Earnings call transcript Q1 2023

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Operator

Good day everyone, and welcome to the Sinclair First Quarter 2023 Earnings Conference Call. [Operator Instructions]

It is now my pleasure to turn the floor over to your host, Lucy Rutishauser, Executive Vice President and Chief Financial Officer of Sinclair. Ma'am, the floor is yours.

Lucy Rutishauser

Thank you, operator. with Rob are and Weisbord, Officer. call and Ripley, Chief the and CEO; President on me Chris today President Operating Participating of Broadcast

Investor would he joining that, where us. Vice and comes and to And our Relations Chris I before Windstream Curo who President Chris also he Communications, of Analysis. from Vice Investor Relations. where King, is Services, of President Vice Planning served Relations, new excited we’re us to like was Health of President Financial as introduce Investor

Before transitioning and side, numerous Chris where senior the a awards at was Welcome, analysis won earnings analyst Stifel to the space. he picking corporate equity TMT research stock in for his Chris. Nicolaus,

and our for available on Before call are sbgi.net, earnings website, the supplemental information Information want we Earnings that begin, I page, on today's the to on Investor remind page. and Webcast slides everyone

today's Because will from a in company also you is previously announced reorganization statements Sinclair want reorganization, proxies soliciting limited call currently holding our call. that regarding earning our with are the the remind to be connection I on followed stockholders contained XX, as with prospectus in Sinclair SEC Broadcast as April Sinclair definitive XXXX, the statement, by X. Q&A Sinclair statements on each Broadcast with the SEC the and Reorganization proxy well filed to Group's Inc's April Group we

they information regarding important documents the contain are stockholders because read to Our these urged Reorganization.

will Now forward-looking disclaimer. Billie-Jo McIntire make statement our

Billie-Jo McIntire

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

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

call measure adjusted will specifically is the its operating cash leverage. non-GAAP The valuation. flow Included of of considers of by financial also industry to a indicator adjusted as on analysts, measures, a of EBITDA The adjusted be be investors discussion assets. used believes that and free the company company adjusted EBITDA EBITDA, an performance frequently and lenders

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numbers, with the to prior periods on reflect prior Diamond results given in Diamond intercompany the XX forma of of sold and meaningful trends, of March X addition, during exclude them deconsolidation In financial comparative around thus, in Sinclair only have any and a and businesses discussions months. exclude and and reporting call discussion this pro transactions all XXXX, order

earnings the release. this please that to was including refer period results, Diamond actual For consolidated, morning's

Chris Ripley will on now the give direction company. an the strategic update of

Chris Ripley

want company's that will parent hold and traded which I a Sinclair structure, new begin Sinclair of will assets. become company. Broadcast Under reorganize the subsidiary, announcement want to Billie-Jo. holding a subsidiaries, you, new will our the publicly which expect non-broadcasting its broadcasting to assets Inc. to hold the pure-play to Sinclair June, to our and begin Ventures I under with announcement close Thank reorganize, or we in the

and structure within will the flexibility disclosures business. the this improves the results on greater the financial believe value the drivers creating for value This of of provide transparency We corporate company. and simplifies

Another think our in structure be non-media Sinclair direct private real will estate, and is assets new ventures. like non-broadcasting Broadcast in broadcast and remain that Group, Tennis assets venture our about assets, the including capital, Compulse way investments Channel, equity to while will our

to on allocate opportunities in non-broadcast continued such broadcasters' transform to While we're business NextGen causing are of uncertainty differently growing its swiftly we through negotiate, where optimistic Broadcast, our and With cloud ability in advancing. continued future governmental to about India holdings about restrictions as to the of transformation continued core more prospects think allocation regulatory investments capital. transact, future NextGen programming, and capital the intend news is technologies broadcasting and us

This reorganization will division play ultimately the allow or its creating grow division free to parts, and that a to pure the financing debt overall of organization. sum more raise and non-broadcast around flexibility for is our equity transactions, unlocking assets, broadcast value transparency for focused, a

in NextGen a Broadcast creation, value around Sinclair, Broadcast several that Labs operate distribution announced core particular, recent weeks Saankhya NAB, NextGen our and CAST.ERA, build advancement the of partners, of along In Speaking network. technology. SK of and we announcements data exciting with will and Telecom we advance made

to a help opportunity This to data NextGen XXXX. create the opportunities, national revenue across and U.S. $XX will and all estimate capitalize by for platform will for billion the independent distribution. data an commercial stations casting services solutions at manage which industry will studies interconnected broadcasters provide This platform available on

and nationwide. is us time, the data next remaining same programming distribution meet while with allowing step services, the continue of exceptional We provide interactive capacity to data in needs the to our evolution repurposing of at believe enhanced users broadcasting, to video channels the the of

a These serve the broadcasters. value business market increase IP on can that data-agnostic of spectrum disrupting communities better terms cases all for pipeline to provide use

data go expect live our core in and to distribution platform of network XXXX. QX We

and out our NextGen with additional In were roll a We're in also to to the host latest both markets. serving Moines as service deploy continuing of Rochester Broadcast in markets. April, markets the Des Sinclair technology NextGen

is in the San although Francisco. markets. we pleased XX And in it now is also the available market, our was NextGen deployed increasingly not top Broadcast technology are

bring coverage of U.S. launching to capability features deployments the by goal country covering Information, an over Broadcast Emergency critical Broadcast ONE key nearly that pilot to with the XX we first nation's be These of is use service enhanced to and this disseminate features. project XX% will year-end. technology XX% NextGen markets industry Advanced of NextGen broadcast with

governments with messaging partnership of a Governments, and to systems. the Washington sent provide provide e-mail, via other enhancements will Council by we text, Through Metropolitan free redundancy social emergency -- media and over-the-air and currently local we

in in launching Columbia, other of the and coming quarter, Initially, will on Northern this but pilot, the Arlington months. Virginia Fairfax expand District to counties jurisdictions and the focus will

for over-the-air owners allow Broadcast capable the get Broadcast NextGen agreement fold. App increases to pay an services. This announced technology matter for watermarking can homes broadcast for programming, access TVs the App also no will that addressable market their TV via they We experience that how of the access TV

we Sinclair's of media are of part our operational our enhanced evolution, continued news adding gathering As also operation much and and workflow to systems. reimagining technology, capabilities

partnerships into providers our several align with entered and with that platforms vision have We for transformation.

migrating and advertisers It operations be have experiences goal further networks and interactive begun as our our media help to also integrated across news compelling for fans. the mobile partners. sports which local communities create for cloud, tools across be will content to to have We fixed to distributed and our and as will and multi-platform devices enable playout well existing enhanced

launch live over-the-air we origination the broadcast the is end, go in set To will that announced, first XXXX. station we Rally, North local cloud, in Carolina playout which affiliate to in June

audiences, production connectivity and reduced integrated and news be innovative enrich workflow for cloud-based news also software content adopting an the gathering, increase news will the Sinclair to news, of speed metadata. our flow of delivery to costs

expense migration mentioned quarter, included are in guidance. As last the costs full our cloud year

for next anticipate and to XX to be investment a this invest We generate ROI and XX thereafter. the mode will -- positive months

are for outcomes ROI we to As optimize towards and these our workflows transformation. best operational step our a company, partnerships believe seek multi-platform the continually another and

YouTube QX The with this with lineup, and and subscribers to carriage Comet, agreement television top offering TBD beginning multi-cast of to franchises. we series carriage also agreements, In and favorite and coincide YouTube recently fan TX service X adds all several bringing add TV Channel Sinclair's offering to year, CHARGE! its Roland-Garros, national announced to networks the June access Tennis TV lineup to TVs French Open. YouTube X of of of renews partnerships most to

In and affiliated existing CBS addition, broadcast Sinclair's stations. MyTV carriage extends of TVs the agreement YouTube television

platform also a ago. agreement TV, couple an in which Hulu's our weeks the + began We Hulu of return reached principle saw of to ABC with on airing stations those Hulu, Live stations

our commitment upgrades Additionally, our overall. first and released highlighted Paramount fubo lowering the CBS energy returned annual to our after recently we an month. have the making CBS affiliated last our which affiliate continued to and We reached equipment Board, energy-efficient are agreement report, fubo usage ESG to stations

and to management. our outreach equal expanded employment opportunities, diversity risk also further and We programs employee enhanced furthering community governance strengthen and

suggest back Sinclair on-air illness history, National mental and a with to and to has Hope, and Support Sinclair an focus with the resources people on Sinclair commitment our health we particular the communities mental proudly launch Mental adults. company-wide, Alliance Cares latest encourage Through serve. Throughout young initiative, our awareness we Cares, giving Health a prioritized campaign on unwavering partnered with to

an genocide Institute’s the Chance a to Sinclair Foundation, the Last of and survivors to part and the genocides. collect Holocaust recording other History Initiative, last with assist Testimony national and Visual also multiyear with agreement effort the for from living the Education with to into interviews witnesses Shoah entered survivors Collection USC Institute of testimonies as

the launched giving local company initiative employees of And volunteering back day first organizations, spring. saw in of home to the our shelters, of calendar on organizations, thousands dedicate will The Service, and Day local animal shelters across an nonprofit April communities. our return to and to all The encouraging veterans' to including community XX, to we their each Sinclair day Day banks, our employee-led food our Sinclair communities. skills banks, local diaper of cleanups company-wide employees' and Service our time

we sustainability, prioritizing our and we only are local our emphasis is but what giving people, By not for on good our to right and long-term communities, are value. our planet, and doing diversity an creating back neighbors, governance,

enduring and performance. long-term, opportunities their Anniversary decades, I its Channel, to year. In build growth successes created this congratulate exciting on an the celebrates want of Speaking X with business past XXth to Tennis financial solid Channel many Tennis has which just

for Rob to it Now operational over an I'll update. turn

Rob Weisbord

Thanks, were off double QX, Chris. year early is see XXXX. record the a We started the in this election booked candidates million midterm strong in political in issue spending QX spending $X political XXXX, to with spending of year. Coming and over the excited off which in has strength

contested record-breaking be once for to we projecting again. continue us presidential are expect race to in our highly nicely set and political We up XXXX, which spend

first quarter, selling of and Our the March same quarter high-profile success slightly resulted in the decreased high period advertising a as the end achieving advertising such Bowl Core year in Super the time in guidance. ago. Madness, to in our first compared periods,

since category offset by in with of seeing percent QX are legal has rebounding categories. insurance year, phase, positives the strength in beginning we are automotive The and increases steadily the These retail along low in category. and been single-digit softness the the

is but line quarter decline the expected you when low and single exclude digits, QX in Second Madness. Super to Bowl with core, March

out first rolling combines Unified and cross-platform began of and of the allows frequency. to Ad digital of velocity reach we the combined all quarter, and highlighting campaigns platform, by linear which our ad Sinclair's our sellers assets, phase increase advertising, This

inventory broadcast makes technology system. the us sellable single consolidate to all first into The local a

package, all our of price the sure Our are inventories make to and maximize clients. goal meeting goals revenue, easy to our while is

and sales national and also allow The at easier be platform to platform But the figure should to save so pricing adjusted it out time to will maximize management algorithms preemptions, with completed pricing for supply charge revenue rollout ensuring will how allowing our supply current and demand pricing. learning, based also folks machine us aligns and campaigns, get reduce of our make and marketplace much us the with uses smarter they of dynamic yield. the for based history yield intelligence on artificial the on We've demand.

QX. is Tennis a stellar to in Channel start off

Miami led XX in up total XX, in strength increase the XX of for was second-best average was and to March adults households highest and were in demos seen the ever our XXXX, since X%. audience both The have and to Indian XX%; up Wells up households and audience having total views. is tournaments March to up We XX, adults which key X%; view X%; in

has leading TX hours Indian XXXX, both channel, second to Miami with Our in its records becoming in also and March top the watch. history set month users Wells in and

quarter more streamed than Channel in and VOD year-over-year. and has Plus the service X.X Our LIVE up million XX%. subscription Total hours are Tennis subscribers

a distribution the We've of sessions now grown in of added Germany, television International Tennis in the has sets approximately as Outside has number and X/X a LG year-over-year. U.S., as of Switzerland. and Channel grown International smart well. XX% partner reach Austria

leading At in the Open dedicated May, Plus. a Tennis to will will merchandising of TC TX, become launching a hours a X over white-label a Tennis us Channel Channel retailer the weeks, we're network X,XXX stream. Off end Channel, air, we second allow anticipate partnership to with create Tennis in the sometime quarter. and Tennis shop, tournament French for launch airing which revenue will shop launch across digital a

community stations dedication broadcast their to continue be advocacy journalism. to Our recognized for

IRE public In investigation Baltimore, proper education, award violating Baltimore rights. Unit, to students a of stations their WBFF our Baltimore Investigative school found was the honored national March, their system, be education for denying with was education federal and of As won dozens with a awards Project their which into for local disabilities report.

In this Sinclair IRE and on the contamination Cincinnati, a WBFF. for in were our fourth IRE honored year radioactive National stations WKRC consecutive station was with for the year named in that fifth This finalist awards is reporting award Ohio.

Sinclair This recognition. outreach our Action. Sinclair received year, received Cares Humanitarian program seeing for two Anthem also We're community Awards

For Cares; our Summer XXXX Hunger fundraising campaign, Relief. Sinclair

mentioned, address the recently Special the Special with illness epidemic added teams. mental facing and with Awareness partnership country. Chris the National Mental addiction Town on partnership a As Alliance a and expanding Hall be the that Health We'll to Town to have Hall opioid in encourage we

and Hall division Our also Town the intelligence be theft as will and topical of upcoming for our viewers response cybersecurity artificial information. as subjects tackling identity in well prevention news Special to requests

a by local missing Erica a which Carolina, South our across the podcast's, station produced and Missing about Charleston, in Dayton; and Carolina, which our YouTube, of Murdaugh millions pretty Murders led the Two country. station strategy South downloads across child to other cross-platform on employed Baker focused and in platform, views TikTok of social on

In We're were over was on local power reporting, video incredibly illustrates are across Utah, all and doing which of while and shared local XX within the news journalism TikTok, using the floods work reporting communities proud coverage our on destructive we of platforms. platforms multiple million times the and the solid viewed communities. of

Lucy. Service the thank now our would for we employees Day it and to to live giving that turn Chris like back to the And of I'll I'd like communities in. over

Lucy Rutishauser

Thank Rob. you,

a our along. our slide and are website, we'll As financial supplements reminder, our and deck follow on help you

end The media revenues with at the range, of and guidance core high guidance. of expectation $XXX high the achieving revenues of surpassing our end million advertising distribution political came in and

subscriber on on The better slightly than beat revenue was churn distribution expected.

XXXX, and of As compared of subscriber driven revenues, absence down to the media quarter first Diamond revenues the churn, were fee ad political deferrals advertising. the X%, management by core

expenses guidance exceeded Adjusted EBITDA revenues the and higher expectations cost timing $XXX of the media end expectation, primarily media lesser extent, on quarter, and due controls. at a in better being to for coming million of to than

adjusted as last was of compared lower overhead compensation driver and fees. the general the expenses quarter, cost, the media of media and for include and annual insurance and increased higher the result year. professional to discussed decreased of Group The corporate XX% expenses. This quarter revenues For onetime corporate first EBITDA

programming step-ups compensation timing This as last reduction technology. higher the a tennis The offset Media were impacted to and year networks. partially expenses. of to investments tournaments in due also in well to also media fees annual sales expenses compared expense by was lift as by was

have this we in and we for year, XXXX over which, and XX latter our that XXXX be to retrans, churn reminder with renew subscriber in digits don't until reported previously contracts of as of lower and the XXXX, on distributor material a then part continued than renewing since retrans as mid-single Speaking expectation expected, is of net but the XXXX months. grow contracts next distributor net

rate X-year is our result, single-digit to retrans low growth be net a As percent. expected

million per with earnings $X.XX. guidance diluted adjusted cash also cash the of free the $XX of for flow and share in $X exceeded of our per quarter Adjusted range, quarter flow share free

We quarter quarter revolver, almost end. $X.X our cash of ended with combined was the $XXX million, a our at liquidity undrawn balance with billion

the while end indebtedness STG's ratio was net on first-lien was leverage through Total a quarters billion of first at and X.Xx. total trailing X debt the quarter was bonds $X.X X.Xx, the

year. of As discussed leverage on last political and XXXX, a year strong net to improved to quarter's call, we the do on expect end increase total by this mid-Xx then primarily

the X.X program, During outstanding beginning approximately the additional of shares shares XX% of year. at we stock million X.X shares since XXbX-X representing million and repurchased total the under XX, common quarter, March approximately an the a buyback

count of end the share the million. total XX at quarter Our was

quarter quarter and of continued second year-over-year compared decline to we XXXX, political subscriber second churn. expect due guidance, mid-single-digit to Turning absence to revenues the spending to media

Second be quarter percent advertising last by of single-digit to with decline Rob macroeconomic year, in versus expected quarter driven discussed. the weakness, core primarily is as core down low the second

million to pro quarter discussed. between in higher programming lower as Rob the and enablers the network first adjusted NextGen of million sales last expenses the million result and $XXX and and quarter, expected to technology Chris primarily EBITDA platform Second $XX from $XXX is timing revenue, costs fees, that be compared investment year, and of forma

million. think flow negative free expected quarter you there cash a flow, cash which free million atypical an mind or need you it as positive $X adjusted about year. provided we is in EBITDA guidance to for for are keep And haven't to Adjusted things $XX full the be make few XXXX, while to year

down be First, due as timing expecting renewals, to distribution prior calls, net noted of year-over-year. are we the to on have retrans we

expected $XX future such services and moving to our are Second, returns. yield NextGen as this platforms marketing the to cloud, we technologies year, are in investing infrastructure that million roughly

macroeconomic generally which impact uncertainty the conditions, advertising of side still is surrounding the could and there Finally, business. the our consumer

there We we'll which to in are to other auto is as services, in but to which seeing be our some positive categories, discussed, in need softness monitor changes and category, closely. Rob continues biggest continue

as head XXXX. free this flow uniqueness into political the expected positive is we Despite expected cash of in to be year, another record-breaking year

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

Operator

Wells is Steven from Cahall [Operator first question Instructions] Your from coming Fargo.

Steven Cahall

There we go.

a to to leverage on got Maybe the just I've going few. start the mid-Xs. off So

You the stock in lot of a bought back quarter.

the with that of love of a dragging as leverage So to just and parts get would investments X.X stock the of to some leverage, this think combined investments about EBITDA, off but moving components from repurchases, we the sheet lot the coming cash mid-Xs? for is the quarter to to balance the the just change

Lucy Rutihauser

Yes.

the repurchases adjusted what's stock piece year, there, political EBITDA being And retrans again of in Steven, then is nonpolitical which year, in a second talked that. net of the as -- the just I is and quarter direction is So down, investments the the a about, infrastructure. then so absence and this

So the attributable second Holocau, out a for those around of churns leverage. was are that of driving X.X also EBITDA the worth shifting successful then And for X.X Q&A EBITDA, and in sort of STG said things And Holocau assumes you we the quarter our then do and closing that Tennis as are the repurchase in have there. leverage. that

Steven Cahall

of venture condition? investments components investments, a to helpful. of might expect current in lot how relatedly, just you've capital Got that? $X.X do receivable the about ventures incremental And and financial and and then, Could billion. we understand facility specifically thinking any it. financial the think you've we about That's accounts I'm we talked those? PE And the about disclosure at Diamond's how marketing got given very estate think that the real the and that about Chris, value

Chris Ripley

Sure.

an additional about have share we we because do careful company have exchange holding outstanding offering. So information around to be

that more say can't than what document without in really triggering we requirement. So is an amendment anything

would I that point there. So your questions to you document for

disclosure voted will a We detailed do -- enhanced the closes, X, come closing plan. and that expected with vision once will in is -- more we XX, we out to of be May which ventures definitely is then June around and part on

my in in of the So dislocation that. repurchasing the driving recently money because as we parts is you I mentioned what's Plus put we our some our can move And -- this the it's and public stock -- comments, big where of this see what's between [indiscernible] marketplace.

right And we on get in properly information so do we're and we very that your right assets the the can focused so hands how get valued.

options in all regard. at looking that we're so And

-- And high-quality reasonably has get that would It it's facility, expect then continue to in we're and security -- refinanced a it. question of to in to hold provides future. some form at good return, AR of terms AR the the it around And in your point a I the happy it AR. a facility is

that So point expectation our some -- but be would is refinanced. at

Steven Cahall

one last the me. for just then And

a action that see I the Diamond the mean Diamond recent financial XX-K, frame bankruptcy did filing you Can reorganization wasn't could that tax material factor to think have the help you or bankruptcy? new just the that either adverse at us risk or related risk any suggesting in consequences. liability point legal this

Chris Ripley

And at be in speculate of to it pure can’t more just when be we’ll It point really Diamond. emergence. future Diamond’s and speculation. terms know We this we as relates back would

Operator

Soff Your is from coming Bank. next from Deutsche question Ben

Ben Soff

Just a of quick ones. couple

also of went quantify the up. expenses first, could wondering, if value XQ? the So investment was And the I us the XQ portfolio that shifting from impact noticed of help I into you

was increase? little talk I more bit you maybe assets about dynamic? just kind And So their value of if could curious, that saw a which

Lucy Rutihauser

Sure.

take So one. Ben, first I'll the

increasing -- expenses the increasing sequentially on So the media QX. QX -- from to expenses from

probably you timing QX. than million $XX different favorable And QX, Tennis need seasonality assets. the about profile goes from into that timing some to recognize has is there variance broadcast QX a So also, from that Channel of then

expense and biggest So fourth both for whereas in our typically is quarter, the wise. revenue broadcast, quarter

is cost biggest around lot when because Roland their their that's a tournament, quarter that. second production Garros expense that's big Tennis, happens, the For quarter of

of would that's that followed best everybody an few standpoint, of And but quarter, of just costs. a kind their close QX, quarter, then talked the we of QX kind just to in tournaments front and Tennis though. EBITDA slams so so of are QX to because historically, other, each typically haven't and in be is their expenses then -- around from And QX by because highest put EBITDA their their years, are lowest back seasonality some those production

move. that's to of to driver So that a QX big going sequential be QX

Chris Ripley

on for And to asset. any terms to in were of investment went was to in point performance And Moines we apartment there underlying improved me in the in one assets high There those value hard fundamentals. realizations the due Great it's quarter several million of portfolio, just then had returns, QX and really QX. also were $XX the -- that up buildings that were in sold

before more values higher they sitting so were in and And cash. conservatively at marked exited are now

So with the perform, the continuing to several combination of those increase assets value. realizations

Ben Soff

willing Got generating is And you guys Channel more the color bit just little share EBITDA roughly? be that you. would about to a Tennis

Chris Ripley

we out to company quarters will come That here finish the reorg. our after in come holding

Operator

next The coming from is Your question Dan Benchmark Kurnos from Company.

Dan Kurnos

to in tangential it the more Chris, forward, sort around of it us level. vision peer or and note just your with has, gracious keep ask broadcast I'll little that that since that it. invested to going synergistic have obviously, properties enough are maybe high things try a your just color to give typically group way And

portfolio You a ventures. will be what have and diversified clearly more eventually

things just core to capital it about sort important or you new competencies of opportunities? or allocation, that of I'm around you sort And think historical if legacy buckets in is wondering, how versus be future

Chris Ripley

a IRR that's -- obvious since sitting is take XX% same performance statement an of an portfolio, we of When our outperformed period. to that at kind is question. about of our the That at great currently a value XXXX. it's -- look equity that mean over say investment without I which Yes.

estate. set quite assets, -- of a and really is equity, that real so And that diversified private

comments are our on is are been core what focused to capital There like technologies. NextGen in is regulatory mentioned that That on returns instance, when areas. there, better able other Broadcast Playfly, business, Saankhya are I focused to do especially for there -- we given some which And for that assets and -- us my which Labs, a in MMR. take but so complementary backdrop it's there look at to our obvious we've in that the college

to we're our business. not adjacencies ourselves core so And within limiting just

So opportunities -- we'll kind be if on as a cherry of that you we will. if do there, good view investment top, that find

core diversified it in our instructed can be find outlook. if business, then it's those or areas. But So there by synergies think a all our I is that. adjacencies over more and And we'll history success we with

Dan Kurnos

it. around super That's Tennis. distribution, just helpful. then Got particularly on And

You announced about kind two for the I principle, think do from deals, you in I -- just we thought you they the if heard I had Tennis Tennis an issue, Hulu took say know that don't agreement station how but opportunity incremental of carriage here?

Chris Ripley

all I going be look, and multi-cast that Tennis the think carrying win our it's a company very for and is Channel significant Well, YouTube TV to TX.

but opportunities I I years. fubo you not can't one more for virtual's the the principle there, It only are And incremental update for is think been a will We sort but really of inked, on there get had. into on the agreement details in with few Hulu had it's Tennis. really once it

TV. YouTube adding it's Now

Channel I'm fully optimistic So ensuring platforms. about all on distributed is that Tennis

Dan Kurnos

of one on maybe rider the flow like for just odd there's Got last opinion just if or through kind a anything strike, Rob, you be curious there's any your or it. then of any And just impact? there, kind if

Rob Weisbord

Yes.

as shows really ratings. fairly go are of now strike. rider higher trending We’re networks as about reality quickly. up right happens, lot with can the library they If shows it reality are ready not a to the And well spin concerned the

at us that see So we impacting don’t all.

Operator

from from coming is Barclays. question next Your [indiscernible]

Courtney Bahlman

subscriber contracts of fixed? I year? know what this you have half of kind are the can those kind negotiations limited 'XX upcoming guys general bit both in -- second results. of them the a on you might are more little a already in the metrics? earlier you Are have the what you a Or question. scheduled Congrats of and of of guys think but for about the have disclose, How function are negotiated we do are context probably the of part contract I How structured?

Chris Ripley

referring you're assume which... to I our contracts MVPD

Courtney Bahlman

Right. Yes.

Chris Ripley

of actually and the the we half this about with subs latter then our to big back of the XX% another beginning coming Yes. XX% -- loaded up X XXXX. half In of MVPDs, year, the of have front-end

a So time are get back on of of there X basis the those 'XX, half MVPDs. of beginning period repriced subscriber a 'XX, done big per our with subscribers it's a big and where lot

Courtney Bahlman

a And the of majority Okay. are on basis. national fixed the are subscriber contracts the on side, also per

So moving you're that they're attrition side? with the kind MVPD subscriber seeing of any on

Chris Ripley

Yes.

negotiations couple X they year. coming more network not subscriber a X So – variable. those on fixed adjust the we years and it’s universal, Those we’ve side, – big change. trends of X this are at end as of got every do than and up to And the but

Operator

is next Reily Edward from Your question coming EF Hutton. from

Ed Reily

housekeeping. some Just

On $XX how segment? year, quarter? on has much is first corporate the And in tech in the line been in this the bucketed infrastructure other the spending corporate outlaid G&A within this and million

Lucy Rutihauser

spent to group in $XX guidance expenses. of we've really and quarter. about it that going insurance in was then versus the see in general around down million corporate and you're first So quarter, the driving media the What's

Operator

Your JPMorgan. question is coming next from Steiner from Avi

Avi Steiner

here. Two

or just follow-up. And out it missed talk categories? opening local, Just worse, I but more this and the got ad you about remarks, apologize trending about parse then in and can some I've it's talk how environment, QX, national, on better the if I one then maybe

Rob Weisbord

the outperforming Yes. way we auto, to that We're Local results now, from gave have our legal, we on specialty but is guidance low single positive digits. side macroeconomics creating local tends have strength watching categories. right which like the a seeing those in when where we're by some headwinds. national, headwinds, be units the But

from cancellations. any we're quarter, taking and keep we'll it, our aren't again, but seeing So major we eye differentiation not much on first

Avi Steiner

and color. one you of trying I'm noted you capital can, I of the M&A in one kind that reallocation backdrop to debt going the And holdings. the that Appreciate And reallocation and me. do to for Is be Chris, silo? -- Sinclair else. Ventures? regulatory raising nonbroadcast of paraphrase best obviously, funded as at then last I investment envision in this, context Or ask potentially by leverage silo everything to TV you

Chris Ripley

Sure.

for need if there resources be other. So are And side of sides you will. supporting either to there house, the significant both no on is the

there in just And leverage, its where division it et so opportunities of in are goals of as what we’ll cetera. have take terms is each around comes terms and it to

Operator

Crockett Your next Barton from from coming Rosenblatt. question is

Barton Crockett

Great. Okay.

the desire discussion fubo groups directly one the represented I the quarter, negotiate and the with about virtual of last there was was the being affiliate was broadcast the networks. So of to about by versus things curious MVPDs

the not change do? some prospect you're are And able to you vMVPDs, that able starting to with directly? negotiate any something for at deals Or Now still you're that is point? to

Chris Ripley

No.

the we feel conformed road to change sector, stated in a sort I at looking in need -- be And to of maturity as to the as and and which least part righted the when be change virtuals industry are what to ecosystem. We into grown scope comes significant rules area was probably and of small you at is that now last the needs beginning, wrong that from as -- the that the quarter, now. size many an the heard in there of pretty of are. that of able not is the and upstart it to negotiate viewed in directly has And believe a foot the

So we're coin rightsized. getting two on and on regulatory that we're perspective from They're work focused our of much that the that a that, relationships very with sort networks. of also both ends how just focused the the

Barton Crockett

then the the the capacity. more have desire of if that the fully so right. All current other broadcast Okay. of of for things FCC ATSC you any, quarter to was update, to need NextGen, tap -- that able kind to versus curious kind out you're this there's And the last came have though -- an requirement the I drop one was

Anything any for you long take there? do progress to might there it action some think that how say, there front? to Is be on

Chris Ripley

There that actually to relates has quite been event significant as it a question.

the FCC -- complete an focused NAB, that the task were were and NAB, industry Rosenworcel we a announced at that accelerate marketplace. of is specifically very as at we the forming of getting force something in that's deployment -- the Chairman And on Jessica Chairwoman, request While X.X to our the the industry. industry, association

perspective competition force. our who shows the And a from the from industry's ours FCC larger force perspective, of in on But consumer is page that positive the that than -- task as the signals on up -- X.X important much worked the is regulating industry area it from that is X.X taking there's engagement two very task largely same are on time, industries be key And perspective. advancing on a the a the One being of the terms which competitive standard, certainly, force. details will is sunsetting, and now. things really is of that really task perspective

but not is important, alignment like there statement. on -- alignment and I So instance. be think, for regulators, might is issues ownership there And there other us the where between that an

are and part to rest can when it sunset with hump, is of of sunset country, task both goal the accelerating X.X it And participants force And the that accelerating but of can having open going spectrum devices, second amount will over believe our focused casting been accomplish really then interactive on is getting regulators of figuring communities, we value X.X, will better mobile we've X.X, that also X.X, and out we GPS, when it opportunities a you for and a low-latency that up like video. unlock to goal when through to higher significant to revenue the getting the the only industry not programming talking the sports, you're of relates around data IoT about that opportunities enhanced things quality as capacity X.X.

And significant at able use big all, network industry. to those facilitate These cases to core it's a building to excellent scale. reason are the that that why think, we're will opportunities we be cases for use amount economic the announced we

going of capacity do and getting mean task puzzle You sunsetting done. a an step think up to need have if of if force to to the the piece X.X, much that that's the you big that. to is is And going we system, those a amounts But operating network, larger towards cases. you're last opening use will, do

Rob Weisbord

is, said what it studies of valued for back And reference independent billion to earlier broadcasters. unlocking have Chris revenue I’ll as $XX being a

once gets So potential we sunset is. of that revenue sight lose X.X what of can’t

Operator

next is David coming JPMorgan. Karnovsky Your question from from

David Karnovsky

other just on any a And media if given includes does, do XX it guide. if fee we revenue one Can just process? to how management line confirm QX you Diamond's risk just Diamond? think Lucy, from that forward about going Chapter the

Lucy Rutihauser

Yes.

status a So fee there there the on is in from quo management that's based March XXXX restructuring.

Chris Ripley

we’re continue deferred currently And expect basis, and on and a reached the this a a that agreed March is was at point of it’s ‘XX, to in isn’t there the of we in terms agreement with is paying yes, which new – deferred that – until agreement to level back at in – Diamond time. new

can’t So that until speculate. we happens,

Operator

from is question Watts from Aaron Your Deutsche next coming Bank.

Aaron Watts

ones. covered a lot I clarifier. quick really two of just One, had ground. You a

$XX of Ventures you'll distributions? you cash stations infrastructure from year, or making the past Sinclair should to we Or self-funding investments move support? continue expect you flows this will the that be As million provide cash via highlighted to be

Chris Ripley

operations there their was there, That's really doesn't The $XX per ventures with and our So investing anything different Aaron. broadcast in two se. focused to investment things do transformation. million have on

make to want conflate we I sure those So don't two.

that in on reorg questions financial be it of is June, ventures, that but entity your you a the of fuller terms in will much will self-sustaining. once see we expected picture complete But

Aaron Watts

one. Great. Lucy And pointed then at Okay. with last this maybe

and for current the And the changed business against at given your do you'd at industry, quarter backdrop, you rate where a stock bought macro evolution you mindset play like opportunity currently How leverage which trading par out buying value? back the all? in environment, around is has discount your Just how to you continue the about secular to to balance end. live talked back quarter debt, post in that

Lucy Rutihauser

Yes.

actually where because trade. great undervalued debt a the So it Aaron, is should question massively that’s also from

look, Xs, the to we’re target STG, taking for that low Xs. leverage something your that’s question, remains high target And – So our a look broadcast at.

said, then I are it that this be back over to will we political. and with year start to As going down come next year,

And one because calculation. leverage from a X-quarter it’s standpoint thing to just a keep in mind trailing

So we in from year we next even this it in less ‘XXs ‘XX higher than drag year have also we ‘XX. part year, what that going get to expect than ‘XXs is is into there. this when have you ‘XXs, political on still with But EBITDA then be

quite to kind of etrains So with net a bit everything we’ve that the But that and playing get here the of some of and with now the in that’s doing that mean doesn’t happening, aren’t got around negative political through business we’ll things leverage the investments we’ve it the deal that that absence to returns need of talked live end the we’re and and out. calculation. ‘XX fundamentals on we the about of

target over be leverage. will the to So down broadcast back that to for get focus time

Operator

now concludes Please for the ahead. go and That CEO, Ripley, Chris closing session. President I to our hand Q&A will remarks. conference back

Chris Ripley

today. you joining Thank for all us

If a have you give should need additional or more don’t questions, information us please to call. hesitate

Operator

This you, event. today's everyone. Thank concludes

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

Sinclair Broadcast (SBGI) 3 May 232023 Q1 Earnings call transcript