Wednesday, April 25, 2007

Scripps Stumbles Along

EW Scripps (NYSE:SPP) announced slightly better than expected results. The print side is just terrible which is not news. The online side is suffering from investment as management attempts to spend their way digital profits. Nothing really new.

The question becomes why even bother with this stock. The management dilemma of converting an old line newspaper business that probably fell asleep into a profitable electronic media company is well documented. Call me when you figure it out.

They will continue to fight legacy costs in print as local advertising stalwarts such as classifieds dry up. What would be truly impressive would be a large and fast execution to get to the necessary endpoint. A death of a thousand cuts will continue to distract.

That having been said there is nothing to suggest that the electronic products will continue to clunk along. I suspect that the company will always need to invest to maintain the product offering which therefor will always drag down profits and cash flows.

What we need is the law of unintended consequences to kick in and take this stock in a new direction.