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I recently wrote up EW Scripps. I think it's a super interesting trade as consolidation comes for the broadcasting Industry.
The way I'm playing this theme is, so far, through Scripp but it's not hard to envision a bunch of companies doing well. The controlling family, I think know this too & are making sure they get top dollar before cashing out by reducing debt & incentivizing mgmt.
The industry is waking up to regulatory change. Nexstar just bought Tegna & the FCC is repealing the 39% ownership cap that's kept companies from getting the scale required to compete with the big tech / steaming companies.
Scripps turned down a $7 bid from their competitor Sinclair. The founding family wouldn't even give them a meeting. Sinclair still owns 9.9% of the company.
Insiders are buying the stock in the open market. The Scripps individual family members have been buying & the CEO did too, literally, for the first time in his career !
The company just launched a turnaround plan to grow EBITDA by $125-150 million by 2028 & they tied the CEO's new contract directly to hitting those numbers — $10 million in cash if he hits it. There's also a clause that pays him out, in full, if the company gets acquired
Most of Scripps revenue comes from advertising. 2026 is going to be a monster year for political advertising. Revenue is set to ramp.
The equity is such a small portion of the enterprise value that it could potentially get very spicy to the upside. But on the other hand, the main risk here is leverage. Their covenants put them at 3.9x but realistically they're closer to 7/8x. Full calcs in the writeup.
Happy to chat, take any pushback, comments etc.
Cheers,