8-K: Scripps Reports Q2 2026 Results: $1.2B Loss Amid Transformation

The E.W. Scripps Company reported a $1.2 billion net loss for Q2 2026, driven by a $1.1 billion goodwill impairment charge, while revenue declined 9.2% year-over-year.

Summary

• The E.W. Scripps Company reported $490 million in revenue for the second quarter of 2026, a decrease of 9.2% compared to the prior year.
• The company incurred a net loss of $1.2 billion, or $12.68 per share, significantly impacted by a $1.1 billion non-cash goodwill and other intangible assets impairment charge for Scripps Networks.
• Local Media revenue decreased by 5.4% to $317 million, with core advertising down 8.7% and distribution revenue down 17%, partly due to distributor blackouts.
• Scripps Networks revenue decreased by 16.5% to $172 million, attributed to the sale of Court TV, a challenging national advertising market, and shifts to streaming.
• The company is progressing on its transformation plan, targeting $125-$150 million in enterprise EBITDA growth by 2028 through cost savings and revenue initiatives, with approximately $100 million in annual run-rate savings expected by year-end.
• Local Media political advertising revenue reached a second-quarter record of $28 million, and full-year 2026 political revenue is now projected between $225-$250 million.
• As of June 30, 2026, the company had $13 million in cash and cash equivalents and $2.5 billion in total debt.
• Aggregated undeclared and unpaid cumulative preferred stock dividends totaled $150 million.

Sentiment

Score: 2

Explanation: StockSavvy.ai views this as a negative sentiment due to a significant net loss, substantial impairment charges, and declining revenues in key segments, despite some strategic progress.

Positives

• Local Media political advertising revenue set a second-quarter record at $28 million.
• The company expects to implement approximately $100 million in annual run-rate savings by year-end as part of its transformation plan.
• Three retransmission consent agreements representing the majority of pay TV subscriber households scheduled for renewal in 2026 have been completed.
• Scripps Sports has formed new partnerships, including a multi-year distribution agreement with the Detroit Pistons and a local rights agreement with the Nashville Predators.
• ION has secured the U.S. rights to televise the Women's Volleyball World Cup 2027 tournament.
• The company completed several local station transactions, including acquiring a second Big 4 station in Lexington, Kentucky, and swapping stations with Gray Media.
• Dean Littleton was promoted to president of media, a new consolidated role overseeing the company's television business.

Negatives

• The company reported a net loss of $1.2 billion, or $12.68 per share, for the second quarter of 2026.
• A significant non-cash goodwill and other intangible assets impairment charge of $1.1 billion was recorded for Scripps Networks.
• Total revenue decreased by 9.2% to $490 million compared to the prior-year quarter.
• Local Media revenue declined 5.4% to $317 million, with core advertising down 8.7% and distribution revenue down 17%.
• Scripps Networks revenue fell 16.5% to $172 million.
• Distributor blackouts during contract negotiations with Comcast and DirecTV negatively impacted Q2 distribution revenues by $26.7 million.
• Undeclared and unpaid cumulative preferred stock dividends totaled $150 million as of June 30, 2026.
• Cash and cash equivalents stood at $13 million as of June 30, 2026, with total debt at $2.5 billion.

Risks

• Continued pressure from a weak national advertising market, ratings challenges, and broader macroeconomic uncertainty impacting Scripps Networks.
• Challenges in the national advertising market, particularly for direct response advertising.
• The decline in legacy linear viewing and the resulting shift in advertiser spending to streaming and digital platforms.
• Changes in Nielsen's measurement methodology, which Scripps is working to mitigate.
• Potential negative impacts from future distributor negotiations and potential service blackouts.
• The company's ability to manage its outstanding debt obligations.
• Risks associated with the company's transformation plan and achieving targeted EBITDA growth.
• Potential for further job reductions impacting workforce and operations.

Future Outlook

The company expects transformation benefits to become increasingly visible in the coming quarters. They are targeting $125-$150 million of enterprise EBITDA growth by 2028. For Q3 2026, Local Media revenue is expected to be up about 20%, Local Media expenses down low-single-digit percent, Scripps Networks revenue down mid-teens percent, Scripps Networks expenses up low-single-digit percent, and Shared services and corporate expenses around $25 million.

Management Comments

• "We're in the midst of transforming Scripps through fundamental changes in how we operate. These changes leverage today's most advanced technology, AI and automation to both deliver improved operating results and allow us to better serve our local consumers, audiences and advertisers that rely on us across the nation."
• "The company's Q2 financial results, impacted by the economic environment and audience measurement challenges, are not reflective of the progress we're making. We expect the transformation benefits to the company's health and performance to become increasingly visible in the coming quarters."
• "In parallel with our transformation work, we continue to evaluate and execute M&A opportunities through a disciplined lens focused on accretive transactions that improve our financial footing and strategic flexibility."
• "Our recently closed transactions bring greater depth and operating efficiency to our local stations portfolio to create the economic durability to sustain our public service commitment: high-quality local news, emergency alerts, weather coverage and local sports that keep people informed, engaged and connected to their communities."
• "Scripps is differentiating ourselves by attacking industry disruption with bold strategic bets. We are making difficult decisions, including eliminating 268 jobs across the company earlier this week, in service to our ability to survive and thrive and fulfill our commitments to our country and to our shareholders."
• "Macroeconomic conditions have come and gone, and we have survived them. What distinguishes our approach today is that we are being proactive in making permanent changes that allow us to succeed within the realities of today's media landscape."

Industry Context

StockSavvy.ai notes that Scripps' results reflect broader industry challenges including a difficult national advertising market, fragmentation of audiences, and the ongoing shift from linear television to streaming and digital platforms. The company's strategic bets in areas like local sports rights and national network brands aim to navigate these disruptions, but the significant impairment charge highlights the pressure on traditional media assets.

Management Changes

Stakeholder Impact

• Shareholders: Impacted by a significant net loss and a substantial impairment charge, which negatively affects book value and potentially future earnings. The preferred stock dividend situation also impacts common shareholders' ability to receive dividends.
• Employees: Approximately 6% of the workforce (268 jobs) were eliminated as part of the transformation plan, impacting morale and job security.
• Distributors (e.g., Comcast, DirecTV): Negotiations for retransmission consent agreements led to temporary station blackouts, impacting revenue for Scripps and potentially service for subscribers.
• Advertisers: Facing a challenging national advertising market and shifts in viewing habits, potentially impacting advertising effectiveness and spending decisions.
• Creditors: The company's substantial debt load ($2.5 billion) and current financial performance could be a concern for creditors, although no immediate issues are flagged.

Next Steps

• Continue executing the company transformation plan to achieve targeted EBITDA growth.
• Implement approximately $100 million in annual run-rate savings by year-end.
• Begin realizing revenue from new Scripps Sports partnerships with the Detroit Pistons and Nashville Predators in the fall.
• Continue to evaluate and execute M&A opportunities.
• Work with Nielsen to mitigate challenges related to measurement methodology in the coming quarters.
• Hold a conference call on August 7, 2026, to discuss Q2 2026 results.

Key Dates

Recommendation

The significant net loss, driven by a massive impairment charge, coupled with declining revenues in core segments and substantial debt, indicates severe financial distress. While the transformation plan and new sports partnerships offer some potential upside, the current financial performance and outlook suggest a high level of risk for investors. The inability to pay preferred dividends and the restrictions on common stock dividends further diminish shareholder value in the short to medium term.

Keywords

Scripps Networks, Local Media, revenue, EBITDA, impairment charge, political advertising, distribution revenue, transformation plan