SBGI - Earnings call transcript Q3 2017 | Sinclair Broadcast Group, Inc.

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Operator

Greetings, and welcome to the Sinclair Broadcast Group Third Quarter 2017 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation.

As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Lucy Rutishauser, Senior Vice President and Chief Financial Officer. you. Thank

begin. may You

Lucy A. Rutishauser

and Participating of Executive call TV Chairman; Chairman; CEO; Pruett, Vice President Vice President operator. Television Vice of are Robert Executive Digital Group; Chris me Officer. Group; David Development and Weisbord, President Executive Marks, Smith, David and Steve Chief Operating on you, Officer with our COO the President today Ripley, Chief our Thank and Amy, Steve Vice and

statement McIntyre Before will (XX:XX) disclaimer. we forward-looking our Felicia begin, make

Unverified Participant

on are meant filed company's Certain include its at of undertakes The risks statements forth Such the which accessed factors. assist valuation highlights. with a measures our statements on you is result cash www.sbgi.net. will not metrics discussed SEC as described reconciliation available reports in measures, through operating flow, EBITDA, may matters will and to call call obligation financial release. and the our can with this Non-GAAP company. leverage. of analysis operating broadcast been in FD, is under the in our financial provided have Ripley company those forward-looking measures statements. factors our flow from results to provided In available their no company this of Investors, recent public in regarding, cash now a remain call of to forward-looking the the Measures. future the are made financial in of replace forward-looking release. the things, various but results. the number non-GAAP and website These differ will today as earnings public. being set our key Regulation discussion our A company future later on until and Included be Actual supplemental important source among third Chris take GAAP subject other A webcast as of detail these a uncertainties. quarterly replay the The television on will Such be free GAAP be most quarter could are as statements website to information, our in to available specifically non-GAAP next accordance included website a update to statements uses measurements, and earnings

Christopher S. Ripley

to Justice. glad welcomed eight the to number closed anti-trust subject our ownership early XX, more through voted deploy the we Media company go the X.X Commission allowed clearance that allowing in that we development need. X, have let competitive previously deployment We're We is for will meeting. the of vote overwhelmingly technological Before whole, and conditions, necessary our decades last Federal anticipate been which results, ATSC September XXX. of place Department have On a October On at upon shareholders read in FCC we and of while the proposed closing the a acquisition. approval local the Tribune TV in emerging services over-the-air customary to to recognizes XXXX, the call. content applaud the favor close for we review the including meaningful probably, for Bonten announced are Communications the we rules distributors the technical since taken the acquisition. of providers recognizing and me is Many and of innovation our for or have for the of FCC expecting platforms. to provide Reforming broadcasters transaction our bringing we some deregulation markets the several media when stations own an its earnings Media broadcasting. Bonten future to levied of and at you, to inequities stations both by the industry adds technologies, footprint, November our to FCC that freely Group addition of that new that ownership as favor consolidate activities and landmark This

fund includes cash the on through FOX of the multi-year purchase and with committed affiliations hand, markets, in multi-year on The FOX ever. the whose fully than renewal the into into by bonds four deals debt expired. entered participate In are backed And affiliate accessing We of a affiliations CBS expect up beneficial and entered virtual the highlight had MVPD both in is to we network financing. model deals. combination September, stronger a ability five the August we capital by agreement which to on mutually a network renewal that deal

networks virtual TV and to has YouTube continue big distribution, the YouTube to with an for all work in markets. of with for led launches compensated which our affiliates TV be as broad MVPDs We to carried those four agreement

its having all they a they important all Comet as announcement of since stations we news with as and Sony Meanwhile virtual offering include agreement, part our the will our stations content well distribution, compelling CW agreement TV recently, As its deliver platforms. to and Canadian TV under professional similar their adding wrestling expand as Ring households. expanded has to Comet continues subscribers It's launch Tennis very important these local local MVPDs our is stations, X their to of will broadcast MyTV Vue, Tennis of this million into it stations, Honor, entered and Channel and almost point to platform. promotion, unique More and include to TV. that YouTube broadcast on out which local

Turning for chips chip stage mobile software helped defined with to and ATSC X.X next-generation next-generation to marketplace. reception announced the standard to Saankhya This for work to bring continue global chipset. first earlier the fixed radio work support truly new a an investment and follows project incubation chip a define X.X, architecture that Labs finished of and to design the we ATSC mobile

and help commitment Through of the continue outreach for total we Columbus, XX for Our Awards, in example students related Emmy Diversity Sinclair Star broadcast recognition Standing raised Cares already $X.X our what would the local studying give have million that regional television their and the Lone Gala. organization local promising in and communities. we to their our alerting do, Texas college station awarded received to in to stations fields and investment Localism news our our approximately our seven stations' XX than community, news past in pursuit our our is receive news. Broadcast ways XXXX. Scholarship. we back quarter, no This the with Recently we to fundraiser. We truth diligently ensure Texas but smooth the to of received on transition in who for high-quality important worked stations and the the Ohio Texas. viewers. Last Several Awards acquisition. a nominations of Army important victims impressive thank reflects of Salvation group-wide upcoming to donated produce of empowering EMMY were least, XXX-plus Strong to in everyone Hurricane that to Bonten Tribune congratulate adding to not employees better I and relentless the have part an there's of want like Harvey The monies our our to

results. quarter will the Lucy third Now you through take

Lucy A. Rutishauser

Thank you, Chris.

primarily by a received Turning of $XXX non-election to in third pro year, as XXXX, pro-forma $XXX just million third in and digital which revenues quarter third barter, revenues $XX the generating than Media This and discussed. basis, and reverse a expenses of or in in offset, year, part, the result Olympic presidential quarter In pro and quarter revenues. impact XXXX, from as million, $XX $XX one-time revenues Texas the startup operating for were and third a retrans $XXX offset, a costs the upgrades. reasons in well on and other quarter revenue by X.X%, third quarter initiatives up revenues hurricanes details. This defined related third renewals, retransmission media forma from on were financial year. normal On higher media million election million, expenses. part, of was the absence million than media primarily decrease of million, were revenues operating fees third the the last X% our in in quarter, was year, expenses were forma before the quarter to basis. a primarily same million million both the lower SG&A production network $X lower third Political lower in $XXX a system million $X political higher to cases, Florida as Media due was versus adjustments. in X% by were driven quarter, as XXXX last

acquisitions as our excluding acquisition This to of to slightly reported as were overhead $XX is auction one-time related spectrum Our million, Corporate Bonten, guidance. favorable the and was to expenses, and in guidance. the prior Bonten Tribune prior our slightly costs media excluding million $X quarter legal cost. well favorable

auction, the the estimated of were prior excluding $XX quarter. slightly XXXX, For spectrum year million than million, guidance. $XX corporate and costs overhead in to million $X development is also Research to costs to related and prior flat better be and acquisitions

for Olympic of relating are quarter guidance. change the For impact in million the last which million EBITDA estimating the and we no ONE XXXX, implementation Adjusting this third of ATSC the $XXX in the $XX transition of year. versus reflects prior $XX quarter, I earlier, million political to to absence discussed items expenses Media and X.X; was is revenues

Net million. down our expense including year $X million interest scheduled the on million, was $XX amortization, debt million quarter EBITDA repayment in sold of we on $XXX for third guide Funding, first of debt $X Alarm adjusted Bonten, which quarter. Excluding versus was quarter last above EBITDA a

cost is average company Our of the for approximately weighted debt X%.

per and expense on shares weighted are expenses. For share the $X.XX estimating per we of XXXX free flow cash or average earnings spectrum million. quarter share in when a be in million $XXX $X.XX to was adjusted. million common Diluted after transaction one-time net $XXX generated quarter the XXX We interest

EBITDA flow impressive Our XX%. remains to cash an conversion ratio free

And billion flow XXXX-XXXX We $X.XX on to on or shares. XXX million billion XXX guidance of post-Tribune reconfirming our $X.XX $X.XX free free are are cash million to our $X.XX flow share shares. guidance $XXX per of $X.XX to or to million pre-Tribune cash $X.XX billion we $X.X reconfirming

Turning quarter to balance Routine and third were the in sheet flow the CapEx million. highlights. $XX cash

get XXXX, prior reimbursed auction million $XX which quarter the million we million. to For $XX million the were repack, government guidance the $XX expect the will to spectrum excludes versus during programming This CapEx proceeds. of from $XX related payments for expenditures of we routine be $XX million. Cash to

flat reconfirming we be million, $XXX taxes are the third our quarter million. cash XXXX payments which $XX cash programming of would to XXXX. were Net For in paid

spectrum of we debt debt. VIE qualifying and taxes pay Cash proceeds on $XXX $XXX to billion, was $XXX continuing year, auction total September forecasting At $X.XX of hand operations. are on the in million was XX plus non-guaranteed September million million including For accounts. million in XX, intermediary net $XX at

addition, trailing was at to we times on and and $XXX revolver, Total had available total our quarter net leverage bringing through eight-quarter X.X holding debt on million a cash. end In liquidity billion. $X.X over excluding non-guaranteed basis, of the VIE net company the

times on X.X XXXX, times. which times of profiles average early leverage. time target traded be X.X The by net net total of high-X estimate a the first assuming balance eight is below sheets be credit company in the an on to lien the trailing was the times our and date, the of history. a holding one Tribune covenant in low would of approximately for acquisition closing Pro quarters closing. is two-year forma strongest indebtedness our ratio our X.XX This leverage publicly leverage at of end We the XXXX and end

previously of we expect end to de-lever quickly to by As times the low-X XXXX. stated, the

target we leverage, to to of year, return potential. one of our generation a expect our the upper within cash So reflection flow range

million in During we of amortization $XX repaid quarter, distributed debt and the dividends. $XX scheduled million

$XX X common of stock of an We at shares average also repurchased million share. price our per

will Marks through you take operating our performance. Steve Now,

Steven M. Marks

you, reduced several Texas In our impacted good morning of quarter, and revenues billion over a in that Lucy $X and third by of markets. Thank the Florida as hurricanes were just the everybody. our result

and year, events, Excluding pro Olympics out last guidance. forma on revenues a August schools, the unanticipated advertising business technical within Bonten, X% our in were core end excluding of over up low weather of of basis,

the in of For political XXXX, $XX quarter comparison non-election a the typical third revenues $X of million quarter, were million versus a year. third

digital news up season. and local XXXX recent portfolio we As would over last leading expect hours of into platforms, share are With translate quarter, to the our news of gearing positive for discussed X,XXX political per we week, awards gains us. for our we that

networks, consider a political When the you including portfolio our share across our we in in that the as quarter, Excluding revenues, have of market affiliations grew third outdistancing industry. all peers which, it the best our The we significant weaker best, comfortable strategies not, margin. by working. among entire you exclude digital know, performance reflects if results performance, are share ones, digital the

grew excluding which, the by new business of Speaking third digital quarter. in XX% our investments, we digital

does Turning Tribune to or include our outlook, the not which repack. spectrum

media revenue includes quarter, of period million, of $XXX we year. last mid $XXX to revenues be XXXX a excluding approximately in be fourth absence a core to as about year. to year. up revenues in the political expectation compared the expected single-digit down million million political versus points For X% Pro fourth are million non-election percentage revenues $XX expecting Fourth the versus quarter, to same forma to quarter $XXX due political, guidance fourth last are quarter advertising

billion, $X.XXX media X.X% hurricanes be revenue expected was are bad revenues to media $X.X excluding of revenues year expected X.X% revenues for on. approximately be billion. to For this up $X.XXX XXXX for adjusted so XXXX a the media $X.XXX up are to pro reported down versus as and forma the is billion billion, only revenues Not to pro billion. given non-Olympian X% $X.XXX media expected of single-digits, forma be year, core forma flat XXXX advertising Adjusted year versus pro to and year. non-political, to

estimated media the in of from approximately initiatives. fourth the $XXX to to expenses. with majority the forecasting $XXX increase decrease On XXXX, on the a X% in fourth expenses quarter in generating same revenue This the be of side, operating by million the in drivers. increase basis, is and we quarter expenses fourth offset expense reverse a acquisitions are forma pro retrans part are coming versus million normal quarter On

expenses X% to are of For and increases operating an the $X.XXX expenses media the a due pro pro increase. reverse forecasted billion, primarily to offset versus expenses and XXXX system be forma are normal a $X.X in decrease retrans upgrade billion media basis year, billion forma $X.XXX initiatives by higher Again acquisition expenses. on

of single-digits. million For expected political. due fourth million, reported fourth to is forma low EBITDA of quarter and $X in expenses XXXX million are expected approximately to the as EBITDA of XXXX absence normal year, be to operating down versus versus in be million, $XXX acquisition the fourth primarily the adjusted for costs, to pro million quarter EBITDA $XXX quarter, $XXX $XXX

to it be year. is to and flow $XXX million flow questions. quarter $XXX million that, in approximately one-time $XXX would spectrum about $XXX expected million. for to to the is expected like adjusted is million cash million free full-year, million million to I XXXX is $XXX costs, approximately EBITDA forma be of to EBITDA up acquisition XXXX for the pro pro fourth For for EBITDA to million. XXXX be the open million. to to acquisition for Free be of costs $XXX $XXX to Pro $XXX Adjusted adjusted and other versus $XXX million hurricane and adjustments million versus EBITDA forma $XXX forma expected year the With $XXX the for cash adjusted expected

Operator

you. Thank

We session. will question-and-answer Thank now conducting a you. be

comes proceed Our the your Marci Ryvicker first from with Wells with Please line question. of question Fargo.

Marci L. Ryvicker

Thanks.

(XX:XX) you'll price. and to that's wanted number A us of with times, the Just and things what's stock give to there that one-time you are think (XX:XX) guide. your lot all cause QX happening of I then these a

in schools, to what mid-single into fourth a through Will offset the you're fourth about digit, talk So have continuing you digits? will think hurricane quarter? you you correct? one-timers impact I have can And quarter, mid-single the the the that

Lucy A. Rutishauser

Yeah.

one. So that I'll take

be we're really in third in so Marci, We million that lapped overhead. about that's cost with corporate will $X run there's – There quarter. going to schools. done the here So that through not – and acquisition QX, of

are only quarter, all really the one-time fourth we're thing you're So (XX:XX) side, adjusting costs, looking third revenue the was hurricane at on acquisition which all in is quarter. nothing for

Marci L. Ryvicker

us because for a then pro XX/XX/XXXX. to Bonten you want of forma, Correct? numbers XXXX, clarify, gave as that And Okay. I when about you talk includes lot of just

Lucy A. Rutishauser

correct. That's

Marci L. Ryvicker

singles, want you up core for exclusive is then of on and And hurricanes? number just gave inclusive to low to make Okay. I – that XXXX of flat sure a schools or

Lucy A. Rutishauser

that So impact. hurricane the excludes

Marci L. Ryvicker

Okay.

Lucy A. Rutishauser

part technical were the were it XXXX And and who year. Olympics, in the it excludes in includes for of It excludes they first Bonten the schools as the XXXX.

forma that again for So that's pro everything have. we

Marci L. Ryvicker

one I question. then ask And want to non-financial Okay.

Just that anything you Sinclair's comment what reading can we're press conversations on with in or about negotiations the O'Reilly? Bill

Christopher S. Ripley

time in as approach we do which by and a of coming people So him. imagine, Marci, did not hiring all from. he the interest get you we stories approached of suspect I where have us, But any can these some are lot

Marci L. Ryvicker

one excluding that Olympics have or I about Olympics? talk is When of And the follow-up. Okay. XXX% displaced you (XX:XX) Olympics,

Lucy A. Rutishauser

$XX So, million was already number. the an incremental

Marci L. Ryvicker

you Thank much. so Okay.

Lucy A. Rutishauser

Thank you.

Operator

from question Our next of the with comes your Please question. Quadrani JPMorgan. proceed with line Alexia

Alexia S. Quadrani

you. thank Hi,

quick if two Just I questions may.

have outlook impacts view will that largely local secondly, guess from subscriber terms or greater on do see you cable to do the I they include could losses And of Do you local MVPD examine the First, it then of DOJ a market? this when the definition any widen the think even you they'll or if specifically, in you distribution? further? you move actually the pay-TV DOJ the retrans addressed your virtual advertising on think comment, to offset you by gains do

Christopher S. Ripley

Okay.

recently launch, declines a markets benefit Most of So, this on in on had year, tend signed. just medium markets the the of roll And, to our subscribers, we were not seen later our sized after deals have very MVPDs we're really MVPDs. but little bit virtual since have of course, slight some we the either these predominantly.

start to for making been are. since gap the ongoing what But that And in not huge kicking we're deliver. retrans to an of up gain subscribers, a on in expecting really quarters the has those we it's as they still we're versus overall they material our MVPDs the audience DOJ, – get not process. come here virtual paid which So, benefit the terms that's of we to in

have very the market definition. We presented should least, that, – in case the strong very obviously, cable at be included a we've,

think that. I un-defendable to it's at at sort not of least look

tell that time be. the we their so terms through their And incredibly our process, our view the they that only feel market right in of – will of the of marketplace. in will go as we're what confident view But

Steven M. Marks

to thing has time that least I now give against come for think local recollect I can that the broadcasters to Commission is compete and some appreciation Federal at said other out the Communications first the essentially essentially everybody. the

So the Commission reality to which is of it. now Communications subscribes view, in that Federal of terms obvious the

of to they Sooner to seems I think, with kind or And upon our them, folks incumbent the the – Currently, they it is of later, not view, get the the attention over what's really on going Justice to aligned the realities the it's of marketplace. to to are going pay aligned marketplace. have world. real with us, Department, in there reality in and

Alexia S. Quadrani

Thank that's very you much. helpful. Okay, very

Lucy A. Rutishauser

Thank you.

Operator

from with next of your comes Please line the question. Crockett question with FBR. Our proceed Barton

Barton Crockett

your to think I you that the TV retrans I be was the one think, be in Okay. in that I significant would consistent and path. that, TV and Does question standard if view outline migration would And have be, for to provisions with potentially include taking proposal guess, that's wondering, the of X.X are have simulcast you around part November to def. Thank you NextGen the those the for? ability that's as ability was negotiations transition question. high at on the I in X.X a that maybe def now your XX And FCC. think NextGen an you hope part what going hearing of your was proposal I the interested

Christopher S. Ripley

put for. an which be So out, that's really order smokescreen objective. voted by it a we're that with of will retrans, flexibility very main anti-competitive And in industry order did was the vMVPDs, up the the of come was on. It just really a the fall lot whether which the is our not negotiating that deploying, FCC – smokescreen in terms pleased draft gives

up to to X.X see we affecting give mentioned of we're this So we're more flexibility is to just whatsoever. transition, to migration affect signals as up And resolutions, what on X.X. do retrans important and as signals, signal our going broadcasters terms signals to in don't free convert stack this it's going you to

can So supported be and both simultaneously. that TVs, new old TVs

Steven M. Marks

transition So the channels appreciate here transition is not to that Commission are analog because the to set transition individual versus that remember doing estate there the left. this to previous They real aside to. enough of isn't digital Federal thing here and Communications for us

So looking together a transition details result basis have work to gotten for. literally market-by-market on we're will broadcasters the and through end the the that accomplish

Christopher S. Ripley

Yeah.

market-driven which line And on this that flexibility perspective. FCC order answer, the this us from a win recognized so is have our the broadcasters gave punch for the is the and to a

Barton Crockett

That's on in notable with what And of other stations change meaningful in Do others. notable some income? done you've helpful. percentage then if as affiliation reflect comp through? effectively one that – you're have a there question change paying do any the recent come those could they Okay. and Is renewals reverse that's I FOX retransmission any with any

Christopher S. Ripley

is terms So in do that here. of on guidance our growth, what can point Lucy which retrans we net to reiterate question

retrans. That's but gross guidance, most our built deals that in And been retrans of reverse reverse recent expectations so, (XX:XX). been increasing And increasing, our on has that's faster. And retrans trend. consistent has increases dollar those net retrans with basis, why our is into a are

the XX really Gross growing retrans, absorb that started retrans reverse been years while retrans our appearance still years of ago. we've So we've ago every and to to able about net single got do been about only five able year. which started

Lucy A. Rutishauser

out we've that and had there. That's changed right our have really we guidance not

of but single we're and next come in side, is reflection the contract grow network the So to in grow up to and percent XXXX, looking the terms on digit versus really then percent. year, teen side a when this MVPD the

Barton Crockett

you. Okay. Great. Thank

Operator

with line your the Watts Deutsche of Bank. from comes Please question next question. proceed Aaron Our with

Aaron L. Watts

Thanks. Hi.

core of on the for me. thoughts you some further about probably in I quarter, in fourth believe new quickly expectations rolling driving into is, Just single-digits from improvement, your Any the Washington? One you best advertising, heard the and mid uncertainties this do growth which what's it's you policy despite think sustainable we've year a couple the year. for talked on,

Steven M. Marks

you in think a coming fourth I hoped look much an our be. you to of We'll it's factor a be. we're pacing business there as very a Olympic year When at Yeah, quarter, we're Fourth just Auto look single-digit take quarter have I off as auto. exactly were positive finish if been at well had performance hoped take pinch remains And political, low third the we to we hurricanes recently. had think stable. we pretty you and where auto. quarter, a off where positive the

think advertising. that bodes well core it very for I

doing are both entertainment, categories. are religion, services, and fourth in fast these categories we're of the of that media, and some well, increases food, consistently some third drugs, very Some quarter, seeing healthy

bit little of in retail. downside, a have the softness we On

we it's in about We furniture store did mostly in the driven. little we in School than fourth You're better we lapped. as that, business, business a reading the bit department mentioned, did third. quarter

into really So, I we're going think, fourth shape. in good quarter

two an Olympic off year. to got year, it's events You the lead major

course those be the that year, for Cup. You auto in the of wants events. special also bodes have World to This well the in usually advertising

the that be business optimistic are we So XXXX. okay will for continue to core

Aaron L. Watts

call, the earnings Okay, on further there the strategize And potential assets dig of on your on you. time Thank Since I'm helpful. you've a and had then sure that's the in just to combined last couple platform. Tribune.

you on can but also most today, speak about most the stand you potential where content about, distribution basis, your excited what not only platform you maybe you're capabilities? combined the on see perhaps, As a touching and

Christopher S. Ripley

Sure.

Tribune been. as have we the more So like. more as The ever excited we learn, about we're we

it's we'll and this think Our of the target at reaffirmed sort synergy so into as excited what excited and that's that. do get And times, hit. slam-dunk built several getting it synergies. that. more been longer-term, target, won't we into can in network selling, which that near-term together, I We're our the medium-term look into more We we're more we platform, of prospect was about very dig

side, the think upside. digital On there's huge we

give consequently than doesn't does more digital in Chicago. Just in even to And a York, it an would a Tribune start be our mobile exist. does market, doesn't New have Tribune you example, digital business, agency LA, it or comparison

WGNA what sort when of are They digital went course, of And and is announced. high from their going we think, away cost the great, on our into and upside well restructured, that So ahead originals had ahead thought potent we best-in-class originals. moved we already lower a mix. of capabilities, own cost

models And far, the revenues going But perspective, impact news near have new huge big we're nationwide once news And new will have went are that lot news be footprint of a to to have explored. didn't that – up with that do avenues presence, ad us. like then up won't ratings for and set just it the Tribune. things XXXX. really news we're getting have that So models And will you a at up, it's to excited personalized our on also starting great for nicely heavy and we about we're to opens coverage look lifting. was a it up we channels. for XXXX. They And very from ahead facilitate did that of

So think and to mention significant area we've an of there, work on I'll we as lot dig we weren't we really more and in actually is and more upside, which station a side, just do the there's also level at we what get DOJ station as from to somewhat well. seen But and there's until are still upside the approval. on prior restricted announcement able

Aaron L. Watts

satisfy might call out? the some portfolio you those extent that it, or And at maybe pruning just the versus be sales of you do that regulators think portfolio can tweaking Okay. least swaps want may the with to them of enhance Chris, outright the able they of stations to

Christopher S. Ripley

the on agenda. are Swaps Absolutely.

first We have bids We've our swap round received process already, did those our include many of ongoing. alternatives.

Some in-market market. the accretive terms within included of we've of very can which be savings discussed swap cost alternatives, as in which

could solution be the part So that here. absolutely of

really there's a it we've an said So at really have really any reason sell perspective. economic of many defendable as to stations, from you when look we'd that times, don't think these we

Aaron L. Watts

Thanks for All right. Great. the time.

Operator

Our Company. question. Please from next the Kurnos with of Dan with proceed your The question comes line Benchmark

Daniel L. Kurnos

year, Thanks. what up have a I Obviously, don't just Cup, I Great. the some auto. inventory? dealer the acting just ratings in levels? in had your tailwind? out inventory drill record into then, seeing uptick of a it how from Steve, and a morning. Series World U.S. comments it's incentives clear the And Good know talk You impact, that. seeing local the little pacing little World mentioned that any about want isn't we've bit QX. if obviously, Are viewing Can in that unfortunately down to as you you you so you're around did is it next – hurricane post-hurricane, you're bit in

Steven M. Marks

Yeah.

automotive for auto, has performance I group hair you foreign the a think, category. a the take look on up been of we're significantly away when are our driven in and being by last dealer from terms money dealer at flat. quarters, and domestic category, the we group two And

dealer So group money. we're right by now being driven

at quarter. I expect least first could into that probably think you to continue

not category the that stop Olympics that. will the World in do realize And not of even should in additional that we will terms from In Cup, United in next the always year, unfortunately be opportunities advertisers attract though because participating revenues the of category. it that And for participating auto category. States

category. had We've I it. we're believe, a, consistent clearly what XXXX a on with So, dependent again, would this very overall,

that plus bodes on XXXX. side to in this going for and are XXXX well in We finish the category,

Christopher S. Ripley

Overall is about XX days. steady supply at

Daniel L. Kurnos

well, There more seasonality the And then of one part in on two housekeeping one it. because pieces, some – guide this just it. there's obviously, is on actually QX Tennis, there. just maybe general, Got – question

we had QX? than about of could QX you of give anticipating a thinking kind with us kind of a seasonality, should bit And races. you distribution political, new some on of lower that little those was sense you've if the political were wins the guide special exposure some how So then announced that vMVPDs be Tennis in we versus timing just the since and of the to the

can how a so be is stations, that on You've XXXX us clean a XXXX, tailwind. shaping have forma you give comp should obviously so you Bonten up? give there? the with And a can thought So got initial political we pro national an us for FOX

Christopher S. Ripley

as the any distribution the start terms had have And until is side on in quarters. seasonality of on core on with Tennis we next one business, then step QX MVPDs I of side, have up yet, So to where deals again, Tennis the again. Tennis, in commented expect don't the we those deals to can virtual up I not And the its just weaker on impact new contributing yes, come. year, any quarters

Steven M. Marks

robust met we in really side, expectations XXXX, a as to our politically. political the we're sitting in On pertains situation. fourth quarter I think And it

gubernatorial senatorial races have and our We races in spot. sweet

senatorial Pennsylvania enjoy And XXXX. Our sweet Ohio, Nevada. we'll those and Florida, and is races spot in both gubernatorial

those are So much markets very in to looking political in races forward for robust a we're those tailor-made season XXXX. and us

Daniel L. Kurnos

with comp you the pro have Bonten? comp, And the do forma

Steven M. Marks

million. $XXX was XXXX, Bonten, with it In

Daniel L. Kurnos

All it. right. Got you. Thank

Steven M. Marks

Thank you.

Operator

line of Kyle question. next from the proceed your Our Please with Stephens. Evans question with comes

Kyle Evans

Hi, thanks.

You XX% strong guys digital the posted in quarter. of growth

which mentioned is what period. XX%, give that base in kicking commentary, that's business that was been number? inflecting and with kind in you there I the in your have us would think of it prior line the you Could

Steven M. Marks

Yes.

with allows in our well dovetails new just for proprietarily of content that product ad quarter First in upload distributed third users. our as as of and off speed is we've we load. CMS we've the team, increase seen everything build in-house And new our apps significant that

pace technology opportunities. enhances looking which with the our keeping what is users revenue for, are So the

Christopher S. Ripley

is driving products our basis. marketing grade continuous also a integrated selling digital of momentum agency there on What in of and that an terms is top

Kyle Evans

Great.

Where on getting you down. and broadcast controls side normal expense operating expenses are mentioned reductions specifically? You those the

Lucy A. Rutishauser

come some political really lean So commissions from expense-focused not that rate always we've are just Others just run revenues, shareholders. will of know will down. company, for and be been try a as having the you us, variable the to our

to just lot other out really spread it's So, a departments. of

Kyle Evans

you. Thank Okay.

Operator

Leo of Please Kulp line RBC. with your the from with proceed question. comes question next Our

Leo Kulp

Good morning.

questions on side. deregulatory on – two the Just the regulatory

intermarket opportunity. a talked big Some dereg peers have the of as your about being

already about Given incremental duopolies, have how ability Sinclair's you to you duopolies? many that are create so thinking

Christopher S. Ripley

our which definition a TV in it. us, way average not at only, many opportunity market share that overall JSA duopolies, those in is nice broadcast on a some to is I the So, note also having of have antiquated just as cleaning I'd for But a we is up look do them mentioned structures. very low-XX%s actually

– rules it idea from So, gives the an a and, into the get the once think stations from then to you but opportunity be significant more And add we additional of And course, the SEC of solidified. market definition flexible potential the the mix. will new DOJ. we

Leo Kulp

out rule. on main for then, present look that the And as Does savings it. studio next opportunity cost the you eliminated an FCC Got – the to year?

Christopher S. Ripley

going just we're through that right So now.

that be don't there happen, think, to expect I some can will optimization significant. be but I that

Leo Kulp

very you Thank it. much. Got

Operator

Our of Please Hebert the comes Davis with line question proceed your with Wells next Fargo. question. from

James Davis Hebert

Thanks proceeds, everyone. committed And with secondly potential of I any taking of have financing morning for anticipate financing mix the or parts but permanent do unsecured? for then, any sales, you just for and moving need? timing you Good that could Tribune your of deal, whether know the to questions. the spectrum total and secured Tribune the be financing change sense station

Christopher S. Ripley

divestitures know don't a the raising have do to we amount. of actually raising – the of before different anticipate what be. the to we going any results may We're So,

pay now, So fully happen, to those a forward loaded do moving the divestures we're for that we basis. will extent use to debt, but down on

Lucy A. Rutishauser

comment one to make I if can other Well, that.

for if in us it the to you bondholders notes. So, assume consented Tribune June, is, recall their

is there of notes billion their $X.X we'll be won't that to have And so, that raise. assuming we

James Davis Hebert

other guys there's score about the – been from earlier ATSC and side as or this week, talking big potential then know on make were a look And at reports, option, that. I think improvements measurement they to for earnings they comp boost perspective. local your and for they've had Nielsen, and you you might about Thank and their measurement talked made plan some being secondly, a you've Okay. I

local thinking curious making whether is how you're measurement, So about Nielsen just I'm strides there not. or

Christopher S. Ripley

to about lead its is a up is company or those nearly sources to exist example in are our And what the that the Neilson improve the many give enough. one I'll just in which measurement able reality lighting is country be the opinion, household strategic every called antiquated product, coming. a we're other of measure a is third Media and there's of what that investor either very of access households an watching. will second of not Sorenson all is platform, by second so in trying you fast

does context that very of you you are – people old Nielsen ATSC about it product fashioned. just So about when data X.X the or it think makes what back think in on what sending watching, look Neilson's

end of so where the of of moving the And we're in on headed. technology sort day, terms is at

Steven M. Marks

no there there's provide And a will watching. on capability to is I the is know appreciate ATSC service provide by about located, Grail the thing want the this which geo is for what X.X that think Holy running. capability. is to what and I appreciate to up where person other which just this out is device X.X and ATSC can device advertiser, basis,

Holy the for Grail that's So industry. the

James Davis Hebert

Okay. so Thank you much.

Operator

comes & line Lucas your with question the Company. question. Barry Please proceed from Our next Gabelli with of

Barry L. Lucas

they've back thoughts good could to alter and the very your Chris, meeting – issues as just how the or been I now Thanks morning. or the regard much, affect, if proposed November come rules divestitures. wonder with and regulatory change much Thanks very for to

Christopher S. Ripley

status went FCC on quo this assuming We rules. road down

terms is rules day, the very longer-term our to result. that's of we can at divestiture subsequent what And pleased – affect but helpful, going the a Tribune. driven That doesn't FCC long-term we're do really the and certainly DOJ's more in are end it a So to impact the of by plan. of be

Barry L. Lucas

any consortium And for additions the to Okay, have thank you. there new been ATSC X.X?

Christopher S. Ripley

additions, do bigger been to looking which is join – broadcasters, smaller have announced there's be always not We up. We and roll some we'll nice some affiliates, which some have well, to so more shortly. terms on coming consortium lot organizational you'll docs out on and announcements We've leadership. spectrum made see in resources figuring of progress that a the set, of the getting

that FCC progress on dovetailing made good with rule. So front, the

to on So more that. come

Barry L. Lucas

do look morning you At release worth? intellectual might what control point is forward X.X we'll of last more work think the what able And on and X.X, one the you that devices. this to chipsets property for ATSC for ATSC that. Okay, to on you the be design share announcement

Christopher S. Ripley

X.X. process just to meetings LA some patent gotten the organized ATSC That underway. MPEG first of pool the related around has

every week Our literally are still through getting of like sort door. one comes issued. patents It the feels

might but words, that, know it's any don't to I still to actually I predict months, play ATSC there do happy a in that of revenue sort think to didn't newbies of to we'll just in participants. work that's And standard long have – this experts expect something industry comes the so it's I'd us gain but patent that will that after assets we out next hard like to how takes pool the other thought process. we we be – it's to out, it visibility the various negotiations we're X.X the in the to process, this not we we hired But and a on, large. with time the these XX something X benefit hold near-term the gain in pushing stream, through that, help some outcoming visibility. would It's have writ of

Barry L. Lucas

Great. Thanks for that.

Operator

Thank you.

session. I to the question-and-answer end reached like of back the have We over floor turn would the Lucy now you Ms. to comments. for Rutishauser, closing

Lucy A. Rutishauser

operator. you, Thank

let that us. any questions, please disconnect, our very deregulation, to for and And call our earnings you the for which just strong excited are morning. expected we and the of this valuation in has anyone if XXXX season, on higher relevancy you upcoming additional reform, for to free say X.X drive company's shareholders marketplace. for contact improve all feel our me political Thank tax a ATSC Before are prospects participating

Operator

today's gentlemen, Ladies conclude teleconference. and this does

You participation. wonderful your may this have And you a lines day. disconnect Thank at for time. your

Sinclair Broadcast (SBGI) 1 Nov 172017 Q3 Earnings call transcript