E.W. SCRIPPS Co 10-K

Item 1. Business Founded in 1878, The E.W. Scripps Company motto is "Give light and the people will find their own way." Our vision statement is We Create Connection. We serve audiences and businesses through a portfolio of more than 60 local television stations in more than 40 markets and national news and entertainment networks. Our local stations have programming agreements with ABC, NBC, CBS and FOX. The Scripps Networks reach nearly every American through national news outlets Scripps News and Court TV and popular entertainment brands ION, Bounce, Grit, ION Mystery, ION Plus and Laff. We also serve as the longtime steward of one of the nation's largest, most successful and longest-running educational programs, the Scripps National Spelling Bee. Additionally, we provide a television viewing device called Tablo that allows households to watch and record dozens of free, over-the-air and streaming channels anywhere in their home without a subscription. For a full listing of our brands, visit http://www.scripps.com. Scripps is a leader in free, ad-supported television. All of our local stations and national entertainment networks reach consumers over the air, and all of our television brands can also be found on free streaming platforms. We have continued to expand in the fast-growing connected television marketplace, and we are leveraging our leadership position in the growing over-the-air marketplace. Currently, one in three non pay-TV homes is watching television over the air alongside their streaming subscription services, and as cord-cutting and streaming service price increases continue, over-the-air channels will be an important part of television viewers' choices. To that end, Scripps continues efforts to broaden antenna use even more and is working with key partners in retail, manufacturing and antenna installation to help television owners understand the quality and quantity of programming available over the air and the ease of antenna use. In January 2023, we announced a strategic restructuring and reorganization of the Company to further leverage our strong position in the U.S. television ecosystem and propel our growth across new distribution platforms and emerging media marketplaces. The strategic restructuring and reorganization created a leaner and more agile operating structure through the centralization of certain services and the consolidation of layers of management across our operating businesses and corporate office. This initial reorganization of the operating structure was substantially completed by the end of the 2024 second quarter and resulted in more than $40 million in annual savings, of which $20 million of the annualized savings was achieved by the end of 2023. We also have continued to identify efficiency opportunities within the functional departments of our organization, which resulted in additional restructuring charges over the last two quarters of 2024. In April 2024, we began a public process to explore the sale of our Bounce multi-cast television network. Bounce, which is available in approximately 95% of U.S. television broadcast homes, broadcasts a combination of syndicated shows, movies and original content that is created for Black audiences. On July 2, 2024, we announced a multi-year agreement with the National Hockey League's Florida Panthers ("Panthers"), which began with the 2024-2025 season. Under the new agreement, we have the ability to televise all locally produced Panthers preseason, regular-season and round one games of the postseason with distribution on cable, satellite and over-the-air television. On September 27, 2024, we announced plans to significantly reduce Scripps News' national network programming beginning in the fourth quarter of 2024. As of November 15, 2024, Scripps News was no longer broadcast over the air, although it remained on streaming and digital platforms with weekday live coverage from the field. Beginning at the start of 2025, the scaled back Scripps News operation is expected to generate annualized net savings of $35 million. In January 2025, we announced the formation of a joint venture with Gray Media, Nexstar Media Group, Inc. and Sinclair, Inc. Leveraging broadcasters’ uniquely efficient network architecture and the ATSC 3.0 transmission standard, EdgeBeam Wireless, LLC will provide expansive, reliable and secure data delivery services. This partnership creates a spectrum footprint that no individual broadcaster could achieve on its own, unlocking the potential of ATSC 3.0 to offer nationwide coverage for data delivery to billions of potential devices on market-disrupting terms. We contributed cash consideration of $6.4 million for our 25% ownership interest in the joint venture. On March 10, 2025, we entered into a Transaction Support Agreement (“TSA”) that was reached with certain of the Company’s lenders. Concurrently, we entered into commitment letters to provide for a new accounts receivable securitization facility and a new revolving credit facility. Transactions contemplated by the TSA and commitment letters, which still need to be consummated, include, among others, entering into new revolving credit and asset securitization facilities and the exchange or repayment of certain of our existing term loans. 4 Financial information for each of our operating 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. LOCAL MEDIA Our Local Media segment includes more than 60 local 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 11 independent stations and 10 additional low power stations. We provide free over-the-air news, information, sports 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, local sporting events, 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. We also provide live, local sporting events on many of our stations by acquiring local television broadcast rights for these events. Revenue cycles and sources Core Advertising Our core advertising is comprised of sales to local and national businesses. The advertising includes a combination of broadcast spots as well as digital and connected TV advertising. Our core advertising revenues accounted for 33% of our Local Media segment’s revenues in 2024. 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 calling upon advertising agencies and local businesses, which typically include advertisers such as car dealerships, health-care facilities, home improvement companies 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 by calling upon advertising agencies, whose clients typically include businesses such as 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 business websites, tablet and mobile products, over-the-top 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 currently 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. 5 Political Advertising Political advertising is generally sold through our Washington, D.C. sales office. Advertising is sold to presidential, gubernatorial, U.S. Senate and House of Representative candidates, as well as for state races and local issues. It is also sold to political action groups (PACs) and other advocacy groups. Political advertising revenues were 20% of our Local Media segment's revenues in 2024, an election year. 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. Distribution Revenues We earn revenues from cable operators, satellite carriers, other multi-channel video programming distributors (collectively "MVPDs"), other online video distributors and subscribers for access rights to our local broadcast signals. Distribution revenues were 46% of our Local Media segment's revenues in 2024. These arrangements are generally governed by multi-year contracts and the fees we receive are typically based on the number of subscribers the respective distributor has in our markets and the contracted rate per subscriber. During 2023, we completed renewal negotiations on distribution agreements covering approximately 75% of our subscriber households. Expenses Employee costs accounted for 38% of our Local Media segment's costs and expenses in 2024. We centralize certain functions, such as master control, traffic, graphics, research 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, local sports rights fees, syndicated programming and shows produced for us or in partnership with others, were 45% of our Local Media segment's costs and expenses in 2024. Our network-affiliated stations broadcast programming is supplied to us by the Big 4 broadcast 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. 6 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 (1) KNXV-TV Phoenix, AZ - Ch. 15 ABC/15 2026 2030 11 KASW -TV Phoenix, AZ - Ch. 61 Ind/27 N/A 2030 11 WMYD-TV Detroit, MI - Ch. 20 Ind/31 N/A 2029 12 WXYZ-TV Detroit, MI - Ch. 7 ABC/25 2026 2029 12 WFTS-TV Tampa-St. Petersburg, FL - Ch. 28 ABC/17 2026 2029 13 KMGH-TV Denver-Aurora, CO - Ch. 7 ABC/7 2026 2030 16 KCDO-TV Denver-Aurora, CO - Ch. 3 Ind/23 N/A 2030 16 WEWS-TV Cleveland, OH - Ch. 5 ABC/15 2026 2029 17 WSFL-TV Miami, FL - Ch. 39 Ind/27 N/A 2029 18 WMAR-TV Baltimore, MD - Ch. 2 ABC/27 2026 2028 24 WRTV-TV Indianapolis, IN - Ch. 6 ABC/25 2026 2029 27 KMCI-TV Kansas City, MO - Ch. 38 Ind/25 N/A 2030 28 KSHB-TV Kansas City, MO - Ch. 41 NBC/36 2027 2030 28 WTVF-TV Nashville, TN - Ch. 5 CBS/36 2026 2029 29 WTMJ-TV Milwaukee, WI - Ch. 4 NBC/32 2027 2029 31 KGTV-TV San Diego, CA - Ch. 10 ABC/10 2026 2030 33 WCPO-TV Cincinnati, OH - Ch. 9 ABC/26 2026 2029 34 KSTU-TV Salt Lake City, UT - Ch. 13 FOX/28 2025 2030 36 KUPX-TV Salt Lake City, UT - Ch. 16 Ind/29 N/A 2030 36 WPTV-TV West Palm Beach-Port St. Lucie, FL - Ch. 5 NBC/12 2027 2029 37 WHDT-TV West Palm Beach-Port St. Lucie, FL - Ch. 9 Ind/34 N/A 2029 37 KTNV-TV Las Vegas, NV - Ch. 13 ABC/13 2026 2030 41 KMCC-TV Las Vegas, NV - Ch. 34 Ind/32 N/A 2030 41 WGNT-TV Norfolk-Virginia Beach, VA - Ch. 27 Ind/20 N/A 2028 42 WTKR-TV Norfolk-Virginia Beach, VA - Ch. 3 CBS/16 2025 2028 42 WXMI-TV Grand Rapids-Kalamazoo, MI - Ch. 17 FOX/19 2025 2029 43 WKBW-TV Buffalo, NY - Ch. 7 ABC/34 2026 2031 49 WFTX-TV Ft. Myers-Cape Coral, FL - Ch. 36 FOX/34 2025 2029 51 WTVR-TV Richmond, VA - Ch. 6 CBS/23 2025 2028 55 KJRH-TV Tulsa, OK - Ch. 2 NBC/8 2027 2030 62 WGBA-TV Green Bay-Appleton, WI - Ch. 26 NBC/14 2027 2029 63 WACY-TV Green Bay-Appleton, WI - Ch. 32 Ind/36 N/A 2029 63 WLEX-TV Lexington, KY - Ch. 18 NBC/28 2027 2029 65 KMTV-TV Omaha, NE - Ch. 3 CBS/31 2025 2030 68 KWBA-TV Tucson, AZ - Ch. 58 Ind/21 N/A 2030 73 KGUN-TV Tucson, AZ - Ch. 9 ABC/9 2026 2030 73 KOAA-TV Colorado Springs, CO - Ch. 5 NBC/25 2027 2030 83 KXXV-TV Waco-Killeen, TX - Ch. 25 ABC/26 2026 2030 91 KIVI-TV Boise, ID - Ch. 6 ABC/24 2026 2030 107 WSYM-TV Lansing, MI - Ch. 47 FOX/28 2025 2029 112 WTXL-TV Tallahassee-Thomasville, FL-GA - Ch. 27 ABC/27 2026 2029 118 KERO-TV Bakersfield, CA - Ch. 23 ABC/10 2026 2030 121 KATC-TV Lafayette, LA - Ch. 3 ABC/28 2026 2029 124 KSBY-TV Santa Barbara-Santa Maria, CA - Ch. 6 NBC/15 2027 2030 130 KRIS-TV Corpus Christi, TX - Ch. 6 NBC/26 2027 2030 135 KTVQ-TV Billings, MT - Ch. 2 CBS/10 2026 2030 164 KPAX-TV Missoula, MT - Ch. 8 CBS/7 2026 2030 167 KXLF-TV Butte-Bozeman-Silver Bow, MT - Ch. 4 CBS/5 2026 2030 187 KRTV-TV Great Falls, MT - Ch. 3 CBS/7 2026 2030 193 KTVH-TV Helena, MT - Ch. 12 NBC/12 2027 2030 204 (1) Market rank is based on the 2024 Comscore HH Universe estimates. 7 SCRIPPS NETWORKS Our Scripps Networks segment includes national news outlets Scripps News and Court TV as well as popular entertainment brands ION, Bounce, Grit, ION Mystery, ION Plus and Laff. The networks reach nearly every U.S. television home through free over-the-air broadcast, cable/satellite, connected TV and/or 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 55% of our Scripps Networks segment's costs and expenses in 2024, reflecting the costs of investing in quality programming, costs of distribution from carriage agreements with local television broadcasters and cable and satellite providers and costs of programming acquired under multi-year sports rights agreements. The national networks are carried on both our owned and operated television stations and from carriage agreements with other broadcast stations. Our over-the-air ("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 is available in nearly 99% of U.S. television broadcast homes. It is available through its 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 generally elects government-mandated must-carry provisions, thereby ensuring its programming is available on cable and satellite systems. ION is available as a free advertising-supported streaming television ("FAST") channel with distribution across multiple streaming services. Bounce Bounce is available in approximately 95% 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 the hit series Johnson and Mind Your Business. Bounce XL is available as either an app or FAST channel with distribution on multiple streaming services. Court TV Court TV is available in approximately 93% 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 available as either an app or FAST channel with distribution on multiple streaming services. 8 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. Grit Xtra is available as a FAST channel with distribution across multiple streaming services. ION 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 NCIS and CSI franchises. ION Mystery is available as a FAST channel with distribution across multiple streaming services. ION Plus ION Plus is available in approximately 92% of U.S. television broadcast homes. The network features popular action and suspense programming that includes Hudson & Rex , Bull , MacGyver and Scorpion . ION Plus is available as a FAST channel with distribution across multiple streaming platforms. Laff Laff is available in approximately 98% of U.S. television broadcast homes and targets comedy-lovers in the 18 to 49 age range. Programming on Laff includes popular sitcoms such as Home Improvement , Last Man Standing, Man with a Plan and According to Jim . Laff More is available as a FAST channel with distribution across multiple streaming services. Scripps News Scripps News is our national streaming news channel focused on bringing objective, fact-based reporting and analysis on world and national news, including politics, entertainment, science and technology. In November 2024, we stopped distribution of the channel on over-the-air television. Scripps News is available on multiple streaming and digital platforms as either an app or FAST channel. The network’s programming lineup includes The National Report, Morning Rush, Scripps News On The Scene, Happening Now In America, Today as it Happened and Scripps News Showcase. 9 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 (1) WPXN New York, NY 34 2031 1 KILM Los Angeles, CA 24 2030 2 KPXN Los Angeles, CA 24 2030 2 WCPX Chicago, IL 34 2029 3 WPPX Philadelphia, PA 34 2031 4 KPXD Dallas-Ft. Worth, TX 25 2030 5 WPXW Washington, DC 35 2028 6 WWPX Washington, DC 13 2028 6 WBPX Boston, MA 22 2031 7 WDPX Boston, MA 22 2031 7 WPXG Boston, MA 23 2031 7 WPXA Atlanta, GA 16 2029 8 KKPX San Francisco-San Jose, CA 33 2030 9 KPXB Houston, TX 32 2030 10 WXPX Tampa-St. Petersburg, FL 29 2029 13 KPXM Minneapolis-St. Paul, MN 16 2030 14 KWPX Seattle, WA 33 2031 15 WPXM Miami, FL 21 2029 18 WOPX Orlando, FL 14 2029 19 KSPX Sacramento, CA 21 2030 20 WINP Pittsburgh, PA 16 2031 22 WRBU St. Louis, MO 28 2029 23 WFPX Raleigh-Durham, NC 32 2028 25 WRPX Raleigh-Durham, NC 32 2028 25 KPXG Portland, OR 22 2031 26 WNPX Nashville, TN 32 2029 29 WPXE Milwaukee, WI 30 2029 31 WSFJ Columbus, OH 19 2029 32 KPXL San Antonio, TX 26 2030 35 WPXC Jacksonville, FL 24 2029 44 WPXQ Providence, RI 17 2031 50 WPXL New Orleans, LA 33 2029 52 WQPX Wilkes Barre-Scranton, PA 33 2031 57 WPXK Knoxville, TN 18 2029 59 WKOI Dayton, OH 31 2029 61 KTPX Tulsa, OK 28 2030 62 KFPX Des Moines, IA 36 2030 71 WIPL Portland, ME 24 2031 74 WPXR Roanoke-Lynchburg, VA 27 2028 75 WLPX Charleston-Huntington, WV 18 2028 78 WZRB Columbia, SC 25 2028 79 WSPX Syracuse, NY 36 2031 82 KPXR Cedar Rapids, IA 22 2030 85 WEPX Greenville-Jacksonville, NC 36 2028 99 WPXU Greenville-Jacksonville, NC 16 2028 99 WTPX Wausau-Stevens Point, WI 19 2029 132 (1) Market rank is based on the 2024 Comscore HH Universe estimates. 10 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, including specific rules related to identifying programming sponsored or provided by foreign governments, 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 review these rules every four years to determine if they continue to serve the public interest. In an Order released in December 2023, the FCC concluded the review that commenced in 2018, largely retaining the existing multiple ownership rules and adding a prohibition on television broadcasters using multicast channels or low power television stations to acquire two “top-four” affiliations in a single market. Existing combinations of two or more “top-four” affiliations are allowed to continue but cannot be sold together to a single buyer. The rule changes adopted in December 2023 went into effect in March 2024. Those changes have been challenged in Court, and those cases remain pending. The 2022 quadrennial review of the ownership rules also remains open. 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' current national audience reach is 38.0% of television households after application of the “UHF discount.” We cannot predict the outcome of these open proceedings, including pending court reviews of the FCC's most recent changes to its television ownership rules, or the effect of further FCC rule revisions on our stations' operations or our business. 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 was originally due to “sunset” in 2023 but has been extended by the FCC and is now due to expire in July 2027, unless further extended. Scripps stations in several markets are operating with the new transmission protocol. 11 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 it continues to explore other ways to allow use of “white spaces” by unlicensed operators. We cannot predict the outcome of these proceedings or their possible impact on the Company. In 2022, Congress passed the Low Power Protection Act, which directed the FCC to adopt rules that will allow certain low-power television stations in smaller markets to apply for “Class A” regulatory status, which will provide those stations with increased protection from interference. FCC rules implementing the Low Power Protection Act went into effect May 31, 2024, and eligible stations have until May 30, 2025 to apply for “Class A” status. While certain low power television stations owned by the Company may be eligible to apply for this status, we cannot predict the outcome of any such applications 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 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 almost 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 other programming issues such as sponsorship identification (including specific rules related to foreign-sponsored programming), broadcasting improper emergency alerts and extending service to persons with disabilities. We cannot predict the effect of the FCC’s enforcement efforts on the Company. 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, curiosity and community 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. Our company has a long history of evolving to meet the changing needs of the media consumer. Employees As of December 31, 2024, we had approximately 5,000 employees, including full-time and part-time employees. Various labor unions represent approximately 360 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. Workplace Scripps is committed to a workplace that reflects the communities where we live, work and play. Our senior leadership team collaborates with business and human resources leaders to develop and implement objectives and initiatives that are focused on culture (educating, developing, and growing), people (attracting and retaining), and business (accessible/engaged leadership, accountability, and transparency). At its core, our work is about engaging every employee and helping them to participate at work in a way that is most fulfilling for them to experience a workplace culture where they experience the satisfaction of belonging and performing well. 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 by using 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 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 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 to purchase company stock at a discounted price. Additionally, we offer a 401(k) defined contribution plan to employees and an executive deferred compensation plan to certain senior-level employees. Our benefits vary by location and are designed to meet or exceed local laws and to be competitive in the marketplace. Professional Development and Training At Scripps, we recognize that our employees are the foundation of our success. To support their growth and align with the evolving needs of our business, we have prioritized offering flexible, impactful learning and development opportunities. Our programs empower employees at all levels—whether they are new to their roles, aspiring leaders, or seasoned professionals—to develop the skills needed for both current and future success. We are committed to fostering a culture of continuous learning. In 2024, employees completed training courses tailored to specific roles and skill sets. Our approach ensures that training adapts to the demands of the business, with a focus on building competencies critical to future success. Employees can also update their skills, interests and experiences in our career development platform, enabling us to align opportunities with their aspirations and encourage self-driven career exploration. Our leadership programs are designed to cultivate effective leaders at every level, from first-time managers to future executives. 13 These programs emphasize continuous learning through flexible formats, including self-paced modules, cohort-based learning and live workshops. Participants gain critical skills such as effective communication, team management, and strategic thinking, reinforced through experiential opportunities like coaching and mentorship. By investing in leadership development, we foster stronger team performance, increased employee engagement, and a robust pipeline of future leaders. To keep pace with rapidly evolving technology, we provide targeted training for employees in key areas such as journalism and sales. These initiatives combine hands-on learning, mentorship, and on-demand resources to enhance job-specific skills. From storytelling and investigative journalism to strategic marketing and client engagement, our training programs are tailored to meet various learning preferences, ensuring employees can grow at their own pace while staying aligned with industry advancements. By investing in our people, we equip them to thrive in a dynamic environment while driving the innovation and excellence that define Scripps. Communication and Engagement We strongly believe Scripps’ success depends on employees understanding how their work contributes to the Company’s overall strategy. To that 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 intranet and social media postings; and regular town hall meetings with the CEO and other executives. We also welcome communication from our employees through focus groups and town hall meeting surveys. 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.