Sinclair Q2 Earnings Call Highlights

Sinclair NASDAQ: SBGI reported higher second-quarter revenue and adjusted EBITDA as early political advertising demand, distribution revenue growth and expense discipline offset softer core advertising. Total revenue for the second quarter was $840 million, up 7% from a year earlier, while adjusted EBITDA rose 45% to $149 million, President and Chief Executive Officer Chris Ripley said. Political advertising revenue reached $59 million, which was 9% above the comparable quarter in the 2022 midterm cycle. Ripley said the company’s station footprint in competitive political markets, along with its broadcast, connected-TV, digital and podcast offerings, positioned Sinclair to benefit as election spending builds through the year. The company also repaid or retired about $320 million of debt during the quarter, with deleveraging remaining its top priority. Sinclair raised its full-year political advertising revenue forecast to at least $375 million, from its previous outlook of at least $333 million. Chief Operating Officer and President of Local Media Rob Weisbord said Sinclair operates in all 10 states projected to receive the highest levels of political advertising spending, including states with competitive Senate, gubernatorial and House races. “Political spending is always back-end loaded towards the weeks immediately preceding election day,” Weisbord said, adding that candidates, parties and issue advertisers have begun reserving inventory earlier in the cycle. During the question-and-answer session, Ripley said the company’s platform is largely unchanged from four years ago and attributed the higher political outlook primarily to increased campaign fundraising. He said total fundraising in the current cycle could approach 2024 presidential-election levels. At the same time, Sinclair reduced its outlook for core advertising revenue. Total company core advertising revenue is now expected to be between $1.22 billion and $1.28 billion, while Local Media core advertising is expected to range from $1.04 billion to $1.09 billion. The revision represents a $40 million reduction at the midpoint of the company’s previous ranges. Executive Vice President and Chief Financial Officer Narinder Sahai said the updated view reflects expected political advertising crowd-out in the second half as well as current demand trends, without assuming improvement by year-end. Core advertising declined 3% in the second quarter. Sahai cited political inventory crowd-out, advertiser caution amid fuel and tariff volatility, and cost inflation affecting some advertiser budgets. Weisbord said automotive advertising was flat year over year, while sports betting and legal categories helped drive quarterly results. Services and medical were am...