Blog Post

E.W. Scripps Online Revs Rise, Despite Downward Pull Of Print Bundling

E.W. Scripps’ online advertising revenues continued to rise in Q2, and the company offers a breakdown that shows where the success is and where it’s still struggling. For one thing, it shows the drag that tying print and online ad sales together can have on the bottom line, while demonstrating what web-only ad sales can do when separated from the legacy product. Secondly, the online revenues reflect both the newspaper and local TV station website dollars it brought in; and the gains at E.W. Scripps (NYSE: SSP) (not to be be confused with its cable TV sibling Scripps Networks (NYSE: SNI) Interactive) show that local broadcast may finally be catching up to newspapers in figuring out how to get more revenue out of digital.

Looking broadly at the newspaper business, like most of its print peers, E.W. Scripps’ mostly southern and western papers were able to arrest declines somewhat. The newspaper segment was down just 4 percent to $108 million. Within the newspaper division, online-only sales were up 14 percent. When print upsells are factored in, though, online was actually down 5.5 percent to $6.9 million in Q2.

Meanwhile, online ad revenues at the Cincinnati company are surging. In Q2, TV station websites’ revenue was up 29 percent to $1.9 million. That’s still significantly less than what the newspaper websites bring in, but it suggests that there’s probably a lot more room for growth on the TV side. Certainly, a lot of other newspaper publishers/local broadcast owners are starting to broaden their connection to TV and online.

In the last few months, Yahoo (NSDQ: YHOO) has been working with its Newspaper Consortium partner Media General (NYSE: MEG) on TV station sales, and more recently, Gannett (NYSE: GCI) also agreed to a local ad deal with Yahoo, covering its community papers and TV affiliates.

But on top of all these numbers were signs that spending was bouncing back some in Q2, thanks to the return of auto advertising. In Q3, E.W. Scripps and other broadcasters could reap the rewards of an expected spending surge tied to the fall political races, which are also expected to use online advertising to a greater degree as well. On the profit side, the jump was due mostly to the newspaper company trend of cost-cutting and the $175 million sale of Scripps’
United Media character licensing business, which markets comic strip characters from Peanuts and Dilbert to coffee mug and t-shirt makers, to Iconix Brand Group in April.