SSP Q2 Deep Dive: Sports Strategy Cushions Ad Weakness Amid Industry Uncertainty

August 11, 2025 at 09:47 AM EDT

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Media, broadcasting, and digital services company E.W. Scripps (NASDAQ: SSP) missed Wall Street’s revenue expectations in Q2 CY2025, with sales falling 5.8% year on year to $540.1 million. Its GAAP loss of $0.59 per share was significantly below analysts’ consensus estimates.

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E.W. Scripps (SSP) Q2 CY2025 Highlights:

Revenue: $540.1 million vs analyst estimates of $544.4 million (5.8% year-on-year decline, 0.8% miss)
EPS (GAAP): -$0.59 vs analyst estimates of -$0.22 (significant miss)
Adjusted EBITDA: $88.86 million vs analyst estimates of $84.65 million (16.5% margin, 5% beat)
Operating Margin: 14.2%, up from 9.7% in the same quarter last year
Market Capitalization: $221 million

StockStory’s Take

E.W. Scripps’ second quarter was marked by a negative market reaction, reflecting missed revenue and earnings expectations as advertising softness persisted. Management attributed the quarter’s resilience to its sports programming strategy, which helped offset broader declines in core advertising. CEO Adam Symson pointed to the NBA Finals and NHL playoff coverage as key drivers, stating, “The NBA and NHL playoffs brought in more than $7 million, helping to offset challenges in a soft advertising -- core advertising marketplace and reinforcing the value of our Scripps Sports strategy.” Despite cautious commentary about the macroeconomic environment, the company emphasized cost controls and margin improvements, particularly within its Networks division.

Looking ahead, E.W. Scripps’ strategy is focused on deepening local market presence, expanding its sports rights portfolio, and capturing growth from connected TV advertising. Management believes the evolving regulatory landscape could enable further portfolio optimization, with Symson noting, “We expect to pursue more opportunities to improve the durability and profitability of our portfolio, opportunities we believe drive economic growth and support accelerated debt paydown.” The company also anticipates that reductions in Big 4 network fees, along with continued growth in streaming audiences, will help support margin expansion and stabilize revenue streams amid ongoing industry disruption.

Key Insights from Management’s Remarks

Management highlighted several factors impacting second quarter results, including the ongoing shift toward sports-focused programming, execution on refinancing initiatives, and cost discipline.

Sports programming offset declines: The company’s investment in local and national sports rights, including the NBA and NHL playoffs, generated over $7 million in revenue and softened the impact of weak advertising markets. Symson emphasized that sports helped Scripps outperform peers in core advertising and drive premium ad rates.
Networks division margin expansion: Major cost reductions in the Scripps Networks division led to a segment margin lift from 18% to 27%. CFO Jason Combs noted that expense reductions initiated last year are now being reflected in higher profitability, with management expecting more moderate year-over-year savings in the coming quarters.
Connected TV (CTV) growth: Scripps saw a 57% year-over-year increase in connected TV advertising revenue, driven by the popularity of WNBA and NWSL games on ION and other streaming platforms. Symson described ION’s unique distribution across free over-the-air TV and streaming as a differentiator in reaching audiences advertisers cannot find elsewhere.
Refinancing and debt reduction: The company completed significant refinancing, retiring or extending maturities on $1.7 billion in debt, and introduced an accounts receivable securitization facility. Combs said these moves improved financial flexibility and reduced near-term refinancing risk, with leverage down by more than 1.5 turns from the prior year.
Advertising environment remains hesitant: Management described a cautious advertising climate, especially outside of sports, citing continued uncertainty related to tariffs, interest rates, and broader macroeconomic factors. Automotive advertising was particularly weak, a trend the company attributes partly to recent tariff-driven demand shifts.

Drivers of Future Performance

Management’s outlook centers on capturing growth through sports rights, connected TV advertising, and regulatory-driven market consolidation, while managing ongoing advertising volatility.

Sports and streaming as growth engines: The company expects that expanding its sports portfolio—both in local markets and on ION—will continue to attract premium advertisers and support revenue growth. Management highlighted the value of live sports in differentiating Scripps’ programming, with new events like the Sports Illustrated Women’s Games and Fort Myers Tip-Off set to bolster ad sales in upcoming quarters.
Regulatory changes enabling consolidation: Symson pointed to anticipated deregulation of broadcast ownership rules, which could accelerate portfolio optimization through swaps and select asset sales. Management believes these changes may allow Scripps to deepen local market coverage and improve both operational durability and profitability, potentially enabling faster debt paydown.
Margin expansion via network fee trends: The company forecasts that decreases in Big 4 network fees and stable distribution revenue can help expand net retransmission (retrans) margins, even as cord-cutting pressures persist. Combs said Scripps is budgeting for continued mid-single-digit subscriber churn but expects expense savings and repricing opportunities to offset volume declines.

Catalysts in Upcoming Quarters

In the coming quarters, our analysts will track (1) the execution and financial impact of new sports programming and event partnerships, (2) progress on regulatory-driven portfolio optimization and station swap transactions, and (3) ongoing growth in connected TV advertising. Additionally, we will monitor trends in network fee negotiations, subscriber churn, and any signs of improved advertising demand as macroeconomic uncertainty evolves.

E.W. Scripps currently trades at $2.56, down from $2.82 just before the earnings. In the wake of this quarter, is it a buy or sell? Find out in our full research report (it’s free).

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