Friday, July 1, 2011

Scripps Not For Sale...For Now

Per the latest news, Scripps Networks, home for HGTV and Food Network, are not for sale. "WSJ said that a potential sale has been put off indefinitely, at least partly because the company and the trust that controls it have determined it might be better to wait until there is more clarity on which way the television business is going." Which translates no sale until market conditions improve and we can maximize the potential dollars for these networks.

Uncertainty in the industry is not likely to go away. Heck, that's what makes this industry so interesting. As cable operators are looking for more distribution rights, including out of home linear access, programmers like Scripps are looking for ways to increase their license fees and ad revenue. New distribution paths will lead to more eyeballs once Nielsen and others can figure out how to best measure this new out of home viewership. Ad revenue is also improving and will only grow as this new research is enabled.

The biggest challenge, license fee revenue, comes because consumers are balking at higher cable rates and those rates increase partly because programming costs increase. Can these fees continue to rise and can programmers find new revenue through other distribution platforms?

Perhaps Scripps wants more clarity on this latter issue before once again putting its networks up for sale.