Sinclair Core Strong As It Awaits Record Political

Executives at Sinclair Broadcast Group are eagerly awaiting the bonanza of the 2020 election season, mentioning several times during the company’s quarterly conference call Wednesday that the election year ahead is expected to break all records for political ad revenues.

Meanwhile, third quarter TV station ad revenues were $301 million, down from $366 million a year earlier. But that 3Q in 2018 was in a non-presidential federal election year, so the $64 million less in political advertising nearly accounted for the decline. Meanwhile, retrans revenue for the TV group rose $37 million to $340 as retrans dollars surpassed ad dollars.

“We’re seeing the strength of pharmaceuticals, attorneys, insurance driving our business,” said Steve Marks, EVP-COO of Sinclair Television Group. He noted that the TV group is introducing new categories and new solutions that are driving business. “And our focus on selling 360 solutions has solidified the core,” he added.

Marks, however, was not able to report that Sinclair had bucked the industry downtrend for auto advertising for the third straight quarter this year. “The auto category for the third quarter was down low single digits. And we expect to see the same results in Q4,” he told the analysts.

With the August closing of its purchase of regional sports networks (RSNs) from Disney, Sinclair is now calling its TV station segment “Local News” and the RSNs “Sports.” With the streaming wars heating up, Sinclair President-CEO Chris Ripley told analysts that the value of sports and news will increase as the relative value of other programming declines in the years ahead.

Sinclair’s RSNs remain off the Dish Network satellite service in a blackout that began in July. But Ripley insisted that the onus is on Dish. “Either we come to a deal with Dish or their relevance in the industry will be reduced over time,” he said in the conference call. And he agreed with one analyst that Sinclair will have more leverage the next time its retrans deal with Dish for the local TV stations comes up for renewal — should the RSN standoff last that long.

One area where the added heft is already coming into play is maximizing the huge political ad pie up for slicing next year. Ripley noted that the RSNs are already “in the flow” working with the broadcasting side to pitch political advertisers. He predicted that the amount spent on the RSNs by political accounts will increase, “particularly in hot markets.”