SBGI - Earnings call transcript Q1 2020 | Sinclair Broadcast Group, Inc.

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Operator

Greetings, welcome to the Sinclair Broadcast Group First Quarter 2020 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] Please note this conference is being recorded.

I'd like to turn the conference over to Lucy Rutishauser, Executive Vice President and Chief Financial Officer. begin. may you you, Thank

Lucy Rutishauser

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

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

Billie Jo McIntire

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

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

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

our walk you operating Ripley highlights. Chris now through will

Chris Ripley

stories that going are for we how different. result and that at and the as we personal Sinclair this sure I'm are unprecedented a the everyone affected is lives country has These their are times of COVID-XX. no through world

These their clubs for communities, have different communities who I'm most cannot book up their making who protective stay time. during to difficult gear impacted for citizens positively and homes, and those who and ways. children their in learn this help shopping Sinclair very proud senior heroes of many are stepped in occupied leave online creating our are vulnerable employees

and will big is environment. resilient industry moment us are in local their stations question through responding. this communities, on efforts impacting business actively of raised see and like is in mind at America period COVID-XX raising which of are fund We dollars challenging strong we're short The our Our involved and the at a for everyone's how all millions having time. of Sinclair, how

For the first by quarter, the our guidance media financial impact impacting is relatively X%. small, revenue

late switched which very side lower we than were expected. to the on advertisers growing to see and EBITDA guidance. attrition In advertising did come caused ended from as react some our the core our legacy cost compared we businesses, However, up quarter, to our in in

seasons beginning However, Sports held up category. which sort MLB NBA, small impact postponed at of relatively on in segments, midpoint the revenue a the March, our the NHL mid EBITDA their political of reflecting In for of in range, the the the strength our and and quarter. came our had range,

direct the the absence dollars, playing. the in the While advertising not resulted costs mostly were offset postponement impact was that by games the lost games of of for

viewership in sites. during and local of effect COVID-XX biggest the was news we our experienced the digital across quarter Perhaps the surge

weeks. television other of this has outbreak, broadcasting. COVID significantly power stations enough. firsthand I and No can't risen the that of than the media local stress are critical Since news the place We to and the seeing compared to keeping importance informed on as public viewership is pre-COVID live on the local news viewers aware content. local local our

And with significantly views and engage addition, unique digital platforms. inform our In on reach, also from nearly a be to to people I still election political to the part very think our it's XX% lives, to all important into every to expected has a are note and will an record viewers ability April, increase there our this of November in COVID that testament STIRR advertising on levels. up uncertainties March seeing despite that platforms is reach injected

refraining COVID Well, this because we've which impact canceling buys to from on is advertisers their some businesses. be of experienced at time, expected or buying

maximize in them including commercial they We are services conferencing working can video efforts highlight produce engine utilize to those that These could businesses and marketing XX with to their artificial minutes. dollars. intelligence a help ad our

incremental included campaigns We're them also costs. no at have in spots Open our, them We that and provided

in We've hires and reducing into taking promotional reductions also been counter open freezing went management on, all expense and not Early differing entertainment, advertising proactively side we Sinclair's essential delaying position to cost travel mode revenue. CapEx, steps including on spending.

continued For segment, during postponement of the games impacted the quarter expected the revenue Sports be second quarter. by to advertising is

shortly, expenses the this absence offset will how part I of the by which explain segments want mentioned, get numbers Lucy, represents But the those revenues. the our I first into sports rights and take be of to and producing work, to with but minute associated the costs XX% as we'll in XX% sports Sports of distribution games. media agreements a

provisions our the by include between teams a to typically sports Commercially, professional obligation. game deliver. our delivery tied agreements of certain include rights including those entered agreements number distributors teams with RSNs Adjustment of games into delivery and rebates actually address sports in affiliation game The agreements also minimum the shortfalls minimum.

any games distributors there our recoup of carries fees. the of We payments therefore pay and has their play, teams potential portion minimum agreements, a mechanism remedies to Each us. unique to of shortfall the can make is contract and confidential the and for to games we under deliver. parameters partners different postponement for the of continue and of distribution continue to Despite we games if is a deliver -- cannot number

under agreements generally the delivered or calendar affiliation our season at any for place of or truing the takes up our received mechanism not rights end The content under not agreements year. for sports

demand in when to we high will the and in this we games where not While minimums. come up the that year minor. leagues sports when NBA seasons that game do were know relation NHL shortfalls almost Therefore, be indicated the those weeks at we this believe resume. regular any complete were will end not be mind and should time, in so will have back in delivery Keep seasons suspended, the if

work guidance full, success as still in are have the we our our initiatives to ensure digital have of Despite full of revenue of expenses. are at ahead. clear Nonetheless, we of our years mind and and picture such we RSN. until of a the COVID-XX, timing time Top reboot year the on hard rebranding

we that previously efforts, more that enhance eventually expected have a dynamic the As been are developing betting live will is part sports robust experience, not include allowing user in with app interact of and available. to ways capabilities. the these to viewers sports This legalized

with talks can companies within deliver how bedding to been partner about compelling experience consumers we best the that We've numerous app. viewing

to these dozen announce ATSC next forward advancing we've step in big on been expect that generation markets X.X. centers last a year. efforts making another years, year the this And to a of initiative the deploy the We later reality, over TV with front taking Sinclair around several are currently more a this planning

consumer produce platform the models year. advertising electronics the consumer data time, broadcast transmitted manufacturers greater approximately new to personalization the as The same and new as of expanded which for and XX NextGen TV for this frequency and stations plan At enabling rich more allows on non-television targeted are several usage content services. well

these about efforts year. be You later more will in also hearing the

is live all total local benefited channel, and that January, has QX increasing city Company that has its platform key is strong five local metrics carried time channels on News recent become the additional with news COVID-XX growing of STIRR watch launched impressions offering XXX new quickly greatly in the XX% a channel XX-hour STIRR, its the by OTT over which the across top free with fast year, April. from and app The quarter XXXX channel. highs linear launch all setting last momentum, and in strength finished of

The news, in close users yours the live and over of XX% of with aspect of with draw local ahead. live first XX% tuning from continues will Xth. local it to a be be over May countries consuming Channel time. May for in This STIRR to to tennis just a a end to offer, has of over tennis time launch of date for men's four exhibition and between lot launch top tennis International major Tennis that the months. I series, the Germany to premiered best a in competition the the other also Channel in tennis of expanding the which at mention April. platform want event The live through ran dedicated was professionals months live International was day tennis of Tennis restart in point Xst the two that played tennis to with

efforts corporate continue we our Finally, as strong which the communities serve. we in citizen a in

We viewers value local news that many brings are our elevating in to of the ways.

during our Also we their targeting educational we XX have example, received at years, schools helping pandemic, the started parents For pieces, of of over aiming children expanding have education. investigative the scope XXXX. to claim with at number moving certain the COVID-XX in to are which due gap critical remote staying home the more markets providing programming viewers fill

working station on we Florida, high local and educational West schools with colleges stream local For markets have example, shows to a Palm virtual our Beach, are in graduations. with PBS and partnered

Nashville those continue to fundraising by including with the by those and Army efforts in the impacted deadly those addition the to Salvation initiatives, In programming in COVID-XX tornadoes March need, pandemic. our assist promote we affected to

recover have $X donations has Sinclair our from Army, communities Since fundraising pandemics. over our million XXXX, year, our helping This wildfires, and Salvation the now efforts over extreme for in raised Cares campaign events, $XXX,XXX. weather raised

For these have help taken them we to our through difficult steps employees, times.

vacation family allowing with employees paid to cash out We assist are eligible to hardships.

created fund to We extended compensation allowing the sick paid advance We to consultants. multi-million are freelancers. marking of use and drive commission-based have RSN eligible leave a dollar

of by know been our securities. financially I performance do and income want that investors disheartened I equity to Sinclair everyone is fixed our have strong. recent assure

our measures taken of measure rather caused liquidity not uncertainty time disruption increase from COVID-XX. precautionary but of out this have by to as a at necessity, We the

significant in amount we you want appropriate. this to have reduce steps our common that to purchased emphasize give on details of but capital to we I measures where as like minute, expenses and a emphasize undervalued we those are we that will our before grossly equity. have are securities the working and assured been Lucy and a preserve more through rest believe want you internally taking scenarios

turn discuss our it over I'll Now, Lucy performance. financial to to

Lucy Rutishauser

keep healthy. a shout give is and to our you, we'd from ensured smooth Chris. our at And you, to We'd who like quick also as Chris thank Sinclair transition and that and we informed out our We the to Thank have like everyone a entertained. viewers staff safe hope work home. remain pointed on to air out, and employees for

commitment inspiring. and creativity had positivity, Your been

towards fourth our the segment year, the actual in we for first last our free COVID-XX of had EBITDA of was Despite of year. mind end results numbers inclusion that this many the the on still the eight cash the larger is impact period exceeded revenue flows Keep in months year's responsible in same guidance. and last versus this which quarter, changes

the prior many those which in we speaking be periods. will meaningful own assumes I in is comparison about more a and year Therefore much pro versus results forma, cases, RSNs

numbers, on earnings the guidance time each actuals metric key QX than financial of consolidated focus much silo. call and our and morning's rather the in is company this of Release, Our those spend our repeating so on

basis, company, Sports consolidated revenues primarily increased quarter were media media of first about first of billion. $X.XXX down total segment. last On due million, inclusion revenues the the the year's a For to the forma pro for quarter revenues immediate versus $XXX

only as absence distribution in ad the and As revenue DISH this Sports in revenues of across all higher business, our partially legacy segment and revenues COVID ad political as March digital well growth, on at impacts offset higher segments.

and well local corporate As as other a as business news of our services our consists and segment marketing legacy our reminder, segments.

In digits. postponement gains of to and hockey, effects with and strong, mid-single cancellation the and February professional advertising commitments. see advertising January began of of the COVID-XX ending March, we basketball, While baseball mid games, were out the

single has digits the COVID or early lags either to businesses continues Subscriber on reporting basis. churn stayed had we large and to distributor down, what's due churn subscription-based know as still It's tell fared impact subscribers but know the great in than last The recession, businesses. one that be MVPD we to subscribers by effective rate at quarter, quarter was better XXXX too any mid ad-based year-over-year excluding up that in flat. during a on were to the

lower X,XX options stay consolidated of the better many and media a entertainment all the TV set flag programming year compared available cost to well games basis pro our last people. in in one due were as guidance is expenses few to the wake with forma as postpone of in and COVID, And place to which rules savings the cost sports that's on the The SG&A. States, on million and higher network than of expenses

XXX and on Sports inclusion to of million in a increased network segments from XX forma XX% EBITDA driver the the with absence consolidated basis EBITDA segment million. largest the million QX Adjusted the XXX Sports was Pro with the last year, cost. contributing adjusted being down higher DISH

lower than expenses more our the revenues. than lower offset forecasted EBITDA However, as exceeded guidance

that a mitigation million which legal the end top XXX was timing in regulatory one adjusted the Consolidated of the cash it than are and million transaction quarter, that events guidance. quarters higher historically flow and in Please occur free flow which non-recurring XX the of XX million, have keep items year. there was lowest excluding mind free EBITDA cash made our of first of

average million $X.XX share XX when $X.XX quarter was in non-recurring per the Diluted items. weighted adjusted for common a where on earnings shares

to As borrowed a term. and not liquidity took mentioned in STG. win abundance an of Diamond's quarter million as million Chris result short We needs pressing out steps the revolver earlier, of XXX of enhance caution of to our and of XXX liquidity we the

balance repaid down balance million. silos XXX cash bringing current sheets. we revolver a are The both draws to revolver sitting However, the as of in outstanding STG the April, on portion

In March, XX to Diamond's preserved kind quarter we first in also elected which stock of dividends, pay were preferred cash. million

of sales-based non-essential approximately open deferred of have including our in this In media and hundred to travel this year, spending saved We also XX expenses of QX. is which identified reduced non-essential discretionary million year. a for realized and be another CapEx, delayed savings CapEx. million total, eliminated positions, also million expected There's non-essential XX we

I needs we a there we time. control measures cost, should and are take do do working liquidity these There we slow to currently could prolonged steps at want take weakness. our constraints, while need But not generate to do economic that to emphasize capital anticipate not period of additional believe, we further be this cash.

million in average Sinclair repurchased We we quarter, our the of price of of advantage traded shares steep publicly took of So an stock $XX.XX. a in prices drop securities. the nearly at XX

have the year, quarter, Since In we million have X the second repurchased shares. shares of XX% another the repurchased. start outstanding the total been of

of Our approximately buy accretion. price creates back $XX share

use now Our STG's flow. and STG's basis dividend is the tax yields best annualized, after on which cost expensive debt more over than of cash represents an free X%

and the the ex for strong statements quarter core the resulted X% total both and political slowed the political. in and economy advertising advertising increased towards in up business, down COVID-XX strength quarter The the We half to Turning for March. growth revenues advertising. with end revenue across cancellations legacy XX% was first on media or of two XX% ad months quarter a early the before ended the

the high This revenue Distribution Adjusted end set distribution all first Political due is XX% for controls also advertising legacy advertising consolidation. benefited XXX record management the EBITDA cost as COVID business guidance higher Diamond. revenue from incentive quarter was of to net for the XX at fees revenue million in paid reminder near XX%, our a increased XX business increased lower impact. This million. by was of that legacy eliminated million the Sinclair. of the and

games. year. of lower decreased The pro the was to segment revenues results in forma primarily Sports million to was of of of as decline DISH due XXX media postponement well expected QX league versus the absence the XXX as million XX% revenues of last In related advertising profession

Sports year's timing adjusted On offset cost game the quarter controls due XX range was QX above million XX guidance and rights costs, from EBITDA that basis than forma adjusted of the to that in pro million direct last XX payments a million decline sports decline our more of lower to advertising. absence of of was a in incentive timing which for million XXX STG. item the amortization were quarter the higher is XXX payments due to Sports as paid fee to the sports rights than the million million of XXX DISH as and payments higher sports well year. EBITDA the of within the for rights quarter, rights

reminder, fourth right a in As are highest payments and typically the first quarters.

XXX million end to STG's cash million revolver a million you balance we million and of in there's X,XXX to that and STG, included of had was consolidated the drawn balance outstanding. XXX just such I mind Diamond including again, Turning cash STG sheet, drawn that on large of want repaid Again, at the of remind at XXX the included XXX cash that since the the Diamond. only at million million keep revolver. XXX quarter portion

quarters first lien was net Total the times debt was and was leverage quarters on bonds. and Television ratio lien eight a Sinclair indebtedness X.X on times. was ratio X.X covenant on times consolidated covenant basis of a quarter net of through X.X at on the of XX,XXX on X.X four times quarter X.XX. the Sinclair leverage end Diamond's million, X.X indebtedness a trailing trailing a ratio first end first at Group's for the

into effect, times. total seven Diamond a And everybody I if net is strong maintenance XX%. only that want was to basis, remind leverage the covenant springs over On revolver

right the impacted it In continue year, how and is rest of terms sports long be and long the will with unknown outlook obviously, postpone professional to the leagues guidance the COVID now their the economy by for of uncertain second quarter seasons. will how

into the full stay of in improvement year more in place, the of guidance until resumption of restrictions the our visibility suspending play. relaxation and rate league are Therefore, we economy, have we

declines see we result suspensions and advertiser of a continue underlying quarter, advertising as businesses. and to in second the the economy general weakness the game our For

For million is to EBITDA the year. be X% core is compared advertising. in decline X% million, a business, million as last our XXX legacy to down XX% to guidance to approximately year. to media last expected by million a driven revenue second XXX This to quarter is XX% projected XXX from XXX XXX

advertising expect half highly help we the of year, concentrated weakness to advertising. the of that will and On which political some core offset side, the flip in second strong the continue in is

million forma is XXX revenue second to For media to year's XXX. last to be pro to the Sports XX% segment, XX% down XXX quarter million, expected

none professional to will as compared the playing second million Pro decline year with DISH XXX. to just the forma that contract EBITDA said. primarily have in of the to million quarter. second XXX assumed resume due leagues We Adjusted be the I and be quarter reasons in XXX the to expected executed the not is last

I item non-cash the out, amortization. to in that in while and Chris not on amortization decline contract. a largest we does rights there expenses the continue payments, continue is based minimal point of want we the pay games pointed Since not the is assumed fourth out team distributors reduces rights is And that per the to this and the sports no sports be will impact have no which quarter, it pay the amortization. result EBITDA, expenses, as off to

$X.XXX of billion per cash $XXX $XXX are cash flow in flow shares, company, quarter. And XX million $XXX second share revenues $X.XX equates to to to expected finally, $XXX EBITDA million. free of for of million million And on the to billion, adjusted to the free be and million adjusted to $X.XX consolidated media this $X.XXX

we'd up to with open to questions. And it that, like

Operator

with Deutsche from Our question Aaron Bank. Watts Instructions] [Operator is proceed. Please first

Aaron Watts

STG those force perhaps on sales out going ground, nature, I I'm sized being that permanent They've in SMBs. the markets a important with what hearing on you impacted to question is and as called as somewhere tilt curious in a And pertains or the wanted is more start it already it between? in by seeing mix. now. from temporary has most been category your whether your to also small the what pullback on side. And overall of businesses perhaps cares how this time medium is advertising see

Chris Ripley

to when that, advertisers. They Rob I on hard, SMBs Well, as than getting division. think, But news relates it take I'll larger national to it's probably, let to the the not that. the Rob When My will let do permanent. speak is normal. local that, things return hit so bounce pretty further back much Weisbord I'm to are comment harder going

Rob Weisbord

Yes. what might lunches with marketing applicable virtual is, the have stated on We're And of what COVID-XX time able to out for demonstrate time to Chris learn, they to I had solutions coming doing and us SMBs agree educating be we're the various would learns. that given business. be services their not

off open to midpoint need to-date see keep the but their their have move COVID-XX. the to do that service will They'll that to to re-staff, autos short robust focal We of return this during cash be flow marketing in the at essential is the get their lot, going, has was continued see so us term. they XXXX year. And to strong we of them point a our a And as considered expect back half business. business. returning, we've Automotive, home-sheltering

Aaron Watts

Got distribution little the apologize helpful this, lighter revenues I I was through context. Lucy, I that? one like question walking main think than factor were in seems your Okay. on That's it you if Sports the what XQ a missed numbers, could the side, but I were as the And all ask guide. of If it.

Lucy Rutishauser

estimated. news So pretty a was on the think we in bit The the within sports guidance. local when and were side, much those churn matter about, negative. It bit versus it's a side of what we difference you positive, a news was in little markets, really, the the had little just side aggregate, right

not at total there's company look what much pretty were material when together, to. changes. at And the again guided we you are So we

Aaron Watts

discussions, one I last this any time, and coming particularly current bigger have environment Comcast the summer? one distribution renewal I Does picture. I the with And if think up just appreciate ask impact upcoming on could your

Chris Ripley

lot an we expect have as occur summer. think do on the that on summer. a impact We will mentioned, more that this news more force that resume, those likely So, likely than to will we sometime negotiations, don't

going also we that we've to so, pent sports. for seen a large is be very And think there up from demand data the

fact, was live this the service, TV that survey were we to population there looking XX% order done in when In was at watch sports it comes just their to of back. a at is looking upgrade

So, we think live than is that really bigger, and incremental normal than, sports bigger return be to drive activity. to going

sense, in gives I So some this stronger think hand. a us

Operator

next with is Our Benchmark Company. Please The from Kurnos proceed. question Dan

Dan Kurnos

Thanks. Good morning. Chris, really helpful economics sort on additional of color just the on DSG side. the

I sports virtual curious, comment the and know that made we rating. got you just press, a worth, what Derby for Just the it's heard Kentucky four

out just, So demand for if don't sports, I just for it's to up I'm but the what handicap But sports, it's trying know, one is QX, maybe year, I hard to know guess you that's pent full understand, is. you not that sports us distributions how there that how of you'd around, against, nets give that that pay, any fees doesn't have out, color can its EBITDA? plays would rights return QX. sport how impact to Kind in

Chris Ripley

back rebate. work. expecting, would And without we're my of situation don't get like in I of detail than rebate play agreements less But to amount MVPDs into get played. the payment played. be should comments in in teams our confidentiality. good than where, less what terms some do will flows That games terms a sort everything the the many expect we the, that terms prepared about say how to of result ultimately violating can normal games paid how pretty of we And in the refer to gets be know we of that

good and essentially so, those, terms And revenue we in offsetting just declines of we -- very expenses. have model do a

be should in any scenario. we fine conceivable So,

Dan Kurnos

side, color. And helpful That's STG side. the on TV the Okay. just then

or know think XX down, XX, you bit of you know including if north at cancellations that going now. I if -- just I might category from you everybody, give challenged in of with is know over maybe of of But core terms kind sort been us perspective, you're but education. and be evolves? the to midpoint. you're just what could pace I next even conversations advertisers how out of I'm some that curious, other. online your other, out category the once color you I said guys in having with seeing called just, XX-ish that's pull a little kind may and more few quarters and

Chris Ripley

have that question. to Great. going And answer we're to Rob Weisbord

Rob Weisbord

company, actually a advertise going education, of colleges, a in trade we've of their lot to classes. universities, lot So, seen online schools,

So where that the specialized have online virtual, those their universities traditionally are up now stepped going budgets. in marketing are

in attorney we see And the specialists and position we that in thing from on focused so, becoming we are same generalists category. the as

as the of when that expect well rate We be norm attorneys the out bankruptcies. higher will at predictions coming the data, divorce it there's unfortunate, you as than read a

and robust states to we we're third will So, lag the the the service cities as it there starts towards as a stated, previously be a But if fourth quarter. things by and planned, secondary reopen. COVID-XX. we end short-term seeing category and robust as way all see have through can go be recovery, And again, don't as quarter

Dan Kurnos

maybe its mean, mentioned down just before, when productions something in dealers, shut just I just I -- OEM you usually anticipating of June I historically, auto hopeful and we've kind but to Is are you've you had on you have and kind reopen. ad July that guys about of talked campaign. of can the timeframe? Rob, it a because know big

Rob Weisbord

open, never we run on-air that of Yes, have we on an that from on promote shut to they've give campaigns the of our is departments we been have are regionalized give anticipating, and we've we most in groups, so down. that very been focused focused groups auto back the back the to open. are marketplaces community standpoint the our Their have automotive local groups, the service part

all dealers. believe remain and come auto So, our we've that goodwill in extended back contact us we with to will that we

Operator

Wolfe next Our Please John question Research. Janedis from proceed. with is

John Janedis

could to STIRR Chris, of there long more a DISH? about meaning, sticking streaming situation play, then term with move live distribution lack any guess, I it? into aggressively update the model? is I And sports, think and to distribution the guess with And how a does on consideration distribution? intact, current so, sport way you

Chris Ripley

Sure.

So in over look, direction. we've have consumer direct been that already it's that slash we offerings I think headed time. inevitable We're more already streaming

And so, don't to of that's do partnerships. be to ecosystem that our at additional complimentary add forward, distribution additional also certainly We going revenue do to be extent and that to streams. we going add additional existing their the and value value part but of viewers our the to model

it's see that that find way. a I -- its thinks it lot an just of proposition, don't we analysts So, either/or and

market offerings. the with is no mentioned, guidance, in Lucy And relates DISH, value DISH. there as complimentary as our updates on approaching it are think We enhancing I to

Operator

next Our JP Morgan. from proceed. Avi Steiner is question Please with

Avi Steiner

the to you for -- above at were to off got about achieve Thank one, low and savings a question. talk I've the if you sports couple able Thank here, a at can be you may beyond little the cost sports be bit of And rights? then longer, more. the A you. couple Diamond

Chris Ripley

beyond is Well, away. will for the primary expenses, cost production fall sports the rights those and savings Diamonds

positions tightened numerous that. have that, and like things Beyond travel, open our areas in like belt we entertainment,

Avi Steiner

done event want maybe it's that in got you liquidity we for reduction -- and Great. you just comfortable happens? And you. early, if is thank on minimum the point I've sports any all versus feel feel to that, that with net should but one and with that, then, your to assume How a related very and you'll distributor be outflow the about more rights that under And comfortable give And would then when I your back? said think confirm know true-up deliveries. fine between

Chris Ripley

Sure.

answer. first. question So simple I'll liquidity deal That's with pretty the a

of situation I not mentioned, rebates. is to the we a terms We rebates, as we're how likely played into are We those think when then We're many on perspectives. will till there. where And get from in don't fine there magnitude of and going play. be clarity games liquidity more the headed those, we concerned know we

do my be a tell, to picture, from the though Once So, guess what is And is, our we there what is. we impact able update will be will you'll next the clear have that guidance. quarter.

Avi Steiner

Okay. And at this. end I'll it

million. is Diamond, I $XXX at Your cash balance think,

silos, made at the that. give the of in of you other leave Thank bond for you about How trading contacted the all it potential And but Diamond terms at in context back. you the do You just that time. levels? comments current talked all and you about securities cash prices your think of some I'll that of that

Lucy Rutishauser

So, too. I'll one that take

So optimize we bonds well both of look view at our all proposals as end We across the the some trading various figure And the can did to as way are of a when securities the this looking well what of everything's as trading, best and environment the that at and world, to in front deliver. quarter, in our you the discounts financing at you silos us we've equity, equity. they're discount had put banking a management opportunity. at alternatives at and Diamond we as be liability buy structure, all where the numerous as is capital deep investment by imagine of out the as opportunistic

come to more know you that in if there's regard. let we'll So,

Operator

with Our next Wells Fargo. Please Hebert Davis proceed. question from is

Davis Hebert

I morning good well everyone. you guys Hi, staying safe. are and hope

Just out I the you about cash? you would whether given over situation true-ups, couple we're will that's perhaps you Diamond time? Is giving those in? idea a negotiable on suggested spread those side. questions seek Can them. of Chris, it something in purely the the the Any precarious be had

Chris Ripley

negotiable. It is not

because such on the who been has equation and why there be the of are clear. quite both And fact, this the are of mainly wondering, event? reason sides be potential contracts an played. you would have might games to not this Well, strikes anticipated In for anticipated

not they generally as calendar or the season year. so, end the quite are the the I at are mentioned, true end clear. up And things of are of either contracts And

Davis Hebert

and guess touch is I if the about more And could this you then on fix? Or for YouTube for template a short a I of given, the future didn't deal broadly didn't wonder how term that all take, distribution? thinking curious is is, this they YES. And just deal specifically Okay. Kind you take just deals? were RSNs

Chris Ripley

offering were, Yes, breakeven. lot pressure under make we'll YouTube, that a to to have of they see, they're cost

And cost them. a so, for exercise it really was

the more of ultimately in markets. didn't were ones expensive some larger they And take RSNs, the the

the there. So, that's outcome really drove what

unique think do, and I decided it what they implications. in to I wanted terms think they of any it's situation don't broader has really a

Davis Hebert

that capture sport bonds for Diamond exchanges alternatives, How you would the the question. Diamond the many And And you terms did just in Okay, great. of at thank And perhaps Lucy, financing discounts last include to buyback entity? at sports entity? time.

Lucy Rutishauser

So, the lot Davis, unsecured on that we we the go proposals us financing And side, we we're X evaluating. And have down, paid we'll let front know once said want everybody of that on about for almost I of again, Diamond. then really, million path of X.X a to in was million we face And the as value. of notes that know.

Operator

question is with next Cahall Steven Our Please proceed. Wells from Fargo.

Steven Cahall

question today. big first picture a taking for Maybe my Thanks just question.

RSNs and ecosystem. lot and and unexpected have know, challenges the DISH of cord it the cable between a now coronavirus' looks through like accelerating on impact is sports gone You cutting

lost big the a of distraction the a this lot want to all decision question been for think you It's alternatives? getting you Because be asset. think a business the since pure see kind certainly that's call. changed that focus really of to business of on this like business So big the is kind has strong have a the term? still that's broadcast made Do I Are this. play in We you considering in seems is any long it a you investors.

today? about So just how viewing do your of we you're the kind way portfolio think

Chris Ripley

implications Diamond. it. just are approximately We've and the come And we value think solidified outstanding ecosystem. and in we at what the are as do we've of enhance The bought to I the we've And to number subscriber strategic streaming earlier. offerings, since then, that a, consumer these, a direct through of incredibly with base really, we really point. since a two are long for this purchased mentioned assets Well, on way there XX% these can DISH Comcast

think betting to opportunities will growth some these to like when return of bear, the come we ultimately direct and consumer. so, sports new to And

is will ultimately day this and the end of at the a that important is So, business provide returns.

Steven Cahall

Thanks the true-ups. and then just, just another one on on,

of I captured kind unrealistic that think just there are June it would I quarter. don't requirements? is calendar Is on for point. typically I'm sports, based fit you If at maybe the this which thinking like I calendar Are no I an at say a there is, heard assumption this So think quarterly year? it's end.

rights have affiliate no have basically sports revenue you'd payments. You and no

EBITDA comes So, Or depends how kind going the a be to the a on quarterly that But to recognition? not work like basis? going RSN really it does is of it zero quarter. for out? year that on Is even retroactive is

Chris Ripley

get not or can in either general, end. calendar have specifics going what the of we it's be we see which factor really beyond not least in air. And played. that basis are in depending impact the remarks, so season the into the was the the in So, to We contracts sports the our until accounting off really the you're them, a or of know assuming I games said estimate impact, better can't in it's of prepared done on QX ultimately a quarterly at number will on that contract at end the

Steven Cahall

retrans Thank very much. last growth the one, on like XXXX? you any for just might then what Great, update net look

Lucy Rutishauser

you guidance at Steve, year clarity point our at cord said, they're among or to people as we actually And you again more where whether right see that, see the TV increase, economically we while full options until this more not, is MVPDs. entertainment now includes under home available subscribers that cutting, we have one have or of not stay suspended whether knowing the rules. few driven

that believe out quarter, we to again, put that we'll able there. next be back So

Operator

call gentlemen, to like President Chief and closing Chris session. question-and-answer we I over have Officer of the would Ripley, Ladies Executive reached end remarks. to turn and the for back our

Chris Ripley

that solid company conclude the meaningful macro I far the during were we are events resilient Thank our of remarks to you, and we more like would than operator. out past. by pointing

Our much higher quality. business in more are revenue and streams diversified

Our more sheet and operations our sophisticated is stronger. are balance

We this experience back have storm and ever. people the and come the stronger the resources, to weather than

thank you. that, With

Lucy Rutishauser

Thank you.

Operator

conference. This you. today's does Thank conclude

and your participation. at You may thank time lines disconnect for your this you

Sinclair Broadcast (SBGI) 6 May 202020 Q1 Earnings call transcript