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Sinclair loses $89 million in first full quarter since Diamond Sports bankruptcy

Sinclair Broadcast Group saw its overall revenue decline and its financial loss widen during its first full quarter since its regional sports subsidiary filed for bankruptcy.

This week, Sinclair revealed it took in $768 million during the three-month quarter ending June 30, with its media business accounting for $761 million if its overall revenue. Both figures represented an 8 percent decline compared to the company’s second financial quarter of 2022, and the company reported an overall financial loss of $89 million.

The financial report covered one full quarter since Sinclair’s regional sports business, Diamond Sports, filed for Chapter 11 bankruptcy protection as it sought to work with various creditors to address around $8 billion in debt. Since then, Diamond Sports has missed several key payments to various industry stakeholders, which has resulted in some professional sports teams breaking up with Diamond Sports and moving their game telecasts to streaming and other channels.

In an effort to insulate the rest of Sinclair from the issues afflicting the regional sports business, executives announced a complete restructuring of the company in April that separated out its broadcast and regional sports assets from its real estate investments and Tennis Channel.

“We believe the new structure will provide greater flexibility for creating value within the company,” Chris Ripley, Sinclair’s president and CEO, said at the time of the announcement. “The new structure simplifies the corporate structure and improves the transparency of financial disclosures on the value drivers of the company.”

This week, Ripley restated his belief that restructuring Sinclair’s businesses was better for the company and its stakeholders because it provided greater financial transparency to shareholders and allowed Sinclair to reallocate capital in pursuit of better investment goals.

On the media front, Sinclair and other broadcasters have been afflicted by a particularly weak advertising market that has seen marketing budgets shift from traditional broadcast and cable television toward connected services like streaming. Executives believe some of this pullback can be offset in future quarters by an uptick in political spending and better revenue from cable and satellite fees.

Over the next several months, Sinclair is expected to renew several cable and satellite carriage agreements covering its major broadcast affiliates. The deals, if they go through, could result in a slight increase in retransmission revenue, though executives cautioned that their major network affiliates may not be valued as much as they once were.

“We anticipate our reverse transmission agreements to have modestly improved terms as the industry take into account current subscriber churn levels, as well as the loss of some additional exclusivity as networks withhold some content for their own streaming products,” Robert Weisbord, Sinclair’s chief revenue officer, said on a conference call with investors this week.

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About the Author:

Matthew Keys

Matthew Keys is the publisher of The Desk and reports on the business and policy matters involving the broadcast television, streaming video and radio industries. He previously worked for Thomson Reuters, Disney-ABC, Tribune Broadcasting and McNaughton Newspapers. Matthew is based in Northern California, has won numerous awards in the field of journalism, and is a member of IRE (Investigative Reporters and Editors).