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United States securities and exchange commission logo
November 29, 2023
Jason Combs
Chief Financial Officer
The E.W. Scripps Company
312 Walnut Street
Cincinnati, OH 45202
Re: The E.W. Scripps
Company
Form 10-K for
Fiscal Year Ended December 31, 2022
Form 10-Q for
Fiscal Quarter Ended September 30, 2023
Form 8-K Furnished
November 3, 2023
File No. 001-10701
Dear Jason Combs:
We have limited our review of your filing to the financial
statements and related
disclosures and have the following comments.
Please respond to this letter within ten business days by
providing the requested
information or advise us as soon as possible when you will respond. If
you do not believe a
comment applies to your facts and circumstances, please tell us why in
your response.
After reviewing your
response to this letter, we may have additional comments.
Form 10-K for Fiscal Year Ended December 31, 2022
Management's Discussion and Analysis of Financial Condition and Results
of Operations
Business Segment Results, page F-5
1. You indicate that while
distribution revenues in your Local Media segment were affected
by subscriber losses by
the MVPDs, rate increases more than offset the subscriber
declines. Similarly,
you refer to numerous factors impacting your Scripps Network
segment revenue such as
the benefit of increases in advertising spots, expanded
distribution of your
network on CTV platforms and higher overall pricing in general
market advertising,
which were offset by lower ratings in your key monetized
demographics and
declines in direct response advertising rates. Where you describe two or
more factors that
contributed to a material change, including any offsetting factors, please
revise to quantify each
material factor that contributed to the overall change. Refer to Item
303(b) of Regulation
S-K.
Jason Combs
FirstName LastNameJason
The E.W. Scripps CompanyCombs
Comapany 29,
November NameThe
2023 E.W. Scripps Company
November
Page 2 29, 2023 Page 2
FirstName LastName
Form 10-Q for Fiscal Quarter Ended September 30, 2023
Notes to Condensed Consolidated Financial Statements
Note 7. Goodwill and Other Intangible Assets, page F-14
2. We note you performed a goodwill impairment test in the second quarter
of 2023, which
resulted in a goodwill impairment charge of $686 million related to
the Scripps Networks
reporting unit. However, we also note your market capitalization
continues to be
significantly in excess of the total book value as of June 30, 2023.
Please tell us the fair
value and the carrying value of each reporting unit as of June 30,
2023. Also provide us
with your reconciliation of the estimated fair value of your reporting
units to the
company s market capitalization as of June 30, 2023. In addition,
given the further
decrease in the Scripps Networks segment revenue during the third
quarter of fiscal 2023
and the continued decline in your market capitalization since June 30,
2023, tell us what
consideration you gave to reassessing the recoverability of your
goodwill in the quarter
ended September 30, 2023.
3. You disclose that you generally determine the fair value of your
reporting units using
market data, appraised values and discounted cash flow analyses.
Please tell us whether
this includes a market approach and if so, how that approach was
weighted with the
discounted cash flow analysis in estimating the fair value of the
Scripps Network
reporting unit. Further, tell us how you performed the market
approach, including
significant estimates and assumptions used. Regarding your discounted
cash flow
analyses, tell us the estimates and assumptions used in your analysis,
such as the discount
rate, etc.
Form 8-K Furnished November 3, 2023
Exhibit 99.1, page 1
4. You refer to segment profit of $97.5 million for the third
quarter of 2023, which appears
to be the sum of the measure of profit for your three reportable
segments less the Shared
services and corporate costs. This segment profit measure is a
non-GAAP measure that
should be reconciled to the most directly comparable GAAP measure and
other
related non-GAAP disclosures should be included. Please revise to
address the following:
Identify this as a non-GAAP measure and disclose the reasons why
you believe the
measure provides useful information to investors.
Reconcile it to the most directly comparable GAAP measure,
operating income, and
present GAAP operating income with equal or greater prominence.
Change the title of the measure, as segment profit appears
to imply it is the
operating results of the segments; however, the measure includes
costs that are not
allocated to segments.
Alternatively, consider removing the measure, as it does not appear to
be significant to
your discussions. Refer to Item 10(e)(1)(i) of Regulation S-K and
Questions 100.05 and
104.04 of the non-GAAP C&DIs.
Jason Combs
The E.W. Scripps Company
November 29, 2023
Page 3
Non-GAAP Information, page E-7
5. You state that free cash flow is a non-GAAP performance measure used
by management
and the Board of Directors to evaluate the performance of your
business. As free cash
flow is a liquidity measure, which is typically calculated as cash
flows from operating
activities less capital expenditures, it is unclear what this measure
represents or what it is
attempting to convey. Please explain and revise your disclosures
accordingly. If this is a
performance measure, revise to remove the cash-based adjustments and
change the title so
as not to imply this is a liquidity measure. Alternatively, if this is
a liquidity measure,
revise to reconcile to cash provided by operating activities, and to
the extent it includes
cash-based adjustments other than capital expenditures, change the
title to adjusted free
cash flow. Please provide us with the proposed revised disclosures you
intend to include
in future filings. Refer to Item 10(e)(1)(i) of Regulation S-K,
Questions 100.05 and 102.07
of the non-GAAP C&DIs.
In closing, we remind you that the company and its management are
responsible for the
accuracy and adequacy of their disclosures, notwithstanding any review,
comments, action or
absence of action by the staff.
Please contact Melissa Kindelan at 202-551-3564 or Kathleen Collins at
202-551-3499
with any questions.
FirstName LastNameJason Combs Sincerely,
Comapany NameThe E.W. Scripps Company
Division of
Corporation Finance
November 29, 2023 Page 3 Office of
Technology
FirstName LastName