EW Scripps (SSP) Q4 2025: Transformation Plan Targets $150M EBITDA Lift, Sports and Core Ads Drive Momentum
Transformation is now central to Scripps’ investment case, with a $125 to $150 million EBITDA uplift plan underway and early cost and margin gains visible. Core advertising and sports rights continue to outpace industry trends, while divestitures and reacquisitions sharpen asset focus and balance sheet repair. With regulatory change and AI-driven efficiency as catalysts, Scripps is positioning for both near-term political windfall and long-term organic growth.
Summary
- Transformation Plan Execution: Multi-year EBITDA uplift targets are backed by cost discipline and revenue initiatives.
- Sports and Core Ad Strength: Local sports rights and core advertising growth outshine industry peers.
- Regulatory and Tech Levers: Asset moves, AI adoption, and regulatory shifts set up margin and growth tailwinds.
Performance Analysis
Scripps delivered on its margin and profit guidance in both the Networks and Local Media divisions, with disciplined expense management and sports-led advertising growth offsetting the cyclical absence of political revenue. The Local Media division’s core advertising jumped 12% YoY, with all top five ad categories up and services and gambling leading. Local sports rights, including new and existing NHL deals, were a key growth engine, expanding both the advertiser base and revenue yield.
The Scripps Networks division posted a revenue decline of less than 8% YoY but outperformed guidance and peers, with Connect2TV, the company’s connected TV (CTV) business, growing nearly 10% in the quarter and 30% for the full year. Network segment margins expanded nearly 700 basis points, reflecting both top-line resilience and a 13% expense reduction. Asset optimization continued with the sale of Court TV and reacquisition of 23 ION-affiliated stations, both immediately accretive to segment profit and margins.
- Core Advertising Outperformance: Local Media core ad revenue up double digits, with sports rights fueling new advertiser growth.
- Expense Controls Drive Margins: Flat or declining expenses in both divisions despite new sports rights and inflationary pressures.
- CTV and Streaming Growth: Connect2TV revenue up 30% for the year, validating the streaming pivot.
With political advertising set to surge in the back half and further cost and asset actions in flight, Scripps’ financial trajectory is increasingly tied to execution of its transformation plan and ability to capture both cyclical and structural tailwinds.
Executive Commentary
"We were very pleased to close out 2025 with strong financial results that have, again, met or exceeded expectations across the board. We delivered these results by doing exactly what we said we'd do, getting more from the assets we have, our local stations and our networks, and executing with focus and discipline."
Adam Simpson, President and Chief Executive Officer
"Our plan balances right-sizing our current expense structure with implementing new ways to grow revenue and profitability. The EBITDA improvement is one aspect of our larger company transformation plan. You'll start to see the financial benefits of our plan in the second half of this year."
Jason Combs, Chief Financial Officer
Strategic Positioning
1. Transformation Plan and Cost Structure Reset
Scripps’ transformation plan targets $125 to $150 million in annualized EBITDA gains by 2028, with $20 to $30 million expected in-year for 2026 and a $60 to $75 million run rate entering 2027. This plan is not just about cost reduction—leadership emphasizes a dual focus on revenue growth (yield management, adjacencies) and expense discipline (AI, automation, centralization). The company has already centralized IT and engineering, and is actively deploying automation in news gathering and production workflows.
2. Sports and Core Advertising as Growth Engines
Live sports rights—particularly NHL and women’s sports—are now central to Scripps’ local and national ad strategy. These assets are expanding the advertiser base, opening up new categories, and driving industry-leading core ad growth. The company’s ability to monetize both linear and CTV inventory, especially during high-profile events and election cycles, is a clear differentiator.
3. Asset Optimization and Capital Allocation
Recent moves—including the sale of Court TV, reacquisition of ION affiliates, and local station divestitures—demonstrate disciplined capital allocation and a focus on accretive, margin-enhancing transactions. These deals are immediately beneficial to segment profit, reduce affiliate fees, and improve the balance sheet. Leadership continues to signal openness to further M&A, especially as regulatory headwinds around ownership caps may ease.
4. Technology, AI, and Organic Growth Initiatives
AI and automation are being used to both improve efficiency and enhance product quality, freeing journalists to focus on reporting while automating repetitive tasks. Leadership sees these investments not only as cost levers but as enablers of organic growth, with new business adjacencies and greenfield opportunities under evaluation. The transformation plan is explicitly framed as “growth-oriented,” not just financial engineering.
5. Regulatory and Industry Dynamics
FCC and DOJ regulatory shifts are expected to unlock further consolidation and asset optimization, with Scripps well-positioned to benefit from a more level playing field. The company is also advocating for direct negotiation rights with virtual MVPDs, which could further enhance distribution economics over time.
Key Considerations
Scripps enters 2026 with a multi-pronged strategy that blends cyclical tailwinds with structural change. The transformation plan is ambitious but underpinned by detailed business cases and early execution. Investors should weigh:
Key Considerations:
- Political Advertising Surge: Record midterm election spending is expected in H2, with Scripps’ local and CTV inventory well positioned to capture both linear and digital political dollars.
- Sports Rights as Moat: Sports partnerships are expanding advertiser reach and driving core ad outperformance, but require ongoing execution and rights renewal discipline.
- Margin Expansion from Asset Actions: Reacquiring ION stations and divesting non-core assets are immediately accretive to margins and reduce fixed costs.
- Execution Risk on Transformation: The $125 to $150 million EBITDA target is “bankable,” but depends on successful tech deployment and employee alignment.
- Regulatory Wildcards: FCC and DOJ decisions on ownership caps and market definitions could reshape the competitive landscape and deal flow.
Risks
Scripps’ execution on its transformation plan is critical—delays or under-delivery on cost or revenue initiatives could undermine the EBITDA uplift narrative. Macroeconomic softness, especially in interest-sensitive ad categories, remains a headwind, and political ad windfalls are inherently cyclical. Regulatory timelines and outcomes are uncertain, and M&A integration or asset sales could face delays or valuation pressure. The company’s high leverage (4.8x net) also limits flexibility if cash flows disappoint.
Forward Outlook
For Q1 2026, Scripps guided to:
- Local Media revenue up low to mid-single digits, with core advertising up mid-single digits.
- Local Media expenses up low single digits (flat ex-Tampa Bay Lightning rights).
- Scripps Networks revenue down high single digits, expenses down low single digits.
For full-year 2026, management expects:
- Low single digit gross revenue growth in Local Media and low teens percent net distribution revenue growth.
- EBITDA improvement of $20 to $30 million in-year from transformation initiatives, targeting $60 to $75 million run rate exiting 2026.
Management highlighted:
- Record political ad spending in key Senate and gubernatorial races, with 51% of spend projected to flow to broadcast.
- Ongoing cost discipline, margin expansion, and debt reduction remain top capital allocation priorities.
Takeaways
Scripps is leaning into a transformation narrative, using asset optimization, sports rights, and technology to drive both near-term and structural profit gains.
- Margin and Core Ad Outperformance: Cost discipline and sports-led ad growth are delivering industry-beating results and set the stage for political windfall in H2 2026.
- Transformation Plan is Central: The $125 to $150 million EBITDA uplift is the defining lever for valuation and will be a key watchpoint for execution and credibility.
- Regulatory and Tech Catalysts: FCC/DOJ action and AI deployment could unlock further growth, but also introduce new risks if delayed or mis-executed.
Conclusion
Scripps exits 2025 with momentum in both operations and strategy, as core advertising, sports rights, and cost management drive outperformance. The transformation plan’s success will define the next chapter, with execution, regulatory clarity, and technology adoption as key themes for investors to monitor.
Industry Read-Through
Scripps’ results underscore the value of live sports rights and CTV scale in a fragmented media landscape, with local broadcasters able to offset macro softness through premium inventory and diversified distribution. The company’s margin expansion and asset optimization moves highlight the importance of disciplined capital allocation in legacy media. Regulatory changes around ownership caps and direct negotiation with virtual MVPDs could catalyze further M&A and industry consolidation, with Scripps’ playbook serving as a template for peers seeking both efficiency and organic growth in a rapidly evolving media environment.