Scripps Tops Q2 Predictions, Thanks To Shopzilla, Networks
Three days before the end of the second quarter, Scripps acquired shopping site Shopzilla. "In the three short days that we owned it, the business contributed about a million dollars in revenue and about $350,000 in segment profits," said Scripps CEO Ken Lowe. According to Lowe, Scripps plans to integrate Shopzilla content into more of its sites in the coming quarters. "Shopzilla is a powerful business model in a growing marketplace ... We're looking for obvious and easy-to-achieve cross-benefits between Shopzilla and our other media businesses."
The acquisition, however, left the company with a significant amount of debt. At the end of the second quarter, the company's debt was $900 million, which includes the financing of the Shopzilla acquisition.
Lowe said the company's second-quarter earnings were largely propelled by growth in their network divisions, led by Home and Garden Television and the Food Network. Advertising revenue rose 28 percent in Q2 2005 to $202 million, and revenue from cable affiliates and satellite TV operators increased 18 percent to $39.6 million. Total network revenue increased 27 percent to $244 million.
Lowe noted that HGTV had seen a slight dip in ratings, and said that to address the "softness" in the ratings, Scripps will be adding several new series to the network's lineup, including shows titled "My First Place" and "I Have No Taste." Nonetheless, Lowe maintained that the dip in ratings had not affected negotiations with advertisers.
Scripps Chief Financial Officer Joe NeCastro said that the negotiations with advertisers--which are about halfway done--suggest that the network's ad dollar volume will be up between 15 and 20 percent in the coming quarter.