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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 
FORM 10-Q

(Mark One) 
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended June 30, 20222023
 
OR
 
☐        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
333-271072 (Sinclair, Inc.)
SINCLAIR BROADCAST GROUP, INC.000-26076 (Sinclair Broadcast Group, LLC)

Sinclair, Inc.
Sinclair Broadcast Group, LLC
(Exact name of Registrant as specified in its charter)
 
Maryland 
92-1076143 (Sinclair, Inc.)
Maryland
52-1494660 (Sinclair Broadcast Group, LLC)
(State or other jurisdiction of Incorporation or organization)(I.R.S. Employer Identification No.)
 
10706 Beaver Dam Road
Hunt Valley, Maryland 21030
(Address of principal executive office, zip code)
 
(410) 568-1500
(Registrant’sRegistrant's telephone number, including area code)
 
NoneSinclair Broadcast Group, Inc.
(Former name, former address and former fiscal year, if changed since last report)
 
Securities registered by Sinclair, Inc. pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of each exchange on which registered
Class A Common Stock, par value $ 0.01 per shareSBGIThe NASDAQ Stock Market LLC

Securities registered by Sinclair Broadcast Group, LLC pursuant to Section 12(b) of the Act: None

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.
Sinclair, Inc.Yes☒No☐
Sinclair Broadcast Group, LLCYes☒ No☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such file).
Sinclair, Inc.Yes☒No☐
Sinclair Broadcast Group, LLCYes☒ No☐

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 accelerated filer", "accelerated filer" and "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Sinclair, Inc.Large accelerated filer☒Accelerated filer☐Non-accelerated filer☐Smaller reporting company☐Emerging growth company☐
Sinclair Broadcast Group, LLCLarge accelerated filer☒Accelerated filer☐Non-accelerated filer☐Smaller reporting company☐Emerging growth company☐
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.
Sinclair, Inc.☐
Sinclair Broadcast Group, LLC☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Sinclair, Inc.Yes☐ No☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock as of the latest practicable date.
Sinclair Broadcast Group, LLCYesNumber of shares outstanding as of
Title of each classAugust 4, 2022
Class A Common Stock☐46,076,496
Class B Common StockNo23,775,056☒

As of August 7, 2023, there were 39,649,259 shares of Sinclair, Inc. Class A Common Stock outstanding and 23,775,056 shares of Sinclair, Inc. Class B Common Stock outstanding.

GENERAL

This combined report on Form 10-Q is filed by both Sinclair, Inc. ("Sinclair") and Sinclair Broadcast Group, LLC ("SBG"). Certain information contained in this document relating to SBG is filed by Sinclair and separately by SBG. SBG makes no representation as to information relating to Sinclair or its subsidiaries, except as it may relate to SBG and its subsidiaries. References in this report to "we," "us," "our," the "Company" and similar terms refer to Sinclair and its consolidated subsidiaries, including SBG, unless context indicates otherwise. As described under Company Reorganization in Note 1. Nature of Operations and Summary of Significant Accounting Policies within Sinclair'sConsolidated Financial Statements below, upon consummation of the Reorganization (as defined therein) on June 1, 2023, Sinclair became the successor issuer to Sinclair Broadcast Group, Inc. ("Old Sinclair"), which, immediately following the Reorganization was converted into a limited liability company. SBG files reports under the Securities Exchange Act of 1934, as amended (the "Exchange Act") solely to comply with Section 1018(a) of the indenture governing the 5.125% Senior Notes due 2027 of Sinclair Television Group, Inc. ("STG"), a wholly-owned subsidiary of SBG. References to SBG herein may also include its predecessor, Old Sinclair, as context indicates.

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 (the "Securities Act"), and Section 21E of 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. All risk factors are deemed to be related to both Sinclair and its subsidiaries, including SBG. Any risks only applicable to Sinclair are denoted as such.

Industry risks

•The business conditions of our advertisers, particularly in the political, automotive and service categories;
•the performance of networks and syndicators that provide us with programming content, as well as the performance of internally originated programming;
•subscriber churn due to the impact of technological changes, the proliferation of over-the-top ("OTT") direct to consumer platforms, and economic conditions on consumers desire to pay for subscription services;
•the loss of appeal of our local news, network content, syndicated program content and sports programming, which may be unpredictable;
•the availability and cost of programming from networks and syndicators, as well as the cost of internally originated programming;
•for Sinclair, the availability and cost of rights to air professional tennis tournaments;

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•our relationships with networks and their strategies to distribute their programming via means other than their local television affiliates, such as OTT or direct-to-consumer content;
•labor disputes and legislation and other union activity associated with film, acting, writing, and other guilds;
•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 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 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 multi-channel video programming distributors ("MVPD") and virtual MVPDs ("vMVPD," and together with MVPDs, "Distributors") to coordinate and determine local advertising rates as a consortium;
•the operation of low power devices in the broadcast spectrum, which could interfere with our broadcast; and
•the impact of Distributors and OTTs offering "skinny" programming bundles that may not include television broadcast stations or other programming that we distribute.

Regulatory risks

•the Federal Communications Commission ("FCC") task force appointed to help ensure a smoother roll-out of NextGen TV could impact business-use cases for the NextGen TV technology and the timeframe for the discontinuance of ATSC 1.0;
•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 ability to compete effectively (including regulations relating to joint sales agreements ("JSA"), shared services agreements ("SSA"), cross ownership rules, the national ownership cap and the UHF discount), 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 which may restrict a television station's retransmission consent negotiations;
•the impact of FCC rules requiring broadcast stations to publish, among other information, political advertising rates online;
•our ability to obtain regulatory approval for transactions related to FCC licenses;
•our ability to execute on our initiatives and goals related to environmental, social and governance ("ESG") matters and the increasing legal and regulatory focus on ESG;
•the impact of foreign government rules related to digital and online assets; and
•the potential impact from the elimination of rules prohibiting mergers of the four major television networks.

Risks specific to us

•the bankruptcy proceedings involving Diamond Sports Group, LLC ("DSG"), an independently managed and unconsolidated subsidiary of Sinclair; DSG and its wholly-owned subsidiary, Diamond Sports Net, LLC may require us to pay monetary damages, which could materially and adversely affect our financial position and results of operations;
•the impact of the war in Ukraine including related disruption to supply chains and the increased price of energy, all of which affect our operations as well as those of our advertisers;
•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 use of derivative financial instruments to reduce interest rate risk may result in added volatility in our operating results;
•our ability to successfully implement and monetize our own content management system 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 any acquired businesses with favorable terms;

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•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 and comply with laws and regulations that apply to them;
•our ability to renew our FCC licenses;
•our ability to identify investment opportunities;
•our ability to successfully integrate any acquired businesses, as well as the success of our new content and distribution initiatives in a competitive environment, including CHARGE!, TBD, Comet, other original programming, mobile DTV, and FAST channels;
•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 ability to generate synergies and leverage new revenue opportunities;
•changes in the makeup of the population in the areas where our stations are located;
•our ability to effectively respond to technology affecting our industry;
•our ability to deploy NextGen TV nationwide, as well as monetize the associated technology;
•the strength of ratings for our local news broadcasts including our news sharing arrangements;
•risks associated with the use of artificial intelligence by us and third parties, including our use in the operations of our business;
•the results of prior year tax audits by taxing authorities;
•for Sinclair, our ability to execute on our investment and growth strategies related to our subsidiary Sinclair Ventures, LLC ("Ventures"); and
•our ability to monetize our investments in real estate, venture capital and private equity holdings, and direct strategic investments in companies.

General risks

•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;
•acts of violence or war, such as the war in Ukraine, and other geopolitical events;
•natural disasters and pandemics (such as the outbreak and worldwide spread of COVID-19) that impact our employees, Distributors, advertisers, suppliers, stations and networks; and
•cybersecurity incidents, data privacy, and other information technology failures have, and in the future, may, adversely affect us and disrupt our operations.

Other matters set forth in this report, including the Risk Factors set forth in Item 1A of this Quarterly Report on Form 10-Q and Old Sinclair's Annual Report on Form 10-K for the year ended December 31, 2022, 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.


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PART I. FINANCIAL INFORMATION


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SINCLAIR, INC.
SINCLAIR BROADCAST GROUP, INC.LLC

FORM 10-Q
FOR THE QUARTER ENDED JUNE 30, 20222023
 
TABLE OF CONTENTS
 
2
  
ITEM 1. FINANCIAL STATEMENTS
3
ITEM 1A. FINANCIAL STATEMENTS OF SINCLAIR, INC. (UNAUDITED)
3
  
CONSOLIDATED BALANCE SHEETS
4
  
CONSOLIDATED STATEMENTS OF OPERATIONS
5
  
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME
6
  
CONSOLIDATED STATEMENTS OF EQUITY (DEFICIT) AND REDEEMABLE NONCONTROLLING INTERESTS
7
  
CONSOLIDATED STATEMENTS OF CASH FLOWS
9
  
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
10
  
ITEM 1B. FINANCIAL STATEMENTS OF SINCLAIR BROADCAST GROUP, LLC (UNAUDITED)
30
CONSOLIDATED BALANCE SHEETS
31
CONSOLIDATED STATEMENTS OF OPERATIONS
32
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME
33
CONSOLIDATED STATEMENTS OF MEMBER'S EQUITY (DEFICIT) AND REDEEMABLE NONCONTROLLING INTERESTS
34
CONSOLIDATED STATEMENTS OF CASH FLOWS
36
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
37
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
3865
  
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
5181
  
ITEM 4. CONTROLS AND PROCEDURES
5181
  
5283
  
ITEM 1. LEGAL PROCEEDINGS
5283
  
ITEM 1A. RISK FACTORS
5283
  
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
5384
  
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
5384
  
ITEM 4. MINE SAFETY DISCLOSURES
5384
  
ITEM 5. OTHER INFORMATION
5384
  
ITEM 6. EXHIBITS
5485
  
5586
  

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ITEM 1. FINANCIAL STATEMENTS

This report includes the Consolidated Financial Statements of Sinclair and SBG in Item 1A and Item 1B, respectively.

ITEM 1A.  FINANCIAL STATEMENTS OF SINCLAIR, INC.
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SINCLAIR, BROADCAST GROUP, INC.
CONSOLIDATED BALANCE SHEETS
(in millions, except share and per share data) (Unaudited) 
As of June 30,
2022		As of December 31,
2021		 As of June 30,
2023		As of December 31,
2022
ASSETSASSETS  ASSETS  
Current assets:Current assets:  Current assets:  
Cash and cash equivalentsCash and cash equivalents$420 $816 Cash and cash equivalents$728 $884 
Accounts receivable, net of allowance for doubtful accounts of $7 as of both periods606 1,245 
Accounts receivable, net of allowance for doubtful accounts of $5 as of both periodsAccounts receivable, net of allowance for doubtful accounts of $5 as of both periods582 612 
Income taxes receivableIncome taxes receivable6 5 
Prepaid expenses and other current assetsPrepaid expenses and other current assets190 182 
Total current assetsTotal current assets1,506 1,683 
Property and equipment, netProperty and equipment, net715 728 
Operating lease assetsOperating lease assets133 145 
Income taxes receivable174 152 
Prepaid sports rights— 85 
Prepaid expenses and other current assets165 173 
Total current assets1,365 2,471 
Property and equipment, net713 833 
Operating lease assets149 207 
Deferred tax assets— 293 
Restricted cash— 3 
GoodwillGoodwill2,088 2,088 Goodwill2,082 2,088 
Indefinite-lived intangible assetsIndefinite-lived intangible assets150 150 Indefinite-lived intangible assets150 150 
Customer relationships, netCustomer relationships, net484 3,904 Customer relationships, net405 444 
Other definite-lived intangible assets, netOther definite-lived intangible assets, net548 1,184 Other definite-lived intangible assets, net458 502 
Other assetsOther assets952 1,408 Other assets752 964 
Total assets (a)Total assets (a)$6,449 $12,541 Total assets (a)$6,201 $6,704 
LIABILITIES, REDEEMABLE NON-CONTROLLING INTERESTS, AND EQUITYLIABILITIES, REDEEMABLE NON-CONTROLLING INTERESTS, AND EQUITY  LIABILITIES, REDEEMABLE NON-CONTROLLING INTERESTS, AND EQUITY  
Current liabilities:Current liabilities:  Current liabilities:  
Accounts payable and accrued liabilitiesAccounts payable and accrued liabilities$414 $655 Accounts payable and accrued liabilities$452 $397 
Current portion of notes payable, finance leases, and commercial bank financingCurrent portion of notes payable, finance leases, and commercial bank financing43 69 Current portion of notes payable, finance leases, and commercial bank financing37 38 
Current portion of operating lease liabilitiesCurrent portion of operating lease liabilities22 35 Current portion of operating lease liabilities21 23 
Current portion of program contracts payableCurrent portion of program contracts payable59 97 Current portion of program contracts payable48 83 
Other current liabilitiesOther current liabilities79 346 Other current liabilities66 67 
Total current liabilitiesTotal current liabilities617 1,202 Total current liabilities624 608 
Notes payable, finance leases, and commercial bank financing, less current portionNotes payable, finance leases, and commercial bank financing, less current portion4,233 12,271 Notes payable, finance leases, and commercial bank financing, less current portion4,185 4,227 
Operating lease liabilities, less current portionOperating lease liabilities, less current portion159 205 Operating lease liabilities, less current portion145 154 
Program contracts payable, less current portionProgram contracts payable, less current portion17 21 Program contracts payable, less current portion7 10 
Deferred tax liabilitiesDeferred tax liabilities360 — Deferred tax liabilities387 610 
Other long-term liabilitiesOther long-term liabilities234 351 Other long-term liabilities212 220 
Total liabilities (a)Total liabilities (a)5,620 14,050 Total liabilities (a)5,560 5,829 
Commitments and contingencies (See Note 6)00
Commitments and contingencies (See Note 5)Commitments and contingencies (See Note 5)
Redeemable noncontrolling interestsRedeemable noncontrolling interests187 197 Redeemable noncontrolling interests— 194 
Shareholders' equity:Shareholders' equity:  Shareholders' equity:  
Class A Common Stock, $.01 par value, 500,000,000 shares authorized, 46,470,546 and 49,314,303 shares issued and outstanding, respectively1 1 
Class A Common Stock, $.01 par value, 500,000,000 shares authorized, 39,274,843 and 45,847,879 shares issued and outstanding, respectivelyClass A Common Stock, $.01 par value, 500,000,000 shares authorized, 39,274,843 and 45,847,879 shares issued and outstanding, respectively1 1 
Class B Common Stock, $.01 par value, 140,000,000 shares authorized, 23,775,056 and 23,775,056 shares issued and outstanding, respectively, convertible into Class A Common StockClass B Common Stock, $.01 par value, 140,000,000 shares authorized, 23,775,056 and 23,775,056 shares issued and outstanding, respectively, convertible into Class A Common Stock— — Class B Common Stock, $.01 par value, 140,000,000 shares authorized, 23,775,056 and 23,775,056 shares issued and outstanding, respectively, convertible into Class A Common Stock— — 
Additional paid-in capitalAdditional paid-in capital628 691 Additional paid-in capital510 624 
Retained earnings (accumulated deficit)79 (2,460)
Accumulated other comprehensive loss(2)(2)
Total Sinclair Broadcast Group shareholders’ equity (deficit)706 (1,770)
Retained earningsRetained earnings184 122 
Accumulated other comprehensive incomeAccumulated other comprehensive income7 1 
Total Sinclair shareholders' equityTotal Sinclair shareholders' equity702 748 
Noncontrolling interestsNoncontrolling interests(64)64 Noncontrolling interests(61)(67)
Total equity (deficit)642 (1,706)
Total equityTotal equity641 681 
Total liabilities, redeemable noncontrolling interests, and equityTotal liabilities, redeemable noncontrolling interests, and equity$6,449 $12,541 Total liabilities, redeemable noncontrolling interests, and equity$6,201 $6,704 
 
The accompanying notes are an integral part of these unaudited consolidated financial statements.
(a)     Our consolidated total assets as of June 30, 20222023 and December 31, 20212022 include total assets of variable interest entities (VIEs)("VIE") of $112$78 million and $217$115 million, respectively, which can only be used to settle the obligations of the VIEs. Our consolidated total liabilities as of June 30, 20222023 and December 31, 20212022 include total liabilities of VIEs of $15$16 million and $62$18 million, respectively, for which the creditors of the VIEs have no recourse to us. See Note 9.8. Variable Interest Entities.
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SINCLAIR, BROADCAST GROUP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except share and per share data) (Unaudited) 
Three Months Ended 
 June 30,		Six Months Ended 
 June 30,		 Three Months Ended 
 June 30,		Six Months Ended 
 June 30,
2022202120222021 2023202220232022
REVENUES:REVENUES:  REVENUES:  
Media revenuesMedia revenues$831 $1,600 $2,106 $3,097 Media revenues$761 $831 $1,527 $2,106 
Non-media revenuesNon-media revenues6 12 19 26 Non-media revenues7 6 14 19 
Total revenuesTotal revenues837 1,612 2,125 3,123 Total revenues768 837 1,541 2,125 
OPERATING EXPENSES:OPERATING EXPENSES:  OPERATING EXPENSES:  
Media programming and production expensesMedia programming and production expenses403 1,345 1,161 2,368 Media programming and production expenses413 403 811 1,161 
Media selling, general and administrative expensesMedia selling, general and administrative expenses195 234 415 447 Media selling, general and administrative expenses190 195 381 415 
Amortization of program contract costsAmortization of program contract costs21 22 46 45 Amortization of program contract costs19 21 41 46 
Non-media expensesNon-media expenses10 14 23 31 Non-media expenses9 10 21 23 
Depreciation of property and equipmentDepreciation of property and equipment24 28 52 56 Depreciation of property and equipment32 24 56 52 
Corporate general and administrative expensesCorporate general and administrative expenses38 36 85 97 Corporate general and administrative expenses62 38 120 85 
Amortization of definite-lived intangible assetsAmortization of definite-lived intangible assets43 119 136 244 Amortization of definite-lived intangible assets41 43 82 136 
Gain on deconsolidation of subsidiaryGain on deconsolidation of subsidiary— — (3,357)— Gain on deconsolidation of subsidiary— — — (3,357)
Gain on asset dispositions and other, net of impairment(4)(8)(9)(22)
Loss (gain) on asset dispositions and other, net of impairmentLoss (gain) on asset dispositions and other, net of impairment5 (4)11 (9)
Total operating expenses (gains)Total operating expenses (gains)730 1,790 (1,448)3,266 Total operating expenses (gains)771 730 1,523 (1,448)
Operating income (loss)107 (178)3,573 (143)
Operating (loss) incomeOperating (loss) income(3)107 18 3,573 
OTHER INCOME (EXPENSE):OTHER INCOME (EXPENSE):  OTHER INCOME (EXPENSE):  
Interest expense including amortization of debt discount and deferred financing costsInterest expense including amortization of debt discount and deferred financing costs(54)(160)(169)(311)Interest expense including amortization of debt discount and deferred financing costs(76)(54)(150)(169)
Gain on extinguishment of debtGain on extinguishment of debt3 — 3 — Gain on extinguishment of debt11 3 11 3 
Income from equity method investments3 2 15 11 
Other (expense) income, net(105)(61)(165)63 
(Loss) income from equity method investments(Loss) income from equity method investments(1)3 30 15 
Other expense, netOther expense, net(38)(105)(27)(165)
Total other expense, netTotal other expense, net(153)(219)(316)(237)Total other expense, net(104)(153)(136)(316)
(Loss) income before income taxes(Loss) income before income taxes(46)(397)3,257 (380)(Loss) income before income taxes(107)(46)(118)3,257 
INCOME TAX BENEFIT (PROVISION)INCOME TAX BENEFIT (PROVISION)40 69 (647)78 INCOME TAX BENEFIT (PROVISION)20 40 224 (647)
NET (LOSS) INCOMENET (LOSS) INCOME(6)(328)2,610 (302)NET (LOSS) INCOME(87)(6)106 2,610 
Net income attributable to the redeemable noncontrolling interests(5)(5)(9)(9)
Net loss (income) attributable to the noncontrolling interests— 1 (25)(33)
NET (LOSS) INCOME ATTRIBUTABLE TO SINCLAIR BROADCAST GROUP$(11)$(332)$2,576 $(344)
Net (income) loss attributable to the redeemable noncontrolling interestsNet (income) loss attributable to the redeemable noncontrolling interests— (5)4 (9)
Net income attributable to the noncontrolling interestsNet income attributable to the noncontrolling interests(2)— (14)(25)
NET (LOSS) INCOME ATTRIBUTABLE TO SINCLAIRNET (LOSS) INCOME ATTRIBUTABLE TO SINCLAIR$(89)$(11)$96 $2,576 
EARNINGS PER COMMON SHARE ATTRIBUTABLE TO SINCLAIR BROADCAST GROUP:  
Basic (loss) earnings per share$(0.17)$(4.41)$36.00 $(4.59)
Diluted (loss) earnings per share$(0.17)$(4.41)$36.00 $(4.59)
EARNINGS PER COMMON SHARE ATTRIBUTABLE TO SINCLAIR:EARNINGS PER COMMON SHARE ATTRIBUTABLE TO SINCLAIR:  
Basic earnings per shareBasic earnings per share$(1.38)$(0.17)$1.44 $36.00 
Diluted earnings per shareDiluted earnings per share$(1.38)$(0.17)$1.43 $36.00 
Basic weighted average common shares outstanding (in thousands)Basic weighted average common shares outstanding (in thousands)70,897 75,331 71,527 74,862 Basic weighted average common shares outstanding (in thousands)64,012 70,897 66,862 71,527 
Diluted weighted average common and common equivalent shares outstanding (in thousands)Diluted weighted average common and common equivalent shares outstanding (in thousands)70,897 75,331 71,533 74,862 Diluted weighted average common and common equivalent shares outstanding (in thousands)64,012 70,897 66,947 71,533 

The accompanying notes are an integral part of these unaudited consolidated financial statements.
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SINCLAIR, BROADCAST GROUP, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME
(in millions) (Unaudited)
 Three Months Ended 
 June 30,		Six Months Ended 
 June 30,
 2022202120222021
Net (loss) income$(6)$(328)$2,610 $(302)
Share of other comprehensive (loss) income of equity method investments— (3)3 5 
Comprehensive (loss) income(6)(331)2,613 (297)
Comprehensive income attributable to the redeemable noncontrolling interests(5)(5)(9)(9)
Comprehensive loss (income) attributable to the noncontrolling interests— 1 (25)(33)
Comprehensive (loss) income attributable to Sinclair Broadcast Group$(11)$(335)$2,579 $(339)
 Three Months Ended 
 June 30,		Six Months Ended 
 June 30,
 2023202220232022
Net (loss) income$(87)$(6)$106 $2,610 
Unrealized gain on interest rate swap, net of tax9 — 6 — 
Share of other comprehensive income of equity method investments— — — 3 
Comprehensive (loss) income(78)(6)112 2,613 
Comprehensive (income) loss attributable to the redeemable noncontrolling interests— (5)4 (9)
Comprehensive income attributable to the noncontrolling interests(2)— (14)(25)
Comprehensive (loss) income attributable to Sinclair$(80)$(11)$102 $2,579 
 
The accompanying notes are an integral part of these unaudited consolidated financial statements.
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SINCLAIR, BROADCAST GROUP, INC.
CONSOLIDATED STATEMENTS OF EQUITY (DEFICIT) AND REDEEMABLE NONCONTROLLING INTERESTS
(in millions, except share and per share data) (Unaudited)
Six Months Ended June 30, 2021
Sinclair Broadcast Group Shareholders  
Redeemable Noncontrolling InterestsClass A
Common Stock		Class B
Common Stock		Additional
Paid-In
Capital		Accumulated DeficitAccumulated
Other
Comprehensive
Loss		Noncontrolling
Interests		Total Deficit
SharesValuesSharesValues
BALANCE, December 31, 2020$190 49,252,671 $1 24,727,682 $— $721 $(1,986)$(10)$89 $(1,185)
Dividends declared and paid on Class A and Class B Common Stock ($0.40 per share)— — — — — — (30)— — (30)
Class B Common Stock converted into Class A Common Stock— 952,626 — (952,626)— — — — — — 
Class A Common Stock issued pursuant to employee benefit plans— 1,411,627 — — — 19 — — — 19 
Distributions to noncontrolling interests, net(9)— — — — — — — (50)(50)
Other comprehensive income— — — — — — — 5 — 5 
Net income9 — — — — — (344)— 33 (311)
BALANCE, June 30, 2021$190 51,616,924 $1 23,775,056 $— $740 $(2,360)$(5)$72 $(1,552)
Three Months Ended June 30, 2021
 Sinclair Broadcast Group Shareholders  
 Redeemable Noncontrolling InterestsClass A
Common Stock		Class B
Common Stock		Additional
Paid-In
Capital		Accumulated DeficitAccumulated
Other
Comprehensive
Loss		Noncontrolling
Interests		Total Deficit
 SharesValuesSharesValues
BALANCE, March 31, 2021$188 51,118,350 $1 24,217,682 $— $735 $(2,013)$(2)$93 $(1,186)
Dividends declared and paid on Class A and Class B Common Stock ($0.20 per share)— — — — — — (15)— — (15)
Class B Common Stock converted into Class A Common Stock— 442,626 — (442,626)— — — — — — 
Class A Common Stock issued pursuant to employee benefit plans— 55,948 — — — 5 — — — 5 
Distributions to noncontrolling interests(3)— — — — — — — (20)(20)
Other comprehensive loss— — — — — — — (3)— (3)
Net income (loss)5 — — — — — (332)— (1)(333)
BALANCE, June 30, 2021$190 51,616,924 $1 23,775,056 $— $740 $(2,360)$(5)$72 $(1,552)
Three Months Ended June 30, 2022
 Sinclair Shareholders  
 Redeemable Noncontrolling InterestsClass A
Common Stock		Class B
Common Stock		Additional
Paid-In
Capital		Retained EarningsAccumulated
Other
Comprehensive
Loss		Noncontrolling
Interests		Total 
Equity
 SharesValuesSharesValues
BALANCE, March 31, 2022$184 47,934,815 $1 23,775,056 $— $657 $109 $(2)$(62)$703 
Dividends declared and paid on Class A and Class B Common Stock ($0.25 per share)— — — — — — (19)— — (19)
Repurchases of Class A Common Stock— (1,585,834)— — — (36)— — — (36)
Class A Common Stock issued pursuant to employee benefit plans— 121,565 — — — 7 — — — 7 
Distributions to noncontrolling interests(2)— — — — — — — (2)(2)
Net income (loss)5 — — — — — (11)— — (11)
BALANCE, June 30, 2022$187 46,470,546 $1 23,775,056 $— $628 $79 $(2)$(64)$642 
Six Months Ended June 30, 2022
Sinclair Shareholders  
Redeemable Noncontrolling InterestsClass A
Common Stock		Class B
Common Stock		Additional
Paid-In
Capital		(Accumulated Deficit) Retained EarningsAccumulated
Other
Comprehensive
Loss		Noncontrolling
Interests		Total 
(Deficit) Equity
SharesValuesSharesValues
BALANCE, December 31, 2021$197 49,314,303 $1 23,775,056 $— $691 $(2,460)$(2)$64 $(1,706)
Dividends declared and paid on Class A and Class B Common Stock ($0.50 per share)— — — — — — (37)— — (37)
Repurchases of Class A Common Stock— (4,058,319)— — — (104)— — — (104)
Class A Common Stock issued pursuant to employee benefit plans— 1,214,562 — — — 41 — — — 41 
Distributions to noncontrolling interests(3)— — — — — — — (5)(5)
Other comprehensive income— — — — — — — 3 — 3 
Deconsolidation of subsidiary(16)— — — — — — (3)(148)(151)
Net income9 — — — — — 2,576 — 25 2,601 
BALANCE, June 30, 2022$187 46,470,546 $1 23,775,056 $— $628 $79 $(2)$(64)$642 

 The accompanying notes are an integral part of these unaudited consolidated financial statements.
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SINCLAIR, BROADCAST GROUP, INC.
CONSOLIDATED STATEMENTS OF EQUITY (DEFICIT) AND REDEEMABLE NONCONTROLLING INTERESTS
(in millions, except share and per share data) (Unaudited)
Six Months Ended June 30, 2022Three Months Ended June 30, 2023
Sinclair Broadcast Group Shareholders   Sinclair Shareholders  
Redeemable Noncontrolling InterestsClass A
Common Stock		Class B
Common Stock		Additional
Paid-In
Capital		(Accumulated Deficit) Retained EarningsAccumulated
Other
Comprehensive
Loss		Noncontrolling
Interests		Total (Deficit) Equity Redeemable Noncontrolling InterestsClass A
Common Stock		Class B
Common Stock		Additional
Paid-In
Capital		Retained EarningsAccumulated
Other
Comprehensive
(Loss) Income		Noncontrolling
Interests		Total Equity
SharesValuesSharesValues SharesValuesSharesValues
BALANCE, December 31, 2021$197 49,314,303 $1 23,775,056 $— $691 $(2,460)$(2)$64 $(1,706)
Dividends declared and paid on Class A and Class B Common Stock ($0.50 per share)— — — — — — (37)— — (37)
Repurchases of Class A Common Stock— (4,058,319)— — — (104)— — — (104)
Class A Common Stock issued pursuant to employee benefit plans— 1,214,562 — — — 41 — — — 41 
Distributions to noncontrolling interests(3)— — — — — — — (5)(5)
Other comprehensive income— — — — — — — 3 — 3 
Deconsolidation of subsidiary(16)— — — — — — (3)(148)(151)
Net income9 — — — — — 2,576 — 25 2,601 
BALANCE, June 30, 2022$187 46,470,546 $1 23,775,056 $— $628 $79 $(2)$(64)$642 
Three Months Ended June 30, 2022
Sinclair Broadcast Group Shareholders  
Redeemable Noncontrolling InterestsClass A
Common Stock		Class B
Common Stock		Additional
Paid-In
Capital		Retained EarningsAccumulated
Other
Comprehensive
Loss		Noncontrolling
Interests		Total Equity
SharesValuesSharesValues
BALANCE, March 31, 2022$184 47,934,815 $1 23,775,056 $— $657 $109 $(2)$(62)$703 
BALANCE, March 31, 2023BALANCE, March 31, 2023$— 44,360,502 $1 23,775,056 $— $602 $289 $(2)$(59)$831 
Dividends declared and paid on Class A and Class B Common Stock ($0.25 per share)Dividends declared and paid on Class A and Class B Common Stock ($0.25 per share)— — — — — — (19)— — (19)Dividends declared and paid on Class A and Class B Common Stock ($0.25 per share)— — — — — — (16)— — (16)
Repurchases of Class A Common StockRepurchases of Class A Common Stock— (1,585,834)— — — (36)— — — (36)Repurchases of Class A Common Stock— (5,201,809)— — — (100)— — — (100)
Class A Common Stock issued pursuant to employee benefit plansClass A Common Stock issued pursuant to employee benefit plans— 121,565 — — — 7 — — — 7 Class A Common Stock issued pursuant to employee benefit plans— 116,150 — — — 8 — — — 8 
Distributions to noncontrolling interestsDistributions to noncontrolling interests(2)— — — — — — — (2)(2)Distributions to noncontrolling interests— — — — — — — — (4)(4)
Other comprehensive lossOther comprehensive loss— — — — — — — 9 — 9 
Net (loss) incomeNet (loss) income— — — — — — (89)— 2 (87)
BALANCE, June 30, 2023BALANCE, June 30, 2023$— 39,274,843 $1 23,775,056 $— $510 $184 $7 $(61)$641 
Net income (loss)5 — — — — — (11)— — (11)
BALANCE, June 30, 2022$187 46,470,546 $1 23,775,056 $— $628 $79 $(2)$(64)$642 
Six Months Ended June 30, 2023
Sinclair Shareholders  
Redeemable Noncontrolling InterestsClass A
Common Stock		Class B
Common Stock		Additional
Paid-In
Capital		Retained EarningsAccumulated
Other
Comprehensive
Income		Noncontrolling
Interests		Total Equity
SharesValuesSharesValues
BALANCE, December 31, 2022BALANCE, December 31, 2022$194 45,847,879 $1 23,775,056 $— $624 $122 $1 $(67)$681 
Dividends declared and paid on Class A and Class B Common Stock ($0.50 per share)Dividends declared and paid on Class A and Class B Common Stock ($0.50 per share)— — — — — — (34)— — (34)
Repurchases of Class A Common StockRepurchases of Class A Common Stock— (8,785,022)— — — (153)— — — (153)
Class A Common Stock issued pursuant to employee benefit plansClass A Common Stock issued pursuant to employee benefit plans— 2,211,986 — — — 39 — — — 39 
Distributions to noncontrolling interestsDistributions to noncontrolling interests— — — — — — — — (8)(8)
Other comprehensive incomeOther comprehensive income— — — — — — — 6 — 6 
Redemption, netRedemption, net(190)— — — — — — — — — 
Net (loss) incomeNet (loss) income(4)— — — — — 96 — 14 110 
BALANCE, June 30, 2023BALANCE, June 30, 2023$— 39,274,843 $1 23,775,056 $— $510 $184 $7 $(61)$641 

The accompanying notes are an integral part of these unaudited consolidated financial statements.
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SINCLAIR, BROADCAST GROUP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions) (Unaudited)
Six Months Ended June 30, Six Months Ended June 30,
20222021 20232022
CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES:  
Net income (loss)$2,610 $(302)
Adjustments to reconcile net income (loss) to net cash flows from (used in) operating activities:  
CASH FLOWS FROM OPERATING ACTIVITIES:CASH FLOWS FROM OPERATING ACTIVITIES:  
Net incomeNet income$106 $2,610 
Adjustments to reconcile net income to net cash flows from operating activities:Adjustments to reconcile net income to net cash flows from operating activities:  
Amortization of sports programming rightsAmortization of sports programming rights326 1,381 Amortization of sports programming rights— 326 
Amortization of definite-lived intangible and other assetsAmortization of definite-lived intangible and other assets136 244 Amortization of definite-lived intangible and other assets82 136 
Depreciation of property and equipmentDepreciation of property and equipment52 56 Depreciation of property and equipment56 52 
Amortization of program contract costsAmortization of program contract costs46 45 Amortization of program contract costs41 46 
Stock-based compensationStock-based compensation38 43 Stock-based compensation36 38 
Deferred tax provision (benefit)654 (93)
Gain on asset dispositions and other, net of impairment(9)(20)
Deferred tax (benefit) provisionDeferred tax (benefit) provision(227)654 
Loss (gain) on asset dispositions and other, net of impairmentLoss (gain) on asset dispositions and other, net of impairment11 (9)
Gain on deconsolidation of subsidiaryGain on deconsolidation of subsidiary(3,357)— Gain on deconsolidation of subsidiary— (3,357)
Income from equity method investmentsIncome from equity method investments(15)(11)Income from equity method investments(30)(15)
Loss (income) from investments159 (60)
Loss from investmentsLoss from investments53 159 
Distributions from investmentsDistributions from investments31 21 Distributions from investments29 31 
Sports programming rights paymentsSports programming rights payments(325)(1,010)Sports programming rights payments— (325)
Rebate payments to distributorsRebate payments to distributors(15)(202)Rebate payments to distributors— (15)
Gain on extinguishment of debtGain on extinguishment of debt(3)— Gain on extinguishment of debt(11)(3)
Change in assets and liabilities, net of acquisitions and deconsolidation of subsidiary:Change in assets and liabilities, net of acquisitions and deconsolidation of subsidiary:  Change in assets and liabilities, net of acquisitions and deconsolidation of subsidiary:  
Decrease (increase) in accounts receivable29 (90)
Decrease in accounts receivableDecrease in accounts receivable26 29 
Increase in prepaid expenses and other current assetsIncrease in prepaid expenses and other current assets(107)(73)Increase in prepaid expenses and other current assets(47)(107)
Increase in accounts payable and accrued and other current liabilitiesIncrease in accounts payable and accrued and other current liabilities29 35 Increase in accounts payable and accrued and other current liabilities62 29 
Net change in net income taxes payable/receivableNet change in net income taxes payable/receivable(21)50 Net change in net income taxes payable/receivable(1)(21)
Decrease in program contracts payableDecrease in program contracts payable(52)(50)Decrease in program contracts payable(46)(52)
Other, netOther, net1 24 Other, net2 1 
Net cash flows from (used in) operating activities207 (12)
CASH FLOWS USED IN INVESTING ACTIVITIES:  
Net cash flows from operating activitiesNet cash flows from operating activities142 207 
CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES:CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES:  
Acquisition of property and equipmentAcquisition of property and equipment(45)(38)Acquisition of property and equipment(40)(45)
Spectrum repack reimbursements2 18 
Proceeds from sale of assets9 39 
Deconsolidation of subsidiary cashDeconsolidation of subsidiary cash(315)— Deconsolidation of subsidiary cash— (315)
Purchases of investmentsPurchases of investments(61)(164)Purchases of investments(39)(61)
Distributions from investmentsDistributions from investments81 6 Distributions from investments204 81 
Other, netOther, net— (2)Other, net4 11 
Net cash flows used in investing activities(329)(141)
Net cash flows from (used in) investing activitiesNet cash flows from (used in) investing activities129 (329)
CASH FLOWS USED IN FINANCING ACTIVITIES:CASH FLOWS USED IN FINANCING ACTIVITIES:  CASH FLOWS USED IN FINANCING ACTIVITIES:  
Proceeds from notes payable and commercial bank financingProceeds from notes payable and commercial bank financing728 357 Proceeds from notes payable and commercial bank financing— 728 
Repayments of notes payable, commercial bank financing and finance leases(845)(385)
Repayments of notes payable, commercial bank financing, and finance leasesRepayments of notes payable, commercial bank financing, and finance leases(38)(845)
Repurchase of outstanding Class A Common StockRepurchase of outstanding Class A Common Stock(104)— Repurchase of outstanding Class A Common Stock(153)(104)
Dividends paid on Class A and Class B Common StockDividends paid on Class A and Class B Common Stock(36)(30)Dividends paid on Class A and Class B Common Stock(34)(36)
Dividends paid on redeemable subsidiary preferred equityDividends paid on redeemable subsidiary preferred equity(3)(4)Dividends paid on redeemable subsidiary preferred equity— (3)
Repurchase of redeemable subsidiary preferred equityRepurchase of redeemable subsidiary preferred equity(190)— 
Distributions to noncontrolling interests, netDistributions to noncontrolling interests, net(8)(5)
Distributions to noncontrolling interests, net(5)(50)
Distributions to redeemable noncontrolling interests— (5)
Other, netOther, net(12)(24)Other, net(4)(12)
Net cash flows used in financing activitiesNet cash flows used in financing activities(277)(141)Net cash flows used in financing activities(427)(277)
NET DECREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASHNET DECREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH(399)(294)NET DECREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH(156)(399)
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, beginning of periodCASH, CASH EQUIVALENTS, AND RESTRICTED CASH, beginning of period819 1,262 CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, beginning of period884 819 
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, end of periodCASH, CASH EQUIVALENTS, AND RESTRICTED CASH, end of period$420 $968 CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, end of period$728 $420 

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

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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. ("SBG," the "Company," or sometimes referred to as "we" or "our"Sinclair") is a diversified media company with national reach and a strong focus on providing high-quality content on our local television stations, digital platforms, and, prior to the Deconsolidation as(as defined below in Deconsolidation of Diamond Sports Intermediate Holdings LLC), regional sports networks. 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.us and our owned networks and professional sports. Additionally, we own digital media productscompanies that are complementary to our extensive portfolio of television station related digital properties. Outside of our media related businesses,properties and we have interests in, own, manage, and/or operate technical and software services companies, focused on supply and maintenance of broadcast transmission systems as well as research and development companies for the advancement of broadcast technology, and we manage other media and non-media related businesses and assets, including real estate, venture capital, private equity, and direct investments.

For the quarter ended June 30, 2022,2023, we had 1two reportable segment for accounting purposes, broadcast.segments: local media and tennis. Prior to the Deconsolidation as(as defined below in Deconsolidation of Diamond Sports Intermediate Holdings LLC,LLC), we had 2one additional reportable segments for accounting purposes, broadcast andsegment, local sports. The broadcastlocal media segment consists primarily of our 185 broadcast television stations in 86 markets, which we own, provide programming and operating services pursuant to agreements commonly referred to as local marketing agreements ("LMA"), or provide sales services and other non-programming operating services pursuant to other outsourcing agreements (such as joint sales agreements ("JSA") and shared services agreements ("SSA")). These stations broadcast 635639 channels as of June 30, 2022.2023. For the purpose of this report, these 185 stations and 635639 channels are referred to as "our" stations and channels. The tennis segment consists of Tennis Channel, a cable network which includes coverage of many of tennis' top tournaments and original professional sports and tennis lifestyle shows; Tennis Channel International streaming service; Tennis Channel Plus streaming service; T2 FAST, a 24-hours a day free ad-supported streaming television channel; and Tennis.com. The local sports segment consisted primarily of our Bally Sports network brands ("Bally RSNs"), the Marquee Sports Network ("Marquee") joint venture, and a minority equity interest in the Yankee Entertainment and Sports Network, LLC ("YES Network") through February 28, 2022. On March 1, 2022, the Bally RSNs, Marquee, and YES Network were deconsolidated from our financial statements. See Deconsolidation of Diamond Sports Intermediate Holdings LLC below. Through February 28, 2022, we refer to the Bally RSNs and Marquee as "the RSNs". The RSNs and YES Network own the exclusive rights to air, among other sporting events, the games of professional sports teams in designated local viewing areas.

Principles of Consolidation
 
The consolidated financial statements include our accounts and those of our wholly-owned and majority-owned subsidiaries, and VIEs for which we are the primary beneficiary. Noncontrolling interests represent a minority owner’sowner'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 havehas the obligation to absorb losses or the right to receive returns that would be significant to the VIE. See Note 9.8. 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.

Company Reorganization

On April 3, 2023, the company formerly known as Sinclair Broadcast Group, Inc., a Maryland corporation ("Old Sinclair"), entered into an Agreement of Share Exchange and Plan of Reorganization (the "Share Exchange Agreement") with Sinclair, and Sinclair Holdings, LLC, a Maryland limited liability company ("Sinclair Holdings"). The purpose of the transactions contemplated by the Share Exchange Agreement was to effect a holding company reorganization in which Sinclair would become the publicly-traded parent company of Old Sinclair.

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SINCLAIR, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
Effective at 12:00 am Eastern U.S. time on June 1, 2023 (the "Share Exchange Effective Time"), pursuant to the Share Exchange Agreement and Articles of Share Exchange filed with the Maryland State Department of Assessments and Taxation, the share exchange between Sinclair and Old Sinclair was completed (the "Share Exchange"). In the Share Exchange, (i) each share or fraction of a share of Old Sinclair's Class A common stock, par value $0.01 per share ("Old Sinclair Class A Common Shares"), outstanding immediately prior to the Share Exchange Effective Time was exchanged on a one-for-one basis for an equivalent share of Sinclair's Class A common stock, par value $0.01 per share ("Sinclair Class A Common Shares"), and (ii) each share or fraction of a share of Old Sinclair's Class B common stock, par value $0.01 per share ("Old Sinclair Class B Common Shares"), outstanding immediately prior to the Share Exchange Effective Time was exchanged on a one-for-one basis for an equivalent share of Sinclair’s Class B common stock, par value $0.01 per share ("Sinclair Class B Common Shares").

Immediately following the Share Exchange Effective Time, Old Sinclair converted from a Maryland corporation to a Maryland limited liability company named Sinclair Broadcast Group, LLC ("SBG"). On the day following the Share Exchange Effective Time (June 2, 2023), Sinclair Holdings became the intermediate holding company between Sinclair and SBG, and SBG transferred certain of its assets (the "Transferred Assets") to Ventures, a new indirect wholly-owned subsidiary of Sinclair. We refer to the Share Exchange and the related steps described above collectively as the "Reorganization." The Transferred Assets included technical and software services companies, intellectual property for the advancement of broadcast technology, and other media and non-media related businesses and assets including real estate, venture capital, private equity, and direct investments, as well as Compulse, a marketing technology and managed services company, and Tennis Channel and related assets. As a result of the Reorganization, the local media segment assets are owned and operated by SBG and the assets of the tennis segment and the Transferred Assets are owned and operated by Ventures.

At the Share Exchange Effective Time, Sinclair's articles of incorporation and bylaws were amended and restated to be the same in all material respects as the existing articles of incorporation and bylaws of Old Sinclair immediately prior to the Share Exchange. As a result, the Sinclair Class A Common Shares confer upon the holders thereof the same rights with respect to Sinclair that the holders of the Old Sinclair Class A Common Shares had with respect to Old Sinclair, and the Sinclair Class B Common Shares confer upon the holders thereof the same rights with respect to Sinclair that the holders of the Old Sinclair Class B Common Shares had with respect to Old Sinclair. Sinclair's Board of Directors, including its committees, and senior management team immediately after the Share Exchange were the same as Old Sinclair's immediately before the Share Exchange.

The Reorganization is considered transactions between entities under common control and as SBG and Ventures are both subsidiaries of Sinclair, there was no impact on the consolidated financial statements of Sinclair.

Deconsolidation of Diamond Sports Intermediate Holdings LLC

On March 1, 2022, SBG'sOld Sinclair's subsidiary Diamond Sports Intermediate Holdings, LLC, and certain of its subsidiaries (collectively "DSIH"), completed a series of transactions (the "Transaction") which are expected to provide DSIH with approximately $1 billion of liquidity enhancement over the next five years.. As part of the Transaction, the governance structure of DSIH was modified including changes to the composition of its Board of Managers, resulting in the Company's loss of voting control. As a result, DSIH, whose operations represented the entirety of our local sports segment, was deconsolidated from our consolidated financial statements effective as of March 1, 2022 (the "Deconsolidation"). The consolidated statement of operations for the six months ended June 30, 2022 therefore includes two months of activity related to DSIH in the fiscal quarter ended March 31, 2022 prior to the Deconsolidation. Subsequent to February 28, 2022, the assets and liabilities of DSIH are no longer included within our consolidated balance sheets. Any discussions related to results, operations, and accounting policies associated with DSIH are referring to the periods prior to the Deconsolidation.

Upon Deconsolidation, we recognized a gain before income taxes of approximately $3,357 million, which is recorded within gain on deconsolidation of subsidiary in our consolidated statements of operations.operations for the six months ended June 30, 2022. Subsequent to the Deconsolidation, we accounted for our equity ownership interest in DSIH under the equity method of accounting. See Note 3.2. Other Assets for more information.

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SINCLAIR, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
Interim Financial Statements
 
The consolidated financial statements for the three and six months ended June 30, 20222023 and 20212022 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 (loss) income, consolidated 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.
 
As permitted under the applicable rules and regulations of the Securities and Exchange Commission (the "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, 20212022 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.

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.

The impact of the war in Ukraine and 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 further materially impact our estimates related to, but not limited to, revenue recognition, goodwill and intangible assets, program contract costs 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 March 2020, the FASB issued guidance providing optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by the discontinuation of the London Interbank Offered Rate ("LIBOR") or by another reference rate expected to be discontinued. The guidance was effective for all entities immediately upon issuance of the update and may be applied prospectively to applicable transactions existing as of or entered into from the date of adoption through December 31, 2022. We adopted this guidance upon issuance and it did not have an impact on our consolidated financial statements.

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In October 2021, the FASB issued guidance to improve the accounting for acquired revenue contracts with customers in a business combination by addressing diversity in practice. ASU 2021-08 requires that an acquiring entity recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606, as if it had originated the contracts. The guidance is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. We are currently evaluatingadopted this guidance during the first quarter of 2023. The impact of this guidance, but dothe adoption did not expecthave a material impact on our consolidated financial statements.

Broadcast Television Programming

We have agreements with programming syndicators for the rights to television programming over contract periods, which generally run from one to three years. Contract payments are made in installments over terms 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.

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Sports Programming Rights

DSIH has multi-year program rights agreements that provide DSIH with the right to produce and telecast professional live sports games within a specified territory in exchange for a rights fee. Prior to the Deconsolidation, we amortized these rights as an expense over each season based upon contractually stated rates. Amortization was accelerated in the event that the stated contractual rates over the term of the rights agreement resulted in an expense recognition pattern that was inconsistent with the projected growth of revenue over the contractual term.

The National Basketball Association ("NBA") and the National Hockey League ("NHL") postponed games in the fourth quarter of 2021 and rescheduled these games to be played in the first quarter of 2022. The sports rights expense associated with these seasons was recognized over the modified term of these seasons.

Hedge Accounting

We entered into an interest rate swap effective February 7, 2023 and terminating on February 28, 2026 in order to manage a portion of our exposure to variable interest rates. The swap agreement has a notional amount of $600 million, bears a fixed interest rate of 3.9%, and we receive a floating rate of interest based on the Secured Overnight Financing Rate ("SOFR").

We have determined that the interest rate swap meets the criteria for hedge accounting. The initial value of the interest rate swap and any changes in value in subsequent periods is included in accumulated other comprehensive income, with a corresponding change recorded in assets or liabilities depending on the position of the swap. Gains or losses on the monthly settlement of the interest rate swap are reflected in interest expense in our consolidated statements of operations. Cash flows related to the interest rate swap are classified as operating activities in our consolidated statements of cash flows. See Interest Rate Swap within Note 3. Notes Payable, Finance Leases, and Commercial Bank Financing for further discussion.

Non-cash Investing and Financing Activities

Leased assets obtained in exchange for new operating lease liabilities were $4 million and $7 million for the six months ended June 30, 2023 and 2022, respectively. Leased assets obtained in exchange for new finance lease liabilities were $1 million for the six months ended June 30, 2022. Non-cash investing activities included property and equipment purchases of $5 million for the six months ended June 30, 2023.
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Revenue Recognition

The following table presents our revenue disaggregated by type and segment (in millions):
For the three months ended June 30, 2023Local MediaTennisOtherEliminationsTotal
Distribution revenue$372 $46 $— $— $418 
Advertising revenue293 14 6 (4)309 
Other media, non-media, and intercompany revenues34 — 8 (1)41 
Total revenues$699 $60 $14 $(5)$768 
For the six months ended June 30, 2023Local MediaTennisOtherEliminationsTotal
Distribution revenue$753 $91 $— $— $844 
Advertising revenue589 23 12 (6)618 
Other media, non-media, and intercompany revenues62 1 19 (3)79 
Total revenues$1,404 $115 $31 $(9)$1,541 
For the three months ended June 30, 2022Local MediaTennisOtherEliminationsTotal
Distribution revenue$385 $45 $— $— $430 
Advertising revenue343 11 13 (1)366 
Other media, non-media, and intercompany revenues32 2 14 (7)41 
Total revenues$760 $58 $27 $(8)$837 
For the six months ended June 30, 2022Local MediaTennisLocal SportsOtherEliminationsTotal
Distribution revenue$778 $92 $433 $— $— $1,303 
Advertising revenue656 19 44 27 (9)737 
Other media, non-media, and intercompany revenues80 3 5 30 (33)85 
Total revenues$1,514 $114 $482 $57 $(42)$2,125 

Distribution Revenue. We have agreements with multi-channel video programming distributors ("MVPD") and virtual MVPDs ("vMVPD," and together with MVPDs, "Distributors"). We generate distribution revenue through fees received from these Distributors for the right to distribute our stations, other properties, and, prior to the Deconsolidation, RSNs. 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.

Advertising Revenue. We generate advertising revenue primarily from the sale of advertising spots/impressions within our broadcast television, digital platforms, and, prior to the Deconsolidation, RSNs.

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) distribution arrangements which are accounted for as a sales/usage based royalty.

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Deferred Revenue. We record deferred revenue when cash payments are received or due in advance of our performance, including amounts which are refundable. We classify deferred revenue as either current in other current liabilities or long-term in other long-term liabilities in our consolidated balance sheets based on the timing of when we expect to satisfy our performance obligations. Deferred revenue was $191 million and $200 million as of June 30, 2023 and December 31, 2022, respectively, of which $134 million and $144 million, respectively, was reflected in other long-term liabilities in our consolidated balance sheets. Deferred revenue recognized during the six months ended June 30, 2023 and 2022, included in the deferred revenue balance as of December 31, 2022 and 2021, was $33 million and $42 million, respectively.

For the three months ended June 30, 2023, two customers accounted for 12% and 10%, respectively, of our total revenues. For the six months ended June 30, 2023, two customers accounted for 11% and 10%, respectively, of our total revenues. For the three months ended June 30, 2022, two customers accounted for 11% and 10%, respectively, of our total revenues. For the six months ended June 30, 2022, three customers accounted for 15%, 14%, and 12%, respectively, of our total revenues. As of June 30, 2023, three customers accounted for 11%, 10%, and 10%, respectively, of our accounts receivable, net. As of December 31, 2022, one customer accounted for 13% of our accounts receivable, net. For purposes of this disclosure, a single customer may include multiple entities under 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 six months ended June 30, 2023 and 2022 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, current and cumulative losses, 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 amount of our available state net operating loss carryforwards based on past operating results, expected timing of the reversals of existing temporary basis differences, alternative tax strategies and projected future taxable income.

Our effective income tax rate for the three months ended June 30, 2023 was less than the statutory rate primarily due to non-deductible expenses. Our effective income tax rate for the six months ended June 30, 2023 was greater than the statutory rate primarily due to a release of valuation allowance on deferred tax assets relating to deductibility of interest expense under the IRC Section 163(j). Our effective income tax rate for the three months ended June 30, 2022 was greater than the statutory rate primarily due to an increase in valuation allowance on deferred tax assets relating to deductibility of interest expense under the IRC Section 163(j). Our effective income tax rate for the six months ended June 30, 2022 approximated our statutory rate.

We believe that our liability for unrecognized tax benefits could be reduced by up to $1 million in the next twelve months, as a result of the expected statute of limitations expirations, and the resolution of examination issues and settlements with tax authorities.

Share Repurchase Program

On August 4, 2020, the Board of Directors authorized an additional $500 million share repurchase authorization in addition to the previous repurchase authorization of $1 billion. There is no expiration date and currently, management has no plans to terminate this program. For the six months ended June 30, 2023, we repurchased approximately 8.8 million shares of Class A Common Stock for $151 million. As of June 30, 2023, the total remaining purchase authorization was $547 million. All shares were repurchased under an SEC Rule 10b5-1 plan.

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

Subsequent Events

In August 2023, our Board of Directors declared a quarterly dividend of $0.25 per share, payable on September 15, 2023 to holders of record at the close of business on September 1, 2023.

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2.OTHER ASSETS:

Other assets as of June 30, 2023 and December 31, 2022 consisted of the following (in millions):

 As of June 30,
2023		As of December 31,
2022
Equity method investments$130 $113 
Other investments397 442 
Note receivable— 193 
Income tax receivable131 131 
Post-retirement plan assets43 41 
Other51 44 
Total other assets$752 $964 

Equity Method Investments

We have a portfolio of investments, including our investment in DSIH (subsequent to the Deconsolidation), and also a number of entities that are primarily focused on the development of real estate and other media and non-media businesses. No investments were individually significant for the periods presented.

Diamond Sports Intermediate Holdings LLC. Subsequent to the Deconsolidation, we began accounting for our equity interest in DSIH under the equity method of accounting. As of March 1, 2022, we reflected the investment in DSIH at fair value, which was determined to be nominal. For the three and six months ended June 30, 2023 and 2022, we recorded no equity method loss related to the investment because the carrying value of the investment is zero and we are not obligated to fund losses incurred by DSIH. See Deconsolidation of Diamond Sports Intermediate Holdings LLC within Note 1. Nature of Operations and Summary of Significant Accounting Policies.

YES Network Investment. Prior to the Deconsolidation, we accounted for our investment in the YES Network as an equity method investment. We recorded income of $10 million for the six months ended June 30, 2022 related to this investment, which is reflected in (loss) income from equity method investments in our consolidated statements of operations. See Deconsolidation of Diamond Sports Intermediate Holdings LLC within Note 1. Nature of Operations and Summary of Significant Accounting Policies.

Other Investments

We measure our investments, excluding equity method investments, at fair value or, in situations where fair value is not readily determinable, we have the option to value investments at cost plus observable changes in value, less impairment. Additionally, certain investments are measured at net asset value ("NAV").

As of June 30, 2023 and December 31, 2022, we held $186 million and $234 million, respectively, in investments measured at fair value. As of June 30, 2023 and December 31, 2022, we held $197 million and $190 million, respectively, in investments measured at NAV. We recognized fair value adjustment losses of $47 million and $48 million for the three and six months ended June 30, 2023, respectively, and fair value adjustment losses of $105 million and $161 million for the three and six months ended June 30, 2022, respectively, associated with these investments, which are reflected in other expense, net in our consolidated statements of operations. As of June 30, 2023 and December 31, 2022, our unfunded commitments related to our investments valued using the NAV practical expedient totaled $80 million and $88 million, respectively.

Investments accounted for utilizing the measurement alternative were $14 million as of June 30, 2023 and $18 million, net of $7 million of cumulative impairments, as of December 31, 2022. We recorded a $6 million impairment related to one investment for the three and six months ended June 30, 2023, which is reflected in other expense, net in our consolidated statements of operations. There were no adjustments to the carrying amount of investments accounted for utilizing the measurement alternative for either of the three and six months ended June 30, 2022.

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Note Receivable

We are party to an Accounts Receivable Securitization Facility ("A/R Facility"), held by Diamond Sports Finance SPV, LLC ("DSPV"), an indirect wholly-owned subsidiary of DSIH. Subsequent to the Deconsolidation, transactions related to the A/R Facility are no longer eliminated as intercompany transactions and, therefore, are reflected in our consolidated financial statements. See Deconsolidation of Diamond Sports Intermediate Holdings LLC within Note 1. Nature of Operations and Summary of Significant Accounting Policies. On May 10, 2023, DSPV paid the Company approximately $199 million, representing the aggregate outstanding principal amount of the loans under the A/R Facility, accrued interest, and outstanding fees and expenses. As of June 30, 2023, the note receivable due to the Company had no outstanding balance and, as of December 31, 2022, the note receivable due to the Company was $193 million, which is reflected in other assets in our consolidated balance sheets. The maximum aggregate commitment under the A/R Facility is $50 million and the A/R Facility has a maturity date of September 23, 2024.

3.NOTES PAYABLE, FINANCE LEASES, AND COMMERCIAL BANK FINANCING:

Bank Credit Agreement and Notes

The bank credit agreement of Sinclair Television Group, Inc. ("STG"), a wholly-owned subsidiary of SBG (the "Bank Credit Agreement"), includes a financial maintenance covenant, the first lien leverage ratio (as defined in the Bank Credit Agreement), which requires such ratio not to exceed 4.5x, measured as of the end of each fiscal quarter. As of June 30, 2023, the STG first lien leverage ratio was below 4.5x. Under the Bank Credit Agreement, a financial maintenance covenant is only applicable if 35% or more of the capacity (as a percentage of total commitments) under the revolving credit facility, measured as of the last day of each fiscal quarter, is utilized under the revolving credit facility as of such date. Since there was no utilization under the revolving credit facility as of June 30, 2023, STG was not subject to the financial maintenance covenant under the Bank Credit Agreement. The Bank Credit Agreement contains other restrictions and covenants with which STG was in compliance as of June 30, 2023.

In June 2023, we purchased $3 million, $15 million, and $13 million aggregate principal amount of the 5.125% Senior Notes due 2027, the 5.500% Senior Notes due 2030, and the 4.125% Senior Secured Notes due 2030 (collectively, the notes are referred to as the "STG Notes"), respectively, in open market transactions for consideration of $3 million, $8 million, and $8 million, respectively. The STG Notes acquired in June 2023 were canceled immediately following their acquisition. We recognized a gain on extinguishment of the STG Notes of $11 million for the three and six months ended June 30, 2023.

In July 2023, we purchased $0.5 million aggregate principal amount of the 5.125% Senior Notes due 2027 in open market transactions for consideration of $0.4 million and repaid $1 million aggregate principal amount of the Term Loan B-2, due September 30, 2026, for consideration of $0.8 million. The STG Notes acquired in July 2023 were canceled immediately following their acquisition.

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 $3 million as of June 30, 2023 and December 31, 2022, respectively. Notes payable, finance leases, and commercial bank financing, less current portion, in our consolidated balance sheets includes finances leases to affiliates of $6 million as of both June 30, 2023 and December 31, 2022. See Note 9. Related Person Transactions.

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

STG jointly, severally, unconditionally, and irrevocably guaranteed $2 million of debt of certain third parties as of both June 30, 2023 and December 31, 2022, all of which related to consolidated VIEs and is included in our consolidated balance sheets as of both June 30, 2023 and December 31, 2022. We provide a guarantee of certain obligations of a regional sports network subject to a maximum annual amount of $112 million with annual escalations of 4% for the next six years. We have determined that, as of June 30, 2023, it is not probable that we would have to perform under any of these guarantees.

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Interest Rate Swap

We entered into an interest rate swap effective February 7, 2023 and terminating on February 28, 2026 in order to manage a portion of our exposure to variable interest rates. The swap agreement has a notional amount of $600 million, bears a fixed interest rate of 3.9%, and we receive a floating rate of interest based on SOFR. See Hedge Accounting within Note 1. Nature of Operations and Summary of Significant Accounting Policies for further discussion. As of June 30, 2023, the fair value of the interest rate swap was an asset of $8 million, which is recorded in other assets in our consolidated balance sheets.

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 Diamond Sports Group, LLC ("DSG") and indirect wholly-owned subsidiary of the Company, issued preferred equity (the "Redeemable Subsidiary Preferred Equity").

Dividends accrued during the six months ended June 30, 2023 were $3 million and during the three and six months ended June 30, 2022 were $3 million and $6 million, respectively, and are reflected in net income attributable to the redeemable noncontrolling interests in our consolidated statements of operations. Dividends accrued during all of the six months ended June 30, 2023 and the three and six months ended June 30, 2022 were paid-in-kind and added to the liquidation preference, which was partially offset by certain required cash tax distributions.

The balance, net of issuance costs, and the liquidation preference of the Redeemable Subsidiary Preferred Equity were $194 million and $198 million, respectively, as of December 31, 2022. On February 10, 2023, we purchased the remaining 175,000 units of the Redeemable Subsidiary Preferred Equity for an aggregate purchase price of $190 million, representing 95% of the sum of the remaining unreturned capital contribution of $175 million, and accrued and unpaid dividends up to, but not including, the date of purchase.

5.COMMITMENTS AND CONTINGENCIES:

Litigation
We are a party to lawsuits, claims, and 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. Except as noted below, we do not believe the outcome of these matters, individually or in the aggregate, will have a material effect on our financial statements. 

FCC Litigation Matters

On May 22, 2020, the Federal Communications Commission ("FCC") released an Order and Consent Decree pursuant to which the Company agreed to pay $48 million to resolve the matters covered by a Notice of Apparent Liability for Forfeiture ("NAL") issued in December 2017 proposing a $13 million fine for alleged violations of the FCC's sponsorship identification rules by the Company and certain of its subsidiaries, the FCC's investigation of the allegations raised in the Hearing Designation Order issued in connection with the Company's proposed acquisition of Tribune, and a retransmission related matter. The Company submitted the $48 million payment on August 19, 2020. As part of the consent decree, the Company also agreed to implement a 4-year compliance plan. Two petitions were filed on June 8, 2020 seeking reconsideration of the Order and Consent Decree. The Company filed an opposition to the petitions on June 18, 2020, and the petitions remain pending.

On September 1, 2020, one of the individuals who filed a petition for reconsideration of the Order and Consent Decree filed a petition to deny the license renewal application of WBFF(TV), Baltimore, MD, and the license renewal applications of two other Baltimore, MD stations with which the Company has a JSA or LMA, Deerfield Media station WUTB(TV) and Cunningham Broadcasting Corporation ("Cunningham") station WNUV(TV). The Company filed an opposition to the petition on October 1, 2020, and the petition remains pending.

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On September 2, 2020, the FCC adopted a Memorandum Opinion and Order and NAL against the licensees of several stations with whom the Company has LMAs, JSAs, and/or SSAs in response to a complaint regarding those stations' retransmission consent negotiations. The NAL proposed a $0.5 million penalty for each station, totaling $9 million. The licensees filed a response to the NAL on October 15, 2020, asking the Commission to dismiss the proceeding or, alternatively, to reduce the proposed forfeiture to $25,000 per station. On July 28, 2021, the FCC issued a forfeiture order in which the $0.5 million penalty was upheld for all but one station. A Petition for Reconsideration of the forfeiture order was filed on August 7, 2021. On March 14, 2022, the FCC released a Memorandum Opinion and Order and Order on Reconsideration, reaffirming the forfeiture order and dismissing (and in the alternative, denying) the Petition for Reconsideration. The Company is not a party to this forfeiture order; however, our consolidated financial statements include an accrual of additional expenses of $8 million for the above legal matters during the year ended December 31, 2021, as we consolidate these stations as VIEs.

On September 21, 2022, the FCC released an NAL against the licensees of a number of stations, including 83 Company stations and several stations with whom the Company has LMAs, JSAs, and/or SSAs, for violation of the FCC's limitations on commercial matter in children's television programming related to KidsClick network programming distributed by the Company in 2018. The NAL proposed a fine of $2.7 million against the Company, and fines ranging from $20,000 to $26,000 per station for the other licensees, including the LMA, JSA, and/or SSA stations, for a total of $3.4 million. As of June 30, 2023, we have accrued $3.4 million. On October 21, 2022, the Company filed a written response seeking reduction of the proposed fine amount, and the matter remains pending.

Other Litigation Matters

On November 6, 2018, the Company agreed to enter into a proposed consent decree with the Department of Justice ("DOJ"). This consent decree resolves the DOJ'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 the Company 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 DOJ 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 had already instructed them not to do.

The Company is aware of twenty-two 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 thirteen 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. The Court denied the Defendants' motion to dismiss on November 6, 2020. Since then, the Plaintiffs have served the Defendants with written discovery requests and have begun taking depositions of the employees of the defendants and certain third parties. The Court has set a pretrial schedule which currently requires discovery to be completed by December 15, 2023, or 90 days after the Special Master certifies completion of the privilege review, whichever date is later, and requires briefing on class certification to be completed within 195 days after that date. The Company believes the lawsuits are without merit and intends to vigorously defend itself against all such claims.

On July 19, 2023, as part of the ongoing bankruptcy proceedings of DSG, an independently managed and unconsolidated subsidiary of Sinclair, DSG and its wholly-owned subsidiary, Diamond Sports Net, LLC, filed a complaint, under seal, in the United States Bankruptcy Court for the Southern District of Texas naming certain subsidiaries of Sinclair, including SBG and STG, David D. Smith, Sinclair's Executive Chairman, Christopher S. Ripley, Sinclair's President and Chief Executive Officer, Lucy A. Rutishauser, Sinclair's Executive Vice President & Chief Financial Officer, and Scott Shapiro, Sinclair's Executive Vice President, Corporate Development and Strategy, as defendants.

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In the complaint, plaintiffs challenge a series of transactions involving SBG and certain of its subsidiaries, on the one hand, and DSG and its subsidiaries, on the other hand, since SBG acquired the former Fox Sports regional sports networks from The Walt Disney Company in August 2019. The complaint alleges, among other things, that the management services agreement entered into by STG and DSG was not fair to DSG and was designed to benefit STG and SBG; that the Bally's Corporation ("Bally's") transaction in November 2020 through which Bally's acquired naming rights to certain regional sports networks was not fair to DSG and was designed to benefit STG and SBG; and that certain distributions made by DSG that were used to pay down preferred equity of DSH, were inappropriate and were conducted at a time when DSG was insolvent. The complaint alleges that SBG and its subsidiaries (other than DSG and its subsidiaries) received payments or indirect benefits of approximately $1.5 billion as a result of the alleged misconduct. The complaint asserts a variety of claims, including certain fraudulent transfers of assets, unlawful distributions and payments, breaches of contracts, unjust enrichment and breaches of fiduciary duties. The plaintiffs are seeking, among other relief, avoidance of fraudulent transfers and unlawful distributions, and unspecified monetary damages to be determined. The defendants believe the allegations in this lawsuit are without merit and intend to vigorously defend against plaintiffs' claims.

While at this early stage of the proceedings it is not possible to determine the probability of any outcome or probability or amount of any loss, in the event of an unfavorable outcome, Sinclair's subsidiaries may be required to pay monetary damages, which could materially and adversely affect Sinclair's financial and results of operations.

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 
 June 30,		Six Months Ended 
 June 30,
 2023202220232022
Income (Numerator)  
Net (loss) income$(87)$(6)$106 $2,610 
Net (income) loss attributable to the redeemable noncontrolling interests— (5)4 (9)
Net income attributable to the noncontrolling interests(2)— (14)(25)
Numerator for basic and diluted earnings per common share available to common shareholders$(89)$(11)$96 $2,576 
Shares (Denominator)  
Basic weighted-average common shares outstanding64,012 70,897 66,862 71,527 
Dilutive effect of stock-settled appreciation rights and outstanding stock options— — 85 6 
Diluted weighted-average common and common equivalent shares outstanding64,012 70,897 66,947 71,533 

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 
 June 30,		Six Months Ended 
 June 30,
 2023202220232022
Weighted-average stock-settled appreciation rights and outstanding stock options excluded3,693 3,645 3,645 3,095 

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7.SEGMENT DATA:
During the period endedJune 30, 2023 we modified our segment reporting to align with the new organizational structure of the Company discussed within Company Reorganization under Note 1. Nature of Operations and Summary of Significant Accounting Policies. The segment information within the comparative periods have been revised to reflect this new presentation. During the period ended June 30, 2023, we measured segment performance based on operating income (loss). For the quarter ended June 30, 2023, we had two reportable segments, local media and tennis. Prior to the Deconsolidation, we had one additional reportable segment, local sports. Our local media segment includes our television stations, original networks and content and provides these through free over-the-air programming to television viewing audiences for stations in markets located throughout the continental United States, as well as distributes the content of these stations to MVPDs for distribution to their customers in exchange for contractual fees. See Revenue Recognition under Note 1. Nature of Operations and Summary of Significant Accounting Policies for further detail. Our tennis segment provides viewers coverage of many of tennis' top tournaments and original professional sport and tennis lifestyle shows. Our local sports segment provided viewers with live professional sports content and included the Bally RSNs, Marquee, and our investment in the YES Network, prior to the Deconsolidation on March 1, 2022. See Deconsolidation of Diamond Sports Intermediate Holdings LLC under Note 1. Nature of Operations and Summary of Significant Accounting Policies. Other and corporate are not reportable segments but are included for reconciliation purposes. Other primarily consists of non-broadcast digital and internet solutions, technical services, and non-media investments. Corporate costs primarily include our costs to operate as a public company and to operate our corporate headquarters location. All of our businesses are located within the United States. As a result of the Reorganization, the local media segment assets are owned and operated by SBG, the assets of the tennis segment are owned and operated by Ventures, and the other Transferred Assets, which are included in other and corporate, are owned and operated by Ventures.

Segment financial information is included in the following tables for the periods presented (in millions):
As of June 30, 2023Local MediaTennisOther & CorporateEliminationsConsolidated
Assets$4,315 $309 $1,577 $— $6,201 

For the three months ended June 30, 2023Local MediaTennisOther & CorporateEliminationsConsolidated
Revenue$699 (b)$60 $14 $(5)(a)$768 
Depreciation of property and equipment and amortization of definite-lived intangibles and other assets67 5 1 — 73 
Amortization of program contract costs19 — — — 19 
Corporate general and administrative expenses46 — 16 — 62 
(Gain) loss on asset dispositions and other, net of impairment(2)— 7 — 5 
Operating income (loss)22 3 (28)— (3)
Interest expense including amortization of debt discount and deferred financing costs76 — — — 76 
Loss from equity method investments— — (1)— (1)
For the six months ended June 30, 2023Local MediaTennisOther & CorporateEliminationsConsolidated
Revenue$1,404 (b)$115 $31 $(9)(a)$1,541 
Depreciation of property and equipment and amortization of definite-lived intangibles and other assets126 10 3 (1)138 
Amortization of program contract costs41 — — — 41 
Corporate general and administrative expenses78 — 42 — 120 
(Gain) loss on asset dispositions and other, net of impairment(3)— 14 — 11 
Operating income (loss)63 21 (66)— 18 
Interest expense including amortization of debt discount and deferred financing costs150 — — — 150 
Income from equity method investments— — 30 — 30 

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SINCLAIR, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
For the three months ended June 30, 2022Local MediaTennisOther & CorporateEliminationsConsolidated
Revenue$760 (b)$58 $27 $(8)(a)$837 
Depreciation of property and equipment and amortization of definite-lived intangibles and other assets61 5 2 (1)67 
Amortization of program contract costs21 — — — 21 
Corporate general and administrative expenses34 — 4 — 38 
Gain on asset dispositions and other, net of impairment(4)— — — (4)
Operating income (loss)116 — (9)— 107 
Interest expense including amortization of debt discount and deferred financing costs54 — 3 (3)54 
Income from equity method investments— — 3 — 3 
For the six months ended June 30, 2022Local MediaTennisLocal Sports (c)Other & CorporateEliminationsConsolidated
Revenue$1,514 (b)$114 $482 $57 $(42)(a)$2,125 
Depreciation of property and equipment and amortization of definite-lived intangibles and other assets122 10 54 4 (2)188 
Amortization of sports programming rights— — 326 — — 326 
Amortization of program contract costs46 — — — — 46 
Corporate general and administrative expenses77 — 1 7 — 85 
Gain on deconsolidation of subsidiary— — — (3,357)— (3,357)
Gain on asset dispositions and other, net of impairment(8)— — (1)— (9)
Operating income (loss)211 24 (4)3,342 — 3,573 
Interest expense including amortization of debt discount and deferred financing costs99 — 72 6 (8)169 
Income from equity method investments— — 10 5 — 15 

(a)Includes $2 million and $3 million for the three and six months ended June 30, 2023, respectively, and $3 million and $10 million for the three and six months ended June 30, 2022, respectively, of revenue for services provided by other to local media, which is eliminated in consolidation; $1 million for the six months ended June 30, 2023, and $1 million and $25 million for the three and six months ended June 30, 2022, respectively, of revenue for services provided by local media to other and local sports, which is eliminated in consolidation; and $1 million and $2 million for the three and six months ended June 30, 2023, respectively, and $1 million and $2 million for the three and six months ended June 30, 2022, respectively, of intercompany revenue related to certain services provided to local media from tennis, which is eliminated in consolidation.
(b)Includes $14 million and $24 million for the three and six months ended June 30, 2023, respectively, and $10 million and $15 million for the three and six months ended June 30, 2022, respectively, of revenue for services provided by local media under management services agreements after the Deconsolidation, which is not eliminated in consolidation. See Deconsolidation of Diamond Sports Intermediate Holdings LLC within Note 1. Nature of Operations and Summary of Significant Accounting Policies.
(c)Represents the activity prior to the Deconsolidation on March 1, 2022. See Deconsolidation of Diamond Sports Intermediate Holdings LLC within Note 1. Nature of Operations and Summary of Significant Accounting Policies.
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SINCLAIR, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
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.

A subsidiary of DSIH is a 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 a prior acquisition, we became party to a joint venture associated with one other regional sports network. DSIH participated significantly in the economics and had the power to direct the activities which significantly impacted the economic performance of these regional sports networks, including sales and certain operational services. As of March 1, 2022, as a result of the Deconsolidation, we no longer consolidate these regional sports networks. See Deconsolidation of Diamond Sports Intermediate Holdings LLC within Note 1. Nature of Operations and Summary of Significant Accounting Policies.

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 June 30,
2023		As of December 31,
2022
ASSETS  
Current assets:  
Accounts receivable, net$15 $47 
Other current assets1 3 
Total current assets16 50 
Property and equipment, net11 10 
Goodwill and indefinite-lived intangible assets15 15 
Definite-lived intangible assets, net36 40 
Total assets$78 $115 
LIABILITIES  
Current liabilities:  
Other current liabilities$13 $15 
Notes payable, finance leases and commercial bank financing, less current portion6 7 
Program contracts payable, less current portion— 1 
Other long-term liabilities3 3 
Total liabilities$22 $26 
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SINCLAIR, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
The amounts above represent the combined 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 $130 million as of both June 30, 2023 and December 31, 2022, 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 June 30, 2023, 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 obligations under Note 3. Notes Payable, Finance Leases, 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 $201 million and $187 million as of June 30, 2023 and December 31, 2022, respectively, and are included in other assets in our consolidated balance sheets. See Note 2. Other Assets for more information related to our equity investments. 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) income from equity method investments and other expense, net, respectively, in our consolidated statements of operations. We recorded gains of $3 million and $38 million for the three and six months ended June 30, 2023, respectively, and gains of $5 million and $25 million for the three and six months ended June 30, 2022, respectively, related to these investments.

In conjunction with the Transaction, the composition of the DSIH board of managers was modified resulting in our loss of voting control over DSIH. We hold substantially all of the equity of DSIH and provide certain management and general and administrative services to DSIH. However, it was determined that we are not the primary beneficiary because we lack the ability to control the activities that most significantly drive the economics of the business. The carrying amount of our investment in DSIH is zero and there is no obligation for us to provide additional financial support. We are also party to the A/R Facility held by an indirect wholly-owned subsidiary of DSIH which has a maturity date of September 23, 2024. On May 10, 2023, DSPV paid the Company approximately $199 million, representing the aggregate outstanding principal amount of the loans under the A/R Facility, accrued interest, and outstanding fees and expenses. There was no outstanding balance as of June 30, 2023 and an outstanding balance of approximately $193 million as of December 31, 2022. As of June 30, 2023, our aggregate commitment under the A/R Facility is $50 million. See Note Receivable within Note 2. Other Assets.

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 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:
Leases. Certain assets used by us and our operating subsidiaries are leased from entities owned by the controlling shareholders. Lease payments made to these entities were $1 million and $3 million for the three and six months ended June 30, 2023, respectively, and $1 million and $3 million for the three and six months ended June 30, 2022, respectively. For further information, see Note 3. Notes Payable, Finance Leases, and Commercial Bank Financing.

Charter Aircraft. We lease aircraft owned by certain controlling shareholders. For all leases, we incurred expenses of $0.1 million and $0.2 million for the three and six months ended June 30, 2023, respectively. We incurred expenses of less than $0.1 million and $0.3 million for the three and six months ended June 30, 2022, respectively.

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SINCLAIR, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
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; WEMT-TV Tri-Cities, Tennessee; WYDO-TV Greenville, North Carolina; KBVU-TV/KCVU-TV Eureka/Chico-Redding, California; WPFO-TV Portland, Maine; KRNV-DT/KENV-DT Reno, Nevada/Salt Lake City, Utah; and KTXD-TV in Dallas, Texas (collectively, the "Cunningham Stations"). Certain of our stations provide services to the Cunningham Stations pursuant to LMAs or JSAs and SSAs. See Note 8. Variable Interest Entities, for further discussion of the scope of services provided under these types of arrangements.
All of the non-voting stock of the Cunningham Stations 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.

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, 2028 and there is one additional five-year renewal term 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 or (ii) $6 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 $63 million and $61 million as of June 30, 2023 and December 31, 2022, respectively. The remaining aggregate purchase price of these stations, net of prepayments, as of both June 30, 2023 and December 31, 2022, was approximately $54 million. Additionally, we provide services to WDBB-TV pursuant to an LMA, which expires April 22, 2025, and have a purchase option to acquire for $0.2 million. We paid Cunningham, under these agreements, $3 million and $6 million for the three and six months ended June 30, 2023, respectively, and $1 million and $4 million for the three and six months ended June 30, 2022, respectively.

The agreements with KBVU-TV/KCVU-TV, KRNV-DT/KENV-DT, WBSF-TV, WDBB-TV, WEMT-TV, WGTU-TV/WGTQ-TV, WPFO-TV, and WYDO-TV expire between April 2025 and November 2029 and certain stations have renewal provisions for successive eight-year periods.

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 in our consolidated statements of operations. Our consolidated revenues include $33 million and $69 million for the three and six months ended June 30, 2023, respectively, and $37 million and $71 million for the three and six months ended June 30, 2022, respectively, related to the Cunningham Stations.

We have an agreement with Cunningham to provide master control equipment and provide master control services to a station in Johnstown, PA with which Cunningham has an LMA that expires in June 2025. Under the agreement, Cunningham paid us an initial fee of $1 million and pays us $0.3 million annually for master control services plus the cost to maintain and repair the equipment. In addition, we have an agreement with Cunningham to provide a news share service with the Johnstown, PA station for an annual fee of $0.6 million, which increases by 3% on each anniversary and expires in November 2024.

We have multi-cast agreements with Cunningham Stations in the Eureka/Chico-Redding, California; Tri-Cities, Tennessee; Anderson, South Carolina; Baltimore, Maryland; Portland, Maine; Charleston, West Virginia; Dallas, Texas; and Greenville, North Carolina markets. In exchange for carriage of these networks in their markets, we paid $0.5 million and $1 million for the three and six months ended June 30, 2023, respectively, and $1 million for both the three and six months ended June 30, 2022 under these agreements.

MileOne Autogroup Inc.
We sell advertising time to certain operating subsidiaries of MileOne Autogroup, Inc. ("MileOne"), including automobile dealerships, body shops, 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, MileOne. We received payments for advertising totaling less than $0.1 million for each of the three and six months ended June 30, 2023 and 2022.
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SINCLAIR, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
Leased property by real estate ventures

Certain of our real estate ventures have entered into leases with entities owned by members of the Smith Family. Total rent payments received under these leases were $0.3 million and $0.7 million for the three and six months ended June 30, 2023, respectively, and $0.3 million and $0.5 million for the three and six months ended June 30, 2022, respectively.

Diamond Sports Intermediate Holdings LLC

Subsequent to February 28, 2022, we accounted for our equity interest in DSIH as an equity method investment. See Deconsolidation of Diamond Sports Intermediate Holdings LLC within Note 1. Nature of Operations and Summary of Significant Accounting Policies.

Management Services Agreement. In 2019, we entered into a management services agreement with DSG, a wholly-owned subsidiary of DSIH, in which we provide DSG with affiliate sales and marketing services and general and administrative services. The contractual annual amount due from DSG for these services during the fiscal year ended December 31, 2023 is $78 million, which is subject to increases on an annual basis. Additionally, the agreement contains an incentive fee payable to us calculated based on certain terms contained within new or renewed distribution agreements with Distributors. As a condition to the Transaction, DSG will defer the cash payment of a portion of its management fee payable to the Company over the next four years. Pursuant to this agreement, the local media segment recorded $13 million and $22 million of revenue for the three and six months ended June 30, 2023, respectively, and $10 million and $38 million of revenue for the three and six months ended June 30, 2022, respectively, of which $24 million for the six months ended June 30, 2022 was eliminated in consolidation prior to the Deconsolidation. We will not recognize the portion of deferred management fees as revenue until such fees are determined to be collectible.

Distributions. DSIH made distributions to DSH for tax payments on the dividends of the Redeemable Subsidiary Preferred Equity of $2 million and $3 million during the three and six months ended June 30, 2022, respectively.

Note receivable. We received payments totaling $206 million and $209 million during the three and six months ended June 30, 2023, respectively, and $10 million and $60 million during the three and six months ended June 30, 2022, respectively, from DSPV related to the note receivable associated with the A/R Facility, including $199 million from DSPV on May 10, 2023, representing the aggregate outstanding principal amount of the loans under the A/R Facility, accrued interest, and outstanding fees and expenses.

We recorded revenue of $6 million and $11 million during the three and six months ended June 30, 2023, respectively, and $4 million and $5 million during the three and six months ended June 30, 2022, respectively, related to certain other transactions between DSIH and the Company.

Other equity method investees

YES Network. In August 2019, YES Network, which was accounted for as an equity method investment prior to the Deconsolidation, entered into a management services agreement with the Company, in which we provide certain services for an initial term that expires on August 29, 2025. The agreement will automatically renew for two 2-year renewal terms, with a final expiration on August 29, 2029. Pursuant to the terms of the agreement, the YES Network paid us a management services fee of $1 million for the six months ended June 30, 2022. See Deconsolidation of Diamond Sports Intermediate Holdings LLC within Note 1. Nature of Operations and Summary of Significant Accounting Policies.

DSIH has a minority interest in certain mobile production businesses. Prior to the Deconsolidation, we accounted for these as equity method investments. DSIH made payments to these businesses for production services totaling $5 million for the six months ended June 30, 2022. See Deconsolidation of Diamond Sports Intermediate Holdings LLC within Note 1. Nature of Operations and Summary of Significant Accounting Policies.

We have a minority interest in a sports marketing company, which we account for as an equity method investment. We made payments to this business for marketing services totaling $2 million for the six months ended June 30, 2022.

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SINCLAIR, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
Sports Programming Rights

Affiliates of six professional teams had non-controlling equity interests in certain of DSIH's RSNs. DSIH paid $61 million for the six months ended June 30, 2022 under sports programming rights agreements covering the broadcast of regular season games associated with these professional teams. Prior to the Deconsolidation, these payments were recorded in our consolidated statements of operations and cash flows. See Deconsolidation of Diamond Sports Intermediate Holdings LLC within Note 1. Nature of Operations and Summary of Significant Accounting Policies.

Employees

Jason Smith, an employee of the Company, is the son of Frederick Smith, who is a Vice President of the Company and a member of the Company's Board of Directors. Jason Smith received total compensation of $0.2 million and $0.1 million for the three months ended June 30, 2023 and 2022, respectively, and $0.4 million and $0.2 million for the six months ended June 30, 2023 and 2022, respectively, consisting of salary and bonus. Ethan White, an employee of the Company, is the son-in-law of J. Duncan Smith, who is a Vice President of the Company and Secretary of the Company's Board of Directors. Ethan White received total compensation of less than $0.1 million for both the three months ended June 30, 2023 and 2022 and $0.1 million for both the six months ended June 30, 2023 and 2022, consisting of salary and bonus, and was granted 1,252 shares of restricted stock, vesting over two years, during the six months ended June 30, 2023. Amberly Thompson, an employee of the Company, is the daughter of Donald Thompson, who is an Executive Vice President and Chief Human Resources Officer of the Company. Amberly Thompson received total compensation of less than $0.1 million for both the three months ended June 30, 2023 and 2022 and $0.1 million for both the six months ended June 30, 2023 and 2022, consisting of salary and bonus. Edward Kim, an employee of the company, is the brother-in-law of Christopher Ripley, who is the President and Chief Executive Officer of the Company. Edward Kim received total compensation of less than $0.1 million for both the three months ended June 30, 2023 and 2022 and $0.1 million for both the six months ended June 30, 2023 and 2022, consisting of salary, and was granted 516 and 302 shares of restricted stock during the six months ended June 30, 2023 and 2022, respectively, vesting over two years.

Frederick Smith is the brother of David Smith, Executive Chairman of the Company and Chairman of the Company's Board of Directors; Robert Smith, a member of the Company's Board of Directors; and J. Duncan Smith. Frederick Smith received total compensation of $0.2 million for both the three months ended June 30, 2023 and 2022 and $0.4 million for both the six months ended June 30, 2023 and 2022, consisting of salary and bonus. J. Duncan Smith is the brother of David Smith, Frederick Smith, and Robert Smith. J. Duncan Smith received total compensation of $0.2 million for both the three months ended June 30, 2023 and 2022 and $0.4 million for both the six months ended June 30, 2023 and 2022, consisting of salary and bonus.

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.

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SINCLAIR, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
The following table sets forth the face value and fair value of our financial assets and liabilities for the periods presented (in millions):
 As of June 30, 2023As of December 31, 2022
 Face ValueFair ValueFace ValueFair Value
Level 1:
Investments in equity securitiesN/A$5 N/A$6 
Money market fundsN/A523 N/A741 
Deferred compensation assets$43 43 $41 41 
Deferred compensation liabilities40 40 35 35 
Level 2:
Investments in equity securities (a)N/A123 N/A153 
Interest rate swap (b)N/A8 N/A— 
STG (c):
5.500% Senior Notes due 2030485 281 500 347 
5.125% Senior Notes due 2027278 237 282 230 
4.125% Senior Secured Notes due 2030737 487 750 560 
Term Loan B-2, due September 30, 20261,251 1,110 1,258 1,198 
Term Loan B-3, due April 1, 2028725 584 729 692 
Term Loan B-4, due April 21, 2029743 559 746 709 
Debt of variable interest entities (c)7 7 8 8 
Debt of non-media subsidiaries (c)16 16 16 16 
Level 3:
Investments in equity securities (d)N/A58 N/A75 
N/A - Not applicable
(a)Consists of warrants to acquire marketable common equity securities. The fair value of the warrants are derived from the quoted trading prices of the underlying common equity securities less the exercise price.
(b)We entered into an interest rate swap effective February 7, 2023 and terminating on February 28, 2026 in order to manage a portion of our exposure to variable interest rates. The swap agreement has a notional amount of $600 million, bears a fixed interest rate of 3.9%, and we receive a floating rate of interest based on SOFR. The fair value of the interest rate swap was an asset as of June 30, 2023. See Hedge Accounting within Note 1. Nature of Operations and Summary of Significant Accounting Policies and Interest Rate Swap within Note 3. Notes Payable, Finance Leases, and Commercial Bank Financing.
(c)Amounts are carried in our consolidated balance sheets net of debt discount, premium, and deferred financing cost, which are excluded in the above table, of $51 million and $56 million as of June 30, 2023 and December 31, 2022, respectively.
(d)On November 18, 2020, we entered into a commercial agreement with Bally's and received warrants and options to acquire common equity in the business. During both the three and six months ended June 30, 2023 we recorded a fair value adjustment loss of $17 million and during the three and six months ended June 30, 2022 we recorded fair value adjustment losses of $74 million and $130 million, respectively, related to these interests. The fair value of the warrants is primarily derived from the quoted trading prices of the underlying common equity. The fair value of the options is derived utilizing the Black Scholes valuation model. The most significant inputs include the trading price of the underlying common stock and the exercise price of the options, which range from $30 to $45 per share.

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SINCLAIR, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
The following table summarizes the changes in financial assets measured at fair value on a recurring basis and categorized as Level 3 under the fair value hierarchy for the three and six months ended June 30, 2023 and 2022 (in millions):
Options and Warrants
Three Months Ended June 30, 2023Six Months Ended June 30, 2023
Fair value at March 31, 2023$75 Fair value at December 31, 2022$75 
Measurement adjustments(17)Measurement adjustments(17)
Fair value at June 30, 2023$58 Fair value at June 30, 2023$58 
Options and Warrants
Three Months Ended June 30, 2022Six Months Ended June 30, 2022
Fair value at March 31, 2022$226 Fair value at December 31, 2021$282 
Measurement adjustments(74)Measurement adjustments(130)
Fair value at June 30, 2022$152 Fair value at June 30, 2022$152 

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ITEM 1B.  FINANCIAL STATEMENTS OF SINCLAIR BROADCAST GROUP, LLC
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SINCLAIR BROADCAST GROUP, LLC
CONSOLIDATED BALANCE SHEETS
(in millions, except share and per share data) (Unaudited)
 As of June 30,
2023		As of December 31,
2022
ASSETS  
Current assets:  
Cash and cash equivalents$368 $884 
Accounts receivable, net of allowance for doubtful accounts of $4 and $5, respectively544 612 
Income taxes receivable6 5 
Prepaid expenses and other current assets146 182 
Total current assets1,064 1,683 
Property and equipment, net689 728 
Operating lease assets132 145 
Goodwill2,016 2,088 
Indefinite-lived intangible assets123 150 
Customer relationships, net265 444 
Other definite-lived intangible assets, net450 502 
Other assets255 964 
Total assets (a)$4,994 $6,704 
LIABILITIES, REDEEMABLE NON-CONTROLLING INTERESTS, AND EQUITY  
Current liabilities:  
Accounts payable and accrued liabilities$378 $397 
Current portion of notes payable, finance leases, and commercial bank financing36 38 
Current portion of operating lease liabilities20 23 
Current portion of program contracts payable48 83 
Other current liabilities56 67 
Total current liabilities538 608 
Notes payable, finance leases, and commercial bank financing, less current portion4,170 4,227 
Operating lease liabilities, less current portion145 154 
Program contracts payable, less current portion7 10 
Deferred tax liabilities394 610 
Other long-term liabilities212 220 
Total liabilities (a)5,466 5,829 
Commitments and contingencies (See Note 5)
Redeemable noncontrolling interests— 194 
SBG member's equity:
Accumulated deficit(418)— 
Accumulated other comprehensive income7 — 
Total SBG member's equity(411)— 
Old Sinclair shareholders' equity:
Old Sinclair Class A Common Stock, $.01 par value, 500,000,000 shares authorized and 45,847,879 shares issued and outstanding as of December 31, 2022— 1 
Old Sinclair Class B Common Stock, $.01 par value, 140,000,000 shares authorized and 23,775,056 shares issued and outstanding as of December 31, 2022, convertible into Old Sinclair Class A Common Stock— — 
Additional paid-in capital— 624 
Retained earnings— 122 
Accumulated other comprehensive income— 1 
Total Old Sinclair shareholders' equity— 748 
Noncontrolling interests(61)(67)
Total equity(472)681 
Total liabilities, redeemable noncontrolling interests, and equity$4,994 $6,704 

The accompanying notes are an integral part of these unaudited consolidated financial statements.
(a)     SBG's consolidated total assets as of June 30, 2023 and December 31, 2022 include total assets of variable interest entities ("VIE") of $78 million and $115 million, respectively, which can only be used to settle the obligations of the VIEs. SBG's consolidated total liabilities as of June 30, 2023 and December 31, 2022 include total liabilities of VIEs of $16 million and $18 million, respectively, for which the creditors of the VIEs have no recourse to SBG. See Note 7. Variable Interest Entities.
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SINCLAIR BROADCAST GROUP, LLC
CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except share and per share data) (Unaudited)
 Three Months Ended 
 June 30,		Six Months Ended 
 June 30,
 2023202220232022
REVENUES:  
Media revenues$740 $831 $1,506 $2,106 
Non-media revenues3 6 10 19 
Total revenues743 837 1,516 2,125 
OPERATING EXPENSES: 
Media programming and production expenses397 403 795 1,161 
Media selling, general and administrative expenses184 195 375 415 
Amortization of program contract costs19 21 41 46 
Non-media expenses7 10 19 23 
Depreciation of property and equipment31 24 55 52 
Corporate general and administrative expenses58 38 116 85 
Amortization of definite-lived intangible assets39 43 80 136 
Gain on deconsolidation of subsidiary— — — (3,357)
Loss (gain) on asset dispositions and other, net of impairment4 (4)10 (9)
Total operating expenses (gains)739 730 1,491 (1,448)
Operating income4 107 25 3,573 
OTHER INCOME (EXPENSE):  
Interest expense including amortization of debt discount and deferred financing costs(76)(54)(150)(169)
Gain on extinguishment of debt11 3 11 3 
Income from equity method investments— 3 31 15 
Other expense, net(64)(105)(53)(165)
Total other expense, net(129)(153)(161)(316)
(Loss) income before income taxes(125)(46)(136)3,257 
INCOME TAX BENEFIT (PROVISION)26 40 230 (647)
NET (LOSS) INCOME(99)(6)94 2,610 
Net (income) loss attributable to the redeemable noncontrolling interests— (5)4 (9)
Net income attributable to the noncontrolling interests(2)— (14)(25)
NET (LOSS) INCOME ATTRIBUTABLE TO SBG$(101)$(11)$84 $2,576 

The accompanying notes are an integral part of these unaudited consolidated financial statements.
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SINCLAIR BROADCAST GROUP, LLC
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME
(in millions) (Unaudited)
 Three Months Ended 
 June 30,		Six Months Ended 
 June 30,
 2023202220232022
Net (loss) income$(99)$(6)$94 $2,610 
Unrealized gain on interest rate swap, net of tax9 — 6 — 
Share of other comprehensive income of equity method investments— — — 3 
Comprehensive (loss) income(90)(6)100 2,613 
Comprehensive (income) loss attributable to the redeemable noncontrolling interests— (5)4 (9)
Comprehensive income attributable to the noncontrolling interests(2)— (14)(25)
Comprehensive (loss) income attributable to SBG$(92)$(11)$90 $2,579 
The accompanying notes are an integral part of these unaudited consolidated financial statements.
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SINCLAIR BROADCAST GROUP, LLC
CONSOLIDATED STATEMENTS OF EQUITY (DEFICIT) AND REDEEMABLE NONCONTROLLING INTERESTS
(in millions, except share and per share data) (Unaudited)
Three Months Ended June 30, 2022
 Old Sinclair Shareholders  
 Redeemable Noncontrolling InterestsClass A
Common Stock		Class B
Common Stock		Additional
Paid-In
Capital		Retained EarningsAccumulated
Other
Comprehensive
Loss		Noncontrolling
Interests		Total 
Equity
 SharesValuesSharesValues
BALANCE, March 31, 2022$184 47,934,815 $1 23,775,056 $— $657 $109 $(2)$(62)$703 
Dividends declared and paid on Old Sinclair Class A and Class B Common Stock ($0.25 per share)— — — — — — (19)— — (19)
Repurchases of Old Sinclair Class A Common Stock— (1,585,834)— — — (36)— — — (36)
Old Sinclair Class A Common Stock issued pursuant to employee benefit plans— 121,565 — — — 7 — — — 7 
Distributions to noncontrolling interests(2)— — — — — — — (2)(2)
Net income (loss)5 — — — — — (11)— — (11)
BALANCE, June 30, 2022$187 46,470,546 $1 23,775,056 $— $628 $79 $(2)$(64)$642 
Six Months Ended June 30, 2022
Old Sinclair Shareholders  
Redeemable Noncontrolling InterestsClass A
Common Stock		Class B
Common Stock		Additional
Paid-In
Capital		(Accumulated Deficit) Retained EarningsAccumulated
Other
Comprehensive
Loss		Noncontrolling
Interests		Total 
(Deficit) Equity
SharesValuesSharesValues
BALANCE, December 31, 2021$197 49,314,303 $1 23,775,056 $— $691 $(2,460)$(2)$64 $(1,706)
Dividends declared and paid on Old Sinclair Class A and Class B Common Stock ($0.50 per share)— — — — — — (37)— — (37)
Repurchases of Old Sinclair Class A Common Stock— (4,058,319)— — — (104)— — — (104)
Old Sinclair Class A Common Stock issued pursuant to employee benefit plans— 1,214,562 — — — 41 — — — 41 
Distributions to noncontrolling interests(3)— — — — — — — (5)(5)
Other comprehensive income— — — — — — — 3 — 3 
Deconsolidation of subsidiary(16)— — — — — — (3)(148)(151)
Net income9 — — — — — 2,576 — 25 2,601 
BALANCE, June 30, 2022$187 46,470,546 $1 23,775,056 $— $628 $79 $(2)$(64)$642 

 The accompanying notes are an integral part of these unaudited consolidated financial statements.
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SINCLAIR BROADCAST GROUP, LLC
CONSOLIDATED STATEMENTS OF MEMBER'S EQUITY (DEFICIT) AND REDEEMABLE NONCONTROLLING INTERESTS
(in millions, except share and per share data) (Unaudited)
Three Months Ended June 30, 2023
 SBG Member  
 Redeemable Noncontrolling InterestsClass A
Common Stock		Class B
Common Stock		Additional
Paid-In
Capital		Retained Earnings (Accumulated Deficit)Accumulated
Other
Comprehensive
(Loss) Income		Noncontrolling
Interests		Total Member's Equity (Deficit)
 SharesValuesSharesValues
BALANCE, March 31, 2023$— 44,360,502 $1 23,775,056 $— $602 $289 $(2)$(59)$831 
Repurchases of Old Sinclair Class A Common Stock— (5,201,809)— — — (100)— — — (100)
Old Sinclair Class A Common Stock issued pursuant to employee benefit plans— 178,722 — — — 9 — — — 9 
Old Sinclair Class A and Class B Common Stock converted to SBG member's equity— (39,337,415)(1)(23,775,056)— — — — — (1)
Deemed dividend to parent— — — — — (511)(606)— (1)(1,118)
Distributions to noncontrolling interests— — — — — — — (3)(3)
Other comprehensive income— — — — — — — 9 — 9 
Net (loss) income— — — — — — (101)— 2 (99)
BALANCE, June 30, 2023$— — $— — $— $— $(418)$7 $(61)$(472)
Six Months Ended June 30, 2023
 SBG Member  
 Redeemable Noncontrolling InterestsClass A
Common Stock		Class B
Common Stock		Additional
Paid-In
Capital		Retained Earnings (Accumulated Deficit)Accumulated
Other
Comprehensive
Income		Noncontrolling
Interests		Total Member's Equity (Deficit)
 SharesValuesSharesValues
BALANCE, December 31, 2022$194 45,847,879 $1 23,775,056 $— $624 $122 $1 $(67)$681 
Dividends declared and paid on Old Sinclair Class A and Class B Common Stock ($0.25 per share)— — — — — — (18)— — (18)
Repurchases of Old Sinclair Class A Common Stock— (8,785,022)— — — (153)— — — (153)
Old Sinclair Class A Common Stock issued pursuant to employee benefit plans— 2,274,558 — — — 40 — — — 40 
Old Sinclair Class A and Class B Common Stock converted to SBG member's equity— (39,337,415)(1)(23,775,056)— — — — — (1)
Deemed dividend to parent— — — — — (511)(606)— (1)(1,118)
Repurchase of redeemable subsidiary preferred equity(190)— — — — — — — — — 
Distributions to noncontrolling interests— — — — — — — — (7)(7)
Other comprehensive income— — — — — — — 6 — 6 
Net (loss) income(4)— — — — — 84 — 14 98 
BALANCE, June 30, 2023$— — $— — $— $— $(418)$7 $(61)$(472)

The accompanying notes are an integral part of these unaudited consolidated financial statements.
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SINCLAIR BROADCAST GROUP, LLC
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions) (Unaudited)
 Six Months Ended June 30,
 20232022
CASH FLOWS FROM OPERATING ACTIVITIES:  
Net income$94 $2,610 
Adjustments to reconcile net income to net cash flows from operating activities:
Amortization of sports programming rights— 326 
Amortization of definite-lived intangible and other assets80 136 
Depreciation of property and equipment55 52 
Amortization of program contract costs41 46 
Stock-based compensation34 38 
Deferred tax (benefit) provision(232)654 
Loss (gain) on asset dispositions and other, net of impairment10 (9)
Gain on deconsolidation of subsidiary— (3,357)
Income from equity method investments(31)(15)
Loss from investments78 159 
Distributions from investments28 31 
Sports programming rights payments— (325)
Rebate payments to distributors— (15)
Gain on extinguishment of debt(11)(3)
Change in assets and liabilities, net of acquisitions, deconsolidation of subsidiary, and asset transfer to Ventures:
Decrease in accounts receivable33 29 
Increase in prepaid expenses and other current assets(34)(107)
Increase in accounts payable and accrued and other current liabilities21 29 
Net change in net income taxes payable/receivable(1)(21)
Decrease in program contracts payable(46)(52)
Other, net3 1 
Net cash flows from operating activities122 207 
CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES: 
Acquisition of property and equipment(41)(45)
Deconsolidation of subsidiary cash— (315)
Purchases of investments(37)(61)
Distributions from investments204 81 
Other, net4 11 
Net cash flows from (used in) investing activities130 (329)
CASH FLOWS USED IN FINANCING ACTIVITIES: 
Proceeds from notes payable and commercial bank financing— 728 
Repayments of notes payable, commercial bank financing, and finance leases(37)(845)
Repurchase of outstanding Old Sinclair Class A Common Stock(153)(104)
Dividends paid on Old Sinclair Class A and Class B Common Stock(18)(36)
Dividends paid on redeemable subsidiary preferred equity— (3)
Repurchase of redeemable subsidiary preferred equity(190)— 
Distributions to member(360)— 
Distributions to noncontrolling interests, net(7)(5)
Other, net(3)(12)
Net cash flows used in financing activities(768)(277)
NET DECREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH(516)(399)
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, beginning of period884 819 
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, end of period$368 $420 

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

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SINCLAIR BROADCAST GROUP, LLC
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
1.NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Nature of Operations

Sinclair Broadcast Group, LLC ("SBG"), a Maryland limited liability company and a wholly owned subsidiary of Sinclair, Inc. ("Sinclair"), is a diversified media company with national reach and a strong focus on providing high-quality content on SBG's local television stations, digital properties, and regional sports networks (prior to the Deconsolidation, as defined below in Deconsolidation of Diamond Sports Intermediate Holdings LLC). The content, distributed through SBG's broadcast platform and third-party platforms, consists of programming provided by third-party networks and syndicators, local news, other original programming produced by SBG and SBG owned networks, and, prior to the Deconsolidation, college and professional sports. Additionally, prior to the Reorganization (as defined below in Company Reorganization), SBG had interests in, owned, managed, and/or operated Tennis Channel, digital media companies, technical and software services companies, research and development companies for the advancement of broadcast technology, and other media and non-media related businesses and assets, including real estate, venture capital, private equity, and direct investments.

For the quarter ended June 30, 2023, SBG had one reportable segment: local media. Prior to the Deconsolidation (as defined below in Deconsolidation of Diamond Sports Intermediate Holdings LLC), SBG had one additional reportable segment: local sports. The local media segment consists primarily of SBG's 185 broadcast television stations in 86 markets, which SBG owns, provides programming and operating services pursuant to agreements commonly referred to as local marketing agreements ("LMA"), or provides sales services and other non-programming operating services pursuant to other outsourcing agreements (such as joint sales agreements ("JSA") and shared services agreements ("SSA")). These stations broadcast 639 channels as of June 30, 2023. For the purpose of this report, these 185 stations and 639 channels are referred to as "SBG" stations and channels. The local sports segment consisted primarily of the Bally Sports network brands ("Bally RSNs"), the Marquee Sports Network ("Marquee") joint venture, and a minority equity interest in the Yankee Entertainment and Sports Network, LLC ("YES Network") through February 28, 2022. On March 1, 2022, the Bally RSNs, Marquee, and YES Network were deconsolidated from SBG's financial statements. See Deconsolidation of Diamond Sports Intermediate Holdings LLC below. Through February 28, 2022, the Bally RSNs and Marquee are referred to as "the RSNs". The RSNs and YES Network own the exclusive rights to air, among other sporting events, the games of professional sports teams in designated local viewing areas.

Principles of Consolidation
The consolidated financial statements include SBG's accounts and those of SBG's wholly-owned and majority-owned subsidiaries, and VIEs for which SBG is the primary beneficiary. Noncontrolling interests represent a minority owner’s proportionate share of the equity in certain of SBG's consolidated entities. Noncontrolling interests which may be redeemed by the holder, and the redemption is outside of SBG's control, are presented as redeemable noncontrolling interests. All intercompany transactions and account balances have been eliminated in consolidation.

SBG consolidates VIEs when SBG is the primary beneficiary. SBG is the primary beneficiary of a VIE when SBG has the power to direct the activities of the VIE that most significantly impact the economic performance of the VIE and has the obligation to absorb losses or the right to receive returns that would be significant to the VIE. See Note 7. Variable Interest Entities for more information on SBG's VIEs.

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

Company Reorganization

On April 3, 2023, the company formerly known as Sinclair Broadcast Group, Inc., a Maryland corporation ("Old Sinclair"), entered into an Agreement of Share Exchange and Plan of Reorganization (the "Share Exchange Agreement") with Sinclair and Sinclair Holdings, LLC, a Maryland limited liability company ("Sinclair Holdings"). The purpose of the transactions contemplated by the Share Exchange Agreement was to effect a holding company reorganization in which Sinclair would become the publicly-traded parent company of Old Sinclair.

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NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
Effective at 12:00 am Eastern U.S. time on June 1, 2023 (the "Share Exchange Effective Time"), pursuant to the Share Exchange Agreement and Articles of Share Exchange filed with the Maryland State Department of Assessments and Taxation, the share exchange between Sinclair and Old Sinclair was completed (the "Share Exchange"). Immediately following the Share Exchange Effective Time, Old Sinclair converted from a Maryland corporation to a Maryland limited liability company named Sinclair Broadcast Group, LLC. On the day following the Share Exchange Effective Time, Sinclair Holdings became the intermediate holding company between Sinclair and SBG, and SBG transferred certain of its assets (the "Transferred Assets") to Sinclair Ventures, LLC, a new indirect wholly-owned subsidiary of Sinclair ("Ventures"). We refer to the Share Exchange and the related steps described above collectively as the "Reorganization." The Transferred Assets included technical and software services companies, intellectual property for the advancement of broadcast technology, and other media and non-media related businesses and assets including real estate, venture capital, private equity, and direct investments, as well as Compulse, a marketing technology and managed services company, and Tennis Channel and related assets.

As a result of the Reorganization, SBG's consolidated statement of operations for the three months ended June 30, 2023 includes two months of activity related to the Transferred Assets and for the six months ended June 30, 2023 includes five months of activity related to the Transferred Assets prior to the Reorganization. Subsequent to June 1, 2023, the assets and liabilities of the Transferred Assets are no longer included within SBG's consolidated balance sheets. Any discussions related to results, operations, and accounting policies associated with the Transferred Assets are referring to the periods prior to the Reorganization.

The Reorganization is considered transactions between entities under common control and therefore the Transferred Assets were transferred from SBG to Ventures at a net book value of $1,118 million, which is recognized in SBG's consolidated statements of equity and redeemable noncontrolling interests as a dividend to SBG's parent.

Deconsolidation of Diamond Sports Intermediate Holdings LLC

On March 1, 2022, Old Sinclair's subsidiary Diamond Sports Intermediate Holdings, LLC, and certain of its subsidiaries (collectively "DSIH"), completed a series of transactions (the "Transaction"). As part of the Transaction, the governance structure of DSIH was modified including changes to the composition of its Board of Managers, resulting in SBG's loss of voting control. As a result, DSIH, whose operations represented the entirety of SBG's local sports segment, was deconsolidated from SBG's consolidated financial statements effective as of March 1, 2022 (the "Deconsolidation"). SBG's consolidated statement of operations for the six months ended June 30, 2022 therefore includes two months of activity related to DSIH prior to the Deconsolidation. Subsequent to February 28, 2022, the assets and liabilities of DSIH are no longer included within SBG's consolidated balance sheets. Any discussions related to results, operations, and accounting policies associated with DSIH are referring to the periods prior to the Deconsolidation.

Upon Deconsolidation, SBG recognized a gain before income taxes of approximately $3,357 million, which is recorded within gain on deconsolidation of subsidiary in SBG's consolidated statements of operations for the six months ended June 30, 2022. Subsequent to the Deconsolidation, SBG's equity ownership interest in DSIH is accounted for under the equity method of accounting. See Note 2. Other Assets for more information.

Interim Financial Statements
SBG's consolidated financial statements for the three and six months ended June 30, 2023 and 2022 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 (loss) income, consolidated statements of equity and redeemable noncontrolling interests, and consolidated statements of cash flows for these periods as adjusted for the adoption of recent accounting pronouncements.
As permitted under the applicable rules and regulations of the SEC, SBG's 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 Old Sinclair's Annual Report on Form 10-K for the year ended December 31, 2022 filed with the SEC. SBG's consolidated statements of operations presented in the accompanying consolidated financial statements are not necessarily representative of operations for an entire year.


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SINCLAIR BROADCAST GROUP, LLC
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
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.

Recent Accounting Pronouncements

In October 2021, the FASB issued guidance to improve the accounting for acquired revenue contracts with customers in a business combination by addressing diversity in practice. ASU 2021-08 requires that an acquiring entity recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606, as if it had originated the contracts. The guidance is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. SBG adopted this guidance during the first quarter of 2023. The impact of the adoption did not have a material impact on SBG's consolidated financial statements.

Broadcast Television Programming

SBG has agreements with programming syndicators for the rights to television programming over contract periods, which generally run from one to seven years. Contract payments are made in installments over terms 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’smanagement's expectation of future advertising revenues, net of sales commissions, to be generated by the program material. We assess ourSBG assesses the program contract costs on a quarterly basis to ensure the costs are recorded at the lower of unamortized cost or fair value.

Sports Programming Rights

DSIH has multi-year program rights agreements that provide DSIH with the right to produce and telecast professional live sports games within a specified territory in exchange for a rights fee. Prior to the Deconsolidation, a prepaid asset was recorded for rights acquired related to future games upon payment of the contracted fee. The assets recorded for the acquired rights were classified as current or non-current based on the period when the games were expected to be aired. Liabilities were recorded for any program rights obligations that had been incurred but not yet paid at period end. WeSBG amortized these rights as an expense over each season based upon contractually stated rates. Amortization was accelerated in the event that the stated contractual rates over the term of the rights agreement resulted in an expense recognition pattern that was inconsistent with the projected growth of revenue over the contractual term.

The National Basketball Association ("NBA") and the National Hockey League ("NHL") delayed the start of their 2020-2021 seasons until December 22, 2020 and January 13, 2021, respectively, and both leagues postponed games in the fourth quarter of 2021 and rescheduled these games to be played in the first quarter of 2022. The sports rights expense associated with these seasons was recognized over the modified term of these seasons.

Hedge Accounting

SBG entered into an interest rate swap effective February 7, 2023 and terminating on February 28, 2026 in order to manage a portion of SBG's exposure to variable interest rates. The swap agreement has a notional amount of $600 million, bears a fixed interest rate of 3.9%, and SBG receives a floating rate of interest based on the Secured Overnight Financing Rate ("SOFR").

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NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
SBG has determined that the interest rate swap meets the criteria for hedge accounting. The initial value of the interest rate swap and any changes in value in subsequent periods is included in accumulated other comprehensive income, with a corresponding change recorded in assets or liabilities depending on the position of the swap. Gains or losses on the monthly settlement of the interest rate swap are reflected in interest expense in SBG's consolidated statements of operations. Cash flows related to the interest rate swap are classified as operating activities in SBG's consolidated statements of cash flows. See Interest Rate Swap within Note 3. Notes Payable, Finance Leases, and Commercial Bank Financing for further discussion.

Non-cash Investing and Financing Activities

Leased assets obtained in exchange for new operating lease liabilities were $7$3 million and $4$7 million for the six months ended June 30, 20222023 and 2021,2022, respectively. Leased assets obtained in exchange for new finance lease liabilities were $1 million for the six months ended June 30, 2022. Non-cash investing activities included property and equipment purchases of $5 million for the six months ended June 30, 2023.

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As part of the Reorganization, SBG made a noncash distribution of $758 million to Ventures for the six months ended June 30, 2023, which represents the book value of the net assets distributed. See Company Reorganization above.
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Revenue Recognition

The following table presents ourSBG's revenue disaggregated by type and segment (in millions):
For the three months ended June 30, 2022BroadcastLocal sportsOtherEliminationsTotal
For the three months ended June 30, 2023For the three months ended June 30, 2023Local MediaOtherEliminationsTotal
Distribution revenueDistribution revenue$385 $— $45 $— $430 Distribution revenue$372 $31 $— $403 
Advertising revenueAdvertising revenue316 — 70 (20)366 Advertising revenue293 13 (3)303 
Other media, non-media, and intercompany revenuesOther media, non-media, and intercompany revenues31 — 16 (6)41 Other media, non-media, and intercompany revenues34 3 — 37 
Total revenuesTotal revenues$732 $— $131 $(26)$837 Total revenues$699 $47 $(3)$743 
For the three months ended June 30, 2021BroadcastLocal sportsOtherEliminationsTotal
For the six months ended June 30, 2023For the six months ended June 30, 2023Local MediaOtherEliminationsTotal
Distribution revenueDistribution revenue$753 $76 $— $829 
Advertising revenueAdvertising revenue589 29 (5)613 
Other media, non-media, and intercompany revenuesOther media, non-media, and intercompany revenues62 14 (2)74 
Total revenuesTotal revenues$1,404 $119 $(7)$1,516 
For the three months ended June 30, 2022For the three months ended June 30, 2022Local MediaOtherEliminationsTotal
Distribution revenueDistribution revenue$363 $666 $49 $— $1,078 Distribution revenue$385 $45 $— $430 
Advertising revenueAdvertising revenue280 162 54 (5)491 Advertising revenue343 25 (2)366 
Other media, non-media, and intercompany revenuesOther media, non-media, and intercompany revenues44 10 17 (28)43 Other media, non-media, and intercompany revenues32 15 (6)41 
Total revenuesTotal revenues$687 $838 $120 $(33)$1,612 Total revenues$760 $85 $(8)$837 
For the six months ended June 30, 2022For the six months ended June 30, 2022BroadcastLocal sportsOtherEliminationsTotalFor the six months ended June 30, 2022Local MediaLocal SportsOtherEliminationsTotal
Distribution revenueDistribution revenue$777 $433 $93 $— $1,303 Distribution revenue$778 $433 $92 $— $1,303 
Advertising revenueAdvertising revenue598 44 138 (43)737 Advertising revenue656 44 47 (10)737 
Other media, non-media, and intercompany revenuesOther media, non-media, and intercompany revenues78 5 34 (32)85 Other media, non-media, and intercompany revenues80 5 32 (32)85 
Total revenuesTotal revenues$1,453 $482 $265 $(75)$2,125 Total revenues$1,514 $482 $171 $(42)$2,125 
For the six months ended June 30, 2021BroadcastLocal sportsOtherEliminationsTotal
Distribution revenue$724 $1,364 $99 $— $2,187 
Advertising revenue547 227 94 (6)862 
Other media, non-media, and intercompany revenues81 15 35 (57)74 
Total revenues$1,352 $1,606 $228 $(63)$3,123 

Distribution Revenue. We haveSBG has agreements with multi-channel video programming distributors ("MVPD") and virtual MVPDs ("vMVPD," and together with MVPDs, "Distributors"). We generateSBG generates distribution revenue through fees received from these Distributors for the right to distribute ourSBG's stations, RSNs,other properties, and, other properties.prior to the Deconsolidation, RSNs. 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 ourSBG's customers (as usage occurs) which corresponds with the satisfaction of ourSBG's performance obligation. Revenue is calculated based upon the contractual rate multiplied by an estimated number of subscribers. OurSBG's 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.

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SINCLAIR BROADCAST GROUP, LLC
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
Advertising Revenue. We generateSBG generates advertising revenue primarily from the sale of advertising spots/impressions within our broadcast television, RSN,digital platforms, and, digital platforms.prior to the Deconsolidation, RSNs.

In accordance with ASC 606, we doSBG does not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) distribution arrangements which are accounted for as a sales/usage based royalty.

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Deferred Revenue. We recordSBG records deferred revenue when cash payments are received or due in advance of our performance, including amounts which are refundable. We classifySBG classifies deferred revenue as either current in other current liabilities or long-term in other long-term liabilities in ourSBG's consolidated balance sheets based on the timing of when we expectSBG expects to satisfy our performance obligations. Deferred revenue was $225$181 million and $235$200 million as of June 30, 20222023 and December 31, 2021,2022, respectively, of which $154$134 million and $164$144 million, respectively, was reflected in other long-term liabilities in ourSBG's consolidated balance sheets. Deferred revenue recognized during the six months ended June 30, 20222023 and 2021,2022, included in the deferred revenue balance as of December 31, 2022 and 2021, and 2020, was $42$32 million and $30$42 million, respectively.

For the three months ended June 30, 2023, two customers accounted for 12% and 10%, respectively, of SBG's total revenues. For the six months ended June 30, 2023, two customers accounted for 11% and 10%, respectively, of SBG's total revenues. For the three months ended June 30, 2022, two customers accounted for 11% and 10%, respectively, of ourSBG's total revenues. For the six months ended June 30, 2022, three customers accounted for 15%, 14%, and 12%, respectively, of our total revenues. For the three months ended June 30, 2021, three customers accounted for 19%, 17%, and 14%, respectively, of our total revenues. For the six months ended June 30, 2021, three customers accounted for 19%, 18%, and 14%, respectively, of ourSBG's total revenues. As of June 30, 2022, two2023, three customers accounted for 11%, 11%, and 10%, respectively, of ourSBG's accounts receivable, net. As of December 31, 2022, one customer accounted for 13% of SBG's accounts receivable, net. For purposes of this disclosure, a single customer may include multiple entities under common control.

Income Taxes

OurSBG's (provision) benefit for taxes and deferred tax balances have been calculated on a separate return basis as if SBG filed its own tax returns, although its operations are included in the Sinclair consolidated tax returns. The separate return method applies the accounting guidance for income taxes to the standalone financial statements as if SBG were a separate taxpayer and a standalone enterprise.

SBG's income tax provision for all periods consists of federal and state income taxes. The tax provision for the three and six months ended June 30, 20222023 and 20212022 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 provideSBG provides a valuation allowance for deferred tax assets if we determineit is determined that it is more likely than not that some or all of the deferred tax assets will not be realized. In evaluating ourSBG's ability to realize net deferred tax assets, we considerSBG considers all available evidence, both positive and negative, including our past operating results, tax planning strategies, current and cumulative losses, and forecasts of future taxable income. In considering these sources of taxable income, weSBG must make certain judgments that are based on the plans and estimates used to manage ourSBG's underlying businesses on a long-term basis. A valuation allowance has been provided for deferred tax assets related to interest expense carryforwards under the Internal Revenue Code ("IRC") Section 163(j) and a substantial amount of ourSBG's available state net operating loss carryforwards based on past operating results, expected timing of the reversals of existing temporary basis differences, alternative tax strategies and projected future taxable income.

OurSBG's effective income tax rate for the three months ended June 30, 2023 was less than the statutory rate primarily due to non-deductible expenses. SBG's effective income tax rate for the six months ended June 30, 2023 was greater than the statutory rate primarily due to a release of valuation allowance on deferred tax assets relating to deductibility of interest expense under the IRC Section 163(j). SBG's effective income tax rate for the three months ended June 30, 2022 was greater than the statutory rate primarily due to an increase in valuation allowance on deferred tax assets relating to deductibility of interest expense under the IRC Section 163(j). OurSBG's effective income tax rate for the six months ended June 30, 2022 approximated our statutory rate. Our effective income tax rate for the three months ended June 30, 2021 was less than the statutory rate primarily due to an increase in valuation allowance on deferred tax assets relating to deductibility of interest expense under the IRC Section 163(j), offset by federal tax credits related to investments in sustainability initiatives. Our effective income tax rate for the six months ended June 30, 2021 approximated ourSBG's statutory rate.

We do not believeSBG believes that ourits liability for unrecognized tax benefits wouldcould be materially impacted,reduced by up to $1 million, in the next twelve months, as a result of the 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.

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Share Repurchase Program

On August 4, 2020, the Board of Directors authorized an additional $500 million share repurchase authorization in addition to the previous repurchase authorization of $1 billion. There is no expiration date and currently, management has no plans to terminate this program. For the six months ended June 30, 2022, we2023, SBG repurchased approximately 40000008.8 million shares of Old Sinclair Class A Common Stock for $104$151 million. As of June 30, 2022, the total remaining purchase authorization was $714 million. As of August 4, 2022, we repurchased an additional 489,051 shares of Class A Common Stock, for $10 million since June 30, 2022. All shares were repurchased under an SEC Rule 10b5-1 plan.plan, which is no longer applicable subsequent to the Reorganization.

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

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2.ACQUISITIONS ANDDISPOSITIONS OF ASSETS:

Broadcast Incentive Auction. In 2012, Congress authorized the Federal Communications Commission ("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 their 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 March 2016, the FCC began the repacking process associated with the auction, in which the FCC reassigned some stations to new post-auction channels. We do not expect reassignment to new channels to have a material impact on our coverage. As part of that process, we 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 recorded gains related to reimbursements for spectrum repack costs incurred of $1 million and $2 million for the three and six months ended June 30, 2022, respectively, and $4 million and $18 million for the three and six months ended June 30, 2021, respectively, which are included within gain on asset dispositions and other, net of impairment in our consolidated statements of operations. Capital expenditures related to the spectrum repack were $0.1 million and $1 million for the three and six months ended June 30, 2022, respectively, and $4 million and $9 million for the three and six months ended June 30, 2021, respectively. The reimbursements we have received throughout this process have covered the majority of the expenses we incurred related to the repack.

3.             OTHER ASSETS:

Other assets as of June 30, 20222023 and December 31, 20212022 consisted of the following (in millions):

As of June 30,
2022		As of December 31,
2021		 As of June 30,
2023		As of December 31,
2022
Equity method investments(a)Equity method investments(a)$142 $517 Equity method investments(a)$1 $113 
Other investments(a)Other investments(a)405 567 Other investments(a)26 442 
Note receivable(a)Note receivable(a)193 — Note receivable(a)— 193 
Income tax receivableIncome tax receivable131 131 
Post-retirement plan assetsPost-retirement plan assets43 50 Post-retirement plan assets43 41 
OtherOther169 274 Other54 44 
Total other assetsTotal other assets$952 $1,408 Total other assets$255 $964 
(a)The note receivable and certain of the equity method and other investments were transferred to Ventures as part of the Reorganization.

Equity Method Investments

We havePrior to the Reorganization, SBG had a portfolio of investments, including our investment in the YES Network (prior to the Deconsolidation), our investment in DSIH (subsequent to the Deconsolidation), and also a number of entities that are primarily focused on the development of real estate and other media and non-media businesses. Subsequent to the Deconsolidation, SBG has an investment in DSIH that is accounted for under the equity method of accounting. No investments were individually significant for the periods presented.

YES Network Investment. Prior to the Deconsolidation, we accounted for our investment in the YES Network as an equity method investment, which was recorded within other assets in our consolidated balance sheets, and in which our proportionate share of the net income or loss generated by the investment was included within income from equity method investments in our consolidated statements of operations. We recorded income of $26 million for the six months ended June 30, 2022 and income of $6 million and $19 million for the three and six months ended June 30, 2021, respectively. See Deconsolidation of Diamond Sports Intermediate Holdings LLC within Note 1. Nature of Operations and Summary of Significant Accounting Policies.

Diamond Sports Intermediate Holdings LLC. Subsequent to the Deconsolidation, we began accounting for ourSBG's equity interest in DSIH is accounted for under the equity method of accounting. As of March 1, 2022, weSBG reflected the investment in DSIH at fair value, which was determined to be nominal. For the three and six months ended June 30, 2023 and 2022, weSBG recorded no equity method loss related to the investment because the carrying value of the investment is zero and we areSBG is not obligated to fund losses incurred by DSIH. See Deconsolidation of Diamond Sports Intermediate Holdings LLC within Note 1. Nature of Operations and Summary of Significant Accounting Policies.

15YES Network Investment. Prior to the Deconsolidation, SBG's investment in the YES Network was accounted for as an equity method investment. SBG recorded income of $10 million for the six months ended June 30, 2022 related to this investment, which is reflected in (loss) income from equity method investments in SBG's consolidated statements of operations. See Deconsolidation of Diamond Sports Intermediate Holdings LLC within Note 1. Nature of Operations and Summary of Significant Accounting Policies.
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Other Investments

We measure ourSBG's investments, excluding equity method investments, are accounted for at fair value or, in situations where fair value is not readily determinable, we haveSBG has the option to value investments at cost plus observable changes in value, less impairment. Additionally, certain investments are measured at net asset value ("NAV").

AsAll of June 30, 2022 and December 31, 2021, we held $216 million and $402 million, respectively, inthe investments measured at fair value and $179certain of the investments measured at NAV were transferred to Ventures as part of the Reorganization. As of December 31, 2022, SBG held $234 million in investments measured at fair value. As of June 30, 2023 and December 31, 2022, SBG held $25 million and $147$190 million, respectively, in investments measured at NAV. WeSBG recognized a fair value adjustment losslosses of $72 million and $73 million for the three and six months ended June 30, 2023,
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respectively, and fair value adjustment losses of $105 million and $161 million for the three and six months ended June 30, 2022, respectively, and a fair value adjustment loss of $63 million and gain of $62 million for the three and six months ended June 30, 2021, respectively, associated with these investments, which are reflected in other (expense) income,expense, net in ourSBG's consolidated statements of operations. As of June 30, 20222023 and December 31, 2021, our2022, SBG's unfunded commitments related to ourthe investments valued using the NAV practical expedient totaled $87$40 million and $81$88 million, respectively. The investments remaining at SBG will be transferred to Ventures upon receipt of third party consents.

Certain of the investments accounted for utilizing the measurement alternative were transferred to Ventures as part of the Reorganization. Investments accounted for utilizing the measurement alternative were $10$1 million net of $7 million of cumulative impairments, as of June 30, 2022,2023 and $18 million, net of $7 million of cumulative impairments, as of December 31, 2021.2022. SBG recorded a $6 million impairment related to one investment for the three and six months ended June 30, 2023, which is reflected in other expense, net in SBG's consolidated statements of operations. There were no adjustments to the carrying amount of investments accounted for utilizing the measurement alternative for anyeither of the three and six months ended June 30, 2022 or 2021.2022. The investments remaining at SBG will be transferred to Ventures upon receipt of third party consents.

Note Receivable

On November 5, 2021, we purchased and assumed the lenders’ and the administrative agent’s rights and obligations under theSBG was party to an Accounts Receivable Securitization Facility (A/("A/R Facility)Facility"), held by Diamond Sports Finance SPV, LLC (DSPV)("DSPV"), an indirect wholly-owned subsidiary of DSIH, by making a payment to the lenders equal to approximately $184 million, representing 101% of the aggregate outstanding principal amount of the loans under the A/R Facility, plus any accrued interest and outstanding fees and expenses. The maximum facility limit availability under the A/R Facility is $400 million and has a maturity date of September 23, 2024.DSIH. Subsequent to the Deconsolidation, transactions related to the A/R Facility are no longer intercompany transactions and, therefore, are reflected in ourSBG's consolidated financial statements. See Deconsolidation of Diamond Sports Intermediate Holdings LLC within Note 1. Nature of Operations and Summary of Significant Accounting Policies. As of June 30,December 31, 2022, the note receivable due to the Company isSBG was approximately $193 million, which is recorded withinreflected in other assets in ourSBG's consolidated balance sheets. On May 10, 2023, DSPV paid SBG approximately $199 million, representing the aggregate outstanding principal amount of the loans under the A/R Facility, accrued interest, and outstanding fees and expenses. The loans under the A/R Facility and cash received were transferred to Ventures as part of the Reorganization.

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4.3.             NOTES PAYABLE, FINANCE LEASES, AND COMMERCIAL BANK FINANCING:

Bank Credit Agreement and Notes

The bank credit agreement of Sinclair Television Group, Inc. ("STG"), a wholly ownedwholly-owned subsidiary of the Company,SBG (the "Bank Credit Agreement"), includes a financial maintenance covenant, the first lien leverage ratio (as defined in the Bank Credit Agreement), which requires such ratio not to exceed 4.5x, measured as of the end of each fiscal quarter. As of June 30, 2022,2023, the STG first lien leverage ratio was below 4.5x. Under the Bank Credit Agreement, a financial maintenance covenant is only applicable if 35% or more of the capacity (as a percentage of total commitments) under the revolving credit facility, measured as of the last day of each fiscal quarter, is utilized under the revolving credit facility as of such date. Since there was no utilization under the revolving credit facility as of June 30, 2022,2023, STG was not subject to the financial maintenance covenant under the Bank Credit Agreement. The Bank Credit Agreement contains other restrictions and covenants with which STG was in compliance as of June 30, 2022.2023.

On April 21, 2022,In June 2023, STG entered into the Fourth Amendment (the "Fourth Amendment") to the Bank Credit Agreement with JPMorgan Chase Bank, N.A., as administrative agent, the guarantors party thereto (the "Guarantors")purchased $3 million, $15 million, and the lenders and other parties thereto.

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Pursuant to the Fourth Amendment, STG raised Term B-4 Loans (as defined in the Bank Credit Agreement) in an$13 million aggregate principal amount of $750the 5.125% Senior Notes due 2027, the 5.500% Senior Notes due 2030, and the 4.125% Senior Secured Notes due 2030 (collectively, the notes are referred to as the "STG Notes"), respectively, in open market transactions for consideration of $3 million, which mature on April 21, 2029 (the "Term Loan B-4").$8 million, and $8 million, respectively. The Term Loan B-4 was issued at 97% of par and bears interest, at STG’s option, at Term Secured Overnight Financing Rate ("SOFR") plus 3.75% (subject to customary credit spread adjustments) or base rate plus 2.75%. The proceeds from the Term Loan B-4STG Notes acquired in June 2023 were used to refinance all of STG’s outstanding Term Loan B-1 due January 2024 and to redeem STG’s outstanding 5.875% senior notes due 2026 (the "STG 5.875% Notes"). In addition, the maturity of $612.5 million of the total $650 million of revolving commitments under the Bank Credit Agreement were extended to April 21, 2027, with the remaining $37.5 million continuing to mature on December 4, 2025. For the three and six months ended June 30, 2022, we capitalized an original issuance discount of $23 million associated with the issuance of the Term Loan B-4, which is reflected as a reduction to the outstanding debt balance and will be recognized as interest expense over the term of the outstanding debt utilizing the effective interest method. The balance of the Term Loan B-4 was $727 million, net of debt discount and deferred financing costs, as of June 30, 2022. Wecanceled immediately following their acquisition. SBG recognized a lossgain on extinguishment of $10the STG Notes of $11 million for the three and six months ended June 30, 2022.2023.

During the three months ended June 30, 2022, weIn July 2023, STG purchased $118$0.5 million aggregate principal amount of STG'sthe 5.125% senior notesSenior Notes due 2027 (the "STG 5.125% Notes") in open market transactions for consideration of $104$0.4 million and repaid $1 million aggregate principal amount of the Term Loan B-2, due September 30, 2026, for consideration of $0.8 million. The STG 5.125% Notes acquired during the three months ended June 30, 2022in July 2023 were canceled immediately following their acquisition. We recognized a gain on extinguishment of the STG 5.125% Notes of $13 million for the three and six months ended June 30, 2022.

The debt of DSIH was deconsolidated from our balance sheet as part of the Deconsolidation. See Deconsolidation of Diamond Sports Intermediate Holdings LLC within Note 1. Nature of Operations and Summary of Significant Accounting Policies.

Finance leases to affiliates

The current portion of notes payable, finance leases, and commercial bank financing in ourSBG's consolidated balance sheets includes finance leases to affiliates of $2 million and $3 million as of June 30, 20222023 and December 31, 2021,2022, respectively. Notes payable, finance leases, and commercial bank financing, less current portion, in ourSBG's consolidated balance sheets includes finances leases to affiliates of $6 million as of both June 30, 20222023 and December 31, 2021.2022. See Note 10.9. Related Person Transactions.

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

STG jointly, severally, unconditionally, and irrevocably guaranteed $37 million and $39$2 million of debt of certain third parties as of both June 30, 20222023 and December 31, 2021, respectively,2022, all of which $9 million, net of deferred financing costs, relatedrelate to consolidated VIEs and is included in ourSBG's consolidated balance sheets as of both June 30, 20222023 and December 31, 2021. These guarantees primarily relate to the debt of Cunningham Broadcasting Corporation (Cunningham) as discussed under Cunningham Broadcasting Corporation within Note 10. Related Person Transactions. The credit agreements and term loans of these VIEs each bear interest of LIBOR plus 2.50%. We provide2022. SBG provides a guarantee of certain obligations of a regional sports network subject to a maximum annual amount of $108$112 million with annual escalations of 4% for the next eightseven years. We haveSBG has determined that, as of June 30, 2022,2023, it is not probable that weSBG would have to perform under any of these guarantees.

Interest Rate Swap

SBG entered into an interest rate swap effective February 7, 2023 and terminating on February 28, 2026 in order to manage a portion of SBG's exposure to variable interest rates. The swap agreement has a notional amount of $600 million, bears a fixed interest rate of 3.9%, and SBG receives a floating rate of interest based on SOFR. See Hedge Accounting within Note 1. Nature of Operations and Summary of Significant Accounting Policies for further discussion. As of June 30, 2023, the fair value of the interest rate swap was an asset of $8 million, which is recorded in other assets in SBG's consolidated balance sheets.

5.4.             REDEEMABLE NONCONTROLLING INTERESTS:

We accountSBG accounts for redeemable noncontrolling interests in accordance with ASC 480, Distinguishing Liabilities from Equity, and classifyclassifies them as mezzanine equity in ourSBG's consolidated balance sheets because their possible redemption is outside of the control of the Company. OurSBG. SBG's 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 DSGDiamond Sports Group, LLC ("DSG") and indirect wholly-owned subsidiary of the Company,SBG, issued preferred equity (the "Redeemable Subsidiary Preferred Equity").
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DividendsDistributions accrued during the six months ended June 30, 2023 were $3 million and during the three and six months ended June 30, 2022 were $3 million and $6 million, respectively, and for the three and six months ended June 30, 2021, were $4 million and $8 million, respectively, and are reflected in net income attributable to the redeemable controllingnoncontrolling interests in ourSBG's consolidated statements of operations. The dividends paid in cash accrue at a rate equal to 1-month LIBOR (with a 0.75% floor) plus 7.5%, which is 0.5% lower than the rate payable if the dividends were paid-in-kind during the quarter. DividendsDistributions accrued during all of the threesix months ended June 30, 2022, March 31, 2022,2023 and the three and six months ended June 30, 20212022 were paid-in-kind and added to the liquidation preference, which was partially offset by certain required cash tax distributions.

The balance, of the Redeemable Subsidiary Preferred Equity, net of issuance costs, was $187 million and $181 million as of June 30, 2022 and December 31, 2021, respectively. Thethe liquidation preference of the Redeemable Subsidiary Preferred Equity was $191were $194 million and $185$198 million, as of June 30, 2022 and December 31, 2021, respectively.

Subsidiary Equity Put Right. A noncontrolling equity holder of DSIH has the right to sell their interest to DSIH at any time during the 30-day period following September 30, 2025. The value of this redeemable noncontrolling interest was$16 millionrespectively, as of December 31, 2021. This redeemable noncontrolling interest was deconsolidated as part2022. On February 10, 2023, SBG purchased the remaining 175,000 units of the Deconsolidation. See DeconsolidationRedeemable Subsidiary Preferred Equity for an aggregate purchase price of Diamond Sports Intermediate Holdings LLC within Note 1. Nature$190 million, representing 95% of Operationsthe sum of the remaining unreturned capital contribution of $175 million, and Summaryaccrued and unpaid distributions up to, but not including, the date of Significant Accounting Policies.purchase.

6.5.             COMMITMENTS AND CONTINGENCIES:

Other Liabilities

Prior to the Deconsolidation, other liabilities included certain fixed payment obligations which were payable through 2027. As of December 31, 2021, $32 million and $71 million were recorded within other current liabilities and other long-term liabilities, respectively, in our consolidated balance sheets. We recorded interest expense of $1 million for the six months ended June 30, 2022 and $1 million and $3 million for the three and six months ended June 30, 2021, respectively. See Deconsolidation of Diamond Sports Intermediate Holdings LLC within Note 1. Nature of Operations and Summary of Significant Accounting Policies.

Prior to the Deconsolidation, other liabilities included certain variable payment obligations which were payable through 2030. These contractual obligations were based upon the excess cash flow of certain Bally RSNs. As of December 31, 2021, $8 million and $23 million were recorded within other current liabilities and other long-term liabilities, respectively, in our consolidated balance sheets. We recorded measurement adjustment losses of $3 million for the six months ended June 30, 2022 and $2 million and $3 million for the three and six months ended June 30, 2021, respectively, which are reflected in other (expense) income, net in our consolidated statements of operations. See Deconsolidation of Diamond Sports Intermediate Holdings LLC within Note 1. Nature of Operations and Summary of Significant Accounting Policies.

Litigation
 
We areSBG is a party to lawsuits, claims, and 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. Except as noted below, we doSBG does not believe the outcome of these matters, individually or in the aggregate, will have a material effect on ourSBG's financial statements. 

FCC Litigation Matters

On May 22, 2020, the FCCFederal Communications Commission ("FCC") released an Order and Consent Decree pursuant to which the Company agreed to pay $48 million to resolve the matters covered by a Notice of Apparent Liability for Forfeiture ("NAL") issued in December 2017 proposing a $13 million fine for alleged violations of the FCC's sponsorship identification rules by the Company and certain of its subsidiaries, the FCC’sFCC's investigation of the allegations raised in the Hearing Designation Order issued in connection with the Company's proposed acquisition of Tribune, and a retransmission related matter. The Company submitted the $48 million payment on August 19, 2020. As part of the consent decree, the Company also agreed to implement a 4-year compliance plan. NaNTwo petitions were filed on June 8, 2020 seeking reconsideration of the Order and Consent Decree. The Company filed an opposition to the petitions on June 18, 2020, and the petitions remain pending.

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On September 1, 2020, one of the individuals who filed a petition for reconsideration of the Order and Consent Decree filed a petition to deny the license renewal application of WBFF(TV), Baltimore, MD, and the license renewal applications of two other Baltimore, MD stations with which the Company has a JSA or LMA, Deerfield Media station WUTB(TV) and Cunningham Broadcasting Corporation ("Cunningham") station WNUV(TV). The Company filed an opposition to the petition on October 1, 2020, and the petition remains pending.

On September 2, 2020, the FCC adopted a Memorandum Opinion and Order and NAL against the licensees of several stations with whom the Company has LMAs, JSAs, and/or SSAs in response to a complaint regarding those stations’stations' retransmission consent negotiations. The NAL proposed a $0.5 million penalty for each station, totaling $9 million. The licensees filed a response to the NAL on October 15, 2020, asking the Commission to dismiss the proceeding or, alternatively, to reduce the proposed forfeiture to $25,000 per station. On July 28, 2021, the FCC issued a forfeiture order in which the $0.5 million penalty was upheld for all but one station. A Petition for Reconsideration of the forfeiture order was filed on August 7, 2021. On March 14, 2022, the CommissionFCC released a Memorandum Opinion and Order and Order on Reconsideration, reaffirming the forfeiture order and dismissing (and in the alternative, denying) the Petition for Reconsideration. The Company is not a party to this forfeiture order; however, ourSBG's consolidated financial statements include an accrual of additional expenses of $8 million for the above legal matters during the year ended December 31, 2021, as we consolidateSBG consolidates these stations as VIEs.

On September 21, 2022, the FCC released an NAL against the licensees of a number of stations, including 83 Company stations and several stations with whom the Company has LMAs, JSAs, and/or SSAs, for violation of the FCC's limitations on commercial matter in children's television programming related to KidsClick network programming distributed by the Company in 2018. The NAL proposed a fine of $2.7 million against the Company, and fines ranging from $20,000 to $26,000 per station for the other licensees, including the LMA, JSA, and/or SSA stations, for a total of $3.4 million. As of June 30, 2023, SBG has accrued $3.4 million. On October 21, 2022, the Company filed a written response seeking reduction of the proposed fine amount, and the matter remains pending.

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Other Litigation Matters

On November 6, 2018, the Company agreed to enter into a proposed consent decree with the Department of Justice (the "DOJ"("DOJ"). This consent decree resolves the DOJ’sDOJ'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 the Company 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 DOJ 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’sCompany's management hashad already instructed them not to do.

The Company is aware of NaNtwenty-two 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 13thirteen 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’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. The Court denied the Defendants’Defendants' motion to dismiss on November 6, 2020. Since then, the Plaintiffs have served the Defendants with written discovery requests and have begun taking depositions of the employees of the defendants and certain third parties. The Court has set a pretrial schedule which nowcurrently requires discovery to be completed by December 30, 202215, 2023, or 90 days after the Special Master certifies completion of the privilege review, whichever date is later, and requires briefing on class certification to be completed by May 15, 2023.within 195 days after that date. The Company believes the lawsuits are without merit and intends to vigorously defend itself against all such claims.

On July 19, 2023, as part of the ongoing bankruptcy proceedings of DSG, an independently managed and unconsolidated subsidiary of Sinclair, DSG and its wholly-owned subsidiary, Diamond Sports Net, LLC, filed a complaint, under seal, in the United States Bankruptcy Court for the Southern District of Texas naming certain subsidiaries of Sinclair, including SBG and STG, David D. Smith, Sinclair's Executive Chairman, Christopher S. Ripley, Sinclair's President and Chief Executive Officer, Lucy A. Rutishauser, Sinclair's Executive Vice President & Chief Financial Officer, and Scott Shapiro, Sinclair's Executive Vice President, Corporate Development and Strategy, as defendants.

In the complaint, plaintiffs challenge a series of transactions involving SBG and certain of its subsidiaries, on the one hand, and DSG and its subsidiaries, on the other hand, since SBG acquired the former Fox Sports regional sports networks from The Walt Disney Company in August 2019. The complaint alleges, among other things, that the management services agreement entered into by STG and DSG was not fair to DSG and was designed to benefit STG and SBG; that the Bally's Corporation ("Bally's") transaction in November 2020 through which Bally's acquired naming rights to certain regional sports networks was not fair to DSG and was designed to benefit STG and SBG; and that certain distributions made by DSG that were used to pay down preferred equity of DSH, were inappropriate and were conducted at a time when DSG was insolvent. The complaint alleges that SBG and its subsidiaries (other than DSG and its subsidiaries) received payments or indirect benefits of approximately $1.5 billion as a result of the alleged misconduct. The complaint asserts a variety of claims, including certain fraudulent transfers of assets, unlawful distributions and payments, breaches of contracts, unjust enrichment and breaches of fiduciary duties. The plaintiffs are seeking, among other relief, avoidance of fraudulent transfers and unlawful distributions, and unspecified monetary damages to be determined. The defendants believe the allegations in this lawsuit are without merit and intend to vigorously defend against plaintiffs' claims.

While at this early stage of the proceedings it is not possible to determine the probability of any outcome or probability or amount of any loss, in the event of an unfavorable outcome, SBG's subsidiaries may be required to pay monetary damages, which could materially and adversely affect SBG's financial and results of operations.

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7.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 
 June 30,		Six Months Ended 
 June 30,
 2022202120222021
Income (Numerator)  
Net (loss) income$(6)$(328)$2,610 $(302)
Net income attributable to the redeemable noncontrolling interests(5)(5)(9)(9)
Net loss (income) attributable to the noncontrolling interests— 1 (25)(33)
Numerator for basic and diluted (loss) earnings per common share available to common shareholders$(11)$(332)$2,576 $(344)
Shares (Denominator)  
Basic weighted-average common shares outstanding70,897 75,331 71,527 74,862 
Dilutive effect of stock-settled appreciation rights and outstanding stock options— — 6 — 
Diluted weighted-average common and common equivalent shares outstanding70,897 75,331 71,533 74,862 

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 
 June 30,		Six Months Ended 
 June 30,
 2022202120222021
Weighted-average stock-settled appreciation rights and outstanding stock options excluded3,645 1,802 3,095 1,608 

8.6.             SEGMENT DATA:
 
During the period endedJune 30, 2022, we2023 SBG modified its segment reporting to align with the new organizational structure of SBG discussed within Company Reorganization under Note 1. Nature of Operations and Summary of Significant Accounting Policies. The segment information within the comparative periods have been revised to reflect this new presentation. During the period ended June 30, 2023, SBG measured segment performance based on operating income (loss). For the quarter ended June 30, 2022, we2023, SBG had 1one reportable segment, broadcast.segment: local media. Prior to the Deconsolidation, weSBG had 2one additional reportable segments, broadcast andsegment: local sports. Our broadcastThe local media segment includes SBG's television stations, original networks, and content and provides these through free over-the-air programming to television viewing audiences and includesfor stations in markets located throughout the continental United States. OurStates, as well as distributes the content of these stations to MVPDs for distribution to their customers in exchange for contractual fees. See Revenue Recognition under Note 1. Nature of Operations and Summary of Significant Accounting Policies for further detail. The local sports segment provided viewers with live professional sports content and included ourthe Bally RSNs, Marquee, and ourSBG's investment in the YES Network, prior to the Deconsolidation on March 1, 2022. See Deconsolidation of Diamond Sports Intermediate Holdings LLC under Note 1. Nature of Operations and Summary of Significant Accounting Policies. Other and corporate are not reportable segments but are included for reconciliation purposes. Other primarily consists of original networks and content, including Tennis,tennis, non-broadcast digital and internet solutions, technical services, and other non-media investments. Corporate costs primarily include ourSBG's costs to operate as a publicthe parent company and to operate our corporate headquarters location.of its subsidiaries. All of ourSBG's businesses are located within the United States.

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Segment financial information is included in the following tables for the periods presented (in millions):
As of June 30, 2022BroadcastLocal sportsOther & CorporateEliminationsConsolidated
As of June 30, 2023As of June 30, 2023Local MediaOther & CorporateEliminationsConsolidated
AssetsAssets$4,620 $— $1,830 (e)$(1)$6,449 Assets$4,349 $645 $— $4,994 

For the three months ended June 30, 2022BroadcastLocal sportsOther & CorporateEliminationsConsolidated
For the three months ended June 30, 2023For the three months ended June 30, 2023Local MediaOther & Corporate (c)EliminationsConsolidated
RevenueRevenue$732 (b)$— $131 $(26)(a)$837 Revenue$699 (b)$47 $(3)$743 
Depreciation of property and equipment and amortization of definite-lived intangibles and other assetsDepreciation of property and equipment and amortization of definite-lived intangibles and other assets60 — 8 (1)67 Depreciation of property and equipment and amortization of definite-lived intangibles and other assets67 3 — 70 
Amortization of program contract costsAmortization of program contract costs18 — 3 — 21 Amortization of program contract costs19 — — 19 
Corporate general and administrative expensesCorporate general and administrative expenses33 — 5 — 38 Corporate general and administrative expenses46 12 — 58 
Gain on asset dispositions and other, net of impairment— — (4)— (4)
(Gain) loss on asset dispositions and other, net of impairment(Gain) loss on asset dispositions and other, net of impairment(2)6 — 4 
Operating income (loss)Operating income (loss)118 — (13)2 107 Operating income (loss)22 (18)— 4 
Interest expense including amortization of debt discount and deferred financing costsInterest expense including amortization of debt discount and deferred financing costs1 — 56 (3)54 Interest expense including amortization of debt discount and deferred financing costs76 — — 76 
Income from equity method investments— — 3 — 3 

For the three months ended June 30, 2021BroadcastLocal sportsOther & CorporateEliminationsConsolidated
Revenue$687 $838 $120 $(33)(a)$1,612 
Depreciation of property and equipment and amortization of definite-lived intangibles and other assets64 78 6 (1)147 
Amortization of sports programming rights— 829 — — 829 
Amortization of program contract costs17 — 5 — 22 
Corporate general and administrative expenses29 3 4 — 36 
Gain on asset dispositions and other, net of impairment(3)— (5)— (8)
Operating income (loss)105 (288)4 1 (178)
Interest expense including amortization of debt discount and deferred financing costs1 110 51 (2)160 
Income (loss) from equity method investments— 10 (8)— 2 



For the six months ended June 30, 2023Local MediaOther & Corporate (c)EliminationsConsolidated
Revenue$1,404 (b)$119 $(7)(a)$1,516 
Depreciation of property and equipment and amortization of definite-lived intangibles and other assets126 10 (1)135 
Amortization of program contract costs41 — — 41 
Corporate general and administrative expenses78 38 — 116 
(Gain) loss on asset dispositions and other, net of impairment(3)13 — 10 
Operating income (loss)63 (38)— 25 
Interest expense including amortization of debt discount and deferred financing costs150 — — 150 
Income from equity method investments— 31 — 31 
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For the six months ended June 30, 2022BroadcastLocal sportsOther & CorporateEliminationsConsolidated
Revenue$1,453 (b)$482 $265 $(75)(a)$2,125 
Depreciation of property and equipment and amortization of definite-lived intangibles and other assets120 54 16 (2)188 
Amortization of sports programming rights— 326 — — 326 
Amortization of program contract costs38 — 8 — 46 
Corporate general and administrative expenses76 1 8 — 85 
Gain on deconsolidation of subsidiary— — (3,357)(c)— (3,357)
Gain on asset dispositions and other, net of impairment(5)— (4)— (9)
Operating income (loss)215 (4)3,359 3 3,573 
Interest expense including amortization of debt discount and deferred financing costs2 72 103 (8)169 
Income from equity method investments— 10 5 — 15 
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

For the six months ended June 30, 2021BroadcastLocal sports (d)Other & CorporateEliminationsConsolidated
For the three months ended June 30, 2022For the three months ended June 30, 2022Local MediaOther & CorporateEliminationsConsolidated
RevenueRevenue$1,352 $1,606 $228 $(63)(a)$3,123 Revenue$760 (b)$85 $(8)(a)$837 
Depreciation of property and equipment and amortization of definite-lived intangibles and other assetsDepreciation of property and equipment and amortization of definite-lived intangibles and other assets126 162 14 (2)300 Depreciation of property and equipment and amortization of definite-lived intangibles and other assets61 7 (1)67 
Amortization of sports programming rights— 1,381 — — 1,381 
Amortization of program contract costsAmortization of program contract costs38 — 7 — 45 Amortization of program contract costs21 — — 21 
Corporate general and administrative expensesCorporate general and administrative expenses84 6 7 — 97 Corporate general and administrative expenses34 4 — 38 
Gain on asset dispositions and other, net of impairmentGain on asset dispositions and other, net of impairment(17)— (5)— (22)Gain on asset dispositions and other, net of impairment(4)— — (4)
Operating income (loss)Operating income (loss)168 (329)17 1 (143)Operating income (loss)116 (9)— 107 
Interest expense including amortization of debt discount and deferred financing costsInterest expense including amortization of debt discount and deferred financing costs2 218 96 (5)311 Interest expense including amortization of debt discount and deferred financing costs54 3 (3)54 
Income (loss) from equity method investments— 23 (12)— 11 
Income from equity method investmentsIncome from equity method investments— 3 — 3 
For the six months ended June 30, 2022Local MediaLocal Sports (d)Other & CorporateEliminationsConsolidated
Revenue$1,514 (b)$482 $171 $(42)(a)$2,125 
Depreciation of property and equipment and amortization of definite-lived intangibles and other assets122 54 14 (2)188 
Amortization of sports programming rights— 326 — — 326 
Amortization of program contract costs46 — — — 46 
Corporate general and administrative expenses77 1 7 — 85 
Gain on deconsolidation of subsidiary— — (3,357)— (3,357)
Gain on asset dispositions and other, net of impairment(8)— (1)— (9)
Operating income (loss)211 (4)3,366 — 3,573 
Interest expense including amortization of debt discount and deferred financing costs99 72 6 (8)169 
Income from equity method investments— 10 5 — 15 

(a)Includes $1 million and $25 million for the three and six months ended June 30, 2022, respectively,2023, and $27$1 million and $54 million for the three and six months ended June 30, 2021, respectively, of revenue for services provided by broadcast to local sports and other; and $22 million and $44$25 million for the three and six months ended June 30, 2022, respectively, of revenue for services provided by local media to other to broadcast,and local sports, which areis eliminated in consolidation.
(b)Includes $14 million and $24 million for the three and six months ended June 30, 2023, respectively, and $10 million and $15 million for the three and six months ended June 30, 2022, respectively, of revenue for services provided by broadcast to DSIH,local media under management services agreements after the Deconsolidation, which are no longer treated as intercompany transactions subsequent to the Deconsolidation.is not eliminated in consolidation. See Deconsolidation of Diamond Sports Intermediate Holdings LLC within Note 1. Nature of Operations and Summary of Significant Accounting Policies.
(c)Represents the gain recognizedactivity in tennis, non-broadcast digital and internet solutions, technical services, and non-media investments (collectively, other) prior to the Reorganization on June 1, 2023 and the Deconsolidation.activity in corporate prior and subsequent to the Reorganization. See Deconsolidation of Diamond Sports Intermediate Holdings LLCCompany Reorganization within Note 1. Nature of Operations and Summary of Significant Accounting Policies.
(d)Represents the activity prior to the Deconsolidation on March 1, 2022. See Deconsolidation of Diamond Sports Intermediate Holdings LLC within Note 1. Nature of Operations and Summary of Significant Accounting Policies.
(e)Includes the note receivable due to the Company outstanding under the A/R facility of approximately $193 million. See Long Term Note Receivable within Note. 3 Other Assets.

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NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
9.7.             VARIABLE INTEREST ENTITIES: 

Certain of ourSBG's stations provide services to other station owners within the same respective market through agreements, such as LMAs, where we provideSBG provides programming, sales, operational, and administrative services, and JSAs and SSAs, where we provideSBG provides non-programming, sales, operational, and administrative services. In certain cases, we haveSBG has also entered into purchase agreements or options to purchase the license related assets of the licensee. WeSBG typically ownowns the majority of the non-license assets of the stations, and in some cases where the licensee acquired the license assets concurrent with ourSBG's acquisition of the non-license assets of the station, we haveSBG has provided guarantees to the bank for the licensee’slicensee'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 ourSBG's investment in the stations, we areSBG is the primary beneficiary when, subject to the ultimate control of the licensees, we haveSBG has the power to direct the activities which significantly impact the economic performance of the VIE through the services we provideSBG provides and we absorbSBG absorbs losses and returns that would be considered significant to the VIEs. The fees paid between usSBG and the licensees pursuant to these arrangements are eliminated in consolidation.

A subsidiary of DSIH is a 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.SBG guarantees. In connection with a prior acquisition, weSBG became party to a joint venture associated with one other regional sports network. DSIH participated significantly in the economics and had the power to direct the activities which significantly impacted the economic performance of these regional sports networks, including sales and certain operational services. As of December 31, 2021, we consolidated these regional sports networks because they were variable interest entities and we were the primary beneficiary. As of March 1, 2022, as a result of the Deconsolidation, weSBG no longer consolidateconsolidates these regional sports networks. See Deconsolidation of Diamond Sports Intermediate Holdings LLC within Note 1. Nature of Operations and Summary of Significant Accounting Policies.

The carrying amounts and classification of the assets and liabilities of the VIEs mentioned above, which have been included in ourSBG's consolidated balance sheets as of the dates presented, were as follows (in millions):
 
As of June 30,
2022		As of December 31,
2021		 As of June 30,
2023		As of December 31,
2022
ASSETSASSETS  ASSETS  
Current assets:Current assets:  Current assets:  
Cash and cash equivalents$— $43 
Accounts receivable, netAccounts receivable, net45 83 Accounts receivable, net$15 $47 
Prepaid sports rights— 2 
Other current assetsOther current assets1 4 Other current assets1 3 
Total current assetsTotal current assets46 132 Total current assets16 50 
Property and equipment, netProperty and equipment, net8 17 Property and equipment, net11 10 
Operating lease assets— 5 
Goodwill and indefinite-lived intangible assetsGoodwill and indefinite-lived intangible assets15 15 Goodwill and indefinite-lived intangible assets15 15 
Definite-lived intangible assets, netDefinite-lived intangible assets, net43 47 Definite-lived intangible assets, net36 40 
Other assets— 1 
Total assetsTotal assets$112 $217 Total assets$78 $115 
LIABILITIESLIABILITIES  LIABILITIES  
Current liabilities:Current liabilities:  Current liabilities:  
Other current liabilitiesOther current liabilities$20 $62 Other current liabilities$13 $15 
Long-term liabilities:Long-term liabilities:  Long-term liabilities:  
Notes payable, finance leases and commercial bank financing, less current portionNotes payable, finance leases and commercial bank financing, less current portion6 7 
Operating lease liabilities, less current portion— 4 
Program contracts payable, less current portionProgram contracts payable, less current portion1 2 Program contracts payable, less current portion— 1 
Other long-term liabilitiesOther long-term liabilities3 4 Other long-term liabilities3 3 
Total liabilitiesTotal liabilities$24 $72 Total liabilities$22 $26 
 
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NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
The amounts above represent the combined assets and liabilities of the VIEs described above, for which we areSBG is the primary beneficiary. Total liabilities associated with certain outsourcing agreements and purchase options with certain VIEs, which are excluded from the above, were $129 million and $127$130 million as of both June 30, 20222023 and December 31, 2021, respectively,2022 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 June 30, 2022,2023, all of the liabilities are non-recourse to usSBG except for the debt of certain VIEs. See Debt of variable interest entities and guarantees of third-party obligations under Note 4.3. Notes Payable, Finance Leases, and Commercial Bank Financing for further discussion. The risk and reward characteristics of the VIEs are similar.

Other VIEs 

We havePrior to the Reorganization, SBG had several investments in entities which are considered VIEs. However, we doSBG did not participate in the management of these entities, including the day-to-day operating decisions or other decisions which would allow usSBG to control the entity, and therefore, we areSBG was not considered the primary beneficiary of these VIEs. SBG's investments in these VIEs for which SBG was not the primary beneficiary were transferred to Ventures as part of the Reorganization.
The carrying amounts of SBG's investments in these VIEs for which SBG was not the primary beneficiary were $187 million as of December 31, 2022, and are included in other assets in SBG's consolidated balance sheets. See Note 2. Other Assets for more information related to SBG's equity investments. The income and loss related to equity method investments and other investments are recorded in (loss) income from equity method investments and other expense, net, respectively, in SBG's consolidated statements of operations. SBG recorded gains of $2 million and $37 million for the three and six months ended June 30, 2023, respectively, and gains of $5 million and $25 million for the three and six months ended June 30, 2022, respectively, related to these investments.

In conjunction with the Transaction, the composition of the DSIH board of managers was modified resulting in the ourSBG's loss of voting control over DSIH. We holdSBG holds substantially all of the equity of DSIH and provides certain management and general and administrative services to DSIH. However, it was determined that we areSBG is not the primary beneficiary because we lackSBG lacks the ability to control the activities that most significantly drive the economics of the business. The carrying amount of ourSBG's investment in DSIH is zero and there is no obligation for usSBG to provide additional financial support. We are

Prior to the Reorganization, SBG was also party to anthe A/R facilityFacility held by an indirect wholly-owned subsidiary of DSIH which had an outstanding balance of approximately $193 million as of June 30,December 31, 2022. See Note Receivable within Note 3.2. Other Assets. The amounts drawnloans under the A/R facility represent our maximum loss exposure.
The carrying amountsFacility were transferred to Ventures as part of our investments in these VIEs for which we are not the primary beneficiary were $182 million and $175 million as of June 30, 2022 and December 31, 2021, respectively, and are included in other assets in our consolidated balance sheets. See Note 3. Other Assets for more information related to our equity investments. 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 income from equity method investments and other (expense) income, net, respectively, in our consolidated statements of operations. We recorded gains of $5 million and $25 million for the three and six months ended June 30, 2022, respectively, and recorded losses of $7 million and 12 million for the three and six months ended June 30, 2021, respectively, related to these investments.Reorganization.

10.8.             RELATED PERSON TRANSACTIONS:
 
Transactions with ourSBG's indirect controlling shareholders
 
David, Frederick, J. Duncan, and Robert Smith (collectively, the "controlling"Sinclair controlling shareholders") are brothers and hold substantially all of ourthe Sinclair Class B Common Stock and some of ourthe Sinclair Class A Common Stock. WeStock and, subsequent to the Reorganization, David, Frederick, and J. Duncan Smith are on the Board of Managers of SBG. SBG engaged in the following transactions with them and/or entities in which they have substantial interests:
 
Leases. Certain assets used by usSBG and ourSBG's operating subsidiaries are leased from entities owned by the Sinclair controlling shareholders. Lease payments made to these entities were $1 million and $3 million for the three and six months ended June 30, 2022,2023, respectively, and $1 million and $2$3 million for the three and six months ended June 30, 2021,2022, respectively. For further information, see Note 4.3. Notes Payable, Finance Leases, and Commercial Bank Financing.

Charter Aircraft. We leaseSBG leases aircraft owned by certain Sinclair controlling shareholders. For all leases, weSBG incurred expenses of $0.1 million and $0.2 million for the three and six months ended June 30, 2023, respectively, and less than $0.1 million and $0.3 million for the three and six months ended June 30, 2022, respectively. We incurred expenses of less than $0.1 million and $0.2 million for three and six months ended June 30, 2021, respectively.

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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; WEMT-TV Tri-Cities, Tennessee; WYDO-TV Greenville, North Carolina; KBVU-TV/KCVU-TV Eureka/Chico-Redding, California; WPFO-TV Portland, Maine; and KRNV-DT/KENV-DT Reno, Nevada/Salt Lake City, UtahUtah; and KTXD-TV in Dallas, Texas (collectively, the "Cunningham Stations"). Certain of ourSBG's stations provide services to the Cunningham Stations pursuant to LMAs or JSAs and SSAs. See Note 9.7. Variable Interest Entities, for further discussion of the scope of services provided under these types of arrangements. As of June 30, 2022, we have jointly and severally, unconditionally, and irrevocably guaranteed $35 million of Cunningham's debt, of which $6 million, net of $0.1 million deferred financing costs, relates to the Cunningham VIEs that we consolidate.
 
All of the non-voting stock of the Cunningham Stations is owned by trusts for the benefit of the children of ourthe Sinclair controlling shareholders. We consolidateSBG consolidates certain subsidiaries of Cunningham with which we haveSBG has variable interests through various arrangements related to the Cunningham 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, 2028 and there is 1one additional five-year renewal term remaining with final expiration on July 1, 2033. WeSBG also executed purchase agreements to acquire the license related assets of these stations from Cunningham, which grant usSBG the right to acquire, and grant Cunningham the right to require usSBG 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 areSBG is obligated to pay Cunningham an annual fee for the television stations equal to the greater of (i) 3% of each station’sstation's annual net broadcast revenue or (ii) $5$6 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 $59$63 million and $58$61 million as of June 30, 20222023 and December 31, 2021,2022, respectively. The remaining aggregate purchase price of these stations, net of prepayments, as of both June 30, 20222023 and December 31, 2021,2022, was approximately $54 million. Additionally, we provideSBG provides services to WDBB-TV pursuant to an LMA, which expires April 22, 2025, and havehas a purchase option to acquire for $0.2 million. WeSBG paid Cunningham, under these agreements, $3 million and $6 million for the three and six months ended June 30, 2023, respectively, and $1 million and $4 million for the three and six months ended June 30, 2022, respectively, and $3 million and $5 million for the three and six months ended June 30, 2021, respectively.

The agreements with KBVU-TV/KCVU-TV, KRNV-DT/KENV-DT, WBSF-TV, WDBB-TV, WEMT-TV, WGTU-TV/WGTQ-TV, WPFO-TV, and WYDO-TV expire between May 2023April 2025 and November 2029 and certain stations have renewal provisions for successive eight-year periods.

As we consolidateSBG consolidates the licensees as VIEs, the amounts we earnSBG earns or paypays under the arrangements are eliminated in consolidation and the gross revenues of the stations are reported in ourSBG's consolidated statements of operations. OurSBG's consolidated revenues include $33 million and $69 million for the three and six months ended June 30, 2023, respectively, and $37 million and $71 million for the three and six months ended June 30, 2022, respectively, and $36 million and $72 million for the three and six months ended June 30, 2021, respectively, related to the Cunningham Stations.

We haveSBG has an agreement with Cunningham to provide master control equipment and provide master control services to a station in Johnstown, PA with which Cunningham has an LMA that expires in June 2025. Under the agreement, Cunningham paid usSBG an initial fee of $1 million and pays usSBG $0.3 million annually for master control services plus the cost to maintain and repair the equipment. In addition, we haveSBG has an agreement with Cunningham to provide a news share service with the Johnstown, PA station for an annual fee of $0.6 million, which increases by 3% on each anniversary and expires in November 2024.

Atlantic Automotive CorporationSBG has multi-cast agreements with Cunningham Stations in the Eureka/Chico-Redding, California; Tri-Cities, Tennessee; Anderson, South Carolina; Baltimore, Maryland; Portland, Maine; Charleston, West Virginia; Dallas, Texas; and Greenville, North Carolina markets. In exchange for carriage of these networks in their markets, SBG paid $0.5 million and $1 million for the three and six months ended June 30, 2023, respectively, and $1 million for both the three and six months ended June 30, 2022 under these agreements.

MileOne Autogroup Inc.
 
We sellSBG sells advertising time to Atlantic Automotive Corporationcertain operating subsidiaries of MileOne Autogroup, Inc. ("Atlantic Automotive"MileOne"), a holding company that ownsincluding automobile dealerships, body shops, 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. WeMileOne. SBG received payments for advertising totaling less than $0.1 million for alleach of the three and six months ended June 30, 20222023 and 2021.2022.
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Leased property by real estate ventures

Certain of ourSBG's real estate ventures have entered into leases with entities owned by members of the Smith Family. Total rent payments received under these leases were $0.3 million and $0.5$0.7 million for the three and six months ended June 30, 2022,2023, respectively, and $0.3 million and $0.5 million for the three and six months ended June 30, 2021,2022, respectively.

25Sinclair, Inc.
Table
Subsequent to the Reorganization, Sinclair is the sole member of ContentsSBG. See Company Reorganization within Note 1. Nature of Operations and Summary of Significant Accounting Policies for further discussion.

SBG recorded revenue of $1 million during both the three and six months ended June 30, 2023 within the local media segment related to sales services provided by SBG to Sinclair, and certain of its direct and indirect subsidiaries.

SBG recorded expenses of $2 million during both the three and six months ended June 30, 2023 within the local media segment related to digital advertising services provided by Sinclair, and certain of its direct and indirect subsidiaries, to SBG.

SBG made a cash distribution of $360 million to Sinclair, and certain of its direct and indirect subsidiaries, during both the three and six months ended June 30, 2023, as part of the Reorganization.

As of June 30, 2023, SBG had a receivable from Sinclair, and certain of its direct and indirect subsidiaries, of $16 million, included within prepaid expenses and other current assets in SBG's consolidated balance sheets.

Diamond Sports Intermediate Holdings LLC

Subsequent to February 28, 2022, we account for ourSBG's equity interest in DSIH is accounted for as an equity method investment. See Deconsolidation of Diamond Sports Intermediate Holdings LLC within Note 1. Nature of Operations and Summary of Significant Accounting Policies.

Management Services Agreement. In 2019, weSBG entered into a management services agreement with DSG, a wholly-owned subsidiary of DSIH, in which we provideSBG provided DSG with affiliate sales and marketing services and general and administrative services. The contractual annual amount due from DSG for these services during the fiscal year ended December 31, 20222023 is $75$78 million, which is subject to increases on an annual basis. Additionally, the agreement contains an incentive fee payable to usSBG calculated based on certain terms contained within new or renewed distribution agreements with Distributors. As a condition to the Transaction, DSG will defer the cash payment of a portion of its management fee payable to the CompanySBG over the next fivefour years. Pursuant to this agreement, the Broadcastlocal media segment recorded $13 million and $22 million of revenue for the three and six months ended June 30, 2023, respectively, and $10 million and $38 million of revenue for the three and six months ended June 30, 2022, respectively, of which $24 million for the six months ended June 30, 2022 was eliminated in consolidation prior to the Deconsolidation. WeSBG will not recognize the portion of deferred management fees as revenue until such fees are determined to be collectible.

Distributions. DSIH made distributions to DSH for tax payments on the dividends of the Redeemable Subsidiary Preferred Equity of $2 million and $3 million during the three and six months ended June 30, 2022, respectively.

Note receivable. WeSBG received payments totaling $206 million and $209 million during the three and six months ended June 30, 2023, respectively, and $10 million and $60 million from DSPV during the three and six months ended June 30, 2022, respectively, from DSPV related to the note receivable associated with the A/R Facility, including $199 million from DSPV on May 10, 2023, representing the aggregate outstanding principal amount of the loans under the A/R Facility, accrued interest, and funded an additional $40outstanding fees and expenses. The loans under the A/R Facility and cash received on May 10, 2023 were transferred to Ventures as part of the Reorganization.

SBG recorded revenue of $4 million and $9 million during boththe three and six months ended June 30, 2023, respectively, and $4 million and $5 million during the three and six months ended June 30, 2022, related torespectively, within the note receivable associated with the A/R facility.

During threelocal media segment and six months ended June 30, 2022 we recorded revenue of $4 million and $5 million, respectively, within other related to certain other transactions between DSIH and the Company.SBG.

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SINCLAIR BROADCAST GROUP, LLC
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
Other equity method investees

YES Network. In August 2019, YES Network, which was accounted for as an equity method investment prior to the Deconsolidation, entered into a management services agreement with the Company,SBG, in which we provide certain services were provided for an initial term that expires on August 29, 2025. The agreement will automatically renew for 2two 2-year renewal terms, with a final expiration on August 29, 2029. Pursuant to the terms of the agreement, the YES Network paid usSBG a management services fee of $1 million for the six months ended June 30, 2022 and $1 million and $2 million for the three and six months ended June 30, 2021, respectively.2022. See Deconsolidation of Diamond Sports Intermediate Holdings LLC within Note 1. Nature of Operations and Summary of Significant Accounting Policies.

DSIH has a minority interest in certain mobile production businesses. Prior to the Deconsolidation, weSBG accounted for these as equity method investments. DSIH made payments to these businesses for production services totaling $5 million for the six months ended June 30, 2022 and $16 million and $24 million for the three and six months ended June 30, 2021, respectively.2022. See Deconsolidation of Diamond Sports Intermediate Holdings LLC within Note 1. Nature of Operations and Summary of Significant Accounting Policies.

We haveSBG has a minority interest in a sports marketing company, which we accountis accounted for as an equity method investment. We made paymentsPayments to this business for marketing services totalingtotaled $2 million for the six months ended June 30, 2022 and $6 million and $9 million for the three and six months ended June 30, 2021, respectively.2022.

Sports Programming Rights

Affiliates of 6six professional teams havehad non-controlling equity interests in certain of DSIH's RSNs. DSIH paid $61 million net of rebates, for the six months ended June 30, 2022 and $138 million and $258 million for the three and six months ended June 30, 2021, respectively, under sports programming rights agreements covering the broadcast of regular season games associated with these professional teams. Prior to the Deconsolidation, these payments were recorded in ourSBG's consolidated statements of operations and cash flows. See Deconsolidation of Diamond Sports Intermediate Holdings LLC within Note 1. Nature of Operations and Summary of Significant Accounting Policies.

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Employees

Jason Smith, an employee of the Company,SBG, is the son of Frederick Smith. Frederick Smith, who is a Vice President of the CompanySBG and a member of the Company'sSBG's Board of Directors.Managers. Jason Smith received total compensation of $0.1$0.2 million and less than $0.1 million for the three months ended June 30, 20222023 and 2021,2022, respectively, and $0.2$0.4 million and $0.1$0.2 million for the six months ended June 30, 2023 and 2022, respectively, consisting of salary and bonus. Ethan White, an employee of SBG, is the son-in-law of J. Duncan Smith, who is a Vice President of SBG and member of SBG's Board of Managers. Ethan White received total compensation of less than $0.1 million for both the three months ended June 30, 2023 and 2022 and 2021, respectively,$0.1 million for both the six months ended June 30, 2023 and 2022, consisting of salary and bonus, and was granted 2,2391,252 shares of restricted stock, vesting over two years, during the six months ended June 30, 2021.2023. Amberly Thompson, an employee of the Company,SBG, is the daughter of Donald Thompson. Donald Thompson, who is an Executive Vice President and Chief Human Resources Officer of the Company.SBG. Amberly Thompson received total compensation of less than $0.1 million for both the three months ended June 30, 20222023 and 20212022 and $0.1 million for both the six months ended June 30, 20222023 and 2021,2022, consisting of salary and bonus. Edward Kim, an employee of the company,SBG, is the brother-in-law of Christopher Ripley. Christopher Ripley, who is the President and Chief Executive Officer of the Company.SBG. Edward Kim received total compensation of less than $0.1 million for both the three months ended June 30, 20222023 and 20212022 and $0.1 million for both the six months ended June 30, 20222023 and 2021,2022, consisting of salary, and was granted 516 and 302 shares of restricted stock vesting over two years, during the six months ended June 30, 2022.2023 and 2022, respectively, vesting over two years.

Frederick Smith a Vice President of the Company and a member of the Company’s Board of Directors, is the brother of David Smith, Executive Chairman of the CompanySBG and Chairman of the Company’s Board of Directors; J. Duncan Smith, a Vice President of the Company and Secretary of the Company’s Board of Directors; and Robert Smith, a member of the Company’sSBG's Board of Directors.Managers, and J. Duncan Smith. Frederick Smith received total compensation of $0.2 million for both the three months ended June 30, 20222023 and 20212022 and $0.4 million for both the six months ended June 30, 20222023 and 2021,2022, consisting of salary and bonus. J. Duncan Smith a Vice President of the Company and Secretary of the Company’s Board of Directors, is the brother of David Smith Executive Chairman of the Company and Chairman of the Company’s Board of Directors; Frederick Smith, a Vice President of the Company and a member of the Company’s Board of Directors; and Robert Smith, a member of the Company’s Board of Directors.Smith. J. Duncan Smith received total compensation of $0.2 million for both the three months ended June 30, 20222023 and 20212022 and $0.4 million for both the six months ended June 30, 20222023 and 2021,2022, consisting of salary and bonus.

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SINCLAIR BROADCAST GROUP, LLC
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
11.9.             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’sentity's own assumptions.

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SINCLAIR BROADCAST GROUP, LLC
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
The following table sets forth the carryingface value and fair value of ourSBG's financial assets and liabilities for the periods presented (in millions):
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 As of June 30, 2022As of December 31, 2021
 Carrying ValueFair ValueCarrying ValueFair Value
Level 1:
Investments in equity securities$5 $5 $5 $5 
Deferred compensation assets40 40 48 48 
Deferred compensation liabilities33 33 38 38 
STG:
Money market funds326 326 265 265 
DSG (a):
Money market funds— — 101 101 
Level 2:
Investments in equity securities (b)59 59 114 114 
STG (c):
5.875% Senior Notes due 2026 (d)— — 348 357 
5.500% Senior Notes due 2030500 375 500 489 
5.125% Senior Notes due 2027 (e)282 240 400 391 
4.125% Senior Secured Notes due 2030750 595 750 712 
Term Loan B-1, due January 3, 2024 (d)— — 379 373 
Term Loan B-2, due September 30, 20261,264 1,150 1,271 1,239 
Term Loan B-3, due April 1, 2028733 674 736 722 
Term Loan B-4, due April 21, 2029 (d)750 690 — — 
DSG (a) (c):
12.750% Senior Secured Notes due 2026— — 31 17 
6.625% Senior Unsecured Notes due 2027— — 1,744 490 
5.375% Senior Secured Notes due 2026— — 3,050 1,525 
Term Loan, due August 24, 2026— — 3,226 1,484 
Debt of variable interest entities (c)9 9 9 9 
Debt of non-media subsidiaries (c)17 17 17 17 
Level 3:
Investments in equity securities (f)152 152 282 282 
 As of June 30, 2023As of December 31, 2022
 Face ValueFair ValueFace ValueFair Value
Level 1:
Investments in equity securities (a)N/A$— N/A$6 
Money market fundsN/A348 N/A741 
Deferred compensation assets$43 43 $41 41 
Deferred compensation liabilities40 40 35 35 
Level 2:
Investments in equity securities (a) (b)N/A— N/A153 
Interest rate swap (c)N/A8 N/A— 
STG (d):
5.500% Senior Notes due 2030485 281 500 347 
5.125% Senior Notes due 2027278 237 282 230 
4.125% Senior Secured Notes due 2030737 487 750 560 
Term Loan B-2, due September 30, 20261,251 1,110 1,258 1,198 
Term Loan B-3, due April 1, 2028725 584 729 692 
Term Loan B-4, due April 21, 2029743 559 746 709 
Debt of variable interest entities (d)7 7 8 8 
Debt of non-media subsidiaries (a) (d)— — 16 16 
Level 3:
Investments in equity securities (a) (e)N/A— N/A75 
N/A - Not applicable
(a)The debt of DSG, a wholly-owned subsidiary of DSIH, was deconsolidated from our balance sheetnon-media subsidiaries and the investments in equity securities were transferred to Ventures as part of the Deconsolidation. See Deconsolidation of Diamond Sports Intermediate Holdings LLC within Note 1. Nature of Operations and Summary of Significant Accounting Policies.Reorganization.
(b)Consists of unrestricted warrants to acquire marketable common equity securities. The fair value of the warrants are derived from the quoted trading prices of the underlying common equity securities less the exercise price.
(c)SBG entered into an interest rate swap effective February 7, 2023 and terminating on February 28, 2026 in order to manage a portion of SBG's exposure to variable interest rates. The swap agreement has a notional amount of $600 million, bears a fixed interest rate of 3.9%, and SBG receives a floating rate of interest based on SOFR. The fair value of the interest rate swap was an asset as of June 30, 2023. See Hedge Accounting within Note 1. Nature of Operations and Summary of Significant Accounting Policies and Interest Rate Swap within Note 3. Notes Payable, Finance Leases, and Commercial Bank Financing.
(d)Amounts are carried in ourSBG's consolidated balance sheets net of debt discount, premium, and deferred financing cost, which are excluded in the above table, of $60$51 million and $158$56 million as of June 30, 20222023 and December 31, 2021,2022, respectively.
(d)In April 2022, STG raised Term B-4 Loans in an aggregate principal amount of $750 million, the proceeds of which were used to refinance all of STG’s outstanding Term Loan B-1 due January 2024 and to redeem STG’s outstanding 5.875% senior notes due 2026. See Note 4. Notes Payable, Finance Leases, and Commercial Bank Financing.
(e)During three months ended June 30, 2022, we purchased $118 million aggregate principal amount of the STG 5.125% Notes in open market transactions for consideration of $104 million. The STG 5.125% Notes acquired during three months ended June 30, 2022 were canceled immediately following their acquisition. See Note 4. Notes Payable, Finance Leases, and Commercial Bank Financing.
(f)On November 18, 2020, weSBG entered into a commercial agreement with Bally's Corporation ("Bally's") and received warrants and options to acquire common equity in the business. During both the three and six months ended June 30, 2023 SBG recorded a fair value adjustment loss of $25 million and during the three and six months ended June 30, 2022 weSBG recorded fair value adjustment losses of $74 million and $130 million, respectively, and during the three and six months ended June 30, 2021 we recorded a fair value adjustment loss of $51 million and a gain of $52 million, respectively, related to these interests. The fair value of the warrants is primarily derived from the quoted trading prices of the underlying common equity adjusted for a 12% and 16% discount for lack of marketability ("DLOM") as of June 30, 2022 and December 31, 2021, respectively.equity. The fair value of the options is derived utilizing the Black Scholes valuation model. The most significant inputs include the trading price of the underlying common stock and the exercise price of the options, which range from $30 to $45 per share, and a DLOM of 12% and 16% as of June 30, 2022 and December 31, 2021, respectively. There are certain restrictions surrounding the sale and ownership of common stock and we have agreed not to sell any shares beneficially owned prior to the first anniversary of the agreement. We are also precluded from owning more than 4.9% of the outstanding common shares of Bally's, inclusive of shares obtained through the exercise of theshare. The warrants and options described above.were transferred to Ventures as part of the Reorganization.

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NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
The following table summarizes the changes in financial assets measured at fair value on a recurring basis and categorized as Level 3 under the fair value hierarchy for the three and six months ended June 30, 20222023 and 20212022 (in millions):
Options and Warrants
Three Months Ended June 30, 2022Six Months Ended June 30, 2022
Fair value at March 31, 2022$226 Fair value at December 31, 2021$282 
Measurement adjustments(74)Measurement adjustments(130)
Fair value at June 30, 2022$152 Fair value at June 30, 2022$152 
Options and Warrants
Three Months Ended June 30, 2023Six Months Ended June 30, 2023
Fair value at March 31, 2023$75 Fair value at December 31, 2022$75 
Measurement adjustments(25)Measurement adjustments(25)
Transfer to Ventures(50)Transfer to Ventures(50)
Fair value at June 30, 2023$— Fair value at June 30, 2023$— 
Options and Warrants
Three Months Ended June 30, 2021Six Months Ended June 30, 2021
Fair value at March 31, 2021$435 Fair value at December 31, 2020$332 
Measurement adjustments(51)Measurement adjustments52 
Fair value at June 30, 2021$384 Fair value at June 30, 2021$384 
Options and Warrants
Three Months Ended June 30, 2022Six Months Ended June 30, 2022
Fair value at March 31, 2022$226 Fair value at December 31, 2021$282 
Measurement adjustments(74)Measurement adjustments(130)
Fair value at June 30, 2022$152 Fair value at June 30, 2022$152 

12.10.             CONDENSED CONSOLIDATING FINANCIAL STATEMENTS:
 
STG is the primary obligor under the Bank Credit Agreement, the 5.125% Senior Notes due 2027, the 5.500% Senior Notes due 2030, and the 4.125% Senior Secured Notes due 2030 (collectively, the Notesnotes are referred to as the "STG Notes"). OurSinclair's Class A Common Stock and Class B Common Stock as of June 30, 2022,2023, were obligations or securities of SBGSinclair and not obligations or securities of STG. SBG is a guarantor under the STG Notes. As of June 30, 2022, our2023, SBG's consolidated total debt, net of deferred financing costs and debt discounts, of $4,276$4,206 million included $4,260$4,206 million related to STG and its subsidiaries of which weSBG guaranteed $4,227$4,176 million.
 
SBG, KDSM, LLC, a wholly-owned subsidiary of SBG, and STG’sSTG's wholly-owned subsidiaries (guarantor subsidiaries)("guarantor subsidiaries") have fully and unconditionally guaranteed, subject to certain customary automatic release provisions, all of STG’sSTG'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 (subsequent to the Reorganization), Old Sinclair (prior to the Reorganization), STG, KDSM, LLC and the guarantor subsidiaries, the direct and indirect non-guarantor subsidiaries of SBG, and the eliminations necessary to arrive at ourSBG's information on a consolidated basis andbasis. The condensed consolidating financial statements are provided pursuant to the terms of certain of ourSBG's debt agreements.

Investments in the subsidiaries of SBG (subsequent to the Reorganization), Old Sinclair (prior to the Reorganization), STG, KDSM, LLC and the guarantor subsidiaries, and the direct and indirect non-guarantor subsidiaries of SBG are presented in each column under the equity method of accounting. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted. As such, these condensed consolidating financial statements should be read in conjunction with the accompanying notes to consolidated financial statements.
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NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
CONDENSED CONSOLIDATING BALANCE SHEET
AS OF JUNE 30, 20222023
(in millions) (unaudited)

Sinclair
Broadcast
Group, Inc.		Sinclair
Television
Group, Inc.		Guarantor
Subsidiaries
and KDSM,
LLC		Non-
Guarantor
Subsidiaries		EliminationsSinclair
Consolidated
Cash and cash equivalents$32 $344 $1 $43 $— $420 
Accounts receivable, net— — 548 55 3 606 
Other current assets14 41 321 18 (55)339 
Total current assets46 385 870 116 (52)1,365 
Property and equipment, net1 31 655 49 (23)713 
Investment in equity of consolidated subsidiaries902 3,153 — — (4,055)— 
Goodwill— — 2,081 7 — 2,088 
Indefinite-lived intangible assets— — 136 14 — 150 
Definite-lived intangible assets, net— — 1,019 46 (33)1,032 
Other long-term assets480 922 417 1,292 (2,010)1,101 
Total assets$1,429 $4,491 $5,178 $1,524 $(6,173)$6,449 
Accounts payable and accrued liabilities$— $75 $326 $14 $(1)$414 
Current portion of long-term debt— 28 6 10 (1)43 
Other current liabilities2 4 126 82 (54)160 
Total current liabilities2 107 458 106 (56)617 
Long-term debt— 4,190 27 375 (359)4,233 
Other long-term liabilities721 56 1,544 323 (1,874)770 
Total liabilities723 4,353 2,029 804 (2,289)5,620 
Redeemable noncontrolling interests— — — 187 — 187 
Total Sinclair Broadcast Group equity706 138 3,149 600 (3,887)706 
Noncontrolling interests in consolidated subsidiaries— — — (67)3 (64)
Total liabilities, redeemable noncontrolling interests, and equity$1,429 $4,491 $5,178 $1,524 $(6,173)$6,449 

Sinclair
Broadcast
Group, LLC		Sinclair
Television
Group, Inc.		Guarantor
Subsidiaries
and KDSM,
LLC		Non-
Guarantor
Subsidiaries		EliminationsSBG Consolidated
Cash and cash equivalents$— $368 $— $— $— $368 
Accounts receivable, net— 1 526 17 — 544 
Other current assets18 55 94 2 (17)152 
Total current assets18 424 620 19 (17)1,064 
Property and equipment, net16 14 644 17 (2)689 
Investment in equity of consolidated subsidiaries274 3,144 — — (3,418)— 
Goodwill— — 2,015 1 — 2,016 
Indefinite-lived intangible assets— — 109 14 — 123 
Definite-lived intangible assets, net— — 707 36 (28)715 
Other long-term assets92 987 638 119 (1,449)387 
Total assets$400 $4,569 $4,733 $206 $(4,914)$4,994 
Accounts payable and accrued liabilities$5 $101 $266 $8 $(2)$378 
Current portion of long-term debt— 27 6 4 (1)36 
Other current liabilities4 2 114 21 (17)124 
Total current liabilities9 130 386 33 (20)538 
Long-term debt— 4,142 22 10 (4)4,170 
Other long-term liabilities802 56 1,183 166 (1,449)758 
Total liabilities811 4,328 1,591 209 (1,473)5,466 
Total SBG (deficit) equity(411)241 3,142 62 (3,445)(411)
Noncontrolling interests in consolidated subsidiaries— — — (65)4 (61)
Total liabilities and equity$400 $4,569 $4,733 $206 $(4,914)$4,994 
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NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
CONDENSED CONSOLIDATING BALANCE SHEET
AS OF DECEMBER 31, 20212022
(in millions)
  
 Sinclair
Broadcast
Group, Inc.		Sinclair
Television
Group, Inc.		Guarantor
Subsidiaries
and KDSM,
LLC		Non-
Guarantor
Subsidiaries		EliminationsSinclair
Consolidated
Cash and cash equivalents$2 $316 $2 $496 $— $816 
Accounts receivable, net— — 649 596 — 1,245 
Other current assets10 82 293 136 (111)410 
Total current assets12 398 944 1,228 (111)2,471 
Property and equipment, net1 31 664 161 (24)833 
Investment in equity of consolidated subsidiaries451 3,448 — — (3,899)— 
Restricted cash— — — 3 — 3 
Goodwill— — 2,081 7 — 2,088 
Indefinite-lived intangible assets— — 136 14 — 150 
Definite-lived intangible assets, net— — 1,105 4,019 (36)5,088 
Other long-term assets331 1,956 427 1,853 (2,659)1,908 
Total assets$795 $5,833 $5,357 $7,285 $(6,729)$12,541 
Accounts payable and accrued liabilities$31 $85 $295 $279 $(35)$655 
Current portion of long-term debt— 20 5 45 (1)69 
Other current liabilities2 6 155 392 (77)478 
Total current liabilities33 111 455 716 (113)1,202 
Long-term debt915 4,317 33 8,488 (1,482)12,271 
Investment in deficit of consolidated subsidiaries1,605 — — — (1,605)— 
Other long-term liabilities12 69 1,426 468 (1,398)577 
Total liabilities2,565 4,497 1,914 9,672 (4,598)14,050 
Redeemable noncontrolling interests— — — 197 — 197 
Total Sinclair Broadcast Group (deficit) equity(1,770)1,336 3,443 (2,644)(2,135)(1,770)
Noncontrolling interests in consolidated subsidiaries— — — 60 4 64 
Total liabilities, redeemable noncontrolling interests, and equity$795 $5,833 $5,357 $7,285 $(6,729)$12,541 

 Sinclair
Broadcast
Group, Inc.		Sinclair
Television
Group, Inc.		Guarantor
Subsidiaries
and KDSM,
LLC		Non-
Guarantor
Subsidiaries		EliminationsOld Sinclair Consolidated
Cash and cash equivalents$47 $750 $1 $86 $— $884 
Accounts receivable, net— — 555 57 — 612 
Other current assets32 42 159 19 (65)187 
Total current assets79 792 715 162 (65)1,683 
Property and equipment, net— 31 668 51 (22)728 
Investment in equity of consolidated subsidiaries1,093 3,463 — — (4,556)— 
Goodwill— — 2,081 7 — 2,088 
Indefinite-lived intangible assets— — 136 14 — 150 
Definite-lived intangible assets, net— — 935 42 (31)946 
Other long-term assets411 938 512 573 (1,325)1,109 
Total assets$1,583 $5,224 $5,047 $849 $(5,999)$6,704 
Accounts payable and accrued liabilities$— $80 $300 $18 $(1)$397 
Current portion of long-term debt— 28 6 5 (1)38 
Other current liabilities4 8 139 87 (65)173 
Total current liabilities4 116 445 110 (67)608 
Long-term debt— 4,181 24 26 (4)4,227 
Other long-term liabilities831 52 1,120 314 (1,323)994 
Total liabilities835 4,349 1,589 450 (1,394)5,829 
Redeemable noncontrolling interests— — — 194 — 194 
Total Old Sinclair equity748 875 3,458 275 (4,608)748 
Noncontrolling interests in consolidated subsidiaries— — — (70)3 (67)
Total liabilities, redeemable noncontrolling interests, and equity$1,583 $5,224 $5,047 $849 $(5,999)$6,704 
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NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME
FOR THE THREE MONTHS ENDED JUNE 30, 2023
(in millions) (unaudited)
 Sinclair
Broadcast
Group, LLC		Sinclair
Television
Group, Inc.		Guarantor
Subsidiaries
and KDSM,
LLC		Non-
Guarantor
Subsidiaries		EliminationsSBG Consolidated
Net revenue$— $15 $713 $33 $(18)$743 
Media programming and production expenses— 4 377 27 (11)397 
Selling, general and administrative expenses13 49 181 4 (5)242 
Depreciation, amortization and other operating expenses1 1 85 15 (2)100 
Total operating expenses14 54 643 46 (18)739 
Operating (loss) income(14)(39)70 (13)— 4 
Equity in (loss) earnings of consolidated subsidiaries(88)54 — — 34 — 
Interest expense— (75)— 2 (3)(76)
Other (expense) income(1)17 — (69)— (53)
Total other (expense) income(89)(4)— (67)31 (129)
Income tax benefit (provision)2 19 (15)20 — 26 
Net (loss) income(101)(24)55 (60)31 (99)
Net income attributable to the noncontrolling interests— — — (2)— (2)
Net (loss) income attributable to SBG$(101)$(24)$55 $(62)$31 $(101)
Comprehensive (loss) income$(101)$(15)$55 $(60)$31 $(90)
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SINCLAIR BROADCAST GROUP, LLC
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME
FOR THE THREE MONTHS ENDED JUNE 30, 2022
(in millions) (unaudited)
 Sinclair
Broadcast
Group, Inc.		Sinclair
Television
Group, Inc.		Guarantor
Subsidiaries
and KDSM,
LLC		Non-
Guarantor
Subsidiaries		EliminationsSinclair
Consolidated
Net revenue$— $11 $820 $46 $(40)$837 
Media programming and production expenses— 2 383 36 (18)403 
Selling, general and administrative expenses3 38 206 6 (20)233 
Depreciation, amortization and other operating expenses1 1 84 12 (4)94 
Total operating expenses4 41 673 54 (42)730 
Operating (loss) income(4)(30)147 (8)2 107 
Equity in (loss) earnings of consolidated subsidiaries(12)119 — — (107)— 
Interest expense— (53)— (4)3 (54)
Other income (expense)6 (2)— (103)— (99)
Total other (expense) income(6)64 — (107)(104)(153)
Income tax (provision) benefit(1)10 (27)58 — 40 
Net (loss) income(11)44 120 (57)(102)(6)
Net income attributable to the redeemable noncontrolling interests— — — (5)— (5)
Net (loss) income attributable to Sinclair Broadcast Group$(11)$44 $120 $(62)$(102)$(11)
Comprehensive (loss) income$(11)$44 $120 $(57)$(102)$(6)

 Sinclair
Broadcast
Group, Inc.		Sinclair
Television
Group, Inc.		Guarantor
Subsidiaries
and KDSM,
LLC		Non-
Guarantor
Subsidiaries		EliminationsOld Sinclair Consolidated
Net revenue$— $11 $820 $46 $(40)$837 
Media programming and production expenses— 2 383 36 (18)403 
Selling, general and administrative expenses3 38 206 6 (20)233 
Depreciation, amortization and other operating expenses1 1 84 12 (4)94 
Total operating expenses4 41 673 54 (42)730 
Operating (loss) income(4)(30)147 (8)2 107 
Equity in (loss) earnings of consolidated subsidiaries(12)119 — — (107)— 
Interest expense— (53)— (4)3 (54)
Other income (expense)6 (2)— (103)— (99)
Total other (expense) income(6)64 — (107)(104)(153)
Income tax (provision) benefit(1)10 (27)58 — 40 
Net (loss) income(11)44 120 (57)(102)(6)
Net income attributable to the redeemable noncontrolling interests— — — (5)— (5)
Net (loss) income attributable to Old Sinclair$(11)$44 $120 $(62)$(102)$(11)
Comprehensive (loss) income$(11)$44 $120 $(57)$(102)$(6)

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SINCLAIR BROADCAST GROUP, LLC
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME
FOR THE THREESIX MONTHS ENDED JUNE 30, 20212023
(in millions) (unaudited)
 Sinclair
Broadcast
Group, Inc.		Sinclair
Television
Group, Inc.		Guarantor
Subsidiaries
and KDSM,
LLC		Non-
Guarantor
Subsidiaries		EliminationsSinclair
Consolidated
Net revenue$— $28 $744 $886 $(46)$1,612 
Media programming and production expenses— 1 359 999 (14)1,345 
Selling, general and administrative expenses4 32 173 91 (30)270 
Depreciation, amortization and other operating expenses— 2 85 90 (2)175 
Total operating expenses4 35 617 1,180 (46)1,790 
Operating (loss) income(4)(7)127 (294)— (178)
Equity in (loss) earnings of consolidated subsidiaries(243)116 — — 127 — 
Interest expense(4)(50)— (113)7 (160)
Other (expense) income(83)9 (10)29 (4)(59)
Total other (expense) income(330)75 (10)(84)130 (219)
Income tax benefit2 22 — 45 — 69 
Net (loss) income(332)90 117 (333)130 (328)
Net income attributable to the redeemable noncontrolling interests— — — (5)— (5)
Net loss attributable to the noncontrolling interests— — — 1 — 1 
Net (loss) income attributable to Sinclair Broadcast Group$(332)$90 $117 $(337)$130 $(332)
Comprehensive (loss) income$(332)$90 $117 $(336)$130 $(331)

 Sinclair
Broadcast
Group, LLC		Sinclair
Television
Group, Inc.		Guarantor
Subsidiaries
and KDSM,
LLC		Non-
Guarantor
Subsidiaries		EliminationsSBG Consolidated
Net revenue$— $25 $1,452 $76 $(37)$1,516 
Media programming and production expenses— 7 753 61 (26)795 
Selling, general and administrative expenses38 84 368 9 (8)491 
Depreciation, amortization and other operating expenses2 2 167 37 (3)205 
Total operating expenses40 93 1,288 107 (37)1,491 
Operating (loss) income(40)(68)164 (31)— 25 
Equity in earnings of consolidated subsidiaries119 123 — — (242)— 
Interest expense— (148)(1)(1)— (150)
Other (expense) income(4)25 — (32)— (11)
Total other income (expense)115 — (1)(33)(242)(161)
Income tax benefit (provision)9 38 (38)221 — 230 
Net income (loss)84 (30)125 157 (242)94 
Net loss attributable to the redeemable noncontrolling interests— — — 4 — 4 
Net income attributable to the noncontrolling interests— — — (14)— (14)
Net income (loss) attributable to SBG$84 $(30)$125 $147 $(242)$84 
Comprehensive income (loss)$84 $(24)$125 $157 $(242)$100 
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SINCLAIR BROADCAST GROUP, LLC
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME
FOR THE SIX MONTHS ENDED JUNE 30, 2022
(in millions) (unaudited)
  
 Sinclair
Broadcast
Group, Inc.		Sinclair
Television
Group, Inc.		Guarantor
Subsidiaries
and KDSM,
LLC		Non-
Guarantor
Subsidiaries		EliminationsSinclair
Consolidated
Net revenue$— $40 $1,611 $577 $(103)$2,125 
Media programming and production expenses— 2 745 448 (34)1,161 
Selling, general and administrative expenses6 86 405 69 (66)500 
Gain on deconsolidation of subsidiary(3,357)— — — — (3,357)
Depreciation, amortization and other operating expenses1 3 168 82 (6)248 
Total operating (gains) expenses(3,350)91 1,318 599 (106)(1,448)
Operating income (loss)3,350 (51)293 (22)3 3,573 
Equity in (loss) earnings of consolidated subsidiaries(50)219 — — (169)— 
Interest expense(4)(97)(1)(79)12 (169)
Other income (expense)10 (1)3 (153)(6)(147)
Total other (expense) income(44)121 2 (232)(163)(316)
Income tax (provision) benefit(730)30 (74)127 — (647)
Net income (loss)2,576 100 221 (127)(160)2,610 
Net income attributable to the redeemable noncontrolling interests— — — (9)— (9)
Net income attributable to the noncontrolling interests— — — (25)— (25)
Net income (loss) attributable to Sinclair Broadcast Group$2,576 $100 $221 $(161)$(160)$2,576 
Comprehensive income (loss)$2,576 $100 $221 $(124)$(160)$2,613 

 Sinclair
Broadcast
Group, Inc.		Sinclair
Television
Group, Inc.		Guarantor
Subsidiaries
and KDSM,
LLC		Non-
Guarantor
Subsidiaries		EliminationsOld Sinclair Consolidated
Net revenue$— $40 $1,611 $577 $(103)$2,125 
Media programming and production expenses— 2 745 448 (34)1,161 
Selling, general and administrative expenses6 86 405 69 (66)500 
Gain on deconsolidation of subsidiary(3,357)— — — — (3,357)
Depreciation, amortization and other operating expenses1 3 168 82 (6)248 
Total operating (gains) expenses(3,350)91 1,318 599 (106)(1,448)
Operating income (loss)3,350 (51)293 (22)3 3,573 
Equity in (loss) earnings of consolidated subsidiaries(50)219 — — (169)— 
Interest expense(4)(97)(1)(79)12 (169)
Other income (expense)10 (1)3 (153)(6)(147)
Total other (expense) income(44)121 2 (232)(163)(316)
Income tax (provision) benefit(730)30 (74)127 — (647)
Net income (loss)2,576 100 221 (127)(160)2,610 
Net income attributable to the redeemable noncontrolling interests— — — (9)— (9)
Net income attributable to the noncontrolling interests— — — (25)— (25)
Net income (loss) attributable to Old Sinclair$2,576 $100 $221 $(161)$(160)$2,576 
Comprehensive income (loss)$2,576 $100 $221 $(124)$(160)$2,613 
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NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOMECASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 20212023
(in millions) (unaudited)
  
 Sinclair
Broadcast
Group, Inc.		Sinclair
Television
Group, Inc.		Guarantor
Subsidiaries
and KDSM,
LLC		Non-
Guarantor
Subsidiaries		EliminationsSinclair
Consolidated
Net revenue$— $55 $1,449 $1,704 $(85)$3,123 
Media programming and production expenses— 2 707 1,683 (24)2,368 
Selling, general and administrative expenses7 90 339 165 (57)544 
Depreciation, amortization and other operating expenses— 4 159 195 (4)354 
Total operating expenses7 96 1,205 2,043 (85)3,266 
Operating (loss) income(7)(41)244 (339)— (143)
Equity in (loss) earnings of consolidated subsidiaries(288)204 — — 84 — 
Interest expense(7)(92)(1)(224)13 (311)
Other (expense) income(63)14 (22)152 (7)74 
Total other (expense) income(358)126 (23)(72)90 (237)
Income tax benefit (provision)21 29 (15)43 — 78 
Net (loss) income(344)114 206 (368)90 (302)
Net income attributable to the redeemable noncontrolling interests— — — (9)— (9)
Net income attributable to the noncontrolling interests— — — (33)— (33)
Net (loss) income attributable to Sinclair Broadcast Group$(344)$114 $206 $(410)$90 $(344)
Comprehensive (loss) income$(344)$114 $206 $(363)$90 $(297)
Sinclair
Broadcast
Group, LLC		Sinclair
Television
Group, Inc.		Guarantor
Subsidiaries
and KDSM,
LLC		Non-
Guarantor
Subsidiaries		EliminationsSBG Consolidated
NET CASH FLOWS (USED IN) FROM OPERATING ACTIVITIES$(74)$(115)$91 $221 $(1)$122 
NET CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES
Acquisition of property and equipment— (2)(38)(2)1 (41)
Purchases of investments(4)— (21)(12)— (37)
Distributions from investments196 — — 8 — 204 
Other, net— — 3 1 — 4 
Net cash flows from (used in) investing activities192 (2)(56)(5)1 130 
NET CASH FLOWS USED IN FINANCING ACTIVITIES      
Repayments of notes payable, commercial bank financing and finance leases— (33)(3)(1)— (37)
Repurchase of outstanding Old Sinclair Class A Common Stock(153)— — — — (153)
Dividends paid on Old Sinclair Class A and Class B Common Stock(18)— — — — (18)
Redemption of redeemable subsidiary preferred equity— — — (190)— (190)
Distributions to member(250)— — (110)— (360)
Distributions to noncontrolling interests— — — (7)— (7)
Increase (decrease) in intercompany payables259 (232)(33)6 — — 
Other, net(3)— — — — (3)
Net cash flows used in financing activities(165)(265)(36)(302)— (768)
NET (DECREASE) INCREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH(47)(382)(1)(86)— (516)
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, beginning of period47 750 1 86 — 884 
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, end of period$— $368 $— $— $— $368 


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SINCLAIR BROADCAST GROUP, LLC
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2022
(in millions) (unaudited)
  
Sinclair
Broadcast
Group, Inc.		Sinclair
Television
Group, Inc.		Guarantor
Subsidiaries
and KDSM,
LLC		Non-
Guarantor
Subsidiaries		EliminationsSinclair
Consolidated
NET CASH FLOWS (USED IN) FROM OPERATING ACTIVITIES$(111)$(96)$616 $(206)$4 $207 
NET CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES
Acquisition of property and equipment— (2)(43)(2)2 (45)
Spectrum repack reimbursements— — 2 — — 2 
Proceeds from the sale of assets— — 5 4 — 9 
Deconsolidation of subsidiary cash— — — (315)— (315)
Purchases of investments(44)(1)(3)(13)— (61)
Distributions from investments60 — 10 11 — 81 
Net cash flows from (used in) investing activities16 (3)(29)(315)2 (329)
NET CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES      
Proceeds from notes payable and commercial bank financing— 728 — — — 728 
Repayments of notes payable, commercial bank financing and finance leases— (841)(3)(1)— (845)
Repurchase of outstanding Class A Common Stock(104)— — — — (104)
Dividends paid on Class A and Class B Common Stock(36)— — — — (36)
Dividends paid on redeemable subsidiary preferred equity— — — (3)— (3)
Distributions to noncontrolling interests— — — (5)— (5)
Increase (decrease) in intercompany payables269 248 (585)74 (6)— 
Other, net(4)(8)— — — (12)
Net cash flows from (used in) financing activities125 127 (588)65 (6)(277)
NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH30 28 (1)(456)— (399)
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, beginning of period2 316 2 499 — 819 
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, end of period$32 $344 $1 $43 $— $420 

 Sinclair
Broadcast
Group, Inc.		Sinclair
Television
Group, Inc.		Guarantor
Subsidiaries
and KDSM,
LLC		Non-
Guarantor
Subsidiaries		EliminationsOld Sinclair Consolidated
NET CASH FLOWS (USED IN) FROM OPERATING ACTIVITIES$(111)$(96)$616 $(206)$4 $207 
NET CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES
Acquisition of property and equipment— (2)(43)(2)2 (45)
Deconsolidation of subsidiary cash— — — (315)— (315)
Purchases of investments(44)(1)(3)(13)— (61)
Distributions from investments60 — 10 11 — 81 
Other, net— — 7 4 — 11 
Net cash flows from (used in) investing activities16 (3)(29)(315)2 (329)
NET CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES     
Proceeds from notes payable and commercial bank financing— 728 — — — 728 
Repayments of notes payable, commercial bank financing and finance leases— (841)(3)(1)— (845)
Repurchase of outstanding Old Sinclair Class A Common Stock(104)— — — — (104)
Dividends paid on Old Sinclair Class A and Class B Common Stock(36)— — — — (36)
Dividends paid on redeemable subsidiary preferred equity— — — (3)— (3)
Distributions to noncontrolling interests— — — (5)— (5)
Increase (decrease) in intercompany payables269 248 (585)74 (6)— 
Other, net(4)(8)— — — (12)
Net cash flows from (used in) financing activities125 127 (588)65 (6)(277)
NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH30 28 (1)(456)— (399)
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, beginning of period2 316 2 499 — 819 
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, end of period$32 $344 $1 $43 $— $420 

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CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2021
(in millions) (unaudited)
 Sinclair
Broadcast
Group, Inc.		Sinclair
Television
Group, Inc.		Guarantor
Subsidiaries
and KDSM,
LLC		Non-
Guarantor
Subsidiaries		EliminationsSinclair
Consolidated
NET CASH FLOWS (USED IN) FROM OPERATING ACTIVITIES$(11)$(72)$337 $(268)$2 $(12)
NET CASH FLOWS USED IN INVESTING ACTIVITIES
Acquisition of property and equipment— — (27)(13)2 (38)
Spectrum repack reimbursements— — 18 — — 18 
Proceeds from the sale of assets— — 30 9 — 39 
Purchases of investments(6)(10)(25)(123)— (164)
Other, net— — (3)7 — 4 
Net cash flows used in investing activities(6)(10)(7)(120)2 (141)
NET CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES     
Proceeds from notes payable and commercial bank financing— 341 — 16 — 357 
Repayments of notes payable, commercial bank financing and finance leases— (352)(3)(30)— (385)
Dividends paid on Class A and Class B Common Stock(30)— — — — (30)
Dividends paid on redeemable subsidiary preferred equity— — — (4)— (4)
Distributions to noncontrolling interests, net— — — (50)— (50)
Distributions to redeemable noncontrolling interests— — — (5)— (5)
Increase (decrease) in intercompany payables62 173 (324)93 (4)— 
Other, net(15)(1)— (8)— (24)
Net cash flows from (used in) financing activities17 161 (327)12 (4)(141)
NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH— 79 3 (376)— (294)
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, beginning of period— 458 — 804 — 1,262 
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, end of period$— $537 $3 $428 $— $968 

13.SUBSEQUENT EVENTS:

In August 2022, our Board of Directors declared a quarterly dividend of $0.25 per share, payable on September 15, 2022 to holders of record at the close of business on September 1, 2022.




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ITEM 2.  MANAGEMENT’SMANAGEMENT'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 (the "Securities Act"), 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

•The suspension, and possible cancellation, of tennis tournaments;
•the need to reimburse Distributors affiliation fees related to canceled tennis tournaments;
•loss of advertising revenue due to (i) reluctance of advertisers to purchase advertising spots due to reduced consumer spending as a result of shelter in place and stay at home orders, or lower audience engagement, (ii) potential reduced need for advertisers to advertise for certain goods or services with low supply, due to interruptions in the supply chain, and (iii) adverse business conditions affecting our customers, including our advertisers’ going out of business;
•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 deterioration 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 interruption to global supply chains caused by COVID-19 could impact our ability to acquire and replace equipment necessary for the continuity of our business;
•the potential effects of COVID-19 on our workforce, suppliers and advertisers including the impact in our operations because employees either contract COVID-19 or leave the workforce, increased health care cost, increased wages due to wage inflation and an inability to attract and retain a quality workforce;
•the potential effects of COVID-19 on the economy, including increased inflation, that may cause a reduction in consumer spending; and
•cybersecurity and operational risks as a result of work-from-home arrangements.

Industry risks
•The business conditions of our advertisers, particularly in the political, automotive and service categories;
•the performance of networks and syndicators that provide us with programming content, as well as the performance of internally originated programming;
•subscriber churn due to the impact of technological changes, the proliferation of over-the-top ("OTT") direct to consumer platforms, and economic conditions on consumers desire to pay for subscription services;
•the loss of appeal of our local news, network content, syndicated program content and sports programming, which may be unpredictable;
•the availability and cost of programming from networks and syndicators, as well as the cost of internally originated programming;
•the availability and cost of rights to air professional tennis tournaments;
•our relationships with networks and their strategies to distribute their programming via means other than their local television affiliates, such as OTT or direct-to-consumer content;
•labor disputes and legislation and other union activity associated with film, acting, writing, and other guilds;
•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 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 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 Distributors to coordinate and determine local advertising rates as a consortium;
•the operation of low power devices in the broadcast spectrum, which could interfere with our broadcast; and
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•the impact of Distributors and OTTs offering "skinny" programming bundles that may not include television broadcast stations or other programming that we distribute.

Regulatory risks

•The effects of the FCC's National Broadband Plan, the impact of the repacking of our broadcasting spectrum, as a result of the incentive auction, within a limited 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 ability to compete effectively (including regulations relating to JSA, SSA, cross ownership rules, the national ownership cap and the UHF discount), 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 which may restrict a television station's retransmission consent 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; and
•the potential impact from the elimination of rules prohibiting mergers of the four major television networks.

Risks specific to us
•The impact of the war in Ukraine including related disruption to supply chains and the increased price of energy, all of which affect our operations as well as those of our advertisers;
•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 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 with favorable terms;
•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 and comply with laws and regulations that apply to them;
•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, as well as any other requests for FCC approval;
•our ability to identify media business investment opportunities and to successfully integrate any acquired businesses, as well as the success of our new content and distribution initiatives in a competitive environment, including CHARGE!, TBD, Comet, STIRR, other original programming, mobile DTV and FAST channels;
•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 ability to generate synergies and leverage new revenue opportunities;
•changes in the makeup of the population in the areas where our stations are located;
•our ability to effectively respond to technology affecting our industry;
•our ability to deploy NEXTGEN TV nationwide;
•the strength of ratings for our local news broadcasts including our news sharing arrangements;
•the results of prior year tax audits by taxing authorities; and
•our ability to monetize our investments in real estate, venture capital and private equity holdings, and direct strategic investments in companies.

General risks
•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;
•acts of violence or war, such as the war in Ukraine, and other geopolitical events;
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•natural disasters and pandemics that impact our employees, Distributors, advertisers, suppliers, stations and networks; and
•cybersecurity incidents, data privacy, and other information technology failures have, and in the future, may, adversely affect us and disrupt our operations.
Other matters set forth in this report, 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, 2021, 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 Management’sManagement's Discussion and Analysis provides qualitative and quantitative information about ourSinclair's and SBG's financial performance and condition and should be read in conjunction with ourSinclair's and SBG's consolidated financial statements and the accompanying notes to those statements. This discussion consists of the following sections:
 
Summary of Significant Events — financial events during the three months ended June 30, 20222023 and through the date this Report on Form 10-Q is filed.

Results of Operations — an analysis of ourSinclair's and SBG's revenues and expenses for the three and six months ended June 30, 20222023 and 2021.2022.
 
Liquidity and Capital Resources — a discussion of ourSinclair's and SBG's primary sources of liquidity and an analysis of ourSinclair's and SBG's cash flows from or used in operating activities, investing activities, and financing activities during the three and six months ended June 30, 2022.2023.

Summary of Significant EventsSUMMARY OF SIGNIFICANT EVENTS

Transactions
•In May 2022, we sold certain assets of Ring of Honor Entertainment, including the wrestling promotion’s extensive video library dating back to 2002, brand assets, intellectual property, production equipment, and more, to an affiliate of All Elite Wrestling.

Content and Distribution
•In April 2022, we2023, Sinclair announced that we and Charter Communications, Inc. reached a comprehensive distribution agreement for continuedwith YouTube TV to add carriage of our owned localSinclair's Tennis Channel and T2 and SBG's CHARGE! and TBD to YouTube TV's service offerings and to extend YouTube TV's existing carriage of SBG's CBS and MyNetworkTV affiliated television broadcast stations and Tennis Channel.stations.
•In April 2023, SBG entered into an agreement with Hulu to resume carriage of SBG's ABC stations.
•In June 2022, we2023, SBG reached an agreement with Smith Entertainment Group, parent company of the Utah Jazz, to make KJZZ "The Home of the Utah Jazz," enabling fans within the Jazz's local broadcast market to watch all non-nationally televised exclusive Jazz games on the over-the-air, local TV station.
•In July 2023, Sinclair announced that our free over-the-air national multicast television networks, COMET,a distribution agreement with Hulu to add carriage of Sinclair's Tennis Channel and T2 and SBG's Comet and CHARGE! and TBD, will add, by September, over 13 million new TV households to their existing footprints.Hulu's service offerings beginning in January 2024.

Environmental, Social, and Governance
•In April 2022, we nominated the renowned Dr. Ben Carson, an experienced board director, former United States Presidential primary candidateTo date in 2023, SBG's newsrooms have won a total of 223 journalism awards, including 23 RTDNA Regional Edward R. Murrow awards, three National Headliner awards, and former Secretary of the U.S. Department of Housingtwo Investigative Reporters and Urban Development, for election to our Board of Directors, as we continue to seek to add diversity to our leadership. In June 2022, Dr. Carson was elected to our Board of Directors.Editors awards.
•In April 2022,2023, SBG announced that Project Baltimore, the special investigative reporting unit of WBFF/Fox 45 News, was honored by Investigative Reporters and Editors ("IRE") for its reporting on Baltimore’s failure in itsBaltimore's public school system. This was the fourth consecutive yearsystem, exposing how Baltimore City Schools denied students with disabilities a Sinclair newsroom has beenproper education, and in doing so, honored. In addition, KUTV in Salt Lake City was an IRE finalist forviolated their investigation into the systematic failures within Utah’s probation and parole system. Over the last three years, our newsrooms have won a total of over 1,000 journalism awards.federal education rights.
•In April 2023, Sinclair and SBG celebrated our first Sinclair Day of Service whereby all employees were encouraged to volunteer that day for charitable causes. Thousands of employees eagerly turned out to help out in their communities.
•In May 2023, Sinclair published its 2022 we launched "Sinclair Green: Battery Recycling,Environmental, Social and Governance report, detailing ESG achievements in 2022 and progress toward its longstanding ESG goals and commitments.
•In May 2023, SBG announced that "Hate Rising: Antisemitism in America," a promotional campaign which ran60-minute special, will initially air on WPEC and be available across SBG's stations throughout the month,summer, providing an unfiltered look at the rise of antisemitism in conjunctionAmerica, examining how the country is combating it through awareness, education, and legislation.
•In July 2023, Sinclair announced a partnership with Earth Month, encouraging our employeesthe National Diaper Bank Network to launch Sinclair Cares: Summer Diaper Drive, a nationwide campaign to create awareness, provide assistance, and viewers to recycle household batteries atbuild a Batteries Plus location or through their local municipality. In addition, we began a pilot programcommunity to reduce diaper need in the amountUS.
•In July 2023, SBG announced that scholarships were awarded to 15 university students as a part of batteries we use and to recycle our battery waste.SBG's annual Diversity Scholarship program.

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NextGen Broadcasting (ATSC 3.0)
•In April 2022, we raised over $215,000, including2023, Sinclair and its partners CAST.ERA, SK Telecom, and Saankhya Labs, announced they will build and operate an innovative and interconnected broadcast platform to provide commercial services and solutions for national data distribution using NextGen Broadcast (ATSC 3.0) network technology. The NextGen Broadcast Data Distribution Core Network will provide a $50,000 donation from Sinclair, through "Sinclair Cares: Ukraine Relief," a fundraising partnership with Global Red Cross to help with their humanitarian relief efforts in Ukraine and neighboring countries.wireless broadcast backbone for IP (Internet Protocol) data delivery across the country.
•In April 2022, our television stations were honored with a total2023, the Metropolitan Washington Council of six National Headliner Awards, including top honors inGovernments and Sinclair's subsidiary, ONE Media 3.0, launched the Public Servicenation's first pilot project to use Next Generation Broadcast to disseminate Advanced Emergency Information. The pilot program provides an efficient, instantaneous and Health/Science categories.simultaneous delivery of emergency messaging sent by local governments to all users for free, utilizing the over-the-air broadcast platform. The pilot also demonstrated delivery of enhanced, rich media supplements to those emergency messages that meet its newsworthy criteria.
•In May 2022, we announced that our newsrooms received a total of 22 Regional Edward R. Murrow awards, including WGME/Portland, which was honored with the award for Overall Excellence, as well as an award for WCIV/Charleston's podcast Unsolved Carolina, which focuses on true crime, unsolved mysteries and cold cases in the local area and beyond, the first time Sinclair's podcast content has been honored with a Murrow award.
•In June 2022, we launched2023, Sinclair, Cares: Summer Hunger Relief, which raised approximately $180,000, including $25,000 from Sinclair, helping provide approximately 1.8 million meals to children and families across the U.S.
•In July 2022, we announced that we awarded $50,000 in tuition assistance as part of our annual Diversity Scholarship program, aiming to invest in the future of the broadcast industry while helping students from diverse backgrounds. The program, started in 2013, was expanded nationally this year.
•To date in 2022, our newsrooms have won a total of 240 journalism awards.

NEXTGEN TV
•In April 2022, we and USSI Global announced a partnership to offer the nation’s first commercial datacasting service using the NextGen Broadcast standard ("ATSC 3.0"). The pilot program will deliver local content, advertising, and data files to the rapidly growing Electric Vehicle Charging station market.
•In August 2022, we announced that we entered into Memorandums of Understanding (MOUs) with two top Korean broadcast networks - Korean Broadcast Systems (KBS) and Munhwa Broadcasting Corp (MBC) - to collaborate on the development and implementation of NextGen broadcast models and technology in both the U.S. and Korea.
•In 2022, we, in coordination with other broadcasters, and led by ourBitPath, its joint venture BitPath,with another broadcaster, have deployed NEXTGENNextGen TV, powered by ATSC 3.0, in our tenthe 4 additional markets below. This brings the total number of our markets in which NEXTGENNextGen TV has been deployed to 32:41:
MonthMarketNumber of StationsCompany Stations
January 2022March 2023Green Bay, WIRochester, NY4
WHAM-TV(a) (ABC), WUHF (FOX)
March 2023Des Moines, IA4KDSM-TV (FOX)
June 2023South Bend, IN5WLUK-TV (FOX), WCWF (CW)WSBT-TV (CBS and FOX)
March 2022July 2023West Palm Beach, FL5WPEC (CBS), WWHB-CD (Azteca)
March 2022Charleston, SC5WCIV (ABC)
March 2022Flint, MIReno, NV5
WSMHKRXI-TV (FOX), WEYI-TVKRNV-DT(a) (NBC), WBSF(a) (CW)
March 2022Albany, NY5WRGB (CBS), WCWN (CW)
April 2022Richmond-Petersburg, VA7WRLH-TV (FOX)
April 2022Omaha, NE5
KPTM (FOX), KXVOand KNSN-TV(b) (TBD)
June 2022Greenville, SC5
WLOS (ABC), WMYA(b) (MNT)
June 2022Fresno / Visalia, CA5KMPH-TV (FOX), KFRE-TV (CW)
June 2022San Antonio, TX4
KABB (FOX), WOAI (NBC), KMYS(a) (DABL)(MyNet)
(a)The license and programming assets for these stationsthis station are currently owned by a third party. We provideSBG provides certain non-programming related sales, operational, and administrative services to these stationsthis station pursuant to a service agreements,agreement, such as JSAsa JSA and SSAs.SSA.
(b)The license assets for these stations are currently owned by a third party. We provideSBG provides programming, sales, operational, and administrative services to these stations pursuant to certain service agreements, such as LMAs.

Financing, Capital Allocation, and Shareholder Returns
•For the six months ended June 30, 2022, we2023, Sinclair repurchased approximately four8.8 million shares of Class A Common Stock for $104$151 million. As of August 4, 2022, we repurchased an additional 489,051 shares of Class A Common Stock, for $10 million since June 30, 2022. TheAll shares were repurchased under an SEC Rule 10b5-1 plan.
•In April 2022, we amended the Bank Credit Agreement to raise Term B-4 LoansMay 2023, Sinclair declared a quarterly dividend of $0.25 per share and in August 2023, Sinclair declared a quarterly dividend of $0.25 per share.
•In June and July 2023, STG purchased an aggregate $32 million of principal across multiple tranches of debt in the amount of $750 million in order to refinance all outstanding Term B-1 loans and to redeem STG’s outstanding 5.875% Senior Notes due 2026. The amendment also extended the maturity of $612.5 million of revolving commitments to April 21, 2027.open market for $21 million.

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•During the three months ended June 30, 2022, we purchased $118 million aggregate principal amount of the STG 5.125% Notes in open market transactions for consideration of $104 million.
•In May 2022 and August 2022, we declared a quarterly cash dividend of $0.25 per share, an increase of 25% over 2021 dividends.

Other Events
•In May 2022, Ryan Moore was named as Chief Revenue Officer/SVP of Digital Sales and Sports and Scott Ehrlich was named to the newly created position of Chief Innovation Officer.
•In June 2022, at our Annual Shareholders' Meeting, our shareholders elected the nine nominated Directors, ratified the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2022, approved our 2022 Stock Incentive Plan, and approved the amendment to the our Amended and Restated Articles of Incorporation to provide for the exculpation of directors and officers.

SINCLAIR, INC. RESULTS OF OPERATIONS
 
Any references to the first, third, or fourth quarters are to the three months ended March 31, September 30, or December 31, respectively, for the year being discussed. For the quarter ended June 30, 2022,2023, we have onetwo reportable segment, "broadcast,"segments, local media and tennis that isare disclosed separately from our other and corporate activities. Prior to the Deconsolidation, we had twoone additional reportable segments, "broadcast" and "local sports," that were disclosed separately from our other and corporate activities.segment, local sports.
 
Seasonality / Cyclicality
 
The operating results of our broadcastlocal media segment 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’quarters' because advertising expenditures are increased in anticipation of certain seasonal and holiday spending by consumers.

The operating results of our local sportstennis segment wereare usually subject to usual cyclical fluctuations based ondue to the timingamount and overlapsignificance of tournaments that take place in the Major League Baseball ("MLB"), NBA, and NHL seasons. Usually,respective quarters during the second and third quarter operating results were higher than theyear. The first and fourth quarter operating results.results are usually higher than the second and third quarters' because of the amount and significance of tournaments that are played during the respective quarters.

Operating Data

The following table sets forth our consolidated operating data for the periods presented (in millions):

Three Months Ended 
 June 30,		Six Months Ended 
 June 30,		Three Months Ended 
 June 30,		Six Months Ended 
 June 30,
20222021202220212023202220232022
Media revenuesMedia revenues$831 $1,600 $2,106 $3,097 Media revenues$761 $831 $1,527 $2,106 
Non-media revenuesNon-media revenues6 12 19 26 Non-media revenues7 6 14 19 
Total revenuesTotal revenues837 1,612 2,125 3,123 Total revenues768 837 1,541 2,125 
Media programming and production expensesMedia programming and production expenses403 1,345 1,161 2,368 Media programming and production expenses413 403 811 1,161 
Media selling, general and administrative expensesMedia selling, general and administrative expenses195 234 415 447 Media selling, general and administrative expenses190 195 381 415 
Depreciation and amortization expensesDepreciation and amortization expenses67 147 188 300 Depreciation and amortization expenses73 67 138 188 
Amortization of program contract costsAmortization of program contract costs21 22 46 45 Amortization of program contract costs19 21 41 46 
Non-media expensesNon-media expenses10 14 23 31 Non-media expenses9 10 21 23 
Corporate general and administrative expensesCorporate general and administrative expenses38 36 85 97 Corporate general and administrative expenses62 38 120 85 
Gain on deconsolidation of subsidiaryGain on deconsolidation of subsidiary— — (3,357)— Gain on deconsolidation of subsidiary— — — (3,357)
Gain on asset dispositions and other, net of impairment(4)(8)(9)(22)
Operating income (loss)$107 $(178)$3,573 $(143)
Net (loss) income attributable to Sinclair Broadcast Group$(11)$(332)$2,576 $(344)
Loss (gain) on asset dispositions and other, net of impairmentLoss (gain) on asset dispositions and other, net of impairment5 (4)11 (9)
Operating (loss) incomeOperating (loss) income$(3)$107 $18 $3,573 
Net (loss) income attributable to SinclairNet (loss) income attributable to Sinclair$(89)$(11)$96 $2,576 

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The Impact of COVID-19 on our Results of Operations

Overview

As of June 30, 2022, the national state of emergency related to COVID-19 is still in effect, though states have reopened their economies at various levels and various timing and COVID-19 vaccinations are available. However, with new variants of COVID-19 being detected across multiple countries, it still remains unclear how the current trends of states reopening their economies will be impacted and what the overall impact of COVID-19 will be on our business.

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. The COVID-19 pandemic has also resulted in some workers leaving the workforce which has caused wage inflation and made it more difficult for us to find qualified employees. Furthermore, additional 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.

BROADCAST SEGMENTLocal Media Segment
 
The following table sets forth our revenue and expenses for our broadcastlocal media segment for the periods presented (in millions):

Three Months Ended June 30,Percent Change Increase / (Decrease)Six Months Ended June 30,Percent Change Increase / (Decrease) Three Months Ended June 30,Percent Change Increase / (Decrease)Six Months Ended June 30,Percent Change Increase / (Decrease)
2022202120222021 2023202220232022
Revenue:Revenue:Revenue:
Distribution revenueDistribution revenue$385 $363 6%$777 $724 7%Distribution revenue$372 $385 (3)%$753 $778 (3)%
Advertising revenue(c)Advertising revenue(c)316 280 13%598 547 9%Advertising revenue(c)293 343 (15)%589 656 (10)%
Other media revenues (a)Other media revenues (a)31 44 (30)%78 81 (4)%Other media revenues (a)34 32 6%62 80 (23)%
Media revenuesMedia revenues$732 $687 7%$1,453 $1,352 7%Media revenues$699 $760 (8)%$1,404 $1,514 (7)%
Operating Expenses:Operating Expenses:Operating Expenses:
Media programming and production expensesMedia programming and production expenses$347 $331 5%$697 $668 4%Media programming and production expenses$369 $360 2%$740 $721 3%
Media selling, general and administrative expenses (b)Media selling, general and administrative expenses (b)156 144 8%312 285 9%Media selling, general and administrative expenses (b)175 169 4%350 339 3%
Depreciation and amortization expensesDepreciation and amortization expenses60 64 (6)%120 126 (5)%Depreciation and amortization expenses67 61 10%126 122 3%
Amortization of program contract costsAmortization of program contract costs18 17 6%38 38 —%Amortization of program contract costs19 21 (10)%41 46 (11)%
Corporate general and administrative expensesCorporate general and administrative expenses33 29 14%76 84 (10)%Corporate general and administrative expenses46 34 35%78 77 1%
Non-media expensesNon-media expenses3 3 —%9 6 50%
Gain on asset dispositions and other, net of impairmentGain on asset dispositions and other, net of impairment— (3)(100)%(5)(17)(71)%Gain on asset dispositions and other, net of impairment(2)(4)(50)%(3)(8)(63)%
Operating incomeOperating income$118 $105 12%$215 $168 28%Operating income$22 $116 (81)%$63 $211 (70)%
Interest expense including amortization of debt discount and deferred financing costsInterest expense including amortization of debt discount and deferred financing costs$76 $54 41%$150 $99 52%
Gain on extinguishment of debtGain on extinguishment of debt$11 $3 n/m$11 $3 n/m
n/m - not meaningful
(a)Includes $1 million and $25 million for three andthe six months ended June 30, 2022, respectively,2023, and $27$1 million and $54$25 million for the three and six months ended June 30, 2021,2022, respectively, of intercompany revenue related to certain services provided to other and local sports, prior to the Deconsolidation, under management services agreements, which wasis eliminated in consolidation, and $14 million and $24 million of revenue for the three and six months ended June 30, 2023, respectively, and $10 million and $15 million of revenue for the three and six months ended June 30, 2022, respectively, for services provided by broadcastlocal media under management services agreements after the Deconsolidation, which is not eliminated in consolidation.
(b)Includes $21$2 million and $37$3 million for the three and six months ended June 30, 2023, respectively, and $3 million and $4 million for the three and six months ended June 30, 2022, respectively, of intercompany expense related to certain services provided to broadcastlocal media from other, which is eliminated in consolidation.
(c)Includes $1 million and $2 million for the three and six months ended June 30, 2023, respectively, and $1 million and $2 million for the three and six months ended June 30, 2022, respectively, of intercompany revenue related to certain services provided to local media from tennis, which is eliminated in consolidation.

Revenue

Distribution revenue. Distribution revenue, which includesrepresents payments from Distributors for our broadcast signals, increased $22decreased $13 million and $53$25 million for the three and six months ended June 30, 2022,2023, respectively, when compared to the same periods in 2021,2022, primarily due to an increasea decrease in contractual rates,subscribers, partially offset by a decreaseincreases in subscribers.contractual rates.

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Advertising revenue. Advertising revenue increased $36decreased $50 million and $51$67 million for the three and six months ended June 30, 2022,2023, respectively, when compared to the same periods in 2021,2022, primarily due to an increasea decrease in political advertising revenue of $49 million for the three-month period and $62 million for the six-month period, as 2022 iswas a political year, compared to 20212023 which wasis a non-political year, partially offset by a decrease to various advertising categories, primarily automotive and services.year.

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The following table sets forth our primary types of programming and their approximate percentages of advertising revenue, excluding digital revenue, for the periods presented:
Percent of Advertising Revenue (Excluding Digital) for thePercent of Advertising Revenue (Excluding Digital) for the
Three Months Ended June 30,Six Months Ended June 30,Three Months Ended June 30,Six Months Ended June 30,
20222021202220212023202220232022
Local newsLocal news40%36%37%34%Local news38%39%35%36%
Syndicated/Other programmingSyndicated/Other programming27%30%27%29%Syndicated/Other programming30%29%28%29%
Network programmingNetwork programming24%26%23%25%Network programming20%23%19%21%
Sports programmingSports programming5%5%10%9%Sports programming7%5%12%9%
Paid programmingPaid programming4%3%3%3%Paid programming5%4%6%5%

The following table sets forth our affiliate percentages of advertising revenue for the periods presented:
Percent of Advertising Revenue for the Percent of Advertising Revenue for the
Three Months Ended June 30,Six Months Ended June 30,Three Months Ended June 30,Six Months Ended June 30,
# of Channels2022202120222021 # of Channels (a)2023202220232022
ABCABC4034%32%33%31%ABC4032%33%29%30%
FOXFOX5622%23%22%24%FOX5521%21%24%21%
CBSCBS3119%19%20%20%CBS3019%18%20%19%
NBCNBC2515%13%15%13%NBC2512%14%12%15%
CWCW465%6%5%6%CW465%5%5%5%
MNTMNT404%5%4%5%MNT404%4%4%4%
Other (a)Other (a)3971%2%1%1%Other (a)4037%5%6%6%
TotalTotal635  Total639  
(a)We broadcast other programming from the following providers on our channels including: Antenna TV, Azteca, Bounce, CHARGE!, Comet, Dabl, Decades, Estrella TV, Get TV, Grit, Me TV, Quest, Rewind, Stadium, TBD, TCN, Telemundo, This TV, UniMas, Univision, and Weather.

Other Media Revenue.Revenues. Other media revenue decreased $13revenues increased $2 million for the three months ended June 30, 2022,2023, when compared to the same period in 2021,2022, primarily due to a $16 million decrease in revenue from the local sports segment and otheran increase related to providing certain services under a management services agreement. Other media revenuerevenues decreased $3$18 million for the six months ended June 30, 2022,2023, when compared to the same period in 2021,2022, primarily due to a $14 million decrease in revenue from the local sports segment and other related to providing certain services under a management services agreement, partially offset by an $8 million increase related to revenue recognized under the Bally's commercial agreement that we began performing on in the second quarter of 2021.agreement.

Expenses
 
Media programming and production expenses. Media programming and production expenses increased $16$9 million for the three months ended June 30, 2022,2023, when compared to the same period in 2021,2022, primarily due to a $13an $8 million increase in fees pursuant to network affiliation agreements.agreements as a result of increased contractual rates. Media programming and production expenses increased $29$19 million for the six months ended June 30, 2022,2023, when compared to the same period in 2021,2022, primarily due to a $27$14 million increase in fees pursuant to network affiliation agreements.agreements as a result of increased contractual rates and a $6 million increase in employee compensation cost.

Media selling, general and administrative expenses. Media selling, general and administrative expenses increased $12$6 million for the three months ended June 30, 2022,2023, when compared to the same period in 2021,2022, primarily due to a $9 million increaseincreases in third-party fulfillment costscost from our digital business and a $7 million increase in information technology costs, partially offset by a $4 million decrease in employment related costs.business. Media selling, general and administrative expenses increased $27$11 million for the six months ended June 30, 2022,2023, when compared to the same period in 2021,2022, primarily due to an
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$18 $8 million increase in third-party fulfillment costscost from our digital business and a $13$3 million increase in information technology costs, and a $2 million increase in national sales commissions, partially offset by $8 million in FCC penalties incurred by several consolidated VIEs that was recorded in our consolidated financial statements for the six months ended June 30, 2021, as discussed in Note 6. Commitments and Contingencies within the Consolidated Financial Statements.cost.

Depreciation andAmortization of program contract costs. The amortization expenses. Depreciation and amortization expensesof program contract costs decreased $4$2 million and $6$5 million for the three and six months ended June 30, 2022,2023, respectively, when compared to the same periods in 2021,2022, primarily duerelated to assets retired during 2022 and 2021.reduced renewal costs.

Corporate general and administrative expenses. See explanation under Corporate and Unallocated Expenses.
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Non-media expenses. Non-media expenses remained flat for the three months ended June 30, 2023, when compared to the same period in 2022. Non-media expenses increased $3 million for the six months ended June 30, 2023, when compared to the same period in 2022, primarily related to expenses associated with our NextGen TV broadcast platform.

Gain on asset dispositions and other, net of impairments. For the three and six months ended June 30, 20222023 we recorded gains of $1$2 million and $2$3 million, respectively, and for the three and six months ended June 30, 2021,2022 we recorded gains of $4$1 million and $18$2 million, respectively, related to reimbursements from the spectrum repack. See Note 2. Acquisitions and Dispositions of Assets within the Consolidated Financial Statements for further discussion. For the six months ended June 30, 2022, we recorded a gain on asset disposition of $3 million related to the sale of assets of one of our stations. For

Interest expense including amortization of debt discount and deferred financing costs. Interest expense increased by $22 million and $51 million for the three and six months ended June 30, 2023, when compared to the same periods in 2022, primarily due to increased interest expense related to our variable rate debt resulting from higher interest rates.

Gain on extinguishment of debt. During the three months ended June 30, 2023, we purchased $31 million in aggregate principal amount of certain STG Notes and recognized a gain of $11 million for both the three and six months ended June 30, 2023. See Bank Credit Agreement and Notes under Note 3. Notes Payable, Finance Leases, and Commercial Bank Financing within Sinclair'sConsolidated Financial Statements.

Tennis Segment

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

 Three Months Ended June 30,Percent Change Increase / (Decrease)Six Months Ended June 30,Percent Change Increase / (Decrease)
 2023202220232022
Revenue:
Distribution revenue$46 $45 2%$91 $92 (1)%
Advertising revenue14 11 27%23 19 21%
Other media revenues— 2 n/m1 3 (67)%
Media revenues$60 $58 3%$115 $114 1%
Operating Expenses:
Media programming and production expenses$40 $39 3%$62 $55 13%
Media selling, general and administrative expenses (a)12 14 (14)%22 25 (12)%
Depreciation and amortization expenses5 5 —%10 10 —%
Operating income$3 $— n/m$21 $24 (13)%
n/m - not meaningful
(a)Includes $1 million and $2 million for the three and six months ended June 30, 2023, respectively, and $1 million and $2 million for the three and six months ended June 30, 2022, respectively, of intercompany expense related to certain services provided to the local media segment, which is eliminated in consolidation.

Revenue

Distribution revenue. Distribution revenue, which is generated through fees received from Distributors for the right to distribute Tennis Channel, increased $1 million for the three months ended June 30, 2023, when compared to the same period in 2022, primarily due to an increase in subscribers as a result of increased carriage that occurred during the quarter. Distribution revenue decreased $1 million for the six months ended June 30, 2021, we recorded2023, when compared to the same period in 2022, primarily due to a gain on asset dispositiondecrease in subscribers, partially offset by increases in contractual rates.
Advertising revenue. Advertising revenue is primarily generated from sales of $12commercial time within Tennis Channel programming. Advertising revenue increased $3 million and $4 million for the three and six months ended June 30, 2023, respectively, when compared to the same periods in 2022, primarily due to an increase in the number of tournaments aired in the current periods versus the prior periods.

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Expenses

Media programming and production expenses. Media programming and production expenses increased $1 million and $7 million for the three and six months ended June 30, 2023, respectively, when compared to the same periods in 2022, primarily due to increased programming, including rights fees, and live production expenses related to various tournaments during each period, which was a result of an increase in the salenumber of two stationstournaments aired in the current periods versus the prior periods.

Media selling, general and a loss of $12administrative expenses. Media selling, general and administrative expenses decreased $2 million and $3 million for the three and six months ended June 30, 2023, respectively, when compared to the same periods in 2022, primarily due to decreases in expenses related to the write-down of the carrying value of assets of one of our stations to approximate the estimated selling price.online tennis platforms.

LOCAL SPORTS SEGMENTLocal Sports Segment

Our local sports segment reflected the results of our Bally RSNs, Marquee, and a minority interest in the YES Network prior to the Deconsolidation on March 1, 2022. See Deconsolidation of Diamond Sports Intermediate Holdings LLC under Note 1. Nature of Operations and Summary of Significant Accounting Policies within theSinclair's Consolidated Financial Statements. The Bally RSNs, Marquee, and YES Network own the exclusive rights to air, among other sporting events, the games of professional sports teams in designated local viewing areas.

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

Three Months Ended June 30,Percent Change Increase / (Decrease)Six Months Ended June 30,Percent Change Increase / (Decrease)
2022202120222021
Revenue:(b)(b)
Distribution revenue$— $666 n/m$433 $1,364 n/m
Advertising revenue— 162 n/m44 227 n/m
Other media revenue— 10 n/m5 15 n/m
     Media revenue$— $838 n/m$482 $1,606 n/m
Operating Expenses:
Media programming and production expenses$— $968 n/m$376 $1,625 n/m
Media selling, general and administrative expenses (a)— 77 n/m55 142 n/m
Depreciation and amortization expenses— 78 n/m54 162 n/m
Corporate general and administrative— 3 n/m1 6 n/m
Operating loss (a)$— $(288)n/m$(4)$(329)n/m
Income from equity method investments$— $10 n/m$10 $23 n/m
Six Months Ended June 30,
2022
Revenue:(b)
Distribution revenue$433 
Advertising revenue44 
Other media revenue5 
     Media revenue$482 
Operating Expenses:
Media programming and production expenses$376 
Media selling, general and administrative expenses (a)55 
Depreciation and amortization expenses54 
Corporate general and administrative1 
Operating loss (a)$(4)
Income from equity method investments$10 
n/m - not meaningful
(a)Includes $24 million for the six months ended June 30, 2022 and $27 million and $53 million for the three and six months ended June 30, 2021, respectively,of intercompany expense related to certain services provided by the broadcastlocal media segment under a management services agreement, which is eliminated in consolidation.
(b)Represents the activity prior to the Deconsolidation on March 1, 2022. See Deconsolidation of Diamond Sports Intermediate Holdings LLC under Note 1. Nature of Operations and Summary of Significant Accounting Policies within theSinclair's Consolidated Financial Statements.

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The decrease in the revenue and expense items noted above for the six months ended June 30, 2022 when compared to the same period in therepresent activity prior year, was primarily due to the Deconsolidation as our current period results include only two months of activity, all of which occurred inon March 1, 2022, thus there is no activity presented for periods subsequent to the first quarter of 2022, due to the Deconsolidation, versus a full period of activity in the prior year, therefore the periods are not comparable.2022. See Deconsolidation of Diamond Sports Intermediate Holdings LLC under Note 1. Nature of Operations and Summary of Significant Accounting Policies within theSinclair's Consolidated Financial Statements for further discussion.

Media revenue. Media revenue was nil for the three months ended June 30, 2022, due to the Deconsolidation, $482 million for the six months ended June 30, 2022, and $838 million and $1,606 million for the three and six months ended June 30, 2021, respectively, and is primarily derived from distribution and advertising revenue. Distribution revenue is generated through fees received from Distributors for the right to distribute the RSNs and advertising revenue is primarily generated from sales of commercial time within the RSN's programming.

Media programming and production expenses. Media programming and production expenses are primarily related to amortization of our sports programming rights with MLB, NBA, and NHL teams, and the costs of producing and distributing content for our brands including live games, pre-game and post-game shows, and backdrop programming. Media programming and production expenses were nil for the three months ended June 30, 2022, due to the Deconsolidation, $376 million for the six months ended June 30, 2022, and $968 million and $1,625 million for the three and six months ended June 30, 2021, respectively.

Media selling, general, and administrative expenses. Media selling, general, and administrative expenses were nil for the three months ended June 30, 2022, due to the Deconsolidation, $55 million for the six months ended June 30, 2022, and $77 million and $142 million for the three and six months ended June 30, 2021, respectively, and are primarily related to management service agreement fees, employee compensation, advertising expenses, and consulting fees.

Depreciation and amortization expenses. Depreciation and amortization expenses were nil for the three months ended June 30, 2022, due to the Deconsolidation, $54 million for the six months ended June 30, 2022, and $78 million and $162 million for the three and six months ended June 30, 2021, respectively, and are primarily 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 method investments was nil for the three months ended June 30, 2022, due to the Deconsolidation. For the six months ended June 30, 2022, income from equity method investments was $10 million and for the three and six months ended June 30, 2021 was $10 million and $23 million, respectively, and is primarily related to our investment in the YES Network.

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OTHEROther

The following table sets forth our revenues and expenses for our owned networks and content, non-broadcast digital and internet solutions, technical services, and non-media investments (collectively, other) for the periods presented (in millions):
Three Months Ended June 30,Percent Change Increase / (Decrease)Six Months Ended June 30,Percent Change Increase/(Decrease)Three Months Ended June 30,Percent Change Increase / (Decrease)Six Months Ended June 30,Percent Change Increase/(Decrease)
20222021202220212023202220232022
Revenue:Revenue:Revenue:
Distribution revenue$45 $49 (8)%$93 $99 (6)%
Advertising revenue70 54 30%138 94 47%
Other media revenues5 4 25%9 6 50%
Media revenues (a)Media revenues (a)$120 $107 12%$240 $199 21%Media revenues (a)$6 $15 (60)%$15 $31 (52)%
Non-media revenues (b)Non-media revenues (b)$11 $13 (15)%$25 $29 (14)%Non-media revenues (b)$8 $12 (33)%$16 $26 (38)%
Operating Expenses:Operating Expenses:Operating Expenses:
Media expenses (c)Media expenses (c)$119 $92 29%$208 $156 33%Media expenses (c)$11 $21 (48)%$25 $42 (40)%
Non-media expenses (d)Non-media expenses (d)$13 $14 (7)%$27 $32 (16)%Non-media expenses (d)$7 $9 (22)%$13 $20 (35)%
Gain on asset dispositions and other, net of impairment$(4)$(5)(20)%$(4)$(5)(20)%
Operating (loss) income$(8)$8 (200)%$10 $24 (58)%
Income (loss) from equity method investments$3 $(8)(138)%$5 $(12)(142)%
Operating lossOperating loss$(12)$(5)n/m$(24)$(8)n/m
(Loss) Income from equity method investments(Loss) Income from equity method investments$(1)$3 n/m$30 $5 n/m
 
n/m - not meaningful
(a)Media revenues for the three and six months ended June 30, 20222023 include $22$2 million and $44$3 million, respectively, and for the three and six months ended June 30, 20212022 include $4$3 million and $5$10 million, respectively, of intercompany revenuesrevenue related to certain services and sales provided to the broadcastlocal media segment, which areis eliminated in consolidation.
(b)Non-media revenues for the three and six months ended June 30, 20222023 include $5$1 million and $6$2 million, respectively, and for the three and six months ended June 30, 20212022 include $2$6 million and $3$7 million, respectively, of intercompany revenuesrevenue related to certain services and sales provided to the broadcastlocal media segment, which areis eliminated in consolidation.
(c)Media expenses for the three and six months ended June 30, 20222023 include $3$1 million and $8$2 million, respectively, and for the three and six months ended June 30, 20212022 include $4$2 million and $6 million, respectively, of intercompany expensesexpense primarily related to certain services provided by the broadcastlocal media segment, which areis eliminated in consolidation.
(d)Non-media expenses for the three and six months ended June 30, 20222023 include $3$1 million and $4$2 million, respectively, and for both the three and six months ended June 30, 20212022 include $1 million and $3 million, respectively, of intercompany expensesexpense related to certain services and sales provided by the broadcastlocal media segment, which areis eliminated in consolidation.

Revenue. Media revenue increased $13revenues decreased $9 million and $41$16 million for the three and six months ended June 30, 2022,2023, respectively, when compared to the same periods in 2021,2022, primarily due to an increasethe sale of one of our businesses and a decrease in advertising revenue related to our digital initiatives. Non-media revenuerevenues decreased $2$4 million for the three months ended June 30, 2023, when compared to the same period in 2022, primarily due to a decrease in broadcast equipment sales. Non-media revenues decreased $10 million for the six months ended June 30, 2023, when compared to the same period in 2022, primarily due to lower sales within our consolidated real estate investments and a decrease in broadcast equipment sales.

Expenses. Media expenses decreased $10 million and $4$17 million for the three and six months ended June 30, 2022,2023, respectively, when compared to the same periods in 2021,2022, primarily due to the sale of Triangle Sign & Service, LLC (Triangle)one of our businesses and a decrease in the second quarter of 2021.

Expenses. Mediaselling, general and administrative expenses increased $27related to our digital initiatives. Non-media expenses decreased $2 million and $52$7 million for the three and six months ended June 30, 2022,2023, respectively, when compared to the same periods in 2021,2022, primarily due to our digitaldecreased sales initiatives. Non-media expenses decreased $1 million and $5 million forassociated with the three andlower broadcast equipment sales.

Income from equity method investments. During the six months ended June 30, 2022, respectively, when compared to the same periods in 2021, primarily due to2023, we recognized a gain of $33 million on the sale of Triangletwo of our real estate investments, which is included in the second quarterincome from equity method investments in our consolidated statements of 2021.

operations.
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CORPORATE AND UNALLOCATED EXPENSESCorporate and Unallocated Expenses
 
The following table presents our corporate and unallocated expenses for the periods presented (in millions):
 Three Months Ended June 30,Percent Change
Increase/ (Decrease)		Six Months Ended June 30,Percent Change
Increase/ (Decrease)
 2022202120222021
Corporate general and administrative expenses$38 $36 6%$85 $97 (12)%
Gain on deconsolidation of subsidiary$— $— n/m$(3,357)$— n/m
Interest expense including amortization of debt discount and deferred financing costs$54 $160 (66)%$169 $311 (46)%
Other (expense) income, net$(105)$(61)72%$(165)$63 (362)%
Income tax (provision) benefit$40 $69 (42)%$(647)$78 (929)%
Net income attributable to the redeemable noncontrolling interests$(5)$(5)—%$(9)$(9)—%
Net loss (income) attributable to the noncontrolling interests$— $1 n/m$(25)$(33)(24)%
 Three Months Ended June 30,Percent Change
Increase/ (Decrease)		Six Months Ended June 30,Percent Change
Increase/ (Decrease)
 2023202220232022
Corporate general and administrative expenses$62 $38 63%$120 $85 41%
Gain on deconsolidation of subsidiary$— $— n/m$— $(3,357)n/m
Other expense, net$38 $105 (64)%$27 $165 (84)%
Income tax benefit (provision)$20 $40 (50)%$224 $(647)n/m
n/m - not meaningful

Corporate general and administrative expenses. The table above and the explanation that follows cover total consolidated corporate general and administrative expenses. Corporate general and administrative expenses increased in total by $2$24 million for the three months ended June 30, 2022,2023, when compared to the same period in 2021,2022, primarily due to a $5$14 million increase in employee compensation cost and an $8 million increase in legal, consulting, and regulatory costs,cost, primarily related to the litigation discussed under Note 6.5. Commitments and Contingencies within the Consolidated Financial Statements. Corporate general and administrative expenses increased by $35 million for the six months ended June 30, 2023, when compared to the same period in 2022, primarily due to an $18 million increase in employee compensation cost, a $10 million increase in legal, consulting, and regulatory cost, primarily related to the litigation discussed under Note 5. Commitments and Contingencies within the Consolidated Financial Statements, and a $2$5 million increase in information technology cost, partially offset by a $7 million decrease in employee compensation costs related to the reduction-in-force severance and termination benefits that occurred in the first quarter of 2021. Corporate general and administrativeinsurance expenses, decreased in total by $12 million for the six months ended June 30, 2022, when compared to the same period in 2021, primarily due to a $20 million decrease in employee compensation costs related to the reduction-in-force severance and termination benefits that occurred in the first quarter of 2021, as well as compensation expense savings within the current period as a result of a reduction-in-force during the first quarter of 2021, partially offset by a $3 million increase in information technology costs and a $2 million increase in legal, consulting, and regulatory costs, primarily related to the litigation discussed under our cyber insurance policy.Note 6. Commitments and Contingencies within the Consolidated Financial Statements

We expect corporate general and administrative expenses to remain flat in the third quarter of 2022 when compared to the second quarter of 2022.

Gain on deconsolidation of subsidiary. DuringFor the first quarter ofsix months ended June 30, 2022, we recorded a gain of $3,357 million related to the Deconsolidation, as discussed in Deconsolidation of Diamond Sports Intermediate Holdings LLC under Note 1. Nature of Operations and Summary of Significant Accounting Policies within theSinclair's Consolidated Financial Statements.

InterestOther expense, including amortization of debt discount and deferred financing costs.net. The table above and explanation that follows cover total consolidated interest expense. InterestOther expense decreased by $106$67 million and $142$138 million for the three and six months ended June 30, 2022,2023, respectively, when compared to the same periods in 2021,2022, primarily due to changes in the fair value of certain investments recorded at fair value. See Note 2. Other Assets within Sinclair'sConsolidated Financial Statements for further information.

Income tax benefit (provision). The effective tax rate for the three months ended June 30, 2023, was a benefit of 18.9% as compared to a benefit of 85.2% during the same period in 2022. The decrease in the effective tax rate for the three months ended June 30, 2023, as compared to the same period in 2022, is primarily due to 2022 valuation allowance recorded on deferred tax assets relating to deductibility of interest expense under the IRC Section 163(j).

The effective tax rate for the six months ended June 30, 2023, was a benefit of 189.3% compared to a provision of 19.9% during the same period in 2022. The increase in the effective tax rate for the six months ended June 30, 2023, as compared to the same period in 2022, is primarily due to a 2023 release of valuation allowance on deferred tax assets relating to deductibility of interest expense under the IRC Section 163(j).

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SINCLAIR BROADCAST GROUP, LLC RESULTS OF OPERATIONS
SINCLAIR BROADCAST GROUP, LLC RESULTS OF OPERATIONS
Any references to the first, third, or fourth quarters are to the three months ended March 31, September 30, or December 31, respectively, for the year being discussed. For the quarter ended June 30, 2023, SBG has one reportable segment, local media that is disclosed separately from SBG's other and corporate activities. Prior to the Deconsolidation, SBG had one additional reportable segment, local sports, that was disclosed separately from SBG's other and corporate activities.
Seasonality / Cyclicality
The operating results of SBG's local media segment 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.

Operating Data

The following table sets forth SBG's consolidated operating data for the periods presented (in millions):

Three Months Ended 
 June 30,		Six Months Ended 
 June 30,
2023202220232022
Media revenues$740 $831 $1,506 $2,106 
Non-media revenues3 6 10 19 
Total revenues743 837 1,516 2,125 
Media programming and production expenses397 403 795 1,161 
Media selling, general and administrative expenses184 195 375 415 
Depreciation and amortization expenses70 67 135 188 
Amortization of program contract costs19 21 41 46 
Non-media expenses7 10 19 23 
Corporate general and administrative expenses58 38 116 85 
Gain on deconsolidation of subsidiary— — — (3,357)
Loss (gain) on asset dispositions and other, net of impairment4 (4)10 (9)
Operating income$4 $107 $25 $3,573 
Net (loss) income attributable to SBG$(101)$(11)$84 $2,576 

Local Media Segment

Refer to Local Media Segment above under Sinclair, Inc.'s Results of Operations for a discussion of SBG's local media segment, which is the same as Sinclair's local media segment for all of the three and six months ended June 30, 2023 and 2022.

Local Sports Segment

Refer to Local Sports Segment above under Sinclair, Inc.'s Results of Operations for a discussion of SBG's local sports segment, which is the same as Sinclair's local sports segment for the six months ended June 30, 2022, prior to the Deconsolidation.

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SINCLAIR BROADCAST GROUP, LLC RESULTS OF OPERATIONS
Other

The following table sets forth SBG's revenues and expenses for tennis, non-broadcast digital and internet solutions, technical services, and non-media investments (collectively, other) for the periods presented, prior to the Reorganization (in millions):
Three Months Ended June 30,Percent Change Increase / (Decrease)Six Months Ended June 30,Percent Change Increase/(Decrease)
2023202220232022
Revenue:(e)(e)
Distribution revenue$31 $45 (31)%$76 $92 (17)%
Advertising revenue13 25 (48)%29 47 (38)%
Other media revenues— 4 n/m3 7 (57)%
Media revenues (a)$44 $74 (41)%$108 $146 (26)%
Non-media revenues (b)$3 $11 (73)%$11 $25 (56)%
Operating Expenses:
Media expenses (c)$38 $74 (49)%$84 $122 (31)%
Non-media expenses (d)$4 $9 (56)%$10 $20 (50)%
Loss (gain) on asset dispositions and other, net of impairment$5 $— n/m$12 $(1)n/m
Operating (loss) income$(4)$(8)(50)%$— $13 (100)%
Income from equity method investments$— $3 n/m$31 $5 n/m
n/m - not meaningful
(a)Media revenues for the three and six months ended June 30, 2023 include $2 million and $3 million, respectively, and for the three and six months ended June 30, 2022 include $3 million and $10 million, respectively, of intercompany revenue related to certain services and sales provided to the local media segment, which is eliminated in consolidation.
(b)Non-media revenues for the six months ended June 30, 2023 include $1 million, and for the three and six months ended June 30, 2022 include $2 million and $7 million, respectively, of intercompany revenue related to certain services and sales provided to the local media segment, which is eliminated in consolidation.
(c)Media expenses for the six months ended June 30, 2023 include $1 million, and for the three and six months ended June 30, 2022 include $2 million and $6 million, respectively, of intercompany expense primarily related to certain services provided by the local media segment, which is eliminated in consolidation.
(d)Non-media expenses for both the three and six months ended June 30, 2023 include $1 million, and for the three and six months ended June 30, 2022 include $1 million and $3 million, respectively, of intercompany expense related to certain services and sales provided by the local media segment, which is eliminated in consolidation.
(e)Represents the activity prior to the Reorganization on June 1, 2023. There was no reportable activity for the June period in the three and six months ended June 30, 2023 following the Reorganization on June 1, 2023. See Company Reorganization under Note 1. Nature of Operations and Summary of Significant Accounting Policies within SBG's Consolidated Financial Statements.

The decrease in DSG interestthe revenue and expense items noted above for the three and six months ended June 30, 2023, when compared to the same periods in the prior year, was primarily due to the Reorganization, as the three and six months ended June 30, 2023 results include only two and five months of activity, respectively, due to the Reorganization as the Transferred Assets were moved to Ventures effective June 1, 2023, versus a full period of activity in the prior year periods, and therefore the periods are not comparable. See Company Reorganization under Note 1. Nature of Operations and Summary of Significant Accounting Policies within SBG'sConsolidated Financial Statements.

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Corporate and Unallocated Expenses
The following table presents SBG's corporate and unallocated expenses for the periods presented (in millions):
 Three Months Ended June 30,Percent Change
Increase/ (Decrease)		Six Months Ended June 30,Percent Change
Increase/ (Decrease)
 2023202220232022
Corporate general and administrative expenses$58 $38 53%$116 $85 36%
Gain on deconsolidation of subsidiary$— $— n/m$— $(3,357)n/m
Other expense, net$64 $105 (39)%$53 $165 (68)%
Income tax benefit (provision)$26 $40 (35)%$230 $(647)n/m
n/m - not meaningful

Corporate general and administrative expenses. The table above and the explanation that follows cover total consolidated corporate general and administrative expenses. Corporate general and administrative expenses increased by $20 million for the three months ended June 30, 2023, when compared to the same period in 2022, primarily due to a $14 million increase in employee compensation cost and an $8 million increase in legal, consulting, and regulatory costs. Corporate general and administrative expenses increased by $31 million for the six months ended June 30, 2023, when compared to the same period in 2022, primarily due to an $18 million increase in employee compensation cost, a $10 million increase in legal, consulting, and regulatory costs, and a $4 million increase in insurance expenses, primarily related to SBG's cyber insurance policy.

Gain on deconsolidation of subsidiary. For the six months ended June 30, 2022, SBG recorded a gain of $3,357 million related to the Deconsolidation, as discussed in Deconsolidation of Diamond Sports Intermediate Holdings LLC under Note 1. Nature of Operations and Summary of Significant Accounting Policies within theSBG's Consolidated Financial Statements.

We expect interest expense to increase in the third quarter of 2022 when compared to the second quarter of 2022.

Other (expense) income,expense, net. Other expense, increasednet decreased by $44 $41 million and $228$112 million for the three and six months ended June 30, 2022,2023, respectively, when compared to the same periods in 2021, 2022, primarily due to decreaseschanges in the fair value of certain investments recorded at fair value. See Note 3.2. Other Assets within theSBG's Consolidated Financial Statements for further information.

Income tax benefit (provision) benefit.. The effective tax rate for the three months ended June 30, 20222023, was a provisionbenefit of 85.2%21.5% as compared to a provision of 17.4%85.2% during the same period in 2021.2022. The increasedecrease in the effective tax rate for the three months ended June 30, 2022,2023, as compared to the same period in 2021,2022, is primarily due to greater impact of 2022 valuation allowance recorded on deferred tax assets relating to deductibility of interest expense under the IRC Section 163(j).

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The effective tax rate for the six months ended June 30, 20222023, was a benefit of 169.9% compared to a provision of 19.9% and materially in line with a provision of 20.6% during the same period in 2021.

Net income attributable to2022. The increase in the redeemable noncontrolling interests. Net income attributable to the redeemable noncontrolling interests remained flat during the three and six months ended June 30, 2022, when compared to the same periods in 2021.

Net loss (income) attributable to the noncontrolling interests. Net income attributable to the noncontrolling interests decreased $8 million duringeffective tax rate for the six months ended June 30, 2022, when2023, as compared to the same period in 2021,2022, is primarily due to a 2023 release of valuation allowance on deferred tax assets relating to deductibility of interest expense under the Deconsolidation, as discussed in IRC Section 163(j).
Deconsolidation of Diamond Sports Intermediate Holdings LLC under Note 1. Nature of Operations and Summary of Significant Accounting Policies within the Consolidated Financial Statements.

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LIQUIDITY AND CAPITAL RESOURCES
Liquidity and Capital Resources
 
As of June 30, 2022, we2023, Sinclair had net working capital of approximately $748$882 million, including $420$728 million in cash and cash equivalent balances.balances, and $650 million of available borrowing capacity. Cash on hand, cash generated by ourSinclair's operations, and borrowing capacity under the Bank Credit Agreement are used as ourSinclair's primary sources of liquidity.

As of June 30, 2023, SBG had net working capital of approximately $526 million, including $368 million in cash and cash equivalent balances, and $650 million of available borrowing capacity. Cash on hand, cash generated by SBG's operations, and borrowing capacity under the Bank Credit Agreement are used as SBG's primary sources of liquidity.

The Bank Credit Agreement includes a financial maintenance covenant, the first lien leverage ratio (as defined in the Bank Credit Agreement), which requires such ratio not to exceed 4.5x, measured as of the end of each fiscal quarter. As of June 30, 2022,2023, the STG first lien leverage ratio was below 4.5x. Under the Bank Credit Agreement, a financial maintenance covenant is only applicable if 35% or more of the capacity (as a percentage of total commitments) under the revolving credit facility, measured as of the last day of each fiscal quarter, is utilized under the revolving credit facility as of such date. Since there was no utilization under the revolving credit facility as of June 30, 2022,2023, STG was not subject to the financial maintenance covenant under the Bank Credit Agreement. The Bank Credit Agreement contains other restrictions and covenants with which STG was in compliance as of June 30, 2022.

On April 21, 2022, STG entered into the Fourth Amendment to the Bank Credit Agreement with JPMorgan Chase Bank, N.A., as administrative agent, the Guarantors and the lenders and other parties thereto. Pursuant to the Fourth Amendment, STG raised the Term Loan B-4 in an aggregate principal amount of $750 million, which matures on April 21, 2029. The proceeds from the Term Loan B-4 were used to refinance all of STG’s outstanding Term Loan B-1 due January 2024 and to redeem the outstanding STG 5.875% Notes. In addition, the maturity of $612.5 million of the total $650 million of revolving commitments under the Bank Credit Agreement were extended to April 21, 2027, with the remaining $37.5 million continuing to mature on December 4, 2025.2023.

During the threesix months ended June 30, 2022, we purchased $118 million aggregate principal amount of the STG 5.125% Notes in open market transactions for consideration of $104 million. The STG 5.125% Notes acquired during the three months ended June 30, 2022 were canceled immediately following their acquisition.

As of March 1, 2022, we no longer consolidate the debt of DSIH. See Deconsolidation of Diamond Sports Intermediate Holdings LLC under Note 1. Nature of Operations and Summary of Significant Accounting Policies within the Consolidated Financial Statements. As of June 30, 2022, our total debt, defined as current and long-term notes payable, finance leases, and commercial bank financing, including finance leases of affiliates, was $4,276 million, including current debt, due within the next 12 months, of $43 million.
Other than as a result of the Deconsolidation,2023, there were no other material changes to ourSinclair's or SBG's contractual cash obligations as of June 30, 2022.2023.

WeSinclair and SBG anticipate that existing cash and cash equivalents, cash flow from ourthe local media segment's operations, and borrowing capacity under the Bank Credit Agreement will be sufficient to satisfy ourthe local media segment's debt service obligations, capital expenditure requirements, and working capital needs for the next twelve months. Sinclair anticipates that existing cash and cash equivalents and cash flow from the tennis segment and other's operations will be sufficient to satisfy the tennis segment and other's 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 and the war in Ukraine and other geopolitical matters, natural disasters, and pandemics (such as the outbreak and worldwide spread of COVID-19), and their resulting effect on the economy, ourSinclair's and SBG's advertisers, and Sinclair's and SBG's Distributors and their subscribers, could affect ourSinclair's and SBG's liquidity and our first lien leverage ratio which could affect ourSinclair's and SBG's ability to access the full borrowing capacity under the Bank Credit Agreement. For our long-term liquidity needs, inIn addition to the sources described above, weSinclair and SBG may rely upon various sources for long-term liquidity needs, such as but not limited to, the issuance of long-term debt, the issuance of Sinclair equity, for Sinclair only, the issuance of Ventures equity or debt, or other instruments convertible into or exchangeable for Sinclair equity, or the sale of Company assets. However, there can be no assurance that additional financing or capital or buyers of our Company assets will be available, or that the terms of any transactions will be acceptable or advantageous to us.Sinclair or SBG.



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Sinclair, Inc. Sources and Uses of Cash
 
The following table sets forth ourSinclair's cash flows for the periods presented (in millions):
Three Months Ended June 30,Six Months Ended June 30, Three Months Ended June 30,Six Months Ended June 30,
2022202120222021 2023202220232022
Net cash flows from (used in) operating activities$137 $194 $207 $(12)
Net cash flows from operating activitiesNet cash flows from operating activities$80 $137 $142 $207 
Cash flows used in investing activities:  
Cash flows from (used in) investing activities:Cash flows from (used in) investing activities:  
Acquisition of property and equipmentAcquisition of property and equipment$(24)$(18)$(45)$(38)Acquisition of property and equipment$(20)$(24)$(40)$(45)
Proceeds from the sale of assets5 11 9 39 
Purchases of investmentsPurchases of investments(56)(115)(61)(164)Purchases of investments(6)(56)(39)(61)
Deconsolidation of subsidiary cashDeconsolidation of subsidiary cash— — (315)— Deconsolidation of subsidiary cash— — — (315)
Distributions from investmentsDistributions from investments11 3 81 6 Distributions from investments196 11 204 81 
Spectrum repack reimbursements1 4 2 18 
Other, netOther, net— — — (2)Other, net3 6 4 11 
Net cash flows used in investing activities$(63)$(115)$(329)$(141)
Net cash flows from (used in) investing activitiesNet cash flows from (used in) investing activities$173 $(63)$129 $(329)
Cash flows used in financing activities:Cash flows used in financing activities:   Cash flows used in financing activities:   
Proceeds from notes payable and commercial bank financingProceeds from notes payable and commercial bank financing$728 $351 $728 $357 Proceeds from notes payable and commercial bank financing$— $728 $— $728 
Repayments of notes payable, commercial bank financing and finance leases(838)(359)(845)(385)
Repayments of notes payable, commercial bank financing, and finance leasesRepayments of notes payable, commercial bank financing, and finance leases(29)(838)(38)(845)
Dividends paid on Class A and Class B Common StockDividends paid on Class A and Class B Common Stock(18)(15)(36)(30)Dividends paid on Class A and Class B Common Stock(16)(18)(34)(36)
Repurchase of outstanding Class A Common StockRepurchase of outstanding Class A Common Stock(36)— (104)— Repurchase of outstanding Class A Common Stock(100)(36)(153)(104)
Repurchase of redeemable subsidiary preferred equityRepurchase of redeemable subsidiary preferred equity— — (190)— 
Distributions to noncontrolling interests, netDistributions to noncontrolling interests, net(4)(2)(8)(5)
Distributions to noncontrolling interests, net(2)(20)(5)(50)
Distributions to redeemable noncontrolling interests— (3)— (5)
Other, netOther, net(9)(10)(15)(28)Other, net1 (9)(4)(15)
Net cash flows used in financing activitiesNet cash flows used in financing activities$(175)$(56)$(277)$(141)Net cash flows used in financing activities$(148)$(175)$(427)$(277)
 
Operating Activities
 
Net cash flows from Sinclair's operating activities decreased during the three months ended June 30, 2022,2023 when compared to the same period in 2021,2022, primarily due to a partial period ofdecrease in cash collections from Distributors and advertisers as a result of the Deconsolidation, as discussedan increase in Deconsolidation of Diamond Sports Intermediate Holdings LLC under Note 1. Nature of Operationsproduction and Summary of Significant Accounting Policies within the Consolidated Financial Statements.overhead costs.

Net cash flows from Sinclair's operating activities increaseddecreased during the six months ended June 30, 2022,2023 when compared to the same period in 2021,2022, primarily due to a partial period of payments for production and overhead costs, distributor rebate payments, and payments for sports rights as a result of the Deconsolidation, partially offset by the partial period ofdecrease in cash collections from Distributors and advertisersan increase in production and overhead costs, as a result ofwell as the Deconsolidation, as discussed in Deconsolidation of Diamond Sports Intermediate Holdings LLC under Note 1. Nature of Operations and Summary of Significant Accounting Policies within the Consolidated Financial Statements.

Investing Activities
Net cash flows used in investing activities decreased during the three months ended June 30, 2022, when compared to the same period in 2021, primarily due to lower purchases of investments.

Net cash flows used in investing activities increased during the six months ended June 30, 2022, when compared to the same period in 2021, primarily due to the 2022 partial period dueimpact related to the Deconsolidation, as discussed in Deconsolidation of Diamond Sports Intermediate Holdings LLC under Note 1. Nature of Operations and Summary of Significant Accounting Policies within Sinclair'sConsolidated Financial Statements.

Investing Activities
Net cash flows from Sinclair's investing activities increased during the three months ended June 30, 2023 when compared to the same period in 2022, primarily due to the $193 million A/R Facility principal payment received from DSPV and a decrease in the purchases of investments during the three months ended June 30, 2023.

Net cash flows from Sinclair's investing activities increased during the six months ended June 30, 2023 when compared to the same period in 2022, primarily due to the removal of DSIH's cash balance as a result of the Deconsolidation in the first quarter of 2022, as discussed in Deconsolidation of Diamond Sports Intermediate Holdings LLC under Note 1. Nature of Operations and Summary of Significant Accounting Policies within Sinclair's Consolidated Financial Statements, partially offset by increased distributionsas well as the $193 million A/R Facility principal payment received from investmentsDSPV and decreaseda decrease in the purchases of investments.investments during the six months ended June 30, 2023.

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Financing Activities

Net cash flows used in Sinclair's financing activities decreased during the three months ended June 30, 2023 when compared to the same period in 2022, primarily due to a decrease in the net repayment of debt (repayments less proceeds), partially offset by an increase in the repurchase of outstanding Common Stock during the three months ended June 30, 2023.

Net cash flows used in Sinclair's financing activities increased during the three and six months ended June 30, 2022,2023 when compared to the same periodsperiod in 2021,2022, primarily due to the repurchase of Class Athe Redeemable Subsidiary Preferred Equity and an increase in the repurchase of outstanding Common Stock, partially offset by a decrease in the net repayment of debt (repayments less proceeds), during the three and six months ended June 30, 2022, the redemption of STG's Term Loan B-1, the redemption of the STG 5.875% Notes, and the partial redemption of the STG 5.125% Notes, partially offset by the proceeds from the Term Loan B-4 issuance.2023.

In May and August 2022, our Board of DirectorsSinclair declared a quarterly dividend of $0.25 per share a 25% increase over 2021 dividends.in May 2023 and $0.25 per share in August 2023. Future dividends on ourSinclair's shares of common stock, if any, will be at the discretion of ourSinclair's Board of Directors and will depend on several factors including ourSinclair's results of operations, cash requirements and surplus, financial condition, covenant restrictions, and other factors that the Board of Directors may deem relevant.

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LIQUIDITY AND CAPITAL RESOURCES
Sinclair Broadcast Group, LLC Sources and Uses of Cash
The following table sets forth SBG's cash flows for the periods presented (in millions):

 Three Months Ended June 30,Six Months Ended June 30,
 2023202220232022
Net cash flows from operating activities$60 $137 $122 $207 
Cash flows from (used in) investing activities:
Acquisition of property and equipment$(21)$(24)$(41)$(45)
Purchases of investments(4)(56)(37)(61)
Deconsolidation of subsidiary cash— — — (315)
Distributions from investments196 11 204 81 
Other, net3 6 4 11 
Net cash flows from (used in) investing activities$174 $(63)$130 $(329)
Cash flows used in financing activities:
Proceeds from notes payable and commercial bank financing$— $728 $— $728 
Repayments of notes payable, commercial bank financing, and finance leases(28)(838)(37)(845)
Dividends paid on Old Sinclair Class A and Class B Common Stock— (18)(18)(36)
Repurchase of outstanding Old Sinclair Class A Common Stock(100)(36)(153)(104)
Repurchase of redeemable subsidiary preferred equity— — (190)— 
Distributions to noncontrolling interests, net(3)(2)(7)(5)
Distributions to member(360)— (360)— 
Other, net2 (9)(3)(15)
Net cash flows used in financing activities$(489)$(175)$(768)$(277)

Operating Activities
Net cash flows from SBG's operating activities decreased during the three months ended June 30, 2023 when compared to the same period in 2022, primarily due to a decrease in cash collections from Distributors and an increase in production and overhead costs, as well as the partial period impact related to the Reorganization, as discussed in Company Reorganization under Note 1. Nature of Operations and Summary of Significant Accounting Policies within SBG'sConsolidated Financial Statements.

Net cash flows from SBG's operating activities decreased during the six months ended June 30, 2023 when compared to the same period in 2022, primarily due to a decrease in cash collections from Distributors, as well as the partial period impact related to the Deconsolidation and Reorganization, as discussed in Deconsolidation of Diamond Sports Intermediate Holdings LLC and Company Reorganization, respectively, under Note 1. Nature of Operations and Summary of Significant Accounting Policies within SBG'sConsolidated Financial Statements.

Investing Activities
Net cash flows from SBG's investing activities increased during the three months ended June 30, 2023 when compared to the same period in 2022, primarily due to the $193 million A/R Facility principal payment received from DSPV and a decrease in the purchases of investments during the three months ended June 30, 2023, as well as the partial period impact related to the Reorganization, as discussed in Company Reorganization under Note 1. Nature of Operations and Summary of Significant Accounting Policies within SBG'sConsolidated Financial Statements. The A/R Facility payment received from DSPV was transferred to Ventures as part of the Reorganization.

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Net cash flows from SBG's investing activities increased during the six months ended June 30, 2023 when compared to the same period in 2022, primarily due to the removal of DSIH's cash balance as a result of the Deconsolidation in the first quarter of 2022, as discussed in Deconsolidation of Diamond Sports Intermediate Holdings LLC under Note 1. Nature of Operations and Summary of Significant Accounting Policies within SBG'sConsolidated Financial Statements; the $193 million A/R Facility principal payment received from DSPV; a decrease in the purchases of investments during the six months ended June 30, 2023; and the partial period impact related to the Reorganization, as discussed in Company Reorganization under Note 1. Nature of Operations and Summary of Significant Accounting Policies within SBG'sConsolidated Financial Statements. The A/R Facility payment received from DSPV was transferred to Ventures as part of the Reorganization.

Financing Activities

Net cash flows used in SBG's financing activities increased during the three months ended June 30, 2023 when compared to the same period in 2022, primarily due to an increase in the repurchase of outstanding Old Sinclair Common Stock during the three months ended June 30, 2023, prior to the Reorganization; the distribution to member in the three months ended June 30, 2023 as a result of the Reorganization; and the partial period impact related to the Reorganization, as discussed in Company Reorganization under Note 1. Nature of Operations and Summary of Significant Accounting Policies within SBG'sConsolidated Financial Statements, partially offset by a decrease in the net repayment of debt (repayments less proceeds).

Net cash flows used in SBG's financing activities increased during the six months ended June 30, 2023 when compared to the same period in 2022, primarily due to the repurchase of the Redeemable Subsidiary Preferred Equity; an increase in the repurchase of outstanding Old Sinclair Common Stock, prior to the Reorganization; the distribution to member in the three months ended June 30, 2023 as a result of the Reorganization; and the partial period impact related to the Reorganization, as discussed in Company Reorganization under Note 1. Nature of Operations and Summary of Significant Accounting Policies within SBG'sConsolidated Financial Statements, partially offset by a decrease in the net repayment of debt (repayments less proceeds).

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

There were no changes to the critical accounting policies and estimates from those disclosed in Critical Accounting Policies and Estimates under Part II. Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations within ourOld Sinclair's Annual Report on Form 10-K for the year ended December 31, 2021.2022.

The impact of the COVID-19 outbreak and the war in Ukraine continues to create significant uncertainty and disruption in the global economy and financial markets. It is reasonably possible that these uncertainties will continue to impact our estimates related to, but not limited to, revenue recognition, goodwill and intangible assets, 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 further change in the future as the COVID-19 pandemic and the war in Ukraine continue, new events occur, and additional information emerges, and such changes are recognized or disclosed in our consolidated financial statements.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 
ThereOther than as described below, there have been no material changes from the quantitative and qualitative discussion about market risk previously disclosed in ourOld Sinclair's Annual Report on Form 10-K for the year ended December 31, 2021.2022.

STG entered into an interest rate swap effective February 7, 2023 and terminating on February 28, 2026. The swap agreement has a notional amount of $600 million and bears a fixed interest rate of 3.9%.

ITEM 4.  CONTROLS AND PROCEDURES
 
Evaluation of Disclosure Controls and Procedures and Internal Control over Financial Reporting
 
OurEach of Sinclair's and SBG's management, under the supervision and with the participation of ourits respective Chief Executive Officer and Chief Financial Officer, evaluated the design and effectiveness of ourits disclosure controls and procedures and our internal control over financial reporting as of June 30, 2022.2023.
 
The term "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’sSEC'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.
  
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The term "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 Officer and Chief Financial 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 ourits disclosure controls and procedures as of June 30, 2022, our2023, each of Sinclair's and SBG's Chief Executive Officer and Chief Financial Officer concluded that, as of such date, ourSinclair's and SBG's disclosure controls and procedures, respectively, were effective at the reasonable assurance level.

Changes in Internal Control over Financial Reporting
 
There have been no changes in oureither Sinclair's or SBG's internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended June 30, 2022,2023, that have materially affected, or are reasonably likely to materially affect, ourits internal control over financial reporting.

Limitations on the Effectiveness of Controls
 
Management, including oureach of Sinclair's and SBG's Chief Executive Officer and Chief Financial Officer, do not expect that ourSinclair's and SBG's disclosure controls and procedures or ourits 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 oureach 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’smanagement'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.

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PART II.  OTHER INFORMATION
 
ITEM 1.  LEGAL PROCEEDINGS
 
WeSinclair and SBG 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.

See Litigation under Note 6.5. Commitments and Contingencies within theSinclair'sConsolidated Financial Statements for discussion related to certain pending lawsuits.

See Litigation under Note 5. Commitments and Contingencies within SBG's Consolidated Financial Statements for discussion related to certain pending lawsuits.

ITEM 1A. RISK FACTORS
 
As of the date of this report, there have been no material changes to the risk factors we previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2021.2022, with the exception of the risk factor discussed below.

Diamond Sports Group's bankruptcy proceedings, which include litigation against SBG, STG and other subsidiaries of Sinclair as well as certain directors and officers of Sinclair, could have a material adverse effect on Sinclair and SBG's financial condition and results of operations.

On March 14, 2023, DSG, Sinclair and SBG's independently managed and unconsolidated subsidiary, filed for Chapter 11 protection in the U.S. Bankruptcy Court for the Southern District of Texas. On July 19, 2023, as part of the ongoing bankruptcy proceedings, DSG and its wholly-owned subsidiary, Diamond Sports Net, LLC, filed a complaint, under seal, in the United States Bankruptcy Court for the Southern District of Texas naming certain subsidiaries of Sinclair, including SBG and STG, David D. Smith, Sinclair's Executive Chairman, Christopher S. Ripley, Sinclair's President and Chief Executive Officer, Lucy A. Rutishauser, Sinclair's Executive Vice President & Chief Financial Officer, and Scott Shapiro, Sinclair's Executive Vice President, Corporate Development and Strategy, as defendants.

In the complaint, plaintiffs challenge a series of transactions involving SBG and certain of its subsidiaries, on the one hand, and DSG and its subsidiaries, on the other hand, since SBG acquired the former Fox Sports regional sports networks from The Walt Disney Company in August 2019. The complaint alleges, among other things, that the management services agreement entered into by STG and DSG was not fair to DSG and was designed to benefit STG and SBG; that the Bally's transaction in November 2020 through which Bally's acquired naming rights to certain regional sports networks was not fair to DSG and was designed to benefit STG and SBG; and that certain distributions made by DSG that were used to pay down preferred equity of DSH were inappropriate and were conducted at a time when DSG was insolvent. The complaint alleges that SBG and its subsidiaries (other than DSG and its subsidiaries) received payments or indirect benefits of approximately $1.5 billion as a result of the alleged misconduct. The complaint asserts a variety of claims, including certain fraudulent transfers of assets, unlawful distributions and payments, breaches of contracts, unjust enrichment and breaches of fiduciary duties. The plaintiffs are seeking, among other relief, avoidance of fraudulent transfers and unlawful distributions, and unspecified monetary damages to be determined. The defendants believe the allegations in this lawsuit are without merit and intend to vigorously defend against plaintiffs' claims.

While at this early stage of the proceedings it is not possible to determine the probability of any outcome or probability or amount of any loss, in the event of an unfavorable outcome, Sinclair's subsidiaries may be required to pay monetary damages, which could materially and adversely affect Sinclair and SBG's financial and results of operations. In addition, the ultimate court-approved structure and organization of DSG post-bankruptcy could result in adverse tax consequences to Sinclair and SBG. These potential consequences could materially and adversely affect Sinclair and SBG's financial condition and results of operations.


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

The following table summarizes repurchases of ourSinclair's stock in the quarter ended June 30, 2022:2023:
  
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)       
04/01/22 - 04/30/22 899,342 $24.67  899,342  $728 
05/01/22 - 05/31/22171,648 $22.88 171,648 $724 
06/01/22 - 06/30/22 514,844 $20.04  514,844  $714 
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)       
04/01/23 - 04/30/23 4,466,375 $18.89  4,466,375  $561 
05/01/23 - 05/31/23735,434 $19.81 735,434 $547 
06/01/23 - 06/30/23 — $—  —  $547 

(a)All repurchases were made in open-market transactions and were repurchased under an SEC Rule 10b5-1 plan.
(b)On August 4, 2020, the Old Sinclair Board of Directors authorized an additional $500 million share repurchase authorization in addition to the previous repurchase authorization of $1 billion. There is no expiration date and currently, management has no plans to terminate this program. As of June 30, 2022,2023, the remaining authorization under the program was $714$547 million.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES
 
None.

ITEM 4.  MINE SAFETY DISCLOSURES
 
None.

ITEM 5.  OTHER INFORMATION
 
None.During the three months ended June 30, 2023, none of Sinclair's or SBG's directors, managers, or officers, as applicable, adopted or terminated any contract, instruction, or written plan for the purchase or sale of Sinclair's securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any "non-Rule 10b5-1 trading arrangement."

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ITEM 6.  EXHIBITS
 
Exhibit
Number		 Description
3.1*
Articles of Conversion of Sinclair Broadcast Group, Inc. into Sinclair Broadcast Group, LLC effective June 1, 2023.
3.2*
Articles of Organization of Sinclair Broadcast Group, LLC dated June 1, 2023.
3.3*
Operating Agreement of Sinclair Broadcast Group, LLC dated June 1, 2023.
3.4*
First Amended and Restated Operating Agreement of Sinclair Broadcast Group, LLC dated June 2, 2023.
3.5
Agreement of Share Exchange and Plan of Reorganization, dated as of April 3, 2023, by and among Sinclair Broadcast Group, Inc., Sinclair, Inc. and Sinclair Holdings, LLC (incorporated by reference from Exhibit 2.1 to Sinclair Broadcast Group, Inc.’s Current Report on Form 8-K filed April 3, 2023).
3.6
Articles of Amendment and Restatement of Sinclair, Inc., effective June 1, 2023 (incorporated by reference from Exhibit 3.1 to Sinclair Inc.’s Form 8-K filed on June 1, 2023).
3.7
Amended and Restated Bylaws of Sinclair, Inc., effective June 1, 2023 (incorporated by reference from Exhibit 3.2 to Sinclair, Inc.'s Form 8-K filed on June 1, 2023).
10.1
FourthOmnibus Assignment, Assumption and Amendment dated as of April 21, 2022, to the Seventh Amended and Restated Credit Agreement, by and among Sinclair Television Group, Inc.,between Sinclair Broadcast Group, Inc. and Sinclair, Inc., the guarantors party thereto, the lenders party thereto, and JPMorgan Chase Bank, N.A.,effective as the administrative agent and collateral agentof June 1, 2023 (incorporated by reference from Exhibit 10.1 to Registrant’s Current Report onSinclair, Inc.’s Form 8-K filed on April 21, 2022)June 1, 2023).
10.2*
Amendment No. 1 dated June 20, 2023 with an effective date of January 1, 2023 to the Amended and Restated Employment Agreement between Sinclair Television Group, Inc. and Robert Weisbord effective as of January 1, 2020.
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, Inc., pursuant to Rule 13a-14(a) of the Exchange Act (15 U.S.C. § 7241).
31.3**
Certification by Christopher S. Ripley, as Chief Executive Officer of Sinclair Broadcast Group, Inc.,LLC, pursuant to Rule 13a-14(a) of the Exchange Act (15 U.S.C. § 7241).
31.4**
Certification by Lucy Rutishauser, as Chief Financial Officer of Sinclair Broadcast Group, LLC, 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, 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).
32.3**
Certification by Christopher S. Ripley, as Chief Executive Officer of Sinclair Broadcast Group, Inc.,LLC, pursuant to Rule 13a-14(b) of the Exchange Act and § 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C § 1350).
32.4**
Certification by Lucy Rutishauser, as Chief Financial Officer of Sinclair Broadcast Group, LLC, 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* The Company's Consolidated Financial Statements and related Notes for the quarter ended June 30, 20222023 from this Quarterly Report on Form 10-Q, formatted in iXBRL (Inline eXtensible Business Reporting Language).*
104Cover 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”"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.

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SIGNATURESIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, theeach Registrant has duly caused this report on Form 10-Q to be signed on its behalf by the undersigned thereunto duly authorized on the 9th day of August 2022.2023.
 
 SINCLAIR, BROADCAST GROUP, INC.
 SINCLAIR BROADCAST GROUP, LLC
  
 By:/s/ David R. Bochenek
  David R. Bochenek
  Senior Vice President/Chief Accounting Officer
  (Authorized Officer and Chief Accounting Officer)


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