AI Analysis | Feedback

Here are 1-3 brief analogies to describe Sinclair (SBGI):

• The Gannett of local TV stations
• The McDonald's of local TV news
• The Marriott of local TV stations

AI Analysis | Feedback

```html

• Local Television Broadcasting: Operates and manages a large portfolio of local television stations across the United States, broadcasting network and local programming.
• Content Production and Distribution: Produces and distributes a variety of news, sports, and entertainment programming for its stations and other platforms.
• Digital and Streaming Services: Offers live and on-demand content through various digital platforms and streaming apps, including sports-focused services.
• Advertising Sales: Sells commercial advertising time and inventory on its television stations and digital properties to local and national businesses.

```

AI Analysis | Feedback

Sinclair Broadcast Group (SBGI) primarily sells its services to other companies, generating revenue through two main channels: retransmission consent fees and advertising sales.

Major Customer Companies:

• Comcast Corporation (Symbol: CMCSA) - As one of the largest cable television providers in the U.S. (Xfinity), Comcast pays Sinclair retransmission consent fees to carry its local broadcast stations.
• Charter Communications, Inc. (Symbol: CHTR) - Another major cable television provider (Spectrum), Charter also enters into retransmission consent agreements with Sinclair to distribute its local stations.
• DISH Network Corporation (Symbol: DISH) - A prominent satellite television provider and owner of the Sling TV streaming service, DISH Network pays Sinclair for the rights to carry its broadcast content.
• Other Cable, Satellite, and Virtual Multichannel Video Programming Distributors (vMVPDs): Sinclair maintains retransmission consent agreements with a wide array of other distributors that carry its local broadcast stations. These can include providers such as Verizon Communications Inc. (Symbol: VZ) for Fios TV, as well as streaming platforms like Hulu + Live TV (owned by Disney, Symbol: DIS) and YouTube TV (owned by Alphabet Inc., Symbol: GOOGL).

In addition to retransmission fees, Sinclair generates significant revenue from advertising. Its advertising customers comprise a broad and diverse base of local, regional, and national businesses across various industries (e.g., automotive, retail, healthcare, food & beverage). While these are numerous corporate customers, they are typically too varied and numerous to identify specific individual major corporate clients in the same way as the large distributors listed above.

AI Analysis | Feedback

null

AI Analysis | Feedback

Chris Ripley, President and Chief Executive Officer

Appointed CEO in January 2017, after serving as CFO of Sinclair from April 2014 to January 2017. Prior to joining Sinclair, he was a managing director at UBS Investment Bank's Global Media Group and head of their Los Angeles office, where he managed, advised, and structured various financings and merger and acquisition transactions in the broadcast and entertainment sectors. He also served as a principal in Prime Ventures and an analyst at Donaldson, Lufkin & Jenrette.

Narinder Sahai, Executive Vice President and Chief Financial Officer

Appointed in July 2025. He brings over 20 years of strategic financial leadership across publicly traded and private equity-backed companies. Most recently, he served as CFO at Arcis Golf, a leisure and hospitality company. Before that, he was CFO of RumbleOn, Inc., a publicly traded omnichannel powersports platform, where he built the financial planning and analysis function, launched internal audit and Sarbanes-Oxley Act compliance programs, and integrated several acquisitions. At Amazon's AWS, he was head of worldwide go-to-market finance for compute and AI/machine learning services. Earlier, he was Senior Vice President, Treasurer, and Investor Relations head at Target Hospitality, managing investor relations and capital markets activities for the company's equity public-market debut and debt financing transactions.

Rob Weisbord, Chief Operating Officer and President of Local Media

Elevated to Chief Operating Officer and President of Broadcast in February 2022. He joined Sinclair in 1997 and has held various executive management positions including Chief Operating Officer of Sinclair Digital Group, Vice President of New Media, Director of Digital Interactive Marketing, Regional Group Manager, and General Manager for the company's Las Vegas stations. He is credited with transforming Sinclair into a multiplatform media business, overseeing the growth of its digital division. His broadcasting career began in the radio industry in 1985.

David D. Smith, Executive Chairman

Has served as Executive Chairman of Sinclair Broadcast Group since 1990. He became president and CEO in 1988 and stepped down as CEO in 2017, remaining as chairman. He is the son of Julian Sinclair Smith, the founder of Sinclair Broadcast Group. From 1971 to 1978, he worked at WBFF-TV, a station run by his father. He founded Comark Communications in 1978. In 2024, he acquired majority ownership of The Baltimore Sun and its affiliated newspapers.

Del Parks, President of Technology

Has served as President of Technology since March 2022. He has been with Sinclair for over 20 years, holding roles such as Executive Vice President/Chief Technology Officer, Senior Vice President/Chief Technology Officer, and Vice President / Engineering and Operations. Earlier in his career, from 1985 to 1996, he was Director of Operations and Engineering for WBFF-TV in Baltimore. He has held various operations and engineering positions with Sinclair for 50 years.

AI Analysis | Feedback

Here are the key risks to Sinclair Broadcast Group (SBGI):

1. Declining Traditional Broadcast Viewership and Advertising Revenue: Sinclair faces significant challenges from the ongoing shift in media consumption habits, including cord-cutting and the migration of audiences to Over-The-Top (OTT) and direct-to-consumer (DTC) streaming platforms. This trend is leading to declining linear TV revenues and a broader shift in advertising spending towards digital platforms, directly impacting Sinclair's core advertising and distribution revenues.
2. Volatility and Decline in Political Advertising Revenue: Political advertising is a significant, yet highly cyclical, revenue driver for Sinclair. The company experiences notable declines in political advertising revenue during non-election years, contributing to overall revenue decreases and net losses. While the company anticipates growth in political advertising during election years, the inherent cyclicality and unpredictability remain a key risk.
3. High Debt and Exposure to Interest Rate Risks: Sinclair carries substantial variable rate debt, which exposes the company to interest rate fluctuations. Increased operating expenses, particularly from interest expenses, and higher debt service costs have contributed to substantial net losses and negatively impacted operating income. The company uses derivative financial instruments to hedge against these fluctuations, but these may not fully mitigate the risk.

AI Analysis | Feedback

The accelerated decline of the traditional pay-TV bundle and the concurrent rise of direct-to-consumer (DTC) streaming options for sports and general entertainment content represent a clear emerging threat to Sinclair's core business model. This trend directly impacts two critical revenue streams:

• Retransmission consent fees: As households continue to cut the cord, the subscriber base for traditional cable, satellite, and even virtual MVPDs shrinks. While Sinclair can negotiate higher per-subscriber fees, the diminishing overall subscriber pool ultimately constrains growth and and may lead to a net decline in total retransmission revenue, a cornerstone of Sinclair's profitability.
• Regional Sports Networks (RSNs): Sinclair's significant investment in its Bally Sports RSNs (through Diamond Sports Group) is severely jeopardized. The traditional RSN model relies on broad carriage across pay-TV bundles. As consumers abandon these bundles in favor of DTC streaming services or league-specific streaming platforms, RSNs lose a critical mass of subscribers and distribution revenue. This has already led to the bankruptcy of Sinclair's subsidiary operating the Bally Sports networks, demonstrating the immediate and severe nature of this threat.

AI Analysis | Feedback

Sinclair Broadcast Group (SBGI) operates in several addressable markets related to its main products and services. These include local broadcast television, regional sports networks, ad-supported streaming, and NEXTGEN TV datacasting services.

Local Broadcast Television

• U.S. TV Households (Audience Reach): 125,497,100 households for the 2024-2025 television season.
• U.S. Local TV Advertising Market: Approximately $33.1 billion based on 2022 data, representing television's share of the total local advertising market.

Regional Sports Networks

• U.S. Sports Broadcasting Technology Market: Projected to reach $28.62 billion by 2030.

Ad-supported Streaming (Free Ad-supported Streaming TV - FAST)

• Global FAST Market: Valued at $12.26 billion in 2025, with a projection to reach $27.14 billion by 2030.
• North America FAST Market: Projected to reach approximately $9.4 billion by 2030.

NEXTGEN TV (ATSC 3.0 Datacasting Services)

• U.S. Datacasting Revenue Potential: Estimated to generate $10.7 billion in new revenue by 2030 (middle case estimate).
• Specific U.S. Datacasting Applications:
  • Automotive Connectivity Services: Potential market of $3.7 billion annually.
  • Content Delivery Network Services: Potential market of $3.65 billion annually.
  • Enhanced GPS Services: Potential market of $220 million annually.

AI Analysis | Feedback

Expected Drivers of Future Revenue Growth for Sinclair (SBGI)

Over the next 2-3 years, Sinclair Broadcast Group (SBGI) is anticipated to drive future revenue growth through several key initiatives and market trends:

1. Political Advertising

Sinclair expects significant revenue from political advertising, particularly in upcoming election cycles. The company reported record political revenues of $405 million in 2024. Management anticipates continued strength in political revenue for 2026, driven by competitive Congressional races, with expectations to match or exceed the $333 million achieved in the 2022 midterm cycle. The 2028 presidential primaries are also expected to contribute substantially, marking only the second time since 2000 with dual open presidential primaries.

2. NextGen TV (ATSC 3.0) Monetization and Datacasting

Sinclair is actively investing in and leveraging NextGen TV (ATSC 3.0) technology, which is expected to unlock new revenue streams. The full transition to ATSC 3.0 and the eventual sunsetting of ATSC 1.0 are projected to significantly increase revenue opportunities by providing more spectrum for additional content and datacasting applications. Revenue from NextGen TV is expected to grow, with industry forecasts reaching $10 billion by 2030. Sinclair is a partner in EdgeBeam Wireless, a joint venture aiming to offer data services via ATSC 3.0, targeting potential annual markets such as automotive connectivity ($3.7 billion), content delivery networks ($3.65 billion), and enhanced GPS services ($220 million). This technology also allows for expanded channel capacity, potentially doubling revenue from existing broadcast assets, and enabling targeted advertising and interactive content.

3. Growth in Distribution Revenues

The company expects continued growth in distribution revenues, primarily from retransmission consent fees. Sinclair reported a 5% year-over-year increase in distribution revenues in Q3 2024, with 78% of its "Big 4" network MVPD linear subscriber base under new agreements. Management has reaffirmed guidance for mid-single-digit net retransmission growth for the 2023-2025 two-year compound annual growth rate (CAGR). Although Q3 2025 saw a slight decline in distribution revenue, the CEO anticipates a sequential increase in Q4 2025.

4. Improvement in Core Advertising Trends

Sinclair projects a recovery and sustained growth in core advertising revenues. In Q3 2025, core advertising revenue grew by 7% year-over-year. For Q4 2025, the company expects core advertising revenue to range from $340 million to $360 million, representing over 10% year-over-year growth at the midpoint. The CEO has noted improving core advertising trends and positive momentum across most advertising categories.

5. Mergers, Acquisitions, and Strategic Investments

Sinclair's management is optimistic about leveraging a more favorable regulatory environment to pursue mergers, acquisitions, and asset trades. The company has identified opportunities to grow its business by acquiring joint sales agreements for synergies, swapping licensed TV stations in overlapping markets, and engaging in large-scale M&A. In Q3 2025, Sinclair successfully closed 11 partner station acquisitions, with more pending, which are expected to generate an additional $30 million in annualized adjusted EBITDA. The company is also strategically repositioning its Ventures portfolio towards majority-owned, high-growth businesses like Digital Remedy and Tennis Channel.

AI Analysis | Feedback

Share Repurchases

• As of January 2023, Sinclair had repurchased 5.3 million shares for approximately $120 million, with $704 million remaining under its authorized share repurchase program.
• In the first quarter of 2023, approximately 3.6 million shares were repurchased, with an additional 5.2 million shares repurchased to date in the second quarter of 2023.
• The company reduced its shares outstanding by nearly 40% over the three years leading up to January 2023.

Outbound Investments

• Sinclair acquired the remaining 75% stake in Digital Remedy for approximately $30 million in Q1 2025, a company specializing in omnichannel media activation solutions with a focus on connected TV.
• The company acquired the Baltimore Sun Media Group in January 2024, marking a strategic shift towards digital content and marketing services.
• Sinclair made capital contributions to its Ventures minority investment portfolio of approximately $33 million in Q1 2023 and $28 million in Q4 2023.

Capital Expenditures

• For the year ending December 31, 2025, Sinclair expects capital expenditures to be between $83 million and $86 million, primarily directed towards station technical, maintenance, and building projects.
• Reported capital expenditures were $22 million in Q3 2025, $17 million in Q2 2025, $22 million in Q4 2023, and $20 million in Q1 2023.
• In Q2 2021, routine capital expenditures were $13 million, with an additional $4 million allocated for spectrum repack efforts.