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DATE

Thursday, April 30, 2026 at 4:30 p.m. ET

CALL PARTICIPANTS

  • President & Chief Executive Officer — Christopher S. Ripley
  • Executive Vice President & Chief Financial Officer — Narinder Sahai
  • Chief Operating Officer & President of Local Media — Robert D. Weisbord
  • Vice President of Investor Relations — Christopher King

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TAKEAWAYS

  • Total Revenue -- $807 million, up 4% year over year, supported by higher distribution and core advertising revenue.
  • Adjusted EBITDA -- $126 million, a 13% increase, driven by revenue growth and operating leverage.
  • Distribution Revenue -- $458 million, up 2%, reflecting lower subscriber churn and initial benefits of partner station buy-ins.
  • Core Advertising Revenue -- $305 million, up 4%, with growth attributed to digital initiatives and the Digital Remedy acquisition.
  • Net Retransmission Revenue -- Increased year over year, attributed to improved subscriber trends and buy-in activity.
  • Local Media Segment Revenue -- $701 million, with notable contributions from distribution revenue of $402 million and core advertising revenue of $261 million.
  • Local Media Segment Adjusted EBITDA -- $117 million, supported by reductions in programming, production, and SG&A costs.
  • Tennis Segment Revenue -- $70 million, with adjusted EBITDA of $20 million, which declined due to higher investment in sales and programming expenses.
  • Tennis Channel Viewership -- Household viewership up 19% year over year, with March 2026 being its most watched month ever.
  • Tennis Channel DTC Subscribers -- Achieved record numbers, primarily after a launch with Amazon Prime Video.
  • Ventures Segment Distributions -- $12 million in cash distributions, ending with $451 million in cash, with $6 million deployed in new investments.
  • Debt Reduction -- Retired $165 million in term loans at a discount, resulting in an expected $12 million annual cash interest savings.
  • Balance Sheet -- Total debt was $4.4 billion; total liquidity reached $1.5 billion, including consolidated cash of $844 million.
  • Leverage Ratios -- Net first lien leverage at 1.5x, first lien leverage at 3.8x, and net leverage at 5.1x; net leverage improved sequentially by 0.2 turn.
  • JSA and LMA Partner Buy-Ins -- Majority closed, with expectation of $30 million annualized synergies in 2026.
  • Duopoly Transactions -- Completed in Providence and Tulsa, with additional smaller portfolio discussions in progress.
  • World Cup Programming on Fox -- 70 of 104 matches to air live, with 40 in prime time, positioning the company for strong summer ad demand.
  • FCC Inquiry Activity -- FCC’s sports media inquiry received over 10,000 comments since late February, highlighting regulatory scrutiny in live sports.
  • Full-Year Guidance -- Management reaffirmed full-year 2026 financial guidance, citing resilient revenue mix and cost discipline.

SUMMARY

Sinclair (SBGI +1.97%) reported quarterly revenue growth and adjusted EBITDA margin expansion, supported by improved distribution contracts and ongoing digital advertising success. Strategic moves included significant progress in partner buy-ins, completion of key local duopoly acquisitions, and accelerated deleveraging efforts. Management emphasized the favorable regulatory backdrop, ongoing FCC attention to live sports fragmentation, and reaffirmed annual guidance, underpinned by World Cup and political advertising tailwinds.

  • Tennis Channel benefited from record-breaking March viewership, increased direct-to-consumer subscriptions, and further investment in digital and programming assets.
  • Ventures continues to generate cash while repositioning its portfolio toward majority-owned operating businesses and maintaining strategic flexibility for a potential separation.
  • Recent term loan retirements were executed via an unmodified reverse Dutch auction, reflecting deliberate capital allocation to accelerate balance sheet improvement.
  • Sinclair is actively preparing dust carve-out audits for Ventures while maintaining optionality on sequencing a separation, tying timeline mainly to prospective broadcast M&A activity.
  • Lower subscriber churn, especially among key MVPDs, contributed measurably to distribution revenue growth and improved reported leverage ratios.
  • AI adoption is broadening across the organization, targeting cost efficiencies, enhanced productivity, and expanded digital reach, including global audience engagement initiatives.
  • FCC and DOJ approval of recent industry consolidation, without conditions, set a precedent anticipated to facilitate future sector M&A, though state-level litigation introduces timing uncertainty.
  • The company expects incremental advertising upside from the World Cup’s U.S. time-zone scheduling and cross-platform event activations, citing robust early advertiser interest.

INDUSTRY GLOSSARY

  • JSA: Joint Sales Agreement, a contractual arrangement where one broadcaster sells advertising time for another station in the same market.
  • LMA: Local Marketing Agreement, an arrangement allowing one station to manage operations or programming for another, usually in the same market.
  • MVPD: Multichannel Video Programming Distributor, typically refers to cable, satellite, or streaming pay-TV providers distributing multiple television channels.
  • Duopoly: Ownership or operational control of two television stations within the same market by a single broadcast company.
  • DTC: Direct-to-Consumer, referring to digital subscription or streaming offerings delivered directly to viewers without a traditional pay-TV intermediary.
  • FAST channel: Free Ad-Supported Streaming Television, a linear channel distributed via streaming platforms supported by advertising rather than subscription fees.
  • AR facility: Accounts Receivable facility, a revolving credit line secured by a company’s accounts receivable.
  • SG&A: Selling, General, and Administrative expenses, encompassing the overhead and operating costs outside direct production or programming.
  • EdgeBeam: Sinclair’s new business focused on the commercialization of ATSC 3.0 technology and related data services.
  • BPS: Broadcast Positioning System, an industry-wide initiative to develop a terrestrial backup for GPS using broadcast infrastructure.
  • ATSC 3.0: The next-generation broadcast television standard supporting enhanced video, audio, interactive capabilities, and datacasting use cases.
  • TVB: Television Bureau of Advertising, the trade association of America’s local broadcast TV industry.

Full Conference Call Transcript

Christopher King: Thank you. Good afternoon, everyone, and thank you for joining Sinclair, Inc.'s first quarter 2026 earnings conference call. Joining me on the call today are Christopher S. Ripley, our President and Chief Executive Officer; Narinder Sahai, our Executive Vice President and Chief Financial Officer; and Robert D. Weisbord, our COO and President of Local Media. Before we begin, I want to remind everyone that slides for today's earnings call are available on our website sbgi.net, on the Events and Presentations page of the Investor Relations portion of the site. A webcast replay will remain available on our website until our next quarterly earnings release.

Certain matters discussed on this call may include forward-looking statements regarding, among other things, future operating results. Such statements are subject to several risks and uncertainties. Actual results in the future could differ from those described in the forward-looking statements because of various important factors. Such factors have been set forth in the company's most recent reports as filed with the SEC and included in our first quarter earnings release. The company undertakes no obligation to update these forward-looking statements. Included on the call will be a discussion of non-GAAP financial measures, specifically adjusted EBITDA.

This measure is not formulated in accordance with GAAP and is not meant to replace GAAP measurements and may differ from other companies' uses or formulations. Further discussions and reconciliations of the company's non-GAAP financial measures to comparable GAAP financial measures can be found on our website. Please note that unless otherwise noted, all year-over-year comparisons throughout today's call are presented on an as-reported basis. Let me now turn the call over to Christopher S. Ripley.

Christopher S. Ripley: Thank you, Christopher, and good afternoon, everyone. Let me begin on slide three. We delivered a strong first quarter, with results that reflect the consistency of the broadcast business and the growth potential of Tennis Channel. For the quarter, total revenue of $807 million was up 4% year over year, while adjusted EBITDA of $126 million grew by 13%. Distribution revenue increased by 2% year over year as modestly improved subscriber trends continued and we are starting to see the benefit of our partner station buy-ins. Net retrans revenue was also up year over year. In addition, we continue to see growth in our core advertising business.

Core advertising grew 4% year over year in the first quarter, a result we were pleased with given our underexposure to NBC, which delivered an exceptionally strong quarter to its affiliates on the back of the Super Bowl, Winter Olympics, and NBA. Looking ahead, Fox, our largest affiliation, will carry a record schedule of World Cup soccer matches on the broadcast network in June and July, ahead of the political ramp in the fourth quarter. Turning to execution across our broader strategic priorities, we have built real momentum.

We have now closed on a substantial majority of our JSA and LMA partner station buy-ins with only a small number remaining, and we expect the full $30 million in annualized synergies in 2026. We also recently completed two accretive duopoly transactions in Providence and Tulsa, with several smaller portfolio discussions underway. Our strategic review of the broadcast business remains active. As previously discussed, our ideal path forward is a broadcast combination concurrent with a Ventures separation. We remain Scripps' largest shareholder and our perspective on the strategic logic of the combination is unchanged from what we shared previously. Within Ventures, the portfolio generated $12 million of cash distributions during the quarter, ending with $451 million of cash.

That liquidity provides flexibility as we advance our Ventures separation planning. As a result of our first quarter results and current forecast, we are reaffirming our full-year 2026 guidance. And finally, we continue to work to strengthen our balance sheet. Earlier this month, we retired approximately $165 million in term loans at a discount through an unmodified reverse Dutch auction. As a result, we will save approximately $12 million in annual cash interest expense. As evidenced by this transaction, deleveraging remains a top priority. We ended the quarter with total debt of $4.4 billion and total liquidity of approximately $1.5 billion, including total cash of $844 million. We are pleased with our first quarter financial and operational results.

Our team is executing with discipline across multiple priorities and we are well positioned for the remainder of 2026. The industry continues to await several important decisions that are now in front of the Federal Communications Commission. While the recent California litigation involving the Nexstar transaction took up much of the broadcast regulatory headlines over the past few weeks and has introduced some near-term uncertainty on timing, we believe the broader environment remains constructive for local broadcasters and we continue to feel optimistic about the direction of significant issues. Both the FCC and the Department of Justice approved the Nexstar acquisition of TEGNA with no material conditions, and we remain pleased with the overall deregulatory tone from Washington.

I will not rehash most of those other issues which we discussed on our fourth quarter call in February, but one development is worth noting. In late February, the FCC launched an inquiry into the sports media marketplace, examining how streaming exclusives affect consumers, broadcasters, and free over-the-air access. Turning to slide five, since the launch of the FCC inquiry on February 25, well over 10,000 comments have been submitted on the FCC's sports media marketplace inquiry, making it one of the most commented-on inquiries in Commission history.

As every television viewer and sports fan knows all too well, the fragmentation of live sports programming is causing increasing customer frustration with both higher costs and confusion around where the games are televised. With 96 of the top 100 most watched telecasts last year being live sports broadcasts, including record ratings across almost every major sport, this has become an increasingly important topic for both consumers and regulators. Broadcast delivers what no other platform can: the widest reach and the lowest cost to the consumer. The numbers make the point. The NFL Thanksgiving game on Fox drew 57.2 million viewers, the most watched regular season NFL game ever on Fox.

The Amazon NFL game, the very next day, drew only 16.3 million. Same week, roughly three and a half times the audience on broadcast. Meanwhile, last year, NFL games aired on 10 different services, which according to some estimates could cost a consumer over $1,500 to watch all of the games, even though the large majority of those games aired free over the air on broadcast networks. Live sports is the cornerstone of the broadcast ecosystem. It drives mass audiences, and it underwrites the financial model that sustains local television stations and the local journalism they produce.

The migration of major sporting events behind streaming paywalls is not just bad for consumers, it risks eroding one of the last shared viewing experiences we all have, and it pressures the very business model that funds local news and community programming. Maintaining broad and free access to live sports should remain a top priority for policymakers as they continue to examine this issue that has clearly struck a nerve with viewers and policymakers across the country. With that, let me turn the call over to Robert to discuss operational highlights in the quarter.

Robert D. Weisbord: Thank you, Christopher, and good afternoon, everyone. Let me walk through our operational performance and how we are positioned heading into the remainder of 2026, starting on slide six. We delivered solid growth in core advertising, with first quarter core revenue up 4% year over year, driven by the strength in digital and our acquisition of Digital Remedy. Advertisers continue to prioritize platforms that provide scale, interactivity, and live engagement, and broadcast consistently delivers on all three. Notably, our NBC affiliates delivered very strong results, benefiting from the convergence of major live sporting events. The Super Bowl was the second most watched telecast of all time in the U.S.

The Winter Olympics were the most watched Winter Olympic Games in 12 years on broadcast television, and the NBA continues to deliver solid ratings for the network. While we are underweight NBC, we are overweight Fox, which is our largest network affiliation, and we are already seeing strong demand for the FIFA World Cup soccer tournament on Fox this June and July. Notably, 70 of the 104 total matches will air live on the linear Fox broadcast stations, with 40 matches scheduled for prime time. This is exactly the kind of appointment viewing broadcast is built for, delivering mass audiences with unmatched reach across the country.

Our core advertising continues to benefit from digital revenue and our programmatic digital advertising platform. As ad dollars increasingly shift across linear, connected TV, and digital, Digital Remedy allows us to capture demand across all those channels rather than being limited to linear. That matters in the political cycle too. Beyond linear, we continue to see engagement growth across podcast and social platforms. Recent activations like the Tailgate Tour and The Block demonstrate our ability to engage audiences beyond traditional broadcast while creating meaningful opportunities for our advertising partners. Our next activation will be at the World Cup, hosted by unfiltered soccer stars Landon Donovan and Tim Howard, two of the most capped players in U.S. national team history.

In summary, Sinclair, Inc. continues to execute well on its core broadcast business. Broadcast's differentiated role is strengthened in a year like this—political and sports-heavy 2026—with both ratings and subscriber trends showing positive momentum. Turning to slide seven, Tennis Channel continued the momentum around live sports and delivered an exceptional quarter and a historic month of March. March 2026 was Tennis Channel's most watched month ever, led by the Indian Wells and Miami Open tournaments attracting record audiences. The Miami Open women's final between Sabalenka and Gauff was the most watched women's match in Tennis Channel history, breaking a viewership record set just two weeks earlier at the Indian Wells women's final.

In fact, four of the top five most watched matches of all time for Tennis Channel occurred in March, as Tennis Channel household viewership increased by 19% year over year in the quarter. In addition, Tennis Channel has hit record DTC subscriber numbers in recent weeks, driven in large part through its recent launch with Amazon Prime Video. Tennis Channel 2, the network's FAST channel, which launched on Peacock in January, will continue to feature Women's Day every Tuesday, a programming day exclusively dedicated to women's tennis, reinforcing our leadership in women's sports programming.

While we remain disciplined on expenses, we are also making thoughtful, high-return investments to support the long-term growth of the franchise—expanding our content rights portfolio, scaling our direct-to-consumer platform, and building out Tennis Channel 2 as well as our digital platforms. Tennis Channel is a differentiated premium sports asset and we are investing behind it accordingly. We are fully bullish on the network. Lastly, we continue to build out Amazing America 250: From Neighborhood to Nation, a multi-platform celebration of U.S. history, culture, innovation, and community spirit. Programming will expand as we approach the 250th anniversary of our nation's founding on July 4.

Let me now turn the call over to Narinder to discuss the first quarter financial results in more detail.

Narinder Sahai: Thank you, Robert, and good afternoon, everyone. Turning to slide eight, I am pleased with our first quarter results that reflect strong execution across the business. At the total company level, revenue was $807 million, up 4% year over year. Distribution revenue of $458 million grew 2%, supported by lower subscriber churn across key MVPDs and incremental benefit from our partner station buy-ins, both of which also contributed to growth in net retransmission revenue. Core advertising revenue of $305 million also grew 4%, reflecting the contribution from the Digital Remedy acquisition that closed in March and continued strength in live sports, including the Winter Olympics and NFL playoffs. Adjusted EBITDA was $126 million, up 13% year over year.

The increase reflects both revenue strength and operating leverage, with operating expenses absorbing the cost base from the Digital Remedy acquisition while core operating costs remained well controlled. In the Local Media segment, total revenue of $701 million benefited from the same distribution and advertising trends. Distribution revenue of $402 million and core advertising revenue of $261 million both showed modest growth year over year. Segment adjusted EBITDA of $117 million reflects lower programming and production costs, lower network compensation related to prior-year station sales, and disciplined SG&A expenses. Within the Tennis segment, total revenue of $70 million was also up year over year.

Adjusted EBITDA of $20 million was below last year's first quarter, reflecting an increase in sales and programming expenses as we continue to invest behind the network's growth that Robert referenced earlier. Capital expenditures on a consolidated basis were $15 million. Overall, the quarter reflects broad-based execution, improving subscriber trends, and solid advertising demand across the company. Turning to slide nine, I would like to provide an update on Sinclair Ventures. Consistent with the strategy we previously outlined, Ventures continues to shift from passive minority investments towards majority-controlled operating businesses with a focus on durable, nondiscretionary, and recurring revenue streams that convert strongly to free cash flow.

Ventures generated $12 million in cash distributions during the quarter, primarily from the secondary market monetization of one of our minority investments, following the $104 million for the full year 2025. These distributions demonstrate our ability to monetize investments while preserving upside in the broader portfolio. We also remain selective on new capital deployment, with incremental investments of $6 million in the quarter. Ventures ended the quarter with $451 million in cash and cash equivalents. That liquidity provides meaningful optionality as we advance separation planning and continue to evaluate capital allocation opportunities. Overall, as we advance our work towards a potential separation, Ventures continues to generate meaningful cash while repositioning the portfolio toward greater operational control and long-term value creation.

Turning to slide 10, as Christopher referenced earlier, in early April, we settled an unmodified reverse Dutch auction for our term loans, retiring $165 million in par value at a discount. The delevering transaction is expected to reduce our annual cash interest expense by approximately $12 million. Including borrowings under the AR facility, total Sinclair Television Group, or STG, debt was $4.4 billion. Our nearest material maturity, excluding the AR facility, continues to be in December 2029. At quarter end, as defined in our credit agreement, STG net first lien leverage was 1.5x, first lien leverage was 3.8x, and net leverage was 5.1x.

Net leverage fell by two tenths of a turn sequentially, and these figures do not yet reflect the April term loan retirements that I referenced earlier. We ended the quarter with $844 million in consolidated cash, including $392 million at STG and $451 million at Ventures. Including revolver availability, total liquidity was approximately $1.5 billion. Before turning the call back to Christopher, let me briefly frame our first quarter results and outlook in the context of the broader operating environment. When we introduced 2026 full-year financial guidance in February, we planned for stable core advertising trends supported by a sports-heavy broadcast calendar while remaining appropriately cautious given macro headwinds in certain categories.

Since then, given the conflict in the Middle East, the external environment has evolved. Consumer sentiment has moved meaningfully lower, inflation expectations have ticked higher, and advertiser visibility in select areas is somewhat more measured than a quarter ago. At the same time, the drivers underpinning our full-year outlook remain firmly intact: a record midterm political cycle with competitive races across several of our key markets; the FIFA World Cup and a sports-heavy broadcast calendar in the second and third quarters; and steady distribution supported by moderating subscriber churn and expected benefit from our partner station buy-ins that are now substantially complete. Based on that balance, we are reaffirming our 2026 full-year guidance today.

Let me now turn the call back over to Christopher for closing comments before we open the call to questions.

Christopher S. Ripley: As we wrap up on slide 11, let me briefly summarize our quarter. First, we continued to execute and build momentum on our core broadcast business. We delivered strong results across the board that translated into meaningful cash generation, with stable core advertising trends, audience strength anchored by live sports, and improving subscriber churn across key MVPD partners. Live sports continues to drive the kind of appointment-viewing audiences that no other platform can match. Both the FCC and DOJ are now examining facets of the live sports broadcasting marketplace, and we believe they are asking the right questions.

Tennis Channel further reinforced this dynamic during the quarter, delivering four of the top five most watched matches in network history, alongside record growth in our direct-to-consumer product. We also continue to advance our deleveraging priorities, with STG net leverage improving in the quarter by 0.2 turn sequentially to 5.1x. We also allocated capital to retire $105 million in par value of our term loans at a discount. Looking ahead, we reaffirmed our 2026 guidance, anchored by a resilient revenue mix, strong midterm political revenue expectations, a sports-heavy broadcast calendar headlined by the World Cup, and continued cost discipline. With that, operator, we are ready to open the line for questions.

Operator: Certainly. Everyone, at this time we will be conducting a question and answer session. If you have any questions or comments, please press 1 on your phone at this time. We do ask that while posing your question, please pick up your handset if you are listening on speakerphone to provide optimum sound quality. And once again, if you have any questions or comments, please press 1 on your phone. Your first question is coming from Steven Lee Cahall from Wells Fargo. Your line is live.

Steven Lee Cahall: Thank you. Christopher, it seems like with Nexstar-TEGNA, a big win for the broadcasters with a far more expanded definition of the market to come into the twenty-first century. On the other side, we are seeing Nexstar and TEGNA tied up in some legal issues. So what do you feel like you glean from watching them go through these processes as you think about potential M&A for Sinclair, Inc.? And just a related one on this topic, you mentioned that you are still Scripps' number one shareholder. You think there is a path there to continue to engage in the future?

Christopher S. Ripley: I think I have got your questions, Steven. So the first one as it relates to what is going on with Nexstar-TEGNA, what you first said I think is very important. We have seen an approval of that transaction from both the FCC and the DOJ, with no conditions and no divestitures required from the DOJ. So that is a huge change in the way the DOJ has historically looked at our market, which was defined as just competition amongst local broadcasters. They have finally come up to date with the realities of the current marketplace, which is that we compete across many different mediums, including cable and connected TVs.

So that is a huge win, and it has been a long time coming, and it will be tremendously helpful to the industry going forward in pursuing a much needed consolidation.

As I have talked about before, we firmly believe under this rule set, which has now essentially been verified at both the FCC and the DOJ with a new large precedent, we are going to head towards a marketplace where you have got two large groups that the industry consolidates up to, which still will be relatively small in the TMT landscape but will be much better competitors within that broader landscape as they improve on efficiencies and gain more access to better talent and open up new business opportunities. So that is very exciting. Now, obviously, you noted the downside here is some of the issues coming up at the state level, and specifically in California for Nexstar-TEGNA.

We do think that the case brought against that deal is very flimsy in terms of the merits, and we believe that now that we have seen the playbook, in any future transactions we can significantly mitigate a similar playbook in future transactions. I think there are a lot of unique features in the Nexstar-TEGNA deal. It was essentially a number one and number two coming together, which certainly would not be what you would expect in the next combination. And there were a bunch of optics around the deal which did not look great, which were very unique to this situation.

We would rather Nexstar just proceed forward on a clean basis, but we have a lot of faith that they will play through this. We do not think the merits of the lawsuit are really there, and we do think future large transactions will learn a lot from this process and be able to mitigate the risk. As it relates to Scripps, the industrial logic is still there. Our position on the deal is still the same, as I mentioned in my remarks. We would be happy to pick up discussions again around such a transaction, but we are not standing still. We are looking at multiple other opportunities to achieve similar levels of benefits and synergies.

We will keep moving, and if something were to materialize with Scripps, great. But if not, we are moving forward.

Operator: Your next question is coming from Aaron Watts from Deutsche Bank. Your line is live.

Aaron Watts: Hi, guys. Thanks for having me on. Just a couple questions. One follow-up on the line you were just addressing. Given the noise or pushback that is being generated with getting the Nexstar transaction across the finish line, do you still expect the FCC to press ahead with trying to officially change or abolish the national ownership caps so that future deals do not have to rely on waivers?

Christopher S. Ripley: I do think that will happen. Of course, that is up to the FCC. And certainly, as an industry, we have been lobbying for that. So it is something that I do expect will happen in the future, that you do not have to rely on waivers.

Aaron Watts: Okay. I wanted to ask for a bit more detail around Local Media core advertising. Your rate of growth slowed down sequentially from 4Q into January. I am guessing Olympics played a key role there. But can you talk about other puts and takes? And then how is 2Q core tracking relative to what you saw in first quarter? Has the war had any discernible impact yet on your bookings, particularly in the auto vertical?

Robert D. Weisbord: It definitely was sports-related in fourth quarter. Being underweight on NBC, and based on NBC’s performance, we know the market still was delivering on the core advertising. Fortunately or unfortunately, a lot of the weight moved to NBC. That is why as we head into World Cup and how we are overweight on Fox, we are bullish on the end of second quarter going into third quarter, by carrying 70 games on the Fox network. We are still comfortable with our guidance that we have given for the year on core. We will remain watching these headwinds. As mentioned in the script, consumer confidence is starting to wane.

Gas prices are increasing, and the cost of goods being shipped most likely will be going up, and we will see that domino effect. But we remain confident in our annual guidance that we will still achieve that guidance.

Christopher S. Ripley: And just to add on to what Robert just mentioned, also remember that these are as-reported numbers, and we did have station divestitures to Rincon and Yakima/Spokane, which impacted the reported number on core. So keep that in mind.

Aaron Watts: Okay. But overall, it sounds like your full-year view on core has not changed despite these moving parts that you have outlined?

Robert D. Weisbord: Yes, we are still comfortable with the full-year view, and as Christopher mentioned and I mentioned, we are coming off of record or very high growth in live sports. Live sports between all our platforms drives significant revenue. So we are still comfortable with the annual outlook.

Aaron Watts: If I could squeeze one last one in, just around political. Sounds like still a lot of optimism on that front for the year. CTV was the big mover in terms of share in 2024, expected to grow further this year. Where do you think the share shift will come from going forward? Do you expect that broadcast TV can maintain its share? And can you also discuss the campaign finance limit case that is currently being debated in court? Help us understand how potential outcomes could impact your political ad revenues, particularly related to lowest unit rate or cost—if not for this midterm cycle, then potentially as we think ahead to 2028. Thank you.

Robert D. Weisbord: We are comfortable. We think the shift to CTV, which is a natural shift, is coming from search and social and going into CTV. We have some TVB research which showcases on the 18+ demo, which is the voting demo, that if you extrapolate Amazon and Prime, which do not take political ads, as well as YouTube, which is short video, broadcast delivers 78% of the commercial inventory. And just recently, as we were talking earlier, I indicated that the faucets have now opened on broadcast political spend. We have seen significant buys from the GOP and the DEM PACs in North Carolina. They have a $1 billion estimated political fund.

So we think we are situated in the markets where there are highly competitive races to capture those dollars.

Christopher S. Ripley: And in terms of your question around some of the back and forth on lowest unit rate/cost, you have this court matter. There is also a petition for reconsideration by the TVB around the recent FCC interpretation. I think that all is important to some extent. There is a real case to question whether something like a lowest unit rate is even constitutional. But that will all take some time to play out. What you should know is that we are not particularly concerned about that affecting the outcomes that we expect for the year. That really plays into the dynamics of what goes on in political ad spend.

Number one, as I like to always say, politicians do not return money to their donors once the elections are over. There is a real incentive to get advertisement on the air in the right places where it can impact voting leading up to the elections, and that is unequivocally on broadcast television and, more specifically, on our stations, which are in a lot of the battleground states and have a very large independent voter viewership that has a high propensity to vote.

Our local news audience is highly coveted when it comes to political advertising, and as things heat up, political advertisers tend to move to inventory categories which have more protection in terms of their ability to be preempted. Those categories come with higher prices, and those tend not to be where your general advertisers play. So in terms of the yield component of this and the total demand, these things matter around the edges, but they will not have a meaningful impact on the outcomes.

Aaron Watts: Appreciate all that. Thanks, Christopher.

Operator: Your next question is coming from Analyst from Hover Research. Your line is live.

Analyst: Great. Thank you. My first question is, you mentioned a few times that you are seeing modestly improving subscriber trends. Can you maybe quantify that? I mean, on a same-station basis, were you down, say, roughly 4% year over year on your subs? Is that reasonable?

Christopher S. Ripley: Our overall subscriber churn in Q1 was mid-single digits, and that did have a very modest overall improvement. More importantly, on the traditional MVPD side, we did see over a 100-basis-point improvement in churn there sequentially, and that is one of our biggest contributors. It is improving and being driven by some of the larger MVPDs like Charter leading the way with its streaming bundling strategy. We have talked a lot about it in the past—it is a great strategy, it is working, you can see it in their numbers publicly, and we are increasingly seeing it in what they report to us.

Comcast has also been doing better as well, and really they are the two bellwethers of the space.

Analyst: Great. Thank you for that. My next question, if I could: Can you maybe touch on what your outlook is for your net retrans this year or if you want to do it on a two-year basis?

Christopher S. Ripley: We do expect net retrans to grow over the long term. We have not given any more specific guidance on net retrans. We feel good about the trends that we are seeing, as we talked about earlier on subscribers, seeing modest improvement there. On our network affiliation costs—which we are about to have a big year on—the balance of power has been swinging back towards the affiliates as the networks have played catch up on retrans and the dollars there are very, very significant to the networks—really irreplaceable. Now you are seeing all the networks stream all of their content; even Fox now streams its content.

It is a simple equation: they are monetizing their content on both broadcast and streaming, but the cost is almost exclusively borne by broadcast. Just as there is a rebalancing that is happening within pay TV where broadcast audience well exceeds its share of the pay TV pie and our growth in gross retrans is being driven by that rebalancing, the cost of our network affiliations is also imbalanced, and the streaming divisions of the networks need to be paying a lot more of the cost of programming relative to the network divisions. That rebalancing is going to be tremendously helpful in reducing the cost of our network relationships going forward.

Analyst: So in other words, over time, you think it will evolve in that direction, favorably to your cost base?

Christopher S. Ripley: Over time, yes.

Operator: Thank you. Your next question is coming from Benjamin Soff from Deutsche Bank. Your line is live.

Benjamin Soff: Good afternoon. Thanks for the question. I had a couple, but first I wanted to ask a follow-up. You made a comment that you might have some strategies to mitigate potential challenges in future transactions. I was hoping you could unpack that a little bit.

Christopher S. Ripley: I cannot get into specifics in terms of how a transaction would play out and what specifically we would do. But just the setup alone would be different. Here, you had a number one and number two essentially coming together. You had a transaction that got closed almost immediately after the approvals. Certain optics would not be the same just naturally. And being the first large transaction where a new market definition has been defined by the DOJ, but not having anything on paper about that, is something that could be addressed more proactively.

Benjamin Soff: Got it. And if there are divestitures from other deals, what is your appetite for buying station assets? Do you think you would be allowed to create duopolies, and how should we think about potential synergy in those types of deals?

Christopher S. Ripley: We are very interested in duopolies. Anywhere we can add stations within a market, that is where we get the biggest efficiency gains. It really does improve the news product that we supply to the marketplace. It both expands the number of stories that we cover and differentiates the products being offered to the marketplace. In the areas where we can have multiple affiliates in a market, those are the ones that are going to be most interesting to us, where we can have an accretive transaction and also be deleveraging as well.

Benjamin Soff: And my last question is just on ATSC. What are your latest thoughts there on the business opportunity, and can you remind us where we are on the path to commercializing it?

Christopher S. Ripley: We have been making good progress on ATSC 3.0 with the founding of EdgeBeam. It is off and running. The team is assembled. There is significant work being done up in Boston where they are based. They are having a lot of traction around digital signage. The eGPS product is up and running in several markets. Automotive is another area that we are very bullish on, but it will be a bit longer term. I would put streaming offload as well in that same bucket. BPS, which is outside of EdgeBeam but is an industry-wide effort led by the NAB, has a lot of traction.

There is a pilot going on right now in the energy sector which we are expecting a readout from shortly. We already know the answer—that BPS is the only practical solution to a backup to GPS. A lot of the experts have already weighed in, including government agencies, that if we want a credible backup that can be rolled out in a timely basis that is not space-based and not vulnerable to jamming or disruption from our enemies, it needs to be BPS. That is a very unique opportunity for the entire industry powered by 3.0 and vitally contributes to American safety and security. I am more bullish than I have ever been on the opportunities around 3.0.

Of course it improves picture quality, consumer experience, interactivity, etc., and there will be more and better content put out to our audiences. But the real incremental revenue opportunities are going to be around datacasting and other use cases, and that will be dramatically enhanced through the sunset of 1.0, which will unlock a lot more capacity to do these use cases and is in front of the FCC as we speak.

Operator: Thank you. Your next question is coming from Daniel Louis Kurnos from Stonex. Your line is live.

Daniel Louis Kurnos: Thanks. Afternoon. Christopher, another M&A question. Obviously some timing—we have to see how Nexstar plays out. With that court case ongoing and the concentration and market definition ramifications, do you believe that you could put up a transaction or find a willing participant in this environment at this time? And given your current stance on your preference to spin Ventures in conjunction with M&A, does that mean that you are willing to bide your time until you find the right transaction and this cleans up? We are not saying it will not happen, but it may just take longer than we anticipate.

Christopher S. Ripley: It is fair to say that the Nexstar-TEGNA transaction and what is going on at the state level is not ideal in terms of creating a good environment for M&A. It certainly creates questions in people’s minds, and players within the industry are not immune to that. But as they dig in—as we have—they will get more comfortable that this can be mitigated. We have confidence that this deal should not hold up progress on M&A, and we think we will be able to play through that. As it relates to the Ventures separation, there is a lot of work that goes into a spin, so we are doing that work now. We are working on the carve-out audits.

We are proceeding on getting ready. We are not letting time waste away here. But as we have said consistently, the ideal outcome is a separation of Ventures alongside a broadcast combination. So there is not a rush to separate Ventures, but we are going to make sure that we have everything ready to go to do that.

Daniel Louis Kurnos: That makes sense. And then as we think about Tennis, you spent a good amount of time talking about it today and the strength that it has. In the past you have said anything could be core or not core. It seems like it is having a moment. Are you leaning more into Tennis? How are you thinking about it as a long-term asset within the portfolio, especially in the consideration of if you were to do transformational M&A on the local side?

Christopher S. Ripley: We are leaning into Tennis Channel. About a year ago, we hired Jeff Blackburn, who is a legend in the streaming industry with an amazing career at Amazon. He is doing wonderful things—engagement up, subs up over 30%, the product is getting better. Interest in tennis is at an all-time high and continues to grow. There is a lot to like. We are investing in the product, upgrading the rights and programming, and upgrading the direct-to-consumer experience. A lot of that investment has been over the last year and really has not even come to light yet. Over the course of this year, you are going to see more and more upgrades to the product and the experience.

When we hired Jeff, that was a commitment to invest in Tennis Channel. It is an amazing asset already, and as it translates its business more and more onto the streaming side—where it already has all the rights it needs—it is going to be a really interesting asset.

Robert D. Weisbord: We believe that over time, the asset—right now about 20% of the audience is through digital—and the goal for Jeff and his team is to get to 50%. We are making this crossroad. What helps those crossroads are the next-generation rivalries: on the men’s side, and on the women’s side this year, the rivalry has evolved between Iga Świątek and Aryna Sabalenka, which will cause even further tune-in. As you saw in the 1000s that took place out of Indian Wells (the BNP Paribas Open) and Miami Open, that was followed in Monte Carlo with record ratings. When we increase this next generation—and America has the next star on the horizon—it bodes well for the sport and for the network.

Daniel Louis Kurnos: Rob, can I stick with you for a second and just talk a little more World Cup? Is there any way to think about the incremental that we should expect from World Cup? And given how much Olympics sort of sucked the oxygen out of the room in Q1, could we see that kind of event, especially in what is a particularly lackluster viewing time—we are in between seasons? You also mentioned in your prepared remarks the digital acquisitions adding and cross-sell. With your digital assets, when you have this marquee event coming up, maybe flesh out your thoughts on how you are game-planning for it.

Robert D. Weisbord: We are super bullish, and we have had large advertising inquiry already in the early phase of selling. Forty games are in prime time. As you indicated, it is normally a weaker viewing period as we head into the summer months. With most of the games and the finals happening here in the States, we are totally bullish. We have set up a process platform, and we have Landon Donovan and Tim Howard who played the most men’s caps. In June, we are launching a female soccer team with Julie Ertz and Kealia Watt, which is great because it also leads into the NFL season, and Julie is married to Zach Ertz and Kealia is married to J.J. Watt.

You will have a very competitive household that will play out on audio as well as soccer, and at the men’s World Cup you are going to get a female perspective. That bodes well maybe into 2027 and the Women’s World Cup. The way we have set this up—natural tie-ins between our audio and our broadcast—and then the third element is activations at these events. It is a 360 offer to our advertising clients, and that is why we are seeing early inquiry.

Christopher S. Ripley: I will add that we have not had a World Cup in this time zone for quite some time, and obviously being partially in the U.S., this is a bigger World Cup than we have seen. The comps are different. We are going to do way better than we did four years ago. I do not think it will be as big as the Olympics in terms of total impact, but it is definitely going to be a nice incremental pickup for us.

Daniel Louis Kurnos: And to tie this together—maybe bring Narinder in—looking at your year, you are pacing towards the high end of your prior revenue guide and towards the lower end of the imputed expense guide, especially based off of Q1. There is uncertainty with political, etc. It sounds like you are being cautious given the macro; you are not necessarily seeing anything yet, but in other circumstances you might be raising guidance—you just want to see how things play out given the uncertainty. Is that fair?

Narinder Sahai: Thanks for the question. I think you captured the puts and takes properly. On core, as I mentioned, there are headwinds that have picked up from what we anticipated when we issued the guide, and the visibility is a little bit less than what we had before, but nothing that changes our view that we would be outside the ranges we gave you. On the distribution side, we are pleased with what the traditional MVPDs are doing with their packaging. We are clearly seeing those results translate into our numbers now. We are monitoring that trend going forward.

A few months do not create a long-term trend; we want to see it consistently repeat before we say we have seen enough to update guidance. On costs, you know us well—management and expense control is built into our DNA. It is an ongoing process, and we continue to look at any and all efficiency measures. We are also investing in the right assets; we talked about Tennis Channel as a great differentiated asset, and we are putting energy behind it. Taking all of that together, it is too early in the year—same with political. There is no reason to change the ranges today.

We will continue to monitor, and if there is a good reason to change that, we will come back and tell you next quarter.

Operator: Thank you. Your next question is coming from David Hamburger from Morgan Stanley. Your line is live.

David Hamburger: Thank you. Could you articulate why the separation of Ventures is contingent upon a broadcast station transaction? And have you provided any guidance as to how Ventures would be capitalized upon a spin-off or a separation?

Christopher S. Ripley: Ventures is not contingent; it is just our preference. At some point, if we are unsuccessful getting a combination on broadcast, we would just move forward with the Ventures separation with the thinking that broadcast would then combine at some point on its own. There is optionality that Ventures gives us as we think about various combinations. It has a decent amount of cash. It obviously has some other assets as well, which could be more or less attractive to varying partners that we are in discussions with. That is really the main reason—having those levers to ensure that a combination gets done that maximizes the outcome for all shareholders. In terms of capitalization, Ventures does not have any debt.

The four walls of Ventures are already very well defined; it is in our financials. There is no debt on any of the Ventures wholly owned subsidiaries, and it sits on about $450 million of cash currently. That is how it would be capitalized if you spun Ventures today. That could change a little bit if it is done in conjunction with a combination on broadcast.

David Hamburger: To clarify, you are saying a combination on broadcast or a combination of Ventures with another company?

Christopher S. Ripley: Tying back to what I said earlier, some of the assets of Ventures may play a role in a broadcast combination. You could see the mix within Ventures change depending on what happens on the broadcast side.

David Hamburger: How might that change? Any guidelines or guardrails around how the complexion of that business might change?

Christopher S. Ripley: No, but in its simplest form, if more cash was needed in the combination, we could use some cash from Ventures in order to complete it. Since there is no specific transaction to talk about on broadcast, I cannot give you any guidelines.

David Hamburger: At what point would you potentially make the determination that you would just proceed with a spin in the absence of effectuating a broadcast deal?

Christopher S. Ripley: We are not going to lay out a specific timeline at this point. As I mentioned, we are doing work to get the necessary items in place to do the spin, like a carve-out audit, and that will play into the ultimate timing.

Narinder Sahai: If you take a step back and go back to the rationale for entertaining a Ventures separation, Ventures has close to $1 billion of assets that we do not feel are fully reflected in our valuation. How do we address that? We can provide enhanced disclosures for investors to look at and determine how they want to value those assets. If that is not happening, then we look at whether these assets would be fairly valued in the hands of other investors, and that was the thinking behind separating Ventures. As that conversation continues, there is some optionality we want to preserve. So we are not under a specific timeline.

We have started the work on Ventures separation, and we are going to be very thoughtful about it. We are pursuing broadcast transactions in parallel. We do not know what the contours of those are going to be sitting here today. We want to preserve optionality. As that picture starts to come into focus, we will provide more color on the separation timeline and what the capitalization would look like. It is too early to give you a firm read today.

David Hamburger: Just one quick question around the balance sheet. Can you talk about how you sized the $165 million of loan buyback? Why specifically that amount, and how should we think about your appetite to do more?

Narinder Sahai: We had cash in STG and looked at how to deploy that cash. We have outlined that delevering the STG balance sheet is a top priority for us. This was the right time for us to see if there would be demand for us to take some of the debt investors out from our term loans. We started the process with a certain number in mind that would be interesting for investors to participate in. As we went through the process, we looked at how much cash we wanted to deploy at this point, and that is where we drew the line and executed the transaction. Looking ahead, all options are on the table. Delevering is a top priority.

As we generate more cash in a political year, you can expect us to continue to focus on that. No specific timeline to give you today on when the next one is, but as opportunities arise, we will look at them and execute.

Operator: Your next question is coming from Analyst from Barclays. Your line is live.

Analyst: Hey, guys. Thanks for taking my question. I know you do not have any distribution contracts up for renewal this year. It seems like some of your peers have been going into blackout and it is becoming more common. GTV filed the private lawsuit against Nexstar-TEGNA. Do you think this is a sign that renewals are becoming more contentious going forward?

Christopher S. Ripley: We do not think this is anything new. There are some blackouts currently going on, there were last year, and the year before that, and the year before that. We have been very fortunate that we really have not had any meaningful blackout for many years now, and we see no reason to necessarily change that. The reality is broadcasters comprise about 50% of the viewership on pay TV and only get about one third of the pay TV pie. The process of rightsizing that to what arguably should be greater than 50%, since we represent the most premium programming on pay TV, is not easy.

That adjustment—shifting share away from cable channels that increasingly are becoming completely irrelevant towards broadcast—is a difficult process. I do not see the activity we are currently witnessing as unusual from prior years, and I think the industry will manage through it as it always has.

Analyst: Great. Thank you. And then you have done a good job managing costs. Are you using any AI tools to help manage costs, or anything in the pipeline that can enhance cost reductions going forward?

Christopher S. Ripley: AI is a big focus for us—as I am sure every company says—and for us it is true. We have rolled out AI tools to our entire workforce. We have both a bottoms-up organic strategy that is bearing fruit in terms of people in various areas coming up with ways to use AI tools to improve productivity, and a top-down strategy with a group dedicated to working on AI that is bringing new tools and workflows to the business. From a high level, beyond our newsrooms and content creators and our reporters, almost everything else could be facilitated or automated by AI.

We do not deal in hard goods; it is information and bits, and largely people in front of computer screens. The content creators are the differentiators, but over time you are going to see a lot of the other roles within Sinclair, Inc.—and other media companies—evolve. We see a lot of potential for creating greater efficiencies and also opening up capacity for new revenue streams.

Narinder Sahai: The application of AI is not just in cost reduction. It is fundamentally reimagining and reinventing how we do things structurally. That is the way to look at it for this to be sustainable, and that is how we are looking at it. There are significant applications on the revenue growth side as well. We have been working with the technology for several years now, iterating on it, and we have some interesting opportunities in the pipeline. This is not just a statement for us—it is actually true.

Robert D. Weisbord: To paint a picture on the revenue side, with our podcasts—just as one of our content creators—Tracy McGrady and Vince Carter have a big following in China. Using AI toolsets to convert their English language to Chinese and allow it to be distributed in China is one opportunity that opens up what we are doing on a global basis, not just U.S.-based. That is what excites us about this technology. While we will put it into operations to make them more efficient, we are going to get greater velocity from these AI toolsets.

Operator: We have reached the allotted time for Q&A. I will now hand the conference back to Christopher S. Ripley for closing remarks.

Christopher S. Ripley: Thank you, operator. We want to thank everyone for joining us for our Q1 earnings call. To the extent you have any follow-up questions that were not already answered, please do not hesitate to reach out to us.

Operator: Thank you, everyone. This concludes today's event. You may disconnect at this time, and have a wonderful day. Thank you for your participation.