Scripps Scripts Solid Q3
Affiliate Fees Drive Net Growth
Mike Farrell -- Multichannel News, 11/6/2009 3:32:34 PM
While most eyes were focused on its just-announced purchase of the Travel Channel, Scripps Networks Interactive managed to sneak in a solid third quarter for its legacy networks, fueled by a 16% increase in network affiliate fees.
Overall revenue at the company was flat in the period at $364.5 million, and operating income rose 4.8% to $122.7 million. Consolidated segment profit rose 7.9% in the period to $144 million.
Leading the growth was SNI's lifestyle media segment -- consisting of cable networks Food, HGTV, Great American Country, DIY and Fine Living (which will be converted to The Cooking Channel in 2010) -- with a revenue gain of 4.3% to $326 million and a segment profit increase of 8% to $150 million. Fueling those increases was a 16% rise in affiliate fees to $81.1 million. Advertising revenue for the period also rose slightly (0.5%) to $237 million.
In a statement, SNI chairman and CEO Ken Lowe praised the networks, adding that audience growth at Food Network was particularly strong. For the first time in its history, Food ranked among the top-10 U.S. cable networks in the quarter.
Revenue at its interactive services unit - mainly online shopping services Shopzilla and BizRate continued to be pressured, dipping 25.1% to $39 million from $52.1 million in the prior year. Segment profit at the interactive unit dropped 44% to $6.4 million from $11.5 million in 2008.
In a statement, Lowe said that the performance of the interactive unit was in-line with expectations.
"Initiatives under way to improve the online shopping experience for both consumers and merchants also are driving positive trends, including an increase in the number of qualified leads we're sending to our merchant partners," Lowe said in a statement.
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