Broadcast television is not a very sexy industry at the moment. Cable subscribers are cutting the cord, people are spending less time watching traditional TV stations, given the proliferation of streaming services, and there are legitimate concerns that the local 6 o’clock broadcast news is not going to be relevant to Gen-Z. Because of all of these concerns, and many others that have come up while Cove Street has owned The E.W. Scripps Company (Ticker: SSP), the stock market embeds a fair amount of pessimism when valuing the publicly traded broadcast companies. However, if you paint all of the broadcasters with the same brush, you miss the nuances and the differences in business models. Take Scripps for example. The company has recently added some leverage to the balance sheet in order to broaden its exposure to the quickly growing over-the-air television (OTA) advertising market. Yes, these days putting up the modern version of rabbit ears (now known as a digital antenna) is cool and people are realizing just how much content is available for free. This is especially critical given just how expensive the cable bundle has become, especially if people are also subscribing to Netflix and Disney+. As SSP CEO Adam Symson discussed when we had him on Compounders, the company has a history of zigging while everyone was zagging—and the pivot to OTA is just another example of that.

With all of that as a backdrop, I recently had the opportunity to appear on the Chit Chat Money podcast for the first time. The hosts of the show like to go deep on individual securities and when they asked me to be a guest, I thought Scripps would be an interesting topic of conversation. We discussed a lot of topics, including:

• Our thoughts on the quality of SSP’s management team;
• The hedge that OTA exposure provides when it comes to continued cord cutting;
• How much pricing power the broadcast affiliates truly have;
• The future of political advertising on local broadcast stations; and
• How we value Scripps given the large impact political advertising has during election years

Please enjoy the interview here.

-Ben Claremon