Hey guys apologies that i haven’t been writing that often lately. I promise that i’ll try to get to one article out per week or maybe 1 every 2 weeks moving forward. Currently been busy as i’m taking a 3 month opportunity to the US to try and build an Asia accounting venture roll-up. Been working on my dream team and looking for people who’ve led M&A deals and led accounting operations. If anyone is interested in my journey, or know anyone whom i could potentially value add to, please feel free to connect with me on Linkedin here ❤️
What If You Owned the Only Bridge?
Imagine owning the only bridge into a town.
The government says nobody else may build another bridge in the same place. Shops pay to put signs beside your bridge because many people pass them every day.
This is similar to E.W. Scripps’s television business.
The government gives each Scripps station permission to use a particular television frequency in a particular city. Another station cannot use the same frequency nearby because the two signals would crash into each other.
This protected permission is called an FCC licence.
The licence gives Scripps something competitors cannot easily copy: a ready-made road into millions of homes.
And every two years, one group becomes desperate to use that road.
Why Can Profits Become So Large?
Political campaigns have a problem. They must reach voters before Election Day.
Imagine ten children trying to buy the last three cupcakes before the shop closes. Because time and cupcakes are running out, each child is willing to pay more.
The same thing happens with political advertisements.
Campaigns compete for a limited number of advertising spaces. Meanwhile, Scripps’s stations, towers and employees are already operating. Showing one more advertisement costs relatively little, so much of the extra money can become profit.
In 2024, Scripps’s local political revenue increased by about $310 million. Local Media profit rose by approximately $226 million.
Then the election ended. In 2025, political revenue fell by about $323 million, while Local Media profit fell by almost $320 million. The figures come from Scripps’s 2025 annual report.
Election Day creates a traffic jam on Scripps’s bridge. But a traffic jam every two years does not mean the bridge has a strong moat.
What Happens When New Roads Appear?
Netflix, YouTube, streaming services and news apps are new roads into town.
They do not need Scripps’s bridge. The government can stop another television station from interfering with Scripps’s signal. It cannot stop someone from opening YouTube.
Some people still return to Scripps. Older viewers watch local news. Sports fans watch live games. Other viewers enjoy crime shows on ION, Black-focused entertainment on Bounce, or Westerns on Grit.
But they usually love the program, team or information—not Scripps.
If a team moves its games somewhere else, fans can follow. Scripps also rents much of the programming that attracts viewers. Changing channels takes only one click.
Cable and satellite companies still pay Scripps to carry many of its local stations. But customers are leaving traditional television packages. In 2025, Scripps received higher prices from distributors, yet Local Media distribution revenue still fell 2%.
That means the audience moat is weak. Yet the bridge itself—the protected frequency—can still be valuable.
Why Is the Old Bridge Still Valuable?
Spectrum is made of invisible lanes in the air. Television pictures, mobile calls and satellite messages travel through them.
There are only so many lanes. If two people use the same lane in the same place, their signals can crash. That is why governments control these limited lanes and why mobile companies have paid billions for 5G licences.
Scripps has protected television lanes. They are scarce, already built and able to reach large areas.
But Scripps cannot simply paint “5G” on its television bridge.
Turning the lane into ordinary 5G would require the government to reorganize the frequencies and issue new mobile licences. SpaceX also uses different lanes and different permissions.
Scripps can still use the spare capacities inside its television signal.
Through EdgeBeam, it is testing ways to send maps, emergency information and software updates to many special receivers at once.
Think of a school bus carrying children but still having a few empty seats. Scripps cannot turn the bus into a 5G taxi. But it may use those empty seats to deliver packages.
That possible second use adds value to the asset, even though it is still early.
What Is the One Lesson?
A moat and an asset are different.
A moat keeps competitors from taking your customers. Scripps’s moat is weak because viewers can easily leave.
An asset is something scarce that competitors cannot easily copy. Scripps’s protected television frequencies remain valuable because they provide local reach today and may carry new kinds of data tomorrow.
Insights You Might Have Missed
Munger taught that the worst decisions come when several biases fire at once and so does the best contrarian setup. Everyone hates Scripps, it is down 80% in the last 5 years, and holding it feels like protecting a mistake. But that is the (bruised) ego talking, not the analysis. The asset is real, the bridge is protected, and the political-ad flood that spikes every election, the same urgency now lighting up Kalshi and Polymarket, arrives again with the midterms. Unloved is not the same as uninvestable.
When you go looking for a moat, don’t stop at the obvious things like the logo.
Some of the strongest ones are boring or legal:
Ready mixed concrete goes hard within about ninety minutes, so a plant only competes within one lorry drive of its own gates, and planning rules mean nobody gets to build a rival next door.
Once a product is named in a safety standard or an insurer’s checklist, competitors can no longer win by being cheaper or better, because first they have to change the rulebook, and that takes years.
Dylan Wills💠Momentum Shortlist
The distinction between a moat and a valuable asset is an important one. Scripps may have a weakening hold on viewers, but the spectrum itself is scarce infrastructure that could end up being worth more than the television business built around it.
The most interesting part isn’t that Scripps is losing viewers — it’s that declining relevance doesn’t necessarily make the underlying asset worthless. Sometimes the market prices the dying business and completely misses the scarce asset underneath it.
This article explains a deep part of a company that every investor should always be aware of, the type of assets the company possess. Usually investors look only for specific moats any company has to protect them from competitors, but there is always intrinsic value within business that should be taken in to consideration when looking for hidden gems. In this case its kind of difficult to understand wether taking part of Scripps is a wise movement, but the point of how they keep holding a valuable physical asset might be worth the digging. Thanks for sharing Felix, clever insight! Reminds me of this article:
Where any investment decision should consider always first your personal situation and how the new option impacts your whole portfolio context, its never an isolated decision.
A scarce asset can be genuinely valuable without the company owning it being a good investment. What I’d want to see from Scripps is the same conversion Project Zero looks for everywhere: asset → new use → customer demand → revenue → margin → cash → per-share value.
The related piece I’d pair with it is The Revenue Trap, where I look at three companies at different points in that conversion chain and why the impressive headline number is usually only the beginning.
Scripps shows how a shrinking audience doesn’t automatically erase the value of a protected asset. Sometimes the moat fades, but the underlying infrastructure still matters.
It’s the same tension I explored with BCE—when legacy reach remains valuable, but the moat around that reach steadily erodes. My breakdown of BCE’s outlook digs into how incumbents navigate that slow‑motion unraveling:
One thing I like about the Scripps example is that it separates two ideas investors often blend together: a valuable asset and a strong moat. Something can remain scarce, protected and useful even while the customer relationship around it becomes weaker. For me, that means asking two separate questions: what is genuinely difficult for competitors to replicate, and what actually gives customers a reason to stay? Sometimes the asset can remain valuable even as the business around it becomes less defensible
Very interesting parallel to systematic trading here. Most traders mistake a single strategy for their moat, when the real durable asset is the process of designing a portfolio of strategies that complement each other. It took me a long time to figure this out.
I think Scripps is a great example of why a weakening business moat doesn’t necessarily mean the underlying asset has lost its value. A similar example in India could be railway infrastructure — even if the businesses operating around it or their customer mix changes, strategically located railway assets can remain valuable because they’re difficult to replicate, with government regulation, limited land availability and other structural factors adding to their scarcity.
Great piece, Felix! Focusing on the structural distinction between a weakening viewership moat and the enduring value of protected spectrum is the exact right lens for Scripps. Broadcasters sit on scarce, irreplaceable assets, and as Next Gen TV opens up new possibilities for data transmission alongside the return of live sports to over-the-air television, these legacy licenses remain surprisingly valuable infrastructure despite the shifts in linear viewing. Very thoughtful breakdown!
Strong piece, Felix. Really enjoyed reading it.
And thank you for including my perspective too. I really appreciate it. 💚