Sinclair 1Q Revenue Down 14.8%

Sinclair Broadcast Group this morning reported that its first quarter 2022 total revenue decreased 14.8% to $1,288 million versus $1,511 million in the prior year period..

Media revenues decreased 14.8% to $1,275 million versus $1,497 million in the same period a year ago.

Total advertising revenues of $371 million were in line with $371 million of advertising revenues in the prior year period.

Core advertising revenues, which excludes political revenues, in the first quarter of $354 million were down 4% versus $367 million in the prior year period.

Distribution revenues of $873 million decreased versus $1,109 million in the same period a year ago.

Operating income of $3,459 million, including non-recurring costs for transaction and transition services, COVID, legal, and regulatory costs of $6 million and a $3,351 million gain on asset dispositions relating to deconsolidating DSG’s net liability (“Adjustments”), increased versus operating income of $35 million in the prior year period, which included Adjustments of $32 million. Operating income, when excluding Adjustments, increased 70% to $114 million from operating income of $67 million for the same prior-year period.

Net income attributable to the company was $2,587 million versus net loss of $12 million in the prior year period. Excluding Adjustments, the company had net income of $27 million. Adjusted EBITDA, which excludes Adjustments, increased 40% to $254 million from $182 million in the prior year period.

Diluted earnings per common share was $35.39 as compared to diluted loss per common share of $0.16 in the prior year period. On a diluted share basis, the impact of Adjustments in the three months ending March 31, 2022 was $35.02, and the impact of Adjustments in the three months ending March 31, 2021 was $(0.34).

Effective March 1, 2022, Sinclair recapitalized debt obligations of Diamond Sports Group, a subsidiary of the company, including raising additional capital, solidifying its capital position. In connection with the recapitalization, DSG agreed to changes to the composition of its board of managers, resulting in deconsolidation of the local sports segment from the company’s financial statements and accounting for DSG under the equity method of accounting. As a result, the company recognized a $3.4 billion non-cash pre-tax gain on asset dispositions.

Chris Ripley, president-CEO, said: “Sinclair progressed on a number of fronts during the quarter, making important strides in advancing key initiatives. “Political advertising is off to a strong start, exceeding our expectations for the first quarter and helping drive our Broadcast and Other first quarter media revenue to the upper end of its guidance range. We believe this is a good indicator of how strong this year’s political cycle can be and gives us confidence that we can achieve a record amount of political advertising for a mid-term election year.”

Ripley continued: “The progress on our initiatives for future growth continues to advance. Our Compulse 360 omni-channel digital advertising ecosystem, offering the ability to run local campaigns at scale, is gaining traction and is expected to see significant growth this year and into the future, as we add incremental functionality and features. Also, we will be launching this year the first commercial datacasting service using the NextGen (ATSC 3.0) technology, an important business use case that will demonstrate the potential for broadcasters to grow beyond broadcast.”

Ripley concluded: “We remain committed to bringing value to our shareholders through a number of different avenues. Utilizing our strong free cash flow, we intend to continue to invest for the future, through actions to grow organically, whether it be content or technology, as well as through strategic and synergistic investments and acquisitions that will help drive profitability in the years ahead. Importantly, we will not hesitate to monetize our assets, when appropriate, and when most beneficial for our stakeholders.”

Read the company’s report here.

Also today, Sinclair declared a quarterly cash dividend of $0.25 per share on the company’s Class A and Class B common stock. The dividend is payable on June 15 to the holders of record at the close of business on June 1.