Sinclair 3Q Media Rev. Rises 27.5% To $635M

Sinclair Broadcast Group today reported that in the three months ended Sept. 30, its media revenues, before barter, increased 27.5% to $635.3 million versus $498.2 million in the third quarter of 2015. (In other Sinclair news today, the company announced that effective Jan. 1, 2017, current chairman, president and CEO David Smith will become executive chairman, with current CFO Christopher Ripley becoming president-CEO. See story here.)

The company’s total revenues increased 26.5% to $693.8 million, versus $548.4 million in the prior year period.

Breaking down the media revenue:

• Political revenues were $45 million versus $7.8 million in the third quarter of 2015.

• Revenues from digital offerings increased 25% in the third quarter as compared to a year ago.

The company’s operating income was $154 million, an increase of 54.6%, versus operating income of $99.6 million in the prior year period.

Net income was $50.8 million, versus net income of $43.3 million in the prior year period.

Diluted earnings per common share were $0.54 as compared to $0.45 in the prior year period, which includes the third quarter 2016 loss on extinguishment of debt of $23.7 million which reduced diluted earnings per share by $0.16.

Sinclair President-CEO David Smith said: “Although industry political ad spending for 2016 has not been at the levels anticipated coming into the year due to the unique nature of this year’s presidential election and certain contested senate races not materializing, our core advertising nonetheless grew slightly in the third quarter, despite the crowding-out impact of political on our normal advertisers.

“We continued opportunistic share repurchases to capitalize on what we believe to be a discount in our stock. Year-to-date, we have repurchased almost 4.5 million shares or 6.5% of the float. Combined with our full year quarterly dividends and scheduled debt amortization, return of capital to shareholders and debt repayments would represent almost half of our expected discretionary 2016 cash flow.

“Looking ahead over the next few months into 2017, we expect to see the completion of the spectrum auction and the approval of ATSC 3.0, both of which will provide value and opportunities that will positively change the broadcast landscape. Our digital business, believed to be the best in the industry, is growing at mid- 20% top line growth this year, while Circa, our newly launched mobile-friendly, video-driven news portal designed for the millennial audience, in the first three months since launch is reaching more consumers and generating more video streams than even we initially expected.”

And David Amy, Sinclair’s EVP-COO, said: “With one week remaining in the political election year, we have been pleasantly surprised by the recent momentum in political ad spending from both sides. This ensures our expectations of a record-breaking political year for us on an as-reported basis.

“Additionally, auto advertising, our largest advertising category, was flat in the third quarter and is expected to be positive in the fourth quarter, despite concerns over production cutbacks, which speaks to our strength and unique focus at serving the auto category. In addition, we are expecting over 20% topline revenue growth in our digital business in fourth quarter as a result of our investments in such areas as our content and video management systems and Compulse, our digital agency.”

Read the company’s report here.