E.W. Scripps CEO Adam Symson briefed Wall Street analysts Friday on the company’s “transformation plan,” which has entailed cutting 12% of its total workforce amid an embrace of AI.
The layoffs, mostly at the company’s local TV stations, come as the company adopts a 24-hour streaming news model enabled by artificial intelligence. Symson rose through the corporate ranks as a digital executive at Scripps, a nearly 150-year-old company which also owns the ION broadcast network, newspapers and multicast networks.
During the company’s second-quarter earnings call, Symson described a “revolution” in the way the company generates local news programming. “We’re leaning into AI, automation, technology and the centralization of some roles,” he said. The changes will make the company’s local station group “a technology-forward, AI-powered broadcast journalism company dedicated to serving our communities with the same high-quality, fact-based reporting that they’ve relied on us for over the past 150 years.”
The new setup will “improve our operating model and better serve our audiences,” he said. “We are not wavering on our commitment to quality journalism.”
Scripps disclosed 268 job cuts earlier this week. Since the beginning of the year, Symson said, the company has eliminated 432 positions and 126 open jobs, accounting for about 12% of the company’s total. The cuts, which will help the company achieve $100 million in run rate savings, coming quarters will see additional savings.
Symson called the job cuts “a painful process full of difficult decisions,” adding execs are making the moves “knowing they are financially necessary for fulfilling our mission.”
Prior to the earnings call, Scripps released second-quarter results below Wall Street expectations, saying they reflect “challenges on a number of fronts.” The company posted revenue of $490.4 million, down 9% from the year-ago period, and a net loss of 34 cents a share.
Broadcasters of all sizes, especially local station owners, have been battling cord-cutting and coping with ongoing audience and advertiser shifts away from linear viewing. The No. 1 owner of stations in the U.S., Nexstar Media Group, has entered a legal quagmire after announcing the close of a $6.2 billion acquisition of rival Tegna, with the outcome likely to have an impact on the entire sector. DirecTV and a group of state attorneys general sued to try to block the deal, arguing it violated antitrust laws. A federal judge agreed, freezing the two companies’ integration despite the fact the transaction technically closed. An appeal of the District Court ruling will be heard in the fall.
Scripps said the layoffs and increased use of technology will help the company increase EBITDA by $125 million to $150 million by 2028 through cost savings and revenue stimuli.
Despite the earnings miss, Scripps shares rose more than 20% in mid-day trading on the cost cutting details. Last year, the company rebuffed a hostile takeover bid by rival Sinclair Inc. Asked by one analyst on the call whether the company could potentially change hands one day soon, Symson said he could not speak on behalf of the family that controls Scripps shares. Speaking for himself, he said his focus is on building the company and continuing its workforce overhaul rather than entertaining offers to sell.
Amid the bigger headlines about job cuts and technology, Symson also joined other station leaders in hailing the FCC’s vote Thursday to eliminate the federal cap on local TV station ownership. The decision is likely to be challenged in court, but it has been championed by local broadcasters and FCC Chairman Brendan Carr as a necessary way to seek a more level playing field between TV stations and Big Tech.
The rules limiting ownership of stations reaching more than 39% of U.S. households, which date to the 1990s, “once served an important purpose, but they were put in place well before the digital revolution, well before consumers have the kind of choices they do today,” Symson said.
