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I recently wrote up Scripps. I think it's a super interesting trade as consolidation comes for the broadcasting Industry. The controlling family know it & are making sure they get top dollar before cashing out.
I think it's a 3x from here.
The way I'm playing this theme is through Scripps. It's basically a bet on a few things lining up at once.
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 risk here is leverage. Their covenants put them at 3.9x but realistically they're closer to 7/8x. They need a good year - they need mgmt to hit their EBITDA goals.
Happy to discuss,
Cheers