Channel acquisition boosts company's revenue
Scripps Networks Interactive’s acquisition of a majority stake in the Travel Channel looks to be a winner so far. Scripps reported second quarter revenue gains on Monday of 32% to $516 million. Without Travel, revenues grew 16% to $454 million.
Scripps paid $181 million for a 65% stake in the Travel Channel late last year, one of the biggest cable channel deals of 2009. Cox owns the remaining stake.
Since adding Travel to its portfolio of cable channels, which includes the Food Network and HGTV, Scripps has lured 30 new advertisers to the Travel Channel and the volume of ad inventory sold for the channel grew by 60% during the upfronts this spring. Penetration of the channel grew from 94 million homes in the second quarter of 2009 to 96 million in the most recent period.
Overall, “we had an outstanding (quarter) by almost every measure,” said Scripps CEO Ken Lowe. Among other highlights in the quarter was the successful rebranding of the Fine Living Network, which became the Cooking Channel on Memorial Day with a launch in 57 million U.S. households. Revenues in the quarter were up 24% to $14 million.
For the Scripps’ unit that houses the cable channels, revenues in the quarter grew 36% to $475 million; affiliate fee revenue grew 73% and ad revenues by 27%, including the Travel Channel. Revenues from the websites associated with the cable channels grew just 3%, which CFO Joe NeCastro attributed to a slowdown in the housing market and slower traffic to housing-related sites.
In the Scripps Interactive division, which primarily includes the site Shopzilla, revenues dropped 9% to $41 million and profits were off 18% to $6 million.