Sinclair revenue drops on weaker advertising income during Q3

The Chico-area studios of Sinclair-owned Fox affiliate KCVU Channel 20. (Photo by Matthew Keys for The Desk) — The studio and administrative offices of KCVU, the former Chico-Redding Fox affiliate. (Photo by Matthew Keys for The Desk)

Key Financial Data

Total revenue: $773 million (-16% year-over)
Media revenue: $765 million (-16%)
Advertising revenue: $321 million (-26%)
Core advertising revenue: $315 million (+7%)
Political advertising revenue: $6 million (-96%)
Distribution fee revenue: $422 million (-3%)
Net income: -$1 million (-101%)
Operating income: $58 million (-68%)
Local media revenue: $667 million (+21%)
Tennis Channel revenue: $67 million (+12%)
Digital and tech revenue: $48 million (+153%)

Television broadcaster Sinclair saw its third quarter (Q3) revenue drop 16 percent, based primarily on lighter political advertising income compared to its windfall during last year’s election cycle.

The Baltimore-based company said its total revenue during Q3 clocked in at $773 million, of which $765 million was based on its media business, which logged a 16 percent year-over dip of its own.

Overall advertising revenue clocked in at $321 million, or 26 percent lower compared to last year. Core advertising revenue jumped 7 percent to $315 million, while political advertising revenue fell 96 percent to $6 million. Political revenue was largely attributed to local and state campaigns for governor, mayor and certain causes like California’s Proposition 50, in what was otherwise a tepid political season in the year between the 2024 presidential race and the 2026 midterm election.

Distribution fees charged to cable, satellite and streaming cable-like platforms for carriage of Sinclair’s broadcast and national multicast networks earned $422 million, or 3 percent lower than last year. Sinclair, like other broadcasters, charges for the privilege of redistributing its channels; distribution fees, also known as affiliate fees, have been depressed across the industry amid higher churn in the cable and satellite business, which has yet to be offset by streaming competitors like YouTube TV and Fubo, few of which pay Sinclair directly for distribution of their major network affiliates.

While advertising and distribution revenue fell compared to last year, Sinclair said both items were on the higher end of its previously-issued guidance.

Stock Price

“Sinclair delivered a strong third quarter, achieving the high end of guidance for advertising and distribution revenue, while media expenses and Adjusted EBITDA beat expectations,” Chris Ripley, Sinclair’s President and CEO, said in a prepared statement on Wednesday. “We expect to see continued improvement in core advertising trends in the fourth quarter and a sequential increase in distribution revenue.”

Sinclair is one of several broadcasters that is in the middle of a transformation of its business, brought on by what many consider to be a more-favorable regulatory environment in Washington under the Trump administration.

During the quarter, Sinclair announced it was carrying out a strategic review of its business units with the goal of spinning out or selling off certain assets to make calculated acquisitions, exercise greater financial discipline and pay down debt. Two days later, the company announced new affiliation deals for some of its national multicast networks like Comet and Charge; the following month, Sinclair said it was acquiring WHAM-TV (Channel 13, ABC) in Rochester from its partner Deerfield Media, a deal that requires regulatory approval. It also sold its streaming platform NewsOn to rival Zeam.

Sinclair also made international headlines after the company announced a decision to pull ABC’s late night talk show “Jimmy Kimmel Live” from its owned or operated affiliates over a controversial, politically-tinged monologue that aired two days earlier. Peer broadcaster Nexstar Media Group joined in the decision; ABC ultimately announced it was putting the show on a temporary hiatus, and the program resumed taping the following week.

During the hiatus, Sinclair made clear it wanted certain concessions from the network, including an apology to the widow of political activist Charlie Kirk, who was fatally shot during a public event. (The controversial monologue involved remarks about the man suspected of assassinating Kirk and his perceived political motivations, as well as President Donald Trump’s purported lack of response to the event.) Sinclair also demanded Disney, the parent company of ABC, make a financial donation to Kirk’s non-profit organization. ABC returned the show to its network without agreeing to any of Sinclair’s demands.

Sinclair and Nexstar appeared influenced by FCC Chairman Brendan Carr, who criticized the monologue during a podcast interview and encouraged independent ABC affiliates to pre-empt the show. Both broadcasters, who have pending business deals before the FCC, denied Carr’s comments motivated them to pull the show, and Carr has since tried to distance himself from the controversy, saying Nexstar and Sinclair made independent decisions based on their public interest obligations.

Ripley didn’t address the controversy in his prepared remarks — and this story was published before the company’s conference call on Wednesday — but he remained optimistic that the broadcaster will weather multiple storms across the regulatory and business environments and the court of public opinion.

“We’re encouraged by the trends we’re seeing and the opportunities ahead for both our local and national platforms,” Ripley said. “Our focus remains on driving efficiency, expanding partnerships, and positioning Sinclair for long-term growth in a changing media environment.”

Looking ahead, Sinclair forecast fourth-quarter revenue between $815 million and $851 million, with adjusted EBITDA ranging from $132 million to $154 million. For the full year, the company expects adjusted EBITDA between $447 million and $469 million.