EARNINGS CALL

Sinclair In An Acquisition State Of Mind

David Amy, the group’s CFO, tells analysts that “our philosophy has been to look toward Big 4 stations and adding on where we have an existing property. We see quite a bit of benefit or opportunity there. We’ll continue to be aggressive if and when they [opportunities] come up.”

A Sinclair Broadcast Group executive on Wednesday said the group broadcaster hopes to continue acquiring TV stations this year—particularly in markets where Sinclair already owns a TV station.

“We believe that Sinclair has emerged as a leader in the consolidation trend in the broadcast industry and we don’t believe we are finished yet,” said David Amy, Sinclair EVP-CFO, during the company’s fourth quarter earnings conference call with analysts Wednesday morning.

Amy also said that Fox Television Stations had notified Sinclair that Fox would not exercise its option to purchase Sinclair stations in Raleigh, N.C. (WRDC/MNT and WLFL/CW); Las Vegas (KVMY/MNT and KVCW/CW; Cincinnati (WSTR/MNT), and Norfolk, VA (WTVZ/MNT).

The option, which was included in a major Fox affiliation deal for 19 TV stations announced last May, was set to expire March 30. “So as previously announced, we will be making the $25 million installment payment [to Fox] in April,” Amy said.

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In addition, Amy said that Sinclair’s retransmission consent agreement with DirecTV came up for renewal at the end of this month. The company does not expect any other significant retransmission consent contracts to expire this year, Amy said.

Amy also said that, going forward, Sinclair, coming out of an upbeat fourth quarter, would continue looking for station acquisitions that would result in combinations. “Our philosophy has been to look toward Big 4 stations and adding on where we have an existing property,” Amy said. “We see quite a bit of benefit or opportunity there. We’ll continue to be aggressive if and when they [opportunities] come up.”

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Amy also said that that the company continues to be well positioned to buy. “If you take a look at our balance sheet, with all that we have acquired, we put very little stress at all on our capability to make additional acquisitions,” Amy said.

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“We’re virtually in as good of shape today as we go into ’13 in terms of our buying power as we were over a year ago,” he added.

Sinclair reported net broadcast revenues from continuing operations rose 58.8% year-over-year to $287.1 million in the fourth quarter of 2012 and were up 42.1% year-over-year to $920.6 million for all of 2012.

“Great Q4 results and strong core-driven Q1 revenue guide should help the stock,” said a note from Marci Ryvicker, a senior analyst for Wells Fargo Equity Research.


Comments (4)

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Meagan Zickuhr says:

February 6, 2013 at 4:51 pm

Why not Low Power and Class A acquisitions? Mark Aitkin has his Broadcast Overlay Plan (BOP) that is being put forth by the Alliance For Free TV And Broadband…… you’d think Sinclair sees great value in these properties too! Here is the link to the BOP – http://broadcastengineering.com/blog/broadcast-alliance-urges-stations-not-sell-spectrum

    Ellen Samrock says:

    February 6, 2013 at 7:20 pm

    Let’s face it, thanks to the Obama Administration’s insistence on carrying out the wacky incentive auction/repacking scheme, the future of LPTV has been put in jeopardy, dropping the value and viability of low power stations to near zero. But once the smoke clears and the remaining low power stations are reassigned, we should see values climb and their attractiveness to station groups grow.

Jay Miller says:

February 7, 2013 at 11:20 am

Just great. A scenario with Sinclair and Nexstar continuing to grow..Beautiful!!!!!Great for our business..Can’t wait!

Bill Vernon says:

February 7, 2013 at 7:25 pm

I would imagine Nexstar growing by leaps and bounds, however, I would like to see Sinclair sell most of its CW/ My Network TV affliates to make money and to focus on the big four affliates.


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