What progress has been made regarding Nielsen's measurement methodology changes, particularly for the Networks business, and what are the expected benefits for local broadcast?

Adam stated that approximately 50% of the Networks' revenue softness is attributable to Nielsen's sudden methodology changes. He confirmed high-level discussions with Nielsen for corrections expected in September, which are hoped to improve reported audience size and better reflect multicultural audiences and local viewing habits. However, no potential upside from these fixes is currently baked into guidance. “Right now, just for investors reference, I would say our performance softness, I'd attribute about 50% of that the sudden change in Nielsen. We've been in conversations with the very highest levels at Nielsen on the process that they're working on to correct this for this fall.”

Given the ongoing changes and external challenges, does the transformation plan make the company more or less likely to consider a sale?

Adam stated he does not speak for the controlling shareholder but reiterated that the family has always acted in the best interest of all shareholders. He believes greater national scale and market depth are beneficial and expects the company to continue transforming the business and pursuing M&A opportunities to create shareholder value. “Well, first of all, it's important to note, Craig, that I don't speak for our controlling shareholder, but I can reiterate what I've said many times before and what you've seen over the long history of the company. The family has always acted in the best interest of all shareholders and is committed to doing what's best for the company to create the greatest shareholder value.”

Can management quantify the cash cost associated with achieving the new $100 million annual run rate of cost savings by year-end?

Jason reiterated the previous guidance of $40 million to $50 million in cash restructuring costs for the transformation plan. He clarified that of the $36 million in restructuring costs this quarter, $12 million was cash, $9 million accrued, and $15 million noncash. The increase in run rate savings reflects pulling forward the achievement, not an increase in total costs. “So we have talked about that previously. We had guided to $40 million to $50 million in cash restructuring costs tied to the transformation plan.”

SSP

E.W. Scripps (SSP) Q2 FY26 earnings call: guidance and Q&A

Earnings call· Jun 2026 (Q2 FY26)· Communication Services· Aug 7, 2026

Source: earnings call transcript

Executive summary

The E.W. Scripps Company Q2 FY26 — Transformation Progress Amidst Revenue Headwinds

The E.W. Scripps Company reported Q2 FY26 results marked by significant progress on its transformation plan and sports strategy, including new NBA/NHL partnerships and record political advertising. However, the quarter faced substantial revenue headwinds from Nielsen measurement changes, linear viewing declines, and distribution blackouts, leading to a large non-cash impairment charge. Management is focused on leveraging AI and M&A to optimize its portfolio and achieve long-term growth despite these challenges.

Highlights

FCC voted to lift broadcast ownership count, potentially leveling the playing field for broadcasters.
Company transformation plan now expects $100 million in annual run rate savings by year-end 2026, up 33% from prior guidance.
Signed first NBA agreement (Detroit Pistons) and fifth NHL team (Nashville Predators) for Scripps Sports.
Successfully renewed 70% of pay TV subscriber agreements, contributing to margin expansion.
Political advertising revenue expected to reach a record $225 million to $250 million for the full year 2026 midterm cycle.

Concerns

Reported a $1.1 billion noncash goodwill and other intangible asset impairment charge for the Scripps Networks business.
Local Media division revenue was down 1% YoY in Q2 FY26, with core advertising decreasing 4.8%.
Local media distribution revenue declined 13% in Q2 FY26 due to service blackouts with Comcast and DIRECTV.
Scripps Networks revenue was down 13% in Q2 FY26, impacted by linear TV viewing trends, Nielsen measurement changes, and a soft direct response ad market.
Net leverage increased to 4.9x at the end of Q2 FY26, up from 4.4x at the end of Q1 FY26.

Guidance & targets

Category	Target	Timeline	Confidence
Incremental enterprise EBITDA	$125 million to $150 million high materiality	FY28	High
Annual run rate savings	$100 million high materiality	Q4 FY26	High
Local Media division revenue growth	up about 20% medium materiality	Q3 FY26	High
Local Media core advertising growth	down low double digits medium materiality	Q3 FY26	High
Political advertising revenue	$225 million to $250 million high materiality	FY26	High
Full year gross distribution revenue growth	down in the low single-digit percent range medium materiality	FY26	Medium
Full year net distribution revenues growth	up in the mid- to high single digits medium materiality	FY26	Medium
Local net expenses growth	down low single digits medium materiality	Q3 FY26	High
Scripps Networks division revenue growth	down in the mid-teens percent range high materiality	Q3 FY26	Medium
Scripps Networks expenses growth	up in the low single digits medium materiality	Q3 FY26	High
Shared services and corporate expenses	about $25 million low materiality	Q3 FY26	High
Net tax refund	approximately $5 million low materiality	FY26	High
CapEx	$50 million to $60 million medium materiality	FY26	High
Local Media expenses growth (excluding sports costs)	mid- to high single-digit decline medium materiality	Q4 FY26	High
Networks expenses growth	down low to mid-single digits medium materiality	Q4 FY26	High

Segment performance

Segment	Revenue	YoY	QoQ	Margin
Local Media Revenue decline tied to broader economic uncertainty, political crowd out, and impact of carriage disputes. Distribution revenue impacted by service blackouts with Comcast and DIRECTV. Expenses driven by lower network affiliation fees and employee costs. Core advertising: decreased 4.8%Political advertising revenue: $28 millionDistribution revenue: declined 13% to $161 millionExpenses: down 3% year-over-yearSegment profit (Q2 FY25): $51 million	$317 million	down 1%	—	$56 million
Scripps Networks Decline driven by linear TV viewing trends, changes in Nielsen's measurement methodology, and a softer direct response advertising market. Connected TV remains a strong growth driver. Connected TV revenue: up 28%Expenses: $146 million, up 3.7%Segment profit (Q2 FY25): $57 million	$172 million	down 13%	—	$26 million
Other Loss due to higher medical claims and increased insurance premiums. Shared services and corporate expenses: $27.5 million	—	—	—	loss of $4.5 million

Product announcements

Product	Type	Timeline
NBA agreement with Detroit Pistons	launch	—
NHL agreement with Nashville Predators	launch	—
Women's Volleyball World Cup tournament	launch	2027 tournament leading up to L28

Deals & partnerships

Gray Media Station swap across 5 midsized and small markets.

Strategic swap of stations to expand presence in Mountain West.

Ino Acquisition of more than 12 stations.

Acquisition of over 12 stations to enhance networks portfolio and spectrum.

Comcast Distribution agreement renewal.

Successfully renewed distribution agreement after service blackout from March 31 to May 5.

DIRECTV Distribution agreement renewal.

Successfully renewed distribution agreement after service blackout from May 31 to July 10.

Undisclosed Acquisition of a second big 4 station to create a duopoly.

Acquired a second big 4 station in Licensing, Kentucky to create a duopoly.

Undisclosed Sale of stations in Fort Myers, Florida and Indianapolis.

Completed sales of stations in Fort Myers, Florida and Indianapolis in the spring.

Risks & headwinds

Nielsen measurement methodology changes Q2 FY26, ongoing into Q3/Q4 FY26

Impacted Scripps Networks revenue by approximately 50% of the softness; underrepresenting multicultural audiences.

Mitigation:Nielsen is developing forthcoming adjustments; management is in high-level conversations with Nielsen for corrections expected in September.

Continued declines in linear TV viewing Ongoing

Contributed to Scripps Networks revenue decline of 13% in Q2 FY26.

Mitigation:Aggressively pursuing strategies to improve networks revenue, expanding sports content, focusing on Connected TV growth, and company transformation plan.

Economic uncertainty and soft direct response advertising market Q2 FY26, ongoing

Local Media core advertising decreased 4.8% in Q2 FY26; Scripps Networks impacted by soft direct response market.

Mitigation:Transformation plan, focus on sports, political advertising strength, and expectation for quick rebound if consumer sentiment improves.

Distribution blackouts with legacy pay-TV providers March 31 to May 5 (Comcast), May 31 to July 10 (DIRECTV)

Local media distribution revenue declined 13% to $161 million in Q2 FY26.

Mitigation:Successfully renewed 70% of subs with new agreements, blackouts are now behind the company.

Goodwill and other intangible asset impairment charge Q2 FY26

$1.1 billion noncash charge.

Mitigation:Company transformation plan for Networks business, new leadership (Dean Littleton) to oversee Networks and Local Media.

Increased net leverage Q2 FY26

Net leverage at 4.9x at end of Q2 FY26, up from 4.4x at end of Q1 FY26.

Mitigation:Debt paydown from station sales, successful refinancing of debt, extension of corporate revolving line of credit through July 2029.

What to watch in Q3 FY26

Nielsen Measurement Correction Impact

Q3/Q4 FY26 (starting September)

Current Networks revenue softness attributed 50% to Nielsen changes

Target Improved reported audience size and Networks revenue

Why it matters

Nielsen's methodology changes significantly impacted Networks revenue; a successful correction could provide substantial upside to current forecasts.

Right now, just for investors reference, I would say our performance softness, I'd attribute about 50% of that the sudden change in Nielsen. We've been in conversations with the very highest levels at Nielsen on the process that they're working on to correct this for this fall.

Find out whether SSP delivers this. Inve re-checks your case every morning.

Q&A highlights

Could management clarify the Q3 core ad pacing and provide directional guidance for net retrans revenue in 2027, considering the resolution of blackouts and reduced programming costs?

Jason confirmed Q3 core ad pacing is expected to be down low double digits, consistent with 2022 midterms. For 2027 net retrans, he indicated a year-over-year benefit from blackouts ending and full-year impact of 2026 step-ups, with only 5% of subs renewing in 2027 (corrected from 20%). He expects both gross and net retrans to be positive but did not provide specific guidance.

“Yes, low doubles in Q3, driven by the political product you would expect. It's pretty -- it's right in line with what we saw in core in Q3 of 2022. But I would... (Jason later corrected: 'I said we had 20% renewing next year. I was getting my years mixed up, that's actually in 2028. Next year is only 5%.')”

asked by Dan Kurnos · answered by Jason Combs

3 min read 8 chapters

Detailed narrative

FCC Vote and Regulatory Environment

The FCC's recent decision to lift the broadcast ownership count was welcomed by management, who view it as a crucial step to level the playing field against nationally scaled big tech companies and streaming platforms. This regulatory change is expected to support Scripps' ability to pursue business models, including M&A, that will help maintain its commitment to communities and facilitate the company's ongoing transformation.

Management believes this will unlock opportunities for the industry.

Company Transformation Plan Progress

Scripps is actively executing its company transformation plan, targeting $125 million to $150 million in incremental enterprise EBITDA by 2028. The company now anticipates achieving $100 million in annual run rate savings by the end of 2026, a 33% increase from previous guidance.

This plan involves both expense reduction and revenue growth components, leveraging AI, automation, and technology to create more efficient operations and better serve consumers.

Expansion of Sports Strategy

The Scripps Sports strategy continues to expand, with new multi-year partnerships signed in Q2 FY26, including the first NBA agreement with the Detroit Pistons and the fifth NHL team, the Nashville Predators. Ion has also been established as the home of women's sports, securing the Women's Volleyball World Cup tournament for 2027.

These sports partnerships are expected to add material gains to core advertising revenue and drive organic growth, differentiating Scripps' program offerings in the national advertising upfront.

Distribution Agreements and Blackouts Resolution

The company successfully renewed 70% of its pay TV subscriber agreements after resolving blackouts with Comcast and DIRECTV. These new agreements are expected to contribute to margin expansion and ensure continued service to local audiences. Management noted that network compensation costs are also being reduced across the board, allowing Scripps to capture more value from its programming despite the temporary impact on Q2 distribution revenue.

Political Advertising Outlook

Q2 FY26 set a new record for political revenue, foreshadowing a strong second half of the year. Scripps expects full-year political advertising revenue for the 2026 midterm cycle to range from $225 million to $250 million, a significant increase from $198 million in the 2022 midterms.

Strong election spending is observed across key markets, and a recent Supreme Court decision on coordinated candidate and party spending is seen as creating significant upside for political volume.

Nielsen Measurement Challenges and Networks Performance

Scripps Networks revenue was significantly impacted by sudden changes in Nielsen's measurement methodology, which management estimates accounted for approximately 50% of the division's Q2 softness. These changes are believed to underrepresent true audience size, particularly multicultural audiences. While Nielsen has indicated forthcoming adjustments, management remains cautious, not baking potential upside into current guidance.

The Networks division also faced headwinds from continued linear viewing declines and a soft direct response advertising market.

Workforce Restructuring and AI Adoption

As part of its transformation, Scripps has reduced its workforce by eliminating 432 employee positions and 126 open positions since the beginning of the year, representing 12% of its total workforce. The company is leveraging AI, automation, and technology to fundamentally change how local news is created and distributed, aiming to improve operating models and better serve audiences across multiple platforms while maintaining quality journalism.

Strategic M&A Activity

Scripps continues to use M&A as a tool to optimize its portfolio and improve its balance sheet. Recent activities include station swaps with Gray Media, the acquisition of a second big 4 station to create a duopoly in Lexington, Kentucky, and the sales of stations in Fort Myers and Indianapolis for debt paydown.

The company also announced the acquisition of over 12 stations from Ino, which are expected to be accretive and enhance its networks portfolio and spectrum holdings.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.