The E.W. Scripps Company (SSP) Q3 2026 earnings review
Election ads lift Scripps profit, but its national networks shrink
Record midterm election advertising lifted E.W. Scripps, the owner of 60 local TV stations and the ION network, back to a profit while its national channels kept shrinking. Revenue from businesses owned a year ago rose 7% by our math (4% as reported to $545 million), and the company earned 21 cents per share after cutting nearly 20% of its staff this year. Chief executive Adam Symson said full-year political ad sales reached $284 million through Election Day, above what the company's own August plan pointed to, which leaves about $166 million of political revenue for the fourth quarter by our math.
| Segment sales from businesses owned a year ago | +7.5% reported revenue +3.6% to $545M |
|---|---|
| Full-year Local Media political ad revenue | $284M raised from $225–250M August plan (+44% vs 2022) |
| Scripps Networks revenue, excluding Court TV | -11.1% fourth-quarter outlook: down high single digits |
| Planned fourth-quarter debt paydown | At least $150M total debt $2.46B; net leverage 5.2x |
⚖️ Verdict: 🟢 Bullish
The story got better because the $284 million political windfall and completed layoffs give Scripps the cash to pay down at least $150 million of its 2028 term loan this quarter. In addition, pay-TV blackouts are over and network fee renewals will lift net distribution profit by double digits in 2027. One caution: Nielsen's September ratings fix boosted measured audiences at Scripps Networks by 23%, yet national network revenue still fell 11% and the fourth-quarter outlook calls for another high-single-digit drop.
The question now is whether $100 million of annual cost cuts and rising cable distribution fees can replace $284 million of political ads when the election cycle ends in 2027. If national network revenue stabilizes, Scripps can keep reducing its 5.2 times debt leverage; if national ads keep sliding, cost savings will merely offset the decline. Management's full-year 2027 outlook in February will settle the debate.
🐂 Bull Case
Record Midterm Ad Sales Fund Debt Paydown
Scripps relies on even-year elections for high-margin cash to reduce its debt, but that creates a steep revenue drop in the following non-election year. Chief executive Adam Symson said "broadcast television continued to prove itself to be the best vehicle for reaching voters" as tight races in Ohio and Michigan brought national party spending to its local stations.
- Full-year Local Media political ad revenue: $284 million through Election Day, up 44% from the 2022 midterm cycle
- Third-quarter Local Media political ad revenue: $80.6 million, up from $5.1 million a year ago
- Implied fourth-quarter Local Media political ad revenue: about $166 million by our math
- Planned fourth-quarter debt reduction: at least $150 million, using political cash and $83.4 million of cash on hand
The $284 million haul beat the $225–250 million outlook set in August and the $275 million update issued a week before the election. Because political advertisers displaced regular business, underlying core advertising fell 12.9% in the third quarter, but finance chief Jason Combs said November core ad pacing jumped 30% over October once the election passed.
What to watch: the exact debt paydown on the B-2 term loan due in 2028 when fourth-quarter results arrive in February. Paying down well above $150 million would shrink the 2028 refinancing wall before political revenue disappears in 2027.
Staff Cuts Lower Operating Costs by Seven Points
In February, Scripps launched a reorganization to add $125–150 million in annual profit by 2028 through automation and centralized workflows. Symson called the effort "one of the most significant structural resets in this company's history" after eliminating 431 roles in October, bringing 2026 job cuts to 850, or nearly 20% of its workforce.
The company recorded $18.8 million in third-quarter restructuring charges to execute the layoffs, which reduced earnings by 14 cents per share. Operating costs for segments and corporate offices fell from 85.3% of revenue a year ago to 78.3% by our math, a 7.0-point drop that lifted operating margin by 5.2 percentage points to 12.3%. Symson said "cost-cutting was never the destination" and noted that automated local news streams grew viewing hours 23% without hurting traditional broadcast ratings.
What to watch: fourth-quarter segment expense lines and the 2027 expense outlook in February. Management reaffirmed its target of $100 million in annualized cost savings by year-end, which should produce year-over-year cost declines across both divisions next year.
Sports Rights and Distribution Renewals Lift Local TV
Scripps is buying local and women's sports rights to attract viewers as traditional pay-TV subscribers decline in the mid-single digits. On the national ION network, Symson said sports advertising sells for "more than two times its non-sports inventory", and the sales team sold out over 75% of its sports slots during upfront negotiations.
In Local Media, Detroit Pistons games created high-priced ad slots for political campaigns. Meanwhile, retransmission revenue — fees cable and satellite operators pay to carry local stations — stabilized at $178 million (up 0.3% from businesses owned a year ago) despite a $3.8 million loss from a DirecTV blackout. With 2026 renewals finished and lower fees paid to broadcast networks, Combs expects fourth-quarter distribution revenue to grow 4% and 2027 net distribution profit to grow in the double digits.
What to watch: Local Media core advertising growth in the first quarter of 2027. With Pistons and Nashville Predators games airing and political displacement over, core ads must grow to justify the new sports rights costs.
🐻 Bear Case
National Networks Shrink Despite the Ratings Fix
For two quarters, management blamed a winter change in Nielsen's audience measurement for the steep revenue drop at Scripps Networks, its national entertainment channels including ION and Bounce. On September 1, Nielsen updated its method to "more accurately measure over-the-air households", and Symson said "our audiences didn't go anywhere" as adult ratings rose 23% in September.
Yet the division's revenue from businesses owned a year ago still fell 11.1% to $173 million in the third quarter, and segment profit dropped 41.0% to $33 million. Connected TV streaming revenue grew 37% and is on track for $155 million this year, but the company cited "pressure from the economy and the impact of low consumer confidence on direct response advertising" for the overall decline. Even with a full quarter of higher Nielsen ratings, Scripps plans for fourth-quarter Networks revenue to fall in the high single digits.
What to watch: first-quarter 2027 Scripps Networks revenue outlook in February. If revenue keeps falling when upfront sports contracts and the Nielsen fix are fully in place, the decline in traditional television advertising is outrunning streaming growth.
Debt Leverage and Preferred Stock Costs Keep Rising
Scripps carries $2.46 billion in total debt, including $558 million of term loans and a $274 million accounts receivable facility, alongside preferred stock held by Berkshire Hathaway. To preserve cash for debt reduction, the broadcaster has not paid its 9% preferred dividend this year, which blocks any common stock dividends or buybacks.
- Net leverage ratio (credit agreement basis): 5.2 times at Q3, up from 4.9 times at Q2 and 3.9 times reported at Q1
- Unpaid cumulative preferred dividends: $166 million at Q3, up from $150 million at Q2 and $117 million at year-end 2025
- Preferred dividend drag on Q3 diluted EPS: 17 cents per share ($16.9 million)
- Diluted share count: 98.1 million, up 10.9% from 88.5 million a year ago
Even with third-quarter political cash arriving and pro forma cost-saving adjustments included in the bank calculation, net leverage climbed to 5.2 times. Meanwhile, compounding unpaid preferred dividends and rising share counts steadily reduce the common shareholders' claim on future profits.
What to watch: year-end net leverage and the remaining balance on the B-2 term loan due in June 2028. Management plans to direct its fourth-quarter cash flow to that loan rather than buying back discounted 2031 bonds.
👓 Other Themes
Midterm Results Cloud Prospects for Large Mergers
Scripps has reshaped its station portfolio this year by selling stations in Indianapolis and Fort Myers, swapping stations with Gray Media, and selling Court TV. While broadcasters hoped for looser federal ownership rules to allow large combinations, Symson said "Tuesday's blue wave injects a little bit more uncertainty into the prospect of a mega merger" because state attorneys general may challenge market overlaps. The company will focus on smaller station swaps and its EdgeBeam spectrum venture.
💲 Other KPIs
Unearned revenue — cash customers have paid in advance for advertisements not yet aired — jumped 90.1% from last quarter's $27.6 million and more than doubled from $22.2 million at the end of 2025. Political campaigns must pay in advance, so this balance built ahead of the November election and turns into fourth-quarter revenue and cash.
Spending on property and equipment fell 22.9% from $15.1 million a year ago and dropped from $16.8 million in the second quarter, taking 2.1% of revenue. Through nine months, capital spending totals $30.5 million, keeping the broadcaster well inside its full-year plan of $50–60 million as it conserves cash for debt payments.
Cash interest payments rose 22.7% from $63.3 million a year ago and jumped from $20.1 million in the second quarter, bringing nine-month payments to $179.2 million. Meanwhile, income Statement interest expense fell 9.2% to $53.8 million, showing that the third-quarter cash outflow reflects coupon payment dates on last year's refinanced debt.
🔮 Guidance
Raised twice and completed. Full-year political ad revenue finished 44% above the 2022 midterm cycle, with the middle of the target moving up $37.5 million on October 28 and another $9 million after Election Day. By our math, that leaves $166.3 million for the fourth quarter after $117.7 million in the first nine months.
New. The plan calls for about 43% growth from businesses owned a year ago, up from 19.0% growth in the third quarter. The jump comes from $166.3 million of implied fourth-quarter political ads against a $9.0 million off-year comparison, alongside 4% distribution growth and a high-single-digit drop in core advertising.
Unchanged. Total Local Media expenses will stay flat compared to a year ago, after falling 3.1% in the third quarter. Finance chief Jason Combs reaffirmed that excluding new rights costs for the Detroit Pistons and Nashville Predators, underlying station expenses will fall in the mid-to-high single digits as October layoffs take effect.
New. The outlook points to an 8% decline at the middle of the range, a smaller drop than the 11.1% decline in the third quarter and 13.4% in the second. Connected TV growth and September's Nielsen ratings fix help, but weak direct-response advertising keeps the division shrinking.
Consistent with prior commentary. After rising 0.9% in the third quarter on WNBA programming costs, national network expenses will turn negative in the fourth quarter (about -2% at the middle of the range) as the WNBA season ends and staff reductions lower payroll.
New. Corporate overhead is planned at $27 million, up about 4% from $25.9 million in the third quarter and up from $22.5 million in the fourth quarter of 2025.
❓ Key Questions
How much of the $150M target is cost versus revenue?
Management targets $125–150 million of profit improvement by 2028 and $100 million in annual cost savings by year-end 2026, but has not split the remaining $25–50 million between further staff cuts and the 70 revenue projects in its pipeline.
Why did credit-agreement net leverage rise to 5.2 times?
Total debt fell by $36 million in the third quarter and third-quarter profit rose, yet bank-defined net leverage increased from 4.9 times in Q2 to 5.2 times in Q3 without a reconciliation of the trailing eight-quarter calculation.
What are the annual costs for the Pistons and Predators?
New local NBA and NHL contracts lifted fourth-quarter Local Media expenses from a mid-to-high single-digit decline to flat, implying roughly $15–20 million of quarterly cost, but the multi-year dollar commitments remain undisclosed.
What is the status of the INYO station purchase?
In February, Scripps exercised an option to buy back 23 ION stations from INYO Broadcast Holdings for $54 million pending regulatory approval, yet management gave no closing timeline or update on the transaction this quarter.