SBGI - Earnings call transcript Q4 2019 | Sinclair Broadcast Group, Inc.

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Operator

Good day, ladies and gentlemen, and welcome to the Sinclair Broadcast Group Fourth Quarter 2019 Earnings Conference Call. All lines have been placed on a listen-only mode and the floor will be opened for your questions and comments following the presentation.

At this time, it is my pleasure to turn the floor over to your host for today, Executive Vice President and Chief Financial Officer, Lucy Rutishauser. Ma'am the floor is yours.

Lucy Rutishauser

Thank you, operator. Krolik, with Weisbord, are News President Services and call and Ripley, and the Sports Division Rob our CEO; of Jeff on me Chris today President Marketing Division. Participating of President our Local

Before forward-looking disclaimer. we our statement begin, McIntire make Jo Billie will

Billie Jo McIntire

those these as a other subject in have Actual filed the recent discussed call result earnings obligation from to of statements could factors. forward-looking included Such of update and company uncertainties. as among fourth our a in forward-looking various matters operating the company’s statements. been results. differ factors forward-looking important statements may The number in with Certain reports and future include Such no release. in set results SEC quarter the future forth on regarding, this undertakes most the things, described statements are risks to

company The be our key website of A the on public. this can company will earnings remain website be which FD, available Regulation to call information www.sbgi.net. with available a uses next webcast until and quarterly its replay our accordance made release. available being is at source accessed as will In

non-GAAP analysis financial in under public provided in their EBITDA, discussion Measures. and Non website valuation meant of is and the the measures be financial on will as detail specifically cash provided to Investors, GAAP supplemental measurements, non-GAAP of replace leverage. A GAAP these our to to free a call measures, financial adjusted These the on Included metrics not assist adjusted statements company. our our flow of are reconciliation but GAAP are measures

operating walk now will highlights. Ripley you through our Chris

Chris Ripley

and for earnings call. everyone, quarter fourth joining morning, our you thank Good

guidance starting to shortly. Lucy lot share estimates. details or of with we'll our exceeded positive today We have results you take those that a through met the you with news

a XXX provider with as portfolio. our hours broadcast XXXX and the largest local news stations and of XX provider and leading sports of across brands ended local Sinclair a

are locally provider relevant the leading content. We of

to an drive local executing finished we forward to myriad are news a looking segments. our on As and sports of incredible opportunities XXXX we both

recent unique We impact. our broadcast and networks has our successful reporting political successes intend peers. in are investigative that stations advertising on markets roll effort terms acclaim of now well We focused far community for over dollars of highly among so sports our in as year this out intently share continuing tangible been both in XX an as growing to

be the months. rebranding RSNs Our in coming will

is opportunity We betting, are working there significant on sports on fronts. around those so and more legalized to a platform come new digital

When we new announced such the our expect RSN engagement beneficial and impacts category, on RSNs enhanced the to to legalize of betting multiple to ad assets. viewer the deal, new ways we sports monetizing lead as

benefits flowing of betting legal. play see those already our have in are that states starting to with to dollars advertising We networks some out made sports

for our On continue Approximately to total in multiple relationships distribution de-risking it's RSNs and of the years good we progress very over renewals distributors carriage sports XX% and for front and with are subscribers we company the making our marque. the segment our XX%. are of on significantly enjoy for locked productive

watch Charter for Just including AT&T Live which the AT&T Hulu geographic distributors have DirecTV, and XX last and means of footprint Hulu to TV carry network. announced than providers that of market-wide that Cubs more Marquee. able We in will -- Now over-the-top with week are TV XXX% agreements Marquee now Marquee that place U-Verse, the mark Mediacom, carriage

the ready March studio. go XX a we to had last Marquee week day with which beautiful the of start with of And successful with opening launch the Cubs’ Training. are new Speaking Spring on

come to we team. enjoy We of their the these their for viewers we and and home will and properties agreement local are value given ultimately an demand will and favorite they watch negotiations remain in subscribers confident with allow Comcast to that

the RSNs discussions the carriage Dish eventually We have agreement. with to will for mutually and carriage our remain continue reach acceptable of two confident companies that

subscribers to with while expired this sequentially On excluding one whose to experiencing put we is this to of less MVPD one front, reached principle their exercised that team agreement annualized an our subscriber in basis minority X% when quarter subscriber team average losses, right fourth recently with the the subscriber MVPD. the on agreement We another interest one than rights us. exception churn added actually was and above

another provide agreements we addition, stations affiliate In also an we Fox to their renew while seven station XX affiliations. renewed with services agreement have which to in principle Fox

X.X ATSC SK in and forward. officially CES in We NexGen moving had process front, that have the will TV, of same initiatives Cast.era, successful with Telecom. are demonstrating called be we many NAV. the venture now a launched On our technologies joint We several

We track TVs to joined to the advancing this the consumer Gen markets year, Next market the manufacturers announced many Pearl TV have to a is TV. industry on broadcast Next year. plans deploy in XX enabled committed electronics Gen industry Next this And organization, in to bring while Gen

XXXX our with is a on political record. spending we to XXXX And of off political XXXX period. to expect the for a well highest reminder, ahead the as be spending strong running same financial start revenue

$XX.XX almost company million, cash free equates forma and XXXX basis, adjusted flow per XXXX, and $X.X For forma That and share flow free $XXX total cash on adjusted a $XX.XX was share. to per XXXX billion. pro averaged pro full year

misinformation to do unfortunately has some mention our the depressed marketplace there want I stock evaluation. has been that that in

very liquidity and horizon, with year-end synergy and MediaCom team of on current find other Sports on digital completed well with billion DIRECTV, over renewals XX% value despite and to us, having you on including in, fact, and deals our multi-year future betting will sports exclusive AT&T that the of subscribers no locked having rights of if the RSN In XXX as the do segment few opportunities. as completed deals small of a describes sum Charter, $X.X as our stock distributors, XXXX, price medium linear parts you

current own we our will million us look shares. Based argue on at better our over XXXX to while X.X stock, more the it's a return trading be to we levels than shares these aggressive. of levels, And there's repurchasing hard trading that in for repurchased

Now, let discuss our financial over to Lucy it to performance. hand me

Lucy Rutishauser

Chris. financing into We company. and to numbers, evolve company disclosures good very our you, public to analysts Thank I and the we and for consolidated thank investors quarter fourth provide diversified before as wanted you had I reflect silos our confidently two our media into results. to a transformation value their But information our patience get

and and we welcome and to feedback our results reflecting goal businesses be you Our valuations is of as as transparent to any provide. want possible the

our want investor to also President Steve efforts I recently Zenker help Relations Vice of introduce our to outreach. and joined relations Investor new who increase

we our this the RSNs will sports referring segment. as segment forward, report be as other part well of assets as Going sports to related as we

be referred as other business business, which will segment includes and remaining our news The corporate to segment. legacy and our local services our and marketing

information credit and your that As will incentive sum fees of to related be parts of segment, news and it valuations segment segment, you inclusive the services the the we the local paid can so sports to specific marketing do each give you silo. by the on management and

consolidation company consolidated these note individual segments, the are in please in So while results. the eliminate amounts total that therefore and not reflected in reflected

in results. fees again the statement, incentive management will poor included but be So eliminated consolidation and

which results; resorts revenues quarter the and the of quarter the billion, at guidance fourth results contributed Turning full million revenues Media the increase to the first an end consolidated segment sports range. of of $X.XXX These for the for were quarter. upper XX% our include $XXX

exclude the QX part which versus of which revenue in election segment business XXXX the offset Our in sports higher $XXX The an lower year. million quarter XXXX was revenues in legacy $XXX fourth revenues. million media core distribution quarter advertising political and in by were fourth was

business was with in In for single-digit approximately our mid fact percents. expectation advertising legacy core the quarter in X% and high up line to fourth of our

For the approximately year advertising legacy up business core the X%. for was

million to QX what our range which of in almost we revenue pro in was million $XX political and double quarter We fourth ad XXXX book million booked $XX the above forma. guidance of $XX

were segment million with As meeting Chris political expect earlier distribution for $XXX advertising quarter we of billion the total. sports the expectations XXXX. revenues $X.X Total mentioned this contributing record revenue in

the revenues. media media increased $X.XX to the due of addition of XX% a consolidated the For to billion sports revenues year segment billion $X.XXX total which contributed

gains. segment political sports media business legacy add revenues the are were revenues growth advertising at and Excluding lower strong or our revenues as core to up and by slightly in distribution offset were

year business Our was revenues for basis revenues a forma $X,XXX pro grew million. the by XX%. XXXX legacy media consolidated distribution On

the in SG&A media million the due the revenues Our $X.XX and media legacy were were production consolidated million, and Sports revenues pro segment fourth media acquisition of pro XXXX media incentive that's business quarter million fees the $X,XXX $X,XXX were forma from operating for RSNs. to and media defined up as including expenses the management quarter the expenses fourth primarily forma

the were quarter fees, $X stock-based $XX expenses and of our was non-recurring million million. and segment compensation and million media EBITDA than approximately repack Corporate activities. regulatory and expenses the legal, expectations was in better $X million incentive on transaction, of million is Including overhead $XXX cost million. excluding the quarter in our higher Sports timing management $XX media our ONE revenue $X which of litigation for non-media businesses

guidance XX% range. and an million. EBITDA at and Total the legacy management Including Sports company of had fees $XXX adjusted our the EBITDA high the segment of an million, adjusted was of of had the end business $XXX million $XXX EBITDA adjusted increase

the $X.XXX for flow year our million from forma business. for sports the segment cash billion adjusted items Pro EBITDA was from exceeding company $XXX was of a adjusted was of Consolidated the quarter adjusted million non-recurring which legacy the billion free expectations. and the for $X.XXX high-end $XXX

billion. consolidated year flow For full was $X.XX adjusted pro forma cash free the

represented quarter XX in shares at XXX,XXX fees Diluted of shares XXXX the the earnings A Class for $X.XX of for in adjusted approximately on weighted the transaction X% outstanding was X.X quarter of non-recurring year common full litigation of million shares and per approximately the per We when regulatory. XXXX. share were beginning share $X.XX which legal million shares average bought fourth the the over income

the buy Chris expect levels should us As a trading you aggressively current shares. the stated to

a capital $XXX quarter were $XX year for CapEx million Turning cash and million the million including full highlights fourth of in the was for $XX flow including repack. to and repack $XX the the expenditures balance million sheet

For XXXX million reimbursable spend. $XXX for plus CapEx $XXX million and we repack another $XX expect million the between a of

at sports the business. segment million in billion. million rights $X.XXX and In for sports the million were $XX $XX $X.X payments film expect film payments million. And to be sports rights and were $XXX payments quarter At we and of billion .XXX was million of fourth debt $XX $XXX payments the XXXX XX December was Cash $XXX XX legacy was total billion. December in which

million in million During $XXX fourth shares approximately in and $X.XX bringing the billion. $XXX to January from original quarter will outstanding the the another generate we $XX significantly redeem million $XXX diamonds of This the savings. million dividend down cash annualized preferred balance

end total a on was on and X.X lien a quarters Total on quarter X.XX net four a times indebtedness net Sinclair times. X.X times X.X times and leverage times trailing of ratio on lien quarters basis. Diamond’s net was on leverage STG’s times through a X.X indebtedness leverage covenant and a ratio first at basis. total eight of times was on X.X covenant first trailing five a

the periods guidance our from all our sports most provided guidance the fiscal and quarter Turning first consistent with is year reserved. to segment for carriages DISH XXXX until recently for for excluded our

be we XXXX a media months -- revenues billion sling as For this quarter year's the billion revenues are guidance. in which and this forma to $X.XXX consolidated three of that of pro to number which includes total between first DISH a and expecting first company media not last a year $X.XXX are distribution billion revenues, quarter of $X.XXX compared

legacy of $XX pro $X includes also revenues $X.XXX year million forma a versus $X.XXX guidance $XX $XXX billion of fees. to expected fees to segment distribution billion million be million in management last million distribution includes million for sports The and are political of to for which the $XXX revenues million the $XX includes it business, and a Media $XXX year. $X.XXX billion to a to million revenues million $XXX last versus

expected $X.XX expenses forma are of in a For XXXX. a the $X.XXX billion expenses of quarter to billion compared to range first media pro from quarter, consolidated total the billion media company first $X.XXX to

billion the versus media company expenses $X.XXX forma be media billion. are $X.XXX billion to expected For year, full pro total of $X.XXX to consolidated approximately XXXX expenses

rights a fees, which increase purposes. as pro back amortization is XXXX now primarily The which driven startup for forma stadium higher key more of which over is consolidated are by and EBITDA the well network sports as is addition added

million costs adjusted costs. $XXX quarter of in $X million to and non-recurring is million non-recurring in $X $XXX Consolidated expected total be pro for company adjusted compared for million to adjusted XXXX EBITDA form $XXX in to first quarter EBITDA first adjusted the million as that's

Our Sports generate segment EBITDA legacy generate to EBITDA. business million adjusted $XX to million our $XXX $XXX to and is the is $XX million expected of million expected of to adjusted

segment Now of due fourth the team quarters as its traditionally highlighted contractual experiences first last the quarter and timing sports EBITDA payments. in to lowest

So with the can the first payments season guidance. team the for year their beginning March see our at baseball in are in you quarter in which highest

that's the one the the expense occur high is the to more be more than gap some segment -- and So of quarter the the for -- models the the the and and third in third will than between payments driving media sports full analyst one year and alone EBITDA quarter. too of on payments first amortization in first amortization

million are amortization, QX while EBITDA that lower sports guidance again So by difference to includes $XXX of resulting expected $XXX million. of in be be million $XXX the rights payments an

However $XXX be than by to is lower amortization expected million. a and important payments are the year this for the

related you're versus any that going payments in primarily in – be consensus the is really difference seeing amortization timing XXXX. QX any of to the So to

adjusted million expected flow in to approximately first And consolidated quarter million. $XX company then is cash free to $XX total finally the be

of from to increasing $XX.XX. We an flow prior between guidance range share for $XX.XX cash and free and of our XXXX XXXX $XX.XX our to are $XX.XX adjusted average per

So I’d to to it up like with questions. that, open

Operator

We'll Instructions] Bank. Aaron move [Operator Deutsche at first Watts to

Aaron Watts

the Hey, for having on one on everyone. on. couple Diamond then have and side Thanks me a I TV side. station the

that first does talk like core can auto side fourth the strong the how it also how quarter TV first played quarter trending quarter you good in that's about and the for quarter? sound in in into fourth the a On and ads quarter

Chris Ripley

to into very in Yes it's core down We're XXXX. quarter. and is trending of as quarter a first flat the off be to slightly auto and on over QX start was a fourth carry in expectation good the

Aaron Watts

Thank Got on about more full Lucy just about Diamond think side. we curious impact it. on the we seasonality cost on you you. cadence Okay. were the the clearly the talking And year? seasonality think Anything revenues on as of the should about

Chris Ripley

for these real on the no seasonality revenue there's No side sports.

Aaron Watts

are extending about for Chris of they the on specifically are talked you're fulsome our with key I kind discussions all of you And Okay. RSNs having discussions more with or know potentially DISH Comcast, DISH with the Comcast the and RSNs? all those with bringing back or

Chris Ripley

these ranging assets. Typically all wide our are negotiations include of that

Aaron Watts

And DSPORT saw on Okay. color quarter? cover Got again fourth the themes so traditional any kind for maybe just you can trends clarifier declines quarter far the MVPD and on on one seeing you the the the in you of were subscriber side, first both vMVPD and have it. on side you're the what

Chris Ripley

Yeah.

MVPD QX added the the one from sequentially higher for the subscribers were virtual. which call something of a then company the what in been been. have whole a we the about than QX, basis. We and is black across if of annualized averages X% QX year-over-year to the we less only Aaron, exclude actually in reporting last talked outs churning lot So in industry because on than And if mentioned you occurring fact churned lag that look you as who's lot by we a

less less quarter. of across all catch-up again churning So the the than saw vMVPD segments. just X% that fourth outside we versus quarter that in one third than – we're But

Aaron Watts

Lucy one is this the And one directed think I appreciate way. time. Okay. for helpful. your That's last me,

couple of using you you attractive you say at debt a trading value. in terms potentially to that open stock them a those on end? your is you how preferred securities back target DSPORT be How your for of side times to would in stock attractive and – to a redeemed and terms the that think being but discount of par towards debt buying heard You now I buybacks cash are your are

Chris Ripley

more like we and shares the So in there right about our silos we're the two we're because in and -- of cash our two DSPORTs really course the SGB on have focusing buckets think STG the for different silo as deleveraging cash considering we investments notes attractive now the as well. and one emphasis the of and as the is preferred senior different

Operator

next to move Benchmark We'll Kurnos The Dan at Company.

Dan Kurnos

Great broader take thanks. or Good just we TV just morning. maybe actually start on Can distribution.

and if distribution you Comcast that and bit bit our little guys little or assume I a higher goes guess get better even DISH. RSN maybe you think a I

called particular limited XQ. both sub to But the sort on of an I you between XQ trying step even sort up in sub just step Lucy in retrains just kind net know understand expectations just on XXXX side kind of or TV given to up on of a maybe And issue and out of then what's churn the the maybe going XXXX? update through environment and a

Chris Ripley

Yeah.

be So to going for division. one really broadcast year for the and what a function big of both really really the ups is the Comcast renewal are this be to come step just up contracts for this later RSN going and year

that outside just I'm And just of annualized So the then to step-ups net the to to be on networks related tied fix have programming is to that aren't increases. primarily really renewal it's question, to any going moved be Dan, glad then going you fees because asked so retrench.

a good margins. is retrench indicator of net really number looking a the longer so distribution at no And

more because of be fee. on networks gross reverse really that just to distribution a payment programming we not a this are fixed it's it’s So going actually you numbers – are know reporting again the charging just

Dan Kurnos

if – and pull into heard it willing Thanks. of sort magnitude on helpful? Got Chris like – your pro any there's either you're know on about maybe just of didn't forward timing line forma And just put QX XXXX there's then be but sound we've it. thoughts you on if the political Okay. over any in anywhere of to put some the would sand order sort XXXX or

Chris Ripley

know Well basis that you we was expect pro did record we highest say to our on the high and we did XXX. – on forma a previous this year be

Dan Kurnos

lot it I between less you're one that clarity means – I read to some know about I doing one. last I but then that Chris don't more but wanted a you release And focus right. focused that? press just All just on know guess you I'm organic. trying talked not the lines, on – if the seemed M&A on just from

Chris Ripley

I that rights have of in RSN the think acquired. which to ongoing like Well initiatives know additional reference really also digital sports betting. number sports that reboot organically be the that's footprint, a you then digital could And of we

And active of organic always. as valuation just know say M&A a so are the number in opportunities still to on we Hopper, we on you that disciplined very but front, that are the they not have

Dan Kurnos

Your Lucy, on so triangulate any noise – full would transaction EBITDA, full-year in one-time to a is just there impact just I number? there year, to is impact that and what trying I’m guess the I'm – – clear, there that

Lucy Rutishauser

For XXXX?

Dan Kurnos

Yeah.

Lucy Rutishauser

Yeah. It'll be minimal.

at $XX million maybe about are call million non-recurring. $XX of We one-time it looking to

Dan Kurnos

Thanks, it. Super Got helpful. guys.

Lucy Rutishauser

Okay.

Operator

at B. next move Riley Zack to We’ll Silver FBR.

Zack Silver

question. for Thanks Great. the taking Okay.

deals your station RSN side? the potentially that first talk The TV getting recent willingness just retrans some step-ups via you've carriage subsidize of the on the the done about can to carriage retrend RSNs upcoming and you well, as one, lower in in of

Chris Ripley

from we Well, can't do perspective, a practical that. really,

work two the what negotiation. the to there the and an have really the And not history drives two. is arrangement We silos, between between way contracts contract discriminate – the the the

Zack Silver

some some have the changed just putting entering Okay. know teams, all? to – end given streaming that, platform. with Deltatre the a at deal as can on Fair there’s you sports I the the rights are then, follow-up given recent enough. of with teams, some talks technology them tech and your of And you the a MLB been had streaming market with back And report you partnership renewals a a the guys that into

DTC potentially impacts streaming you Just how DTC service forward? on see your curious a know going that thoughts – to a

Chris Ripley

have MLB thing So the change talks yes started that is new have a to NHL for the and this we NBA. already rights direct for consumer

new currently we know the we're you exploring supports area and that so that's do new teams a that these. will any And deal include with

to digital although decisions – a been rumor relates the is it you ESPN Digital. doing – as which but lot of a on the scale that create opportunity I'll reboot know no know we Deltatre And you know made to – fantastic work the of there, the a have we the something are think around

that be know would include base artist various And you know it the for the that packages straight point new had today. different is consumer aside not fully but capable entirety now of super we're of to doing would on being not out fan launching the what content certainly that up-sell just only be direct offering and done any ideal consumer plans be or a from the types but a no out would which footprint do up video you building We digital that. that

Zack Silver

you, it. Thank Chris. Got

Operator

We'll Evans Stephens. move Kyle to next at

Kyle Evans

Hi. the legacy on XXXX TV legacy can follow-up your as questions of a of where kind outlook? update Thanks. Barron's and and a XQ core to speak and to percent is XQ non-political us auto, auto you Few

Chris Ripley

less continuous we’re on It reliant basis, a is on auto.

Our categories. sale different many on to structure has been focus

flat year pharmaceutical to for to in up we're So those slightly big looking legal we’re a be insurance, services success our to from and full business categories. but to seeing

the sales. the sales as running of declining a and percentage out over But some we the time it's of points ad whole, as segments. of terms Rob see in quarter grow these about that still at ad of we our So non-political

Kyle Evans

Got it.

got I follow-up. think I've a

national National question. It Rob a some shoots a hearing drag of follow-up course signs last over piece non-political this more commentary kind some, The there, green please? like to been then sounds five the and business and we're think growth the I on years. one on years of of probably any is three

Chris Ripley

robust is ex-political. start National a off Yeah. to very

expected year. we the to see and this core our throughout on just So

we're very the of So companies agencies. holding coming seeing out National ad bullish and on we're what

Kyle Evans

just and maybe a seen for that's you've And probably update STIRR Thanks. looking of on Got roughly that Great. and it. Chris you're XXXX? kind growth what an Compulse in XXXX and

Chris Ripley

Yeah. And offer let last power effort of is has there stop have can have you know marketing advertisers integrated and the marketing best-in-class we're full we digital solution our time of so to and years we been speak on this growth digital bike that one spent the five very campaign growth powerful making that sure I’ll all lot over our will Rob that services part in services and XXXX. seeing a has and a of which pulse. a we of been an suite shop offering story big to continue that the marketplace into a digital

different various the nicely a It in growing be which channels usage to we're very to climb the so on a and AVOD from markets happy you’re over platform. STR. the progress what supported been our direct-to-consumer based about programming going more more open and It ad is usage of STR we're and soon on we’re continues is that. It's and are channels content, year now. on more adding for has stations, strategy syndicated XXX adding with

and it of up it into compulse to offering, in ad sales those successful in our sell we part that that local selling us inventory what provide ONO, very businesses for generates channels. OTT additional does it’s additional inventory ties into And as are compulse so to

the that's XXX the XX focus our box to not and program training the on of part weeks course have focus solution. is a we selling continuous just So

our the come into So have based of they for clients part do the the of the but in include flavor needs at local when clients. time day, point digital in all And the is neat XX we it’s our kind our of the play to as in the and solutions. assets some we of analysis markets assets bucket OTT on

Kyle Evans

saying back us Maybe, you heard kind that what they to agreements exactly say relationships, thirds understand just dollar, CBS the unfriendly meaningful given I going less if friendly of two how maybe you the I margin forward. on Thank know networks but of retrans step or network today programming and you're fixed guys update is you. more. say could one you network with net I guess Lucy, characterize XXXX the what everybody going versus kind there, the Great. told when were just get relationships are? is on

Lucy Rutishauser

There's in change no of network terms of real been Yeah. trend relations. note to

with their in scale continue productive for that, operate the we maximum They years. really our wouldn't to and you specific several programming way dollars over but them. course and want We to of I relationships of last change use try importance they very know the know have minimize to any

Operator

Fargo. Hebert We’ll at [Operator move Instructions] next to Davis Wells

Davis Hebert

adjust would normalized to Good morning, everyone. EBITDA difference a Thanks approach questions. Do for and think taking a RSNs that payments. $XXX be to amortization the QX million the you by the the talked between more get right give to a about higher On number. your guidance, you Lucy cash more normalized for the

Chris Ripley

-- in it When adjust you is case? say that what

Davis Hebert

$XX and to of difference the million first the amortization Sorry payments? between the quarter the $XX million Oh! the for and then guidance adding EBITDA cash

Chris Ripley

as you when what opposed sports calculating not payments think to rights are EBITDA. we're sports amortization I whether the use so just should rights we when saying the or – Yeah is

Davis Hebert

Exactly. normalized Correct. more … To get a

Chris Ripley

Yeah.

Davis Hebert

… look at it?

Chris Ripley

mean I what I would way. is us do know look let mean say we I as Yeah it investors can either

volatility for they feedback know the would get amortization prefer I adds people the way can which us within year trying when let this mean But we us we EBITDA. I mean offline can calculate – calculate which and would you take look from it. Just prefer. to less more one adds certainly to

Davis Hebert

for the for distributions. then Okay And side think you outlook things side that's like in on helpful. the about RSN leverage YES as How think Diamond the Sports do EBITDA about adjusting attributable XXXX? you the

Chris Ripley

so it because way for we've the and we outside really all is Diamond DISH, state. far on don't Diamond track we is DISH so is what of – Well I RSNs the we blackout. think of permanent believe and along indicated mean a DISH at

estimates that, track You're are we that really of just until outside But leverage temporary of an the elevated on. really they for on we at expected. come elevated looking originally all

Davis Hebert

And I that should only Are of balance for we Diamond put, sheet for two we $XXX cash the the and the have Okay. on million adjustments those adjust you there, the should preferred redemption? quarter? raise Sports, first make think for then, the

Lucy Rutishauser

So, we put. that exercised their team did have one

quarter. did in craft. happened $XXX that of the So the out We the take first million

the large So, those to be adjust two items for. would

Davis Hebert

small, And Okay. – know I lastly, I then, And platform, does SuBo over, no other that but we near term? MVPD YouTube a this before relatively have have or longer should or had hand virtual like on then, guess, Hulu TV, I contracts any any it Got are you where there impact dispute, with aware guidance anything that's contracts, on year? you're for it. virtual you be your that of

Chris Ripley

did we but near – we guidance. term. was it recently And that's onto just Marquee out SuBo an YouTube immaterial, you added noted. Hulu, of active So, our Hulu as and is And negotiation take

Davis Hebert

you Thank so much. Great.

Operator

We'll with to move Steven next Wells Cahall Fargo.

Steven Cahall

it Thank where the cash from, first XXXX, help Sports come we you that the divisional it increase a expectation look raised come as you. maybe from it flow. for guidance, Networks? on think us the if did or Maybe is you come your or about question the just raise level in outperformance just at XXXX XXXX-XXXX the legacy Regional Sinclair and of kind that free Could

Chris Ripley

Yeah.

So look know quarter. the legacy business a you fourth had phenomenal

it it there. revenue would sports you're and do internal guidance seeing it from done EBITDAR And we impacted its be is increase – segment exactly But also again flow primarily what cash coming that. – would so the free the thought

the for our so than political are And a it's in it – what quarter. even that's coming but numbers lot in so a look we first higher budgeted driver internally

driver So is through. we're flow seeing that well

Steven Cahall

maybe a longer us view growth some revenue are this the you've talked revenue kind rate had an long-term single-digit that look think could to in confident you at run bit recent like cost about past on should of rate I EBITDAR compare does renewals algorithm you cash of how growth give around low expectations growth? flow the and think growth cost your And business, free a then still the about how you to we take when And single-digit the you medium-term? the Great. just over RSNs, low in term

Chris Ripley

Yeah.

we subscriber you the you influenced of growth to flowing near but obviously confident the be going And distribution through offset by mid-single despite low be to by single-digit digit trends, yeah medium are so keep that So there expense revenue term, in it’s know our to is renewals still XX% will area. know in in highly escalators. even ability

Though And will betting, advertising, help the we not sports as it think know helps viewership helps than pool and you we're think with that. of associated We then which like subscript top does you a working we'll tangential. new revenue viewership are but things subscription. that large MVPD be ultimately have negotiations, advertising which that, bigger as with bigger on those your

the which a stream think ultimately around rebuild digital then ESPN ad We you think see is. really any of of we digital that's XX%, a opportunity process. And in yield advertising. we sports of our and ads their on we've got only new to are these will And incremental a moving very of much an so although now up side, opportunity be which be an know right there betting will magnitude revenue assets revenue more forming a, bigger significant what digitally even isn't order for there

just in basics seeing doing yield already selling is there better progress a growth of management. going and around obviously terms Political to be We're area. local

being flow already flow tier the yield. services add with sellers that with the and stations seeing the suite local digital to of top also that the the and are sharing We bringing our marketing will to RSNs, in through then that RSNs come

then RSNs fairly top well to and could I in the include an then, opportunity as given going And management, got renewals, which the opportunities on synergies which subscriptions to we’re cost have the are non-game with DTC our well. rights you've better how we aggressive are or underway, actually that be through to programming as And of a add-on cost to we think of teams are leagues. go much payer that,

they're in really subscriber really will the large driven revenue eSports. they're the a term, trends. – the near But by that's be of of And so, look part as pointed sort out, at how – really – I we

Steven Cahall

year? got flow know Great. about at company down standpoint. I think both cash as And mean debt next the both the standpoint lastly, available free overall repay between a them fungible? should Thanks. than cash siloed Is repurchases I the we and over that share silos leverage being you've debt for businesses from for

Chris Ripley

as as siloed is we really that I cash as think it way And well. earlier, mentioned The about well.

eSports, what STG. In priorities terms for with right now, the and are – the what on deleveraging of which is focused priorities there's then, different

Operator

participation. conclude conference. We ladies you, for Thank will thank That today's gentlemen. and your you

and great at a day. just made this disconnect You have time

Lucy Rutishauser

everyone. Thank you,

Billie Jo McIntire	IR
Lucy Rutishauser	SVP & CFO
Chris Ripley	President & CEO
Rob Weisbord	President, Local News & Marketing Services
Jeff Krolik	President, Sports Division
Aaron Watts	Deutsche Bank
Dan Kurnos	The Benchmark Company
Zach Silver	B. Riley FBR
Kyle Evans	Stephens
Davis Hebert	Wells Fargo
Steven Cahall	Wells Fargo

Sinclair Broadcast (SBGI) 26 Feb 202019 Q4 Earnings call transcript