Sinclair, Inc. saw its total revenue increase to $829 million during the second financial quarter (Q2) of the year, reflecting a year-over increase of 8 percent when compared to the same quarter last year.
The company’s overall revenue was juiced by higher advertising and distribution income across its local broadcast stations, multicast digital broadcast networks and other properties like regional Bally Sports networks and the Tennis Channel.
Total advertising revenue climbed to $343 million during the quarter, an increase of 11 percent from the $309 million reported last year. The company attributed the increase to an uptick in campaigns and causes purchasing more political ad inventory during the quarter. Core advertising revenue, which excludes political advertising, clocked in at $303 million, or about the same as last year.
Sinclair’s local broadcasting stations drew the largest amount of advertising revenue during the quarter, with $287 million in core advertising and $6 million in political advertising attributed to its broadcast stations. The Tennis Channel and a companion free streaming network called T2 earned $46 million in advertising revenue during Q2, Sinclair said. Other business segments earned $6 million in advertising revenue.
Distribution revenue — which includes fees charged to cable, satellite and some streaming platforms for the rights to redistribute Sinclair-owned local stations, digital networks and cable channels — clocked in at $435 million during Q2, representing a 4 percent lift in income.
The company reported a profit of $17 million during Q2, which fully reversed its net loss of $89 million during the same quarter last year.
“Sinclair delivered solid second-quarter results, meeting our guidance expectations across major financial metrics, including a $105 million monetization of an investment in our Ventures portfolio,” Chris Ripley, Sinclair’s CEO, said in a statement that accompanied the company’s earnings report on Wednesday.
Ripley highlighted the growth in the company’s total advertising and distribution segments, while noting that Sinclair is still working through affiliation and distribution agreements with some cable and satellite platforms, which could drive higher distribution revenue in the months to come.
“As we enter the second half of the year, we are buoyed by strong momentum and multiple cash flow drivers,” Ripley said. “Political advertising revenue is on track to be our largest ever, with expected double-digit growth rates over the 2020 presidential election year. Coupled with growth in distribution revenues, and continued strength in core advertising trends, we are well-positioned for a robust finish to the year.”
On a conference call with investors, Ripley said he expects distribution revenue to experience a lift as more sports fans take advantage of offerings from cable, satellite and some streaming cable-like services headed into the start of the National Football League’s regular season.
The NFL has long-term distribution agreements with the Walt Disney Company’s ABC, Comcast’s NBC Universal, Paramount Global’s CBS and Fox Corporation, and those agreements benefit Sinclair’s Big Four network affiliated stations.
That programming helps Sinclair market its local stations as extremely valuable to cable, satellite and streaming cable-like TV platforms — and he warned that if the platforms are not willing to pay what Sinclair thinks is fair, subscribers of those services could lose access to channels in the coming months.
That said, Ripley noted that Sinclair has had “many renewals so far this year” with small and large pay TV platforms alike, “and they all have met or exceeded our expectations so far.”
“Our confidence is based on our very recent history of successful negotiations and with no blackouts,” Ripley said. “Not to say that we wouldn’t be ready to blackout [our stations] if we don’t feel like we’re getting fair compensation for what we’re offering — but, so far, so good.”
