Scripps cost cutting and AI integration are latest effort to boost profits

Electronic warfare scripts is implementing what it calls a transformation plan for the broadcasting company – aimed at driving growth in both profits and its local TV stations.

The company announced Wednesday that it is targeting growth of between $125 million and $150 million in annual corporate earnings before interest, taxes, depreciation and amortization by 2028. To achieve this, Scripps will go through a number of cost-cutting and revenue growth measures that leverage technology, namely artificial intelligence, CNBC can exclusively report.

“It will essentially be a reorientation of the entire company … with a much more agile and efficient cost structure,” CEO Adam Symson said in an interview with CNBC. “We need to act like a media startup. We need to act like the company EW founded, because the market can’t support the pace or the legacy thinking.”

The company plans to provide more details about its efforts during its next conference call with investors on Feb. 26, but Symson said it has made changes to the newsroom to ease administrative tasks for journalists and focus more on news gathering and coverage.

The company declined to comment on specific staff impacts resulting from the cost reduction, saying potential employment effects would be determined over the coming months.

“Everything is on the table, but our goal is to always preserve journalism and sales, the two things that make up our customer relationship,” Symson said.

Scripps has more than 60 local affiliate broadcast stations in 40 markets, including Ion, which has become a broadcaster of the WNBA and other professional sports games.

The company’s shares have fallen 70% over the past five years, a decline not unlike that of many of its media industry peers.

The revitalization of the nearly 150-year-old Scripps comes as the company – as well as the broadcast industry as a whole – finds itself at a historically difficult time.

The broadcast station industry, which also includes publicly traded companies like Nextstar Media Group, Tegna, Sinclair And Gray media — faces the same challenges as its cable and content studio peers, namely the defection of subscribers from pay-TV packages to streaming alternatives.

As a result, the industry is looking to consolidate while awaiting key regulatory changes. Scripps itself has been a merger and acquisition target, with Sinclair recently taking a hostile approach to merging with the company. Scripps rejected such overtures.

Meanwhile, print, digital and television media have been in the midst of massive layoffs over the past year. Paramount Skydance has cut thousands of jobs across the company, including at CBS News, and most recently, the Washington Post reportedly told its staff it would cut a third of the jobs in its newsroom.

The rise of AI has also fueled fears of mass layoffs, particularly in newsrooms.

In 2024, Scripps announced the creation of an AI team that would report to Laura Tomlin, Scripps’ chief transformation officer. Symson said his first task was to “consolidate technology across the entire company.”

Symson said Scripps’ decision to implement new technology is not intended to replace journalism jobs with AI, but rather to help newsrooms work more efficiently and ensure a long runway for local news.

“This cannot be a cost-cutting exercise to incrementally improve margins resulting from product reduction. This has proven to be the beginning of the end,” Symson said. “We really have to start by understanding our consumers, what they expect from us, both from our information product and our sales product.”

This week, Symson gathered 200 executives from across the company at Scripps headquarters in Cincinnati to present the latest plan, which will be announced more broadly Wednesday to Scripps employees and investors.

The company will also reaffirm its most recent earnings guidance, noting that it expects its 2026 financial results to be boosted by the midterm elections (local broadcast stations rely heavily on political advertising) as well as the broadcast of the Winter Olympics and the upcoming World Cup on its subsidiaries this year.

This transformation, with the vision slogan “We Create Connection,” is the latest step in recent years for Scripps to find new avenues for revenue growth.

“Scripps’ transformation effort is not unique in itself. Everyone in the industry is cutting costs,” Benchmark analyst Dan Kurnos said in a recent interview. “Last time we checked, broadcast television wasn’t the fastest-growing segment of the media ecosystem. It’s just not as bad as cable.”

During a November earnings conference call with investors, Symson discussed other initiatives the team has been working on, highlighting a focus on “spend management.”

For the local media division, Scripps said its third-quarter spending fell more than 4% year over year and the networks business saw spending fall 7.5%, both in part due to “lower personnel costs.”

Still, Kurnos said Scripps has deviated from its peers with other moves, such as expanding Scripps Sports with local media rights. Scripps networks now have the rights to broadcast WNBA games, and the company also picked up the rights to NHL teams leaving their regional sports networks.

“I think Scripps has been forced to reinvent itself several times,” Kurnos told CNBC.

Although Scripps rejected a merger with Sinclair, the company has entered into smaller deals of its own, such as offloading stations and a station swap with Gray Media, which is still awaiting approval. This week, the company also agreed to sell its Court TV network for less than $125 million, according to a person familiar with the matter who requested anonymity citing internal matters.

Symson recognized the need for consolidation as the industry enters a new era. But he didn’t say it was a necessity, at least for Scripps, as some of his peers have said in recent public calls.

“Responsible consolidation is undoubtedly important to the industry. But make no mistake, this is financial engineering,” Symson said. “It will create a tailwind for our business that investors should like, and we’ll look for it, but it won’t create the organic growth that we’re talking about here.”

Symson’s history at Scripps runs deep and began in the newsroom. He started at the company as an executive producer of investigations and special projects at a Scripps-owned subsidiary in Phoenix before joining the parent company in 2003 and taking over as CEO in 2017.

The latest transformation efforts follow similar changes in 2023, when Scripps eliminated some anchor roles, added reporters in smaller markets and increased reporter salaries, among other changes.

“It’s very personal to me. I think at this point I’m the only CEO of a broadcast company who comes from journalism and the newsroom,” Symson said. “What we do is too important for us not to go on the offensive and aggressively transform the business to ensure we are a company that continues to thrive.”

Disclosure: Versant, parent company of CNBC, airs Olympic coverage produced by NBC Sports on its networks, including USA Network and CNBC.