E.W. Scripps Q2 2024 Earnings Call Transcript

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August 9, 2024

There are 8 speakers on the call.

Operator

Good day, everyone, and thank you for standing by for the Scripps Q2 Earnings Call. At this time, all participants are in a listen only mode. Later, we will conduct a question and answer session. As a reminder, today's call is being recorded. I will now turn the call over to your host, Carolynne Michele.

Operator

Please go ahead.

Speaker 1

Thanks, Kevin. Good morning, everyone. Thanks for joining us for a discussion of The E. W. Scripps Company's financial results and business strategies.

Speaker 1

You can visit scrippsdot 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 based on management's current outlook and actual results may differ materially. Factors that may cause them to differ are outlined in our SEC filings. We do not intend to update any forward looking statements we make today. Included 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.

Speaker 1

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 of non GAAP financial measures to the GAAP measures reported in our financial statements. We will hear first this morning from Scripps' Chief Financial Officer, Jason Combs, who will share financial results as well as color on the Scripps ad marketplaces. Then we'll hear from President and CEO, Adam Simpson Chief Operating Officer, Lisa Knutson also is in the room. Here's Jason.

Speaker 2

Good morning, everyone, and thank you for joining us. I'd like to start this morning with the best news of the quarter, probably the whole year, political advertising revenue. Once again, we're raising our guidance for political after a record first half of the year, up 40% over the same period for 2020. Our full year guidance is also at a record level. Again this year, we will see broadcast television continuing to capture the lion's share of political advertising dollars.

Speaker 2

Also exceeding our expectations and the performance of our peer companies are our national advertising upfront commitments. Adam will talk in more detail about political and the upfront in a moment. But first, let's cover the highlights from our Local Media second quarter results and some Q3 and full year guidance and then Scripps Networks division results and guidance. I will end by addressing our debt reduction plan. For the Q2 of 2024, Local Media 2024, Local Media division revenue was up nearly 4% from the year ago period, in line with guidance as we brought in a record amount of 2nd quarter political advertising revenue.

Speaker 2

The political revenue, which was $28,000,000 gained strength from early U. S. Senate spending in Montana and Ohio. Local distribution revenue was about flat over Q2 of 2023 as we had minimal Pay TV contract renewals this year. Our virtual pay TV subscriber count rose by low double digits from a year ago quarter and the overall pay TV subscribers were down mid single digits in line with our modeling and expectations.

Speaker 2

2nd quarter local core advertising revenue was down about 7% from the prior year period. Core was impacted by some displacement due to our strong political advertising revenue, a tough comp for last year's NBA finals and a transition period as we moved away from a national rep firm. Local media expenses were up only 2% from the prior year quarter, right in line with our guidance, even factoring in our new sports rights agreements with the NHL's Vegas Golden Knights and the former Arizona Coyote franchise. Local Media segment profit was $88,000,000 a 9% increase from Q2 of 2023. For the Q3, we expect Local Media division revenue to be up about 20%.

Speaker 2

We expect Local Core ad revenue to be down mid single digits due to the influx political advertising revenue. This displacement of core is expected to be partially offset by Summer Olympics advertising revenue that is coming in 13% higher than our Tokyo Olympics revenue. We expect Q3 Local Media expenses to be up in the low single digit percent range. Turning to the full year, We now expect our Local Media division political advertising revenue to come in between $270,000,000 $290,000,000 That is our 2nd raise to guidance and would be a record level even at the lowest debt. We already had a record setting second quarter and first half for political revenue.

Speaker 2

Now the entry of Kamala Harris into the presidential race and the high level of fundraising for both Harris and Donald Trump is resulting in new dollars spent with us. In Montana and Ohio, U. S. Senate races also continue with heavy spending and we have at least 4 states with reproductive rights issues on their ballots. Now I'd like to discuss Scripps Networks division's 2nd quarter results and 3rd quarter.

Speaker 2

In the 2nd quarter, Scripps Networks revenue was $209,000,000 down 9.7% from the year ago quarter. During Q2, we continue to feel the effects of last year's soft upfront advertising season. However, we were pleased to deliver ad revenue for both to the prior year. Connected TV revenue was up 11% in the 2nd quarter after backing out the programmatic advertising products we shut down. During the quarter, we were impacted by the same dynamics as many others on streaming as Amazon and Netflix unloaded a large amount of inventory into the advertising marketplace at steeply discounted rates.

Speaker 2

We expect the market to absorb all of this inventory and ultimately for rates to rise. But until we move past that, we have lowered our expectations for Connected TV revenue. We have guided in May to CTV revenue in Networks being up about 30% for 2024 minus the impact of our programmatic product. Our new guidance is up about 10% from 2023 on that basis. 2nd quarter Scripps Networks expenses were flat to prior year at $171,000,000 despite incremental sports spend reflecting ongoing prudent expense management.

Speaker 2

Segment profit was 38,000,000 For the Q3, we expect Scripps Networks division revenue to be down in the mid single digit range from last Q3 as we cycle past the impact of the 2023 upfront, we do not see the benefit of the 2024 upfront. Our expectation is that Networks expenses will be down in the low single digit range in the 3rd quarter and that we realize an even greater decline in Q4. We've been working diligently to keep down company expenses as you can see from our 2nd quarter results and 3rd quarter outlook. Turning to the segment labeled Other. In the 2nd quarter, we reported a loss of $9,000,000 Shared services and corporate expenses for Q2 were $21,700,000 For the Q3, we expect the expense to again fall in the $21,000,000 range.

Speaker 2

We are planning for CapEx to fall somewhat below our guidance of $70,000,000 to $80,000,000 due to our broader expense management efforts. Our new expectation is $65,000,000 to $70,000,000 For the Q2, the loss attributable to shareholders of Scripps was $13,000,000 or 0 point has a negative impact on earnings per share even when we don't pay it. This quarter, it reduced EPS by 0 point 17 dollars At June 30, cash and cash equivalents totaled $27,000,000 Our net debt at quarter end was 2,900,000,000

Speaker 3

dollars As we've discussed, we

Speaker 2

have laid out an aggressive plan for debt pay down and leverage reduction this year and we're moving well through the execution of this plan. Our plan has 3 key components: asset sales, use of incremental cash flow and evaluating the best possible timing for the refinancing of our upcoming maturities. We continue to move through our process to sell the Bounce TV network as well as to divest us some real estate holdings. We remain on track to share more details on the divestiture process within the next several months. In terms of cash use, we plan to apply proceeds from our robust political ad revenue and other incremental cash flow to debt pay down.

Speaker 2

As I hope is clear by now, paying down debt is our highest capital allocation priority and we're putting our energy around significant pay down by year end to reach a leverage ratio in the low to mid five times range. And now, here's Adam.

Speaker 3

Thanks, Jason. Good morning and thanks for being with us. Today, Scripps is moving through another meaningful intersection in our long history. We're very near term focused on paying down debt and capturing new efficiencies that give our business sustainability. At the same time, our eyes are fixed on a future where we channel our powerful ability to create connection into driving company growth.

Speaker 3

At this moment, broadcast television is the tailwind propelling us forward. We see our broadcast strength in the ongoing intake of tremendous political advertising dollars, in our ability to drive huge audiences to local and national sports and in the massive viewership and ad spending on the Olympics, reaching records out of Paris this year. I'd like to talk in more detail about the areas of politics and sports and how they create value for us. The 2024 presidential election recently took an unprecedented turn with Joe Biden's decision not to run again. The entry of Kamala Harris into the race combined with the wind down of Donald Trump's trials appears to be translating into a higher spend in the presidential race than anyone had anticipated.

Speaker 3

While still early, this appears to be very good news for Scripps. We are already receiving ad bookings from both campaigns and related political action committees. In Montana, Scripps is seeing the full effect of its number 1 and number 2 ranked local television stations in the race between Democratic incumbent U. S. Senator Jon Tester and his Republican challenger Tim Sheehy.

Speaker 3

And in Ohio, where Democratic Senator Sherrod Brown is defending his seat against Republican Bernie Moreno, our big ABC affiliates in Cleveland and Cincinnati are seeing large spends. The Nevada, Michigan and Arizona U. S. Senate races are also toss ups, driving spending in our markets, as are the contested ballot issues. Ad Impact projects local broadcasters will receive at least half of this year's election spending, demonstrating the ongoing influence and reach of local news as a brand safe vehicle for political advertisers.

Speaker 3

As you know, record political revenue comes down to where you have stations during any given election year. And this year, Scripps is benefiting from exactly the right footprint. Scripps' foresight and subsequent bold moves into live sports were always about leaning into the unparalleled reach of broadcast television. We're glad to see the leagues and teams continue to recognize the critical role we play, including the recent NBA deal that will bring more live sports to Scripps' local NBC and ABC stations than ever. It's clear to us that prudent investment in live sports pays off with evidence we're seeing both in local media and at our networks.

Speaker 3

1st in local, last month we announced our newest major partnership with the NHL's Florida Panthers, fresh off their Stanley Cup title win. The Panthers play in Fort Lauderdale with a dedicated fan base that extends from Miami all the way north through Palm Beach County. This provides Scripps the opportunity to broadcast in 3 TV markets: Miami, West Palm Beach and Fort Myers. We also will retain the partnership next season with the Arizona coyotes, the former Arizona coyotes at their new home in Salt Lake City. And we continue to see great success with the Vegas Golden Knights who have a fan base reaching across multiple Western states and Scripps markets.

Speaker 3

I already shared how important Montana is to our political performance this year. What you should also know is the key role state, it's all about Montana and Montana State Football. And this season, 13 of our 18 Big Sky related adjacent programming will capture a significant percentage of our political yield. On the national network side, our strategy to leverage our in and commitment to professional women's sports is paying off for our whole portfolio in this year's upfront. Our Friday Saturday night franchise telecasts of the WNBA and the National Women's Soccer League have new big brands advertising with us for the first time, more than 2 dozen so far.

Speaker 3

Our upfront strategy drives their commitment to Scripps across time periods, networks and platforms. In fact, the impact of sports has helped drive our upfront results to low single digit increases in volume over last year and compares very favorably to what we're hearing about similar sized media companies. Our successful upfront sales have been buoyed by record viewership of the WNBA on ION and elsewhere. On ION, 3 games have surpassed 1,000,000 viewers so far this season. Our revenue for the WNBA so far this year is up 85% over 2023.

Speaker 3

Just halfway through our seasons, we're seeing the Summer Olympics add more fuel to fans' passion for both women's basketball and soccer. And we expect that enthusiasm to carry over into our ratings when the leagues return to Ion after the Olympics break. Between our local footprint and Networks portfolio, Scripps is the best positioned to create new value from live sports. For Scripps, acquiring ION continues to be an entry point to new growth through women's sports and by allowing us to create a national networks portfolio that has nearly generated $900,000,000 in 2023 revenue, including almost $100,000,000 in Connected TV revenue, while diversifying us away from the volatility in traditional pay TV. Upon the divestiture of bounce, we'll examine our expense structure and resource allocation in the Networks division in pursuit of additional efficiencies within that portfolio to continuously improve financial operating performance.

Speaker 3

Scripps' strength lies in creating connection. We connect consumers to one another and to us through live sports. We connect advertisers to their customers with consumer insights and through new technologies. And our journalism connects people to their neighborhoods and communities with important information that improves their lives. Connection is not just a mission of ours at this company, it's a business imperative.

Speaker 3

These kinds of connections drive our business every day. The transformation of our company for better operating performance is far from over. And once we emerge from a period of debt pay down and significant leverage reduction, we intend to further catalyze value for our shareholders through the concept of connection with our sports partnerships, new advertising and consumer media technologies and by continuing our deep commitment to our news and entertainment audiences and our local communities. In pursuing network, enterprise value is the measure of our success. And now operator, we're ready for your questions.

Operator

Thank you. And we'll go to the line of Dan Koumous of Benchmark. Please go ahead. Okay, sir, your line is open now.

Speaker 4

Dan? Hey, can you guys hear me? Yes. Okay. Sorry, I don't know what happened there.

Speaker 4

Apologies for that. Quick couple of questions, more just I guess, we'll call them housekeeping. Jason, can you just talk a little bit more about core trends? And if you want to strip out, obviously, the tough comp of the Nuggets last year in 2Q and then into 3Q. And I know it's hard to figure out what displacement actually is doing or impacting.

Speaker 4

That would be helpful. And then on the political front, obviously, super strong guide from you guys. Your prepared remarks, Adam, kind of imply that you're not baking in sort of full spend from presidential or I just want to be clear on how you're thinking about the new guide and relative to the fundraising we've seen sort of what the potential range of outcomes is?

Speaker 3

I'll take the political first, Dan. It's Adam. Yes, mean, obviously, we've moved our guide up pretty aggressively. I think that accommodates our view relative to what we've seen with Kamala Harris' Republican to now being toss ups, that's benefited us. We certainly see the continued opportunity with reproductive rights on the ballot.

Speaker 3

As it as we think about the presidential race in and of itself, Look, I mean, I think that we are seeing a level of energy around this campaign cycle that hadn't been baked into our earlier forecasts. And now it's a question of how they allocate their spend. We've clearly set out an expectation that we think this year will be a record for We saw a record amount of spending in 2nd quarter and a record amount of spending in the first half. And frankly, that was against tough presidential comps when we thought about Michael Bloomberg and his early spending in the cycle, one cycle ago. So, so far so good.

Speaker 3

I mean, I think there's obviously continued upside, but the question will be how do we maximize this opportunity and we will pull out all the stops in order to make sure that we're able to place all the revenue on our broadcast stations.

Speaker 5

Hey, Dan, it's Lisa. Related to core in Q2, so as we reported, revenue was down about 7%. Some of that was due to displacement. And when we think about displacement, we think of anywhere from 10% to 20% in a particular market. As Jason and Adam indicated, both Montana and Ohio are very, very tight and we continue to see huge upside there.

Speaker 5

So that's driving a lot of it. We also saw some category softness in Q2. I think when we did our Q1 call, we were seeing our top categories sort of in the positive, both for services and automotive. We finished the quarter slightly down, and we're seeing a little bit of that continue into Q3. So you're seeing some of that in our guide.

Speaker 5

I think the big story really as Jason and Adam both pointed out is political. And we saw record political in the first half of the year including in Q2. And I think we'll see record political spending in Q3 as well and obviously for the year.

Speaker 4

Got it. Thank you. And good to hear from you, Lisa. One more if I can sneak one in. Just Adam, just on Networks and ION, I mean, appreciate the color from the upfront.

Speaker 4

Obviously, we heard some really positive things, even around linear pricing for live sports. And it seems like the upfront actually came in a lot better than people thought, from sort of a combined linear digital perspective. And so as we move forward and appreciate your cost efficiency commentary, just trying to understand how we should be thinking about from Q4 and then onwards forgetting what happens with the macro because no one can control that, how we should be thinking about the portfolio's potential to return to growth and subsequently like how fast you can get margins back to where I know you had sort of envisioned being when you made the acquisition?

Speaker 3

Yes. Thanks, Dan. Let me first start with a little bit more commentary on the upfront and then get to your question about how it will impact, I think, the Networks portfolio. I think ultimately this year's upfront results have essentially validated our sports strategy. And it really is very apparent when you think about overall, we're going to be up low single digits in volume driven by sports and CTV.

Speaker 3

And so I don't know that I think everybody in the industry will say that the upfront was a good story, but I think if you have the right assets, driven by sports and if you have the right CTV strategy, we're going to see that positive story. For us, CTV upfront right now and we're not completely done is pacing about 60% up over last year's upfront. And sports, we're looking at about 10 times last year's volume. Relative to rates, I think rates are going to be pretty consistent with last year. Sports rates, are going to be up in the mid single digits over last year.

Speaker 3

So I think, again, a really, really positive story and a validation of our strategy. The beautiful part of this, though sports make up a small percentage of our programming, our strategy was always about leveraging women's sports in order to impact the overall ION brand and our entire Networks portfolio. And so while the rate is going to be different, we brought in all of these new advertisers for sports and now we're driving their spend not only in those time periods, but well across those time periods on ION, across our networks, onto our different networks and across platforms onto CTV. And I think that's the big story for us out of the upfront. Relative to getting the networks back to where we want them to be, I think over the course of the next year, you're going to see us continue to optimize the networks resource allocation and expense strategy in order to continuously improve the margins for the business.

Speaker 3

I think we obviously recognize that there is a gap between the revenue when we where we thought the business was going and then since because of the macroeconomic conditions where the business has been. And that calls for us obviously to adjust the expense structure to meet the revenue so that we can get the business back to the margin we expect it to be in. And I think you'll see us act prudently but urgently in order to do that.

Speaker 2

Just to maybe add on that a little bit, one thing that wasn't lost in the script. You've already seen us flat expenses in Q2, guided to download singles in Q3 and we foreshadowed to Q4 that you should expect to be down by more in Q4 than we are in Q3. So you're also starting to see that come through in our forward looking guidance.

Speaker 4

Got it. That's really helpful color. Thanks everybody. I appreciate it.

Speaker 3

Thanks Dan.

Operator

And next we go to the line of Steven Cahill of Wells Fargo. Please go ahead.

Speaker 6

Thanks. So Adam, you talked a lot about sports. We've seen Nexstar reprogram the CW towards a much more sports centric platform. I was wondering what your view is of how much more sports you could bring to ION given some of the success that you're seeing. And if you think that there's a point at which it makes sense to move that from a must carry network to a retrans driven network as you think about the cost of sports?

Speaker 6

And then I know you talked a little bit about prudent sports investments on the local side. Was just wondering how much they're contributing to core at this point and what we think that will do going forward. And then, Jason, so thanks for touching on some of the deleveraging efforts. Any update on the timing around balance? It sounds like that's going well.

Speaker 6

Can you mention whether you have multiple bidders or what stage you're in? And then finally, as it relates to other assets like towers and real estate, is there any kind of rough way for us to think about quantum for timing for those types of divestitures? Thank you.

Speaker 3

Hey, Stephen. Thanks for the question. Yes, look, I think we are prudently looking at adding additional sports, but the mix is key. The answer is not to turn ION into a sports station. The answer is for us to continue to look at ways to add sports in which it's an accretive move to our programming strategy.

Speaker 3

I have to tell you, even in the upfront, we get a lot of benefit from the predictability and from the value we bring to the marketplace with our existing programming strategy. And entertainment is a really, really important part of our strategy. So it's not about moving all in on sports. It's about recognizing that general entertainment today requires you to really reach a variety of different audiences and bringing sports, particularly women's sports to ION and rebranding ION about that is lowering the age the average age of the ION viewer. It is making it more multicultural, not only in those time periods, but also outside of those time periods.

Speaker 3

So the strategy is really working. But I would say we would look to continue to identify opportunities to bring on additional sports if they are on brand and if the economics make sense. You asked about moving to retrans versus must carry and that's certainly not in our plan right now. And so you're probably wondering, well, how can you afford to continue to add sports? And I have to say that all comes down to ION's premise or the proposition ION brings to the negotiating table when we talk to leagues and teams.

Speaker 3

At the end of the day, we believe ION's platform as a ubiquitously deployed platform available on over the air, cable, satellite and connected TV make it an unparalleled platform where leagues recognize that we are bringing something to the table in addition to a check for rights. And that's why I think we continue to have good luck with the relationships we have. I think when we talk to folks at the NWSL and the WNBA, they appreciate our commitment to women's sports. They appreciate the fact that we've put a franchise night on the table for both, which has helped fans of women's sports find women's sports because otherwise on other networks, it's sort of just jammed in around men's sports. And we've committed to creating studio shows, pre shows, mid halftime shows, post game shows that tell the stories of these athletes and develop the characters in the leagues in a way that nobody else has committed to.

Speaker 3

And so I think they see the value of our reach and the value of our partnership well beyond just a check that we can cash. And that's why we're able to take, I think, a prudent approach to expense allocation towards Live Sports programming.

Speaker 2

And Steve, on your balance questions, we can't really say a lot since we're in the middle of the process. I would say it's moving along well and it's a competitive process and you should hear more from us in the next couple of months. From a real estate perspective, if you're looking for sort of a quantum there, I would say we're looking to generate between $50,000,000 $100,000,000 in cash proceeds from those activities.

Speaker 7

Thank you.

Speaker 3

Thanks, Steve.

Speaker 1

Kevin, anyone else in the queue? All right, Kevin, I think we'll wrap it up assuming there are no other questions. Thanks everyone for joining us today. Sorry?

Operator

Actually we do have one Craig Huber of Huber Research.

Speaker 5

Okay, great.

Speaker 1

We were wondering where Craig was. Hey, Craig.

Speaker 7

Good morning. Hi. Most of us aren't used to this 1 and 0 to get in the queue and stuff. All right. A few questions.

Speaker 7

I'll just do them 1 at a time just to make you guys' life easier. Adam, what percent of the viewers on your TV stations nowadays are coming from over the air? Where's that number at now? Where do you think it was roughly 5 years ago?

Speaker 3

I think it's grown to be somewhere between 20% 30% depending on the market. In some cases, it's even higher. Market topography and market geography have a lot to do with that. Markets like in Arizona, it's higher. In markets like West Palm, it's lower.

Speaker 3

Again, that's based topography and probably also demographics. When we think about the networks, it also I'd say between 30% 40% of the networks audience, our Ion audience is probably coming from over the air, but other networks, it's much higher. Balance, for example, significantly higher. And then you think about some of the other multicast networks, their distribution is primarily over the air and the revenue they're generating primarily from over the air viewing. All that said, I don't necessarily believe that the currency or the measurement is accurately reflecting the value that we're getting from the over the air audiences because we can definitely see a delta, especially in the direct response marketplace, which is obviously dependent on viewing, and the efficacy of our networks and local markets with direct response compared to the ratings.

Speaker 3

And we continue to work with all of the ratings platforms to ensure that they're properly measuring the over the air marketplace, but we feel pretty darn good about the percentage of the marketplace at this point that continues to grow.

Speaker 7

And where do you think, Adam, that number was roughly 5 years ago? And while I have you, you have this big promotion effort you guys have been running through your other segment here and stuff. I mean, it sounds like you're curious about the funding level of your money you put into that this year versus last year. I mean, you must get it feels like you're getting a pretty good bang for your buck there, right?

Speaker 3

Yes. I mean, I would say, several years ago, when we were really beginning our focus on over the year distribution as a platform, it was below 20%. I would tell you, if you go back even further than that, at the outset of cord cutting, it was about 7%. I think Forbes just did an interesting article and referenced the fact that over the air broadcasting is probably the fastest growing form of television viewing, linear television as cable is in decline and CTV obviously reaches a certain level of ubiquity. We're seeing a lot of people identifying the opportunity to add television for free to their bundle.

Speaker 3

And that continues to be the premise of our view on over the air growth.

Speaker 7

And what about your promotion efforts that go through that other segment, the small segment you have? I mean, how's those dollars this year being spent versus last year? Is it about the same or what?

Speaker 3

Yes. I mean, overall, this year, I think most of the revenue or most of the expense that you see tied to our air is being run through our development and growth of the Tableau business in which we're also generating revenue. We sort of shifted away from being the industry's advocate to really trying to advocate for over the air through the use of Tableau because there's a direct consumer connection that we get. And this quarter Tableau hit its sales targets. And in fact, we've been able to lower our customer acquisition costs.

Speaker 3

And so we'll continue to use that as a prudent way to grow the over the air marketplace. We also do pretty routinely use our own promo inventory, not only to remind consumers that they need to rescan in order to identify new opportunities, not only ours, but others in the marketplace. And frankly, I'm at the point now where I'm starting to have really positive conversations with some of my peers. They are themselves also recognizing the need for us to support over the air television and we think that will inure to our benefit disproportionately as well.

Speaker 7

Okay. I appreciate that. If I could ask you a little bit more on the Scripps Networks, just going back to last quarter for a second, just let you understand this. Your guidance for the Scripps Networks was down mid single digits for revenue in the quarter. Numbers came in down 9.7% against the revenues.

Speaker 7

Was that all because maybe I missed this, is this all because the month of June came in significantly worse than expected? What categories would you hone in on there that's been the problems?

Speaker 5

Hey, Craig, it's Lisa. On the network side, it was the story was all CTV. So, as Jason mentioned in his remarks, both Amazon and Netflix really dumped a ton of inventory into the marketplace at steeply discounted rates. And not just Scripps, but lots of others on in the CTV space had to react to that. So it was I think Amazon launched ads in late March, early April.

Speaker 5

And we ended up seeing the effect of that throughout the quarter. That was really I think in some ways unexpected.

Speaker 7

Okay. And you think you have a much better grasp on that dynamic now with your similar down mid single digit outlook for the current quarter? In other words, do you feel fairly confident about the down mid single this time around this Q3? Yes.

Speaker 5

Oh, yes. Yes.

Speaker 7

All right. And then, talk a little bit further about auto advertising at your TV stations, if you would, please. I think you said it was down slightly. And just what sort of I know it's a little things moving around here for the current quarter, but what's your outlook for auto, please?

Speaker 5

Well, in my comments were that Q2 was down slightly. So auto was down about 2%. I think the biggest issue in Q2 were which was a turn from previous quarters where local dealers were down about 8%. And I think that's also our best opportunity to grow in certainly in the future quarters is that dealer group as they have to move auto certainly 2024s off the lot and onto to make room for the 2025. In terms of so automotive is trending, I would say, in about that range.

Speaker 5

We're seeing some as Jason mentioned, we're seeing some positive momentum out of Olympics, which is helping really multiple categories, but auto being one of our largest categories and certainly helping that. But I think we'll continue to see that slightly down in the Q3.

Speaker 7

And my last question, sorry, Vince, my last question on political. I mean, obviously, things have changed quite a bit out there as you guys went through several different ways about on the political side about how strong you think it's going to be this year and stuff. Is there a chance at all that this may play out again like what happened in 2022? Early indications where political is going to be very hot, very strong for the full year. And then as we got deeper into the year, some of the races end up not being as competitive and money shifted and the TV station group did not benefit in general for the whole industry did not benefit as much as people thought earlier in the year.

Speaker 7

Is it possible you'd be might we see that unfortunately here in 2020

Speaker 3

4? Absolutely not. In fact, I think it's quite the opposite scenario. And I think I've said to all the analysts and investors that we learned a lesson in the last time around. We would not be putting out this guide if we were not confident in this guide.

Speaker 7

Okay, great. Thank you very much.

Speaker 4

Thanks, Craig.

Operator

At this time, we have no further questions in queue.

Speaker 1

Okay. Thanks, Kevin. We'll wind up now. Thanks, everybody, for your time today. Have a good weekend.

Operator

And thank you. Ladies and gentlemen, that does conclude your conference. You may now disconnect. Have a good day.

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E.W. Scripps Q2 2024
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