E.W. SCRIPPS Co 10-Q

Item 1A. Risk Factors The risk factors disclosed in Item 1A. Risk Factors in our 2019 Annual Report on Form 10-K have been updated for the impacts of the COVID-19 pandemic in our Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2020 as well as for the risks related to the pending ION Media transaction as set forth below. Our planned acquisition of ION Media may not occur at all, may not occur in the expected time frame or may involve the divestiture of certain businesses and assets in addition to or in lieu of our planned divestiture of up to 26 ION stations, any of which may negatively affect the trading price of our common shares and our future business and financial results. If the transaction is completed, ION Media will become our indirect wholly owned subsidiary. The consummation of the acquisition and the related planned divestitures is not assured and is subject to certain conditions, including the expiration or termination of any waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations promulgated thereunder, the consent of the Federal Communications Commission, and the absence of any law or order restraining, enjoining or otherwise prohibiting the acquisition, as well as other customary closing conditions. The planned acquisition of ION Media is subject to a number of risks and uncertainties, including general economic and capital markets conditions; the effects that the pendency of the transaction may have on us or ION Media; our inability to obtain required regulatory or government approvals or to obtain such approvals in a timely manner or on satisfactory conditions; the inability of ION Media to satisfy closing conditions; our inability to obtain financing on acceptable terms; the inability of the buyer of the divestiture stations to obtain financing on acceptable terms; the occurrence of any event, change or other circumstance that could give rise to the termination of the acquisition agreement, certain of which could require us to pay a termination fee of $35 million to ION Media; legal proceedings that may be instituted related to the proposed acquisition and the legal expenses and diversion of management's attention that may be associated therewith; and unexpected costs, charges or 3 expenses. If the planned acquisition of ION Media and related planned divestitures are not completed, if there are significant delays in completing the planned acquisition or if the planned acquisition and related divestitures involve unexpected additional required divestitures, it could negatively affect the trading price of our common shares and our future business and financial results or result in the termination of the acquisition agreement. We have incurred and will continue to incur significant transaction costs in connection with the acquisition of ION Media that could adversely affect our results of operations. Whether or not we complete the transaction, we have incurred, and will continue to incur, significant costs in connection with the acquisition, including payment of certain fees and expenses incurred in connection with the transaction and related financing transactions. Additional unanticipated costs may be incurred in the integration process. These could adversely affect our results of operations in the period in which such expenses are recorded or our cash flow in the period in which any related costs are actually paid. Furthermore, we may incur material restructuring charges in connection with the transaction, which may adversely affect our operating results following the closing of the transaction in the period in which such expenses are recorded or our cash flow in the period in which any related costs are actually paid. A delay in closing or a failure to complete the transaction could have a negative impact on our business. Under the terms of the acquisition agreement with ION Media, we are required to consummate the acquisition regardless of whether we or the buyer of the divestiture stations is able to obtain financing as anticipated, and our failure or such buyer’s failure to obtain financing could materially and adversely affect us. If we are not able to obtain financing as anticipated for the acquisition of ION Media, we may need to obtain alternative financing or will be in breach of the acquisition agreement. If the buyer of the ION Media stations we plan to divest is not able to obtain financing, and we are not able to find or reach an agreement with an alternative buyer, we will be in breach of the acquisition agreement. The buyer of the stations we must divest is a newly-formed entity that may not be able to obtain equity or debt financing sufficient to purchase those stations. These alternative arrangements may be on terms that are less favorable to us than our currently anticipated terms, and such differences may be material, or such alternative arrangements my not be available at all. In any of these events, we could be exposed to claims of breach that could result in substantial damages owed to ION Media and have a material adverse effect on our business, cash flows, results of operations and financial position.