Media Operations - As of December 31, 2024, Sinclair operates 185 television stations across 86 markets, broadcasting a total of 641 channels, including 235 affiliated with major networks such as FOX, ABC, CBS, NBC, CW, and MyNetworkTV[31]. - Sinclair produces over 2,400 hours of local news weekly across 114 stations, receiving 232 journalism awards in 2024, including 22 regional and two national RTDNA Edward R. Murrow awards[33]. - The local media segment's revenue primarily comes from advertising sales and fees from distributors, with a focus on delivering significant audiences in key demographics[37]. - Political advertising significantly influences operating results, with higher spending observed in even-numbered years due to election cycles, particularly presidential elections[38]. - Sinclair's local media segment includes various networks such as The Nest, Comet, and CHARGE!, expanding its content offerings beyond traditional broadcasting[34]. - Sinclair's strategy focuses on quality local news programming and popular network content to attract national and local advertisers[37]. - Sinclair's local news initiatives are crucial for attracting viewership, with 114 stations producing local news in 72 markets[53]. - The company has entered into local news sharing arrangements that enhance viewer ratings and revenues for participating stations[56]. - Sinclair's sports programming remains highly popular, attracting desirable demographics for advertisers and maintaining strong viewership[60]. - The tennis segment includes the Tennis Channel and various streaming services, generating revenue primarily from distributor fees and advertising[44]. Financial Performance - The local media segment had one customer that accounted for 10% of Sinclair's consolidated revenue in 2024, indicating a significant reliance on key customers[51]. - Local revenues accounted for 59% and 61% of Sinclair's net time sales for the years ended December 31, 2024 and 2023, respectively[63]. - Political advertising represented 26% of local media segment advertising revenue for the year ended December 31, 2024, compared to 4% for the year ended December 31, 2023[179]. - The company relies heavily on advertising revenue, which is subject to volatility based on factors such as economic health and competition from other media[178]. - The company faces significant costs related to network and syndicated programming, which can escalate during a weak advertising market[181]. - The company may lose revenue if the FCC requires modifications or terminations of existing LMAs and JSAs, leading to fewer demographic options and lower audience distribution[195]. - The company’s ability to sell advertising time is influenced by the financial health of underlying advertisers and the popularity of its programming[179]. Corporate Structure and Strategy - The company underwent a reorganization on June 1, 2023, transitioning from a corporation to a limited liability company, with Sinclair becoming the publicly traded parent company[27]. - Following the reorganization, Sinclair Holdings became the intermediate holding company, and certain assets were transferred to Sinclair Ventures, LLC, including marketing technology and the Tennis Channel[28]. - Sinclair aims to enhance its digital presence by selling digital advertisements and providing digital marketing services across multiple platforms[37]. - The company aims to develop new business models, including online sales and streaming content, to enhance traditional broadcasting[68]. - The company has diversified investments in real estate, venture capital, and technology-driven companies, indicating a broad investment strategy[49]. Regulatory Environment - The FCC adopted the 2018 Ownership Order, extending the Top-Four Prohibition, which became effective on March 18, 2024, and is currently under appeal[88]. - Local Marketing Agreements (LMAs) are exempt from attribution until further FCC action, but if the exemption is eliminated, the company may need to terminate or modify existing LMAs[89]. - The FCC's rules require broadcasters to pay a fee of 5% of gross revenues from any DTV ancillary or supplementary service for which there is a subscription fee[96]. - The FCC's syndicated exclusivity rules allow local broadcast television stations to demand that cable operators black out syndicated non-network programming carried on distant signals[95]. - The FCC is currently reviewing the Local Radio Ownership Rule, the Local Television Ownership Rule, and the Dual Network Rule as part of the 2022 Quadrennial Regulatory Review[100]. - The company faces potential risks from antitrust regulation as the DOJ and FTC scrutinize ownership concentration within markets, including LMAs and outsourcing agreements[91]. - Regulatory approvals from the FCC may restrict Sinclair's ability to consummate future acquisitions and could require divestitures[154]. Employee and Community Engagement - As of December 31, 2024, the company had approximately 7,200 employees, including 580 represented by labor unions[115]. - The company has a strategic approach to talent development, offering on-the-job training and access to a learning platform[119]. - The company maintains a comprehensive benefits package, including a 401(k) plan and three weeks minimum paid time off[124]. - The company actively engages in community service through its Sinclair Cares program, supporting various charitable endeavors[130]. - In 2024, Sinclair partnered with over 400 nonprofit organizations, raising nearly $25 million for various charitable causes[131]. - Sinclair collected over 4.3 million pounds of food, 250,000 diapers, and 300,000 toys for those in need, while donating over $7 million in promotional airtime[131]. - The Diversity Scholarship Fund awarded $56,000 to 12 college students in 2024, with nearly $400,000 distributed since 2013 to support students in the broadcast industry[133]. Technological Innovations - Sinclair's technical services subsidiaries focus on developing NextGen TV technologies and wireless communication solutions[48]. - The implementation and adoption of NextGen TV (ATSC 3.0) is expected to occur over the next two years, with broadcasting already in more than 60 markets[75]. - The company has developed several NextGen Broadcast-related patents for monetization through various channels[76]. - The company continues to seek investments in emerging digital technologies and ad tech to expand its digital capabilities[72]. - The company has invested significantly in the development of the NextGen TV platform, with costs recorded under non-media expenses, but the outcome of this investment remains uncertain[200]. Risks and Challenges - The decline in Distributor service subscribers poses a risk to Sinclair's revenues, as consumers shift to OTT and DTC services[141]. - Future acquisitions and investments may increase financial leverage and present risks related to management focus and market reception[152]. - The company faces intense competition for viewers and advertisers from various media platforms, impacting advertising revenues[155]. - The company is vulnerable to cyber threats, which could disrupt operations and lead to significant financial losses[167]. - The evolving landscape of data privacy laws may require substantial resources for compliance, impacting financial condition and operations[172]. - The company depends on cloud computing services for operations, and any disruption could adversely affect financial results[174]. - The company may incur significant costs related to compliance with new SEC regulations on climate-related disclosures, which could negatively impact operating results[205]. - The company’s high level of debt poses risks, including potential inability to service debt obligations during negative economic conditions[215]. - The company may not generate sufficient cash to service all of its debt, potentially leading to forced actions to satisfy debt obligations[217]. - Failure to make scheduled debt payments could lead to default, with lenders potentially declaring all outstanding principal and interest due[219]. Corporate Governance - The Smiths control approximately 81.9% of the common stock voting rights, allowing them to influence most shareholder votes[210]. - The company is subject to investigations by governmental authorities, which could lead to fines and negatively impact financial condition and operations[187]. - Approximately 580 employees and freelancers are represented by labor unions under collective bargaining agreements, which could lead to potential strikes or work stoppages if agreements are not renewed[176].

Financial Performance - Sinclair's preliminary unaudited Local Media segment media revenues for Q4 2024 are reported, but specific figures are not disclosed yet[6] - The financial closing procedures for Q4 2024 are incomplete, indicating that final results may differ from preliminary estimates[7] - The preliminary financial information should not be viewed as a substitute for full financial statements prepared in accordance with GAAP[7]

Company Overview - Sinclair Inc (NASDAQ: SBGI) is developing new in-depth stories and offering unique links with local communities that smaller competitors cannot provide [1] - The company's business model may benefit from the growing importance of politics [1] Analyst Background - The analysis is provided by an ex-investment banker with approximately 11 years of industry experience [1] - The analyst focuses on value investments, typically targeting companies trading at around 10x earnings with dividend yields [1] - Research coverage includes small and mid-cap companies across the United States, Canada, South America, UK, France, and Germany [1] Analyst Position - The analyst holds a beneficial long position in SBGI shares through stock ownership, options, or other derivatives [2] - The analysis represents the analyst's personal opinions and is not compensated by the company [2]

Financial Performance - In Q3 2024, Sinclair's total revenues increased to $917 million, up 19.5% from $767 million in Q3 2023[278] - Media revenues rose to $845 million in Q3 2024, a 21% increase compared to $697 million in Q3 2023[280] - Political advertising revenue surged by $127 million in Q3 2024, reflecting a significant increase due to the presidential election year[283] - Operating income for Q3 2024 was $179 million, compared to $37 million in Q3 2023, marking a substantial improvement[278] - Net income attributable to Sinclair reached $94 million in Q3 2024, a recovery from a loss of $46 million in Q3 2023[278] - Media revenues for the three months ended September 30, 2024, increased to $845 million, up 21.3% from $697 million in the same period of 2023[307] - Total revenues for the nine months ended September 30, 2024, were $2,322 million, compared to $2,213 million for the same period in 2023, reflecting a growth of 4.9%[307] - Operating income for the three months ended September 30, 2024, was $182 million, significantly higher than $44 million in the same period of 2023[307] - Net income attributable to SBG for the three months ended September 30, 2024, was $80 million, compared to a loss of $22 million in the same period of 2023[307] Revenue Breakdown - Distribution revenue grew by $18 million or 5% in Q3 2024, driven by contractual rate increases despite a decrease in subscribers[281] - Distribution revenue increased by $2 million (4%) and $14 million (10%) for the three and nine months ended September 30, 2024, respectively, compared to the same periods in 2023[292] - Core advertising revenue decreased by $1 million (11%) for the three months ended September 30, 2024, while remaining flat for the nine months compared to the same period in 2023[293] - Media programming and production expenses increased by $13 million (approximately 8.5%) and $38 million (approximately 10.5%) for the three and nine months ended September 30, 2024, respectively, compared to the same periods in 2023[286] - Media selling, general and administrative expenses rose by $24 million (approximately 10.5%) for the three months and $35 million (approximately 11.5%) for the nine months ended September 30, 2024, compared to the same periods in 2023[287] - Non-media revenues increased by $3 million (approximately 14%) for the nine months ended September 30, 2024, compared to the same period in 2023, primarily due to an increase in broadcast equipment sales[298] Cash Flow and Capital Management - As of September 30, 2024, SBG had net working capital of approximately $238 million, including $202 million in cash and cash equivalents[317] - Sinclair anticipates that existing cash and cash equivalents and cash flow from operations will be sufficient to meet debt service obligations and working capital needs for the next twelve months[321] - Net cash flows from Sinclair's operating activities increased to $226 million for the three months ended September 30, 2024, compared to $50 million in the same period in 2023, driven by higher cash collections related to political revenue and Distributors[325] - For the nine months ended September 30, 2024, net cash flows used in operating activities increased to $(86) million, primarily due to the DSG settlement payment and increased production costs, despite higher cash collections[326] - Net cash flows used in financing activities decreased to $(74) million for the three months ended September 30, 2024, compared to $(111) million in the same period in 2023, primarily due to reduced debt repayment[329] - For the nine months ended September 30, 2024, net cash flows used in financing activities decreased to $(11) million, influenced by the repurchase of outstanding Common Stock and a decrease in debt repayment[330] Corporate Actions and Developments - Sinclair expanded its podcast division with new sports programming in August and September 2024[268] - The company launched the Rip City Television Network in October 2024, enhancing its market presence in the Pacific Northwest[268] - Sinclair declared a quarterly dividend of $0.25 per share in August and November 2024[273] - Sinclair declared a quarterly dividend of $0.25 per share in August 2024 and November 2024, with future dividends subject to the Board's discretion based on various financial factors[331] - Sinclair agreed to a global settlement involving a cash payment of $495 million related to litigation, with $445 million paid in the second quarter of 2024[322] Tax and Accounting - The effective tax rate for the three months ended September 30, 2024, was a provision of 23.0%, compared to a benefit of 20.7% during the same period in 2023[302] - The effective tax rate for the nine months ended September 30, 2024, was a provision of 17.4%, compared to a benefit of 134.3% during the same period in 2023[303] - The effective tax rate for the three months ended September 30, 2024, was a provision of 22.8%, compared to a benefit of 18.9% in the same period of 2023[313] - There were no changes to critical accounting policies and estimates from those disclosed in the previous annual report[339] Investments and Equity - Income from equity method investments recognized a gain of $93 million during the nine months ended September 30, 2024, compared to a gain of $33 million in the same period of 2023[300] - Sinclair and SBG increased estimated contractual amounts owed for network programming rights by $1,592 million, with terms extending into 2027[320]

Financial Data and Key Metrics Changes - The company reported total distribution revenue in line with guidance, with core advertising revenues growing by 1% in Q3, marking the first growth in core advertising during a high political advertising period [8][30] - Adjusted EBITDA for Q3 was $249 million, reflecting a 72% year-over-year increase driven by stronger political and distribution revenues [34][35] - Consolidated media revenues reached $908 million, up 20% year-over-year, primarily due to higher political revenue and distribution revenues [32][46] Business Line Data and Key Metrics Changes - Political advertising revenue for Q3 was $138 million, an all-time high for the quarter, despite $5 million in late cancellations [23][30] - Tennis Channel's media revenues increased by 2% year-over-year, with distribution revenues growing by 4%, although advertising revenues fell by 7% [36] Market Data and Key Metrics Changes - Broadcast market share of viewing minutes increased by 230 basis points over the past two months, driven by live sports content [15][16] - The company noted that broadcast television continues to be a dominant medium for political advertising, with expectations for strong performance in upcoming elections [25][47] Company Strategy and Development Direction - The company is optimistic about the regulatory environment, anticipating modernization of regulations that could facilitate M&A activities [51][63] - Sinclair is focused on leveraging its strong operational performance and the broader broadcast industry's strength to capitalize on future opportunities [47] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the impact of late political ad cancellations but remains optimistic about the upcoming political season and the potential for increased revenues [7][25] - The company expects to finish the year with core advertising down only 2%, which is significantly better than historical declines during political years [40][42] Other Important Information - The company launched two sports-related podcasts that have ranked among Apple's top 10 sports podcasts, indicating a growing interest in digital content [27] - A direct-to-consumer product for the Tennis Channel is set to launch, which is expected to enhance viewership and provide additional revenue streams [29][66] Q&A Session Summary Question: Can you discuss the decision to preannounce on political advertising? - Management explained that shifts in political ad spending led to a lower-than-expected Q4, which was not anticipated based on historical trends [50] Question: Should Sinclair be viewed as a buyer or seller in potential M&A? - Management expressed excitement about the regulatory environment and indicated that the company is open to participating in M&A as a buyer, seller, or merger partner [51] Question: What are the expectations for distribution revenue growth? - Management indicated that there is still room for growth in distribution revenue, with 28% of subscribers yet to renew [52] Question: How are core advertising trends expected to evolve post-election? - Management noted that despite political crowd-out, core advertising is expected to remain stable, supported by strong sports programming [58] Question: Can you provide insights on the regulatory environment and its impact? - Management highlighted the potential for regulatory changes that could benefit the industry, particularly regarding ownership rules [63] Question: What is the outlook for capital allocation and debt management? - Management stated that they are focused on reducing leverage and managing upcoming debt maturities efficiently while exploring M&A opportunities [71][74]

SINCLAIR 111 3Q24 Earnings Presentation November 6, 2024 Published by: Sinclair, Inc. NON-GAAP FINANCIAL MEASURES n Q This presentation contains certain financial measures of Sinclair, Inc. (the "Company"), including Adjusted EBITDA, which are not prepared in accordance with U.S. generally accepted accounting principles ("GAAP") (collectively, the "non-GAAP financial measures"). Adjusted EBITDA is defined as earnings before interest, tax, depreciation and amortization, and non-recurring and unusual transact ...

Core Viewpoint - Sinclair (SBGI) reported quarterly earnings of $1.28 per share, significantly exceeding the Zacks Consensus Estimate of $0.89 per share, and showing a turnaround from a loss of $0.30 per share a year ago, indicating strong performance in the current quarter [1][2] Financial Performance - The company achieved revenues of $917 million for the quarter ended September 2024, surpassing the Zacks Consensus Estimate by 0.98% and reflecting a year-over-year increase from $767 million [2] - Over the last four quarters, Sinclair has consistently surpassed consensus EPS estimates, achieving this four times [2] Stock Performance - Sinclair shares have increased approximately 28.5% since the beginning of the year, outperforming the S&P 500's gain of 21.2% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [6] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $1.92 on revenues of $1.02 billion, and for the current fiscal year, it is $4.57 on revenues of $3.58 billion [7] - The trend of estimate revisions for Sinclair is mixed, which may change following the recent earnings report [6] Industry Context - The Media Conglomerates industry, to which Sinclair belongs, is currently ranked in the top 24% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8]

Revenue Performance - Total revenues for Q3 2024 increased by 20% to $917 million compared to $767 million in the prior year period[8]. - For the nine months ended September 30, 2024, total revenues increased by 10% to $2,544 million compared to $2,308 million in the prior year period[11]. - Total revenues for the three months ended September 30, 2023, were $767 million, a decrease of 6% compared to the previous period[16]. - Total revenues for the three months ended September 30, 2024, were $917 million, a 19.5% increase from $767 million in the same period of 2023[27]. - Media revenues increased to $908 million, up 19.8% from $758 million year-over-year[27]. Advertising Revenue - Core advertising revenues grew by 1% year-over-year, totaling $295 million, while total advertising revenues increased by 42% to $433 million[2][8]. - Political revenues reached $138 million, a 31% increase over 2020 levels, despite $5 million in lost revenue due to late ad cancellations[2][3]. - Core advertising revenue for the twelve months ending December 31, 2024, is projected to be between $1,210 million and $1,219 million[23]. EBITDA and Income - Adjusted EBITDA for Q3 2024 increased by 72% to $249 million from $145 million in the prior year period[9]. - Adjusted EBITDA for the same period was $145 million, reflecting a decrease of 11%[16]. - Operating income for the three months ended September 30, 2024, was $179 million, compared to $37 million in the same period of 2023, representing a significant increase[27]. - Adjusted EBITDA for the three months ended September 30, 2024, was $249 million, up from $145 million in the same period of 2023[32]. - Net income attributable to Sinclair for the three months ended September 30, 2024, was $94 million, compared to a net loss of $46 million in the same period of 2023[27]. - Net income attributable to the Company was $134 million for the nine months ended September 30, 2024, compared to $50 million in the prior year period[12]. Expenses and Costs - Total operating expenses for the three months ended September 30, 2024, were $738 million, slightly up from $730 million in the same period of 2023[27]. - Interest expense for the three months ended September 30, 2024, was $78 million, compared to $77 million in the same period of 2023[32]. - The company incurred $22 million in non-recurring and unusual transaction costs, impacting overall profitability[36]. - Depreciation and intangible amortization expenses totaled $59 million, contributing to the operating income analysis[36]. Cash and Debt - Total company debt as of September 30, 2024, was $4,131 million[18]. - Cash and cash equivalents as of September 30, 2024, amounted to $536 million[18]. - Capital expenditures for the third quarter of 2024 were $17 million[19]. - The company paid a quarterly cash dividend of $0.25 per share in September 2024[19]. Future Projections - The company expects total revenues for the three months ending December 31, 2024, to be between $1,004 million and $1,014 million[22]. - Operating income for the three months ending December 31, 2024, is expected to be between $236 million and $247 million[22]. - Distribution revenue for the twelve months ending December 31, 2024, is expected to be between $1,740 million and $1,742 million[23]. Strategic Initiatives - The Company launched new podcasts and expanded its podcast division, with several shows ranking among Apple's top-10 sports podcasts[4]. - Sinclair Ventures made investments of approximately $7 million in minority investments during Q3 2024[7]. - The company emphasizes the importance of successful execution of outsourcing and retransmission consent agreements for future growth[37]. - There is a focus on identifying and consummating acquisitions to enhance market position and financial leverage[37]. Risks and Challenges - Forward-looking statements highlight potential risks including subscriber decline and regulatory challenges, which may affect future operating results[37]. - The company faces material risks related to programming costs and competition for viewers and advertisers[37]. - Legal and reputational risks are acknowledged, particularly concerning breaches of information systems[37]. - The company has no obligation to publicly release revisions to forward-looking statements except as required by law[37].

Core Insights - Sinclair (SBGI) shows potential as a strong investment due to significant revisions in earnings estimates, indicating an improving earnings outlook [1][2] - The trend of increasing estimate revisions reflects growing analyst optimism about Sinclair's earnings prospects, which is likely to positively impact its stock price [2][3] Current-Quarter Estimate Revisions - For the current quarter, Sinclair is projected to earn $0.93 per share, representing a remarkable increase of +410% compared to the same quarter last year [4] - Over the past 30 days, there has been one upward revision in estimates with no negative revisions, leading to a 9.47% increase in the Zacks Consensus Estimate [4] Current-Year Estimate Revisions - For the full year, Sinclair is expected to earn $4.57 per share, which is a substantial change of +140.62% from the previous year [5] - The current year's estimate revisions are also favorable, with one estimate moving higher and a 21.83% increase in the consensus estimate over the past month [5] Favorable Zacks Rank - Sinclair currently holds a Zacks Rank 1 (Strong Buy) due to positive estimate revisions, which historically correlate with strong stock performance [6] - Stocks with Zacks Rank 1 and 2 have shown significant outperformance compared to the S&P 500 [6] Bottom Line - Strong estimate revisions have led to a 10.7% increase in Sinclair's stock price over the past four weeks, suggesting further upside potential [7]

Shares of Sinclair (SBGI) have gained 2.8% over the past four weeks to close the last trading session at $13.92, but there could still be a solid upside left in the stock if short-term price targets of Wall Street analysts are any indication. Going by the price targets, the mean estimate of $17.62 indicates a potential upside of 26.6%. The mean estimate comprises six short-term price targets with a standard deviation of $5.18. While the lowest estimate of $13 indicates a 6.6% decline from the current price ...