Sinclair, Inc. Increases Third Quarter and Full-Year 2024 Political Revenue Expectations; Reiterates Prior Net Retrans Forecast

Rhea-AI Summary

Sinclair, Inc. (Nasdaq: SBGI) has increased its third quarter 2024 political revenue expectations to $140-$145 million, up from the previous forecast of $113-$128 million. The company's Local Media segment core advertising revenue is expected to be $285-$293 million, slightly down from the earlier forecast due to crowd-out from increased political advertising. This represents a 2-4% year-over-year growth in core advertising.

Total Local Media advertising revenue for Q3 is now anticipated to be $425-$438 million, up from the previous range of $401-$428 million. Sinclair has also increased its full-year 2024 political revenue expectation to $442-$469 million, up from $385-$410 million. The company reaffirms its previously provided 2-year compounded annualized mid-single digit percent growth rate for net retrans from 2023 through 2025. Sinclair will release its Q3 2024 financial results on November 6, 2024.

Positive

• Increased Q3 2024 political revenue expectations to $140-$145 million
• Total Local Media advertising revenue for Q3 raised to $425-$438 million
• Full-year 2024 political revenue expectation increased to $442-$469 million
• 2-4% year-over-year growth in core advertising expected
• Reaffirmation of 2-year compounded annualized mid-single digit percent growth rate for net retrans

Negative

• Slight decrease in Local Media segment core advertising revenue forecast due to political ad crowd-out

Insights

Financial Analyst

Sinclair's upward revision of political ad revenue expectations is a significant positive for the company. The projected $140-145 million for Q3 2024 represents a substantial 17-23% increase from the previous forecast. This boost, coupled with the increased full-year political revenue expectation to $442-469 million, suggests strong demand for political advertising ahead of the 2024 elections. However, the slight downward adjustment in core advertising due to political ad "crowd-out" indicates potential short-term pressure on regular advertisers. The reaffirmation of mid-single-digit growth in net retransmission revenue provides stability to a key revenue stream. Overall, this update paints a picture of robust political ad spending, which could significantly bolster Sinclair's 2024 financial performance.

Media Industry Expert

The substantial increase in political ad revenue expectations for Sinclair is a testament to the enduring power of local TV in political campaigns. This surge indicates that despite the rise of digital platforms, traditional media remains a important battleground for political messaging. The 2-4% year-over-year growth in core advertising, even with political crowd-out, suggests underlying strength in Sinclair's local markets. However, the company must navigate the delicate balance between maximizing political revenue and maintaining relationships with regular advertisers who may face reduced inventory. The reaffirmed net retransmission growth forecast is crucial, as it provides a stable revenue base amidst the cyclical nature of political advertising. This update underscores Sinclair's strong positioning in key markets as the 2024 election cycle heats up.

Market Research Analyst

Sinclair's revised guidance offers valuable insights into the broader media landscape. The significant uptick in political ad revenue expectations suggests a highly competitive and well-funded election cycle for 2024. This trend could benefit other local TV station groups and media companies with similar market exposure. The slight decrease in core advertising midpoint due to political crowd-out highlights a recurring challenge in election years - balancing short-term political gains against potential disruption to regular advertisers. The maintained forecast for net retransmission revenue growth indicates stability in Sinclair's relationships with pay-TV providers, a critical factor as cord-cutting continues to impact the industry. Investors should watch for similar trends across the sector, as Sinclair's performance could be indicative of broader industry dynamics in the lead-up to the 2024 elections.

BALTIMORE--(BUSINESS WIRE)-- Sinclair, Inc. (Nasdaq: SBGI), the "Company," today announced that it is increasing its advertising guidance for the third quarter 2024 to account for stronger-than-expected political revenues. The Company’s updated expectation for third quarter political advertising revenue is approximately $140 million to $145 million, up from the previously announced forecast range of $113 million to $128 million. Expectations for Local Media segment third quarter core advertising revenue are $285 million to $293 million, with the midpoint down slightly compared to the previously announced forecast range of $288 million to $300 million, due to crowd-out from the increased political advertising. The updated expectation represents Local Media segment core advertising growth of 2% to 4% year-over-year. In total, the Company now anticipates Local Media advertising revenue during the third quarter to be within a range of $425 million to $438 million, up from the expectation of a range of $401 million to $428 million, as previously provided on August 7, 2024.

The Company’s updated full-year political revenue expectation is now $442 million to $469 million, up from the previously-disclosed forecast range of $385 million to $410 million.

Recent retransmission agreement renewal activity has been in-line with expectations and the Company is reaffirming its previously provided 2-year compounded annualized mid-single digit percent growth rate for net retrans from 2023 through 2025.

The Company will provide financial and operating results for the third quarter 2024 on Wednesday, November 6, 2024.

Forward-Looking Statements:

The matters discussed in this news release, particularly those in the section labeled “Outlook,” include forward-looking statements regarding, among other things, future operating results. When used in this news release, the words “outlook,” “intends to,” “believes,” “anticipates,” “expects,” “achieves,” “estimates,” and similar expressions are intended to identify forward-looking statements. Such statements are subject to a number of risks and uncertainties. Actual results in the future could differ materially and adversely from those described in the forward-looking statements as a result of various important factors, including and in addition to the assumptions set forth therein, but not limited to, the rate of decline in the number of subscribers to services provided by traditional and virtual multi-channel video programming distributors (“Distributors”); the Company’s ability to generate cash to service its substantial indebtedness; the successful execution of outsourcing agreements; the successful execution of retransmission consent agreements; the successful execution of network and Distributor affiliation agreements; the Company’s ability to identify and consummate acquisitions and investments, to manage increased financial leverage resulting from acquisitions and investments, and to achieve anticipated returns on those investments once consummated; the Company’s ability to compete for viewers and advertisers; pricing and demand fluctuations in local and national advertising; the appeal of the Company’s programming and volatility in programming costs; material legal, financial and reputational risks and operational disruptions resulting from a breach of the Company’s information systems; the impact of FCC and other regulatory proceedings against the Company; compliance with laws and uncertainties associated with potential changes in the regulatory environment affecting the Company’s business and growth strategy; the impact of pending and future litigation claims against the Company; the Company’s limited experience in operating or investing in non-broadcast related businesses; and any risk factors set forth in the Company’s recent reports on Form 10-Q and/or Form 10-K, as filed with the Securities and Exchange Commission. There can be no assurances that the assumptions and other factors referred to in this release will occur. The Company undertakes no obligation to publicly release the result of any revisions to these forward-looking statements except as required by law.

Category: Financial

View source version on businesswire.com: https://www.businesswire.com/news/home/20240919077985/en/

Investor Contacts:

Chris King, VP, Investor Relations

Billie-Jo McIntire, AVP, Investor Relations

(410) 568-1500

Media Contact:

Jessica Bellucci

jbellucci-c@sbgtv.com

Source: Sinclair, Inc.

FAQ

What is Sinclair's updated Q3 2024 political revenue expectation?

Sinclair (SBGI) has increased its Q3 2024 political revenue expectation to $140-$145 million, up from the previous forecast of $113-$128 million.

How much total Local Media advertising revenue does Sinclair expect for Q3 2024?

Sinclair (SBGI) now anticipates total Local Media advertising revenue for Q3 2024 to be within a range of $425-$438 million, up from the previous expectation of $401-$428 million.

What is Sinclair's updated full-year 2024 political revenue forecast?

Sinclair (SBGI) has increased its full-year 2024 political revenue expectation to $442-$469 million, up from the previously-disclosed forecast range of $385-$410 million.

When will Sinclair release its Q3 2024 financial results?

Sinclair (SBGI) will provide financial and operating results for the third quarter 2024 on Wednesday, November 6, 2024.