THE E.W. SCRIPPS CO. JAN. 30, 2018

Transcription

1 THE E.W. SCRIPPS CO. NOBLE CAPITAL MARKETS NOBLECON 14 JAN. 30, 2018

2 NOBLECON14 SAFE HARBOR/ DISCLOSURE This presentatin cntains certain frward-lking statements related t the cmpany's businesses that are based n management s current expectatins. Frward-lking statements are subject t certain risks, trends and uncertainties, including changes in advertising demand and ther ecnmic cnditins that culd cause actual results t differ materially frm the expectatins expressed in frward-lking statements. Such frward-lking statements are made as f the date f this presentatin and shuld be evaluated with the understanding f their inherent uncertainty. A detailed discussin f principal risks and uncertainties which may cause actual results and events t differ materially frm such frward-lking statements is included in the cmpany s Frm 10-K n file with the SEC in the sectin titled Risk Factrs. The cmpany undertakes n bligatin t publicly update any frward-lking statements t reflect events r circumstances after the date the statement is made. 2

3 LISA KNUTSON Chief Financial Officer

4 TODAY S AGENDA Capitalizing n the evlving media ecsystem Lcal Media benefitting frm diverse revenue streams Newsy the multi-platfrm path ahead Midrll winning pdcasting Katz netwrks its industry and grwth trajectry Financial principles and investment highlights 4

5 THE MEDIA ECOSYSTEM Tday, Cnsumers Find Media and Cntent On A Variety Of Distributin Platfrms 5

6 THE MEDIA ECOSYSTEM Cnsumers Will Seek Out Cntent They Lve 6

7 SCRIPPS & THE MEDIA CONSUMER We Have Rerganized The Cmpany T Reflect Hw Audiences And Advertisers View Our Businesses LOCAL MEDIA BRANDS NATIONAL MEDIA BRANDS 7

8 THE E.W. SCRIPPS COMPANY Scripps Pririties Remain Near-Term Results And Lng-Term Value FOR THE NEAR TERM: FOR THE LONG TERM: Restructure t imprve margins and cash flw: Scale ur natinal businesses t maximize their audience and revenue grwth ptential and then free cash flw cntributin: Organize ur brands int Lcal Media and Natinal Media Examine the fit f nn-cre assets Katz netwrks: Capitalize n the grwth f ver-the-air viewing by cntinuing t expand distributin ftprint; further transitin frm direct respnse t general market advertising Streamline crprate and shared services fr greater efficiency Blster perfrmance f ur televisin statin prtfli: Midrll: Expand pdcast industry leadership as the marketplace grws; cntinue grwth f premium brand advertising; expand Stitcher s distributin Execute buy-sell-swap strategy fr statin M&A Drive margin and ratings grwth Newsy: Further develp a natinal news netwrk that the next generatin f news cnsumers will find n any distributin platfrm; mnetize grwth thrugh advertising and carriage fees Capture tpline pprtunity thrugh the grwth f retransmissin rates and distributin n cable, satellite and ver-the-tp platfrms 8

9 LOCAL MEDIA Here s Why We Lve The Televisin Business High barriers t entry Multiple revenue streams Lcal/natinal advertising blend Predictable revenue: lng-term retransmissin cntracts Predictable expenses: lng-term netwrk cntracts Lng-term, mutually beneficial partnerships Strng, trusted brands built n serving lcal cmmunities The advertising platfrm that pwers the Main Street ecnmy Lcal TV plays a strng rle in the develpment f the media ecsystem 9

10 LOCAL MEDIA Bradcast TV Cmmands The Largest Primetime Audiences Rank Shw Netwrk Viewers 1 NBC SUNDAY NIGHT FOOTBALL NBC 18,578,000 2 BIG BANG THEORY CBS 18,523,000 Tp 10 primetime shws ranked by average weekly viewers, fall THE GOOD DOCTOR ABC 17,955,000 4 YOUNG SHELDON CBS 17,760,000 5 NCIS CBS 17,700,000 6 THIS IS US NBC 16,516,000 7 AMERICA'S GOT TALENT-TUES NBC 16,034,000 8 WALKING DEAD AMC 14,796,000 9 AMERICA'S GOT TALENT-WED NBC 14,697, BULL CBS 14,423,000 Surce: Nielsen NNTV Prgram Reprt. All Bradcast and Cable. Jan. 1, 2017 Nv. 19, Live+7. Bradcast Prime 10

11 LOCAL MEDIA Our Lcal Brands Have the Greatest Reach Int The Lcal Markets Audiences Fr Advertisers 11

12 LOCAL MEDIA Our Lcal Audience Reach Is Expanding On New Platfrms Such As Alexa, Rku, YuTube TV 12

13 LOCAL MEDIA Our Lcal Brands Are Essential T The Launch Of New OTT Services Over-the-Tp Services Have signed cntracts t carry Scripps lcal televisin prgramming 13

14 LOCAL MEDIA The Rise f Autmated Ad Buying Will Help Lift Cre Advertising Revenue Cre advertising revenue Technlgy tday keeps media buyers frm easily buying lcal televisin Autmated advertising will remve the frictin in lcal ad buying This new technlgy will make it easier, less labrintensive and less expensive fr agencies t buy lcal 14

15 LOCAL MEDIA Scripps Televisin Statins Will Play A Leading Rle In The U.S. Electins Again In U.S. Senate Races and 16 Gvernrs Races Will Be Held Acrss Our Markets in

16 LOCAL MEDIA Our Retransmissin Revenue Cntinues Meaningful Grwth Next Year and Beynd SCRIPPS RETRANSMISSION REVENUE TRAJECTORY ~$260 $221 $148 $94 $ $ IN MILLIONS 2013, 2014 and 2015 figures are based n adjusted cmbined histrical results, which d nt necessarily reflect histrical results and are nt necessarily indicative f future results. 16

17 LOCAL MEDIA We Will Engage in Televisin Statin M&A That Strengthens Our Prtfli Perfrmance OUR M&A GOAL: Engage in a buy-sell-swap strategy, seizing pprtunities in light f impending regulatry changes, with the gal f a strnger TV prtfli OUR M&A STRATEGY: Expand within ur existing markets Expand int new markets that enhance ur prtfli BUY SELL SWAP 17

18 NATIONAL MEDIA Our Natinal Media divisin brands maximize revenue and audience grwth as they build prfitability thrugh: Cntent strategies that draw key target demgraphic grups Natinwide scale and audience reach that prvides Scripps access t the brader natinal advertising pl The pprtunity t cnvert significant inventry frm direct respnse advertising t the higher CPM general market advertiser 18

19 NATIONAL MEDIA: NEWSY Newsy Is The Next-Generatin News Netwrk, Prviding Depth, Cntext and Objectivity Newsy s jurnalism and prgramming reflect its cmmitment t crafting a prduct that appeals t its target news cnsumer - millennials. 19

20 NATIONAL MEDIA: NEWSY Newsy Is Expanding Int Cable Distributin With The Acquisitin Of Cable Netwrk Subscribers TOTAL U.S. PAY Ttal U.S. TV HOUSEHOLDS: pay TV husehlds: MILLION millin NEWSY SUBSCRIBERS BY THE END OF 2018: 40 MILLION We expect t grw Newsy s pay-tv subscribers t 40 millin hmes by the end f Newsy is expanding its live OTT prgramming stream nt cable/satellite platfrms while retaining its digital cst structure. The mve int cable was kicked ff by the efficient acquisitin f Retirement Living Televisin subscribers in the third quarter, with a maximum purchase price f $23 millin 93 cents per subscriber, based n a pay-as-theycnvert mdel. The expanded distributin gives Newsy access t increasingly lucrative and dual revenue streams f carriage fees and advertising revenue available n cable/satellite platfrms. 20

21 NATIONAL MEDIA: MIDROLL Midrll Is A Leader Acrss All Parts Of The Pdcast Ecsystem CONTENT CREATION MONETIZATION DISTRIBUTION 21

22 NATIONAL MEDIA: MIDROLL Pdcasting Is A Rapidly Grwing Media Marketplace MONTHLY LISTENERS HAVE LISTENED AWARE UNAWARE millin millin 25 percent f U.S. listens t pdcasts mnthly 60 percent are nw aware f the medium millin millin * Surce: Edisn Research *Midrll prjectin 22

23 NATIONAL MEDIA: MIDROLL Midrll Is A One-Stp Shp Fr Advertisers Seeking T Reach Yunger Listeners 23

24 NATIONAL MEDIA: MIDROLL Expanding Stitcher s Distributin Means Owning The Cnsumer Relatinship SMART HOME DEVICES MOBILE CAR INTEGRATION 24

25 NATIONAL MEDIA: KATZ NETWORKS The Fast-Grwing Katz Netwrks Leverage Target Audiences t Attract A Brad Natinal Ad Base Multicasting takes advantage f the grwth in the ver-the-air marketplace. Katz is the multicasting industry leader, with great audience resnance and advertiser relatinships. At nearly 90 percent f the cuntry, the netwrks have natinal distributin and scale. The netwrks are fur f nly six that are big enugh t be Nielsen rated. Katz natinwide reach gives Scripps a new revenue stream with natinal advertisers targeting these audiences. 25

26 NATIONAL MEDIA: KATZ NETWORKS All Fur Katz Netwrks Reach Abut 90 Percent f U.S. TV Husehlds 87% f U.S. husehlds 90% f U.S. husehlds 87% f U.S. husehlds 91% f U.S. husehlds 26

27 NATIONAL MEDIA: KATZ NETWORKS Shifting Inventry T A Mre Premium Advertiser Mix Is One Grwth Driver EXAMPLE: NETWORK ADVERTISING INVENTORY DIRECT RESPONSE HYBRID DIRECT RESPONSE GENERAL MARKET 35% f general market rate 80% f general market rate LOWER REVENUE HIGHER REVENUE 27

28 NATIONAL MEDIA: KATZ NETWORKS Cntinuing T Expand Distributin On Multiple Frnts Is Anther Grwth Driver Renewals and incremental new markets Expanded cable and satellite ftprint Virtual MVPDs ATSC

29 FINANCIALS Scripps Investment Highlights Our liquidity and access t capital prvides additinal capacity t grw. Our mst imprtant capital allcatin strategy is TV statin buy-sell-swap, with a fcus n a balanced return f capital. Our retransmissin revenue grwth prvides additinal pprtunity fr margin imprvement. Our prtfli f large and attractive TV markets prvides leverage with the netwrks and cable/satellite peratrs. Our natinal media brands will maximize revenue grwth by gaining scale and prfitability. 29

30 FINANCIALS Our Leverage Allws The Ability Fr New Capital Allcatin Capitalizatin Five-Year Return Of Capital Cash Balance: Ttal Debt: Net Leverage: Liquidity 1 : $150 millin $703 millin ~3.5x $279 millin Share repurchase 24% Natinal media acquisitins 20% 46 percent f free cash flw used fr share repurchase 63 percent f free cash flw used fr share repurchase and a special dividend 1 Liquidity defined as revlver availability, plus cash, less utstanding letters f credit 30

31 NOBLECON 14 QUESTIONS+DISCUSSION