• Political Advertising Revenue: $405 million, doubling the 2016 Presidential year results.
• Adjusted EBITDA: $330 million in Q4, $5 million above the high end of guidance.
• Distribution Revenue Growth: Over 5% net retransmission growth year-over-year in 2024.
• Cash Inflows from Ventures: $209 million in 2024, including $47 million in Q4.
• First-Out First Lien Note: $1.43 billion at 8.8% over eight years.
• First Lien Net Leverage: 4.2 times as of year-end 2024.
• Core Advertising Decline: 9% year-over-year in Q4 due to political crowd out.
• Tennis Channel Revenue Growth: 6% year-over-year, driven by digital advertising.
• Media Expenses: $38 million better than the midpoint of original full-year guidance.
• CapEx: $84 million for 2024, below the original midpoint guidance of $114 million.
• Q1 2025 Media Revenue Guidance: Expected to be 2% to 4% lower year-over-year.
• Q1 2025 Adjusted EBITDA Guidance: $90 million to $102 million.
• Net Cash Interest Expense: $143 million, including $75 million non-recurring refinancing fees.

• Warning! GuruFocus has detected 5 Warning Signs with SBGI.

Release Date: February 26, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Sinclair Inc (NASDAQ:SBGI) reported record-breaking political advertising revenues of $405 million in 2024, doubling the 2016 Presidential year results.
• The company completed a successful year of distribution and network affiliation agreements, achieving over 5% net retransmission growth year-over-year.
• Sinclair Inc (NASDAQ:SBGI) launched several top-rated sports-related podcasts and a Tennis Channel DTC product, expanding its digital and streaming offerings.
• The company's Ventures side received $209 million in cash in 2024, as it continues to reposition its minority investment portfolio towards more majority-owned assets.
• Sinclair Inc (NASDAQ:SBGI) substantially completed a comprehensive refinancing of its balance sheets, extending debt maturities and improving its financial position.

Negative Points

• Core advertising revenues came in slightly below expectations due to late-year macroeconomic pressures in several categories.
• The company anticipates a 2% to 4% decline in first-quarter 2025 media revenues year-over-year, primarily due to lower political revenues and softness in core advertising categories.
• Sinclair Inc (NASDAQ:SBGI) faces ongoing negotiations with 20% of its MVPDs, which could impact future retransmission revenues.
• The company expects a modest 2% increase in media programming, production, and SG&A expenses year-over-year in 2025.
• Sinclair Inc (NASDAQ:SBGI) is forecasting significant cash tax payments in 2025, largely driven by the emergence of Diamond from Chapter 11 protection.

Q & A Highlights

Q: With the potential relaxation of local station ownership rules by the new FCC, does Sinclair see itself as a buyer or seller in the market? How will this affect the use of cash from Ventures? A: Christopher Ripley, CEO, stated that Sinclair is optimistic about deregulation and is considering three M&A opportunities: buying in JSAs, station swaps, and large-scale M&A. Sinclair is flexible and aims to maximize shareholder value, potentially acting as both a buyer and seller. The company is also exploring new investments and shareholder returns, with no immediate need to use Ventures cash for M&A.

Q: How should we think about the impact of ATSC 3.0 over the next few years, especially with the recent developments? A: Christopher Ripley, CEO, highlighted the significance of the NAB's filing for a sunset of ATSC 1.0, which will enhance revenue opportunities for ATSC 3.0. While some revenue is expected in 2025, the major revenue influx will occur post-2028 when the transition is complete. Sinclair is working on strategies to increase 3.0 capacity in the interim.

Q: What are your thoughts on subscriber trends and the potential impact on retransmission revenues? A: Christopher Ripley, CEO, expressed optimism about Pay TV, citing Charter's successful bundling strategy and improving churn trends. Sinclair's new contracts and the evolving market dynamics are expected to positively impact net retransmission revenues, with a strong outlook for growth.

Q: Can Sinclair grow core advertising for the full year, and what factors are influencing this outlook? A: Robert Weisbord, COO, confirmed the potential for positive growth in core advertising, driven by strategic sales solutions and improving consumer confidence. Automotive and service categories are expected to rebound, and Sinclair's cross-platform offerings are positioned to capitalize on these trends.

Q: How did Sinclair defend its share of political advertising against digital and CTV, and what are the expectations for future cycles? A: Christopher Ripley, CEO, noted that Broadcast TV increased its share in the last cycle, with Sinclair specifically benefiting from its local community engagement and cross-platform solutions. The company anticipates continued strength in political advertising for the 2026 midterms and 2028 elections.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.