UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

ý☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~September 30, 2017~~March 31, 2020

o☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to .

COMMISSION FILE NUMBER: 000-26076

SINCLAIR BROADCAST GROUP, INC.

(Exact name of Registrant as specified in its charter)



Maryland		52-1494660
(State or other jurisdiction of Incorporation or organization)		~~52-1494660~~ (I.R.S. Employer Identification No.)

10706 Beaver Dam Road

Hunt Valley, Maryland21030

(Address of principal executive office, zip code)

~~(410)~~ (410) 568-1500

(Registrant’s telephone number, including area code)

None

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:



Title of each class	Trading Symbol	Name of each exchange on which registered
Class A Common Stock, par value $ 0.01 per share	SBGI	The NASDAQ Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.



Yesx	☒	Noo	☐

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such file).



Yesx	☒	Noo	☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definitions of ~~“large~~"large accelerated ~~filer”~~filer", ~~“accelerated filer”~~"accelerated filer" and ~~“smaller~~"smaller reporting company,”" and "emerging growth company" in Rule 12b-2 of the Exchange Act. ~~(check one):~~

~~Large accelerated filer~~ x

~~Accelerated filer~~ o

~~Non-accelerated filer~~ o

~~Smaller reporting company~~ o

~~Emerging growth company~~ o

~~Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).~~

~~Yes~~ o

Large accelerated filer

☒

No x

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2). Emerging growth companyo

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).



Yes	☐	No	☒

Indicate the number of ~~share~~shares outstanding of each of the issuer’s classes of common stock as of the latest practicable date.



		Number of shares outstanding as of
Title of each class		~~Number of shares outstanding as of~~ ~~November 6, 2017~~ May 8, 2020
Class A Common Stock		~~76,071,145~~55,394,945
Class B Common Stock		~~25,670,684~~24,727,682

SINCLAIR BROADCAST GROUP, INC.

FORM 10-Q

FOR THE QUARTER ENDED ~~SEPTEMBER 30, 2017~~MARCH 31, 2020

TABLE OF CONTENTS



PART I. FINANCIAL INFORMATION	3

ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)	3

CONSOLIDATED BALANCE SHEETS	4

CONSOLIDATED STATEMENTS OF OPERATIONS	5

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME	6

CONSOLIDATED ~~STATEMENT~~STATEMENTS OF EQUITY ~~(DEFICIT)~~AND REDEEMABLE NONCONTROLLING INTERESTS	7

CONSOLIDATED STATEMENTS OF CASH FLOWS	9

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS	10

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	3638

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	49

~~ITEM 4. CONTROLS AND PROCEDURES~~	49

~~PART II. OTHER INFORMATION~~	51

~~ITEM 1. LEGAL PROCEEDINGS~~	51

~~ITEM 1A. RISK FACTORS~~	51

~~ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS~~	51

~~ITEM 3. DEFAULTS UPON SENIOR SECURITIES~~	51

~~ITEM 4. MINE SAFETY DISCLOSURES~~	51

~~ITEM 5. OTHER INFORMATION~~	51

~~ITEM 6. EXHIBITS~~	52

~~SIGNATURE~~	53

~~EXHIBIT INDEX~~ITEM 4. CONTROLS AND PROCEDURES	54

PART II. OTHER INFORMATION	56

ITEM 1. LEGAL PROCEEDINGS	56

ITEM 1A. RISK FACTORS	56

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	57

ITEM 3. DEFAULTS UPON SENIOR SECURITIES	58

ITEM 4. MINE SAFETY DISCLOSURES	58

ITEM 5. OTHER INFORMATION	58

ITEM 6. EXHIBITS	58

SIGNATURE	59

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

SINCLAIR BROADCAST GROUP, INC.

CONSOLIDATED BALANCE SHEETS

(in ~~thousands,~~millions, except share and per share data) (Unaudited)


	As of September 30, 2017			As of December 31, 2016			As of March 31, 2020			As of December 31, 2019
ASSETS
Current assets:
Cash and cash equivalents	$	602,193		$	259,984		$	1,342		$	1,333
Restricted cash	312,802			200
Accounts receivable, net of allowance for doubtful accounts of $2,510 and $2,124, respectively	523,111			513,954
Current portion of program contract costs	97,768			83,601
Accounts receivable, net of allowance for doubtful accounts of $5 and $8, respectively							1,100			1,132
Income taxes receivable	5,080			5,500			137			103
Prepaid sports rights							338			113
Prepaid expenses and other current assets	37,384			36,067			152			232
Deferred barter costs	11,093			5,782
Total current assets	1,589,431			905,088			3,069			2,913
Program contract costs, less current portion	4,513			8,919
Property and equipment, net	724,125			717,576			786			765
Restricted cash	1,501			—
Operating lease assets							226			223
Goodwill	2,113,651			1,990,746			4,716			4,716
Indefinite-lived intangible assets	168,720			156,306			158			158
Definite-lived intangible assets, net	1,841,938			1,944,403
Notes Receivable from affiliates	19,500			19,500
Customer relationships, net							5,853			5,979
Other definite-lived intangible assets, net							1,961			1,998
Other assets	223,690			220,630			591			618
Total assets (a)	$	6,687,069		$	5,963,168		$	17,360		$	17,370
LIABILITIES AND EQUITY (DEFICIT)

LIABILITIES, REDEEMABLE NON-CONTROLLING INTERESTS, AND EQUITY
Current liabilities:
Accounts payable and accrued liabilities	$	290,848		$	322,505		$	526		$	782
Deferred spectrum auction proceeds	310,802			—
Income taxes payable	1,500			23,491
Current portion of notes payable, capital leases and commercial bank financing	164,485			171,131
Current portion of notes and capital leases payable to affiliates	2,183			3,604
Current portion of notes payable, finance leases, and commercial bank financing							71			71
Current portion of operating lease liabilities							41			38
Current portion of program contracts payable	130,892			109,702			69			88
Deferred barter revenues	10,513			6,040
Other current liabilities							133			155
Total current liabilities	911,223			636,473			840			1,134
Long-term liabilities:
Notes payable, capital leases and commercial bank financing, less current portion	3,876,134			4,014,932
Notes payable and capital leases to affiliates, less current portion	12,824			14,181
Notes payable, finance leases, and commercial bank financing, less current portion							13,231			12,367
Operating lease liabilities, less current portion							216			217
Program contracts payable, less current portion	46,026			53,836			35			39
Deferred tax liabilities	661,745			609,317			429			407
Other long-term liabilities	70,818			76,493			431			434
Total liabilities (a)	5,578,770			5,405,232			15,182			14,598
Commitments and contingencies (See Note 4)
Equity:
Sinclair Broadcast Group shareholders’ equity:
Class A Common Stock, $.01 par value, 500,000,000 shares authorized, 76,032,524 and 64,558,207 shares issued and outstanding, respectively	760			646
Class B Common Stock, $.01 par value, 140,000,000 shares authorized, 25,670,684 and 25,670,684 shares issued and outstanding, respectively, convertible into Class A Common Stock	257			257
Commitments and contingencies (See Note 5)
Redeemable noncontrolling interests							522			1,078
Shareholders' equity:
Class A Common Stock, $.01 par value, 500,000,000 shares authorized, 58,352,497 and 66,830,110 shares issued and outstanding, respectively							1			1
Class B Common Stock, $.01 par value, 140,000,000 shares authorized, 24,727,682 and 24,727,682 shares issued and outstanding, respectively, convertible into Class A Common Stock							—			—
Additional paid-in capital	1,318,155			843,691			864			1,011
Accumulated deficit	(176,370		)	(255,804		)
Retained earnings							596			492
Accumulated other comprehensive loss	(807		)	(807		)	(2		)	(2		)
Total Sinclair Broadcast Group shareholders’ equity	1,141,995			587,983			1,459			1,502
Noncontrolling interests	(33,696		)	(30,047		)	197			192
Total equity	1,108,299			557,936			1,656			1,694
Total liabilities and equity	$	6,687,069		$	5,963,168
Total liabilities, redeemable noncontrolling interests, and equity							$	17,360		$	17,370

The accompanying notes are an integral part of these unaudited consolidated financial statements.

(a)

Our consolidated total assets as of ~~September 30, 2017~~March 31, 2020 and December 31, ~~2016~~2019 include total assets of variable interest entities (VIEs) of ~~$260.7~~$212 million and ~~$142.3~~$228 million, respectively, which can only be used to settle the obligations of the VIEs. Our consolidated total liabilities as of ~~September 30, 2017~~both March 31, 2020 and December 31, ~~2016~~2019 include total liabilities of ~~the~~ VIEs of ~~$160.2~~$27 million ~~and $40.9 million, respectively,~~ for which the creditors of the VIEs have no recourse to us. See Note ~~1. Nature of Operations and Summary of Significant Accounting Policies~~8. Variable Interest Entities.

SINCLAIR BROADCAST GROUP, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(in ~~thousands,~~millions, except share and per share data) (Unaudited)


	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended March 31,
	2017			2016			2017			2016			2020			2019
REVENUES:
Media revenues	$	624,169		$	635,269		$	1,858,477		$	1,772,860		$	1,574		$	673
Revenues realized from station barter arrangements	31,787			32,061			91,817			92,574
Other non-media revenues	14,935			26,505			49,821			73,824
Non-media revenues													35			49
Total revenues	670,891			693,835			2,000,115			1,939,258			1,609			722

OPERATING EXPENSES:
Media production expenses	267,993			242,880			795,140			702,377
Media programming and production expenses													828			319
Media selling, general and administrative expenses	133,605			126,672			385,372			370,169			210			160
Expenses realized from barter arrangements	26,696			27,181			77,491			79,365
Amortization of program contract costs and net realizable value adjustments	28,047			32,441			87,962			96,722			23			24
Other non-media expenses	14,945			20,488			46,921			57,946
Non-media expenses													30			39
Depreciation of property and equipment	24,442			25,886			72,026			74,330			24			23
Corporate general and administrative expenses	25,831			19,052			71,458			54,672			49			28
Amortization of definite-lived intangible and other assets	43,368			47,807			132,299			137,197			150			43
Research and development expenses	2,551			745			5,053			3,055
Gain on asset dispositions	(34		)	(3,311		)	(53,531		)	(5,982		)
Gain on asset dispositions and other, net of impairment													(32		)	(8		)
Total operating expenses	567,444			539,841			1,620,191			1,569,851			1,282			628
Operating income	103,447			153,994			379,924			369,407			327			94

OTHER INCOME (EXPENSE):
Interest expense and amortization of debt discount and deferred financing costs	(51,743		)	(53,488		)	(160,020		)	(156,819		)
Loss from extinguishment of debt	—			(23,699		)	(1,404		)	(23,699		)
(Loss) income from equity and cost method investments	(4,362		)	1,423			(4,221		)	2,789
Other income, net	2,342			789			5,601			2,355
Interest expense including amortization of debt discount and deferred financing costs													(180		)	(54		)
Gain from extinguishment of debt													2			—
Loss from equity method investments													(6		)	(14		)
Other (expense) income, net													(4		)	2
Total other expense, net	(53,763		)	(74,975		)	(160,044		)	(175,374		)	(188		)	(66		)
Income before income taxes	49,684			79,019			219,880			194,033
INCOME TAX PROVISION	(17,118		)	(26,986		)	(70,577		)	(65,771		)
Income before income tax													139			28
INCOME TAX BENEFIT (PROVISION)													12			(5		)
NET INCOME	32,566			52,033			149,303			128,262			151			23
Net income attributable to the redeemable noncontrolling interests													(20		)	—
Net income attributable to the noncontrolling interests	(1,929		)	(1,188		)	(16,820		)	(3,858		)	(8		)	(1		)
NET INCOME ATTRIBUTABLE TO SINCLAIR BROADCAST GROUP	$	30,637		$	50,845		$	132,483		$	124,404		$	123		$	22
Dividends declared per share	$	0.180		$	0.180		$	0.540		$	0.525
BASIC AND DILUTED EARNINGS PER COMMON SHARE ATTRIBUTABLE TO SINCLAIR BROADCAST GROUP:

EARNINGS PER COMMON SHARE ATTRIBUTABLE TO SINCLAIR BROADCAST GROUP:
Basic earnings per share	$	0.30		$	0.54		$	1.34		$	1.32		$	1.36		$	0.23
Diluted earnings per share	$	0.30		$	0.54		$	1.32		$	1.30		$	1.35		$	0.23
Weighted average common shares outstanding	102,245			93,948			99,210			94,595
Weighted average common and common equivalent shares outstanding	103,055			94,766			100,173			95,465
Weighted average common shares outstanding (in thousands)													90,609			92,302
Weighted average common and common equivalent shares outstanding (in thousands)													91,226			93,218

The accompanying notes are an integral part of these unaudited consolidated financial statements.

SINCLAIR BROADCAST GROUP, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in millions) (Unaudited)



	Three Months Ended March 31,
	2020			2019
Net income	$	151		$	23
Comprehensive income	151			23
Comprehensive income attributable to the redeemable noncontrolling interests	(20		)	—
Comprehensive income attributable to the noncontrolling interests	(8		)	(1		)
Comprehensive income attributable to Sinclair Broadcast Group	$	123		$	22

The accompanying notes are an integral part of these unaudited consolidated financial statements.

SINCLAIR BROADCAST GROUP, INC.

CONSOLIDATED STATEMENTS OF EQUITY

(in millions, except share and per share data) (Unaudited)



	Three Months Ended March 31, 2019
	Sinclair Broadcast Group Shareholders
	Class A Common Stock				Class B Common Stock				Additional Paid-In Capital			Retained Earnings			Accumulated Other Comprehensive Loss			Noncontrolling Interests			Total Equity
	Shares		Values		Shares		Values		Additional Paid-In Capital			Retained Earnings			Accumulated Other Comprehensive Loss			Noncontrolling Interests			Total Equity
BALANCE, December 31, 2018	68,897,723		$	1	25,670,684		$	—	$	1,121		$	517		$	(1	)	$	(38	)	$	1,600
Dividends declared and paid on Class A and Class B Common Stock ($0.20 per share)	—		—		—		—		—			(18		)	—			—			(18		)
Class B Common Stock converted into Class A Common Stock	143,002		—		(143,002	)	—		—			—			—			—			—
Repurchases of Class A Common Stock	(3,493,194	)	—		—		—		(105		)	—			—			—			(105		)
Class A Common Stock issued pursuant to employee benefit plans	694,321		—		—		—		22			—			—			—			22
Distributions to noncontrolling interests, net	—		—		—		—		—			—			—			(3		)	(3		)
Net income	—		—		—		—		—			22			—			1			23
BALANCE, March 31, 2019	66,241,852		$	1	25,527,682		$	—	$	1,038		$	521		$	(1	)	$	(40	)	$	1,519

The accompanying notes are an integral part of these unaudited consolidated financial statements.

SINCLAIR BROADCAST GROUP, INC.

CONSOLIDATED STATEMENTS OF EQUITY AND REDEEMABLE NONCONTROLLING INTERESTS

(in millions, except share and per share data) (Unaudited)



	Three Months Ended March 31, 2020
				Sinclair Broadcast Group Shareholders
	Redeemable Noncontrolling Interests			Class A Common Stock				Class B Common Stock			Additional Paid-In Capital			Retained Earnings			Accumulated Other Comprehensive Loss			Noncontrolling Interests			Total Equity
	Redeemable Noncontrolling Interests			Shares		Values		Shares	Values		Additional Paid-In Capital			Retained Earnings			Accumulated Other Comprehensive Loss			Noncontrolling Interests			Total Equity
BALANCE, December 31, 2019	$	1,078		66,830,110		$	1	24,727,682	$	—	$	1,011		$	492		$	(2	)	$	192		$	1,694
Dividends declared and paid on Class A and Class B Common Stock ($0.20 per share)	—			—		—		—	—		—			(19		)	—			—			(19		)
Repurchases of Class A Common Stock	—			(9,957,297	)	—		—	—		(176		)	—			—			—			(176		)
Class A Common Stock issued pursuant to employee benefit plans	—			1,479,684		—		—	—		29			—			—			—			29
Distributions to noncontrolling interests, net	—			—		—		—	—		—			—			—			(3		)	(3		)
Distributions to redeemable noncontrolling interests	(378		)	—		—		—	—		—			—			—			—			—
Redemption of redeemable noncontrolling interests	(198		)	—		—		—	—		—			—			—			—			—
Net income	20			—		—		—	—		—			123			—			8			131
BALANCE, March 31, 2020	522			58,352,497		$	1	24,727,682	$	—	$	864		$	596		$	(2	)	$	197		$	1,656

The accompanying notes are an integral part of these unaudited consolidated financial statements.

SINCLAIR BROADCAST GROUP, INC.

CONSOLIDATED STATEMENTS OF ~~COMPREHENSIVE INCOME~~CASH FLOWS

(in ~~thousands)~~millions) (Unaudited)

Three Months Ended
September 30, Nine Months Ended
September 30,
2017 2016 2017 2016
Net income $ 32,566
$ 52,033
$ 149,303
$ 128,262
Comprehensive income 32,566
52,033
149,303
128,262
Comprehensive income attributable to the noncontrolling interests (1,929 ) (1,188 ) (16,820 ) (3,858 )
Comprehensive income attributable to Sinclair Broadcast Group $ 30,637
$ 50,845
$ 132,483
$ 124,404



	Three Months Ended March 31,
	2020			2019
CASH FLOWS (USED IN) FROM OPERATING ACTIVITIES:
Net income	$	151		$	23
Adjustments to reconcile net income to net cash flows from operating activities:
Depreciation of property and equipment	24			23
Amortization of definite-lived intangible and other assets	150			43
Amortization of program contract costs and net realizable value adjustments	23			24
Stock-based compensation	17			11
Deferred tax benefit	22			2
Gain on asset disposition and other, net of impairment	(32		)	(8		)
Loss from equity method investments	6			14
Distributions from investments	24			1
Amortization of sports programming rights	391			—
Sports programming rights payments	(612		)	—
Gain on extinguishment of debt	(2		)	—
Change in assets and liabilities, net of acquisitions:
Decrease in accounts receivable	34			16
Decrease (increase) in prepaid expenses and other current assets	44			(23		)
Decrease in accounts payable and accrued and other current liabilities	(240		)	(18		)
Net change in net income taxes payable/receivable	(34		)	1
Decrease in program contracts payable	(23		)	(24		)
Other, net	18			14
Net cash flows (used in) from operating activities	(39		)	99
CASH FLOWS USED IN INVESTING ACTIVITIES:
Acquisition of property and equipment	(46		)	(29		)
Spectrum repack reimbursements	24			8
Proceeds from the sale of assets	18			—
Purchases of investments	(25		)	(28		)
Other, net	6			2
Net cash flows used in investing activities	(23		)	(47		)
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES:
Proceeds from notes payable and commercial bank financing	873			—
Repayments of notes payable, commercial bank financing, and finance leases	(20		)	(11		)
Repurchase of outstanding Class A Common Stock	(176		)	(105		)
Dividends paid on Class A and Class B Common Stock	(18		)	(18		)
Redemption of redeemable subsidiary preferred equity	(198		)	—
Distributions to noncontrolling interests, net	(3		)	(2		)
Distributions to redeemable noncontrolling interests	(378		)	—
Other, net	(9		)	(1		)
Net cash flows from (used in) financing activities	71			(137		)
NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH	9			(85		)
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, beginning of period	1,333			1,060
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, end of period	$	1,342		$	975

The accompanying notes are an integral part of these unaudited consolidated financial statements.

~~SINCLAIR BROADCAST GROUP, INC.~~

~~CONSOLIDATED STATEMENT OF EQUITY (DEFICIT)~~

~~(in thousands) (Unaudited)~~

Sinclair Broadcast Group Shareholders

Class A
Common Stock

Class B
Common Stock

Additional
Paid-In
Capital

Accumulated
Deficit

Accumulated
Other
Comprehensive
Loss

Noncontrolling
Interests

Total Equity
(Deficit)
Shares Values Shares Values
BALANCE, December 31, 2015 68,792,483
$ 688
25,928,357
$ 259
$ 962,726
$ (437,029 ) $ (834 ) $ (26,132 ) $ 499,678
Cumulative effect of adoption of new accounting standards —
—
—
—
431
1,833
—
—
2,264
Dividends declared and paid on Class A and Class B Common Stock —
—
—
—
—
(49,667 ) —
—
(49,667 )
Repurchases of Class A Common Stock (3,610,201 ) (37 ) —
—
(101,127 ) —
—
—
(101,164 )
Class A Common Stock issued pursuant to employee benefit plans
364,319
4
—
—
14,865
—
—
—
14,869
Distributions to noncontrolling interests —
—
—
—
—
—
—
(8,363 ) (8,363 )
Issuance of subsidiary stock awards —
—
—
—
—
—
—
787
787
Net income —
—
—
—
—
124,404
—
3,858
128,262
BALANCE, September 30, 2016 65,546,601
$ 655
25,928,357
$ 259
$ 876,895
$ (360,459 ) $ (834 ) $ (29,850 ) $ 486,666

~~The accompanying notes are an integral part of these unaudited consolidated financial statements.~~

~~SINCLAIR BROADCAST GROUP, INC.~~

~~CONSOLIDATED STATEMENT OF EQUITY (DEFICIT)~~

~~(In thousands) (Unaudited)~~

Sinclair Broadcast Group Shareholders

Class A
Common Stock

Class B
Common Stock

Additional
Paid-In
Capital

Accumulated
Deficit

Accumulated
Other
Comprehensive
Loss

Noncontrolling
Interests

Total Equity
(Deficit)
Shares Values Shares Values
BALANCE, December 31, 2016 64,558,207
$ 646
25,670,684
$ 257
$ 843,691
$ (255,804 ) $ (807 ) $ (30,047 ) $ 557,936
Issuance of common stock, net of issuance costs 12,000,000
120
—
—
487,763
—
—
—
487,883
Dividends declared and paid on Class A and Class B Common Stock —
—
—
—
—
(53,049 ) —
—
(53,049 )
Repurchases of Class A Common Stock (997,300 ) (10 ) —
—
(30,277 ) —
—
—
(30,287 )
Class A Common Stock issued pursuant to employee benefit plans 471,617
4
—
—
16,978
—
—
—
16,982
Distributions to noncontrolling interests, net —
—
—
—
—
—
—
(20,469 ) (20,469 )
Net income —
—
—
—
—
132,483
—
16,820
149,303
BALANCE, September 30, 2017 76,032,524
$ 760
25,670,684
$ 257
$ 1,318,155
$ (176,370 ) $ (807 ) $ (33,696 ) $ 1,108,299

~~The accompanying notes are an integral part of these unaudited consolidated financial statements.~~

~~SINCLAIR BROADCAST GROUP, INC.~~

~~CONSOLIDATED STATEMENTS OF CASH FLOWS~~

~~(in thousands) (Unaudited)~~

Nine Months Ended September 30,
2017 2016
CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES:

Net income $ 149,303
$ 128,262
Adjustments to reconcile net income to net cash flows from operating activities:

Depreciation of property and equipment 72,026
74,330
Amortization of definite-lived intangible and other assets 132,299
137,197
Amortization of program contract costs and net realizable value adjustments 87,962
96,722
Loss on extinguishment of debt, non-cash portion 1,404
3,875
Stock-based compensation expense 12,905
13,470
Deferred tax provision (benefit) (13,285 ) 6,631
Gain on asset dispositions (53,531 ) (5,982 )
Change in assets and liabilities, net of acquisitions:

Decrease (increase) in accounts receivable 2,167
(77,118 )
Increase in prepaid expenses and other current assets (1,057 ) (4,344 )
(Decrease) increase in accounts payable and accrued liabilities (28,237 ) 36,286
Net change in net income taxes payable/receivable (21,571 ) (8,411 )
Payments on program contracts payable (84,499 ) (84,625 )
Other, net 22,525
13,967
Net cash flows from operating activities 278,411
330,260

CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES:

Acquisition of property and equipment (55,463 ) (68,601 )
Acquisition of businesses, net of cash acquired (269,799 ) (425,856 )
Purchase of alarm monitoring contracts (5,682 ) (29,143 )
Proceeds from sale of non-media business 192,634
16,396
Investments in equity and cost method investees (22,302 ) (34,224 )
Loans to affiliates —
(19,500 )
Other, net (550 ) 3,401
Net cash flows used in investing activities (161,162 ) (557,527 )

CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES:

Proceeds from notes payable and commercial bank financing 166,041
1,011,312
Repayments of notes payable, commercial bank financing and capital leases (318,309 ) (653,987 )
Net proceeds from the sale of Class A Common Stock 487,883
—
Dividends paid on Class A and Class B Common Stock (53,049 ) (49,667 )
Distributions to noncontrolling interests (20,469 ) (8,363 )
Repurchase of outstanding Class A Common Stock (30,287 ) (101,164 )
Payments for deferred financing cost (731 ) (15,598 )
Other, net (6,119 ) (693 )
Net cash flows from financing activities 224,960
181,840
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 342,209
(45,427 )
CASH AND CASH EQUIVALENTS, beginning of period 259,984
149,972
CASH AND CASH EQUIVALENTS, end of period $ 602,193
$ 104,545

~~The accompanying notes are an integral part of these unaudited consolidated financial statements.~~

SINCLAIR BROADCAST GROUP, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

1.NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Nature of Operations

Sinclair Broadcast Group, Inc. (the Company) is a diversified television ~~broadcasting~~media company with national reach and a strong focus on providing high-quality content on our local television stations, regional sports networks, and digital platforms. The content, distributed through our broadcast platform and third-party platforms, consists of programming provided by third-party networks and syndicators, local news, college and professional sports, and other original programming produced by us. ~~We also distribute our original programming, and owned and operated network affiliates, on other third-party platforms.~~ Additionally, we own digital media products that are complementary to our extensive portfolio of television station related digital properties. Outside of our media related businesses, we operate technical services companies focused on supply and maintenance of broadcast transmission systems as well as research and development for the advancement of broadcast technology, and we manage other non-media related investments.

As of ~~September 30, 2017, our broadcast distribution platform is a single~~March 31, 2020, we had 2 reportable ~~segment~~segments for accounting ~~purposes. It~~purposes, local news and marketing services and sports. The local news and marketing services segment consists primarily of our 191 broadcast television stations in 89 markets, which we own, provide programming and operating services pursuant to agreements commonly referred to as local marketing agreements (LMAs), or provide sales services and other non-programming operating services pursuant to other outsourcing agreements (such as joint sales agreements (JSAs) and shared services agreements (SSAs)) ~~to 192 stations in 89 markets.~~. These stations broadcast ~~586~~631 channels as of ~~September 30, 2017.~~March 31, 2020. For the purpose of this report, these ~~192~~191 stations and ~~586~~631 channels are referred to as ~~“our”~~"our" stations and channels. The sports segment consists primarily of 21 regional sports network brands (the Acquired RSNs), the Marquee Sports Network (Marquee), and a 20% equity interest in the Yankee Entertainment and Sports Network, LLC (YES Network). We refer to the Acquired RSNs and Marquee as "the RSNs." The RSNs and YES Network, on a combined basis, own the exclusive rights to air, among other sporting events, the games of 44 professional sports teams and the RSNs are renegotiating rights with one team.

Principles of Consolidation

The consolidated financial statements include our accounts and those of our wholly-owned and majority-owned subsidiaries, including the operating results of the regional sports networks acquired on August 23, 2019, as discussed in Note 2. Acquisitions and Dispositions of Assets, and variable interest entities (VIEs) for which we are the primary beneficiary. Noncontrolling ~~interest represents~~interests represent a minority owner’s proportionate share of the equity in certain of our consolidated entities. Noncontrolling interests which may be redeemed by the holder, and the redemption is outside of our control, are presented as redeemable noncontrolling interests. All intercompany transactions and account balances have been eliminated in consolidation.

We consolidate VIEs when we are the primary beneficiary. We are the primary beneficiary of a VIE when we have the power to direct the activities of the VIE that most significantly impact the economic performance of the VIE and have the obligation to absorb losses or the right to receive returns that would be significant to the VIE. See Note 8. Variable Interest Entities for more information on our VIEs.

Investments in entities over which we have significant influence but not control are accounted for using the equity method of accounting. Income from equity method investments represents our proportionate share of net income generated by equity method investees.

Interim Financial Statements

The consolidated financial statements for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2020 and ~~2016~~2019 are unaudited. In the opinion of management, such financial statements have been presented on the same basis as the audited consolidated financial statements and include all adjustments, consisting only of normal recurring adjustments necessary for a fair statement of the consolidated balance sheets, consolidated statements of operations, consolidated statements of comprehensive income, consolidated ~~statement~~statements of equity ~~(deficit)~~and redeemable noncontrolling interests, and consolidated statements of cash flows for these periods as adjusted for the adoption of recent accounting pronouncements discussed below.

As permitted under the applicable rules and regulations of the Securities and Exchange Commission (SEC), the consolidated financial statements do not include all disclosures normally included with audited consolidated financial statements and, accordingly, should be read together with the audited consolidated financial statements and notes thereto in our Annual Report on Form 10-K for the year ended December 31, ~~2016~~2019 filed with the SEC. The consolidated statements of operations presented in the accompanying consolidated financial statements are not necessarily representative of operations for an entire year.

~~Variable Interest Entities~~

Equity Investments

~~In determining whether we are the primary beneficiary of a VIE for financial reporting purposes, we consider whether~~We measure our investments, excluding equity method investments, at fair value or, in situations where fair value is not readily determinable, we have the ~~power~~option to ~~direct~~value investments at cost plus observable changes in value less impairment. Investments accounted for utilizing the ~~activities~~measurement alternative were $38 million, net of $7 million of cumulative impairments, as of March 31, 2020 and $28 million, net of $7 million of cumulative impairments, as of December 31, 2019. There were 0 adjustments to the carrying amount of investments accounted for utilizing the measurement alternative for the three months ended March 31, 2020 and a $2 million impairment related to one investment for the three months ended March 31, 2019, which is reflected in other income (expense), net in our consolidated statements of operations.

YES Network Investment. On August 29, 2019, an indirect subsidiary of Diamond Sports Group, LLC (DSG), an indirect wholly-owned subsidiary of the ~~VIE that most significantly impact the economic performance~~Company, acquired a 20% equity interest in YES Network for cash consideration of ~~the VIE and whether we have the obligation to absorb losses or the right to receive returns that would be significant to the VIE.~~$346 million as part of a consortium led by Yankee Global Enterprises. We ~~consolidate VIEs when we are the primary beneficiary.~~

~~Third-party station licensees.~~ Certain of our stations provide services to other station owners within the same respective market through agreements, such as LMAs, where we provide programming, sales, operational and administrative services, and JSAs and SSAs, where we provide non-programming, sales, operational and administrative services. In certain cases, we have also entered into purchase agreements or options to purchase the license related assets of the licensee. We typically own the majority of the non-license assets of the stations, and in some cases where the licensee acquired the license assets concurrent with our acquisition of the non-license assets of the station, we have provided guarantees to the bankaccount for ~~the licensee’s acquisition financing. The terms of the agreements vary, but generally have initial terms of over five years with several optional renewal terms. Based on the terms~~

~~of the agreements and the significance of~~ our investment in the ~~stations, we are the primary beneficiary when, subject to the ultimate control of the licensees, we have the power to direct the activities~~YES Network as an equity method investment, which significantly impact the economic performance of the VIE through the services we provide and we absorb losses and returns that would be considered significant to the VIEs. The fees paid between us and the licensees pursuant to these arrangements are eliminated in consolidation. Several of these VIEs are owned by a related party, Cunningham Broadcasting Corporation (Cunningham). See ~~Note 7. Related Person Transactions~~ ~~for more information about the arrangements with Cunningham. See~~ ~~Changes in the Rules of Television Ownership, Joint Sales Agreements, Retransmission Consent Negotiations, and National Ownership Cap~~is recorded within ~~Note 4. Commitments and Contingencies~~ ~~for discussion of recent changes in Federal Communications Commission (FCC) rules related to JSAs.~~

~~As of the dates indicated, the carrying amounts and classification of the~~other assets ~~and liabilities of the VIEs mentioned above which have been included~~ in our consolidated balance sheets, ~~for the periods presented (in thousands):~~

September 30,
2017 December 31,
2016
ASSETS

Current assets:

Restricted cash $ 122,948
$ —
Accounts receivable 18,820
21,879
Other current assets 12,851
12,076
Total current assets 154,619
33,955

Program contract costs, less current portion 1,091
2,468
Property and equipment, net 6,418
2,996
Goodwill and indefinite-lived intangible assets 16,475
16,475
Definite-lived intangible assets, net 76,487
79,509
Other assets 5,601
6,871
Total assets $ 260,691
$ 142,274

LIABILITIES

Current liabilities:

Deferred spectrum auction proceeds $ 122,948
$ —
Other current liabilities 23,899
18,992

Long-term liabilities:

Notes payable, capital leases and commercial bank financing, less current portion 15,043
19,449
Program contracts payable, less current portion 12,063
14,353
Other long-term liabilities 8,452
12,921
Total liabilities $ 182,405
$ 65,715

~~The amounts above represent the consolidated assets~~ and ~~liabilities~~in which our proportionate share of the ~~VIEs described above, for which we are~~net income generated by the ~~primary beneficiary, and have been aggregated as they all relate to our broadcast business. Excluded~~investment is represented within loss from the amounts above are payments made to Cunningham under the LMAs and certain outsourcing agreements which are treated as a prepayment of the purchase price of the stations and capital leases between us and Cunningham which are eliminated in consolidation. The total payments made under these LMAs and certain JSAs as of September 30, 2017 and December 31, 2016, which are excluded from liabilities above, were $42.8 million and $40.8 million, respectively. The total capital lease liabilities, net of capital lease assets, excluded from the above were $4.7 million and $4.5 million for the years ended September 30, 2017 and December 31, 2016, respectively. Also excluded from the amounts above are liabilities associated with certain outsourcing agreements and purchase options with certain VIEs totaling $78.1 million and $74.5 million as of September 30, 2017 and December 31, 2016, respectively, as these amounts are eliminated in consolidation. The assets of each of these consolidated VIEs can only be used to settle the obligations of the VIE. All the liabilities are non-recourse to us except for certain debt of VIEs which we guarantee. The risk and reward characteristics of the VIEs are similar.

~~Other investments.~~ We have investments in real estate ventures and investment companies which are considered VIEs. However, we do not participate in the management of these entities including the day-to-day operating decisions or other decisions which

~~would allow us to control the entity, and therefore, we are not considered the primary beneficiary of these VIEs. We account for these entities using the~~ equity ~~or cost method of accounting.~~

The carrying amounts of our investments in these VIEs for which we are not the primary beneficiary as of September 30, 2017 and December 31, 2016 are $105.2 million and $117.0 million, respectively, and are included in other assets in the consolidated balance sheets. Our maximum exposure is equal to the carrying value of our investments. The income and loss related to these investments are recorded in income from equity and cost method investments in ~~the~~our consolidated ~~statement~~statements of operations. WeDuring the three months ended March 31, 2020, we recorded ~~loss of $1.3 million and~~ income of ~~$2.1~~$5 million ~~for the three and nine months ended September 30, 2017, and income of $1.4 million and $2.8 million for the three and nine months ended September 30, 2016, respectively.~~related to our investment.

Use of Estimates

The preparation of financial statements in accordance with accounting principles generally accepted in the United States of

America requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses in the consolidated financial statements and in the disclosures of contingent assets and liabilities. Actual results could differ from those estimates.

As of March 31, 2020, the impact of the outbreak of the novel coronavirus (COVID-19) continues to create significant uncertainty and disruption in the global economy and financial markets. It is reasonably possible that these uncertainties could materially impact our estimates related to, but not limited to, revenue recognition, goodwill and intangible assets, program contract costs, sports programming rights, and income taxes. As a result, many of our estimates and assumptions require increased judgment and carry a higher degree of variability and volatility. Our estimates may change as new events occur and additional information emerges, and such changes are recognized or disclosed in our consolidated financial statements.

Recent Accounting Pronouncements

In ~~May 2014,~~June 2016, the ~~Financial Accounting Standards Board (FASB)~~FASB issued amended guidance on ~~revenue recognition~~the accounting for ~~revenue from contracts with customers. This~~credit losses on financial instruments. Among other provisions, this guidance ~~requires an entity~~introduces a new impairment model for most financial assets and certain other instruments. For trade and other receivables, held-to-maturity debt securities, loans and other instruments, entities will be required to ~~recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers and~~use a forward-looking “expected loss” model that will replace ~~most existing revenue~~the current “incurred loss” model that will generally result in the earlier recognition of allowances for losses. We adopted this guidance ~~when it becomes effective.~~during the first quarter of 2020. The new standard will be effective for annual reporting periods beginning after December 15, 2017. The standard permits the use of either the retrospective or cumulative effect transition method. Since ASU 2014-09 was issued, several additional ASUs have been issued and incorporated within ASC 606 to clarify various elementsimpact of the ~~guidance. We have~~adoption did not ~~finalized our assessment of the impact of this guidance on our consolidated financial statements. However, we do not currently believe that the adoption of this guidance will~~ have a material impact on our ~~station advertising~~consolidated financial statements.

In August 2018, the FASB issued guidance which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or ~~retransmission consent revenue.~~obtain internal-use software, with the capitalized implementation costs of a hosting arrangement that is a service contract expensed over the term of the hosting arrangement. We adopted this guidance during the first quarter of 2020. The impact of the adoption did not have ~~determined~~a material impact on our consolidated financial statements.

In October 2018, the FASB issued guidance for determining whether a decision-making fee is a variable interest. The amendments require organizations to consider indirect interests held through related parties under common control on a proportional basis rather than as the equivalent of a direct interest in its entirety (as currently required in GAAP). We adopted this guidance during the first quarter of 2020. The impact of the adoption did not have a material impact on our consolidated financial statements.

In March 2019, the FASB issued guidance which requires that ~~under~~an entity test a film or license agreement within the ~~new standard, certain barter revenue and expense related to syndicated programming will no longer be recognized. Barter revenues and expenses~~scope of Subtopic 920-350 for impairment at the ~~three and nine months ending September 30, 2017 was $26.4 million and $76.4 million, respectively.~~film group level, when the film or license agreement is predominantly monetized with other films and/or license agreements. We adopted this guidance during the first quarter of 2020. The impact of the adoption did not have a material impact on our consolidated financial statements. See Broadcast Television Programming below for further information on our accounting for television program contracts.

In ~~January 2016,~~December 2019, the FASB issued ~~new~~ guidance which ~~address~~is intended to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain ~~aspects of recognition, measurement, presentation,~~exceptions to the general principles in Topic 740 and ~~disclose of financial instruments. The new~~also clarifies and amends existing guidance ~~requires entities~~ to measure equity investments (except those accounted for under the equity method of accounting or those that resulted in consolidation of the investee) at fair value, with changes in fair value recognized in net income. The new standard isimprove consistent application. ASU 2019-12 will be effective for ~~the~~ interim and annual periods beginning after December 15, ~~2017. We are currently evaluating the impact of this guidance on our consolidated financial statements.~~

In February 2016, the FASB issued new guidance related to accounting for leases, which requires the assets and liabilities that arise from leases to be recognized on the balance sheet. Currently only capital leases are recorded on the balance sheet. This update will require the lessee to recognize a lease liability equal to the present value of the lease payments and a right-of-use asset representing its right to use the underlying asset for the lease term for all leases longer than 12 months. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and liabilities and recognize the lease expense for such leases generally on a straight-line basis over the lease term. This new guidance will be effective for fiscal periods beginning after December 15, 2018, including interim periods within that reporting period.2020. Early adoption is permitted. We are currently evaluating the impact of this guidance on our consolidated financial statements.

In ~~August 2016,~~March 2020, the FASB issued ~~new~~ guidance ~~related~~providing optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by the ~~classification~~discontinuation of ~~certain cash receipts and cash payments.~~the London Interbank Offered Rate (“LIBOR”) or by another reference rate expected to be discontinued. The new standard, which includes eight specific cash flow issues with the objective of reducing the existing diversity in practice as to how cash receipts and cash payments are represented in the statement of cash flow. The new standardguidance is effective for ~~fiscal year beginning after~~all entities as of March 12, 2020 and may be applied prospectively through December ~~15, 2017, including the interim periods within that reporting period. Early adoption is permitted.~~31, 2022. We are currently evaluating the impact of this guidance on our consolidated financial ~~statements.~~statements, if elected.

~~In October 2016,~~

Broadcast Television Programming

We have agreements with rights holders for the ~~FASB issued new~~rights to television programming over contract periods, which generally run from one to seven years. Contract payments are made in installments over periods that are generally equal to or shorter than the contract period. Pursuant to accounting guidance for the broadcasting industry, an asset and a liability for the rights acquired and obligations incurred under a license agreement are reported on the balance sheet when the cost of each program is known or reasonably determinable, the program material has been accepted by the licensee in accordance with the conditions of the license agreement, and the program is available for its first showing or telecast. The portion of program contracts which becomes payable within one year is reflected as a current liability in the accompanying consolidated balance sheets.

The rights to this programming are reflected in the accompanying consolidated balance sheets at the lower of unamortized cost or fair value. Program contract costs are amortized on a straight-line basis except for contracts greater than three years which are amortized utilizing an accelerated method. Program contract costs estimated by management to be amortized in the succeeding year are classified as current assets. Payments of program contract liabilities are typically made on a scheduled basis and are not affected by amortization or fair value adjustments.

Fair value is determined utilizing a discounted cash flow model based on management’s expectation of future advertising revenues, net of sales commissions, to be generated by the program material. We assess our program contract costs on a quarterly basis to ensure the costs are recorded at the lower of unamortized cost or fair value in accordance with the accounting guidance for the broadcasting industry.

Sports Programming Rights

We have multi-year program rights agreements that provide the Company with the right to produce and telecast professional live sports games within a specified territory in exchange for a rights fee. A prepaid asset is recorded for rights acquired related to future games upon payment of the ~~accounting~~contracted fee. The assets recorded for ~~income tax consequences~~the acquired rights are classified as current or non-current based on the period when the games are expected to be aired. Liabilities are recorded for any program rights obligations that have been incurred but not yet paid at period end. We amortize these programing rights as an expense over each season based upon contractually stated rates. Amortization is accelerated in the event that the stated contractual rates over the term of ~~intra-entity transfers~~the rights agreement results in an expense recognition pattern that is inconsistent with the projected growth of ~~assets other than inventory. Currently~~revenue over the contractual term.

On March 12, 2020, the NBA and NHL suspended their seasons as a result of the COVID-19 pandemic. On this date, the Company suspended the recognition of ~~current and deferred income taxes for an intra-entity are prohibited until~~amortization expense associated with program rights agreements with teams within these leagues. Amortization expense will resume over the ~~asset has been sold to an outside party. This update requires an entity to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory~~modified seasons when the ~~transfer occurs. We adopted this guidance during the first quarter of 2017.~~games commence. The ~~impact~~timing and format of the ~~adoption~~remaining 2019-2020 NBA and NHL seasons is uncertain. On March 12, 2020, MLB also announced the delay of the 2020 regular season. This delay did not have a material ~~impact~~effect on ~~our financial statements.~~

~~In October 2016, the FASB issued new guidance which relates to related party considerations in the variable interest entities assessment. The new standard is effective~~amortization expense for the ~~interim~~threemonths ended March 31, 2020 as the season has not yet commenced; however, the season delay will impact the timing and ~~annual periods beginning after December 15, 2017. We adopted this guidance during~~potentially the ~~first quarter~~amount of ~~2017. The impact~~amortization recognized in future periods.

Certain rights agreements with professional teams contain provisions which require the rebate of rights fees paid by the ~~adoption did not have~~Company if a ~~material impact on our financial statements.~~

~~In November 2016, FASB issued new guidance related to the classification and presentation~~contractually minimum number of changes in restricted cash on the statement of cash flows. This new standard requires that a statement of cash flow explain change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling from period to period as shown on the cash flow. The new standard is effective for the fiscal year beginning after December 15, 2017, including the interim periods within that reporting period. Early adoption is permitted. Upon adoption, we will retrospectively reconcile the consolidated statement of cash flows to the restricted cash balance included in the consolidated balance sheet for the period presented in our financial statements. We are currently evaluating the method of presentation on our financial statements.

In January 2017, the FASB issued guidance which clarifies the definition of a business with additional guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The new standard should be applied prospectively and is effective for the interim and annual periods beginning after December 15, 2017. We do not expect the adoption of this guidance will have a material impact on our financial statements.

In January 2017, the FASB issued guidance which eliminates the requirement to calculate the implied fair value of goodwill to measure a goodwill impairment charge. The new standard should be applied prospectively and is effective for the interim and annual periods beginning after December 15, 2019. Early adoption is permitted. We adopted this guidance during the first quarter of 2017. The impact of the adoption did not have a material impact on our financial statements.

In May 2017, the FASB issued new guidance which relates to stock based compensation and clarifies when to account for a change to the terms or conditions of a share-based payment award as a modification. Under the new guidance, modification accounting is required only if the fair value, the vesting conditions, or the classification of the award (as equity or liability) changes as a result of the change in terms or conditions. The new standard is effective for the interim and annual periods beginning after December 15, 2017. We adopted this guidance during the second quarter of 2017. The impact of the adoption did not have a material impact on our financial statements.

~~Broadcast Incentive Auction~~

Congress authorized the FCC to conduct so-called “incentive auctions” to auction and re-purpose broadcast television spectrum for mobile broadband use. Pursuant to the auction, television broadcasters submitted bids to receive compensation for relinquishing all or a portion of its rights in the television spectrum of their full-service and Class A stations. Low power stations were not eligible to participate in the auction andlive games are not ~~protected and therefore may be displaced or forced to go off the air as a result~~delivered. As of the post-auction repacking process. On April 13, 2017, the FCC issued a public notice which announced the conclusion of the spectrum auction. In July 2017, we received $310.8 million of gross proceeds from the auction. These proceeds are reflected as restricted cash because we directed the FCC to deposit those proceeds with the qualifying intermediaries accounts to facilitate potential like kind exchange transactions.

We are limited in our ability to access this cash for a period of time which ends at the earlier of the date that we close on the acquisition of qualifying replacement property or 180 days from the date that the cash was received. We received the auction proceeds in advance of vacating the spectrum sold in the auction; as a result, we have recorded a corresponding deferred liability of $310.8 million. We expect to recognize a gain of approximately $308.2 million once we vacate/cease using the spectrum sold in the auction which we expect will occur during the first quarter of 2018. The results of the auction are not expected to produce any material change in operations ofMarch 31, 2020, the Company ~~as there is no change in on air operations.~~

~~In the repacking process~~has not recorded any receivables associated with the auction, the FCC has reassigned some stations to new post-auction channels. We do not expect reassignment to new channels to have a material impact on our coverage. We have received notification from the FCC that 98 of our stations have been assigned to new channels. The legislation authorizing the incentive auction provides the FCC with a $1.75 billion fund to reimburse reasonable costs incurred by stations that are reassigned to new channels in the repack. We expect that the reimbursements from the fund will cover the majority of our expenses related to the repack. However, we cannot predict whether the fund will be sufficient to reimburse all of our expenses. The sufficiency of the fund is dependent upon a number of factors including the amounts to be reimbursed to other industry participants for repacking costs.these rebate provisions.

Revenue Recognition

~~Total revenues include: (i) station~~The following table presents our revenue disaggregated by type and segment (in millions):



For the three months ended March 31, 2020	Local News and Marketing Services		Sports		Other		Eliminations			Total
Distribution revenue	$	355	$	752	$	49	$	—		$	1,156
Advertising revenue	310		55		35		—			400
Other media, non-media, and intercompany revenues	36		5		44		(32		)	53
Total revenues	$	701	$	812	$	128	$	(32	)	$	1,609

For the three months ended March 31, 2019	Local News and Marketing Services		Sports		Other		Eliminations			Total
Distribution revenue	$	320	$	—	$	32	$	—		$	352
Advertising revenue	288		—		20		—			308
Other media, non-media, and intercompany revenue	11		—		55		(4		)	62
Total revenues	$	619	$	—	$	107	$	(4	)	$	722

Distribution Revenue. We generate distribution revenue through fees received from MVPDs and vMVPDs for the right to distribute our stations, RSNs, and other properties. Distribution arrangements are generally governed by multi-year contracts and the underlying fees are based upon a contractual monthly rate per subscriber. These arrangements represent licenses of intellectual property; revenue is recognized as the signal or network programming is provided to our customers (as usage occurs) which corresponds with the satisfaction of our performance obligation. Revenue is calculated based upon the contractual rate multiplied by an estimated number of subscribers. Our customers will remit payments based upon actual subscribers a short time after the conclusion of a month, which generally does not exceed 120 days. Historical adjustments to subscriber estimates have not been material.

Certain of our distribution arrangements contain provisions that require the Company to deliver a minimum number of live professional sports games or tournaments during a defined period which usually corresponds with a calendar year. If the minimum threshold is not met, we may be obligated to refund a portion of the distribution fees received if shortfalls are not cured within a specified period of time. Our ability to meet these requirements is primarily driven by the delivery of games by the professional sports leagues. The Company has not historically paid any material rebates under these contractual provisions as it is unusual for there to be an event which is significant enough to preclude the Company from meeting or exceeding these thresholds. The COVID-19 pandemic has resulted in significant disruptions to the normal operations of the professional sports leagues resulting in delays and uncertainty with respect to regularly scheduled games. Decisions made by the leagues regarding the timing and format of the revised 2020 seasons may result in our inability to meet these minimum requirements and the need to reduce revenue based upon estimated rebates due to our distribution customers.

Advertising Revenue. We generate advertising revenue ~~net~~primarily from the sale of ~~agency commissions;~~advertising spots/impressions within our broadcast television, RSN, and digital platforms.

In accordance with ASC 606, we do not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) ~~barter advertising revenues; (iii) retransmission consent fees; (iv) other media~~distribution arrangements which are accounted for as a sales/usage based royalty.

Deferred Revenue. We record deferred revenue when cash payments are received or due in advance of our performance, including amounts which are refundable. Deferred revenue was $45 million and $54 million as of March 31, 2020 and December 31, 2019, respectively. Deferred revenue recognized during the three months ended March 31, 2020 and 2019 that was included in the deferred revenue balance as of December 31, 2019 and 2018 was $30 million and $38 million, respectively.

For the three months ended March 31, 2020, 3 customers accounted for 20%, 17%, and 12%, respectively, of our total revenues and ~~(v) revenues from our other businesses.~~

~~Advertising revenues, net of agency commissions, are recognized in the period during which advertisements are placed.~~

~~Some~~19%, 17%, and 12%, respectively, of our ~~retransmission consent agreements contain both advertising and retransmission consent elements. We have determined that these retransmission consent agreements are revenue arrangements with~~accounts receivable, net. For purposes of this disclosure, a single customer may include multiple ~~deliverables. Advertising and retransmission consent deliverables sold~~entities under our agreements are separated into different units of accounting at fair value. Revenue applicable to the advertising element of the arrangement is recognized similar to the advertising revenue policy noted above. Revenue applicable to the retransmission consent element of the arrangement is recognized over the life of the agreement.common control.

Income Taxes

Our income tax provision for all periods consists of federal and state income taxes. The tax provision for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2020 and ~~2016~~2019 is based on the estimated effective tax rate applicable for the full year after taking into account discrete tax items and the effects of the noncontrolling interests. We provide a valuation allowance for deferred tax assets if we determine that it is more likely than not that some or all of the deferred tax assets will not be realized. In evaluating our ability to realize net deferred tax assets, we consider all available evidence, both positive and negative, including our past operating results, tax planning strategies and forecasts of future taxable income. In considering these sources of taxable income, we must make certain judgments that are based on the plans and estimates used to manage our underlying businesses on a long-term basis. A valuation allowance has been provided for deferred tax assets related to a substantial portion of our available state net operating loss (NOL) carryforwards, based on past operating results, expected timing of the reversals of existing temporary book/tax basis differences, alternative tax strategies and projected future taxable income.

Our effective income tax rate for the three ~~and nine~~ months ended ~~September 30, 2017 and 2016, approximated~~March 31, 2020 was less than the statutory ~~rate.~~rate primarily due to $27 million of federal tax credits related to investments in sustainability initiatives and a $13 million discrete benefit as a result of the CARES Act allowing for the estimated 2020 federal net operating loss to be carried back to pre-2018 years when the federal tax rate was 35%. Our effective income tax rate for the three months ended March 31, 2019 was less than the statutory rate primarily due to $5 million of federal tax credits related to investments in sustainability initiatives partially offset by a $3 million increase in liability for unrecognized tax benefits.

~~Equity Offering~~We believe it is reasonably possible that our liability for unrecognized tax benefits related to continuing operations could be reduced by up to $4 million, in the next twelve months, as a result of expected statute of limitations expirations, the application of limits under available state administrative practice exceptions, and the resolution of examination issues and settlements with federal and certain state tax authorities.

On March 15, 2017, we issued and sold 12.0 million shares of Class A Common stock to the public at a price of $42.00 per share. The proceeds from the offering, net of financing costs, were approximately $487.9 million and are intended to fund future potential acquisitions and general corporate purposes.

Share Repurchase Program

On ~~March 20, 2014,~~August 9, 2018, the Board of Directors authorized a ~~$150.0 million~~$1 billion share repurchase ~~authorization. On September 6, 2016~~authorization, in addition to the ~~Board~~previous repurchase authorization of ~~Directors authorized an additional $150.0 million shares repurchases authorization.~~$150 million. There is no expiration date and currently, management has no plans to terminate this program. ~~For~~We repurchased approximately 10 million shares for $176 million during the three ~~and nine~~ months ended ~~September 30, 2017,~~March 31, 2020. As of March 31, 2020, the total remaining purchase authorization was $547 million. As of May 8, 2020, we ~~purchased approximately 1.0~~repurchased an additional 3.1 million shares of Class A Common Stock for ~~$30.3 million. As of September 30, 2017,~~$47 million during the ~~total remaining repurchase authorization is $88.8 million.~~second quarter.

Subsequent Events

In ~~October 2017,~~May 2020, our Board of Directors declared a quarterly dividend of ~~$0.18~~$0.20 per share, payable on ~~December~~June 15, ~~2017~~2020 to holders of record at the close of business on ~~December~~June 1, ~~2017.~~2020.

The Company is closely monitoring the impact of the COVID-19 pandemic on all aspects of its business, including how it has and will impact its advertisers, distributors, and professional sports leagues. While the Company did not incur significant disruptions from the COVID-19 pandemic during the three months ended March 31, 2020, the Company expects the effect of the COVID-19 pandemic to intensify during the three month period ended June 30, 2020. The Company is currently unable to predict the extent of the impact that the COVID-19 pandemic will have on its financial condition, results of operations and cash flows in future periods due to numerous uncertainties.

Reclassifications

Certain reclassifications have been made to prior years' consolidated financial statements to conform to the current year's presentation.

2.~~ACQUISITIONS AND DISPOSITION OF ASSETS:~~

~~2017 Acquisitions.~~2.ACQUISITIONS AND DISPOSITIONS OF ASSETS:

~~Bonten .~~ Acquisitions

RSN Acquisition. In May 2019, DSG entered into a definitive agreement to acquire controlling interests in 21 Regional Sports Network brands and Fox College Sports (collectively, the Acquired RSNs), from The Walt Disney Company (Disney) for $9.6 billion plus certain adjustments. On ~~September 1, 2017,~~August 23, 2019 we ~~acquired~~completed the ~~stock of Bonten Media Group Holdings, Inc. (Bonten) and Cunningham acquired the membership interest of Esteem Broadcasting (Esteem)~~acquisition for an aggregate preliminary purchase price, including cash acquired, and subject to an adjustment based upon finalization of ~~$240 million plus a~~ working capital, ~~adjustment, excluding cash acquired,~~net debt, and other adjustments, of ~~$1.3~~$9,817 million, accounted for as a business combination under the acquisition method of accounting. ~~As a result~~The acquisition provides an expansion to our premium sports programming including the exclusive regional distribution rights to 42 professional teams consisting of ~~the transaction we added~~ 14 ~~television stations in 8 markets: Tri-Cities, TN/VA; Greensville/New Bern/Washington, NC; Chico/Redding, CA; Abilene/Sweetwater, TX; Missoula, MT; Butte/Bozeman, MT; San Angelo, TX;~~Major League Baseball teams, 16 National Basketball Association teams, and ~~Eureka, CA. Cunningham assumed the joint sales agreement under which we will provide services to 4 additional stations.~~ 12 National Hockey League teams. The Acquired RSNs are reported within our sports segment. See Note 7. Segment Data.

The transaction was funded through ~~cash on hand. The acquisition will expand our regional presence in several states where we already operate~~a combination of debt financing raised by DSG and ~~help us bring improvements to small market stations.~~Sinclair Television Group (STG), and redeemable subsidiary preferred equity.

The following table summarizes our current allocation of the ~~allocated~~ fair value of acquired assets, ~~and~~ assumed liabilities, and noncontrolling interests of the Acquired RSNs (in ~~thousands)~~millions):

Accounts receivable 14,665
Prepaid expenses and other current assets 699
Program contract costs 683
Property and equipment 23,019
Definite-lived intangible assets 157,979
Indefinite-lived intangible assets 8,363
Other assets 3,609
Accounts payable and accrued liabilities (8,481 )
Program contracts payable (783 )
Deferred tax liability (65,789 )
Other long term liabilities (3,409 )
Fair value of identifiable net assets acquired 130,555
Goodwill 110,716
Total purchase price, net of cash acquired $ 241,271



Cash and cash equivalents	$	824
Accounts receivable, net	606
Prepaid expenses and other current assets	175
Property and equipment, net	25
Customer relationships, net	5,439
Other definite-lived intangible assets, net	1,286
Other assets	52
Accounts payable and accrued liabilities	(181		)
Other long-term liabilities	(396		)
Goodwill	2,615
Fair value of identifiable net assets acquired	$	10,445
Redeemable noncontrolling interests	(380		)
Noncontrolling interests	(248		)
Gross purchase price	$	9,817
Purchase price, net of cash acquired	$	8,993

The preliminary purchase price allocation presented above is based upon ~~management’s estimate~~management's estimates of the fair value of the acquired assets, ~~and~~ assumed liabilities, and noncontrolling interest using valuation techniques including income ~~cost~~ and ~~market~~cost approaches. The fair value estimates are based on, but not limited to, ~~expected~~projected revenue, projected margins, and discount rates used to present value future ~~revenue~~cash flows. The adjustments to the initial purchase price are based on more detailed information obtained about the specific assets acquired and ~~cash flows, expected future growth rates, and estimated discount rates.~~liabilities assumed. The adjustments made to the initial allocation did not result in material changes to the amortization expense recorded in previous quarters. The allocation is preliminary pending a final determination of the fair value of the assets and liabilities.

The definite-lived intangible assets of ~~$158.0~~$6,725 million isare primarily comprised of ~~network affiliations~~customer relationships, which represent existing advertiser relationships and contractual relationships with MVPDs of ~~$49.5~~$5,439 million, the fair value of contracts with sports teams of $1,271 million, and ~~customer relationships~~tradenames/trademarks of ~~$108.5~~$15 million. ~~These~~The intangible assets will be amortized over a weighted average useful life of 142 years for ~~network affiliations~~tradenames/trademarks, 13 years for customer relationships, and ~~other intangible assets.~~12 years for contracts with sports teams on a straight-line basis. The fair value of the sports team contracts will be amortized over the respective contract term. Acquired property and equipment will be depreciated on a straight-line basis over the respective estimated remaining useful lives. Goodwill is calculated as the excess of the consideration transferred over the fair value of the identifiable net assets acquired and represents the future economic benefits expected to arise from other intangible assets acquired that do not qualify for separate recognition, ~~including assembled workforce and noncontractual relationships,~~ as well as expected future synergies. We ~~expect~~estimate that $2.6 billion of goodwill, which represents our interest in the Acquired RSNs, will be deductible for tax ~~purposes will be approximately $5.6 million.~~purposes.

In connection with the acquisition, for the three ~~and nine~~ months ended ~~September 30, 2017,~~March 31, 2020, we ~~incurred a total~~recognized $4 million of ~~$0.3 million and $0.8 million, respectively, of~~transaction costs ~~primarily related to legal and other professional services which~~that we expensed as incurred and classified as corporate general and administrative expenses in ~~the~~our consolidated statements of operations. ~~Net revenues~~For the three months ended March 31, 2020, revenue and operating income (excluding the effects of intercompany expenses) of the ~~Bonten stations in our consolidated statements of operations, were $7.6 million and $0.9 million for the three and nine months ended September 30, 2017.~~

~~Other 2017 Acquisitions.~~ ~~During 2017,we acquired certain media assets for an aggregate $27 million, less working capital of $2.8 million~~. ~~The transactions were funded with cash on hand.~~

~~2016 Acquisitions.~~

~~Tennis Channel.~~ In March 2016, we acquired all of the outstanding common stock of Tennis Channel (Tennis), a cable network which includes coverage of the top 100 tennis tournaments and original professional sport and tennis lifestyle shows for $350.0 million plus a working capital adjustment, excluding cash acquired, of $4.1 million accounted for as a business combination under the acquisition method of accounting. The transaction was funded through cash on hand and a draw on the Bank Credit Agreement. The acquisition provides an expansion of our network business and increases value based on the synergies we can achieve. Tennis is reported within Other within ~~Note 6. Segment Data~~.

~~The following table summarizes the allocated fair value of acquired assets and assumed liabilities (in thousands):~~

Accounts receivable 17,629
Prepaid expenses and other current assets 6,518
Property and equipment 5,964
Definite-lived intangible assets 272,686
Indefinite-lived intangible assets 23,400
Other assets 619
Accounts payable and accrued liabilities (7,414 )
Capital leases (115 )
Deferred tax liability (16,991 )
Other long term liabilities (1,669 )
Fair value of identifiable net assets acquired 300,627
Goodwill 53,427
Total purchase price, net of cash acquired $ 354,054

The purchase price allocation presented above is based upon management’s estimate of the fair value of the acquired assets and assumed liabilities using valuation techniques including income, cost and market approaches. The fair value estimates are based on, but not limited to, expected future revenue and cash flows, expected future growth rates, and estimated discount rates.

The definite-lived intangible assets of $272.7 million related primarily to customer relationships, which represent existing advertiser relationships and contractual relationships with multi-channel video programming distributors (MVPDs) and will be amortized over a weighted average useful life of 15 years. Acquired property and equipment will be depreciated on a straight-line basis over the respective estimated remaining useful lives. Goodwill is calculated as the excess of the consideration transferred over the fair value of the identifiable net assets acquired and represents the future economic benefits expected to arise from other intangible assets acquired that do not qualify for separate recognition, including assembled workforce and noncontractual relationships, as well as expected future synergies. Goodwill will not be deductible for tax purposes.

In connection with the acquisition, for the year ended December 31, 2016, we incurred a total of $0.2 million of costs primarily related to legal and other professional services which we expensed as incurred and classified as corporate general and administrative expenses in the consolidated statements of operations.

~~Net revenues of Tennis~~RSNs included in our consolidated statements of operations were ~~$33.9~~$805 million and $103.2 million for the three and nine months ended September 30, 2017, and $27.4 million and $62.5 million for the three and nine months ended September 30, 2016, respectively. Our consolidated statements of operations included operating income of Tennis of $3.0 million and $8.1 million for the three and nine months ended September 30, 2017, respectively, and an operating income of $1.3 million and an operating loss of $9.6 million for the three and nine months ended September 30, 2016, respectively.$192 million.

~~Other 2016 Acquisitions.~~ During the year ended December 31, 2016, we acquired certain television station related assets for an aggregate purchase price of $72.0 million less working capital of $0.1 million. We also exchanged certain broadcast assets which~~had a carrying value of $23.8 million with another broadcaster for no cash consideration, and recognized a gain on the derecognition of those broadcast assets of $4.4 million, respectively.~~

Pro Forma Information. The ~~following~~ table below sets forth unaudited pro forma results of operations, assuming that ~~Bonten for~~ the ~~three and nine months ended September 30, 2017 and 2016 and that Tennis for the nine months ended September 30, 2016,~~RSN Acquisition, along with transactions necessary to finance the acquisition, occurred at the beginning of the ~~year preceding the year of acquisition. The pro forma results exclude the other acquisitions discussed above, as they were deemed not material both individually and in the aggregate~~period presented (in ~~thousands, except~~millions, expect per share data):



	Three Months Ended March 31, 2019
Total revenue	$	1,671
Net income	$	92
Net income attributable to Sinclair Broadcast Group	$	34
Basic earnings per share attributable to Sinclair Broadcast Group	$	0.37
Diluted earnings per share attributable to Sinclair Broadcast Group	$	0.37

Three months ended September 30, Nine months ended September 30,
2017 2016 2017 2016
Total revenues $ 685,382
$ 714,451
$ 2,056,790
$ 2,014,195
Net Income $ 34,303
$ 54,437
$ 155,532
$ 134,504
Net Income attributable to Sinclair Broadcast Group $ 32,374
$ 53,249
$ 138,712
$ 130,646
Basic earnings per share attributable to Sinclair Broadcast Group $ 0.32
$ 0.57
$ 1.40
$ 1.38
Diluted earnings per share attributable to Sinclair Broadcast Group $ 0.31
$ 0.56
$ 1.38
$ 1.37

This pro forma financial information is based on historical results of operations, adjusted for the allocation of the purchase price and other acquisition accounting adjustments, and is not indicative of what our results would have been had we operated ~~Bonten or Tennis~~the Acquired RSNs for the ~~periods~~period presented because the pro forma results do not reflect expected synergies. The pro forma adjustments reflect depreciation expense and amortization of intangible assets related to the fair value ~~adjustments~~ of the assets acquired and any adjustments to interest expense to reflect the debt financing of the transactions, if applicable. Depreciation and amortization expense are higher than amounts recorded in the historical financial statements of the acquirees due to the fair value adjustments recorded ~~for long-lived tangible and intangible assets~~ in purchase accounting.

~~Pending Acquisitions.~~ Dispositions

Broadcast Sales. In ~~May 2017,~~January 2020, we ~~entered into a definitive agreement~~agreed to ~~acquire~~sell the ~~stock~~license and non-license assets of ~~Tribune Media Company (Tribune) for $43.50 per share,~~WDKY-TV in Lexington, KY and certain non-license assets associated with KGBT-TV in Harlingen, TX for an aggregate purchase price of approximately $3.9 billion, plus the assumption or refinancing of approximately $2.7 billion in net debt. Under the terms of the agreement, Tribune stockholders will receive $35.00 in cash and 0.23 shares of Sinclair Class A common stock for each share of Tribune Class A common stock and Class B common stock they own. Tribune owns or operates 42 television stations in 33 markets, cable network WGN America, digital multicast network Antenna TV, minority stakes in the TV Food Network, ThisTV, and CareerBuilder, and a variety of real estate assets. Tribune’s stations consists of 14 FOX, 12 CW, 6 CBS, 3 ABC, 2 NBC, 3 MyNetworkTV affiliates and 2 independent stations. We expect the$36 million. The KGBT-TV transaction ~~will close~~closed during the first quarter of ~~2018, as well as~~2020 and we recorded a gain of $8 million which is included within gain on asset dispositions and other, net of impairment in our consolidated statements of operations. We expect the WDKY-TV transaction to close during the second half of 2020, pending customary closing conditions ~~including antitrust clearance~~ and approval by the FCC. The carrying value of these assets was not material as of March 31, 2020.

Broadcast Incentive Auction. Congress authorized the FCC to conduct so-called "incentive auctions" to auction and re-purpose broadcast television spectrum for mobile broadband use. Pursuant to the auction, television broadcasters submitted bids to receive compensation for relinquishing all or a portion of its rights in the television spectrum of their full-service and Class A stations. Low power stations were not eligible to participate in the auction and are not protected and therefore may be displaced or forced to go off the air as a result of the post-auction repacking process.

In the repacking process associated with the auction, the FCC has reassigned some stations to new post-auction channels. We do not expect reassignment to new channels to have a material impact on our coverage. We have received notification from the FCC that 100 of our stations have been assigned to new channels. Legislation has provided the FCC with a $3 billion fund to reimburse reasonable costs incurred by stations that are reassigned to new channels in the repack. We expect that the reimbursements from the fund will cover the majority of our expenses related to ~~fund~~ the ~~purchase price through a combination~~repack. We recorded gains related to reimbursements for spectrum repack costs incurred of ~~cash~~$24 million and $8 million for the three months ended March 31, 2020 and 2019, respectively, which are recorded within gain on ~~hand, fully committed debt financing,~~asset dispositions and ~~by accessing~~other, net of impairment on our consolidated financial statements. For the three months ended March 31, 2020 and 2019, capital ~~markets. In October 2017, Tribune shareholders held a meeting~~expenditures related to the spectrum repack were $21 million and ~~voted to approve the merger agreement. See~~ ~~Note 3. Notes Payable and Commercial Bank Financing~~ ~~for further discussion on debt financing.~~$13 million, respectively.

~~2017 Dispositions~~3.NOTES PAYABLE AND COMMERCIAL BANK FINANCING:

~~Alarm Funding Sale.~~Bank Credit Agreements

On March 17, 2020, we drew $648 million under STG's $650 million five-year revolving credit facility (the STG Revolving Credit Facility), priced at LIBOR plus 2.00%. As of March 31, 2020, there were $648 million outstanding borrowings, $1.4 million in letters of credit outstanding, and $0.6 million available under the STG Revolving Credit Facility. In April 2020, we repaid $423 million of the outstanding borrowings under the STG Revolving Credit Facility. On March ~~2017,~~17, 2020, we ~~sold Alarm Funding Associates LLC (Alarm)~~drew down $225 million under DSG's $650 million five-year revolving credit facility (the DSG Revolving Credit Facility), priced at LIBOR plus 3.00%, subject to step-downs based on certain leverage ratios. As of March 31, 2020, there were $225 million outstanding borrowings and $425 million available under the DSG Revolving Credit Facility. The Bank Credit Agreements contain various restrictions and covenants, including a financial maintenance covenant only applicable if borrowings under the respective revolving credit facility exceed 35% of the total commitments of each facility, whereby the first lien leverage ratio (as defined in the respective credit agreements) would need to be below 4.5x and 6.25x for ~~$200.0 million less~~STG and DSG, respectively. As of March 31, 2020, we were in compliance with all covenants.

The draws on the revolving credit facilities were a precautionary measure to preserve the Company's financial flexibility in light of the current uncertainly in the global economy resulting from the novel coronavirus pandemic (COVID-19). If needed, the proceeds will be available to be used for working capital and ~~transaction costs~~general corporate purposes.

DSG Senior Notes

On March 23, 2020, we redeemed, at a discount, $5 million aggregate principal amount of ~~$5.0~~DSG's 6.625% Notes due 2027 (the DSG 6.625% Notes and together with DSG's 5.375% Senior Secured Notes due 2026, the DSG Notes) for consideration of $3 million. We recognized a gain on the sale of Alarm of $53.0 million of which $12.3 million was attributable to noncontrolling interests which is included in the gain on asset dispositions and net income attributable to the noncontrolling interest, respectively, on the consolidated statement of operations.

3.~~NOTES PAYABLE AND COMMERCIAL BANK FINANCING:~~

~~Bank Credit Agreement~~

~~On January 3, 2017, we amended our bank credit agreement. We extended the maturity date~~extinguishment of the ~~Term Loan B from April 9, 2020 and July~~DSG 6.625% Notes of $2 million for the three months ended March 31, 2021 to January 3, 2024. In connection with the extension, we added additional operating flexibility, including a reduction in certain pricing terms related to Term Loan B and our existing revolving credit facility (Revolver) and revisions to certain covenant ratio requirements. The Term Loan B and Revolver bear interest at LIBOR plus 2.25% and 2.00%, respectively. We incurred approximately $11.6 million of financing costs in connection with the amendment, of which $3.4 million related to an original issuance discount, $7.7 million was expensed, and $0.5 million was capitalized as a deferred financing cost as of September 30, 2017. Additionally, unamortized deferred financing costs of $1.4 million were written off as loss on extinguishment in the consolidated statement of operations in the first quarter of 2017 related to this amendment.2020. As of ~~September 30, 2017 and December~~March 31, ~~2016,~~2020, the ~~Term Loan B~~DSG 6.625% Notes balance, net of deferred financing costs, was $1,781 million.

Notes payable and ~~debt discounts was $1,346.7~~finance leases to affiliates

The current portion of notes payable, finance leases, and commercial bank financing in our consolidated balance sheets includes finance leases to affiliates of $2 million ~~and $1,353.5 million, respectively.~~

Asas of ~~September 30, 2017~~March 31, 2020 and December 31, ~~2016, there~~2019. Notes payable, finance leases, and commercial bank financing, less current portion, in our consolidated balance sheets includes finances leases to affiliates of $8 million and $9 million as of March 31, 2020 and December 31, 2019, respectively.

Debt of variable interest entities and guarantees of third-party debt

We jointly, severally, unconditionally, and irrevocably guarantee $55 million and $57 million of debt of certain third parties as of March 31, 2020 and December 31, 2019, respectively, of which $19 million and $20 million, net of deferred financing costs, related to consolidated VIEs that are included in our consolidated balance sheets as of March 31, 2020 and December 31, 2019, respectively. These guarantees primarily relate to the debt of Cunningham Broadcasting Corporation (Cunningham) as discussed under Cunningham Broadcasting Corporation within Note 9. Related Person Transactions. We have determined that, as of March 31, 2020, it is not probable that we would have to perform under any of these guarantees.

4.REDEEMABLE NONCONTROLLING INTERESTS:

We account for redeemable noncontrolling interests in accordance with ASC 480, Distinguishing Liabilities from Equity, and classify them as mezzanine equity in our consolidated balance sheets because their possible redemption is outside of the control of the Company. Our redeemable non-controlling interests consist of the following:

Redeemable Subsidiary Preferred Equity. On August 23, 2019, Diamond Sports Holdings LLC (DSH), an indirect parent of DSG and indirect wholly-owned subsidiary of the Company, issued preferred equity (the Redeemable Subsidiary Preferred Equity).

On January 21, 2020, we redeemed 200,000 units of the Redeemable Subsidiary Preferred Equity for an aggregate redemption price equal to $200 million plus accrued and unpaid dividends, representing 100% of the unreturned capital contribution with respect to the units redeemed, plus accrued and unpaid dividends with respect to the units redeemed up to, but not including, the redemption date, and after giving effect to any applicable rebates.

The balance of the Redeemable Subsidiary Preferred Equity as of March 31, 2020 was no$522 million, net of issuance costs. Dividends accrued during the three months ended March 31, 2020 were $13 million which was paid-in-kind and included in the outstanding balance ~~under~~as of March 31, 2020. The dividends paid-in-kind accrue at a rate equal to 1-month LIBOR (with a 0.75% floor) plus 8%, which is 0.5% higher than the rate payable if the dividends were paid in cash during the quarter.

Subsidiary Equity Put Right. A noncontrolling equity holder of one of our ~~revolving credit facility. As~~subsidiaries had the right to sell their interest to the Company at a fair market sale value of ~~September 30, 2017, we had $484.4~~$376 million, plus any undistributed income, which was exercised and settled in January 2020.

5.COMMITMENTS AND CONTINGENCIES:

Sports Programming Rights

We are contractually obligated to make payments to purchase sports programming rights. The following table presents our annual non-cancellable commitments relating to the sports segment's sports programming rights agreement as of ~~borrowing capacity under our revolving credit facility.~~March 31, 2020. These commitments assume that sports teams fully deliver the contractually committed games.

~~Commitment Letters and Incremental Term B Facility related to Tribune Acquisition~~



(in millions)
2020 (remainder)	$	1,223
2021	1,784
2022	1,529
2023	1,479
2024	1,409
2025 and thereafter	8,215
Total	$	15,639

Other Liabilities

In connection with the ~~pending acquisition~~RSN Acquisition, we assumed certain fixed payment obligations which are payable through 2027. We recorded these obligations in purchase accounting at estimated fair value. As of ~~Tribune discussed~~March 31, 2020, $56 million was recorded within other current liabilities and $147 million was recorded within other long-term liabilities in ~~Note 2. Acquisitions and Disposition~~our consolidated balance sheets. Interest expense of ~~Assets,~~ ~~we entered into financing commitment letters (Commitment Letters) with certain financial institutions~~$2 million was recorded for (i) a seven-year senior secured incremental term loan B facility of up to $3.747 billion (Incremental Term Loan B Facility) and (ii) a one-year senior unsecured term loan bridge facility of up to $785 million (Bridge Facility) and, together with the Incremental Term B Facility, collectively the (Facilities), convertible into a nine-year extended term loan, for purposes of financing a portion of the cash consideration payable under the terms of the agreement of plan merger between the Company and Tribune (Merger Agreement) and to pay or redeem certain indebtedness of Tribune and its subsidiaries. The Commitment Letters also contemplate certain amendments to our existing credit agreement, as subsequently amended (Existing Credit Agreement) inthree months ended March 31, 2020.

In connection with the ~~Tribune~~RSN Acquisition, ~~to permit~~we assumed certain variable payment obligations which are payable through 2030. These contractual obligations are based upon the ~~acquisition~~excess cash flow of certain RSNs. We recorded these obligations in purchase accounting at estimated fair value. As of March 31, 2020, $30 million was recorded within other current liabilities and ~~to provide~~$205 million was recorded within other long-term liabilities in our consolidated balance sheets. These obligations are recorded at fair value on a recurring basis. Total measurement adjustments of $3 million were recorded for the Incremental Term B Facility in accordance with the terms of the Existing Credit Agreement. The Commitment Letters also provide for the syndication of an incremental revolving credit loan facility commitment of up to $225 million (Incremental Revolving Commitments) to be provided in accordance with the terms of the Existing Credit Agreement. The provision of the Incremental Revolving Commitments is not a condition of the Incremental Term B Facility or the Bridge Facility.three months ended March 31, 2020. For further information, see Note 10. Fair Value Measurements.

The Incremental Term Loan B Facility will be subject to representations, warranties and covenants that, subject to certain agreed modifications, will be substantially similar to those in the Existing Credit Agreement. The documentation for the Bridge Facility shall, except as otherwise agreed, be based on and consistent with the indenture governing our 5.125% Senior Notes due 2027, dated as of August 30, 2016, among STG and U.S. Bank National Association, as trustee (5.125% Notes Indenture), and shall in any case, except as expressly agreed, be no less favorable to us than the 5.125% Notes Indenture.

~~The funding of the Facilities is subject to our compliance with customary terms and conditions precedent as set forth in~~

the Commitment Letters, including, among others, (i) the execution and delivery by us of definitive documentation consistent with the Commitment Letters and (ii) that the acquisition of Tribune shall have been, or substantially simultaneously with the funding under the Facilities shall be, consummated in accordance with the terms of the Merger Agreement without giving effect to any amendments or waivers that are material and adverse to the parties to the Commitment Letters.

In June 2017, Tribune commenced a consent solicitation, seeking consents from the holders of Tribune notes to amend certain provisions of the indenture governing Tribune's 5.875% Senior Notes due 2022 (Tribune notes), to (i) eliminate any requirement for Tribune to make a "Change of Control Offer," to holders of Tribune notes in connection with the transactions, (ii) clarify the treatment under the Tribune notes of the proposed structure of the transactions and to facilitate the integration of Tribune and its subsidiaries and the Tribune notes with and into the Company's debt capital structure, and (iii) eliminate the expense associated with producing and filing with the SEC separate financial reports for STG, a wholly-owned subsidiary and the television operating subsidiary of the Company, as successor issuer of the Tribune notes, if the Company or any other parent entity of the successor issuer of the Tribune notes, in its sole discretion, provides an unconditional guarantee of the payment obligations of the successor issuer under the Tribune notes. Tribune received the requisite consent from the holders of the Notes and executed a supplemental indenture to amend these provisions of the Tribune indenture. The Company paid a consent fee of $8.25 million to the consenting holders of the Notes.

4.~~COMMITMENTS AND CONTINGENCIES:~~

Litigation

We are a party to lawsuits, claims, and ~~claims~~regulatory matters from time to time in the ordinary course of business. Actions currently pending are in various stages and no material judgments or decisions have been rendered by hearing boards or courts in connection with such actions. ~~After reviewing developments to date with legal counsel, our management is~~Except as noted below, we do not believe the outcome of these matters, individually or in the ~~opinion that none~~aggregate, will have a material effect on the Company's financial statements.

FCC Litigation Matters

On December 21, 2017, the FCC issued a Notice of ~~our pending and threatened matters are material. The FCC has undertaken an investigation in response to~~Apparent Liability for Forfeiture (NAL) proposing a ~~complaint it received alleging possible~~$13 million fine for alleged violations of the ~~FCC’s~~FCC's sponsorship identification rules by the Company and certain of its subsidiaries. We ~~cannot predict~~have responded to dispute the ~~outcome~~Commission's findings and the proposed fine.

On July 19, 2018, the FCC released a Hearing Designation Order (HDO) to commence a hearing before an Administrative Law Judge (ALJ) with respect to the Company’s proposed acquisition of ~~any potential~~Tribune. The HDO asked the ALJ to determine (i) whether Sinclair was the real party in interest to the sale of WGN-TV, KDAF(TV), and KIAH(TV), (ii) if so, whether the Company engaged in misrepresentation and/or lack of candor in its applications with the FCC ~~action related to this matter but it is possible that such action could include fines and/or compliance programs.~~

~~Changes~~and (iii) whether consummation of the overall transaction would be in the ~~Rules~~public interest and compliance with the FCC’s ownership rules. The Company maintains that the overall transaction and the proposed divestitures complied with the FCC’s rules, and strongly rejects any allegation of ~~Television Ownership, Local Marketing Agreements, Joint Sales Agreements, Retransmission Consent Negotiations,~~misrepresentation or lack of candor. The Merger Agreement was terminated by Tribune on August 9, 2018, on which date the Company subsequently filed a letter with the FCC to withdraw the merger applications and ~~National Ownership Cap~~

~~Certain~~have them dismissed with prejudice and filed with the ALJ a Notice of ~~our stations have entered into what have commonly been referred~~Withdrawal of Applications and Motion to ~~as local marketing agreements or LMAs. One typical type of LMA is~~Terminate Hearing (Motion). On August 10, 2018, the FCC's Enforcement Bureau filed a ~~programming agreement between two separately owned television stations serving~~responsive pleading with the ~~same market, whereby the licensee of one station programs substantial portions~~ALJ stating that it did not oppose dismissal of the ~~broadcast day~~merger applications and ~~sells advertising time during such programming segments~~concurrent termination of the hearing proceeding. The ALJ granted the Motion and terminated the hearing on March 5, 2019. As part of a discussion initiated by the ~~other licensee’s station subject~~Company to respond to allegations raised in the HDO, the FCC’s Media Bureau sent the Company a confidential letter of inquiry, which was inadvertently posted to the ~~latter licensee’s ultimate editorial~~FCC’s online docket and ~~other controls. We believe these arrangements allow us to reduce our operating expenses and enhance profitability.~~

~~In 1999, the~~removed by FCC established a new local television ownership rule which made LMAs attributable. However, the rule grandfathered LMAs that were entered into prior to November 5, 1996, and permitted the applicable stations to continue operations pursuant to the LMAs until the conclusion of the FCC’s 2004 biennial review.staff shortly thereafter. The FCC ~~stated it would~~subsequently released a statement that said the Media Bureau is in the process of resolving an outstanding issue regarding Sinclair’s conduct ~~a case-by-case review of grandfathered LMAs and assess the appropriateness of extending the grandfathering periods. The FCC did not initiate any review of grandfathered LMAs in 2004 or~~ as part of ~~its subsequent quadrennial reviews. We do not know when, or if,~~ the ~~FCC will conduct any such~~last year's FCC’s review of ~~grandfathered LMAs. Currently, all~~its proposed merger with Tribune and that the Bureau believes that delaying consideration of ~~our LMAs are grandfathered under the local television ownership rule because they were entered into prior to November 5, 1996. If the FCC were to eliminate the grandfathering of these LMAs, we~~this matter would ~~have to terminate~~not be in anyone's interest.

On or ~~modify these LMAs.~~

In February 2015, the FCC issued an order implementing certain statutorily required changes to its rules governing the duty to negotiate retransmission consent agreements in good faith. With these changes, a television broadcast station is prohibited from negotiating retransmission consent jointly with another television station in the same market unless the “stations are directly or indirectly under common de jure control permitted under the regulations of the Commission.” During a 2015 retransmission consent negotiation, an MVPD filed a complaint with the FCC accusing us of violating this rule. Although we reached agreement with the MVPD, the FCC initiated an investigation. In order to resolve the investigation and all other pending matters before the FCC's Media Bureau (including the grant of all outstanding renewals and dismissal or cancellation of all outstanding adversarial pleadings or forfeitures before the Media Bureau),about May 6, 2020, the Company ~~on July 29, 2016, without any admission of liability,~~ entered ~~into~~ a consent decree with the FCC pursuant to which the Company ~~paid a settlement payment and~~ agreed to ~~be subject~~pay $48 million to ~~ongoing compliance monitoring~~resolve the FCC’s investigation of the allegations raised in the HDO, the matters covered by the ~~FCC~~NAL, and a retransmission related matter. As part of the consent decree, the Company also agreed to implement a 4-year compliance plan. For the three months ended March 31, 2020, we recorded an expense of $2.5 million for the above legal matters, which is reflected within selling, general, and administrative expenses in our consolidated statements of operations.

Other Litigation Matters

On November 6, 2018, the Company agreed to enter into a ~~period~~proposed consent decree with the Department of ~~36 months.~~Justice (DOJ). This consent decree resolves the Department of Justice’s investigation into the sharing of pacing information among certain stations in some local markets. The DOJ filed the consent decree and related documents in the U.S. District Court for the District of Columbia on November 13, 2018. The U.S. District Court for the District of Columbia entered the consent decree on May 22, 2019. The consent decree is not an admission of any wrongdoing by the Company and does not subject Sinclair to any monetary damages or penalties. The Company believes that even if the pacing information was shared as alleged, it would not have impacted any pricing of advertisements or the competitive nature of the market. The consent decree requires the Company to adopt certain antitrust compliance measures, including the appointment of an Antitrust Compliance Officer, consistent with what the Department of Justice has required in previous consent decrees in other industries. The consent decree also requires the Company's stations not to exchange pacing and certain other information with other stations in their local markets, which the Company’s management has already instructed them not to do.

The Company is aware of NaN putative class action lawsuits that were filed against the Company following published reports of the DOJ investigation into the exchange of pacing data within the industry. On October 3, 2018, these lawsuits were consolidated in the Northern District of Illinois. The consolidated action alleges that the Company and 13 other broadcasters conspired to fix prices for commercials to be aired on broadcast television stations throughout the United States and engaged in unlawful information sharing, in violation of the Sherman Antitrust Act. The consolidated action seeks damages, attorneys’ fees, costs and interest, as well as injunctions against adopting practices or plans that would restrain competition in the ways the plaintiffs have alleged. Defendants in this action filed a motion to dismiss the consolidated action, and that motion is now fully briefed. The Company believes the lawsuits are without merit and intends to vigorously defend itself against all such claims.

~~In September 2015, the FCC released~~On August 9, 2018, Edward Komito, a ~~Notice of Proposed Rulemaking in response to~~putative Company shareholder, filed a Congressional directive in STELAR to examine the “totality of the circumstances test” for good-faith negotiations of retransmission consent. The proposed rulemaking sought comment on new factors and evidence to considerclass action complaint (the "Initial Complaint") in the ~~FCC's evaluation~~United States District Court for the District of ~~claims~~Maryland (the "District of ~~bad faith negotiation, including service interruptions~~Maryland") against the Company, Christopher Ripley and Lucy Rutishauser, which action is now captioned In re Sinclair Broadcast Group, Inc. Securities Litigation, case No. 1:18-CV-02445-CCB (the "Securities Action"). On March 1, 2019, lead counsel in the Securities Action filed an amended complaint, adding David Smith and Steven Marks as defendants, and alleging that defendants violated the federal securities laws by issuing false or misleading disclosures concerning (a) the Merger prior to the termination thereof; and (b) the DOJ investigation concerning the alleged exchange of pacing information. The Securities Action seeks declaratory relief, money damages in an amount to be determined at trial, and attorney’s fees and costs. On May 3, 2019, Defendants filed a ~~“marquee sports or entertainment event,” restrictions on online access~~motion to ~~broadcast programming during negotiation impasses, broadcasters’ ability~~dismiss the amended complaint, which motion has been opposed by lead plaintiff. On February 4, 2020, the Court issued a decision granting the motion to offer bundles of broadcast signals with other broadcast stations or cable networks, and broadcasters’ ability to invoke the FCC’s exclusivity rules during service interruptions. On July 14, 2016, then-Chairman Wheeler announced that the FCC would not, at such time, proceed to adopt additional rules governing good faith negotiations of retransmission consent. No formal action has yet been taken on this Proposed Rulemaking, and we cannot predict if the full Commission will agree to terminate the Rulemaking without action.

In August 2016, the FCC completed both its 2010 and 2014 quadrennial reviews of its media ownership rules and issued an order (the "Ownership Order") which left most of the existing multiple ownership rules intact, but amended the rules to provide for the attribution of JSAs where two television stations are located in the same market, and a party with an attributable ownership interest in one station sells more than 15% of the advertising time per week of the second station. The Ownership Order also provides that JSAs that existed prior to March 31, 2014, will not be counted as attributable and may remain in place until October 1, 2025, at which point they must be terminated, amended or otherwise come into compliance with the rules. These "grandfathered" JSAs may be transferred or assigned without terminating the grandfathering status relief. Among other things, the television JSA attribution rule could limit our future ability to create duopolies or other two-station operations in certain markets. We cannot predict whether we will be able to terminate or restructure such arrangements prior to October 1, 2025, on terms that are as advantageous to us as the current arrangements. The revenues of these JSA arrangements we earned during the three and nine months ended September 30, 2017 were $15.9 million and $45.1 million, and $16.0 million and $42.5 million during the three and nine months ended September 30, 2016, respectively. The Ownership Order is the subject of an appeal to the U.S. Court of Appeals for the Third Circuit and Petitions for Reconsideration before the FCC. On October 26, 2017, the FCC announced plans to grantdismiss in part and ~~deny~~denying the motion to dismiss in ~~part~~part. On February 18, 2020, plaintiffs filed a motion for reconsideration or, in the ~~Petitions~~alternative, to certify dismissal as final and appealable. Defendants have filed an opposition to this motion. The Company believes that the allegations in the Securities Action are without merit and intends to vigorously defend against the allegations.

In addition, beginning in late July 2018, Sinclair received letters from two putative Company shareholders requesting that the Board of Directors of the Company investigate whether any of the Company’s officers and directors committed nonexculpated breaches of fiduciary duties in connection with, or gross mismanagement with respect to: (i) seeking regulatory approval of the Tribune Merger and (ii) the HDO, and the allegations contained therein. A committee consisting of independent members of the board of directors has been formed to respond to these demands (the "Special Litigation Committee"). The members of the Special Litigation Committee are Martin R. Leader, Larry E. McCanna, and the Honorable Benson Everett Legg, with Martin Leader as its designated Chair.

On November 29, 2018, putative Company shareholder Fire and Police Retiree Health Care Fund, San Antonio filed a shareholder derivative complaint in the District of Maryland against the members of the Company’s Board of Directors, Mr. Ripley, and the Company (as a nominal defendant), which action is captioned Fire and Police Retiree Health Care Fund, San Antonio v. Smith, et al., Case No. 1:18-cv-03670-RDB (the "San Antonio Action"). On December 26, 2018, putative Company shareholder Teamsters Local 677 Health Services & Insurance Plan filed a shareholder derivative complaint in the Circuit Court of Maryland for ~~Reconsideration~~Baltimore County (the "Circuit Court") against the members of the Company’s Board of Directors, Mr. Ripley, and ~~released~~the Company (as a ~~draft Order on Reconsideration~~nominal defendant), which action is captioned Teamsters Local 677 Health Services & Insurance Plan v. Friedman, et al., Case No. 03-C-18-12119 (the "Teamsters Action"). A defendant in the Teamsters Action removed the Teamsters action to the District of Maryland, and the plaintiff in that case has moved to remand the case back to the Circuit Court. That motion is fully briefed and awaiting decision. On December 21, 2018, putative Company shareholder Norfolk County Retirement System filed a shareholder derivative complaint in the District of Maryland against the members of the Company’s Board of Directors, Mr. Ripley, and the Company (as a nominal defendant), which action is captioned Norfolk County Retirement System v. Smith, et al., Case No. 1:18-cv-03952-RDB (the "Norfolk Action," and together with the San Antonio Action and the Teamsters Action, the "Derivative Actions"). The plaintiffs in each of the Derivative Actions allege breaches of fiduciary duties by the defendants in connection with (i) seeking regulatory approval of the Tribune Merger and (ii) the HDO, and the allegations contained therein. The plaintiffs in the Derivative Actions seek declaratory relief, money damages to be ~~voted on~~awarded to the Company in an amount to be determined at trial, corporate governance reforms, equitable or injunctive relief, and attorney’s fees and costs. Additionally, the ~~Commission’s November 16, 2017 monthly public meeting.~~plaintiffs in the Teamsters and Norfolk Actions allege that the defendants were unjustly enriched, in the form of their compensation as directors and/or officers of the Company, in light of the alleged breaches of fiduciary duty, and seek restitution to be awarded to the Company. These allegations are the subject matter of the review being conducted by the Special Litigation Committee, as noted above. On April 30, 2019, the Special Litigation Committee moved to dismiss and, in the alternative, to stay the San Antonio and Norfolk Actions, which motion has been opposed by the plaintiffs. The ~~draft Order on Reconsideration includes,~~Company and the remaining individual defendants joined in this motion. On October 23, 2019, the court granted the plaintiff’s motion in the Teamsters Action to remand that action back to the Circuit Court. On December 9, 2019, the court denied defendants’ motions to dismiss and, in the alternative, to stay the San Antonio and Norfolk Actions without prejudice, subject to potential renewal following limited discovery.

On August 9, 2018, Tribune filed a complaint (the "Tribune Complaint") in the Court of Chancery of the State of Delaware against the Company, which action is captioned Tribune Media Company v. Sinclair Broadcast Group, Inc, Case No. 2018-0593-JTL. The Tribune Complaint alleged that the Company breached the Merger Agreement by, among other things, ~~proposals~~failing to ~~(1) eliminate~~use its reasonable best efforts to secure regulatory approval of the ~~Newspaper/Broadcast~~Merger, and TV/Radio Cross-Ownership Rules; (2) permit certain TV duopolies in all markets by eliminating the Eight Voices Test and assessing proposed Big-4 station combinations on a case-by-case basis; (3) eliminate attribution of Joint Sales Agreements; and (4) create an incubator program to promote new entry and ownership diversitythat such breach resulted in the ~~broadcast industry.~~failure of the Merger to obtain regulatory approval and close. The ~~draft Order on Reconsideration is subject~~Tribune Complaint sought declaratory relief, money damages in an amount to ~~change prior~~be determined at trial (but which the Tribune Complaint suggests could be in excess of $1 billion),and attorney's fees and costs. On August 29, 2018, the Company filed its Answer, Affirmative Defenses, and Verified Counterclaim to ~~adoption. If adopted,~~ the ~~Order on Reconsideration would~~Verified Complaint. In its counterclaim, the Company alleges that Tribune breached the Merger Agreement and seeks declaratory relief, money damages in an amount to be ~~effective 30 days after publication~~determined at trial, and attorneys' fees and costs. On January 27, 2020, the Company and Nexstar, which acquired Tribune in September 2019, agreed to settle the ~~Federal Register.~~Tribune Complaint. As part of this settlement, the companies agreed to dismiss with prejudice the Tribune Complaint and release each other from any current and future claims relating to the terminated merger. Neither party has admitted any liability or wrongdoing in connection with the terminated merger; both parties have settled the lawsuit to avoid the costs, distraction, and uncertainties of continued litigation. On January 28, 2020, Tribune and Sinclair filed a stipulation voluntarily dismissing this litigation.

~~If we are required to terminate or modify our LMAs or JSAs, our business could be affected in the following ways:~~

~~Losses on investments~~. In some cases, we own the non-license assets used by the stations we operate under LMAs and JSAs. If certain of these arrangements are no longer permitted, we could be forced to sell these assets, restructure our agreements or find another use for them. If this happens, the market for such assets may not be as good as when we purchased them and, therefore, we cannot be certain of a favorable return on our original investments.

~~Termination penalties~~. If the FCC requires us to modify or terminate existing LMAs or JSAs before the terms of the agreements expire, or under certain circumstances, we elect not to extend the terms of the agreements, we may be forced to pay termination penalties under the terms of some of our agreements. Any such termination penalties could be material.

On September 6, 2016, the FCC released an order eliminating the UHF discount (the "UHF Discount Order"). The UHF discount allowed television station owners to recognize the limitation of coverage inherent with UHF stations when calculating compliance with the FCC’s national ownership cap, which prohibits a single entity from owning television stations that reach, in total, more than 39% of all the television households in the nation. All but 34 of the stations we currently own and operate, or to which we provide programming services are UHF. On April 20, 2017, the FCC acted on a Petition for Reconsideration of the UHF Discount Order and adopted an Order on Reconsideration which reinstated the UHF Discount, which was to become effective June 5, 2017. The Order on Reconsideration also announced the FCC's plans to open a rulemaking proceeding later this year to consider whether to modify the national audience reach rule, including the UHF discount. A petition for judicial review of the Order on Reconsideration was filed at the U.S. Court of Appeals for the D.C. Circuit on May 12, 2017. Sinclair has filed to intervene in support of the FCC. Prior to the effective date, the petitioners in that case filed an emergency motion with the court seeking a stay of the Order on Reconsideration pending judicial review. The D.C. Circuit Court of Appeals entered an administrative stay of the Order on Reconsideration pending its review of the emergency stay motion. On June 15, 2017, the court issued an order dissolving the administrative stay and denying the emergency stay motion. The Order on Reconsideration became effective immediately upon release of the court's order, as a result of which the UHF discount remains in effect. The petitioners filed their brief in the D.C. Circuit Court of Appeals on September 25, 2017. The FCC's brief is currently due November 7, 2017, and the intervenor's brief is currently due November 14, 2017. Petitioners' reply brief is due December 5, 2017. We cannot predict the outcome of this proceeding. With the application of the UHF discount, counting all our present stations, we reach approximately 25% of U.S. households. With the pending Tribune transaction, absent divestitures, we would exceed the 39% cap, even with the application of the UHF discount. Changes to the national ownership cap could limit our ability to make television station acquisitions.

5.6.EARNINGS PER SHARE:

The following table reconciles income (numerator) and shares (denominator) used in our computations of basic and diluted earnings per share for the periods presented (in millions, except share amounts which are reflected in thousands):



	Three Months Ended March 31,
	2020			2019
Income (Numerator)
Net income	$	151		$	23
Net income attributable to the redeemable noncontrolling interests	(20		)	—
Net income attributable to the noncontrolling interests	(8		)	(1		)
Numerator for basic and diluted earnings per common share available to common shareholders	$	123		$	22

Shares (Denominator)
Weighted-average common shares outstanding	90,609			92,302
Dilutive effect of stock-settled appreciation rights and outstanding stock options	617			916
Weighted-average common and common equivalent shares outstanding	91,226			93,218

Three Months Ended
September 30, Nine Months Ended
September 30,
2017 2016 2017 2016
Income (Numerator)
Net income $ 32,566
$ 52,033
$ 149,303
$ 128,262

Net income attributable to noncontrolling interests (1,929 ) (1,188 ) (16,820 ) (3,858 )
Numerator for basic and diluted earnings per common share available to common shareholders $ 30,637
$ 50,845
$ 132,483
$ 124,404

Shares (Denominator)

Weighted-average common shares outstanding 102,245
93,948
99,210
94,595

Dilutive effect of stock-settled appreciation rights and outstanding stock options 810
818
963
870

Weighted-average common and common equivalent shares outstanding 103,055
94,766
100,173
95,465

The following table shows the weighted-average stock-settled appreciation rights and outstanding stock options (in thousands) that are excluded from the calculation of diluted earnings per common share as the inclusion of such shares would be anti-dilutive:



	Three Months Ended March 31,
	2020	2019
Weighted-average stock-settled appreciation rights and outstanding stock options excluded	2,814	950

Three Months Ended
September 30, Nine Months Ended
September 30,
2017 2016 2017 2016
Weighted-average stock-settled appreciation rights and outstanding stock options excluded 1,150
525
383
525

6.7.SEGMENT DATA:

We measure segment performance based on operating income (loss). We have 2 reportable segments: local news and marketing services and sports. Our local news and marketing services segment, previously referred to as our broadcast segment, provides free over-the-air programming to television viewing audiences and includes stations in 89 markets located throughout the continental United States. Our sports segment provides viewers with live professional sports content and includes 23 regional sports network brands. Other and corporate are not reportable segments but are included for reconciliation purposes. Other primarily consists of original networks and content, including Tennis, non-broadcast digital and internet solutions, technical services, and other non-media investments. ~~All of our businesses are located within the United States.~~ Corporate costs primarily include our costs to operate as a public company and to operate our corporate headquarters location. ~~Other and Corporate~~All of our businesses are ~~not reportable segments but are included for reconciliation purposes.~~located within the United States.

We had approximately $172.7 million and $226.5 million of intercompany loans between the broadcast segment, other, and corporate as of September 30, 2017 and 2016, respectively. We had $4.3 million and $6.1 million in intercompany interest expense related to intercompany loans between the broadcast segment, other, and corporate for the three months ended September 30, 2017 and 2016, respectively. We had $14.2 million and $18.3 million in intercompany interest expense for the the nine months ended September 30, 2017 and 2016, respectively. All other intercompany transactions are immaterial.

Segment financial information is included in the following tables for the periods presented (in ~~thousands)~~millions):

For the three months ended September 30, 2017 Broadcast Other Corporate Consolidated
Revenue $ 610,840
$ 60,051
$ —
$ 670,891
Depreciation of property and equipment 22,344
1,851
247
24,442
Amortization of definite-lived intangible assets and other assets 38,186
5,182
—
43,368
Amortization of program contract costs and net realizable value adjustments 28,047
—
—
28,047
General and administrative overhead expenses 23,582
224
2,025
25,831
Research and development —
2,551
—
2,551
Operating income (loss) 115,571
(9,852 ) (2,272 ) 103,447
Interest expense 1,281
204
50,258
51,743
Loss from equity and cost method investments —
(4,362 ) —
(4,362 )
Assets 5,274,895
762,751
649,423
6,687,069



As of March 31, 2020	Local News and Marketing Services		Sports		Other & Corporate		Eliminations			Consolidated
Assets	$	4,758	$	10,846	$	1,774	$	(18	)	$	17,360

For the three months ended September 30, 2016 Broadcast Other Corporate Consolidated
Revenue $ 635,559
$ 58,276
$ —
$ 693,835
Depreciation of property and equipment 24,195
1,425
266
25,886
Amortization of definite-lived intangible assets and other assets 38,717
9,090
—
47,807
Amortization of program contract costs and net realizable value adjustments 32,441
—
—
32,441
General and administrative overhead expenses 17,530
247
1,275
19,052
Research and development —
745
—
745
Operating income (loss) 158,666
(3,077 ) (1,595 ) 153,994
Interest expense 1,404
1,664
50,420
53,488
Income from equity and cost method investments —
611
812
1,423



For the three months ended March 31, 2020	Local News and Marketing Services			Sports		Other & Corporate			Eliminations				Consolidated
Revenue	$	701		$	812	$	128		$	(32	)	(b)	$	1,609
Depreciation of property and equipment and amortization of definite-lived intangibles and other assets	58			110		6			—				174
Amortization of sports programming rights (a)	—			391		—			—				391
Amortization of program contract costs and net realizable value adjustments	23			—		—			—				23
Corporate general and administrative expenses	44			2		3			—				49
Gain on asset dispositions and other, net of impairment	(32		)	—		—			—				(32		)
Operating income (loss)	152			165		19			(9		)		327
Interest expense including amortization of debt discount and deferred financing costs	1			123		59			(3		)		180
Income (loss) from equity method investments	—			6		(12		)	—				(6		)

Nine months ended September 30, 2017 Broadcast Other Corporate Consolidated
Revenue $ 1,821,248
$ 178,867
$ —
$ 2,000,115
Depreciation of property and equipment 65,850
5,438
738
72,026
Amortization of definite-lived intangible assets and other assets 114,810
17,489
—
132,299
Amortization of program contract costs and net realizable value adjustments 87,962
—
—
87,962
General and administrative overhead expenses 65,059
785
5,614
71,458
Research and development —
5,053
—
5,053
Operating income (loss) 361,259
25,016
(a) (6,351 ) 379,924
Interest expense 3,976
1,633
154,411
160,020
Loss from equity and cost method investments —
(4,221 ) —
(4,221 )

~~(a) - Includes gain on the sale of Alarm of $53.0 million of which $12.3 million was attributable to noncontrolling interests. See~~ ~~Note 2. Acquisitions and Disposition of Assets~~.



For the three months ended March 31, 2019	Local News and Marketing Services			Sports		Other & Corporate			Eliminations			Consolidated
Revenue	$	619		$	—	$	107		$	(4	)	$	722
Depreciation of property and equipment and amortization of definite-lived intangibles and other assets	63			—		3			—			66
Amortization of program contract costs and net realizable value adjustments	24			—		—			—			24
Corporate general and administrative expenses	26			—		2			—			28
Gain on asset dispositions and other, net of impairment	(8		)	—		—			—			(8		)
Operating income (loss)	95			—		2			(3		)	94
Interest expense including amortization of debt discount and deferred financing costs	1			—		57			(4		)	54
Loss from equity method investments	—			—		(14		)	—			(14		)

Nine months ended September 30, 2016 Broadcast Other Corporate Consolidated
Revenue $ 1,790,561
$ 148,697
$ —
$ 1,939,258
Depreciation of property and equipment 69,469
4,063
798
74,330
Amortization of definite-lived intangible assets and other assets 117,038
20,159
—
137,197
Amortization of program contract costs and net realizable value adjustments 96,722
—
—
96,722
General and administrative overhead expenses 50,320
1,075
3,277
54,672
Research and development —
3,055
—
3,055
Operating income (loss) 402,236
(28,699 ) (4,130 ) 369,407
Interest expense 4,297
4,695
147,827
156,819
Income from equity and cost method investments —
414
2,375
2,789


(a)	The amortization of sports programming rights is included within media programming and production expenses on our consolidated statements of operations. Due to the outbreak of COVID-19 and postponement of professional sports leagues, we stopped recording amortization of our sports contracts during the month of March 2020.


(b)	Includes$24 million of revenue and selling, general, and administrative expenses, respectively, for services provided by local news and marketing services to sports and other, which are eliminated in consolidation.

8.VARIABLE INTEREST ENTITIES:

Certain of our stations provide services to other station owners within the same respective market through agreements, such as LMAs, where we provide programming, sales, operational, and administrative services, and JSAs and SSAs, where we provide non-programming, sales, operational, and administrative services. In certain cases, we have also entered into purchase agreements or options to purchase the license related assets of the licensee. We typically own the majority of the non-license assets of the stations, and in some cases where the licensee acquired the license assets concurrent with our acquisition of the non-license assets of the station, we have provided guarantees to the bank for the licensee’s acquisition financing. The terms of the agreements vary, but generally have initial terms of over five years with several optional renewal terms. Based on the terms of the agreements and the significance of our investment in the stations, we are the primary beneficiary when, subject to the ultimate control of the licensees, we have the power to direct the activities which significantly impact the economic performance of the VIE through the services we provide and we absorb losses and returns that would be considered significant to the VIEs. The fees paid between us and the licensees pursuant to these arrangements are eliminated in consolidation.

We are party to a joint venture associated with Marquee. Marquee is party to a long term telecast rights agreement which provides the rights to air certain live game telecasts and other content, which we guarantee. In connection with the RSN Acquisition, we became party to a joint venture associated with one other regional sports network. We participate significantly in the economics and have the power to direct the activities which significantly impact the economic performance of these regional sports networks, including sales and certain operational services. We consolidate these regional sports networks because they are variable interest entities and we are the primary beneficiary.

The carrying amounts and classification of the assets and liabilities of the VIEs mentioned above, which have been included in our consolidated balance sheets as of the dates presented, were as follows (in millions):



	As of March 31, 2020		As of December 31, 2019
ASSETS
Current assets:
Cash and cash equivalents	$	17	$	39
Accounts receivable, net	34		39
Other current assets	30		16
Total current assets	81		94

Property and equipment, net	17		15
Operating lease assets	7		8
Goodwill and indefinite-lived intangible assets	18		15
Definite-lived intangible assets, net	87		93
Other assets	2		3
Total assets	$	212	$	228

LIABILITIES
Current liabilities:
Other current liabilities	$	20	$	19

Notes payable, finance leases and commercial bank financing, less current portion	14		15
Operating lease liabilities, less current portion	6		6
Program contracts payable, less current portion	6		7
Other long-term liabilities	1		1
Total liabilities	$	47	$	48

7.The amounts above represent the consolidated assets and liabilities of the VIEs described above, for which we are the primary beneficiary. Total liabilities associated with certain outsourcing agreements and purchase options with certain VIEs, which are excluded from the above, were $128 million and $127 million as of March 31, 2020 and December 31, 2019, respectively, as these amounts are eliminated in consolidation. The assets of each of these consolidated VIEs can only be used to settle the obligations of the VIE. As of March 31, 2020, all of the liabilities are non-recourse to us except for the debt of certain VIEs. See Debt of variable interest entities and guarantees of third-party debt under Note 3. Notes Payable and Commercial Bank Financing for further discussion. The risk and reward characteristics of the VIEs are similar.

Other VIEs

We have several investments in entities which are considered VIEs. However, we do not participate in the management of these entities, including the day-to-day operating decisions or other decisions which would allow us to control the entity, and therefore, we are not considered the primary beneficiary of these VIEs.

The carrying amounts of our investments in these VIEs for which we are not the primary beneficiary were $68 million and $71 million as of March 31, 2020 and December 31, 2019, respectively. Our maximum exposure is equal to the carrying value of our investments. The income and loss related to equity method investments and other investments are recorded in loss from equity method investments and other income, net, respectively, in our consolidated statements of operations. We recorded losses of $12 million and $13 million for the three months ended March 31, 2020 and March 31, 2019, respectively.

9.RELATED PERSON TRANSACTIONS:

Transactions with our controlling shareholders

David, Frederick, J. Duncan, and Robert Smith (collectively, the controlling shareholders) are brothers and hold substantially all of ~~the~~our Class B Common Stock and some of our Class A Common Stock. We engaged in the following transactions with them and/or entities in which they have substantial ~~interests.~~interests:

Leases. Certain assets used by us and our operating subsidiaries are leased from ~~Cunningham Communications Inc., Keyser Investment Group, Gerstell Development Limited Partnership and Beaver Dam, LLC (entities~~entities owned by the controlling ~~shareholders).~~shareholders. Lease payments made to these entities were ~~$1.3~~$1 million for both the three months ended ~~September 30, 2017~~March 31, 2020 and ~~2016,~~2019. For further information, see Note 3. Notes Payable and ~~$3.9 million and $3.8 million for the nine months ended September 30, 2017 and 2016, respectively.~~Commercial Bank Financing.

Charter Aircraft. We lease aircraft owned by certain controlling shareholders. For all leases, we incurred expenses of ~~$0.4~~less than $1 million ~~and $0.3 million~~ for both the three months ended ~~September 30, 2017~~March 31, 2020 and ~~2016, and $1.3 million and $1.0 million for the for the nine months ended September 30, 2017 and 2016, respectively.~~2019.

Cunningham Broadcasting Corporation

Cunningham owns a portfolio of television stations, including: WNUV-TV Baltimore, Maryland; WRGT-TV Dayton, Ohio; WVAH-TV Charleston, West Virginia; WMYA-TV Anderson, South Carolina; WTTE-TV Columbus, Ohio; WDBB-TV Birmingham, Alabama; WBSF-TV Flint, Michigan; WGTU-TV/WGTQ-TV Traverse City/Cadillac, ~~Michigan, and beginning in September 2017,~~Michigan; WEMT-TV Tri-Cities, ~~Tennessee,~~Tennessee; WYDO-TV Greenville, North ~~Carolina, KBVU-TV Eureka, California,~~ Carolina; KBVU-TV/KCVU-TV Eureka/Chico-Redding, ~~California, and~~California; WPFO-TV Portland, ~~Maine~~Maine; and KRNV-DT/KENV-DT Reno, Nevada/Salt Lake City, Utah (collectively, the Cunningham Stations). Certain of our stations provide services to ~~these~~the Cunningham Stations pursuant to LMAs or JSAs and SSAs. See Note ~~1. Nature of Operations and Summary of Significant Accounting Policies~~8. Variable Interest Entities, for further discussion of the scope of services provided under these types of arrangements. As of March 31, 2020, we have jointly and severally, unconditionally, and irrevocably guaranteed $45 million of Cunningham's debt, of which $9 million, net of $0.5 million deferred financing costs, relates to the Cunningham VIEs that we consolidate.

The ~~estate of Carolyn C. Smith, the mother of our controlling shareholders, currently owns all of the~~ voting stock of ~~the~~ Cunningham ~~Stations. The sale of the voting stock~~is owned by ~~the estate to~~ an unrelated ~~party is pending approval of the FCC.~~party. All of the non-voting stock is owned by trusts for the benefit of the children of our controlling shareholders. We consolidate certain subsidiaries of Cunningham with which we have variable interests through various arrangements related to the Cunningham ~~Stations discussed further below.~~Stations.

The services provided to WNUV-TV, WMYA-TV, WTTE-TV, WRGT-TV and WVAH-TV are governed by a master agreement which has a current term that expires on July 1, 2023 and there are ~~two~~2 additional ~~5- year~~5-year renewal terms remaining with final expiration on July 1, 2033. We also executed purchase agreements to acquire the license related assets of these stations from Cunningham, which grant us the right to acquire, and grant Cunningham the right to require us to acquire, subject to applicable FCC rules and regulations, 100% of the capital stock or the assets of these individual subsidiaries of Cunningham. Pursuant to the terms of this agreement we are obligated to pay Cunningham an annual fee for the television stations equal to the greater of (i) 3% of each station’s annual net broadcast revenue ~~and~~or (ii) ~~$4.7~~$5 million. The aggregate purchase price of these television stations increases by 6% annually. A portion of the fee is required to be applied to the purchase price to the extent of the 6% increase. The cumulative prepayments made under these purchase agreements were $52 million and $51 million as of March 31, 2020 and December 31, 2019, respectively. The remaining aggregate purchase price of these stations, net of prepayments, as of ~~September 30, 2017~~both March 31, 2020 and December 31, 2019, was approximately ~~$53.6~~$54 million. Additionally, we provide services to WDBB-TV pursuant to an LMA, which expires April 22, 2025, and ~~own~~have a purchase option to acquire for $0.2 million. We paid Cunningham, under these agreements, ~~$2.4~~$2 million ~~and $2.1 million~~ for both the three months ended ~~September 30, 2017~~March 31, 2020 and ~~2016, and $6.4 million and $6.6 million for the nine months ended September 30, 2017 and 2016,~~2019, respectively.

~~In September 2017, Cunningham acquired the membership interest of Esteem Broadcasting in connection with our acquisition of Bonten Media Group, as discussed in~~ ~~Note 2. Acquisitions and Disposition of Assets. As a result of the transaction, Cunningham assumed the joint sales agreement under which we will provide services to four stations; WEMT-TV, WYDO-TV, and KBVU-TV/KCVU-TV.~~

The agreements with KBVU-TV/KCVU-TV, KRNV-DT/KENV-DT, WBSF-TV, WEMT-TV, WGTU-TV/WGTQ-TV, WPFO-TV, and WYDO-TV expire inbetween December 2020 ~~November 2021, May 2023, August 2023, December 2023,~~ and August 2025 ~~respectively,~~ and ~~each has~~certain stations have renewal provisions for successive ~~eight year~~eight-year periods. We earned $6.6 million and $1.4 million from the services we performed for these stations for both the three months ended September 30, 2017 and 2016, and $10.9 million and $3.9 million for the nine months ended September 30, 2017 and 2016, respectively.

As we consolidate the licensees as VIEs, the amounts we earn or pay under the arrangements are eliminated in consolidation and the gross revenues of the stations are reported ~~within~~in our consolidated ~~statement~~statements of operations. Our consolidated revenues include $39 million and $34 million for the three months ended March 31, 2020 and 2019, respectively, related to the Cunningham Stations include $31.4 million and $29.4 million for the three and nine months ended September 30, 2017 and 2016, and $84.5 million and $83.8 million for the nine months ended September 30, 2017 and 2016, respectively.Stations.

During January 2016, Cunningham entered into a promissory note to borrow $19.5 million from us. The note bears interest at a fixed rate of 5.0% per annum (the 5.0% Notes), which is payable quarterly, commencing March 31, 2016. The note matures in January 2021, with additional one year renewal periods upon our approval. Interest income was $0.2 million for both the three months ended September 30, 2017 and 2016 and $0.7 million for both the for the nine months ended September 30, 2017 and 2016, respectively.

In April 2016, we entered into an agreement with Cunningham to provide master control equipment and provide master control services to a station in Johnstown, PA with which ~~they have a time brokerage agreement~~Cunningham has an LMA that expires in ~~April 2019.~~June 2022. Under the agreement, Cunningham ~~will pay~~paid us an initial fee of ~~$0.7~~$1 million and pays us $0.2 million annually for master control services plus the cost to maintain and repair the equipment. ~~Also, in~~In August 2016, we entered into an agreement, expiring in October 2021, with Cunningham to provide a news share service with ~~their station in~~the Johnstown, PA station beginning in October 2016 for an annual fee of ~~$1.0 million per year.~~$1 million.

Atlantic Automotive Corporation

We sell advertising time to Atlantic Automotive Corporation (Atlantic Automotive), a holding company that owns automobile dealerships and an automobile leasing company. David D. Smith, our Executive Chairman, has a controlling interest in, and is a member of the Board of Directors of, Atlantic Automotive. We received payments for advertising totaling less than $0.1 million ~~and $0.3 million~~ for both the three months ended ~~September 30, 2017~~March 31, 2020 and 2016, and $0.4 million and $0.6 million, for the nine months ended September 30, 2017 and 2016, respectively. Additionally, Atlantic Automotive leases office space owned by one of our consolidated real estate ventures in Towson, Maryland. In May 2017, our consolidated real estate ventures sold their investment. See ~~Leased property by real estate ventures~~ ~~below for discussion on the sale our consolidated real estate ventures' investment.~~

~~Atlantic Automotive paid $0.4 million and $0.8 million in rent for the nine months ended September 30, 2017 and 2016, respectively.~~2019.

Leased property by real estate ventures

Certain of our real estate ventures have entered into leases with entities owned by ~~David D.~~members of the Smith ~~to lease space. There are leases for space in a building owned by one of our consolidated real estate ventures in Baltimore, MD.~~Family. Total rent received under these leases was ~~$0.1~~$0.3 million and $0.2 million for the three months ended ~~September 30, 2017~~March 31, 2020 and ~~2016, and $0.3 million and $0.5 million for the nine months ended September 30, 2017 and 2016,~~2019, respectively.

~~One of our real estate ventures, accounted for under the~~Equity method investees

YES Network. In August 2019, YES Network, an equity method ~~owned~~investee, entered into a ~~building~~management services agreement with the Company, in ~~Towson, MD,~~ which ~~leased restaurant space to entities owned by David D. Smith up until May 2017, when~~ the ~~property was sold to~~Company provides certain services for an ~~unrelated party. This investment received less than $0.1 million and $0.2 million in rent pursuant~~initial term that expires on August 29, 2025. The agreement will automatically renew for 2 2-year renewal terms, with a final expiration on August 29, 2029. Pursuant to the ~~lease for~~terms of the ~~for the nine months ended September 30, 2017 and 2016, respectively.~~

~~Payments for~~agreement, YES Network paid us a management services ~~provided by the restaurants to us was less than $0.1~~fee of $1 million for ~~both~~ the three months ended ~~September 30, 2017~~March 31, 2020.

In conjunction with the acquisition of the RSNs on August 23, 2019, as discussed in Note 2. Acquisitions and ~~2016, and nine months ended September 30, 2017 and 2016.~~

~~Other transactions with equity method investees~~

~~In April 2017,~~Dispositions of Assets, we ~~made~~assumed a ~~$15.0 million investment~~minority interest in ~~120 Sports LLC, a multi-platform sports network branded as Stadium,~~certain mobile production companies, which we account for ~~under the~~as equity ~~method. We entered into a services agreement with the entity to provide certain linear distribution, engineering advertising, traffic, sales, and promotional services.~~method investments. For the three months ended ~~September 30, 2017,~~March 31, 2020, we ~~did not receive any consideration pursuant~~made payments to these investments totaling $7 million for production services.

Programming Rights

For the ~~services agreement.~~three months ended March 31, 2020, the Company paid $70 million, under sports programming rights agreements covering the broadcast of regular season games, to 5 professional teams who have non-controlling equity interests in certain of our RSNs. These agreements expire on various dates during the fiscal years ended 2030 through 2033.

8.10.FAIR VALUE MEASUREMENTS:

Accounting guidance provides for valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow), and the cost approach (cost to replace the service capacity of an asset or replacement cost). A fair value hierarchy using three broad levels prioritizes the inputs to valuation techniques used to measure fair value. The following is a brief description of those three levels:

Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.

Level 3: Unobservable inputs that reflect the reporting entity’s own assumptions.

The ~~fair value of our notes payable, capital leases, and commercial bank financing are considered Level 2 measurements within~~following table sets forth the ~~fair value hierarchy. The~~ carrying value and fair value of our ~~notes~~financial assets and ~~debentures~~liabilities for the periods presented (in ~~thousands)~~millions):



	As of March 31, 2020				As of December 31, 2019
	Carrying Value		Fair Value		Carrying Value		Fair Value
Level 1:
STG:
Money market funds	$	826	$	826	$	354	$	354
Deferred compensation assets	33		33		36		36
Deferred compensation liabilities	28		28		33		33
DSG:
Money market funds	256		256		559		559

Level 2 (a):
STG:
5.875% Senior Unsecured Notes due 2026	350		310		350		368
5.625% Senior Unsecured Notes due 2024	550		507		550		566
5.500% Senior Unsecured Notes due 2030	500		414		500		511
5.125% Senior Unsecured Notes due 2027	400		338		400		411
Term Loan B	1,325		1,259		1,329		1,326
Term Loan B-2	1,294		1,216		1,297		1,300
Revolving Credit Facility (b)	648		648		—		—
DSG:
6.625% Senior Unsecured Notes due 2027	1,820		1,217		1,825		1,775
5.375% Senior Secured Notes due 2026	3,050		2,478		3,050		3,085
Term Loan	3,284		2,528		3,292		3,284
Revolving Credit Facility (b)	225		225		—		—
Debt of variable interest entities	20		20		21		21
Debt of non-media subsidiaries	18		18		18		18

Level 3
DSG:
Variable payment obligations (c)	235		235		239		239

As of September 30, 2017 As of December 31, 2016
Carrying Value (a) Fair Value Carrying Value (a) Fair Value
6.125% Senior Unsecured Notes due 2022 500,000
516,170
500,000
521,240
5.875% Senior Unsecured Notes due 2026 350,000
359,342
350,000
351,456
5.625% Senior Unsecured Notes due 2024 550,000
565,637
550,000
562,755
5.375% Senior Unsecured Notes due 2021 600,000
615,714
600,000
617,892
5.125% Senior Unsecured Notes due 2027 400,000
389,156
400,000
382,028
Term Loan A 241,073
241,374
272,198
271,517
Term Loan B 1,359,725
1,361,425
1,365,625
1,364,841
Debt of variable interest entities 20,585
20,585
23,198
23,198
Debt of other operating divisions 27,470
27,470
135,211
135,211


(a)	Amounts are carried in our consolidated balance sheets net of debt discount and deferred financing cost, which are excluded in the above table, of $223 million and $231 million as of March 31, 2020 and December 31, 2019, respectively.


(b)	On March 17, 2020, we drew down $648 million and $225 million under the STG Revolving Credit Facility and DSG Revolving Credit Facility, respectively. See Note 3. Notes Payable and Commercial Bank Financing for further information.

(c)

The Company records its variable payment obligations at fair value on a recurring basis. These liabilities are further described in Other Liabilities within Note 5. Commitments and Contingencies. Significant unobservable inputs used in the fair value measurement are projected future operating income before depreciation and amortization; and weighted average discount rate of 9%. Significant increases (decreases) in projected future operating income would generally result in a significantly higher (lower) fair value measurement. Significant increases (decreases) in discount rates, would result in a significantly (lower) higher fair value measurement.

The following table summarizes the changes in financial liabilities measured at fair value on a recurring basis and categorized as Level 3 under the fair value hierarchy (in millions):



	Variable Payment Obligations
Fair value at December 31, 2019	$	239
Payments	(7		)
Measurement adjustments	3
Fair value at March 31, 2020	$	235

~~(a) Amounts are carried net of debt discount and deferred financing cost, which are excluded in the above table, of $40.7 million as of September 30, 2017 and $43.4 million as of December 31, 2016.~~

9.11.CONDENSED CONSOLIDATING FINANCIAL STATEMENTS:

~~STG,~~Sinclair Television Group, Inc. (STG), a wholly-owned subsidiary and the television operating subsidiary of Sinclair Broadcast Group, Inc. (SBG), is the primary obligor under ~~the~~STG's Bank Credit Agreement, ~~the 5.375% Notes,~~ 5.625% ~~Notes, 6.125%~~ Notes, 5.875% Notes, 5.125% Notes, and 5.500% Notes (collectively, the Notes are referred to as, the STG Notes), and, until they were redeemed, ~~the 6.375%~~STG's 5.375% Notes and 6.125% Notes. STG’s 5.625% Notes were publicly registered on a Registration Statement on Form S-3ASR (No. 333-203483), effective April 17, 2015, and, until they were redeemed, STG’s 6.125% Notes were publicly registered on a Registration Statement on Form S-4 (No. 333-187724), effective April 16, 2013. Our Class A Common Stock and Class B Common Stock as of ~~September 30, 2017,~~March 31, 2020, were obligations or securities of SBG and not obligations or securities of STG. SBG is a guarantor under ~~the~~STG Bank Credit Agreement, ~~the 5.375% Notes,~~ 5.625% ~~Notes, 6.125%~~ Notes, 5.875% Notes, ~~6.125%~~5.125% Notes, ~~and 5.125%~~5.500% Notes and, until they were redeemed, ~~the 6.375%~~STG's 5.375% Notes and 6.125% Notes. As of ~~September 30, 2017,~~March 31, 2020, our consolidated total debt, net of deferred financing costs and debt discounts, of ~~$4,055.6~~$13,302 million included ~~$4,027.1~~$5,079 million related to STG and its subsidiaries of which SBG guaranteed ~~$3,980.9~~$5,037 million.

SBG, KDSM, LLC, a wholly-owned subsidiary of SBG, and STG’s wholly-owned subsidiaries (guarantor subsidiaries), have fully and unconditionally guaranteed, subject to certain customary automatic release provisions, all of STG’s obligations. Those guarantees are joint and several. There are certain contractual restrictions on the ability of SBG, STG, or KDSM, LLC to obtain funds from their subsidiaries in the form of dividends or loans.

The following condensed consolidating financial statements present the consolidated balance sheets, consolidated statements of operations and comprehensive income, and consolidated statements of cash flows of SBG, STG, KDSM, LLC and the guarantor subsidiaries, the direct and indirect non-guarantor subsidiaries of SBG and the eliminations necessary to arrive at our information on a consolidated basis. The year-end condensed balance sheet data was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America.

These statements are presented in accordance with the disclosure requirements under SEC Regulation S-X, Rule 3-10.

CONDENSED CONSOLIDATING BALANCE SHEET

AS OF ~~SEPTEMBER 30, 2017~~MARCH 31, 2020

(in ~~thousands)~~millions) (unaudited)



	Sinclair Broadcast Group, Inc.		Sinclair Television Group, Inc.		Guarantor Subsidiaries and KDSM, LLC		Non- Guarantor Subsidiaries		Eliminations			Sinclair Consolidated
Cash and cash equivalents	$	—	$	840	$	3	$	499	$	—		$	1,342
Accounts receivable, net	—		1		538		561		—			1,100
Other current assets	2		46		258		373		(52		)	627
Total current assets	2		887		799		1,433		(52		)	3,069

Property and equipment, net	1		35		678		98		(26		)	786

Investment in consolidated subsidiaries	2,120		3,595		—		—		(5,715		)	—
Goodwill	—		—		2,091		2,625		—			4,716
Indefinite-lived intangible assets	—		—		144		14		—			158
Definite-lived intangible assets, net	—		—		1,384		6,476		(46		)	7,814
Other long-term assets	79		1,604		277		529		(1,672		)	817
Total assets	$	2,202	$	6,121	$	5,373	$	11,175	$	(7,511	)	$	17,360

Accounts payable and accrued liabilities	$	28	$	98	$	256	$	197	$	(53	)	$	526
Current portion of long-term debt	—		27		5		40		(1		)	71
Other current liabilities	1		1		117		124		—			243
Total current liabilities	29		126		378		361		(54		)	840

Long-term debt	700		4,991		37		8,529		(1,026		)	13,231
Other long-term liabilities	13		48		1,364		550		(864		)	1,111
Total liabilities	742		5,165		1,779		9,440		(1,944		)	15,182

Redeemable noncontrolling interests	—		—		—		522		—			522
Total Sinclair Broadcast Group equity	1,460		956		3,594		1,020		(5,571		)	1,459
Noncontrolling interests in consolidated subsidiaries	—		—		—		193		4			197
Total liabilities, redeemable noncontrolling interests, and equity	$	2,202	$	6,121	$	5,373	$	11,175	$	(7,511	)	$	17,360

Sinclair
Broadcast
Group, Inc. Sinclair
Television
Group, Inc. Guarantor
Subsidiaries
and KDSM,
LLC Non-
Guarantor
Subsidiaries Eliminations Sinclair
Consolidated
Cash $ —
$ 551,349
$ 22,161
$ 28,683
$ —
$ 602,193
Restricted cash —
—
187,854
124,948
—
312,802
Accounts receivable —
—
488,553
34,558
—
523,111
Other current assets 4,063
4,843
139,838
25,511
(22,930 ) 151,325
Total current assets 4,063
556,192
838,406
213,700
(22,930 ) 1,589,431

Property and equipment, net 1,075
17,814
584,699
133,155
(12,618 ) 724,125

Investment in consolidated subsidiaries 1,109,617
3,759,217
4,179
—
(4,873,013 ) —
Goodwill —
—
2,109,784
3,867
—
2,113,651
Indefinite-lived intangible assets —
—
153,011
15,709
—
168,720
Definite-lived intangible assets —
—
1,820,369
80,168
(58,599 ) 1,841,938
Other long-term assets 36,255
836,081
102,107
157,903
(883,142 ) 249,204
Total assets $ 1,151,010
$ 5,169,304
$ 5,612,555
$ 604,502
$ (5,850,302 ) $ 6,687,069

Accounts payable and accrued liabilities $ 207
$ 68,816
$ 204,821
$ 42,129
$ (25,125 ) $ 290,848
Deferred spectrum auction proceeds —
—
187,854
122,948
—
310,802
Current portion of long-term debt —
154,521
2,357
7,607
—
164,485
Current portion of affiliate long-term debt 479
—
1,388
765
(449 ) 2,183
Other current liabilities —
—
127,097
15,808

142,905
Total current liabilities 686
223,337
523,517
189,257
(25,574 ) 911,223

Long-term debt —
3,806,135
28,954
41,045
—
3,876,134
Affiliate long-term debt —
—
11,505
343,517
(342,198 ) 12,824
Other liabilities 8,329
36,524
1,289,220
181,505
(736,989 ) 778,589
Total liabilities 9,015
4,065,996
1,853,196
755,324
(1,104,761 ) 5,578,770

Total Sinclair Broadcast Group equity (deficit) 1,141,995
1,103,308
3,759,359
(112,439 ) (4,750,228 ) 1,141,995
Noncontrolling interests in consolidated subsidiaries —
—
—
(38,383 ) 4,687
(33,696 )
Total liabilities and equity (deficit) $ 1,151,010
$ 5,169,304
$ 5,612,555
$ 604,502
$ (5,850,302 ) $ 6,687,069

CONDENSED CONSOLIDATING BALANCE SHEET

AS OF DECEMBER 31, ~~2016~~2019

(in ~~thousands)~~millions)


	Sinclair Broadcast Group, Inc.		Sinclair Television Group, Inc.		Guarantor Subsidiaries and KDSM, LLC		Non- Guarantor Subsidiaries			Eliminations			Sinclair Consolidated			Sinclair Broadcast Group, Inc.		Sinclair Television Group, Inc.		Guarantor Subsidiaries and KDSM, LLC		Non- Guarantor Subsidiaries		Eliminations			Sinclair Consolidated
Cash	$	—	$	232,297	$	10,675	$	17,012		$	—		$	259,984
Restricted Cash	—		—		200		—			—			200
Accounts receivable	—		—		478,190		37,024			(1,260		)	513,954
Cash and cash equivalents																$	—	$	357	$	3	$	973	$	—		$	1,333
Accounts receivable, net																—		—		561		571		—			1,132
Other current assets	5,561		3,143		124,113		25,406			(27,273		)	130,950			5		41		264		188		(50		)	448
Total current assets	5,561		235,440		613,178		79,442			(28,533		)	905,088			5		398		828		1,732		(50		)	2,913

Property and equipment, net	1,820		17,925		570,289		131,326			(3,784		)	717,576			1		31		659		96		(22		)	765

Investment in consolidated subsidiaries	551,250		3,614,605		4,179		—			(4,170,034		)	—			2,270		3,558		—		—		(5,828		)	—
Goodwill	—		—		1,986,467		4,279			—			1,990,746			—		—		2,091		2,625		—			4,716
Indefinite-lived intangible assets	—		—		140,597		15,709			—			156,306			—		—		144		14		—			158
Definite-lived intangible assets	—		—		1,770,512		233,368			(59,477		)	1,944,403
Definite-lived intangible assets, net																—		—		1,426		6,598		(47		)	7,977
Other long-term assets	$	46,586	$	819,506	$	103,808	$	169,817		$	(890,668	)	$	249,049		82		1,611		279		618		(1,749		)	841
Total assets	$	605,217	$	4,687,476	$	5,189,030	$	633,941		$	(5,152,496	)	$	5,963,168		$	2,358	$	5,598	$	5,427	$	11,683	$	(7,696	)	$	17,370

Accounts payable and accrued liabilities	$	100	$	69,118	$	225,645	$	48,815		$	(21,173	)	$	322,505		$	142	$	109	$	286	$	296	$	(51	)	$	782
Current portion of long-term debt	—		55,501		1,851		113,779			—			171,131			—		27		4		41		(1		)	71
Current portion of affiliate long-term debt	1,857		—		1,514		2,336			(2,103		)	3,604
Other current liabilities	—		—		127,967		13,590			(2,324		)	139,233			—		1		133		147		—			281
Total current liabilities	1,957		124,619		356,977		178,520			(25,600		)	636,473			142		137		423		484		(52		)	1,134

Long-term debt	—		3,939,463		31,014		44,455			—			4,014,932			700		4,348		32		8,317		(1,030		)	12,367
Affiliate long-term debt	—		—		12,663		396,957			(395,439		)	14,181
Other liabilities	15,277		31,817		1,190,717		183,418			(681,583		)	739,646
Other long-term liabilities																13		53		1,418		547		(934		)	1,097
Total liabilities	17,234		4,095,899		1,591,371		803,350			(1,102,622		)	5,405,232			855		4,538		1,873		9,348		(2,016		)	14,598

Total Sinclair Broadcast Group equity (deficit)	587,983		591,577		3,597,659		(134,991		)	(4,054,245		)	587,983
Redeemable noncontrolling interests																—		—		—		1,078		—			1,078
Total Sinclair Broadcast Group equity																1,503		1,060		3,554		1,069		(5,684		)	1,502
Noncontrolling interests in consolidated subsidiaries	—		—		—		(34,418		)	4,371			(30,047		)	—		—		—		188		4			192
Total liabilities and equity (deficit)	$	605,217	$	4,687,476	$	5,189,030	$	633,941		$	(5,152,496	)	$	5,963,168
Total liabilities, redeemable noncontrolling interests, and equity																$	2,358	$	5,598	$	5,427	$	11,683	$	(7,696	)	$	17,370

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME

FOR THE THREE MONTHS ENDED ~~SEPTEMBER 30, 2017~~MARCH 31, 2020

(in ~~thousands)~~millions) (unaudited)



	Sinclair Broadcast Group, Inc.			Sinclair Television Group, Inc.			Guarantor Subsidiaries and KDSM, LLC			Non- Guarantor Subsidiaries			Eliminations			Sinclair Consolidated
Net revenue	$	—		$	24		$	739		$	893		$	(47	)	$	1,609

Media programming and production expenses	—			—			328			516			(16		)	828
Selling, general and administrative expenses	3			44			168			67			(23		)	259
Depreciation, amortization and other operating expenses	—			1			51			147			(4		)	195
Total operating expenses	3			45			547			730			(43		)	1,282

Operating (loss) income	(3		)	(21		)	192			163			(4		)	327

Equity in earnings of consolidated subsidiaries	129			173			—			—			(302		)	—
Interest expense	(3		)	(55		)	(1		)	(127		)	6			(180		)
Other (expense) income	(2		)	(2		)	(9		)	8			(3		)	(8		)
Total other income (expense)	124			116			(10		)	(119		)	(299		)	(188		)

Income tax benefit (provision)	2			29			(6		)	(13		)	—			12
Net income	123			124			176			31			(303		)	151
Net income attributable to the redeemable noncontrolling interests	—			—			—			(20		)	—			(20		)
Net income attributable to the noncontrolling interests	—			—			—			(8		)	—			(8		)
Net income attributable to Sinclair Broadcast Group	$	123		$	124		$	176		$	3		$	(303	)	$	123
Comprehensive income	$	123		$	124		$	176		$	31		$	(303	)	$	151

Sinclair
Broadcast
Group, Inc. Sinclair
Television
Group, Inc. Guarantor
Subsidiaries
and KDSM,
LLC Non-
Guarantor
Subsidiaries Eliminations Sinclair
Consolidated
Net revenue $ —
$ —
$ 638,100
$ 50,816
$ (18,025 ) $ 670,891

Media program and production expenses —
—
254,956
29,376
(16,339 ) 267,993
Selling, general and administrative 2,027
23,534
130,289
3,582
4
159,436
Depreciation, amortization and other operating expenses 247
1,591
111,849
27,158
(830 ) 140,015
Total operating expenses 2,274
25,125
497,094
60,116
(17,165 ) 567,444

Operating (loss) income (2,274 ) (25,125 ) 141,006
(9,300 ) (860 ) 103,447

Equity in earnings of consolidated subsidiaries 32,196
90,445
114
—
(122,755 ) —
Interest expense (10 ) (50,247 ) (1,013 ) (4,968 ) 4,495
(51,743 )
Other income (expense) (92 ) 1,869
(2,673 ) (1,124 ) —
(2,020 )
Total other income (expense) 32,094
42,067
(3,572 ) (6,092 ) (118,260 ) (53,763 )

Income tax benefit (provision) 817
25,364
(46,987 ) 3,688
—
(17,118 )
Net income (loss) 30,637
42,306
90,447
(11,704 ) (119,120 ) 32,566
Net income attributable to the noncontrolling interests —
—
—
(1,730 ) (199 ) (1,929 )
Net income (loss) attributable to Sinclair Broadcast Group $ 30,637
$ 42,306
$ 90,447
$ (13,434 ) $ (119,319 ) $ 30,637
Comprehensive income (loss) $ 30,637
$ 42,306
$ 90,447
$ (11,704 ) $ (119,120 ) $ 32,566

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME

FOR THE THREE MONTHS ENDED ~~SEPTEMBER 30, 2016~~MARCH 31, 2019

(in ~~thousands)~~millions) (unaudited)



	Sinclair Broadcast Group, Inc.			Sinclair Television Group, Inc.			Guarantor Subsidiaries and KDSM, LLC			Non- Guarantor Subsidiaries			Eliminations			Sinclair Consolidated
Net revenue	$	—		$	—		$	656		$	83		$	(17	)	$	722

Media programming and production expenses	—			—			301			30			(12		)	319
Selling, general and administrative expenses	2			26			156			5			(1		)	188
Depreciation, amortization and other operating expenses				1			78			44			(2		)	121
Total operating expenses	2			27			535			79			(15		)	628

Operating (loss) income	(2		)	(27		)	121			4			(2		)	94

Equity in earnings of consolidated subsidiaries	24			89			—			—			(113		)	—
Interest expense	—			(53		)	(1		)	(4		)	4			(54		)
Other income (expense)	—			1			(12		)	(1		)	—			(12		)
Total other income (expense)	24			37			(13		)	(5		)	(109		)	(66		)

Income tax benefit (provision)	—			12			(17		)	—			—			(5		)
Net income (loss)	22			22			91			(1		)	(111		)	23
Net income attributable to the noncontrolling interests	—			—			—			(2		)	1			(1		)
Net income (loss) attributable to Sinclair Broadcast Group	$	22		$	22		$	91		$	(3	)	$	(110	)	$	22
Comprehensive income (loss)	$	23		$	22		$	91		$	(1	)	$	(112	)	$	23

Sinclair
Broadcast
Group, Inc. Sinclair
Television
Group, Inc. Guarantor
Subsidiaries
and KDSM,
LLC Non-
Guarantor
Subsidiaries Eliminations Sinclair
Consolidated
Net revenue $ —
$ —
$ 655,778
$ 63,877
$ (25,820 ) $ 693,835

Media program and production expenses —
—
234,474
33,556
(25,150 ) 242,880
Selling, general and administrative 1,275
16,969
124,352
3,153
(25 ) 145,724
Depreciation, amortization and other operating expenses 266
3,257
115,527
32,571
(384 ) 151,237
Total operating expenses 1,541
20,226
474,353
69,280
(25,559 ) 539,841

Operating (loss) income (1,541 ) (20,226 ) 181,425
(5,403 ) (261 ) 153,994

Equity in earnings of consolidated subsidiaries 51,113
114,060
51
—
(165,224 ) —
Interest expense (56 ) (50,364 ) (1,117 ) (8,256 ) 6,305
(53,488 )
Loss from extinguishment of debt —
(23,699 ) —
—
—
(23,699 )
Other income (expense) 1,157
469
(27 ) 613
—
2,212
Total other income (expense) 52,214
40,466
(1,093 ) (7,643 ) (158,919 ) (74,975 )

Income tax benefit (provision) 172
34,334
(64,535 ) 3,043
—
(26,986 )
Net income (loss) 50,845
54,574
115,797
(10,003 ) (159,180 ) 52,033
Net income attributable to the noncontrolling interests —
—
—
(1,180 ) (8 ) (1,188 )
Net income (loss) attributable to Sinclair Broadcast Group $ 50,845
$ 54,574
$ 115,797
$ (11,183 ) $ (159,188 ) $ 50,845
Comprehensive income (loss) $ 50,845
$ 54,574
$ 115,797
$ (10,003 ) $ (159,180 ) $ 52,033

~~CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME~~

~~FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2017~~

~~(in thousands) (unaudited)~~

Sinclair
Broadcast
Group, Inc. Sinclair
Television
Group, Inc. Guarantor
Subsidiaries
and KDSM,
LLC Non-
Guarantor
Subsidiaries Eliminations Sinclair
Consolidated
Net revenue $ —
$ —
$ 1,901,075
$ 157,236
$ (58,196 ) $ 2,000,115

Media program and production expenses —
—
760,642
88,296
(53,798 ) 795,140
Selling, general and administrative 5,615
64,903
377,177
9,135
—
456,830
Depreciation, amortization and other operating expenses 738
4,967
335,316
29,248
(2,048 ) 368,221
Total operating expenses 6,353
69,870
1,473,135
126,679
(55,846 ) 1,620,191

Operating (loss) income (6,353 ) (69,870 ) 427,940
30,557
(2,350 ) 379,924

Equity in earnings of consolidated subsidiaries 136,311
274,850
257
—
(411,418 ) —
Interest expense (81 ) (154,330 ) (3,557 ) (16,740 ) 14,688
(160,020 )
Loss from the extinguishment of debt —
(1,404 ) —
—
—
(1,404 )
Other income 731
3,796
(4,071 ) 924
—
1,380
Total other income (expense) 136,961
122,912
(7,371 ) (15,816 ) (396,730 ) (160,044 )

Income tax benefit (provision) 1,875
75,105
(143,059 ) (4,498 ) —
(70,577 )
Net income (loss) 132,483
128,147
277,510
10,243
(399,080 ) 149,303
Net income attributable to the noncontrolling interests —
—
—
(16,608 ) (212 ) (16,820 )
Net income (loss) attributable to Sinclair Broadcast Group $ 132,483
$ 128,147
$ 277,510
$ (6,365 ) $ (399,292 ) $ 132,483
Comprehensive income (loss) $ 132,483
$ 128,147
$ 277,510
$ 10,243
$ (399,080 ) $ 149,303

~~CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME~~

~~FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2016~~

~~(in thousands) (unaudited)~~

Sinclair
Broadcast
Group, Inc. Sinclair
Television
Group, Inc. Guarantor
Subsidiaries
and KDSM,
LLC Non-
Guarantor
Subsidiaries Eliminations Sinclair
Consolidated
Net revenue $ —
$ —
$ 1,828,407
$ 178,164
$ (67,313 ) $ 1,939,258

Media program and production expenses —
—
679,337
88,378
(65,338 ) 702,377
Selling, general and administrative 3,277
53,189
360,793
7,641
(59 ) 424,841
Depreciation, amortization and other operating expenses 798
5,666
340,974
96,560
(1,365 ) 442,633
Total operating expenses 4,075
58,855
1,381,104
192,579
(66,762 ) 1,569,851

Operating (loss) income (4,075 ) (58,855 ) 447,303
(14,415 ) (551 ) 369,407

Equity in earnings of consolidated subsidiaries 124,536
289,593
170
—
(414,299 ) —
Interest expense (192 ) (147,635 ) (3,417 ) (24,258 ) 18,683
(156,819 )
Loss from extinguishment of debt —
(23,699 ) —
—
—
(23,699 )
Other income (expense) 3,386
736
583
439
—
5,144
Total other income (expense) 127,730
118,995
(2,664 ) (23,819 ) (395,616 ) (175,374 )

Income tax benefit (provision) 749
75,470
(150,436 ) 8,446
—
(65,771 )
Net income (loss) 124,404
135,610
294,203
(29,788 ) (396,167 ) 128,262
Net income attributable to the noncontrolling interests —
—
—
(3,341 ) (517 ) (3,858 )
Net income (loss) attributable to Sinclair Broadcast Group $ 124,404
$ 135,610
$ 294,203
$ (33,129 ) $ (396,684 ) $ 124,404
Comprehensive income (loss) $ 124,404
$ 135,610
$ 294,203
$ (29,788 ) $ (396,167 ) $ 128,262

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

FOR THE ~~NINE~~THREE MONTHS ENDED ~~SEPTEMBER 30, 2017~~MARCH 31, 2020

(in ~~thousands)~~millions) (unaudited)



	Sinclair Broadcast Group, Inc.			Sinclair Television Group, Inc.			Guarantor Subsidiaries and KDSM, LLC			Non- Guarantor Subsidiaries			Eliminations			Sinclair Consolidated
NET CASH FLOWS (USED IN) FROM OPERATING ACTIVITIES	$	(115	)	$	(40	)	$	154		$	(37	)	$	(1	)	$	(39	)

NET CASH FLOWS USED IN INVESTING ACTIVITIES
Acquisition of property and equipment	—			(5		)	(41		)	(4		)	4			(46		)
Spectrum repack reimbursements	—			—			24			—			—			24
Proceeds from the sale of assets	—			—			18			—			—			18
Purchases of investments	(1		)	(2		)	(12		)	(10		)	—			(25		)
Distributions from investments	1			—			—			5			—			6
Net cash flows used in investing activities	—			(7		)	(11		)	(9		)	4			(23		)

NET CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES
Proceeds from notes payable and commercial bank financing	—			648			—			225			—			873
Repayments of notes payable, commercial bank financing and finance leases	—			(7		)	(1		)	(12		)	—			(20		)
Repurchase of outstanding Class A Common Stock	(176		)	—			—			—			—			(176		)
Dividends paid on Class A and Class B Common Stock	(18		)	—			—			—			—			(18		)
Redemption of redeemable subsidiary preferred equity	—			—			—			(198		)	—			(198		)
Distributions to noncontrolling interests	—			—			—			(3		)	—			(3		)
Distributions to redeemable noncontrolling interests	—			—			—			(378		)	—			(378		)
Increase (decrease) in intercompany payables	310			(111		)	(142		)	(54		)	(3		)	—
Other, net	(1		)	—			—			(8		)	—			(9		)
Net cash flows from (used in) financing activities	115			530			(143		)	(428		)	(3		)	71

NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH	—			483			—			(474		)	—			9
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, beginning of period	—			357			3			973			—			1,333
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, end of period	$	—		$	840		$	3		$	499		$	—		$	1,342

Sinclair
Broadcast
Group, Inc. Sinclair
Television
Group, Inc. Guarantor
Subsidiaries
and KDSM,
LLC Non-
Guarantor
Subsidiaries Eliminations Sinclair
Consolidated
NET CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES $ (5,605 ) $ (141,239 ) $ 433,435
$ (12,959 ) $ 4,779
$ 278,411
CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES:
Acquisition of property and equipment (131 ) (6,088 ) (47,564 ) (2,677 ) 997
(55,463 )
Acquisition of businesses, net of cash acquired —
(8,308 ) (261,491 ) —
—
(269,799 )
Purchase of alarm monitoring contracts —
—
—
(5,682 ) —
(5,682 )
Proceeds from sale of non-media business —
—
—
192,634
—
192,634
Investments in equity and cost method investees (945 ) (1,101 ) (15,469 ) (4,787 ) —
(22,302 )
Other, net 3,903
(7,733 ) 541
2,739
—
(550 )
Net cash flows from (used in) investing activities 2,827
(23,230 ) (323,983 ) 182,227
997
(161,162 )

CASH FLOWS (USED IN) FROM FINANCING ACTIVITIES:

Proceeds from notes payable, commercial bank financing and capital leases —
159,669
—
6,372
—
166,041
Repayments of notes payable, commercial bank financing and capital leases —
(200,119 ) (1,367 ) (116,823 ) —
(318,309 )
Proceeds from the issuance of Class A Common Stock 487,883
—
—
—
—
487,883
Dividends paid on Class A and Class B Common Stock (53,049 ) —
—
—
—
(53,049 )
Repurchase of outstanding Class A Common Stock (30,287 ) —
—
—
—
(30,287 )
Distributions to noncontrolling interests
—
—
—
(20,469 ) —
(20,469 )
Increase (decrease) in intercompany payables (400,451 ) 524,016
(92,993 ) (24,750 ) (5,822 ) —
Other, net (1,318 ) (45 ) (3,606 ) (1,927 ) 46
(6,850 )
Net cash flows (used in) from financing activities 2,778
483,521
(97,966 ) (157,597 ) (5,776 ) 224,960

NET INCREASE IN CASH AND CASH EQUIVALENTS —
319,052
11,486
11,671
—
342,209
CASH AND CASH EQUIVALENTS, beginning of period —
232,297
10,675
17,012
—
259,984
CASH AND CASH EQUIVALENTS, end of period $ —
$ 551,349
$ 22,161
$ 28,683
$ —
$ 602,193

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

FOR THE ~~NINE~~THREE MONTHS ENDED ~~SEPTEMBER 30, 2016~~MARCH 31, 2019

(in ~~thousands)~~millions) (unaudited)

Sinclair
Broadcast
Group, Inc. Sinclair
Television
Group, Inc. Guarantor
Subsidiaries
and KDSM,
LLC Non-
Guarantor
Subsidiaries Eliminations Sinclair
Consolidated
NET CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES $ (4,060 ) $ (152,724 ) $ 451,804
$ 17,138
$ 18,102
$ 330,260
CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES:

Acquisition of property and equipment (7 ) (3,626 ) (61,758 ) (3,842 ) 632
(68,601 )
Acquisition of businesses, net of cash acquired —
—
(415,481 ) (10,375 ) —
(425,856 )
Purchase of alarm monitoring contracts —
—
—
(29,143 ) —
(29,143 )
Investments in equity and cost method investees (2,945 ) (10,840 ) (34 ) (20,405 ) —
(34,224 )
Proceeds from sale of non-media business —
—
7,263
9,133
—
16,396
Loans to affiliates —
(19,500 ) —
—
—
(19,500 )
Other, net 1,714
(1,828 ) (86 ) 3,601
—
3,401
Net cash flows from (used in) investing activities (1,238 ) (35,794 ) (470,096 ) (51,031 ) 632
(557,527 )

CASH FLOWS (USED IN) FROM FINANCING ACTIVITIES:

Proceeds from notes payable, commercial bank financing and capital leases —
995,000
—
16,312
—
1,011,312
Repayments of notes payable, commercial bank financing and capital leases —
(636,547 ) (1,171 ) (16,269 ) —
(653,987 )
Dividends paid on Class A and Class B Common Stock (49,667 ) —
—
—
—
(49,667 )
Distributions to noncontrolling interests —
—
—
(8,363 ) —
(8,363 )
Repurchase of outstanding Class A Common Stock (101,164 ) —
—
—
—
(101,164 )
Increase (decrease) in intercompany payables 158,574
(189,022 ) 22,603
26,764
(18,919 ) —
Other, net (2,445 ) (15,013 ) 1,175
(193 ) 185
(16,291 )
Net cash flows (used in) from financing activities 5,298
154,418
22,607
18,251
(18,734 ) 181,840

NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS —
(34,100 ) 4,315
(15,642 ) —
(45,427 )
CASH AND CASH EQUIVALENTS, beginning of period —
115,771
235
33,966
—
149,972
CASH AND CASH EQUIVALENTS, end of period $ —
$ 81,671
$ 4,550
$ 18,324
$ —
$ 104,545



	Sinclair Broadcast Group, Inc.			Sinclair Television Group, Inc.			Guarantor Subsidiaries and KDSM, LLC			Non- Guarantor Subsidiaries			Eliminations			Sinclair Consolidated
NET CASH FLOWS (USED IN) FROM OPERATING ACTIVITIES	$	—		$	(66	)	$	154		$	13		$	(2	)	$	99

NET CASH FLOWS USED IN INVESTING ACTIVITIES
Acquisition of property and equipment	—			(3		)	(27		)	(1		)	2			(29		)
Spectrum repack reimbursements	—			—			8			—			—			8
Purchases of investments	(2		)	(6		)	(18		)	(2		)	—			(28		)
Distributions from investments	—			1			—			1			—			2
Net cash flows used in investing activities	(2		)	(8		)	(37		)	(2		)	2			(47		)

CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES:
Repayments of notes payable, commercial bank financing and finance leases	—			(8		)	(1		)	(2		)	—			(11		)
Repurchase of outstanding Class A Common Stock	(105		)	—			—			—			—			(105		)
Dividends paid on Class A and Class B Common Stock	(18		)	—			—			—			—			(18		)
Distributions to noncontrolling interests	—			—			—			(2		)	—			(2		)
Increase (decrease) in intercompany payables	126			(10		)	(132		)	16			—			—
Other, net	(1		)	—			—			—			—			(1		)
Net cash flows from (used in) financing activities	2			(18		)	(133		)	12			—			(137		)

NET (DECREASE) INCREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH	—			(92		)	(16		)	23			—			(85		)
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, beginning of period	—			962			19			79			—			1,060
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, end of period	$	—		$	870		$	3		$	102		$	—		$	975

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

FORWARD-LOOKING STATEMENTS

This report includes or incorporates forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act), and the U.S. Private Securities Litigation Reform Act of 1995. We have based these forward-looking statements on our current expectations and projections about future events. These forward-looking statements are subject to risks, uncertainties and assumptions about us, including, among other things, the following risks:

COVID-19 risks

Requirement of our RSNs to pay professional sports team minimum rights fees, regardless of the number of games played in a season;

potential need to reimburse vMVPD and MVPD affiliation fees related to canceled professional sporting events;

loss of advertising revenue due to postponement or cancellation of professional sporting events;

loss of advertising revenue as advertisers may be more reluctant to purchase advertising spots due to reduced consumer spending as a result of shelter in place and stay at home orders; and

cybersecurity and operational risks as a result of work-from-home arrangements.

General risks

•~~the~~The impact of changes in national and regional economies and credit and capital markets;

•loss of consumer confidence;

•the potential impact of changes in tax law;

•the activities of our competitors;

•terrorist acts of violence or war and other geopolitical events;

•natural disasters and pandemics that impact our advertisers, our stations and ~~our stations;~~networks; and

•~~cybersecurity.~~cybersecurity breaches.

Industry risks

~~the~~The business conditions of our advertisers, particularly in the political, automotive and service ~~industries;~~categories;

competition with other broadcast television stations, radio stations, ~~MVPDs,~~multi-channel video programming distributors (MVPDs), internet and broadband content providers, and other print and media outlets serving in the same markets;

the performance of networks and syndicators that provide us with programming content, as well as the performance of internally originated programming;

the loss of appeal of our sports programming, which may be unpredictable, the impact of strikes caused by collective bargaining between players and sports leagues, and increased programming costs may have a material negative effect on our business and our results of operations;

the availability and cost of programming from networks and syndicators, as well as the cost of internally originated programming;

our relationships with networks and their strategies to distribute their programming via means other than their local television affiliates, such as over-the-top (OTT) or direct-to-consumer content;

the effects of the Federal Communications Commission’s ~~(FCC’s)~~(FCC) National Broadband Plan, ~~and incentive auction and~~the impact of the repacking of our broadcasting spectrum, as a result of the incentive auction, within a limited ~~timeframe;~~timeframe and funding allocated;

the potential for additional governmental regulation of broadcasting or changes in those regulations and court actions interpreting those regulations, including ownership regulations limiting over-the-air ~~television’s~~television's ability to compete effectively (including regulations relating to Joint Sales Agreements (JSA) ~~and~~, Shared Services Agreements (SSA), cross ownership rules, and the national ownership cap), arbitrary enforcement of indecency regulations, retransmission consent regulations, and political or other advertising restrictions, such as payola rules;

the impact of FCC and Congressional efforts ~~to limit the ability of a television station to negotiate retransmission consent agreements for the same-market stations it does not own and other FCC efforts~~ which may restrict a television station's retransmission consent ~~agreements;~~negotiations;

the impact of FCC rules requiring broadcast stations to publish, among other information, political advertising rates online;

the impact of foreign government rules related to digital and online assets;

labor disputes and legislation and other union activity associated with film, acting, writing, and other guilds and professional sports leagues;

the broadcasting community’s ability to develop and adopt a viable mobile digital broadcast television (mobile DTV) strategy and platform, such as the adoption of ~~ATSC 3.0~~a next generation broadcast standard (NEXTGEN TV), and the consumer’s appetite for mobile television;

the impact of programming payments charged by networks pursuant to their affiliation agreements with broadcasters requiring compensation for network programming;

the potential impact from the elimination of rules prohibiting mergers of the four major television networks;

the effects of declining live/appointment viewership as reported through rating systems and local television efforts to adopt and receive credit for same day viewing plus viewing on-demand thereafter;

changes in television rating measurement methodologies that could negatively impact audience results;

the ability of local MVPDs to coordinate and determine local advertising rates as a consortium;

the ability to negotiate terms at least as favorable as those in existence with MVPDs and others;

changes in the makeup of the population in the areas where stations are located;

the operation of low power devices in the broadcast spectrum, which could interfere with our broadcast signals;

~~Over-the-top (OTT)~~OTT technologies and their potential impact on cord-cutting; ~~and~~

the impact of MVPDs, virtual MVPDs (vMVPDs), and OTTs offering ~~“skinny”~~"skinny" programming bundles that may not include television broadcast ~~stations; and~~stations, regional sports networks, or other programming that we distribute;

the effect of a potential decline in the number of subscribers to MVPD services;

fluctuations in advertising rates and availability of ~~inventory.~~inventory;

the ability of others to retransmit our signal without our consent; and

the ability to renew media rights agreements with various professional sports teams which have varying durations and terms that are at least as favorable as those in existence.

Risks specific to us

~~our limited ability to obtain FCC approval for any future acquisitions, as well as, in certain cases, customary antitrust clearance and network consents for any future acquisitions;~~

~~the~~The effectiveness of our management;

our ability to attract and maintain local, national, and network advertising and successfully participate in new sales channels such as programmatic and addressable advertising through business partnership ventures and the development of technology;

our ability to service our debt obligations and operate our business under restrictions contained in our financing agreements;

our ability to successfully implement and monetize our own content management system (CMS) designed to provide our viewers significantly improved content via the internet and other digital platforms;

our ability to successfully renegotiate retransmission consent and distribution agreements for our existing and acquired businesses;

the ability of stations which we consolidate, but do not negotiate on their behalf, to successfully renegotiate retransmission consent and affiliation fees (cable network fees) agreements;

our ability to secure distribution of our programming to a wide audience;

our ability to renew our FCC licenses;

our ability to obtain FCC approval for any future acquisitions, as well as, in certain cases, customary antitrust clearance for any future acquisitions;

our exposure to any wrongdoing by those outside the Company, but which could affect our business or pending acquisitions;

our ability to identify media business investment opportunities and to successfully integrate any acquired businesses, as well as the success of our ~~digital~~new content and distribution initiatives in a competitive environment, ~~such as the investment~~including CHARGE!, TBD, Comet, STIRR, Marquee, other original programming, mobile DTV, and our recent acquisition of and investments in the ~~re-launch of Circa;~~RSNs;

our ability to maintain our affiliation and programming service agreements with our networks and program service providers and at renewal, to successfully negotiate these agreements with favorable terms;

our joint venture arrangements related to our regional sports networks are subject to a number of operational risks that could have a material adverse effect on our business, results of operations, and financial condition;

our ability to generate synergies and leverage new revenue opportunities;

our ability to renew contracts with leagues and sports teams;

our ability to effectively respond to technology affecting our industry and to increasing competition from other media providers;

our ability to deploy NEXTGEN TV nationwide;

the strength of ratings for our local news broadcasts including our news sharing arrangements;

the successful execution of our program development and multi-channel broadcasting initiatives including, but not limited to, sports programming, COMET, CHARGE!, TBD and other original programming, and mobile DTV; and

the results of prior year tax audits by taxing authorities.

Other matters set forth in this report, ~~and other reports filed with the Securities and Exchange Commission,~~ including the Risk Factors set forth in Item 1A of this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K for the year ended December 31, ~~2016~~2019, may also cause actual results in the future to differ materially from those described in the forward-looking statements. However, additional factors and risks not currently known to us or that we currently deem immaterial may also cause actual results in the future to differ materially from those described in the forward-looking statements. You are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date on which they are made. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. In light of these risks, uncertainties, and assumptions, events described in the forward-looking statements discussed in this report might not occur.

The following table sets forth certain operating data for the periods presented:

STATEMENTS OF OPERATIONS DATA

(in ~~thousands,~~millions, except for per share data) (Unaudited)

Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 2017 2016
Statement of Operations Data:

Media revenues (a) $ 624,169
$ 635,269
$ 1,858,477
$ 1,772,860
Revenues realized from station barter arrangements 31,787
32,061
91,817
92,574
Other non-media revenues 14,935
26,505
49,821
73,824
Total revenues 670,891
693,835
2,000,115
1,939,258

Media production expenses 267,993
242,880
795,140
702,377
Media selling, general and administrative expenses 133,605
126,672
385,372
370,169
Expenses realized from barter arrangements 26,696
27,181
77,491
79,365
Depreciation and amortization expenses (b) 95,857
106,134
292,287
308,249
Other non-media expenses 14,945
20,488
46,921
57,946
Corporate general and administrative expenses 25,831
19,052
71,458
54,672
Research and development expenses 2,551
745
5,053
3,055
Gain on asset dispositions (34 ) (3,311 ) (53,531 ) (5,982 )
Operating income 103,447
153,994
379,924
369,407

Interest expense and amortization of debt discount and deferred financing costs (51,743 ) (53,488 ) (160,020 ) (156,819 )
Loss from extinguishment of debt —
(23,699 ) (1,404 ) (23,699 )
(Loss) income from equity and cost method investees (4,362 ) 1,423
(4,221 ) 2,789
Other income, net 2,342
789
5,601
2,355
Income before income taxes 49,684
79,019
219,880
194,033
Income tax provision (17,118 ) (26,986 ) (70,577 ) (65,771 )
Net income 32,566
52,033
149,303
128,262
Net income attributable to the noncontrolling interests (1,929 ) (1,188 ) (16,820 ) (3,858 )
Net income attributable to Sinclair Broadcast Group $ 30,637
$ 50,845
$ 132,483
$ 124,404

Basic and Diluted Earnings Per Common Share Attributable to Sinclair Broadcast Group:

Basic earnings per share $ 0.30
$ 0.54
$ 1.34
$ 1.32
Diluted earnings per share $ 0.30
$ 0.54
$ 1.32
$ 1.30

Balance Sheet Data: September 30, 2017 December 31, 2016
Cash and cash equivalents $ 602,193
$ 259,984
Total assets $ 6,687,069
$ 5,963,168
Total debt (c) $ 4,055,626
$ 4,203,848
Total equity $ 1,108,299
$ 557,936



	Three Months Ended March 31,
	2020			2019
Statement of Operations Data:
Media revenues (a)	$	1,574		$	673
Non-media revenues	35			49
Total revenues	1,609			722

Media programming and production expenses	828			319
Media selling, general and administrative expenses	210			160
Depreciation and amortization expenses (b)	174			66
Amortization of program contract costs and net realizable value adjustments	23			24
Non-media expenses	30			39
Corporate general and administrative expenses	49			28
Gain on asset dispositions and other, net of impairment	(32		)	(8		)
Operating income	327			94

Interest expense including amortization of debt discount and deferred financing costs	(180		)	(54		)
Gain from extinguishment of debt	2			—
Loss from equity method investments	(6		)	(14		)
Other (expense) income, net	(4		)	2
Income before income taxes	139			28
Income tax benefit (provision)	12			(5		)
Net income	$	151		$	23
Net income attributable to the redeemable noncontrolling interests	(20		)	—
Net income attributable to the noncontrolling interests	(8		)	(1		)
Net income attributable to Sinclair Broadcast Group	$	123		$	22

Basic and Diluted Earnings Per Common Share Attributable to Sinclair Broadcast Group:
Basic earnings per share	$	1.36		$	0.23
Diluted earnings per share	$	1.35		$	0.23

~~(a)Media revenues is defined as broadcast revenues, net of agency commissions, retransmission fees, and other media related revenues.~~



	As of March 31, 2020		As of December 31, 2019
Balance Sheet Data:
Cash and cash equivalents	$	1,342	$	1,333
Total assets	$	17,360	$	17,370
Total debt (c)	$	13,302	$	12,438
Redeemable noncontrolling interests	$	522	$	1,078
Total equity	$	1,656	$	1,694

~~(b)Depreciation and amortization includes depreciation and amortization of property and equipment, definite-lived intangible assets, program contract costs and other assets.~~

~~(c)Total debt is defined as notes payable, capital leases and commercial bank financing, including the current and long-term portions.~~


(a)	Media revenues are defined as; distribution revenue; advertising revenue; and other media revenues.


(b)	Depreciation and amortization expenses include depreciation of property and equipment and amortization of definite-lived intangible and other assets.


(c)	Total debt is defined as current and long-term notes payable, finance leases, and commercial bank financing, including finance leases of affiliates.

The following Management’s Discussion and Analysis provides qualitative and quantitative information about our financial performance and condition and should be read in conjunction with our consolidated financial statements and the accompanying notes to those statements. This discussion consists of the following sections:

~~Executive Overview~~Summary of Significant Events — financial events during the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2020 and through the date this Report on Form 10-Q is filed.

Results of Operations — an analysis of our revenues and expenses for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2020 and ~~2016,~~2019, including comparisons between quarters and expectations for the three months ended ~~December 31, 2017.~~June 30, 2020.

Liquidity and Capital Resources — a discussion of our primary sources of liquidity and an analysis of our cash flows from or used in operating activities, investing activities, and financing activities ~~and an update of our debt refinancings~~ during the three ~~and nine~~ months ended ~~September 30, 2017.~~March 31, 2020.

Summary of Significant Events and Financial Highlights ~~from Third Quarter 2017 Events~~

~~Acquisitions~~

Transactions

In ~~September 2017,~~January 2020, a minority partner in one of our RSNs exercised their right to sell the entirety of their non-controlling interest to the Company ~~closed on its purchase of the stock of Bonten Media Group Holdings, Inc. (“Bonten”),~~for $376 million.

Television and Cunningham Broadcasting Corporation (“Cunningham”) also completed its purchase of the membership interest of Esteem Broadcasting for an aggregate purchase price of $240 million plus a working capital, excluding cash acquired, of $1.3 million. As a result of the transaction,Digital Content


•	In January 2020, STIRR launched an original channel, "2020 LIVE", to offer a continuous stream of live election coverage, giving viewers live access to daily campaign event feeds from across the country, including town hall meetings and stump speeches.

In March 2020, the Company ~~added 14 television stations in 8 markets and Cunningham assumed~~launched a new channel on STIRR, the ~~joint sales agreements under which the Company will provide services~~Company's fast-growing, free ad-supported streaming service. The new channel is dedicated to ~~4 additional stations. The acquisition was funded through cash on hand.~~

~~In October 2017, more than 99%~~COVID-19 coverage, including live feeds of Tribune stockholders voted to approve the Company’s announced acquisition of 100% of the outstanding shares of Tribune for $43.50 per share, or an aggregate purchase price of $3.9 billion, plus the assumption of $2.7 billion in net debt. The Company expects the transaction will close in early 2018 subject to customary closing conditions, including approval by the Federal Communications Commission (“FCC”) and antitrust clearance. The Company expects to fund the purchase price at closing through a combination of cash on hand, fully committed debt financing and by accessing the capital markets.

~~Content and Distribution~~

In August 2017, the Company announced an agreement for all of its ABC, CBS, FOX and NBC affiliates to be carried in their respective markets as YouTube TV launches in those markets. As part of this agreement, YouTube TV will also deliver Tennis Channel to all of its members.

In August 2017, the Company announced a multi-year deal with Fox Broadcasting Company ("FOX") that renews station affiliation agreements for all five of Sinclair's Fox Affiliations that were at the end of their terms. The affiliations renewed were for WACH in Columbia, South Carolina; KFOX in El Paso, Texas; KRXI in Reno Nevada; WFXL in Albany, Georgia; and WSBT in South Bend, Indiana.

In September 2017, the Company entered into a multi-year deal with CBS Corporation that renews three station affiliation that were set to expire at the end of 2018. In addition, CBS renewed an affiliation that was set to expire at the end of 2018 with a station that Sinclair provides sales and other services to under a joint sales agreement. The three stations owned by the Company are KGAN in Cedar Rapids, Iowa, KGBT in Harlingen, Texas, and WGME in Portland, Maine. The station to which the Company provides services to is WTVH in Syracuse, N.Y.

In October 2017, the Company’s professional wrestling promotion Ring of Honor expanded distribution into French-speaking Canada, on the channel Reseau des Sports, making it available to over 2 million homes in Canada.

~~In October 2017, the Company entered into an agreement with Sony Vue under which Sony Vue will include Sinclair's ABC, CBS, FOX, and NBC affiliates station broadcast~~press conferences as well as ~~Tennis, MyNetworkTV,~~other local and national news. STIRR finished the quarter with strong momentum, setting all-time highs across all key metrics with total impressions increasing 25% over the fourth quarter of 2019.

In April 2020, the Company made significant changes to the content across three, company-owned networks; Comet, ~~on their platform.~~Charge!, and TBD, including adding some of the most popular classic television series, as well as TBD's first-ever original series, The Link.

In April 2020, the Company's Nashville affiliate, WZTV FOX17, was named AP Outstanding News Operation in the state of Tennessee. The station was awarded the honor for its remarkable agility in chasing breaking news and demonstrating a sustained commitment to public service.

In April 2020, the Company won four National Headliner Awards and for the second consecutive year, Sinclair's Project Baltimore investigative reporting team received Investigative Reporters and Editors Inc. (IRE) recognition for exposing local education issues that reflected governmental neglect and lack of oversight.

~~ATSC 3.0~~

Distribution

In ~~July 2017, ONE Media entered into~~January 2020, the Company reached an agreement in principle to renew ten affiliation agreements with FOX Broadcasting Company.

In February 2020, Marquee announced a ~~definitive services~~carriage agreement with ~~Saankhya Labs~~Hulu. Including Hulu and previously announced agreements with over-the top platform AT&T TV Now and traditional MVPDs Charter, AT&T U-Verse, DirecTV, and Mediacom, Marquee has signed affiliation agreements with 43 distributors.

In March 2020, the Company and YouTube TV reached agreement for continued carriage of 19 RSNs across the country.

NEXTGEN TV

In January 2020, the Company and SK Telecom announced Cast.era, a joint venture focused on cloud infrastructure for broadcasting, ultra-low latency OTT broadcasting, and targeted advertising.

In February 2020, the Company became a member of Pearl TV, a business organization of U.S. broadcast companies with a shared interest in exploring forward-looking broadcasting opportunities, including innovative ways of promoting local broadcast TV content and developing digital media and wireless platforms for the design of a next-generation chip for ATSC 3.0 fixed and mobile reception. The parties also agreed to an investment in Saankhya Labs to provide such chips to the market. These agreements follow the previously announced incubation stage agreement between the parties that initiated the design of a new software defined radio chip architecture to support the first mobile next-generation chipset.broadcast industry.

Financing, Capital Allocation, and Shareholder Returns


•	In January 2020, we redeemed 200,000 units of redeemable subsidiary preferred equity for an aggregate redemption price equal to $200 million plus accrued and unpaid dividends. See Redeemable Subsidiary Preferred Equity under Note 4: Redeemable Noncontrolling Interests within the Consolidated Financial Statements for further discussion.

~~In August 2017,~~During the ~~Board of Directors declared a quarterly dividend of $0.18 per share, paid on September 15, 2017 to holders of record at the close of business on September 1, 2017.~~

~~In October 2017, the Board of Directors declared a quarterly dividend of $0.18 per share, payable on December 15, 2017 to the holders of record at the close of business on December 1, 2017.~~

~~For both the three and nine months~~quarter ended ~~September 30, 2017,~~March 31, 2020, we ~~purchased~~repurchased approximately ~~1.0~~10 million shares of Class A Common Stock for ~~$30.3~~$176 million. As of ~~September 30, 2017,~~May 8, 2020, we repurchased an additional 3.1 million shares of Class A Common Stock for $47 million during the ~~total remaining authorization was $88.8 million.~~second quarter.

In February 2020 and May 2020, we declared quarterly cash dividends of $0.20 per share.

Other Legal and Regulatory


•	In January 2020, the Company and Nexstar agreed to settle the outstanding lawsuit between the Company and Tribune Media Company, which Nexstar acquired in September 2019. See Litigation under Note 5. Commitments and Contingencies within the Consolidated Financial Statements for further discussion.

Other Events

In ~~August 2017,~~January 2020, the Company ~~awarded seven young students from diverse background the annual~~opened its Broadcast Diversity Scholarship for applications. Since launching the scholarship program, the Company has distributed over $148,000 in financial assistance to ~~assist them~~students demonstrating a promising future in the broadcast industry.

In February 2020, the Company promoted Lucy Rutishauser to Executive Vice President & Chief Financial Officer, Del Parks to Executive Vice President & Chief Technology Officer, Don Thompson to Executive Vice President & Chief Human Resources Officer, Scott Shapiro to Senior Vice President/Chief Development Officer, Brian Bark to Senior Vice President/Chief Information Officer, and Don Roberts to VP/Sports Engineering and Production Systems.

In March 2020, the Company, in partnership with the ~~funds needed~~Salvation Army, held a day of giving with its stations participating in on-air, digital and social media efforts to encourage viewers to donate and help ~~them earn college degrees~~local communities recover from damage caused by tornadoes in ~~broadcast-related fields.~~

Nashville, Tennessee. In total, the initiative raised almost $100,000, including $25,000 from Sinclair.

In ~~September 2017,~~March 2020, in direct response to the COVID-19 pandemic, the Company ~~held~~made available advances to offer financial support to nearly 1,300 eligible freelancers who work across the ~~"Standing Strong for Texas" relief effort, in which viewers in our markets generously contributed almost $1.4 million to~~Acquired RSNs and Marquee, as the COVID-19 pandemic has indefinitely halted the production of live sports, depriving these freelancers of work.

In March 2020 and April 2020, the Company partnered with the Salvation ~~Army.~~Army on the “Sinclair Cares: Your Neighbor Needs You” initiative which has raised over $750,000 for those financially impacted by COVID-19, including $100,000 from Sinclair. In addition, the Company delivered over 2,200 masks to the Red Cross and donated ~~$100,000 bringing~~millions of dollars of air time for public service announcements around the ~~total~~COVID-19 pandemic.

In April 2020, the Company entered into a new public service initiative, in partnership with the University of Maryland School of Medicine, to ~~almost $1.5 million.~~

provide consumers with important and timely news and information about COVID-19.

RESULTS OF OPERATIONS

~~The results of the businesses acquired during 2017 and 2016 are included in our results of operations from their respective dates of acquisition. See~~ ~~Note 2. Acquisitions and Disposition of Assets~~ ~~in our consolidated financial statements for further discussion of acquisitions. Additionally, any~~Any references to the ~~first,~~ second, third, or fourth quarters are to the three months ended ~~March 31,~~ June 30, ~~and~~September 30, or December 31, respectively, for the year being discussed. We have ~~one~~two reportable ~~segment, “broadcast”,~~segments, "local news and marketing services" and "sports," that isare disclosed separately from our other and corporate activities.

SEASONALITY/CYCLICALITY

~~Our~~The operating results of our local news and marketing services segment are usually subject to seasonal fluctuations. Usually, the second and fourth quarter operating results are higher than first and third quarters’ because advertising expenditures are increased in anticipation of certain seasonal and holiday spending by consumers.

~~Our operating results are usually subject to~~cyclical fluctuations from political advertising. In even numbered years, political spending is usually significantly higher than in odd numbered years due to advertising expenditures preceding local and national elections. Additionally, every four years, political spending is usually elevated further due to advertising expenditures preceding the presidential election. Also, the second and fourth quarter operating results are usually higher than the first and third quarters’ because advertising expenditures are increased in anticipation of certain seasonal and holiday spending by consumers.

The operating results of our sports segment are usually subject to cyclical fluctuations based on the timing and overlap of the seasons for professional baseball, basketball, and hockey. Usually, the second and third quarter operating results are higher than first and fourth quarters.

Operating Data

The following table sets forth our consolidated operating data for the ~~three and nine months ended September 30, 2017 and 2016~~periods presented (in millions):

Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 2017 2016
Media revenues (a) $ 624.2
$ 635.3
$ 1,858.5
$ 1,772.9
Revenues realized from station barter arrangements 31.8
32.0
91.8
92.6
Other non-media revenues 14.9
26.5
49.8
73.8
Total revenues 670.9
693.8
2,000.1
1,939.3
Media production expenses (a) 268.0
242.9
795.1
702.4
Media selling, general and administrative expenses (a) 133.6
126.7
385.4
370.2
Expenses recognized from station barter arrangements 26.7
27.2
77.5
79.4
Depreciation and amortization 95.9
106.1
292.2
308.2
Other non-media expenses 14.9
20.5
46.9
57.9
Corporate general and administrative expenses 25.8
19.1
71.5
54.7
Research and development 2.6
0.7
5.1
3.1
Gain on asset dispositions —
(3.3 ) (53.5 ) (6.0 )
Operating income $ 103.4
$ 153.9
$ 380.0
$ 369.4
Net income attributable to Sinclair Broadcast Group $ 30.6
$ 50.8
$ 132.5
$ 124.4



	Three Months Ended March 31,
	2020			2019
Media revenues	$	1,574		$	673
Non-media revenues	35			49
Total revenues	1,609			722
Media programming and production expenses	828			319
Media selling, general and administrative expenses	210			160
Depreciation and amortization expenses	174			66
Amortization of program contract costs and net realizable value adjustments	23			24
Non-media expenses	30			39
Corporate general and administrative expenses	49			28
Gain on asset dispositions and other, net of impairment	(32		)	(8		)
Operating income	$	327		$	94
Net income attributable to Sinclair Broadcast Group	$	123		$	22

~~(a) Our~~The Impact of COVID-19 on our Results of Operations

Overview

In December 2019, COVID-19 surfaced in Wuhan, China, and has since spread globally, including every state in the United States. On March 11, 2020, the World Health Organization declared COVID-19 a pandemic, and by the end of the following day, each of the MLB, NBA, and NHL had suspended their seasons. On March 13, 2020, the United States declared a national state of emergency. Since that time, efforts to contain the spread of COVID-19 have intensified. Several countries, including the United States, have taken steps to restrict travel, temporarily close businesses and issue quarantine orders, and it remains unclear how long such measures will remain in place regionally.

Local news and marketing services segment

The advertising revenue of our local news and marketing services segment was negatively impacted late in the first quarter due to the attrition of advertisers which caused lower local and national net times sales. During the three months ended March 31, 2020, as compared to the prior year, we saw decreases in certain advertising categories, notably an $8 million decrease in automotive, a $2 million decrease in schools, and a $2 million decrease in media, ~~related revenues~~as a result of the impact of the COVID-19 pandemic. During the month of April 2020, our advertising revenue declined 45% as compared to April 2019 which is primarily as a result of the impact of COVID-19. We expect similar decreases during the quarter ended June 30, 2020 as compared to the prior year.

Sports segment

The NBA and ~~expenses~~NHL are ~~primarily derived~~considering options to resume their regular seasons and/or start a truncated playoffs. MLB is also considering options to start its regular season. No MLB, NBA or NHL games are expected to be played prior to the end of June 2020 at the earliest, and may not be played at all. In the event that the leagues are unable to play their scheduled season due to the impact of COVID-19, our agreements are structured in a way such that rights payments paid by the RSNs to the teams and/or affiliate fees paid by the MVPDs to the RSNs may be proportionally reduced/rebated.

The rights agreements entered into between our RSNs and MLB, NBA and NHL professional sports teams typically include a minimum game delivery obligation on behalf of the applicable teams. If in any given season during the term of the relevant agreement, the applicable team is unable to provide the minimum number of games to the RSN for production and telecast, then the RSN may be entitled to a rebate and/or refund on a portion of its annual rights fees paid. Rebates, if any, are typically due within a certain amount of time following the conclusion of the then applicable season and generally take the form of either a payment from the team to the applicable RSN or a credit against rights fees otherwise due.

The affiliation agreements entered into between our ~~broadcast segment, but also~~RSN(s) and the distributors generally require the RSNs to meet certain content criteria, which may include minimum thresholds for professional event telecasts throughout the year on our networks. If we are unable to meet these criteria, distributors may be entitled to exercise certain remedies against us, which may include fee reductions, rebates or refunds and/or termination of these agreements. Rebates, if any, are typically either due in the calendar year immediately following the calendar year in which the dislocation occurred or, in the event the RSN's have the right to cure a dislocation, following the expiration of the applicable cure period. Such rebates generally take the form of a payment from the RSN to the applicable distributor or in certain circumstances may take the form of a credit against fees otherwise due.

We have experienced a decrease in advertising revenue since live sports game telecasts were suspended, and this decrease in advertising revenue is expected to continue for so long as live sports games are not aired on our RSNs. The loss of advertising revenue has been, and we believe will continue to be, partially offset by a decrease in costs associated with sports programming and production due to professional sports leagues suspending their seasons and postponing events.

Distributors continue to comply with the terms of our affiliation agreements and we continue to comply with the terms of our sports rights agreements. However, there can be no assurance that distributors will continue to comply with the terms of our affiliation agreements in the future. See Item 1A, Risk Factors. The COVID-19 pandemic and any future outbreak or pandemic of any other ~~media related~~highly infectious or contagious diseases, could have a material and adverse effect on or cause disruption to our business ~~including our networks and content such as CHARGE!, TBD TV, Tennis Channel, COMET, and non-broadcast digital properties. The~~or financial condition, results of operations and cash flows. Due to the expected timing of any rebates, as of May 11, 2020, we do not expect that the COVID-19 pandemic will have a material adverse impact on our ~~broadcast~~operations and cash flows of our sports segment for the three months ended June 30, 2020. Given the uncertainty regarding the timing for the resumption of NBA, NHL and MLB games, however, as of May 11, 2020, we are unable to predict the extent of the impact that the COVID-19 pandemic will have on our financial condition and results of operations, including the revenues or expenses we may recognize. When the NBA, NHL and MLB determine whether games will be resumed and the ~~other media businesses are discussed further below under~~ ~~Broadcast Segment~~number of games to be played, for accounting purposes, we may be required to recognize revenues or expenses related to rebates, even though payment and ~~Other, respectively.~~receipt of the rebates will occur at a later date.

Business Continuity

Within the United States, our business has been designated an essential business, which allows us to continue to serve our customers, however, the COVID-19 pandemic has disrupted our operations. Certain of our facilities have experienced temporary disruptions as a result of the COVID-19 pandemic, and we cannot predict whether our facilities will experience more significant disruptions in the future and how long these disruptions will last. The COVID-19 pandemic has heightened the risk that a significant portion of our workforce will suffer illness or otherwise be unable to work. Furthermore, reductions in our workforce may become necessary as a result of declines in our business caused by the COVID-19 pandemic. If we take such actions, we cannot assure that we will be able to rehire our workforce once our business has recovered. Our RSNs typically retain the services of freelancers to produce content and we have not retained the services of certain freelancers during the suspension of the MLB, NBA and NHL seasons. In an effort to assist such freelancers during this difficult time, we have established a multimillion-dollar emergency fund to offer eligible freelancers a $2,500 interest-free advance.

~~BROADCAST~~LOCAL NEWS AND MARKETING SERVICES SEGMENT

~~Revenue~~

The following table ~~presents~~sets forth our ~~media revenues, net of agency commissions,~~revenue and expenses for our local news and marketing services segment, previously known as our broadcast segment, for the periods presented (in millions):

Three Months Ended September 30, Nine Months Ended September 30,
2017 2016
Percent
Change
2017 2016
Percent
Change
Local revenues:

Non-political $ 485.5
$ 469.6
3.4 % $ 1,456.5
$ 1,350.8
7.8 %
Political 2.0
3.7
(b)
3.6
11.4
(b)
Total local 487.5
473.3
3.0 % 1,460.1
1,362.2
7.2 %
National revenues (a):

Non-political 87.0
89.7
(3.0 )% 260.2
264.4
(1.6 )%
Political 5.3
41.3
(b)
11.2
74.7
(b)
Total national 92.3
131.0
(29.5 )% 271.4
339.1
(20.0 )%
Total broadcast segment media revenues $ 579.8
$ 604.3
(4.1 )% $ 1,731.5
$ 1,701.3
1.8 %



	Three Months Ended March 31,						Percent Change Increase / (Decrease)
	2020			2019			Percent Change Increase / (Decrease)
Revenue:
Distribution revenue	$	355		$	320		11%
Advertising revenue	310			288			8%
Other media revenues	36			11			227%
Media revenues	$	701		$	619		13%

Operating Expenses:
Media programming and production expenses	$	316		$	289		9%
Media selling, general and administrative expenses	140			130			8%
Depreciation and amortization expenses	58			63			(8)%
Amortization of program contract costs and net realizable value adjustments	23			24			(4)%
Corporate general and administrative expenses	44			26			69%
Gain on asset dispositions and other, net of impairment	(32		)	(8		)	300%
Operating income	$	152		$	95		60%

~~(a)National~~Revenue

Distribution revenue. Distribution revenue, ~~relates to advertising sales sourced~~which includes payments from MVPDs, virtual MVPDs, and OTT distributors for our ~~national representation firm.~~

~~(b)Political revenue is not comparable from year to year due to cyclicality of elections. See~~ ~~Political Revenues~~ ~~below~~broadcast signals, increased $35 million for ~~more information.~~

~~Media revenues.~~ ~~Media revenues decreased $24.5 million when comparing to~~ the three months ended September 30, 2017 to the same period in 2016. The decrease related to the three months ended September 30, 2017 is primarily related to a decrease in political revenue and a decrease in markets impacted by hurricanes during the three months ended September 30, 2017. The decrease is partially offset by a increase in retransmission and digital revenues. For the three months ended September 30, 2017, the medical, direct response, paid programming, automotive, schools, food and grocery, retail, and restaurant sectors decreased year over year, and services, pharmaceutical/cosmetics, and media sectors increased year over year, as well as $7.4 million related to the stations not included in the same period of 2016, net of dispositions.

Media revenues increased $30.2 million for the nine months ended September 30, 2017 compared to the same period in 2016, of which $14.5 million was related to the stations not included in the same period of 2016, net of dispositions. The increase for the nine months ended September 30, 2017 is primarily related to an increase in retransmission and digital revenues and is partially offset by a decrease in political and a decrease in markets impacted by hurricanes during the three months ended September 30, 2017. For the nine months ended September 30, 2017, the services, automotive, pharmaceutical/cosmetics, entertainment, and media sectors increased year over year, and schools, telecommunications, paid programming, medical, and restaurant sectors, decreased year over year. Automotive, which typically is our largest category, represented 25.7% and 23.7% of net time sales for the nine months ended September 30, 2017 and 2016, respectively.

~~From a network affiliation or program service arrangement perspective, the following table sets forth percentages of our total day net time sales by affiliate for the periods presented:~~

# of channels Percent of Net Time Sales for the
Net Time Sales
Percent Change
Percent of Net Time Sales for the
Net Time Sales
Percent Change
Three months ended September 30, Nine months ended September 30,
2017 2016 2017 2016
ABC 41 29.2% 26.1% 3.1% 29.0% 27.5% 1.5%
FOX 58 24.2% 23.3% 0.9% 25.0% 24.3% 0.7%
CBS 30 18.6% 18.5% 0.1% 19.2% 19.2% —%
NBC 26 13.2% 16.7% (3.5)% 12.2% 13.4% (1.2)%
CW 47 7.5% 7.3% 0.2% 7.4% 7.6% (0.2)%
MNT 36 5.7% 6.2% (0.5)% 5.6% 6.2% (0.6)%
Other (a) 348 1.6% 1.9% (0.3)% 1.6% 1.8% (0.2)%
Total 586

~~(a)~~ We broadcast other programming from the following providers on our channels including: Antenna TV, ASN, Azteca, Bounce, CHARGE!, COMET, CoziTV, Decades, Estrella TV, Get TV, Grit, Me TV, Movies!, Stadium Network, TBD, Telemundo, This TV, News & Weather, UniMas and Univision.

~~Political Revenues.~~ ~~Political revenues decreased by $37.7 million and decreased by $71.3 million for the three and nine months ended September 30, 2017 and 2016,~~March 31, 2020, when compared to the same periods in ~~2016. Political revenues are typically higher~~2019, primarily due to an increase in ~~election years such as 2016.~~rates, partially offset by a decrease in subscribers.

~~Local Revenues.~~ ~~Excluding political revenues, our local broadcast revenues, which include local time sales, retransmission revenues and other local revenues,~~Advertising revenue. Advertising revenue increased ~~$15.9~~$22 million for the three months ended ~~September 30, 2017,~~March 31, 2020, when compared to the same period in ~~2016, of which $6.5 million was related to the stations not included in the same period in 2016, net of dispositions.~~ 2019. The increase is primarily ~~related~~due to an increase in ~~retransmission~~political advertising revenue of $38 million as ~~well as an~~2020 is a political year. The increase ~~in fast food, telecommunications, and services sectors. These increases were~~is partially offset by ~~lower revenues~~decreases in certain other categories, notably an $8 million decrease in automotive and a $2 million decrease in schools, media, and furniture, respectively, as a result of the ~~retail, schools, paid~~impact of the COVID-19 pandemic.

The following table sets forth our primary types of programming and ~~medical sectors, as well as a decrease in markets impacted by hurricanes during~~their approximate percentages of advertising revenue, excluding digital revenue, for the periods presented:



	Percent of Advertising Revenue (Excluding Digital) for the
	Three Months Ended March 31,
	2020	2019
Local news	33%	33%
Syndicated/Other programming	28%	29%
Network programming	25%	25%
Sports programming	10%	9%
Paid programming	4%	4%

The following table sets forth our affiliate percentages of advertising revenue for the periods presented:



		Percent of Advertising Revenue for the
		Three Months Ended March 31,
	# of Channels	2020	2019
ABC	59	29%	29%
FOX	41	28%	24%
CBS	29	19%	22%
NBC	24	13%	13%
CW	48	6%	6%
MNT	39	4%	4%
Other (a)	391	1%	2%
Total	631


(a)	We broadcast other programming from the following providers on our channels including: Antenna TV, Azteca, Bounce Network, CHARGE!, Comet, Dabl, Estrella TV, Get TV, Grit, Me TV, Movies!, Stadium, TBD, Telemundo, This TV, UniMas, Univision, and Weather.

Other Media Revenue. For the three months ended ~~September 30, 2017.~~

~~Excluding political revenues, our local broadcast revenues, which include local times sales, retransmission revenues~~March 31, 2020, other media revenue increased $25 million, primarily due to $24 million in intercompany revenue from sports and other ~~local revenues,~~related to providing certain services under a management services agreement, which is eliminated in consolidation.

Expenses

Media programming and production expenses. Media programming and production expenses increased ~~by $105.7~~$27 million for the ~~nine~~three months ended ~~September 30, 2017,~~March 31, 2020, when compared to the same period in ~~2016, of~~2019, which ~~$14.7 million was related to the stations not included in the same period in 2016, net of dispositions. The increase~~ is primarily related to ana $24 million increase in ~~retransmission~~fees pursuant to network affiliation agreements.

Media selling, general and ~~digital revenues, as well as an increase in the automotive~~administrative expenses. Media selling, general and fast food sectors. These increases were offset by lower revenues in the schools, paid programming, and retail sectors, as well as a decrease in markets impacted by hurricanes during the three months ended September 30, 2017.

~~National Revenues.~~ ~~Excluding political revenues, our national broadcast revenues, which relates to time sales sourced from our national representation firms, decreased by $2.7~~administrative expenses increased $10 million for the three months ended ~~September 30, 2017~~March 31, 2020, when compared to the same period in ~~2016.~~2019. The decrease is primarily related to a decrease in the medical and fast food sectors, as well as a decrease in markets impacted by hurricanes during the three months ended September 30, 2017. These decreases were offset by higher revenues in the services, media, retail, and pharmaceutical/cosmetics sectors, as well as $0.8 million related to the stations not included in the same period of 2016, net of dispositions

Excluding political revenues, our national broadcast revenues, which relates to time sales sourced from our national representation firm, decreased by $4.2 million for the nine months ended September 30, 2017 when compared to the same period in 2016. The decrease is primarily related to a decrease in the telecommunications, direct response, automotive, fast foods, and medical sectors, as well as a decrease in markets impacted by hurricanes during the three months ended September 30, 2017. These decreases were offset by higher revenues in the media, services, and entertainment sectors, as well as $1.4 million related to the stations not included in the same period of 2016, net of dispositions

~~Expenses~~

~~The following table presents our significant operating expense categories for our broadcast segment for the periods presented (in millions):~~

Three months ended September 30,
Percent Change
(Increase/(Decrease))
Nine months ended September 30, Percent Change
(Increase/(Decrease))
2017 2016 2017 2016
Media production expenses $ 242.9
$ 222.7
9.1 % $ 712.4
$ 639.2
11.5 %
Media selling, general and administrative expenses $ 114.4
$ 116.8
(2.1 )% $ 338.9
$ 344.2
(1.5 )%
Amortization of program contract costs and net realizable value adjustments $ 28.0
$ 32.4
(13.6 )% $ 88.0
$ 96.7
(9.0 )%
Corporate general and administrative expenses $ 23.6
$ 17.5
34.9 % $ 65.1
$ 50.3
29.4 %
Depreciation and amortization expenses $ 60.5
$ 62.9
(3.8 )% $ 180.7
$ 186.5
(3.1 )%

~~Media production expenses.~~ Media production expenses increased $20.2 million and $73.2 million during the three and nine months ended September 30, 2017, respectively, compared to the same periods in 2016. The acquired stations not included in the same period of 2016, net of dispositions, contributed $3.4 million and $6.1 million of the increase for the three and nine months ended September 30, 2017, respectively. The remaining increase is primarily ~~related~~due to ~~increases~~a $3 million increase in ~~fees pursuant to network affiliation agreements mainly~~information technology costs, a $2 million increase in third-party fulfillment costs from our digital business due to higher ~~retransmission revenue~~revenues and ~~viewership measurement~~product mix, a $2 million increase related to employee compensation costs, ~~partially offset by~~and a ~~reduction of equipment maintenance costs.~~

~~Media selling, general and administrative expense.~~ ~~Media selling, general and administrative expenses decreased $2.4~~$1 million ~~for the three months ended September 30, 2017, compared to the same period in 2016. The decrease is primarily attributable to a~~ decrease in national sales ~~commissions, partially offset by expenses from acquired stations not included in the same period of 2016, net of dispositions.~~commissions.

Media selling, general and administrative expenses decreased $5.3 million during the nine months ended September 30, 2017 compared to the same periods in 2016. The decrease for this period is primarily related to the settlement with the FCC in for June 2016 for the amount of $9.5 million, partially offset by higher information technology infrastructure costs and by expense from acquired stations not included in the same period of 2016, net of dispositions.

Amortization of program contract costs and net realizable value adjustments. The amortization of program contract costs decreased ~~$4.4~~$1 million ~~and $8.7 million during~~for the three ~~and nine~~ months ended ~~September 30, 2017, respectively,~~March 31, 2020, when compared to the same ~~periods~~period in ~~2016. The decrease~~2019, and is primarily ~~due~~related to the timing of amortization on ~~long term~~long-term contracts and reduced renewal costs, and partially offset by the increase of cost due to new programs added since the same period in 2016. Additionally, we recognized $1.5 million and $3.6 million of accelerated amortization of certain program contracts during the three and nine months ended September 30, 2016, respectively, resulting in reduced amortization attributed to those contracts in 2017.costs.

Corporate general and administrative expenses. See explanation under Corporate and Unallocated Expenses.

Depreciation and ~~Amortization~~amortization expenses.Depreciation of property and equipment and amortization of definite-lived intangibles and other assets decreased ~~$2.4~~$5 million for the three months ended March 31, 2020, when compared to the same period in 2019, primarily related to $3 million of depreciation and amortization related to assets retired during 2019.

Gain on asset dispositions and other, net of impairments. For the three months ended March 31, 2020 and 2019, we recorded gains of $23 million and ~~$5.8~~$8 million, ~~during~~respectively, related to reimbursements from the spectrum repack. During the first quarter of 2020, we recorded a gain on asset dispositions and other, net of impairments of $8 million, related to the KGBT-TV transaction. See Broadcast Sales under Note 2. Acquisitions and Dispositions of Assets for further discussion.

SPORTS SEGMENT

Our sports segment reflects the results of our 21 regional sports network brands, Marquee, and a 20% equity interest in the YES Network. The RSNs and YES Network own the exclusive rights to air, among other sporting events, the games of 44 professional sports teams.

The following table sets forth our revenue and expenses for our sports segment for the period presented (in millions):



	Three Months Ended March 31, 2020
Revenue:
Distribution revenue	$	752
Advertising revenue	55
Other media revenue	5
Media revenue	$	812

Operating Expenses:
Media programming and production expenses	$	478
Media selling, general and administrative expenses (a)	57
Depreciation and amortization expenses	110
Corporate general and administrative	2
Operating income (a)	$	165
Income from equity method investments	$	6


(a)	Includes $23 million of intercompany expense related to certain services provided by the local news and marketing services segment under a management services agreement, which is eliminated in consolidation.

Media revenue. Media revenue was $812 million for the three ~~and nine~~ months ended ~~September~~March 31, 2020 and is primarily derived from distribution and advertising revenue. Distribution revenue is generated through fees received from MVPDs for the right to distribute our RSNs. Advertising revenue is primarily generated from sales of commercial time within the regional sports networks' programming. For the three months ended March 31, 2020, our advertising revenue declined due to professional sports leagues suspending their seasons and postponing events as a result of COVID-19. We expect advertising revenue for the three months ended June 30, ~~2017. These decreases~~2020 to decrease as compared to the three months ended March 31, 2020 as a result of COVID-19. The extent of this decrease will depend on the duration and degree of impact associate with the pandemic. See discussion under The Impact of COVID-19 on our Results of Operations for further discussion.

Media programming and production expenses. Media programming and production expenses were $478 million for the three months ended March 31, 2020 and are primarily related to ~~assets becoming fully depreciated, which is greater than~~$391 million of amortization of our sports programming rights with MLB, NBA, and NHL teams, and the ~~added depreciation from capital expenditures. The~~costs of producing and distributing content for our brands including live games, pre-game and post-game shows, and backdrop programming. For the three months ended March 31, 2020, certain costs associated with sports programming and production were not incurred due to professional sports leagues suspending their seasons and postponing events as a result of COVID-19. We expect media programming and production expenses for the three months ended June 30, 2020 to decrease ~~of these expenses is partially offset by depreciation~~as compared to the three months ended March 31, 2020 due to lower production costs and amortization ~~from acquired stations~~ of ~~$1.0 million~~sports rights as a result of postponed events as a result of COVID-19. The extent of this decrease will depend on the duration and ~~$1.4 million during~~degree of impact associate with the ~~three and nine months ended September 30, 2017, respectively, not included in the same period~~pandemic. See discussion under The Impact of ~~2016, net~~COVID-19 on our Results of ~~dispositions.~~Operations for further discussion.

~~OTHER~~

Three months ended September 30,
Percent Change
(Increase/(Decrease))
Nine months ended September 30, Percent Change
(Increase/(Decrease))
2017 2016 2017 2016
Media revenues $ 44.5
$ 31.0
43.5 % $ 127.0
$ 71.5
77.6 %
Media expenses $ 44.4
$ 30.1
47.5 % $ 129.3
$ 89.2
45.0 %

Other non-media:
Revenues:
   Investments in real estate ventures $ 5.1
$ 5.8
(12.1 )% $ 14.5
$ 15.0
(3.3 )%
   Investments in private equity $ 6.3
$ 17.8
(64.6 )% $ 28.1
$ 49.6
(43.3 )%
   Technical services $ 3.6
$ 2.9
24.1 % $ 7.2
$ 9.2
(21.7 )%
Expenses: (a)
   Investments in real estate ventures $ 6.4
$ 6.5
(1.5 )% $ 18.4
$ 20.7
(11.1 )%
   Investments in private equity $ 6.0
$ 14.7
(59.2 )% $ 26.3
$ 41.6
(36.8 )%
   Technical services $ 4.4
$ 3.2
37.5 % $ 10.9
$ 10.1
7.9 %

Research and development expenses $ 2.6
$ 0.7
271.4 % $ 5.1
$ 3.1
64.5 %
Gain on asset dispositions $ —
$ 1.4
n/a
$ 53.2
$ 1.4
3,700.0 %
(Loss) income from equity and cost method investments $ (4.4 ) $ 1.4
(414.3 )% $ (4.2 ) $ 2.8
(250.0 )%

(a) Comprises total expenses of the entity including general administrative, depreciation and amortization and applicable other income and expense items such as interest expense and non-cash stock-based compensation expense related to issuances of subsidiary stock awards and excludes equity method investment income.

Media ~~revenues, media production expenses, and media~~ selling, general, and administrative ~~expense.~~expenses. Media selling, general, and administrative expenses were $57 million for the three months ended March 31, 2020 and are primarily related to $23 million of management services agreement fees, employee compensation cost, advertising expenses, and consulting fees.

Depreciation and amortization. Depreciation and amortization expense was $110 million for the three months ended March 31, 2020 and is related to the depreciation of definite-lived assets and other assets.

Corporate general and administrative expenses. See explanation under Corporate and Unallocated Expenses.

Income from equity method investments. Income from equity investments for the three months ended March 31, 2020 was $6 million and is primarily related our investment in YES, which was acquired in August 2019.

OTHER

The ~~media revenue included within Other primarily relates to original~~following table sets forth our revenues and expenses for our owned networks and content, ~~as well as our~~ non-broadcast digital and internet ~~businesses. The year-over-year increase~~solutions, technical services, and non-media investments (collectively, other) for the ~~three-month~~periods presented (in millions):



	Three Months Ended March 31,						Percent Change Increase / (Decrease)
	2020			2019			Percent Change Increase / (Decrease)
Revenue:
Distribution revenue	$	49		$	32		53%
Advertising revenue	35			20			75%
Other media revenues	1			2			(50)%
Media revenues	$	85		$	54		57%
Non-media revenues (a)	$	43		$	53		(19)%

Operating Expenses:
Media expenses (b)	$	70		$	60		17%
Non-media expenses	$	30		$	39		(23)%
Operating income	$	22		$	2		n/m
Loss from equity method investments	$	(12	)	$	(14	)	(14)%

n/m — not meaningful


(a)	Non-media revenue for the three months ended March 31, 2020 and 2019 includes $8 million and $4 million, respectively, of intercompany revenue related to certain services provided to the local news and marketing services segment, which are eliminated in consolidation.


(b)	Media expenses for the three months ended March 31, 2020 include $1 million of intercompany expense primarily related to certain services provided by the local news and marketing services segment under a management services agreement, which is eliminated in consolidation.

Revenue. Media revenue increased $31 million for the three months ended March 31, 2020 when compared to the same period in 2019. The increase is primarily related to an increase in ~~content fees from MVPDs for Tennis, as well as increases in revenue from~~distribution related to our ~~other original~~owned networks and ~~from~~an increase in advertising revenue related to our non-broadcast digital and internet businesses. Our expenses relate to the programming and production, and general and administrative costs related to the operations of our network, content, and non-broadcast digital and internet businesses. The year-over-year increases primarily relate to Tennis, which was acquired during the first quarter of 2016, and general and administrative costs related to the start-up of our original networks and content, production costs of new original programming, and new non-broadcast digital and internet initiatives such as Circa News.

~~Other non-media revenues and expenses:~~

~~Investments in real estate ventures.~~ ~~We have controlling interests in certain real estate investments owned by Keyser Capital which we consolidate. The decrease in~~initiatives. Non-media revenue ~~and expenses~~decreased $10 million for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2020 when compared to the same period ~~of 2016,~~in 2019 and is primarily ~~relates~~related to ~~decreases~~a decrease in broadcast equipment sales.

Expenses. Media expenses increased $10 million for the three months ended March 31, 2020 when compared to the same period in 2019 and is primarily related to our owned networks and our non-broadcast digital initiatives. Non-media expenses decreased $9 million for the three months ended March 31, 2020 when compared to the same period in 2019, primarily related to a decrease in the ~~sale~~costs of ~~land and lot parcels with~~ our ~~real estate development projects.~~broadcast equipment sales.

~~Investments in private equity.~~ We have controlling interests in certain private equity investments owned by Keyser Capital, which we consolidate; that includes Triangle Sign & Service, LLC, a sign designer and fabricator; and Alarm, a regional security alarm operating and bulk acquisition company which we sold in March 2017. The decrease in revenues and expenses for both the three and nine months ended September 30, 2017 is primarily due to the sale of Alarm in early March 2017.

~~Technical Services.~~ We own certain subsidiaries which are dedicated to providing broadcast related technical services to the broadcast industry including: Acrodyne Technical Services, a provider of service and support for broadcast transmitters throughout the world and Dielectric, a designer and manufacturer of broadcast systems including all components from transmitter output to antenna.

~~Research and development expenses.~~ Our research and development expenses relate to the costs to develop the Advanced Television Systems Committee's 3.0 standard (ATSC 3.0) along with related products and services through our consolidated subsidiaries, ONE Media and ONE Media 3.0.

~~Gain on asset dispositions.~~ In March 2017, we sold Alarm for $200.0 million less working capital and transaction costs. We recognized a gain on the sale of Alarm of $53.0 million of which $12.3 million was attributable to non-controlling interests which is included in the gain on asset dispositions and net income attributable to the noncontrolling interest, respectively, on the consolidated statement of operations.

~~(Loss) income from Equity and Cost Method Investments.~~ ~~We recognize income from certain real estate, private equity, media, and digital ventures for which we hold as equity and cost method investments.~~

CORPORATE AND UNALLOCATED EXPENSES

The following table presents our corporate and unallocated expenses for the periods presented (in millions):

Three months ended September 30, Percent Change
(Increase/ (Decrease)) Nine months ended September 30, Percent Change
(Increase/ (Decrease))
2017 2016 2017 2016
Corporate general and administrative expenses $ 2.0
$ 1.3
53.8 % $ 5.6
$ 3.3
69.7 %
Interest expense $ 50.3
$ 50.4
(0.2 )% $ 154.4
$ 147.8
4.5 %
Income tax provision $ (17.1 ) $ (27.0 ) (36.7 )% $ (70.6 ) $ (65.8 ) 7.3 %
Loss from extinguishment of debt $ —
$ (23.7 ) n/a
$ (1.4 ) $ (23.7 ) (94.1 )%



	Three Months Ended March 31,						Percent Change Increase/ (Decrease)
	2020			2019			Percent Change Increase/ (Decrease)
Corporate general and administrative expenses	$	49		$	28		75%
Interest expense including amortization of debt discount and deferred financing costs	$	180		$	54		233%
Income tax benefit (provision)	$	12		$	(5	)	n/m
Net income attributable to the redeemable noncontrolling interests	$	(20	)	$	—		n/m
Net income attributable to the noncontrolling interests	$	(8	)	$	(1	)	700%

n/m — not meaningful

Corporate general and administrative expenses. ~~We allocate most of our~~ The table above and the explanation that follows cover total consolidated corporate general and administrative ~~expenses to the broadcast segment. The explanation that follows combines the corporate general and administrative expenses found in the~~ ~~Broadcast Segment~~ ~~section with the corporate general and administrative expenses found in this section,~~ ~~Corporate and Unallocated Expenses. These results exclude general and administrative costs from our other non-media businesses and investments which are included in our discussion of expenses in the~~ ~~Other~~ ~~section above.~~

expenses. Corporate general and administrative expenses increased in total by ~~$6.8~~$21 million for the three months ended ~~September 30, 2017,~~March 31, 2020, when compared to the same period in ~~2016. The increase is~~2019, primarily due to ~~$8.8~~a $10 million increase in ~~expenses incurred~~legal, consulting, and regulatory cost, primarily related to ~~legal~~the litigation discussed within Note 5. Commitments and ~~consulting fees related to our completed and pending acquisitions, and spectrum auction expenses, as well as $0.4~~Contingencies, a $6 million ~~of increased~~increase in employee compensation ~~costs related to merit increases, partially offset by~~cost, and a ~~$2.5~~$3 million ~~decrease~~increase in group health insurance costs.

Corporate general and administrative expenses increased in total by $17.1 million for the nine months ended September 30, 2017, when compared to the same period in 2016. The increase is due to $14.8 million in expenses incurred related to legal and consulting fees related to our completed and pending acquisitions, and spectrum auction expenses, as well as $2.4 million of increased employee compensation costs related to merit increases.

We expect corporate general and administrative expenses to decrease in the ~~fourth~~second quarter of ~~2017~~2020 compared to ~~third~~the first quarter of ~~2017.~~2020 primarily as a result of lower transaction, legal, and regulatory costs.

Interest ~~expense.~~expense including amortization of debt discount and deferred financing costs. The table above and explanation that follows ~~combines the~~cover total consolidated interest ~~expense included within the~~ ~~Broadcast Segment~~ ~~with the interest expense found in this section,~~ ~~Corporate and Unallocated Expenses~~.expense. Interest expense ~~decreased~~increased by ~~$0.3~~$126 million ~~compared~~ for the three months ended ~~September 30, 2017~~March 31, 2020, when compared to the same period in ~~2016. The~~2019, primarily due to $126 million of interest expenses related to financing of our Acquired RSNs by DSG and STG, partially offset by a net decrease ~~is primarily~~of $2 million related to the ~~net effect~~refinancing of the ~~redemption of $350 million of 6.375% senior unsecured notes (6.375% Notes) and the offering of $400 million of senior unsecured notes~~STG 5.375% Notes with a new Term Loan be in August ~~2016 bearing a more favorable~~2019.

We expect interest ~~rate~~expense to decrease in the second quarter of ~~5.125% (5.125% Notes).~~

~~Interest expense increased $6.3 million during the nine months ended September 30, 2017,~~2020 compared to the ~~same period in 2016 primarily due to $6.4 million in debt financing fees expensed related to the amendment~~first quarter of certain terms and extension of the maturity date of Term Loan B under the existing bank credit agreement, partially offset by the net effect of the redemption of the 6.375% Notes and offering for 5.125% Notes. See ~~Liquidity and Capital Resources~~ ~~for more information.~~2020.

Income tax benefit (provision) ~~benefit.~~. The effective tax rate for the three months ended ~~September 30, 2017, including the effects of the noncontrolling interest~~March 31, 2020 was a ~~provision~~benefit of ~~35.8%~~8.3% as compared to a provision of ~~34.7%~~18.0% during the same ~~periods~~period in ~~2016.~~2019. The

~~increase~~ change in the effective tax rate from a provision to a benefit for the three months ended ~~September 30, 2017,~~March 31, 2020, as compared to the same period in ~~2016,~~2019, is primarily due to a ~~2016 reduction in liability for unrecognized tax benefits+~~

-$13 million discrete benefit as a result of ~~statute of limitations expiration.~~

~~The effective~~the CARES Act allowing for the estimated 2020 federal net operating loss to be carried back to pre-2018 years when the federal tax rate was 35% and a greater 2019 increase in liabilities for unrecognized tax benefits versus the same period in 2020.

Net income attributable to redeemable noncontrolling interests. Net income attributable to redeemable noncontrolling interests was $20 million for the ~~for the nine~~three months ended ~~September 30, 2017, including the effects of noncontrolling interest was a provision of 34.8% as compared~~March 31, 2020 which is primarily related to ~~a provision of 34.6% during the same periods in 2016.~~

~~Loss from extinguishment of debt.~~ ~~In January 2017, we entered into an amendment~~dividends accrued and distributed related to our ~~Bank Credit Agreement that includes extended maturity for some Term Loan positions and more favorable rates. As a result, we recognized a loss of $1.4 million from the extinguishment of debt. See~~ ~~Note 3. Notes Payable and Commercial Bank Financing~~ ~~for further discussion.~~Redeemable Subsidiary Preferred Equity.

LIQUIDITY AND CAPITAL RESOURCES

As of ~~September 30, 2017,~~March 31, 2020, we had ~~cash and cash equivalent balances and~~ net working capital of approximately ~~$678.2 million.~~$2,229 million, including $1,342 million in cash and cash equivalent balances. Borrowing capacity under our STG Revolving Credit Facility and DSG Revolving Credit Facility (collectively, the Bank Credit Agreements) was $0.6 million and $425 million, respectively, as of March 31, 2020. Cash on hand, cash generated by our operations, and borrowing capacity under the Bank Credit ~~Agreement~~Agreements are used as our primary sources of liquidity. As

In March 2020, we drew down $648 million under the STG Revolving Credit Facility and $225 million under the DSG Revolving Credit Facility. The draw on the aforementioned credit facilities was a precautionary measure to preserve the Company's financial flexibility in light of ~~September 30, 2017,~~the current uncertainty in the global economy resulting from the COVID-19 pandemic. If needed, the proceeds will be available to be used for working capital and general corporate purposes. In April 2020, we ~~had $484.4~~repaid $423 million of ~~borrowing capacity available on our revolving credit facility.~~the outstanding borrowings under the STG Revolving Credit Facility.

In January ~~2017,~~2020, we ~~entered into~~redeemed 200,000 units of redeemable subsidiary preferred equity for an ~~amendment~~aggregate redemption price equal to $200 million plus accrued and unpaid dividends, representing 100% of the unreturned capital contribution with respect to the units redeemed, plus accrued and unpaid dividends with respect to the units redeemed up to, but not including, the redemption date, and after giving effect to any applicable rebates.

In January 2020, a minority partner in one of our ~~Bank Credit Agreement that includes extending maturity~~RSNs exercised its right to sell the entirety of its non-controlling interest to the Company, which the Company purchased for ~~some Term Loan positions and more favorable rates. See~~ ~~Note 3. Notes Payable and Commercial Bank Financing~~ ~~for further discussion.~~$376 million.

We anticipate that existing cash and cash equivalents, cash flow from our operations, and borrowing capacity under the Bank Credit ~~Agreement~~Agreements will be sufficient to satisfy our debt service obligations, capital expenditure requirements, and working capital needs for the next twelve months. However, certain factors, including but not limited to, the severity and duration of the COVID-19 pandemic, could affect our liquidity and our first lien leverage ratio (See Note 3. Notes Payable and Commercial Bank Financing) which could affect our ability to access borrowing capacity under our bank credit agreements. For our long-term liquidity needs, in addition to the sources described above, we may rely upon the issuance of long-term debt, the issuance of equity or other instruments convertible into or exchangeable for equity, or the sale of non-core assets. However, there can be no assurance that additional financing or capital or buyers of our non-core assets will be available, or that the terms of any transactions will be acceptable or advantageous to us. ~~In connection~~

For the quarter ended March 31, 2020, we were in compliance with all of the ~~pending acquisition of Tribune, we entered into certain commitments~~covenants related to the STG Bank Credit Agreement, DSG Bank Credit Agreement, the STG Notes, and ~~facilities to finance~~ the ~~acquisition. See~~ ~~Note 3. Notes Payable and Commercial Bank Financing~~ ~~for further discussion.~~DSG Notes.

Sources and Uses of Cash

The following table sets forth our cash flows for the periods presented (in millions):

For the three months ended September 30, For the nine months ended September 30,
2017 2016 2017 2016
Net cash flows from operating activities $ 136.9
$ 120.6
$ 278.4
$ 330.3

Cash flows (used in) from investing activities:

Acquisition of property and equipment $ (22.0 ) $ (18.8 ) $ (55.5 ) $ (68.6 )
Acquisition of businesses, net of cash acquired (241.5 ) (2.8 ) (269.8 ) (425.9 )
Purchase of alarm monitoring contracts —
(7.5 ) (5.7 ) (29.1 )
Proceeds from sale of non-media business —
16.4
192.6
16.4
Investments in equity and cost method investees (1.6 ) (12.4 ) (22.3 ) (34.2 )
Loans to affiliates —
—
—
(19.5 )
Other 2.6
(4.0 ) (0.5 ) 3.4
Net cash flows used in investing activities $ (262.5 ) $ (29.1 ) $ (161.2 ) $ (557.5 )

Cash flows (used in) from financing activities:

Proceeds from notes payable, commercial bank financing and capital leases $ 3.0
$ 403.8
$ 166.0
$ 1,011.3
Repayments of notes payable, commercial bank financing and capital leases (17.1 ) (374.4 ) (318.3 ) (654.0 )
Net proceeds from the sale of Class A Common Stock —
—
487.9
—
Dividends paid on Class A and Class B Common Stock (18.3 ) (16.9 ) (53.1 ) (49.7 )
Repurchase of outstanding Class A Common Stock (30.3 ) (89.9 ) (30.3 ) (101.2 )
Other (5.5 ) (13.3 ) (27.3 ) (24.7 )
Net cash flows (used in) from financing activities $ (68.2 ) $ (90.7 ) $ 224.9
$ 181.7



	Three Months Ended March 31,
	2020			2019
Net cash flows (used in) from operating activities	$	(39	)	$	99

Cash flows used in investing activities:
Acquisition of property and equipment	$	(46	)	$	(29	)
Proceeds from the sale of assets	18			—
Spectrum repack reimbursements	24			8
Other, net	(19		)	(26		)
Net cash flows used in investing activities	$	(23	)	$	(47	)

Cash flows from (used in) financing activities:
Proceeds from notes payable and commercial bank financing	$	873		$	—
Repayments of notes payable, commercial bank financing and finance leases	(20		)	(11		)
Dividends paid on Class A and Class B Common Stock	(18		)	(18		)
Repurchase of outstanding Class A Common Stock	(176		)	(105		)
Redemption of redeemable subsidiary preferred equity	(198		)	—
Distributions to redeemable noncontrolling interests	(378		)	—
Other, net	(12		)	(3		)
Net cash flows from (used in) financing activities	$	71		$	(137	)

Operating Activities

Net cash flows from operating activities ~~increased~~decreased during the three months ended ~~September 30, 2017~~March 31, 2020 compared to the same period in ~~2016. The increase is primarily related to higher cash received from customers compared to the same period in the prior year.~~

~~Net cash flows from operating activities decreased during the nine months ended September 30, 2017 compared to the same period in 2016.~~2019. The decrease is primarily related to ~~increased~~ payments ~~to vendors~~for sports rights, production and ~~tax payments,~~overhead costs, and interest on our term loans, partially offset by ~~higher~~ cash ~~received~~collections from ~~customers compared to the same period in the prior year.~~MVPDs.

Investing Activities

Net cash flows used in investing activities ~~increased~~decreased during the three months ended ~~September 30, 2017~~March 31, 2020 compared to the same period in 2016. This increase is primarily related to the acquisition of Bonten in September 2017, partially offset by a decrease in investment in equity and cost method investments compared to the same period in 2016.

~~Net cash flows used in investing activities decreased during the nine months ended September 30, 2017 compared to the same period in 2016. This~~2019. The decrease is primarily related to ~~proceeds received from~~higher spectrum repack reimbursements and the sale of ~~Alarm Funding in March 2017, a decrease in acquisition activity, a decrease in~~KGBT-TV during the first quarter of 2020, offset by higher capital ~~expenditures, and a decrease in loans to affiliates compared to the same period in 2016.~~expenditures.

In the ~~fourth~~second quarter of ~~2017,~~2020, we anticipate capital expenditures to stay flat or increase from the ~~third~~first quarter of ~~2017.~~2020. As discussed in Note ~~4. Commitments~~2. Acquisitions and ~~Contingencies~~Dispositions of Assets within our Consolidated Financial Statements, certain of our channels have been reassigned in conjunction with the FCC repacking process. We expect ~~that the majority~~a significant amount of these expenditures will be reimbursed from the fund administered by the ~~fund established by the Auction.~~FCC.

Financing Activities

Net cash flows used in financing activities decreased for the three months ended September 30, 2017, compared to the same period in 2016. The decrease is primarily due to lower repurchases of Class A common stock, partially offset by proceeds from the issuance of debt during 2016.

Net cash flows from financing activities increased ~~for~~during the ~~nine~~three months ended ~~September 30, 2017,~~March 31, 2020, compared to the same period in ~~2016.~~2019. The increase is primarily ~~due~~related to the ~~proceeds received from~~draw under the ~~public offering~~STG Revolving Credit Facility and DSG Revolving Credit Facility, partially offset by distributions to other redeemable noncontrolling interests, the redemption of redeemable subsidiary preferred equity, and increases in Class A Common Stock ~~during the first quarter of 2017~~repurchases. See Note 3. Notes Payable and ~~lower repurchases of Class A common stock, partially offset by the repayment of notes payable in conjunction with the sale of Alarm during the first quarter of 2017~~Commercial Bank Financing and ~~proceeds from the issuance of~~Note 4: Redeemable Noncontrolling Interests within our ~~5.875% Notes, net of repayments on our revolving credit facility, during the first quarter of 2016.~~Consolidated Financial Statements for further discussion.

In ~~October 2017,~~February and May 2020, our Board of Directors declared a quarterly dividend of ~~$0.18~~$0.20 per share. Future dividends on our common shares, if any, will be at the discretion of our Board of Directors and will depend on several factors including our results of operations, cash requirements and surplus, financial condition, covenant restrictions, and other factors that the Board of Directors may deem relevant.

CONTRACTUAL CASH OBLIGATIONS

~~See~~ ~~Bank Credit Agreement~~ ~~within~~ ~~Note 3. Notes Payable~~During the three months ended March 31, 2020, we entered into agreements which increased estimated contractual amounts owed for program rights and ~~Commercial Bank Financing~~content for the ~~amendment~~remainder of 2020 and the ~~Bank Credit Agreement in January 2017.~~years 2021-2022 by $69 million and $134 million, respectively, as of March 31, 2020.

As of ~~September 30, 2017,~~March 31, 2020, there were no other material changes to our contractual cash obligations.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

~~There~~Other than discussed below, there were no changes to critical accounting policies and estimates from those disclosed in Critical Accounting Policies and Estimates ~~with~~ under Part II. Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations ofwithin our ~~2016~~ Annual ~~Report.~~Report on Form 10-K for the year ended December 31, 2019.

See Recent Accounting Pronouncements ~~within~~ under Note 1. Nature of Operations and Summary of Significant Accounting Policies within our Consolidated Financial Statements for a discussion of new accounting guidance. See Broadcast Television Programming under Note 1. Nature of Operations and Summary of Significant Accounting Policies within our Consolidated Financial Statements for a more detailed discussion of the accounting for television program contracts.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

~~Other than the foregoing, there~~There have been no material changes from the quantitative and qualitative discussion about market risk previously disclosed in our Annual Report on ~~Form~~form 10-K for the year ended December 31, ~~2016.~~2019.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures and Internal Control over Financial Reporting

Our management, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the design and effectiveness of our disclosure controls and procedures and our internal control over financial reporting as of ~~September 30, 2017.~~March 31, 2020.

The term ~~“disclosure~~"disclosure controls and procedures,”" as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to provide reasonable assurance that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to provide reasonable assurance that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to our management, including its principal executive and principal financial officers, as appropriate, to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

The term ~~“internal~~"internal control over financial reporting,”" as defined in Rules 13a-15d-15(f) under the Exchange Act, means a process designed by, or under the supervision of our Chief Executive and Chief Financial ~~Officers~~Officer and effected by our Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles (GAAP) and includes those policies and procedures that:

pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets;

provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP and that our receipts and expenditures are being made in accordance with authorizations of management or our Board of Directors; and

provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material adverse effect on our financial statements.

Assessment of Effectiveness of Disclosure Controls and Procedures

Based on the evaluation of our disclosure controls and procedures as of ~~September 30, 2017,~~March 31, 2020, our Chief Executive Officer and Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.

Changes in Internal Control over Financial Reporting

During the quarters ended June 30, 2017 and September 30, 2017, we completed the implementation of a new enterprise resource planning (ERP) system and human capital management (HCM) system, respectively. Both systems are functioning as designed. We have made appropriate changes to our internal controls as a result of the implementation of these new systems.

~~Other than as discussed above, there~~There have been no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended ~~September 30, 2017,~~March 31, 2020, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

On August 23, 2019, DSG acquired the Acquired RSNs. See RSN Acquisition within Note 2. Acquisitions and Dispositions of Assets for more information. We are currently integrating policies, processes, people, technology, and operations for the acquired company. Management will continue to evaluate our internal control over financial reporting as we execute integration activities.

Limitations on the Effectiveness of Controls

Management, including our Chief Executive Officer and Chief Financial Officer, do not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management’s override of the control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We are party to lawsuits and claims from time to time in the ordinary course of business. Actions currently pending are in various stages and no material judgments or decisions have been rendered by hearing boards or courts in connection with such actions. ~~After reviewing developments~~

See Litigation under Note 5. Commitments and Contingencies within our Consolidated Financial Statements for discussion related to ~~date with legal counsel, our management is of~~certain class action lawsuits filed in United States District Court against the ~~opinion~~Company, Tribune Media Company, Tribune Broadcasting Company, LLC, Hearst Communications, Inc., Gray Television, Inc., Nexstar Media Group, Inc., Tegna, Inc. and other defendants that ~~none of our pending and threatened matters~~ are ~~material.~~unnamed.

ITEM 1A. RISK FACTORS

~~There~~Except as set forth below, as of the date of this report, there have been no material changes to ~~the Risk Factors contained~~risk factors we previously disclosed in our Annual ~~Report~~report on Form 10-K for the year ended December 31, ~~2016.~~2019.

The COVID-19 pandemic or the future outbreak or pandemic of any other highly infectious or contagious diseases, could have a material and adverse effect on or cause disruption to our business or financial condition, results of operations and cash flows.

In December 2019, COVID-19, a novel strain of the coronavirus, was reported to have surfaced in Wuhan, China in December 2019, and has since spread globally, including to every state in the United States. On March 11, 2020, the World Health Organization declared COVID-19 a pandemic, and on March 13, 2020, the United States declared a national emergency. As a result, the COVID-19 pandemic is negatively affecting almost every industry directly or indirectly. Since that time, efforts to contain the spread of COVID-19 have intensified. Several countries, including the United States, have taken steps to restrict travel, temporarily close businesses and issue quarantine orders, and it remains unclear how long such measures will remain in place regionally.

As a result, the COVID-19 pandemic is negatively affecting almost every industry directly or indirectly. The COVID-19 pandemic may trigger a period of global economic slowdown or a global recession. COVID-19 (or a future pandemic) could have a material and adverse effect on or cause disruption to our business or financial condition, results from operations and cash flows due to, among other factors:

the suspension, and possible cancellation, of some or all of the MLB, NBA and NHL seasons;

the requirement of our RSNs to pay professional sports team minimum rights fees, regardless of the number of games played in a season;

potential need to reimburse vMVPD and MVPD affiliation fees related to canceled professional sporting events;

loss of advertising revenue due to postponement or cancellation of professional sporting events;

loss of advertising revenue as advertisers may be more reluctant to purchase advertising spots due to reduced consumer spending as a result of shelter in place and stay at home orders;

lack of liquidity and access to capital resources and may cause one or more MVPDs or advertisers to be unable to meet their obligations to us or to otherwise seek modifications of such obligations;

we may be unable to access debt and equity capital on favorable terms, if at all, or a severe disruption and instability in the global financial markets or deteriorations in credit and financing conditions may affect our access to capital necessary to fund business operations, pursue acquisition and development opportunities, refinance existing debt, and increase our future interest expense;

the financial impact of COVID-19 could negatively affect our future compliance with financial and other covenants of the STG Credit Agreement, DSG Credit Agreement, and the indentures governing the STG Notes and the DSG Notes, and the failure to comply with such covenants could result in a default that accelerates the payment of such indebtedness; and

the potential negative impact on the health of our executive officers, employees or Board of Directors, particularly if a significant number are impacted, or the impact of government actions or restrictions, including stay-at-home orders, restricting access to our headquarters located in Hunt Valley, Maryland, could result in a deterioration in our ability to ensure business continuity during a disruption.

The extent to which COVID-19 impacts our operations and those of our sports team partners, MVPDs and advertisers will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the scope,

severity and duration of the outbreak, the actions taken to contain the outbreak or mitigate its impact, and the direct and indirect economic effects of the outbreak and containment measures, among others.

A prolonged imposition of mandated closures or other social-distancing guidelines may adversely impact the ability of our sports team partners, MVPDs and advertisers to generate sufficient revenues, and could force them to default on their obligations to us, or result in their bankruptcy or insolvency. The rapid development and fluidity of the pandemic precludes any prediction as to the ultimate adverse impact on us. Nevertheless, COVID-19 presents material uncertainty and risk with respect to our performance, business or financial condition, results from operations and cash flows.

Our media rights agreements with various professional sports teams have varying durations and terms and we may be unable to renew those agreements on acceptable terms or such rights may be lost for other reasons.

Our ability to generate revenues is dependent upon media rights agreements with professional sports teams. As of March 31 31, 2020, we had a weighted average remaining life of 10 years under our exclusive media rights agreements. Upon expiration, we may seek renewal of these agreements and, if we do, we may be outbid by competing programming networks or others for these agreements or the renewal costs could substantially exceed our costs under the current agreements. For example, our media rights agreement with the Kansas City Royals expired following the completion of the 2018-19 MLB season. We are currently in negotiations with the Royals regarding the renewal of the agreement. Even if we are to renew such agreements, our results of operations could be adversely affected if increases in sports programming rights costs outpace increases in affiliate fee and advertising revenues. In addition, one or more of these sports teams may seek to establish their own programming network or join one of our competitor's networks or regional sports network and, in certain circumstances, we may not have an opportunity to bid for the media rights. Also, there is a risk that certain rights can be distributed via digital rights and the RSNs would not have the same monetization for such rights.

Moreover, the value of these agreements may also be affected by various league decisions and/or league agreements that we may not be able to control, including a decision to alter the number of games played during a season. The governing bodies of the MLB, NBA and NHL have imposed, and may impose in the future, various rules, regulations, guidelines, bulletins, directives, policies and agreements (collectively, “League Rules”), which could have a material negative effect on our business and results of operations. For example, the League Rules define the territories in which we may distribute games of the teams in the applicable league. Changes to the League Rules, or the adoption of new League Rules, could affect our media rights agreements with the various teams and as consequence have a material negative effect on our business and results of operations. For example, the leagues may give digital rights to other distributors may allocate more games for national feeds or other distributors and/or incentivize participation in league-controlled sports networks.

The value of these media rights can also be affected, or we could lose such rights entirely, if a team is liquidated, undergoes reorganization in bankruptcy or relocates to an area where it is not possible or commercially feasible for us to continue to distribute programming for such team. Any loss or diminution in the value of rights could impact the extent of the sports coverage offered by us and could materially negatively affect us and our results of operations. In addition, our affiliation agreements with MVPDs typically include certain remedies in the event our networks fail to meet a minimum number of professional event telecasts, and, accordingly, any loss of rights could materially negatively affect our business and our results of operations.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The following table summarizes repurchases of our stock in the quarter ended ~~September 30, 2017:~~March 31, 2020:



Period	Total Number of Shares Purchased (a)	Average Price Per Share		Total Number of Shares Purchased as Part of a Publicly Announced Program	Approximate Dollar Value of Shares That May Yet Be Purchased Under the Program (in millions)
Class A Common Stock: (b)
01/01/20 – 01/31/20	—	$	—	—	$	—
02/01/20 – 02/29/20	—	$	—	—	$	—
03/01/20 – 03/31/20	9,957,297	$	17.65	9,957,297	$	547

Period Total Number of Shares Purchased (1) Average Price Per Share Total Number of Shares Purchased as Part of a Publicly Announced Program Approximate Dollar Value of Shares That May Yet Be Purchased Under the Program (in millions)
Class A Common Stock : (2)
07/01/17 – 07/31/17 —
—
—
—

08/01/17 – 08/31/17 997,300
$ 30.37
997,300
$ 88.8

09/01/17 – 09/30/17 —
—
—
—


(a)	All repurchases were made in open-market transactions.


(b)	On August 9, 2018, the Board of Directors authorized an additional $1 billion share repurchase authorization, in addition to the previous repurchase authorization of $150 million. There is no expiration date and currently, management has no plans to terminate this program. As of March 31, 2020, the remaining authorization under the program was $547 million.

~~(1)All repurchases were made in open-market transactions.~~

~~(2)~~ On October 28, 1999, we announced a $150.0 million share repurchase program, which was renewed on February 6, 2008. On March 20, 2014, the Board of Directors authorized a new $150.0 million shares of Class A Common Stock repurchase authorization. In September 2016, the Board of Directors authorized an additional $150.0 million shares of Class A Common Stock repurchase authorization. There is no expiration date and currently, management has no plans to terminate this program. As of September 30, 2017, the total remaining authorization was $88.8 million.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

None.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS



Exhibit Number		Description

~~10.1~~ 10.1*		~~Amended and Restated Employment Agreement by and between Sinclair Broadcast Group, Inc. and Christopher Ripley, President and Chief Executive Officer, dated August 23, 2017.~~

~~10.2~~		~~Amended and Restated Employment Agreement by and between Sinclair Broadcast Group, Inc. and Lucy Rutishauser, Senior Vice President, Chief Financial Officer and Treasurer, dated August 28, 2017.~~

~~10.3~~		Stock Appreciation Right Agreement by and between Sinclair Broadcast Group, Inc. and Christopher Ripley ~~President and Chief Executive Officer,~~ dated ~~August 29, 2017.~~February 24, 2020.

~~10.4~~ 10.2*		~~Restricted~~ Stock ~~Award~~Appreciation Right Agreement by and between Sinclair Broadcast Group, Inc. and ~~Christopher Ripley, President and Chief Executive Officer,~~David Smith dated ~~August 29, 2017.~~February 24, 2020.

~~10.5~~ 10.3*		~~Amended and Restated Employment~~Stock Appreciation Right Agreement by and between Sinclair Broadcast Group, Inc. and ~~Steve Marks, Executive Vice President and Chief Operating Officer,~~Lucy Rutishauser, dated ~~August 31, 2017.~~February 24, 2020.

~~31.1~~ 10.4*		Form of Stock Appreciation Right Agreement.

31.1**		Certification by Christopher S. Ripley, as Chief Executive Officer of Sinclair Broadcast Group, Inc., pursuant to Rule 13a-14(a) of the Exchange Act (15 U.S.C. § 7241).

~~31.2~~ 31.2**		Certification by Lucy Rutishauser, as Chief Financial Officer of Sinclair Broadcast Group, Inc., pursuant to Rule 13a-14(a) of the Exchange Act (15 U.S.C. § 7241).

~~32.1~~ 32.1**		Certification by Christopher S. Ripley, as Chief Executive Officer of Sinclair Broadcast Group, Inc., pursuant to Rule 13a-14(b) of the Exchange Act and § 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C § 1350).

~~32.2~~ 32.2**		Certification by Lucy Rutishauser, as Chief Financial Officer of Sinclair Broadcast Group, Inc., pursuant to Rule 13a-14(b) of the Exchange Act and § 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C § 1350).

~~101.INS~~ 101*		~~XBRL Instance Document~~ The Company's Consolidated Financial Statements and related Notes for the quarter ended March 31, 2020 from this Quarterly Report on Form 10-Q, formatted in iXBRL (Inline eXtensible Business Reporting Language).*

~~101.SCH~~ 104		~~XBRL Taxonomy Extension Schema~~

~~101.CAL~~		~~XBRL Taxonomy Extension Calculation Linkbase~~

~~101.LAB~~		~~XBRL Taxonomy Extension Label Linkbase~~

~~101.PRE~~		~~XBRL Taxonomy Extension Presentation Linkbase~~

~~101.DEF~~		~~XBRL Taxonomy Extension Definition Linkbase~~ Cover Page Interactive Data File (included in Exhibit 101).

* Filed herewith.

** In accordance with Item 601(b)(32) of Regulation S-K, this Exhibit is not deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section. Such certifications will not be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that the registrant specifically incorporates it by reference.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report on Form 10-Q to be signed on its behalf by the undersigned thereunto duly authorized on the ~~8th~~11th day of ~~November 2017.~~May 2020.



	SINCLAIR BROADCAST GROUP, INC.


	By:	/s/ David R. Bochenek
		David R. Bochenek
		Senior Vice President/Chief Accounting ~~Officer~~Officer/Corporate Controller
		(Authorized Officer and Chief Accounting Officer)

~~EXHIBIT INDEX~~



~~Exhibit~~ ~~Number~~		~~Description~~

~~10.1~~		~~Amended and Restated Employment Agreement by and between Sinclair Broadcast Group, Inc. and Christopher Ripley, President and Chief Executive Officer, dated August 23, 2017.~~

~~10.2~~		~~Amended and Restated Employment Agreement by and between Sinclair Broadcast Group, Inc. and Lucy Rutishauser, Senior Vice President, Chief Financial Officer and Treasurer, dated August 28, 2017.~~

~~10.3~~		~~Stock Appreciation Right Agreement by and between Sinclair Broadcast Group, Inc. and Christopher Ripley, President and Chief Executive Officer, dated August 29, 2017.~~

~~10.4~~		~~Restricted Stock Award Agreement by and between Sinclair Broadcast Group, Inc. and Christopher Ripley, President and Chief Executive Officer, dated August 29, 2017.~~

~~10.5~~		~~Amended and Restated Employment Agreement by and between Sinclair Broadcast Group, Inc. and Steve Marks, Executive Vice President and Chief Operating Officer, dated August 31, 2017.~~

~~31.1~~		~~Certification by Christopher S. Ripley, as Chief Executive Officer of Sinclair Broadcast Group, Inc., pursuant to Rule 13a-14(a) of the Exchange Act (15 U.S.C. § 7241).~~

~~31.2~~		~~Certification by Lucy Rutishauser, as Chief Financial Officer of Sinclair Broadcast Group, Inc., pursuant to Rule 13a-14(a) of the Exchange Act (15 U.S.C. § 7241).~~

~~32.1~~		Certification by Christopher S. Ripley, as Chief Executive Officer of Sinclair Broadcast Group, Inc., pursuant to Rule 13a-14(b) of the Exchange Act and § 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C § 1350).

~~32.2~~		Certification by Lucy Rutishauser, as Chief Financial Officer of Sinclair Broadcast Group, Inc., pursuant to Rule 13a-14(b) of the Exchange Act and § 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C § 1350).

~~101.INS~~		~~XBRL Instance Document~~

~~101.SCH~~		~~XBRL Taxonomy Extension Schema~~

~~101.CAL~~		~~XBRL Taxonomy Extension Calculation Linkbase~~

~~101.LAB~~		~~XBRL Taxonomy Extension Label Linkbase~~

~~101.PRE~~		~~XBRL Taxonomy Extension Presentation Linkbase~~

~~101.DEF~~		~~XBRL Taxonomy Extension Definition Linkbase~~



	Nine Months Ended September 30,
	2017			2016
CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES:
Net income	$	149,303		$	128,262
Adjustments to reconcile net income to net cash flows from operating activities:
Depreciation of property and equipment	72,026			74,330
Amortization of definite-lived intangible and other assets	132,299			137,197
Amortization of program contract costs and net realizable value adjustments	87,962			96,722
Loss on extinguishment of debt, non-cash portion	1,404			3,875
Stock-based compensation expense	12,905			13,470
Deferred tax provision (benefit)	(13,285		)	6,631
Gain on asset dispositions	(53,531		)	(5,982		)
Change in assets and liabilities, net of acquisitions:
Decrease (increase) in accounts receivable	2,167			(77,118		)
Increase in prepaid expenses and other current assets	(1,057		)	(4,344		)
(Decrease) increase in accounts payable and accrued liabilities	(28,237		)	36,286
Net change in net income taxes payable/receivable	(21,571		)	(8,411		)
Payments on program contracts payable	(84,499		)	(84,625		)
Other, net	22,525			13,967
Net cash flows from operating activities	278,411			330,260

CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES:
Acquisition of property and equipment	(55,463		)	(68,601		)
Acquisition of businesses, net of cash acquired	(269,799		)	(425,856		)
Purchase of alarm monitoring contracts	(5,682		)	(29,143		)
Proceeds from sale of non-media business	192,634			16,396
Investments in equity and cost method investees	(22,302		)	(34,224		)
Loans to affiliates	—			(19,500		)
Other, net	(550		)	3,401
Net cash flows used in investing activities	(161,162		)	(557,527		)

CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES:
Proceeds from notes payable and commercial bank financing	166,041			1,011,312
Repayments of notes payable, commercial bank financing and capital leases	(318,309		)	(653,987		)
Net proceeds from the sale of Class A Common Stock	487,883			—
Dividends paid on Class A and Class B Common Stock	(53,049		)	(49,667		)
Distributions to noncontrolling interests	(20,469		)	(8,363		)
Repurchase of outstanding Class A Common Stock	(30,287		)	(101,164		)
Payments for deferred financing cost	(731		)	(15,598		)
Other, net	(6,119		)	(693		)
Net cash flows from financing activities	224,960			181,840
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	342,209			(45,427		)
CASH AND CASH EQUIVALENTS, beginning of period	259,984			149,972
CASH AND CASH EQUIVALENTS, end of period	$	602,193		$	104,545



	September 30, 2017		December 31, 2016
ASSETS
Current assets:
Restricted cash	$	122,948	$	—
Accounts receivable	18,820		21,879
Other current assets	12,851		12,076
Total current assets	154,619		33,955

Program contract costs, less current portion	1,091		2,468
Property and equipment, net	6,418		2,996
Goodwill and indefinite-lived intangible assets	16,475		16,475
Definite-lived intangible assets, net	76,487		79,509
Other assets	5,601		6,871
Total assets	$	260,691	$	142,274

LIABILITIES
Current liabilities:
Deferred spectrum auction proceeds	$	122,948	$	—
Other current liabilities	23,899		18,992

Long-term liabilities:
Notes payable, capital leases and commercial bank financing, less current portion	15,043		19,449
Program contracts payable, less current portion	12,063		14,353
Other long-term liabilities	8,452		12,921
Total liabilities	$	182,405	$	65,715



Accounts receivable	14,665
Prepaid expenses and other current assets	699
Program contract costs	683
Property and equipment	23,019
Definite-lived intangible assets	157,979
Indefinite-lived intangible assets	8,363
Other assets	3,609
Accounts payable and accrued liabilities	(8,481		)
Program contracts payable	(783		)
Deferred tax liability	(65,789		)
Other long term liabilities	(3,409		)
Fair value of identifiable net assets acquired	130,555
Goodwill	110,716
Total purchase price, net of cash acquired	$	241,271



Accounts receivable	17,629
Prepaid expenses and other current assets	6,518
Property and equipment	5,964
Definite-lived intangible assets	272,686
Indefinite-lived intangible assets	23,400
Other assets	619
Accounts payable and accrued liabilities	(7,414		)
Capital leases	(115		)
Deferred tax liability	(16,991		)
Other long term liabilities	(1,669		)
Fair value of identifiable net assets acquired	300,627
Goodwill	53,427
Total purchase price, net of cash acquired	$	354,054



	Three months ended September 30,				Nine months ended September 30,
	2017		2016		2017		2016
Total revenues	$	685,382	$	714,451	$	2,056,790	$	2,014,195
Net Income	$	34,303	$	54,437	$	155,532	$	134,504
Net Income attributable to Sinclair Broadcast Group	$	32,374	$	53,249	$	138,712	$	130,646
Basic earnings per share attributable to Sinclair Broadcast Group	$	0.32	$	0.57	$	1.40	$	1.38
Diluted earnings per share attributable to Sinclair Broadcast Group	$	0.31	$	0.56	$	1.38	$	1.37



For the three months ended September 30, 2017	Broadcast		Other			Corporate			Consolidated
Revenue	$	610,840	$	60,051		$	—		$	670,891
Depreciation of property and equipment	22,344		1,851			247			24,442
Amortization of definite-lived intangible assets and other assets	38,186		5,182			—			43,368
Amortization of program contract costs and net realizable value adjustments	28,047		—			—			28,047
General and administrative overhead expenses	23,582		224			2,025			25,831
Research and development	—		2,551			—			2,551
Operating income (loss)	115,571		(9,852		)	(2,272		)	103,447
Interest expense	1,281		204			50,258			51,743
Loss from equity and cost method investments	—		(4,362		)	—			(4,362		)
Assets	5,274,895		762,751			649,423			6,687,069



Nine months ended September 30, 2017	Broadcast		Other				Corporate			Consolidated
Revenue	$	1,821,248	$	178,867			$	—		$	2,000,115
Depreciation of property and equipment	65,850		5,438				738			72,026
Amortization of definite-lived intangible assets and other assets	114,810		17,489				—			132,299
Amortization of program contract costs and net realizable value adjustments	87,962		—				—			87,962
General and administrative overhead expenses	65,059		785				5,614			71,458
Research and development	—		5,053				—			5,053
Operating income (loss)	361,259		25,016			(a)	(6,351		)	379,924
Interest expense	3,976		1,633				154,411			160,020
Loss from equity and cost method investments	—		(4,221		)		—			(4,221		)



Nine months ended September 30, 2016	Broadcast		Other			Corporate			Consolidated
Revenue	$	1,790,561	$	148,697		$	—		$	1,939,258
Depreciation of property and equipment	69,469		4,063			798			74,330
Amortization of definite-lived intangible assets and other assets	117,038		20,159			—			137,197
Amortization of program contract costs and net realizable value adjustments	96,722		—			—			96,722
General and administrative overhead expenses	50,320		1,075			3,277			54,672
Research and development	—		3,055			—			3,055
Operating income (loss)	402,236		(28,699		)	(4,130		)	369,407
Interest expense	4,297		4,695			147,827			156,819
Income from equity and cost method investments	—		414			2,375			2,789



	As of September 30, 2017		As of December 31, 2016
	Carrying Value (a)	Fair Value	Carrying Value (a)	Fair Value
6.125% Senior Unsecured Notes due 2022	500,000	516,170	500,000	521,240
5.875% Senior Unsecured Notes due 2026	350,000	359,342	350,000	351,456
5.625% Senior Unsecured Notes due 2024	550,000	565,637	550,000	562,755
5.375% Senior Unsecured Notes due 2021	600,000	615,714	600,000	617,892
5.125% Senior Unsecured Notes due 2027	400,000	389,156	400,000	382,028
Term Loan A	241,073	241,374	272,198	271,517
Term Loan B	1,359,725	1,361,425	1,365,625	1,364,841
Debt of variable interest entities	20,585	20,585	23,198	23,198
Debt of other operating divisions	27,470	27,470	135,211	135,211



Balance Sheet Data:	September 30, 2017		December 31, 2016
Cash and cash equivalents	$	602,193	$	259,984
Total assets	$	6,687,069	$	5,963,168
Total debt (c)	$	4,055,626	$	4,203,848
Total equity	$	1,108,299	$	557,936



	# of channels	Percent of Net Time Sales for the		Net Time Sales Percent Change	Percent of Net Time Sales for the		Net Time Sales Percent Change
		Three months ended September 30,			Nine months ended September 30,
		2017	2016		2017	2016
ABC	41	29.2%	26.1%	3.1%	29.0%	27.5%	1.5%
FOX	58	24.2%	23.3%	0.9%	25.0%	24.3%	0.7%
CBS	30	18.6%	18.5%	0.1%	19.2%	19.2%	—%
NBC	26	13.2%	16.7%	(3.5)%	12.2%	13.4%	(1.2)%
CW	47	7.5%	7.3%	0.2%	7.4%	7.6%	(0.2)%
MNT	36	5.7%	6.2%	(0.5)%	5.6%	6.2%	(0.6)%
Other (a)	348	1.6%	1.9%	(0.3)%	1.6%	1.8%	(0.2)%
Total	586



	Three months ended September 30,				Percent Change (Increase/(Decrease))		Nine months ended September 30,				Percent Change (Increase/(Decrease))
	2017		2016		Percent Change (Increase/(Decrease))		2017		2016		Percent Change (Increase/(Decrease))
Media production expenses	$	242.9	$	222.7	9.1	%	$	712.4	$	639.2	11.5	%
Media selling, general and administrative expenses	$	114.4	$	116.8	(2.1	)%	$	338.9	$	344.2	(1.5	)%
Amortization of program contract costs and net realizable value adjustments	$	28.0	$	32.4	(13.6	)%	$	88.0	$	96.7	(9.0	)%
Corporate general and administrative expenses	$	23.6	$	17.5	34.9	%	$	65.1	$	50.3	29.4	%
Depreciation and amortization expenses	$	60.5	$	62.9	(3.8	)%	$	180.7	$	186.5	(3.1	)%



	Three months ended September 30,						Percent Change (Increase/ (Decrease))		Nine months ended September 30,						Percent Change (Increase/ (Decrease))
	2017			2016			Percent Change (Increase/ (Decrease))		2017			2016			Percent Change (Increase/ (Decrease))
Corporate general and administrative expenses	$	2.0		$	1.3		53.8	%	$	5.6		$	3.3		69.7	%
Interest expense	$	50.3		$	50.4		(0.2	)%	$	154.4		$	147.8		4.5	%
Income tax provision	$	(17.1	)	$	(27.0	)	(36.7	)%	$	(70.6	)	$	(65.8	)	7.3	%
Loss from extinguishment of debt	$	—		$	(23.7	)	n/a		$	(1.4	)	$	(23.7	)	(94.1	)%



	For the three months ended September 30,						For the nine months ended September 30,
	2017			2016			2017			2016
Net cash flows from operating activities	$	136.9		$	120.6		$	278.4		$	330.3

Cash flows (used in) from investing activities:
Acquisition of property and equipment	$	(22.0	)	$	(18.8	)	$	(55.5	)	$	(68.6	)
Acquisition of businesses, net of cash acquired	(241.5		)	(2.8		)	(269.8		)	(425.9		)
Purchase of alarm monitoring contracts	—			(7.5		)	(5.7		)	(29.1		)
Proceeds from sale of non-media business	—			16.4			192.6			16.4
Investments in equity and cost method investees	(1.6		)	(12.4		)	(22.3		)	(34.2		)
Loans to affiliates	—			—			—			(19.5		)
Other	2.6			(4.0		)	(0.5		)	3.4
Net cash flows used in investing activities	$	(262.5	)	$	(29.1	)	$	(161.2	)	$	(557.5	)

Cash flows (used in) from financing activities:
Proceeds from notes payable, commercial bank financing and capital leases	$	3.0		$	403.8		$	166.0		$	1,011.3
Repayments of notes payable, commercial bank financing and capital leases	(17.1		)	(374.4		)	(318.3		)	(654.0		)
Net proceeds from the sale of Class A Common Stock	—			—			487.9			—
Dividends paid on Class A and Class B Common Stock	(18.3		)	(16.9		)	(53.1		)	(49.7		)
Repurchase of outstanding Class A Common Stock	(30.3		)	(89.9		)	(30.3		)	(101.2		)
Other	(5.5		)	(13.3		)	(27.3		)	(24.7		)
Net cash flows (used in) from financing activities	$	(68.2	)	$	(90.7	)	$	224.9		$	181.7



Period	Total Number of Shares Purchased (1)	Average Price Per Share		Total Number of Shares Purchased as Part of a Publicly Announced Program	Approximate Dollar Value of Shares That May Yet Be Purchased Under the Program (in millions)
Class A Common Stock : (2)
07/01/17 – 07/31/17	—	—		—	—
08/01/17 – 08/31/17	997,300	$	30.37	997,300	$	88.8
09/01/17 – 09/30/17	—	—		—	—