

We expect retransmission revenue to be up about 10%.

We expect Q3 local media expenses to be up in the mid single digit percent range.

And the Scripps networks Division, we expect revenue to be flat.

Networks' expenses are expected to increase in the mid teens percent range as we finish cycling against the three network launch cost I referenced earlier by the fourth quarter, we expect networks' expenses to be closer to flat to the year ago period.

Third quarter shared services costs are expected to be about $20 million.

And a reminder, about our segment caption. Other it includes the expense for our over the air consumer marketing campaign, we expect about a $7 million operating loss in the other segment in Q3 and about two thirds of that is related to the digital antenna marketing campaign.

I'll conclude with updated guidance for a few full year items.

We now expect cash interest payments to be about $150 million based on the current estimates for the federal reserve's rate hikes, the remainder of this year.

We now expect to pay cash taxes for the year of about $80 million, rather than our original guidance of $100 million to $110 million.

We now expect capital expenditures of $45 million to $55 million, that's down from $70 million to $80 million due to our cost reduction initiatives.

We now expect free cash flow for the full year of about $400 million.

Still within the range of our guidance aided by our expense control.

And we have made a slight adjustment in our leverage expectations due to the national AD market climate, we now expect to drop to the low to mid fours by year end and we remain committed to debt paydown as our top capital allocation priority and now here's Brian to talk about local media. Thanks.

Thanks, Jason Good morning, everybody.

Scripps political advertising results for the first half of the year continue to confirm our expectations that this mid term election will match. The 2020 presidential cycle Youll recall that early in 2020, Michael Bloomberg, we're spending heavily in an attempt to establish a viable presidential campaign.

Many investors thought it would be impossible to replace that high level of spending and yet we nearly reached it in.

In the second quarter, specifically, we far surpassed our Q2 2020 levels with our highest Q2 political performance ever on a same station basis.

Nationwide fundraising continues at a record pace.

Recent U S Senate.

Supreme Court rulings have only increased our inbound calls we expect the valid issues to be a big driver for our markets in Kansas, Kentucky and Montana.

And in Michigan, and Wisconsin, the state legislatures are in a toss up scenario and.

In addition, we expect competitive U S Senate races in our states of Arizona, Florida, Nevada, Ohio, and Wisconsin.

And competitive governors races, in Arizona, Kansas, Michigan, Nevada, and Wisconsin.

We have about 75 competitive U S house seats as we moved through the third quarter. We continued to see only positive signs for a heavy political spending cycle.

Retransmission revenue was another significant contributor to the 10% revenue growth our division delivered for the second quarter.

A recent envy PD contract, we signed was a tailwind.

And subscriber household declines continued to moderate in the quarter, 1% from the previous quarter and one 5% from the year ago period strengthened virtual mvpds subscribers is driving this improvement.

Also during the second quarter, we were pleased to have signed a new multiyear agreement with ABC, our largest network relationship and with Fox and.

In the last year, we've renewed 39 of our 42 Big four affiliated stations. All ahead of next year, when we renew about 75% of our subscriber households.

It is helpful to have that visibility going into the mvpds negotiations.

Our third revenue line core advertising held steady in the quarter, despite the economic climate.

Our largest category services continued to show growth, even amid local business challenges, while maintaining product and employees.

<unk>, our second largest category was down again for the quarter, but up 20% in June after improving each month of the quarter.

I'm not expecting auto to continue every month with year to year growth, but I do believe we're starting to see improvement in the auto category.

Travel and leisure had a good quarter up double digits as Americans have returned to more active lives and experiences.

For the third quarter, we expect core advertising to be down in the low double digit percentage range. As we are beginning to experience displacement from our projected $90 million of political ad revenue.

We will also be cycling against last year's Summer Olympics the.

The benefit of the NBA finals for our Phoenix ABC station in July .

As well as last year's strongest quarter of sports betting to support the launches in Arizona, Colorado and Michigan.

Before I wrap up I'd like to share a highlight regarding our minority investment in the esports company Misfits gaming.

We have developed a number of revenue generating opportunities with them, including a live minecraft themed competition with some of the most popular Gen Z and millennial gaming Influencers in the world.

It'll be held at Michigan State University on October 2nd Misfit.

<unk> will produce the event and our three Michigan television stations are taking the lead on sales and marketing.

We expect to hold similar competitions in other states in the near future.

Now here's Lisa.

Thanks, Brian and good morning, everyone pressures from the current macroeconomic climate continued to impact our advertising revenue in the second quarter and yet. Despite these pressures we were able to hold our revenue at the same level as Q2 of 'twenty, one and deliver ahead of our peer network portfolio group and the National AD marketplace E.

<unk> digital streaming and technology companies are experiencing AD revenue decline due to the cyclical economic downturn.

All things considered we believe our networks performed quite well.

This is a short term challenge created by the economic conditions, and we are well equipped to manage the rebound one indication of our ability to be resilient is the viewership growth we are seeing across our portfolio in Q2. The Scripps portfolio grew its total Nielsen measured primetime audience by 6% among total.

Viewers, we drew 70 million viewers across our network per month during the quarter and they spent more than 11 hours with us each month.

In addition, our share of linear viewing accounts for 26% of all network feeling among over the air households.

Another sign of our resilience is our ability to optimize our advertising revenue streams through innovation we.

We have recently done so by creating a new political AD revenue opportunity for the National networks Division, primarily with ion and.

Until now we've told you that though ion is a collection of local stations, we exclusively sell it and the national AD marketplace like a cable network that way, we can deliver an efficient one stream national programming and advertising model.

However over the last several months, we have created the ability to sell geographically based political advertising, while preserving the efficiency of our national scaled approach. We have built the technical capability to answered political ads at the local level where demand is strong.

We're also leveraging script in house political expertise to help political AD agencies understand this new opportunity.

We see 2022 as a year of learning and a few markets and have $15 million to $20 million laid into our outlook for the back half of this year.

We then expect to grow the networks political revenue stream significantly in 2024.

Now I'd like to share a few network highlights the bounce network performed especially well for us in the quarter in terms of both ratings and revenue.

Early this year, we launched an effort to help <unk> connect more fully with our black communities and audiences. It serves.

We have changed some of our programming strategies and increased our social media engagement and return. We saw Q2 total day ratings increased plus 5% among people 25 to 54 for the balance cable and over the air viewership defined linear TV trends and driving up add right now.

<unk> revenue grew 38% in the quarter. In addition, during this season's upfront bounce garnered remarkable year over year CPM growth in the mid to high teens.

<unk> also has a streaming channel called <unk> that is now available on eight of the top connected TV services and is garnering nearly 2 million hours of viewing per month.

Court TV also delivered a strong second quarter with healthtrust and celebrity dysfunction that Johnny Depp Amber her trial drove record viewership for the network and a 25% year over year increase in key demographics.

That compares favorably to our area of the Derrick Sheldon trial, a year ago. So a strong basis, we're expecting court TV revenue to be up more than 30% for the full year exceeding our initial expectations.

In response to the current advertising client climate, we've engaged in several expense control measures.

Those include slowing slowing hiring moderating spending on non critical capital projects travel and other discretionary operating items that won't impact our growth strategies.

Turning to distribution, we have been pleased by our steady cadence of connected TV launches. This summer all of our networks are fully distributed to audiences over the air and most have broad cable distribution.

We also are capitalizing on the tremendous growth in CTV as Adam said, it's in all of the above strategy in terms of serving audiences through their various television viewing choices.

The ion network limestone, Samsung TV plus in the spring and its revenue performance. There has exceeded our expectations I am also launched on Tcl and Amazon freely during the quarter and all three of these platforms will launch our networks ion Ministry and grid extra this quarter.

We have also reached agreements with Roku vizio demo and to be to carry our free AD supported streaming networks on their platforms. Beginning this quarter. We expect these recent and upcoming launches to help drive a full year increase in CTV revenue of more than 25%.

Next I'd like to share highlights from Newsy, which continues to establish itself as a significant national news brand respected for its tax base opinion premium reporting disease bureaus, and multiple U S cities and it's nimble production team given the important news gathering advantages over coastal base is outback.

For example, when news broke at the tragic shooting at Rob Elementary School in <unk>, Texas Newsy with the first National network on the air from the scene the networks programming, including primetime coverage anchored and you've already were major drivers.

Viewership.

To conclude we were pleased to achieve division results this quarter that equaled our strong performance last year, and we're much better than the national AD market overall and to deliver margins that are enviable in the industry. We have positioned this division to be resilient and we look forward to our growth path jumped ahead and now operator, we're ready for questions.

Thank you and once again, ladies and gentlemen, if you would like to ask a question. Please press. One then zero on your telephone keypad you may withdraw your question at any time by repeating the Wednesday on command.

First of all in line with Dan <unk> with benchmark. Please go ahead.

Great. Thanks, good morning lots of dive into here, but just before I start Adam I just wanted to congratulate junior contract extension I think it's really well deserved, especially given the transformation you've taken this company through so just wanted to throw that out there first.

Thank you the second thing though.

Second thing Bryan.

Maybe just on local.

You guys have sort of that unique.

To start off in Q3 given.

Five the NBA finals, obviously the Olympics can you carve out what local doing in Q3.

Kind of those items and just.

We've heard kind of the obvious with auto sort of coming back, but just how you think sequentially categorically things are pacing in Q3 from an underlying perspective.

Yeah, Hey, Dan good to hear from you.

Look I think that.

As you saw we are.

You know kind of forecasting a little bit of a stronger decline than some of our peers are part.

Part of that is clearly attributed to the fact that the Phoenix SUNS hosted the NBA finals last year, we had the summer Olympics at the same time, we also our footprint.

Was heavier weighted to the benefit of sports betting in Q3 last year were Michigan, Arizona, and Colorado, where all launching at the same time, which was significant dollars. Those are obviously into maintenance mode right now and we really don't have any states launching in Q3.

And just a reminder, we were I believe the only broadcast group last Q3 to say to report that we had surpassed Q3 of 2019. So we had a heck of a quarter I think we also reported that we had done $90 million in new business.

Third quarter was really good that Phoenix SUNS thing is probably three or four points. So it probably starts to get us in line with what others are reporting.

As I kind of look at the categories in the months.

Look I think Q3 is starting to look sort of like Q2 did Q2 started with April was.

Lousy was down seven 7%, but then may rebounded to down about half a percentage point and then June was up a couple of points and I think that in this new economy people are waiting to see am I going to have product and you're going to have.

People to do the work and then their booking and so it looks like kind of Q3 is laying out the same way where.

We didn't have a great July but August is much better July overall and in almost every category and we've still got a couple of weeks to see how September plays out, but I think we may get that same sort of traction and momentum so.

Specifically you asked about auto we've talked about it rebounding in June I can tell you right now that July was down a little bit but August and September to August is flat right now to last August with still some business to right. So I think we may still see a little bit of a build there so.

I know it through a laid out.

A lot at you there anything else you wanted to probe.

No. That's really helpful color that gives a little bit more background purchase how does the view that the delta.

Not to monopolize I just wanted to move over quickly then just sort of Adam Lisa on the national side on the network side sorry.

I guess.

It's interesting is you've got a lot of moving parts right you've got new network launches. The upfronts are going to kick in your guide was actually in line with where we thought you'd come in which is pretty good considering I think everybody else sustained high high single down for national at least sort of the number that we're kind of hearing so can you just talk us.

Through maybe the underlying trends that youre seeing.

How you're optimizing yield I know you guys talked about that a lot between Dr. General market sounds like it's been continue to be pretty weak and then when we get into Q4.

I don't know how would you sell through the upfront, but I'm just trying to understand the level of risk and b.

Subsequently the benefit that it sounds like you're getting from some pretty good CPM increases so like how do we think about I know no one has an economic crystal ball, but.

How do we think about the networks business, maybe sequentially from Q3 into Q4.

Thanks, Dan.

I would say where our team is really navigating I think and stewarding our businesses through this challenging economic time now.

There has been broadly reported weakness for for instance in July the Scripps networks are not necessarily seeing a decline in fact, our CTV revenues for July outperformed our expectations and Additionally, wildfire from a strong market the pace of scatter has improved from Q1.

In Q2.

This is true both from a general market perspective, and on the Dr side, our pipeline in general market is fairly steady thus far into Q3 and pricing on the Dr side has stabilized with a slight increase in demand and again our portfolio approach I think is resonating.

Even at somewhat challenged market.

In terms of the upfront.

We're really really pleased with.

Despite the challenging macroeconomic conditions, we were pleased with our performance in the Upfronts were actually not quite finished we're still in some negotiations, but really I think proved our enormous value.

In terms of our content portfolio and also our advertising clients as a differentiated means.

To service brands and we saw.

Of our networks had a CPM growth.

Obviously I called out <unk> as the most significant in the upfront.

And I do think what Youll see is as we turn to fourth quarter, we've given ourselves the room to take advantage of I think what and an improving although not.

Not.

Not significantly the scatter market. So we typically have our scatter rates are 30% to 40% higher than our upfront rates that we've given ourselves plenty of room for growth in the fourth quarter.

And the other thing I'd I'd.

Highlights from leases.

The prepared remarks is the potential contribution of political in third and fourth quarter.

Dan you may have been the one that asked on the call when we acquired Io.

On whether or not without political would be an option and at the time. We did reference. The fact that <unk> is sold in the national AD marketplace, but really thanks to I think the strength of our political office and presence in Washington DC.

And some really significant technological innovation that Lisa and her team have executed.

We are able to generate upside in networks that we think will add on somewhere between 15 and $20 million in political revenue on top of the $270 million, we're already talking about local.

And Thats.

Experimental stage to be quite Frank we really expect this to be something that could be quite significant in 2024. So stay tuned for performance on that as we move through the back half of the year something we're really excited about a big opportunity for the Scripps networks to generate political from what were sort of referring to.

A server side or transmitter side AD insertion to take advantage of crowd out.

Yes, Adam I didn't want to hog the call, but given now first the magnate deal.

To expand outside of your switch I also don't think is included in your political guide plus the seasonality.

Very very creative and using that.

The desk so.

Kudos to you guys on that thank you.

Thanks, Dan.

Yeah.

Our next question is from Stephen Cahill with Wells Fargo. Please go ahead.

Thanks, and maybe just a follow up on on that immediate point, so the opportunity for political on ion whether that's through the linear network or whether that's.

In the digital space is that included in the free cash flow guidance that you've given for the year or would that be incremental to that and then Lisa maybe just sticking with ion. Thanks for some of those revenue trends at court in balance I was just wondering if you could.

Maybe isolate ion a little bit in terms of how that's performing in terms of revenue growth and margins I know the direct response and national has been tapped in the macro so just kind of wondering if you could help us unpack some of the trends there.

And then finally, just Adam on the.

Marketing campaigns, you've been doing for OTI could you give us any sense of what the Kpis are you seeing there and how those are performing against some of your goals. Thank you.

Steve I'll go first because I'd be quick yes. The ion political revenue was included in our original guidance of 400 $450 million of meeting of the year. Okay.

In terms of ion is it with them.

Brand that was probably because it's more general market and then Dr advertising.

We took and we sell more in the upfront and ion has definitely been more challenged throughout the first half of the year as I said in my response to Dan's.

Question, we are seeing starting to see some improvement from Q1 to Q2 in terms of the pace of the scatter market and also seeing some.

Both on the general market side and the Dr side to our pipeline specifically for ion has improved in the back half of the year.

Stephen in terms of the leading indicators on the marketing campaign, it's really very simple I mean in addition to I think the general lead Gen metrics you'd expect when youre pushing people to our website. We are working with retailers to track antenna sales, we expect antenna sales.

Will.

<unk> open up opportunity for additional viewing, especially given our 26% to 30% share in the OTT marketplace, and we expect that to lead to higher revenue. So we were still in the experimental stage at the earliest stage right now in 13 markets. We just started last month, but I expect as we head towards third quarter and.

And then fourth quarter, we will be able to give you an update on the efficacy of our campaign, but it really comes down to the opportunity. This company has to disproportionately profit from the growth of the over the year marketplace, something we think is going to happen anyway. As a result of the economy I mean.

It's.

That and.

NFL is move to put everything on broadcast we think bodes very well for the growth of the OTT marketplace.

And maybe Adam just to follow up on that it does look like cord cutting picked up a bit in the second quarter do you have any data yet as to whether or not those folks are re engaging on an OTA.

As you planned.

Yes, I mean, I think I think the percentages of cord cutters and cord Nevers that continue to add on a digital antenna to their self bundle has maintained has remained steady somewhere between.

Quarter, and 20% of broadband only homes are leveraging a digital antenna.

We think that should be higher we think there's still not enough information out there about the opportunity for <unk>.

Folks that use <unk> services to bundle in free premium programming from.

Over the year, and we expect to inform them and educate them on that opportunity work with retailers and installers to make it easy for them to do as well.

Great. Thank you.

Thanks Steven.

Yes.

Next we'll go to Craig Huber with Huber Research. Please go ahead.

Great. Thank you on the strips network side wanted to ask if you could share some data with us on the ratings or viewership trends in latest quarter that you have please.

Start there.

Yes.

Craig in terms of.

Viewership, we saw across the portfolio, our Nielsen not not all of our networks, our Nielsen rated but primetime audience grew by 6% among total viewers and I mentioned in my prepared remarks that we are drawing nearly 70 million viewers across all of our networks during the quarter.

Second quarter. Once again, we grew share in linear I talked about the fact that we and make up 26% of our viewing that happens over the air is.

<unk> done on our network.

Total primetime viewership again was up 6% year over year, the growth came from and total nationwide linear.

Page.

Of course that is against a comparison of.

All viewing of down 8%, so in sort of defying in many ways define.

Logic in terms of our network is really growing our ratings are obviously impacted by total TV viewing trends that our programming strategy and really intentional investments are certainly offsetting those trends.

And the data you guys have what percentage of the U S households, do you think Kevin antenna right now.

Okay.

I think the latest.

The latest data.

Yes, I think about 30% of U S households are using an antenna.

Boeing we expect it to continue to grow I think forecast show it going up to 45% within the next couple of years.

Tenant sales have been between eight and $12 million a year pretty.

Pretty steady over the last couple of years.

Okay, and then I wanted to ask you talked a lot about the political opportunity with the Scripps networks and sorting political ads there I assume those ads it gets slotted in there.

Promotional spot used to be as opposed to it's something that we're taking away from our core advertising slot no yeah, no not necessarily because we want to maximize the opportunity. So we do.

We're essentially running yield management with with a pretty complicated algorithm that allows us to understand what the loss will be in the national reach when we do local AD insertion. So what we're actually running is direct response.

In that time period or in that avail, and so we're able to cover the direct response ads without negatively impacting the direct response rates. We cover the direct response ads in the specific markets, where there is high demand for political and where the Cpm's are high enough that we.

Incrementally improve the yield on the network.

Okay very good my last question guys, if I could ask on the TV station side.

Brian or somebody that percent of.

Retrans subs up for renewal this year and what's the number.

For next year, just wondering if that's changed at all.

So hey, Craig its Brian we're done this year next year, 75% of our subs are up in 2023 drops back to about 5% in 2024, and then 25% come up in 2025.

And what is the cadence in 2023 number please.

All are in the well the majority is in the first half.

There is a good <unk>.

<unk> in the first quarter and a good chunk in the second quarter.

Largely at the end of the first quarter in the second quarter correct when you're modeling.

Okay, great. Thanks, guys Thats all I had.

Thanks, Craig.

And just as a quick reminder, if you would like to ask a question on the call. Please press one then zero.

And allowing a few moments no further questions coming in.

Alright. Thank you very much John I'll, let you go ahead and give the replay information thanks to everyone for joining us.

Okay.

Okay.

None.

Thank you and ladies and gentlemen.

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