Scripps hits records before Discovery merger
Scripps Networks Interactive announced it took in $3.6 billion in 2017, a company record.
That’s up 4.7 percent over 2016, as Knoxville-based Scripps prepares for its merger with Discovery Communications.
But net income for the year was down 7.4 percent to $623.9 million, attributed to tax law changes in the U.S. and Poland; more investment in programming, marketing and data; and “merger related expenses,” according to a Scripps news release.
Net income adjusted for foreign currency transactions, lower interest expense, and all other factors came in at $752.6 million, up 16.9 percent from 2016.
Maryland-based Discovery is buying Scripps in a $14.6 billion cash-and-stock deal expected to close in early 2018. That includes Discovery’s assumption of Scripps’ $2.7 billion debt.
Ad revenues and program distribution revenues were also up from last year, leading to an adjusted profit of $1.5 billion, an increase of 2.2 percent.
“Scripps Networks Interactive finished a pivotal 2017 year with a strong fourth quarter, executing on our strategic objectives and delivering financially with record revenue and growing segment profit,” the company’s chairman, president and CEO Ken Lowe said in a news release.
“We reached new consumers through the thousands of compelling experiences created by Scripps Lifestyle Studios. We invested in our core business as well as our fast-growing digital offerings, allowing us to capitalize on the popularity of our powerful lifestyle brands across the globe.
And, of course, we announced our merger with Discovery Communications, creating an unmatched opportunity to deliver our real-life content to a greater number of audiences.”
Scripps did not hold a conference call for investors, citing its pending merger with Discovery.
The merger left Scripps’ 1,000 Knoxville-area employees concerned for their jobs, but in January Discovery announced it would not only keep the Knoxville campus open, but would move its own national operations headquarters here as well. The move comes with unspecified state incentives.
“Featuring a compelling environment and infrastructure, Knoxville is a self-contained campus with many amenities and benefits for a National Operations Headquarters, including a low cost of living, and built-in facilities and operational capabilities,” a Discovery news release said. “It will continue to house the major Scripps brands and creative digital teams along with corporate functions.”
Scripps produces its content for about half the price of Discovery, according to a Kiplinger report. Discovery announced it hopes to save $350 million over two years by merging and streamlining operations
“Discovery will evaluate duplication of other facilities and functions in other cities around the world following the closing of the Scripps acquisition to determine the most efficient and effective plan for housing its combined company employee base,” the Discovery news release said. “Decisions on individual job status and relocation also will be made after the close of the Scripps acquisition.”
According to the Scripps news release, its HGTV, Food Network, Travel Channel and TVN arms all grew or remained near the top of their ratings niches. Scripps Lifestyle Studios, its online content division, nearly tripled its annual video views to more than 19 billion. The company attributed that in part to acquisition of Spoon University, launch of Genius Kitchen, and expansion of its international offerings.
Source: Knoxville News Sentinel
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Published March 9, 2018