E.W. SCRIPPS Co 10-K

Item 1. Business We are a 143-year-old media enterprise with interests in local and national media brands. Founded in 1878, our motto is "Give light and the people will find their own way." Our mission is to do well by doing good — creating value for customers, employees and owners by informing, engaging and empowering those we serve. We serve audiences and businesses in our Local Media division through a portfolio of local television stations and their associated digital media products. We are one of the nation's largest independent owners of local television stations, with 61 stations in 41 markets that reach about 25% of U.S. television households. We have affiliations with all of the “Big Four” television networks as well as the CW network. In our Scripps Networks division, we operate nine news and entertainment networks - ION, Bounce, Court TV, Defy TV, Grit, ION Mystery, Laff, Newsy and TrueReal. We also operate an award-winning investigative reporting newsroom in Washington, D.C., and serve as the longtime steward of one of the nation's largest, most successful and longest-running educational programs, the Scripps National Spelling Bee. For a full listing of our outlets, visit http://www.scripps.com. We completed the acquisition of ION Media Networks, Inc. (“ION”) on January 7, 2021, for $2.65 billion. ION is a national broadcast television network that delivers popular crime and justice procedural programming to more than 100 million U.S. homes through its over-the-air broadcast and pay TV platforms. To comply with ownership rules of the Federal Communications Commission, we simultaneously divested 23 of ION's television stations, which were purchased by INYO Broadcast Holdings, LLC upon completion of the acquisition. These divested stations became independent affiliates of ION pursuant to long-term affiliation agreements. At the time of the acquisition and related divestitures, ION's programming was being delivered through 48 owned and operated stations and 63 independent ION affiliated stations. The acquisition of ION enabled us to create a full-scale national television networks business. By combining ION with our other news and entertainment networks, Scripps Networks reaches nearly every American through free over-the-air broadcast, cable/satellite, connected TV and digital distribution, with multiple advertising-supported programming streams. The ION network airs on primary channels in its owned and operated markets and on digital subchannels in its affiliates’ markets. Our other multicast networks air on digital subchannels on our and other broadcast stations. The ION transaction was financed with a combination of cash, debt financing and preferred equity financing, including Berkshire Hathaway's $600 million preferred equity investment in Scripps. Berkshire Hathaway did not receive any board seats or other governance rights with the preferred equity investment. Berkshire Hathaway also received a warrant to purchase up to 23.1 million Class A shares, at an exercise price of $13 per share. On July 1, 2021, we launched two national television networks. The two networks, which are distributed for free to viewers over-the-air and reached 92% of U.S. television homes at launch, are demo-specific and reality-based. TrueReal targets women in the 25-54 demographic and features off-network shows such as Storage Wars , Married at First Sight , Hoarders and Little Women: LA . Defy TV targets men ages 25-54 with programming that includes off-network series such as Pawn Stars , Forged in Fire , American Pickers and The Curse of Oak Island . During the first quarter of 2021, the Company began notifying MVPDs carrying Newsy of our intent to exit cable and satellite distribution of the network. In October 2021, the network launched as an over-the-air television station. Newsy became the nation's only free 24/7 broadcast news network, available to more than 90% of U.S. television homes. The network is headquartered in Atlanta and is carried primarily on the Scripps-owned ION stations and select Scripps local television stations and those of other station groups. Our Board of Directors approved the sale of our Triton business in the first quarter of 2021 and we signed a definitive agreement to sell the business on February 16, 2021. The transaction closed on March 31, 2021 for total net proceeds of $225 million. Financial information for each of our business segments can be found under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the Notes to Consolidated Financial Statements of this Form 10-K. 4 LOCAL MEDIA Our Local Media segment is comprised of our 61 local broadcast television stations and their related digital operations. We have operated broadcast television stations since 1947, when we launched Ohio’s first television station, WEWS, in Cleveland. Our television station group reaches approximately 25% of the nation’s television households and includes 18 ABC affiliates, 11 NBC affiliates, nine CBS affiliates and four FOX affiliates. We also have 12 CW affiliates - four on full power stations and eight on multicast; five independent stations and 10 additional low power stations. We produce high-quality news, information and entertainment content that informs and engages our local communities. We distribute our content on multiple platforms, including broadcast, digital, mobile, social and over-the-top (OTT). It is our objective to develop content and applications designed to enhance the user experience on each of those platforms. Our ability to cover our communities across various digital platforms allows us to expand our audiences beyond traditional broadcast television. We believe the most critical component of our product mix is compelling news content, which is an important link to the community and aids our stations' efforts to retain and expand viewership. We have trained employees in our news departments to be multi-media journalists, allowing us to pursue a “hyper-local” strategy by having more reporters covering local news for our over-the-air and digital platforms. In addition to news programming, our television stations run network programming, syndicated programming and original programming. Our strategy is to balance syndicated programming with original programming that we control. We believe this strategy improves our Local Media division's financial performance. Original shows we produce ourselves or in partnership with others include: • The List, an Emmy-award winning infotainment show, is available in 36 markets reaching viewers in approximately 24% of the country. • The Race is a weekly show that focuses on the issues impacting Americans as we face a quickly changing economy and nation. We travel coast to coast talking to Americans about their lives. It is real people talking about real issues. This show is available in more than 42 markets. • RightThisMinute is a daily entertainment program featuring consumer-generated viral videos. RightThisMinute reaches nearly 94% of the nation's television households. 5 Information concerning our full-power television stations, their network affiliations and the markets in which they operate is as follows: Station Market Network Affiliation/ DTV Channel Affiliation Agreement Expires in FCC License Expires in Market Rank KNXV-TV Phoenix, Ch. 15 ABC/15 2022 2022 12 KASW -TV Phoenix, Ch. 61 CW/27 2024 2022 12 WFTS-TV Tampa, Ch. 28 ABC/29 2022 2029 13 WMYD-TV Detroit, Ch. 20 Ind/21 N/A 2029 15 WXYZ-TV Detroit, Ch. 7 ABC/41 2022 2029 15 KMGH-TV Denver, Ch. 7 ABC/7 2022 2022 16 KCDO-TV Denver, Ch. 3 Ind/3 N/A 2022 16 WSFL-TV Miami, Ch. 39 CW/27 2024 2029 18 WEWS-TV Cleveland, Ch. 5 ABC/15 2022 2029 19 WRTV-TV Indianapolis, Ch. 6 ABC/25 2022 2029 25 KGTV-TV San Diego, Ch. 10 ABC/10 2022 2022 28 WMAR-TV Baltimore, Ch. 2 ABC/38 2022 2028 27 WTVF-TV Nashville, Ch. 5 CBS/25 2024 2029 30 KSTU-TV Salt Lake City, Ch. 13 FOX/28 2022 2022 29 KMCI-TV Kansas City, Ch. 38 Ind./41 N/A 2022 32 KSHB-TV Kansas City, Ch. 41 NBC/42 2024 2022 32 WCPO-TV Cincinnati, Ch. 9 ABC/22 2022 2029 35 WTMJ-TV Milwaukee, Ch. 4 NBC/28 2024 2029 36 WPTV-TV W. Palm Beach, Ch. 5 NBC/12 2024 2029 39 WHDT-TV W. Palm Beach, Ch. 9 Ind/34 N/A 2029 39 KTNV-TV Las Vegas, Ch. 13 ABC/13 2022 2022 40 WXMI-TV Grand Rapids, Ch. 17 FOX/19 2022 2029 41 WGNT-TV Norfolk, Ch. 27 CW/50 2024 2028 46 WTKR-TV Norfolk, Ch. 3 CBS/40 2022 2028 46 WKBW-TV Buffalo, Ch. 7 ABC/38 2022 2023 52 WFTX-TV Fort Myers/Naples, Ch. 4 FOX/35 2022 2029 54 WTVR-TV Richmond, Ch. 6 CBS/25 2022 2028 56 KJRH-TV Tulsa, Ch. 2 NBC/8 2024 2022 61 WLEX-TV Lexington, Ch. 18 NBC/39 2024 2029 63 KWBA-TV Tucson, Ch. 58 CW/44 2024 2022 69 KGUN-TV Tucson, Ch. 9 ABC/9 2022 2022 69 WGBA-TV Green Bay/Appleton, Ch. 26 NBC/41 2024 2029 68 WACY-TV Green Bay/Appleton, Ch. 32 Ind/27 N/A 2029 68 KMTV-TV Omaha, Ch. 3 CBS/45 2022 2022 72 KOAA-TV Colorado Springs, Ch.5 NBC/42 2024 2022 84 KXXV-TV Waco, Ch.25 ABC/26 2022 2022 82 KIVI-TV Boise, Ch. 6 ABC/24 2022 2022 98 WTXL-TV Tallahassee, Ch. 27 ABC/27 2022 2029 107 WSYM-TV Lansing, Ch. 47 FOX/38 2022 2029 114 KSBY-TV San Luis Obispo, Ch. 6 NBC/15 2024 2022 122 KATC-TV Lafayette, Ch. 3 ABC/28 2022 2029 124 KERO-TV Bakersfield, Ch. 23 ABC/10 2022 2022 125 KRIS-TV Corpus Christi, Ch. 6 NBC/13 2024 2022 130 KPAX-TV Missoula, Ch. 8 CBS/7 2024 2022 162 KTVQ-TV Billings, Ch. 2 CBS/10 2024 2022 166 KXLF-TV Butte-Bozeman, Ch. 4 CBS/5 2024 2022 187 KRTV-TV Great Falls, Ch. 3 CBS/7 2024 2022 191 KTVH-TV Helena, Ch. 12 NBC/12 2024 2022 203 Historically, we have been successful in renewing our FCC licenses. Market rank is based on the 2022 Nielsen HH Universe estimates and represents the relative size of a station's Designated Market Area rank in the United States. 6 Revenue cycles and sources Core Advertising Our core advertising is comprised of sales to local and national customers. The advertising includes a combination of broadcast spots, as well as digital and OTT advertising. Our core advertising revenues accounted for 50% of our Local Media segment’s revenues in 2021. Pricing of broadcast spot advertising is based on audience size and share, the demographics of our audiences and the demand for our limited inventory of commercial time. Our stations compete for advertising revenues with other sources of local media, including competitors’ television stations in the same markets, radio stations, cable television systems, newspapers, digital platforms and direct mail. Local advertising time is sold by each station’s local sales staff who call upon advertising agencies and local businesses, which typically include advertisers such as car dealerships, health-care facilities and other service providers. We seek to attract new advertisers to our television stations and to increase the amount of advertising sold to existing local advertisers by relying on experienced local sales forces with strong community ties, producing news and other programming with local advertising appeal and sponsoring or promoting local events and activities. National advertising time is generally sold through national sales representative firms that call upon advertising agencies, whose clients typically include automobile manufacturers and dealer groups, telecommunications companies and insurance providers. Digital revenues are primarily generated from the sale of advertising to local and national customers on our local television websites, smartphone apps, tablet apps and other platforms. Cyclical factors influence revenues from our core advertising categories. Some of the cycles are periodic and known well in advance, such as election campaign seasons and special programming events (e.g. the Olympics or the Super Bowl). For example, our NBC affiliates benefit from incremental advertising demand from the coverage of the Olympics. Economic cycles are less predictable and beyond our control. Due to increased demand in the spring and holiday seasons, the second and fourth quarters normally have higher advertising revenues than the first and third quarters. Political Advertising Political advertising is generally sold through our Washington D.C. sales office. Advertising is sold to presidential, gubernatorial, Senate and House of Representative candidates, as well as for state races and local issues. It is also sold to political action groups (PACs) or other advocacy groups. Political advertising revenues were 2% of our Local Media segment's revenues in 2021. Political advertising revenues increase significantly during even-numbered years when local, state and federal elections occur. In addition, every four years, political spending is typically elevated further due to the advertising for the presidential election. Because of the cyclical nature of each political election cycle, there has been a significant difference in our operating results when comparing the performance in even-numbered years to that in odd-numbered years. Additionally, our operating results are impacted by the number, importance and competitiveness of individual political races and issues discussed in our local markets. Retransmission Revenues We earn revenues from retransmission consent agreements with multi-channel video programming distributors ("MVPDs") in our markets. Retransmission revenues were 47% of our Local Media segment's revenues in 2021. The MVPDs are cable operators, telecommunication companies and satellite carriers who pay us to offer our programming to their customers. The fees we receive from our retransmission consent agreements are typically based on the number of subscribers in our local market and the contracted rate per subscriber. Approximately 20% of subscribers within our retransmission consent agreements are subject to negotiation in 2022 and 75% of our subscribers are under consent agreements that will expire in 2023. We also receive fees from over-the-top virtual MVPDs. Expenses Employee costs accounted for 41% of our Local Media segment's costs and expenses in 2021. 7 We centralize certain functions, such as master control, traffic, graphics and political advertising, at company-owned hubs that do not require a presence in the local markets. This approach enables each of our stations to focus local resources on the creation of content and revenue-producing activities. We expect to continue to look for opportunities to centralize functions that do not require a local market presence. Programming costs, which include network affiliation fees, syndicated programming and shows produced for us or in partnership with others, were 42% of our Local Media segment's costs and expenses in 2021. Our network-affiliated stations broadcast programming that is supplied to us by the networks in various dayparts. Under each affiliation agreement, the station broadcasts all of the programs transmitted by the network. In exchange, we pay affiliation fees to the network and the network sells a substantial majority of the advertising time during these broadcasts. We expect our network affiliation agreements to be renewed upon expiration. Federal Regulation of Broadcasting — Broadcast television is subject to the jurisdiction of the FCC pursuant to the Communications Act of 1934, as amended (“Communications Act”). The Communications Act prohibits the operation of broadcast stations except in accordance with a license issued by the FCC and empowers the FCC to revoke, modify and renew broadcast licenses, approve the transfer of control of any entity holding such a license, determine the location of stations, regulate the equipment used by stations and adopt and enforce necessary regulations. As part of its obligation to ensure that broadcast licensees serve the public interest, the FCC exercises limited authority over broadcast programming by, among other things, requiring certain children's television programming and limiting commercial content therein, requiring the identification of program sponsors, regulating the sale of political advertising and the distribution of emergency information, and restricting indecent programming. The FCC also requires television broadcasters to close caption their programming for the benefit of persons with hearing impairment and to ensure that any of their programming that is later transmitted via the Internet is captioned. Network-affiliated television broadcasters in larger markets must also offer audio narration of certain programming for the benefit of persons with visual impairments. Reference should be made to the Communications Act, the FCC’s rules and regulations, and the FCC’s public notices and published decisions for a fuller description of the FCC’s extensive regulation of broadcasting. Broadcast licenses are granted for a term of up to eight years and are renewable upon request, subject to FCC review of the licensee's performance. While there can be no assurance regarding the renewal of our broadcast licenses, we have never had a license revoked, have never been denied a renewal, and all previous renewals have been for the maximum term. FCC regulations govern the ownership of television stations, and the agency is required by statute to periodically review these rules. In November 2017, the FCC adopted significant changes to its local television ownership rules. Those rules were vacated by a reviewing court in late 2019 but reinstated by the Supreme Court in early 2021. One of these changes was the relaxation of the television “duopoly rule” to allow ownership of two television stations in the same market as long as at least one of the stations is not among the “top-four” rated stations in the market, as measured at the time an application to acquire the second station is filed. Acquisition of two “top-four” stations in the same market is allowed only pursuant to waiver. In addition to upholding changes to the duopoly rule, the United States Supreme Court also affirmed the FCC’s elimination of its newspaper/broadcast cross-ownership rule, its radio/television cross-ownership rule, and its determination that stations in joint advertising sales agreements should not be treated as if they were under common ownership. With respect to national television ownership, the FCC voted in December 2017 to consider whether and how it might revisit its rule preventing applicants from obtaining an ownership interest in television stations whose total national audience reach would exceed 39% of all television households. Earlier in that year, the FCC also reinstated the 50% discount applied to the number of households deemed covered by UHF television stations. Scripps' 2021 acquisition of ION brought the Company's national audience reach to 38.9% of television households after application of the “UHF discount.” In December 2018, the FCC began another of its statutorily required reviews of its multiple ownership rule, including a broad review of whether all the current local radio and television rules continue to serve the public interest. This proceeding remains open, and the FCC in 2021 requested that parties refresh the record in that proceeding, although the FCC has not proposed any specific rule changes. The Communications Act requires the FCC to conduct such a review every four years, and as a result a new proceeding is required to be opened in 2022, although it may be consolidated with the existing 2018 review. We cannot predict the outcome of these open proceedings, the expected court reviews of any changes to the FCC's television ownership rules, or the effect of further FCC rule revisions on our stations' operations or our business. 8 The restrictions imposed by the FCC’s ownership rules may apply to a corporate licensee due to the ownership interests of its officers, directors or significant shareholders. If such parties meet the FCC’s criteria for holding an attributable interest in the licensee, they are likewise expected to comply with the ownership limits, as well as other licensee requirements such as compliance with certain criminal, antitrust and antidiscrimination laws. In order to provide additional spectrum for mobile broadband and other services, the FCC in 2017 conducted an incentive spectrum auction in which some television broadcasters agreed to voluntarily give up spectrum in return for a share of the auction proceeds. No Scripps station went off-air or relinquished a UHF-band allocation for a VHF-band allocation as a result of the auction, but many of Scripps' full-power, Class A, and low-power and translator stations relocated to new channels in the reduced broadcast spectrum band. All Scripps stations completed this transition timely. Broadcasters are continuing to deploy a new voluntary digital television standard, ATSC 3.0. This Internet-protocol based transmission method permits television stations to offer enhanced and innovative services coupled with much improved broadcast signal reception, particularly by mobile devices. The new standard, however, is incompatible with both existing television receivers and with a station’s ability to continue offering its service via the current ATSC 1.0 digital standard. To avoid loss of service to those viewers who lack a new receiver, stations switching to ATSC 3.0 transmission are required to arrange for a local station that continues to use the current 1.0 standard to air (on a subchannel) programming “substantially similar” to that offered by the switching station on its 3.0 channel. In return, the 3.0 station could host the 3.0 signal of its 1.0 “host” station. This “simulcasting” requirement will sunset in July 2023, unless extended by the FCC. Scripps stations in several markets are operating with the new transmission protocol. The FCC remains committed to permitting non-broadcast spectrum use in the “white spaces” between television stations' protected service areas despite broadcasters’ concerns about the possibility of harmful interference to their existing service and to the potential for innovative uses of their broadcast spectrum in the future. In 2015, the FCC proposed to reserve a 6 MHz “vacant channel” in each market for non-broadcast, unlicensed services (including wireless microphones) which, if adopted, would have further reduced the spectrum available for television broadcasting. The reservation of spectrum in the “broadcast” band for interference-protected non-broadcast services could have had a particularly adverse effect on the ability of low-power and translator television stations to offer service since these stations enjoy only “secondary” status that offers no protection from interference caused by a full-power station. In late 2020, the FCC declined to adopt its own vacant channel proposal, although petitions for reconsideration of this decision remain pending. We cannot predict the outcome of these proceedings or their possible impact on the Company. Full-power broadcast television stations generally enjoy “must-carry” rights on any cable television system defined as “local” with respect to the station. Stations may waive their must-carry rights and instead negotiate retransmission consent agreements with local cable companies. Similarly, satellite video providers are required to carry the signal of those television stations that request carriage and that are located in markets in which the satellite carrier chooses to retransmit at least one local station. Satellite video providers may not carry a broadcast station without its consent. For stations that do not elect mandatory carriage, FCC rules most recently revised in 2020 require parties to negotiate in “good faith” for retransmission consent agreements, and the FCC has imposed significant fines on parties who have been found to have violated these requirements. The Company has elected to negotiate retransmission consent agreements with cable operators and satellite video providers for the majority of both our network-affiliated stations and our independent stations. Prior to the Company’s 2021 acquisition of ION, only two Scripps stations had elected “must-carry” status, but all acquired ION stations rely on “must carry” to ensure carriage. Other proceedings before the FCC and the courts have reexamined the policies that protect television stations' rights to control the distribution of their programming within their local service areas. For example, the FCC in 2014 initiated a rulemaking proceeding on the degree to which an entity relying upon the Internet to deliver video programming should be subject to the regulations that apply to multi-channel video programming distributors (“MVPDs”), such as cable operators and satellite systems. While the major broadcast networks secured a victory in their lawsuit against the streaming service Locast, with the court finding that its retransmission of local television stations’ signals without their consent violated copyright law, the application of copyright law to other potential streaming services remains uncertain. We cannot predict the outcome of any FCC initiatives to address the use of new technologies to challenge traditional means of redistributing television broadcast programming or their possible impact on the Company. The FCC may impose substantial penalties for violations of its rules and policies. While uncertainty continues regarding the scope of the FCC's authority to regulate indecent programming, the agency has increased its enforcement efforts regarding 9 other programming issues such as sponsorship identification, broadcasting improper emergency alerts and extending service to persons with disabilities. We cannot predict the effect of the FCC’s expanded enforcement efforts on the Company. SCRIPPS NETWORKS Our Scripps Networks segment is comprised of nine national television networks - ION, Bounce, Court TV, Grit, ION Mystery, Laff, Newsy and recently launched, Defy TV and TrueReal. The networks reach nearly every U.S. television home through free over-the-air (OTA) broadcast, cable/satellite, connected TV and digital distribution. The segment generates revenue principally from the sale of advertising time on the national television networks. Advertising revenue generated by our networks depends on viewership ratings and advertising rates paid by advertisers for delivery of advertisements to certain viewer demographics. Advertising revenue is sold in the upfront, scatter (together called general market), direct response and connected TV markets. In the upfront market, advertisers buy advertising time for upcoming seasons and, by committing to purchase in advance, lock in the advertising rates they will pay for the upcoming year. In the scatter market, advertisers buy their spots closer to the time when the spots will run. The mix of upfront and scatter market advertising time sold is based upon the economic conditions at the time the sales take place, impacting the sell-out levels management is willing or able to obtain. The demand in the scatter market then impacts the pricing achieved for our remaining general market advertising inventory. Scatter market pricing can vary from upfront pricing and can be volatile. In most cases, advertising sales in the upfront and scatter markets are subject to ratings guarantees that require us to provide additional advertising time if the guaranteed audience levels are not achieved. Similar to the scatter market, direct response advertisers buy their spots closer to the time when the spots will run and pricing can vary based on demand. Direct response advertisers buy spots based on expected performance, giving advertisers an efficient and measured way to reach their customers. Direct response advertising is not subject to ratings guarantees. Revenue from advertising is subject to seasonality, market-based variations and general economic conditions. Due to increased demand in the spring and holiday seasons, the second and fourth quarters normally have higher advertising revenues than the first and third quarters. Programming expenses, employee costs and sales and marketing expenses are the primary operating costs of our Scripps Networks segment. Programming expenses accounted for 51% of our Scripps Networks segment's costs and expenses in 2021, reflecting both the costs of investing in quality programming and costs of distribution from carriage agreements with local television broadcasters and cable and satellite providers. The national networks are carried on both our owned and operated television stations and from carriage agreements with other broadcast stations. Our OTA television networks are well-positioned to capitalize on cord-cutting trends and provide a platform for delivering mass audiences to national advertisers. ION Our ION national television network reaches around 100 million domestic homes through its 44 owned and operated OTA broadcast TV stations, on pay TV platforms and independent broadcast affiliates that carry the ION programming. ION broadcasts popular scripted crime and justice procedural programming and has the fifth-largest average prime-time audience among all broadcast networks on television. ION elects government-mandated must-carry provisions, thereby ensuring its programming is available on cable and satellite systems. Bounce Bounce is available in approximately 98% of U.S. television broadcast homes. Bounce is an African American broadcast network dedicated to inspiring, empowering and entertaining viewers. Bounce programming represents a rich mosaic of the African American community, featuring both licensed and original dramas, sitcoms, movies and specials. Original programming includes hit series such as Johnson and Saints and Sinners . In the fourth quarter of 2021, Bounce XL was launched as a free advertising-supported streaming television (FAST) channel with distribution on multiple streaming services. Court TV Court TV is available in approximately 97% of U.S. television broadcast homes. Court TV is devoted to live, gavel-to-gavel coverage, in-depth legal reporting and expert analysis of the nation's most important and compelling trials. Court TV is also available as a FAST channel with distribution on multiple streaming services. 10 Defy TV The network was launched on July 1, 2021 and reaches approximately 96% of U.S. television broadcast homes. Defy TV features male-centric programming that includes reality-based series such as Pawn Stars , Forged in Fire , American Pickers and The Curse of Oak Island . Grit Grit is available in approximately 98% of U.S. television broadcast homes and appeals more strongly to male viewers. Grit’s programming line-up is primarily iconic Western series and movies. ION Mystery (formerly Court TV Mystery) ION Mystery is available in approximately 98% of U.S. television broadcast homes and its programming is anchored in popular true-crime and justice procedural programming. Programming on ION Mystery includes The First 48 , Law & Order and CSI franchises. Laff Laff is available in approximately 97% of U.S. television broadcast homes and targets comedy-lovers in the 18 to 49 age range. Programming on Laff includes popular sitcoms including Home Improvement , How I Met Your Mother and According to Jim . Newsy Newsy is our national news network focused on bringing objective, fact-based reporting and analysis on world and national news, including politics, entertainment, science and technology. During the first six months of 2021, Newsy exited its cable and satellite distribution of the network as part of a strategy to relaunch as an over-the-air network, which happened in October 2021. Newsy is now the nation's only free 24/7 broadcast news network, available in approximately 95% of U.S. television broadcast homes. Newsy is also available on multiple streaming services as either an app or FAST channel. The network’s programming lineup includes Morning Rush , In the Loop with Christian Bryant , Newsy Tonight with Chance Seales and Newsy Docs Presents . TrueReal The network was launched on July 1, 2021 and reaches approximately 96% of U.S. television broadcast homes. TrueReal features female-centric programming that includes reality-based shows such as Storage Wars , Married at First Sight, Hoarders and Little Women: LA . 11 Information concerning our Scripps Networks FCC licensed television stations and the markets in which they operate is as follows: Station Market DTV Channel FCC License Expires in Market Rank WPXN New York, NY 34 2023 1 KILM Los Angeles, CA 24 2022 2 KPXN Los Angeles, CA 24 2022 2 WCPX Chicago, IL 34 2029 3 WPPX Philadelphia, PA 34 2023 4 KPXD Dallas-Ft. Worth, TX 25 2022 5 WPXA Atlanta, GA 16 2029 6 WPXW Washington, DC-Hagerstown, MD 35 (1) 7 WWPX Washington, DC-Hagerstown, MD 13 2028 7 KKPX San Francisco-Oakland-San Jose, CA 33 2022 8 KPXB Houston, TX 32 2022 9 WBPX Boston, MA 22 2023 10 WDPX Boston, MA 22 2023 10 WPXG Boston, MA 23 2023 10 KWPX Seattle-Tacoma, WA 33 2023 11 WXPX Tampa-St. Petersburg, FL 29 2029 13 KPXM Minneapolis-St. Paul, MN 16 2022 14 WOPX Orlando-Daytona, FL 14 2029 17 WPXM Miami-Ft.Lauderdale, FL 21 2029 18 KSPX Sacramento-Stockton-Modesto,CA 21 2022 20 KPXG Portland,OR 22 2023 21 WRBU St. Louis, MO 28 2029 23 WFPX Raleigh-Durham, NC 32 2028 24 WRPX Raleigh-Durham, NC 32 2028 24 WINP Pittsburgh, PA 16 2023 26 KUPX Salt Lake City, UT 29 2023 29 WNPX Nashville, TN 32 2029 30 KPXL San Antonio, TX 26 2022 31 WSFJ Columbus, OH 19 2029 33 WPXE Milwaukee, WI 30 2029 36 KMCC Las Vegas, NV 32 2022 40 WPXC Jacksonville, FL-Brunswick, GA 24 2029 43 WPXL New Orleans, LA 33 2029 50 WPXQ Providence, RI 17 2023 51 WQPX Wilkes Barre-Scranton, PA 33 2023 58 KTPX Tulsa, OK 28 2022 61 WPXK Knoxville, TN 18 2029 62 WKOI Dayton, OH 31 2029 64 KFPX Des Moines-Ames, IA 36 2030 67 WPXR Roanoke, VA 27 2028 71 WLPX Charleston-Huntington, WV 18 2028 77 WIPL Portland-Auburn, ME 24 2023 78 WZRB Columbia, SC 25 2028 79 WSPX Syracuse, NY 36 2023 83 KPXR Cedar Rapids, IA 22 2030 92 WEPX Greenville-New Bern, NC 36 2028 102 WPXU Greenville-New Bern, NC 16 2028 102 WTPX Wausau-Rhinelander, WI 19 2029 134 (1) Application for renewal of the license was submitted timely to the FCC. Under FCC rules, the license expiration date is automatically extended pending FCC review of and action on the renewal application. Market rank is based on the 2022 Nielsen HH Universe estimates and represents the relative size of a station's Designated Market Area rank in the United States. 12 Employees and Human Capital Resource Management Scripps operates under the fundamental philosophy that people are our most valuable asset. Identifying quality talent is at the heart of everything we do and our business success is dependent upon our ability to attract, develop and retain highly qualified employees. Our core values of courage, compassion, excellence, fairness, integrity and respect establish the foundation on which the culture is built and represent the key expectations we have of our employees. Our goal is to hire the best, to spark their passion for the job and then to nourish their career with tools that will help them learn and excel. We believe our culture and commitment to our employees help us attract and retain our qualified talent, while simultaneously providing significant value to Scripps and its shareholders. Employees As of December 31, 2021, we had approximately 5,600 full-time equivalent employees, of whom approximately 4,300 were with Local Media and 860 with Scripps Networks. Various labor unions represent approximately 400 employees, all of which are in Local Media. We have not experienced any work stoppages at our current operations since 1985. We consider our relationships with our employees to be good. COVID-19 During 2021, the coronavirus and variants that cause the disease COVID-19 continued the global pandemic monitored by the World Health Organization. As the United States continued to combat the crisis, we reinforced our commitment to three priorities to guide our actions of protecting the well-being of our employees, serving our audiences and communities and maintaining business continuity. In mid-March 2020, nearly all of our employees were transitioned out of our workplaces without an interruption to news programming or other media delivery. As we returned portions of our employees back to newsrooms and workplaces in 2021, we instituted a mask requirement in our facilities. In September 2021, we made the decision to implement a vaccine policy as part of our commitment to workplace safety. The policy required all employees to be fully vaccinated by December 1, 2021, unless a medical or religious accommodation was granted. It is our belief that a fully vaccinated workplace creates the safest environment for employees to return to the workplace in 2022. As part of this healthy workplace goal, we have updated our Communicable Disease policy to provide guidance and expectations to all of our employees when faced with questions about communicable illnesses. Learnings from this experience have resulted in a rethinking of our workplace and work requirements and we may continue to provide certain employees with flexible working arrangements, depending upon their duties and responsibilities. In addition to protecting our employees’ physical health, we also offer resources to assist with our employees' mental well-being. To help employees navigate this troubling time, we’ve created a holistic library of well-being resources called “Healthy Minds” that is posted to the Company intranet and available to all employees. Additionally, the Company's philanthropic organization, The Scripps Howard Foundation, created a fund in March 2020 to give aid to qualified Scripps employees adversely affected by the COVID-19 crisis. The Company made a donation to this employee relief fund in 2020 equal to the amount of voluntary salary reductions from the senior leadership team and fee reductions from members of the Company’s Board of Directors. Members of the Scripps family also contributed significantly to the fund in both 2020 and 2021. During 2020 and early 2021, the fund disbursed in excess of $1.4 million to provide more than 900 employees up to $2,000 each for needs caused by the pandemic, such as food and basic household supplies, housing-related assistance, and childcare or eldercare costs. Equity, Diversity and Inclusion Scripps is committed to an equitable, diverse and inclusive workplace that reflects the communities where we live, work and play. Our overarching Equity, Diversity and Inclusion (EDI) strategy focuses on building awareness of the importance of EDI in our workplaces and communities, empowering leaders to employ EDI practices in their business units or reporting structures, and tracking its equity, diversity and inclusion efforts, which culminates in regulatory reporting (Equal Employment Opportunity-1 reports), divisional analysis and regular reports to the Company’s Board of Directors. 13 Leading Scripps’ diversity, equity and inclusion strategies across the enterprise is a chief diversity officer. She and her team partner with business and human resources leaders across the Company to develop and implement the EDI strategy as well as action plans that continually evolve Scripps’ EDI commitment. The components of these plans include: • HR/EDI Strategic Purpose/Enterprise HR Objective: Foster diverse, inclusive, respectful workplaces focused on recruiting and developing talent that drives a high-performance, mission-oriented culture to support business objectives. • EDI Mission: Cultivate a culture of inclusion where everyone is valued, informed and empowered to fully realize their Scripps story. • EDI Vision: Transforming our business and the communities where we live, work and play by acknowledging, incorporating and uplifting our increasingly diverse world. Representative 2021 EDI activities include increased history and heritage month celebrations as well as an inaugural diversity symposium with 15 sessions over five days. The diversity symposium included 50 speakers on topics ranging from empathy as a superpower, being an effective ally/upstander, neurodiversity, bias free journalism, mental health, and guided virtual tours of three museums, including The Holocaust & Humanity Center, Asian Art Museum and National WWII Museum. As a result of what has been a multi-year focus on EDI awareness, we now have: 1) ten employee resource groups, 2) an enhanced sponsorship program to complement existing retention, development and advancement strategies, 3) an EDI Advisory Council to obtain perspective and participation from employees across the enterprise, and 4) embedded EDI into our employee onboarding, engagement and compliance schedule including mandated unconscious bias education for all employees. Compensation and Benefits Critical to our success is identifying, recruiting, retaining and incentivizing our existing and future employees. We strive to attract and retain the most talented employees in the industry by offering competitive compensation and benefits. Our compensation philosophy is based on rewarding each employee’s individual contributions and striving to achieve equal pay for equal work regardless of gender, race or ethnicity. We use a combination of fixed and variable pay, including base salary, bonus, commissions and merit increases, which vary across the business and by role. In addition, as part of our long-term incentive plan for executives and certain employees, we provide share-based compensation to foster our merit-based culture, align our business leaders’ interests with those of our shareholders and to attract, retain and motivate our key leaders. As the success of our business is fundamentally connected to the well-being of our people, we offer benefits that support their physical, financial and emotional well-being. We provide our employees with access to flexible and convenient medical programs intended to meet their needs and the needs of their families. In addition to standard medical coverage, we offer eligible employees dental and vision coverage, health savings and flexible spending accounts, paid time off, employee assistance programs, voluntary identity theft protection, access to financial counseling and student loan assistance programs, voluntary short-term and long-term disability insurance and term life insurance. We also offer a voluntary Employee Stock Purchase Plan (ESPP) whereby employees can elect to participate through payroll deductions and purchase Company stock at a discounted price. Additionally, we offer a 401(k) Defined Contribution Plan to all regular employees and an Executive Deferred Compensation Plan to certain employees. Through our Scripps Howard Foundation, we offer our employees opportunities to apply for grants to support their volunteer efforts in local communities as well as charitable contribution matching gifts. Our benefits vary by location and are designed to meet or exceed local laws and to be competitive in the marketplace. Commitment to Values and Ethics Along with our core values, we demonstrate a commitment to operate at the highest ethical standards by enforcing the principles in Scripps’ Code of Conduct, which is applicable to all employees and sets forth expectations and guidance for employees to make appropriate decisions. Our Code of Conduct covers topics related to accounting and auditing matters, antitrust activity, confidentiality and privacy, conflict of interest, discrimination or harassment, diverting of product or business activity, embezzlement, employee relations, falsification of contracts, reports or records, gifts or entertainment, improper supplier or contractor activity, leadership or management issues, securities law violations, sexual harassment, substance abuse, theft, and unsafe working conditions, among other things. The Code of Conduct reflects our commitment to operating in a fair, honest, responsible and ethical manner and also establishes a means for employees to submit confidential and anonymous reports of suspected or alleged violations of our policies (including through an anonymous hotline). Our executive officers and supervisors maintain “open door” policies and any form of retaliation is strictly prohibited. Additionally, the Company has in 14 place a Code of Business Conduct and Ethics for the Chief Executive Officer and the Senior Financial and Accounting Officers. We also require our journalists to read and sign our Journalism Code of Ethics, and we provide Social Media Guidelines that help our employees understand how to protect the reputations of themselves and the Company on social media platforms. Professional Development and Training We believe a key factor in employee retention is training and professional development for our talent. We have training programs across all levels of Scripps to meet the needs of various roles, specialized skill sets and departments across the Company. We use certain employee turnover rates in assessing our employee programs to ensure that they are structured to instill high levels of employee tenure, low levels of voluntary turnover and optimal productivity and performance across our workforce. Additionally, we utilize a performance evaluation program that adopts a modern approach to valuing and strengthening individual performance through on-going interactive progress assessments related to established goals and objectives. Communication and Engagement We strongly believe Scripps’ success depends on employees understanding how their work contributes to the Company’s overall strategy. To this end, we communicate with our workforce through a variety of channels and encourage open and direct communication, including frequent emails and videos from corporate leaders to all employees; daily company social media postings; an annual all-employee awards program; employee engagement survey; and, during the work-from-home environment due to the global pandemic, regular town hall meetings with the CEO and other executives. In addition, Scripps employees across the country are giving back in their local communities through reporting on critical issues, entertaining audiences with quality content, fundraising to help those in need and volunteering for important causes.