What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2025-05-09 compared with 2024-11-08 · 150 added, 206 removed, 177 unchanged (67% of the section changed)

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This discussion consists of the following sections:

Summary of Significant Events — financial events during the three months ended September 30, 2024 and through the date this Report on Form 10-Q is filed.

Results of Operations — an analysis of Sinclair's and SBG's revenues and expenses for the three and nine months ended September 30, 2024 and 2023.

Liquidity and Capital Resources — a discussion of Sinclair's and SBG's primary sources of liquidity and an analysis of Sinclair's and SBG's cash flows from or used in operating activities, investing activities, and financing activities during the three and nine months ended September 30, 2024.

Summary of Significant Events — financial events during the three months ended March 31, 2025 and through the date this Report on Form 10-Q is filed.

Results of Operations — an analysis of Sinclair’s and SBG’s revenues and expenses for the three months ended March 31, 2025 and 2024.

Liquidity and Capital Resources — a discussion of Sinclair’s and SBG’s primary sources of liquidity and an analysis of Sinclair’s and SBG’s cash flows from or used in operating activities, investing activities, and financing activities during the three months ended March 31, 2025.

SUMMARY OF SIGNIFICANT EVENTS

Content and Distribution

• In August and September 2024, Sinclair expanded its podcast division, launching a new slate of sports programming featuring top athletes, coaches, and experts including “The Triple Option,” hosted by Urban Meyer, Mark Ingram II, and Rob Stone and “Throwbacks” with Matt Leinart and Jerry Ferrara.

• In the third quarter 2024, Sinclair entered into a multi-year renewal with Altice USA for continued carriage of SBG's broadcast stations and Tennis Channel on Altice's Optimum and Suddenlink owned systems.

• In the third quarter 2024, Sinclair entered into a multi-year renewal with DIRECTV for continued carriage of SBG's broadcast stations and Tennis Channel across DIRECTV, DIRECTV Stream, and U-verse.

• In October 2024, SBG launched the Rip City Television Network, a network of SBG affiliates throughout the Pacific Northwest to serve as the new television home of Trail Blazers starting with the 2024-25 season.

• In October 2024, Sinclair announced the launch of a soccer-focused podcast, "Unfiltered Soccer with Landon and Tim," featuring former U.S.

soccer stars Landon Donovan and Tim Howard.

Corporate Social Responsibility

• In July 2024, Sinclair awarded scholarships to 12 university students as a part of its annual Diversity Scholarship program.

• In October 2024, Sinclair ran Sinclair Cares:

Hurricane Helene Relief, a fundraising partnership with the Salvation Army and The United Way to assist with humanitarian relief efforts on the ground in Western North Carolina, South Carolina, Georgia, Florida, Virginia, and Tennessee in the aftermath of Hurricanes Helene and Milton.

Including Sinclair's corporate donation of $50,000, the campaign raised nearly $1.3 million in donations designated for delivering emergency aid, including food, water, shelter, and cleanup kits.

• To date in 2024, SBG's newsrooms have won a total of 196 journalism awards.

• In January 2025, SBG and NBC announced a comprehensive multi-year agreement that renews station affiliation agreements for 21 of SBG’s owned and/or operated NBC affiliates and affiliations in five markets where SBG provides sales and other services under a joint sales agreement or marketing service agreement.

• In the first quarter 2025, Sinclair reached a distribution agreement with YouTube TV to continue carriage of Tennis Channel, TennisChannel 2, CHARGE!, Comet, and ROAR.

The agreement also added carriage of The Nest and PickleBall TV.

• In April 2025, SBG launched BFFR, a weekly podcast from AMP Media hosted by women’s soccer icons Sydney Leroux and Ali Riley, across all major podcast platforms.

• In April 2025, Sinclair announced that the Federal Aviation Administration (“FAA”) accepted Sinclair’s Declaration of Compliance for Operations Over People, making Sinclair the first broadcast company authorized to fly drones over individuals and moving vehicles without needing an FAA waiver for news gathering under FAA rules.

Corporate Social Responsibility Practices

• To date in 2025, SBG’s newsrooms have won a total of 33 journalism awards, including four national headliner awards.

• In January 2025, Sinclair and Tennis Channel announced Sinclair Cares:

California Wildfires Relief, a fundraising partnership with the Salvation Army to provide disaster relief support across Southern California which helped provide critical aid, shelter, food, fresh water, and support for wildfire survivors and first responders in Los Angeles.

• In March 2025, Sinclair announced a partnership with the Salvation Army to launch Sinclair Cares:

From Homeless to Hope, a nationwide initiative, including content produced by SBG and airing on SBG’s newscasts, dedicated to raising awareness about homelessness by shedding light on the many faces of homelessness and highlighting solutions that offer hope and stability.

• In April 2025, Sinclair held its third annual Sinclair Day of Service, whereby all employees were encouraged to volunteer that day for charitable causes.

Over 1,300 employees volunteered a total of more than 3,600 hours that day.

NextGen Broadcast (ATSC 3.0)

• In 2024, Sinclair, in coordination with other broadcasters, and led by BitPath, its joint venture with another broadcaster, has deployed NextGen TV, powered by ATSC 3.0, in the two markets below.

This brings the total number of our markets in which NextGen TV has been deployed to 45:

Month Market Number of Stations Company Stations

April 2024 Portland, ME 5 WGME (CBS), WPFO (a) (FOX)

June 2024 Myrtle Beach, SC 4 WPDE (ABC)

(a) The license and programming assets for this station are currently owned by a third party.

SBG provides certain non-programming related sales, operational, and administrative services to this station pursuant to a service agreement, such as a JSA and SSA.

• In January 2025, Sinclair joined with three broadcast peers and merged BitPath to form a new company, EdgeBeam Wireless, to provide robust wireless data services to a wide range of businesses and industries across the country.

Financing, Capital Allocation, and Shareholder Returns

• In August 2024, Sinclair declared a quarterly dividend of $0.25 per share and in November 2024, Sinclair declared a quarterly dividend of $0.25 per share.

• In February 2025, Sinclair declared a quarterly dividend of $0.25 per share and in May 2025, Sinclair declared a quarterly dividend of $0.25 per share.

• In the first quarter 2025, Sinclair closed a new money financing and debt recapitalization to strengthen Sinclair’s balance sheet and better position it for long-term growth, which transactions are described more fully under Note 3.

Notes Payable, Finance Leases, and Commercial Bank Financing within Sinclair’s Consolidated Financial Statements and Note 3.

Notes Payable, Finance Leases, and Commercial Bank Financing within SBG’s Consolidated Financial Statements .

• In April 2025, STG repurchased $66 million aggregate principal amount of the 5.125% Senior Notes due 2027 for consideration of $62 million.

The 5.125% Senior Notes due 2027 acquired in April 2025 were canceled immediately following their acquisition.

• In March 2025, Sinclair announced that Lucy Rutishauser, current Executive Vice President and Chief Financial Officer, will retire upon appointment and transition of her successor into the role.

Following her retirement, Ms.

Rutishauser is expected to serve as a senior advisor to the Company.

SINCLAIR, INC.

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RESULTS OF OPERATIONS

Any references to the first, second, or fourth quarters are to the three months ended March 31, June 30, or December 31, respectively, for the year being discussed.

As of September 30, 2024, we had two reportable segments for accounting purposes, local media and tennis.

Any references to the second, third, or fourth quarters are to the three months ended June 30, September 30, or December 31, respectively, for the year being discussed.

As of March 31, 2025, we had two reportable segments for accounting purposes, local media and tennis.

Seasonality / Cyclicality

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Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

Media revenues $ 770 $ 792

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Corporate general and administrative expenses 52 58

Loss on deconsolidation of subsidiary — 10 — 10

(Gain) loss on asset dispositions and other, net of impairment (13) — (11) 11

Loss on asset dispositions and other, net 8 —

Operating income $ 14 $ 42

Net income (loss) attributable to Sinclair

$ 94 $ (46) $ 134 $ 50

Net (loss) income attributable to Sinclair

SINCLAIR, INC.

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The following table sets forth our revenue and expenses for our local media segment for the periods presented (in millions):

Three Months Ended September 30, Percent Change Increase / (Decrease) Nine Months Ended

September 30, Percent Change Increase / (Decrease)

2024 2023 2024 2023

Three Months Ended March 31, Percent Change Increase / (Decrease)

Distribution revenue $ 395 $ 384 3%

Core advertising revenue 271 284 (5)%

Political advertising revenue 138 11 n/m 202 20 n/m

Political advertising revenue 6 24 (75)%

Other media revenues 22 35 (37)%

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Non-media expenses 2 2 —%

Gain on asset dispositions and other, net of impairment (11) (2) n/m (11) (5) n/m

Operating income $ 182 $ 53 n/m $ 306 $ 116 n/m

Loss on asset dispositions and other, net 8 — n/m

Operating income $ 12 $ 41 (71)%

Interest expense including amortization of debt discount and deferred financing costs $ 144 $ 76 89%

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(a) Includes $2 million and $7 million for the three and nine months ended September 30, 2024, respectively, and $2 million and $4 million for the three and nine months ended September 30, 2023, respectively, of intercompany revenue related to certain services provided to the tennis segment, which is eliminated in consolidation.

(b) Includes $4 million and $9 million for the three and nine months ended September 30, 2024, respectively, and $2 million and $5 million for the three and nine months ended September 30, 2023, respectively, of intercompany expense related to certain services provided by other, which is eliminated in consolidation.

(a) Includes $3 million and $2 million for the three months ended March 31, 2025 and 2024, respectively, of intercompany revenue related to certain services provided to the tennis segment, which is eliminated in consolidation.

(b) Includes $4 million and $2 million for the three months ended March 31, 2025 and 2024, respectively, of intercompany expense related to certain services provided by other, which is eliminated in consolidation.

Distribution revenue.

Distribution revenue, which represents fees earned from Distributors for our broadcast signals, increased $18 million or 5% and $33 million or 3% for the three and nine months ended September 30, 2024, respectively, when compared to the same periods in 2023.

Contractual rate increases favorably impacted period-over-period distribution revenue by high-teen percentages for the three months ended September 30, 2024 and by mid-teen percentages for the nine months ended September 30, 2024.

The increase in distribution revenue was offset by a decrease in subscribers by low double-digit percentages for both periods, respectively.

Distribution revenue, which represents fees earned from Distributors for our broadcast signals, increased $11 million or 3% for the three months ended March 31, 2025, when compared to the same period in 2024.

Contractual rate increases favorably impacted period-over-period distribution revenue by high-teen percentages for the three months ended March 31, 2025.

The increase in distribution revenue as a result of increased contractual rates was offset by a decrease in Big-4 subscribers by low-teen percentages for the period.

Core advertising revenue.

Core advertising revenue increased $2 million and decreased $9 million for the three and nine months ended September 30, 2024, respectively, when compared to the same periods in 2023, with no particular product/services category dominating the variance.

Core advertising revenue decreased $13 million for the three months ended March 31, 2025, when compared to the same period in 2024, with no particular product/services category dominating the variance.

Political advertising revenue.

Political advertising revenue increased $127 million and $182 million for the three and nine months ended September 30, 2024, respectively, when compared to the same periods in 2023, primarily due to 2024 being a presidential political year, compared to 2023 which was an off-year election cycle, and therefore only had a small number of political races and correspondingly less political advertising spend.

Political advertising revenue decreased $18 million for the three months ended March 31, 2025, when compared to the same period in 2024, primarily due to 2025 being an off-year election cycle, and therefore having only a small number of political races and correspondingly less political advertising spending, compared to 2024 which was a presidential political year.

Other media revenues.

Other media revenues decreased $13 million for the three months ended March 31, 2025, when compared to the same period in 2024, primarily due to a decrease related to certain services under management services agreements.

SINCLAIR, INC.

RESULTS OF OPERATIONS

Other media revenues.

Other media revenues increased $1 million and $15 million for the three and nine months ended September 30, 2024, respectively, when compared to the same periods in 2023, primarily due to an increase related to providing certain services under management services agreements.

The following table sets forth our primary types of programming and their approximate percentages of advertising revenue for the periods presented:

Percent of Advertising Revenue for the

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

Three Months Ended March 31,

Syndicated/Other programming 39% 38%

Local news 27% 29%

Network programming 17% 15% 17% 16%

Sports programming 15% 10% 12% 11%

Network programming (a) 15% 16%

Sports programming (a) 16% 14%

Paid programming 3% 3%

(a) Sports programming includes both local and network sports programming.

Network programming is exclusive of any network sports programming.

The following table sets forth our affiliate percentages of advertising revenue for the periods presented:

Percent of Advertising Revenue for the

Three Months Ended September 30, Nine Months Ended September 30,

Three Months Ended March 31,

# of Channels 2025 2024

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NBC 24 12% 12%

CW 47 5% 5% 5% 5%

MNT 39 3% 4% 3% 4%

Other 406 8% 6%

Media programming and production expenses.

Media programming and production expenses increased $13 million and $38 million for the three and nine months ended September 30, 2024, respectively, when compared to the same periods in 2023, primarily due to an increase in fees pursuant to network affiliation agreements as a result of increased contractual rates.

Media programming and production expenses increased $7 million for the three months ended March 31, 2025, when compared to the same period in 2024, primarily due to an increase in fees pursuant to network affiliation agreements and other programming contracts as a result of increased contractual rates.

Media selling, general and administrative expenses.

Media selling, general and administrative expenses increased $24 million for the three months ended September 30, 2024, when compared to the same period in 2023, primarily due to a $7 million increase in third-party fulfillment costs from our digital business as a result of increased digital revenues, a $6 million increase in national sale commissions due to an increase in national advertising sales, a $5 million increase in employee compensation cost, and a $2 million increase in both information technology costs and credit card processing fees due to the increase in advertising revenue.

Media selling, general and administrative expenses increased $35 million for the nine months ended September 30, 2024, when compared to the same period in 2023, primarily due to an $11 million increase in third-party fulfillment costs from our digital business as a result of increased digital revenues, an $8 million increase in national sale commissions due to an increase in national advertising sales, a $6 million increase in employee compensation cost, a $3 million increase in credit card processing fees due to an increase in advertising revenue, and a $1 million increase in trade related expenses.

Amortization of program costs.

The amortization of program costs remained flat for the three months ended September 30, 2024, when compared to the same period in 2023.

The amortization of program costs decreased $4 million for the nine months ended September 30, 2024, when compared to the same period in 2023, primarily related to reduced programming renewal costs.

Media selling, general and administrative expenses decreased $13 million for the three months ended March 31, 2025, when compared to the same period in 2024, primarily due to a $7 million decrease in trade related expenses, a $3 million decrease in employee compensation cost, and a $1 million decrease in national sale commissions.

Corporate general and administrative expenses.

See explanation under Corporate and Unallocated Expenses.

SINCLAIR, INC.

RESULTS OF OPERATIONS

Interest expense including amortization of debt discount and deferred financing costs.

Interest expense increased $1 million and $3 million for the three and nine months ended September 30, 2024, respectively, when compared to the same periods in 2023, primarily due to increased interest expense related to our variable rate debt resulting from higher interest rates.

Interest expense increased $68 million for the three months ended March 31, 2025, when compared to the same period in 2024, primarily due to a series of financing transactions completed during the first quarter of 2025, as described in Credit Agreement and Notes under Note 3.

Notes Payable, Finance Leases, and Commercial Bank Financing within Sinclair’s Consolidated Financial Statements.

Included in interest expense for the three months ended March 31, 2025 is $68 million of one-time financing costs that will not recur in future periods.

Gain on extinguishment of debt.

For the three months ended March 31, 2025 , we recognized a gain on extinguishment of the 4.125% Senior Secured Notes due 2030 and 5.125% Senior Notes due 2027 of $5 million and $3 million , respectively, and a loss on extinguishment of the Term Loan B-2 of $6 million.

See Credit Agreement and Notes under Note 3.

Notes Payable, Finance Leases, and Commercial Bank Financing within Sinclair’s Consolidated Financial Statements.

Other income, net.

During the nine months ended September 30, 2024, we recognized a $26 million gain related to the sale of certain broadcast related assets and $9 million in interest income.

For the three months ended March 31, 2024, we recognized a $26 million gain related to the sale of certain broadcast related investments and $4 million in interest income.

SINCLAIR, INC.

RESULTS OF OPERATIONS

Tennis Segment

The following table sets forth our revenue and expenses for our tennis segment for the periods presented (in millions):

Three Months Ended September 30, Percent Change Increase / (Decrease) Nine Months Ended

September 30, Percent Change Increase / (Decrease)

2024 2023 2024 2023

Three Months Ended March 31, Percent Change Increase / (Decrease)

Distribution revenue $ 56 $ 52 8%

Core advertising revenue 11 10 10%

Other media revenues 1 1 —% 4 2 n/m

Other media revenues 1 1 —%

Media revenues $ 68 $ 63 8%

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(a) Includes $2 million and $7 million for the three and nine months ended September 30, 2024, respectively, and $2 million and $4 million for the three and nine months ended September 30, 2023, respectively, of intercompany expense related to certain services provided by the local media segment, which is eliminated in consolidation.

(a) Includes $3 million and $2 million for the three months ended March 31, 2025 and 2024, respectively, of intercompany expense related to certain services provided by the local media segment, which is eliminated in consolidation.

Distribution revenue.

Distribution revenue, which is generated through fees earned from Distributors for the right to distribute Tennis Channel, increased $2 million or 4% and $14 million or 10% for the three and nine months ended September 30, 2024, respectively, when compared to the same periods in 2023.

Contractual rate increases favorably impacted period-over-period distribution revenue by low double-digit percentages for both the three and nine months ended September 30, 2024.

The increase in distribution revenue was offset by a decrease in subscribers by single-digit percentages for both periods, respectively.

Distribution revenue, which represents fees earned from Distributors for the right to distribute Tennis Channel, increased $4 million or 8% for the three months ended March 31, 2025, when compared to the same period in 2024.

Distribution revenue increased primarily due to low single-digit percentage increases in contractual rates for the three months ended March 31, 2025 and a low single-digit percentage increase in direct-to-consumer (“DTC”) subscriptions, partially offset by a decrease in subscribers by low single-digit percentages for the period.

Core advertising revenue.

Core advertising revenue is primarily generated from sales of commercial time within Tennis Channel programming.

Core advertising revenue decreased $1 million for the three months ended September 30, 2024, when compared to the same period in 2023, primarily due to a shift in the 2024 tournament calendar compared to the 2023 tournament calendar.

Core advertising revenue remained flat for the nine months ended September 30, 2024, when compared to the same period in 2023.

Core advertising revenue increased $1 million for the three months ended March 31, 2025, when compared to the same period in 2024, primarily due to additions in the 2025 tournament calendar compared to the 2024 tournament calendar.

Media programming and production expenses.

Media programming and production expenses increased $1 million and $7 million for the three and nine months ended September 30, 2024, respectively, when compared to the same periods in 2023, primarily due to an increase in live production expenses related to an increase in the number of tournaments aired in the current periods versus the prior periods.

SINCLAIR, INC.

RESULTS OF OPERATIONS

Media programming and production expenses increased $2 million for the three months ended March 31, 2025, when compared to the same period in 2024, primarily due to an increase in tournament production costs and an increase in build-out costs associated with our DTC platform.

Media selling, general and administrative expenses.

Media selling, general and administrative expenses increased $2 million for the three months ended September 30, 2024, when compared to the same period in 2023, primarily due to an increase in employee compensation cost.

Media selling, general and administrative expenses increased $9 million for the nine months ended September 30, 2024, when compared to the same period in 2023, primarily due to an increase in expenses related to certain services provided by the local media segment, which is eliminated in consolidation, and employee compensation cost.

Media selling, general and administrative expenses increased $6 million for the three months ended March 31, 2025, when compared to the same period in 2024, primarily due to an increase in costs associated with the launch of the DTC platform.

Corporate general and administrative expenses.

See explanation under Corporate and Unallocated Expenses.

SINCLAIR, INC.

RESULTS OF OPERATIONS

The following table sets forth our revenues and expenses for our non-broadcast digital and internet solutions, technical services, and non-media investments (collectively, other) for the periods presented (in millions):

Three Months Ended September 30, Percent Change Increase / (Decrease) Nine Months Ended

September 30, Percent Change Increase/(Decrease)

2024 2023 2024 2023

Media revenues (a) $ 9 $ 6 50% $ 24 $ 21 14%

Three Months Ended March 31, Percent Change Increase / (Decrease)

Media revenues (a) $ 15 $ 6 n/m

Non-media revenues (b) $ 6 $ 9 (33)%

Operating Expenses:

Media expenses (c) $ 6 $ 5 20% $ 16 $ 30 (47)%

Non-media expenses (d) $ 12 $ 13 (8)% $ 36 $ 26 38%

Operating income (loss) $ 1 $ (7) n/m $ (2) $ (31) (94)%

Income from equity method investments $ — $ — n/m $ 93 $ 30 n/m

Media expenses $ 12 $ 5 n/m

Non-media expenses (c) $ 9 $ 12 (25)%

Operating loss $ (1) $ (3) (67)%

( Loss) income from equity method investments $ (5) $ 15 n/m

Other (expense) income, net $ (69) $ 6 n/m

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(a) Media revenues for the three and nine months ended September 30, 2024 include $4 million and $9 million, respectively, and for the three and nine months ended September 30, 2023 include $2 million and $5 million, respectively, of intercompany revenue related to certain services and sales provided to the local media segment, which is eliminated in consolidation.

(b) Non-media revenues for the three and nine months ended September 30, 2024 include $1 million and $5 million, respectively, and for the three and nine months ended September 30, 2023 include $2 million and $4 million, respectively, of intercompany revenue related to certain services and sales provided to the local media segment, which is eliminated in consolidation.

(c) Media expenses for the nine months ended September 30, 2023 include $2 million of intercompany expense primarily related to certain services provided by the local media segment, which is eliminated in consolidation.

(d) Non-media expenses for the nine months ended September 30, 2024 include $3 million and for the three and nine months ended September 30, 2023 include $1 million and $2 million, respectively, of intercompany expense related to certain services and sales provided by the local media segment, which is eliminated in consolidation.

Media revenues increased $3 million for both the three and nine months ended September 30, 2024, when compared to the same periods in 2023, primarily due to an increase in advertising revenue related to our digital initiatives.

Non-media revenues increased $3 million for the nine months ended September 30, 2024, when compared to the same period in 2023, primarily due to an increase in broadcast equipment sales.

Media expenses increased $1 million for the three months ended September 30, 2024, when compared to the same period in 2023, primarily due to an increase in selling, general and administrative expenses related to our digital initiatives.

Media expenses decreased $14 million for the nine months ended September 30, 2024, when compared to the same period in 2023, primarily due to the sale of Stadium Network.

Non-media expenses increased $10 million for the nine months ended September 30, 2024, when compared to the same period in 2023, primarily due to an increase in expenses related to our technical services business and an increase in expenses associated with higher broadcast equipment sales.

Income from equity method investments.

During the nine months ended September 30, 2024, we recognized a gain of $93 million related to the sale of one of our investments, which is included in income from equity method investments in our consolidated statements of operations.

During the nine months ended September 30, 2023, we recognized a gain of $33 million on the sale of two of our real estate investments, which is included in income from equity method investments in our consolidated statements of operations.

(a) Media revenues for the three months ended March 31, 2025 and 2024 include $4 million and $2 million, respectively, of intercompany revenue related to certain services and sales provided to the local media segment, which is eliminated in consolidation.

(b) Non-media revenues for the three months ended March 31, 2024 include $3 million of intercompany revenue related to certain services and sales provided to the local media segment, which is eliminated in consolidation.

(c) Non-media expenses for the three months ended March 31, 2024 include $2 million of intercompany expense related to certain services and sales provided by the local media segment, which is eliminated in consolidation.

Media revenues increased $9 million for the three months ended March 31, 2025, when compared to the same period in 2024, primarily due to an increase in advertising revenue related to the acquisition of CPX Interactive, as discussed in Business Combinations and Station Disposals under Note 1.

Nature of Operations and Summary of Significant Accounting Policies within Sinclair’s Consolidated Financial Statements and our digital initiatives.

Non-media revenues decreased $3 million for the three months ended March 31, 2025, when compared to the same period in 2024, primarily due to a decrease in broadcast equipment sales.

Media expenses increased $7 million for the three months ended March 31, 2025, when compared to the same period in 2024, primarily due to an increase in selling, general and administrative expenses related to the acquisition of CPX Interactive, as discussed in Business Combinations and Station Disposals under Note 1.

Nature of Operations and Summary of Significant Accounting Policies within Sinclair’s Consolidated Financial Statements.

Non-media expenses decreased $3 million for the three months ended March 31, 2025, when compared to the same period in 2024, primarily due to a decrease in expenses associated with lower broadcast equipment sales and a decrease in expenses related to our technical services business.

(Loss) income from equity method investments.

During the three months ended March 31, 2024, we recognized a gain of $17 million on the sale of two of our investments, which is included in (loss) income from equity method investments in our consolidated statements of operations.

Other (expense) income, net .

During the three months ended March 31, 2025 and 2024, we recognized a fair value adjustment loss of $73 million and a fair value adjustment gain of $2 million, respectively, associated with investments measured at fair value and NAV.

SINCLAIR, INC.

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Three Months Ended

September 30, Percent

Increase/ (Decrease) Nine Months Ended

September 30, Percent

March 31, Percent Change

Increase/ (Decrease)

2024 2023 2024 2023

Corporate general and administrative expenses $ 52 $ 58 (10)%

Income tax (provision) benefit $ (29) $ 12 n/m $ (30) $ 236 n/m

Income tax benefit $ 46 $ 4 n/m

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The table above and the explanation that follows cover total consolidated corporate general and administrative expenses.

Corporate general and administrative expenses decreased $4 million and $16 million for the three and nine months ended September 30, 2024, respectfully, when compared to the same periods in 2023, primarily due to a decrease in legal, consulting, and regulatory costs, primarily related to the litigation discussed under Note 5.

Commitments and Contingencies within Sinclair's Consolidated Financial Statements, partially offset by an increase in employee compensation cost.

Income tax (provision) benefit.

The effective tax rate for the three months ended September 30, 2024 was a provision of 23.0% as compared to a benefit of 20.7% during the same period in 2023.

The change from benefit to provision is primarily due to a book loss in 2023 compared to book income in 2024.

The effective tax rate for the nine months ended September 30, 2024 was a provision of 17.4% as compared to a benefit of 134.3% during the same period in 2023.

The decrease in the effective tax rate for the nine months ended September 30, 2024, as compared to the same period in 2023, is primarily due to a release of the 2023 valuation allowance on deferred tax assets relating to deductibility of interest expense under the IRC Section 163(j) as a result of the change in the tax classification of the legal entity owning the DSG business because of the exit of the sole minority investor.

Corporate general and administrative expenses decreased $6 million for the three months ended March 31, 2025, when compared to the same period in 2024, primarily due to a decrease in employee compensation cost.

Income tax benefit.

The effective tax rate for the three months ended March 31, 2025 was a benefit of 23.0% as compared to a benefit of 18.3% during the same period in 2024.

The increase in the effective tax rate for the three months ended March 31, 2025, when compared to the same period in 2024, is primarily due to an immaterial $7.5 million correcting adjustment related to the accrual of interest income attributable to prior years’ pending income tax refund claims in 2024.

SINCLAIR BROADCAST GROUP, LLC RESULTS OF OPERATIONS

Any references to the first, second, or fourth quarters are to the three months ended March 31, June 30, or December 31, respectively, for the year being discussed.

As of September 30, 2024, SBG had one reportable segment for accounting purposes, local media.

Any references to the second, third, or fourth quarters are to the three months ended June 30, September 30, or December 31, respectively, for the year being discussed.

As of March 31, 2025, SBG had one reportable segment for accounting purposes, local media.

Seasonality / Cyclicality

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Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

Media revenues $ 845 $ 697 $ 2,322 $ 2,203

Non-media revenues — — — 10

Total revenues 845 697 2,322 2,213

Total media revenues $ 694 $ 727

Media programming and production expenses 390 383

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Corporate general and administrative expenses 37 41

Loss on deconsolidation of subsidiary — 10 — 10

(Gain) loss on asset dispositions and other, net of impairment (11) (3) (11) 7

Loss on asset dispositions and other, net 8 —

Operating income $ 12 $ 41

Net income (loss) attributable to SBG $ 80 $ (22) $ 87 $ 62

Net (loss) income attributable to SBG $ (102) $ 5

Local Media Segment

Refer to Local Media Segment above under Sinclair, Inc.'s Results of Operations for a discussion of SBG's local media segment, which is the same as Sinclair's local media segment for all of the three and nine months ended September 30, 2024 and 2023.

Refer to Local Media Segment above under Sinclair, Inc.’s Results of Operations for a discussion of SBG’s local media segment, which is the same as Sinclair’s local media segment for the three months ended March 31, 2025 and 2024.

As of March 31, 2025, the unrestricted subsidiaries (as defined in the New Credit Agreement, “Unrestricted Subsidiaries”) represented 0% of SBG’s total assets.

For the three months ended March 31, 2025, the Unrestricted Subsidiaries represented 0% of SBG’s total revenues and decreased SBG’s total operating income by 18%.

As of March 31, 2025 and for the three months ended March 31, 2025 there were no restricted subsidiaries that were non-guarantors (as defined in the New Credit Agreement) of SBG.

SINCLAIR BROADCAST GROUP, LLC RESULTS OF OPERATIONS

The following table sets forth SBG's revenues and expenses for tennis, non-broadcast digital and internet solutions, technical services, and non-media investments (collectively, other) for the period presented, prior to the Reorganization (in millions):

Nine Months Ended September 30,

Distribution revenue $ 76

Core advertising revenue 29

Other media revenues 3

Media revenues (a) $ 108

Non-media revenues (b) $ 11

Operating Expenses:

Media expenses (c) $ 86

Non-media expenses (d) $ 10

Loss on asset dispositions and other, net of impairment $ 13

Income from equity method investments $ 31

(a) Media revenues for the nine months ended September 30, 2023 include $3 million of intercompany revenue related to certain services and sales provided to the local media segment, which is eliminated in consolidation.

(b) Non-media revenues for the nine months ended September 30, 2023 include $1 million of intercompany revenue related to certain services and sales provided to the local media segment, which is eliminated in consolidation.

(c) Media expenses for the nine months ended September 30, 2023 include $1 million of intercompany expense primarily related to certain services provided by the local media segment, which is eliminated in consolidation.

(d) Non-media expenses for the nine months ended September 30, 2023 include $1 million of intercompany expense related to certain services and sales provided by the local media segment, which is eliminated in consolidation.

The revenue and expense items noted above for the nine months ended September 30, 2023 represent activity prior to the Reorganization which occurred June 1, 2023, thus there is no activity presented for periods subsequent to May 31, 2023.

See Company Reorganization under Note 1.

Nature of Operations and Summary of Significant Accounting Policies within SBG's Consolidated Financial Statements.

Corporate and Unallocated Expenses

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Three Months Ended

September 30, Percent

Increase/ (Decrease) Nine Months Ended

September 30, Percent

March 31, Percent Change

Increase/ (Decrease)

2024 2023 2024 2023

Corporate general and administrative expenses $ 37 $ 41 (10)%

Income tax (provision) benefit $ (25) $ 6 n/m $ (15) $ 236 n/m

Income tax benefit $ 26 $ 9 n/m

n/m - not meaningful

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The table above and the explanation that follows cover total consolidated corporate general and administrative expenses.

Corporate general and administrative expenses decreased by $7 million and $47 million for the three and nine months ended September 30, 2024, respectively, when compared to the same periods in 2023, primarily due to a decrease in legal, consulting, and regulatory costs, primarily related to the litigation discussed under Note 5.

Commitments and Contingencies within SBG's Consolidated Financial Statements.

Income tax (provision) benefit.

The effective tax rate for the three months ended September 30, 2024 was a provision of 22.8% as compared to a benefit of 18.9% during the same period in 2023.

The change from benefit to provision is primarily due to a book loss in 2023 compared to book income in 2024.

SINCLAIR BROADCAST GROUP, LLC RESULTS OF OPERATIONS

The effective tax rate for the nine months ended September 30, 2024, was a provision of 13.6% as compared to a benefit of 144.6% during the same period in 2023.

Corporate general and administrative expenses decreased by $4 million for the three months ended March 31, 2025, when compared to the same period in 2024, primarily due to a decrease in employee compensation cost.

Income tax benefit.

The effective tax rate for the three months ended March 31, 2025 was a benefit of 20.1% as compared to a benefit of 383.5% during the same period in 2024.

The decrease in the effective tax rate for the three months ended March 31, 2025, when compared to the same period in 2024, is primarily due to an immaterial $7.5 million correcting adjustment related to the accrual of interest income attributable to prior years’ pending income tax refund claims in 2024.

LIQUIDITY AND CAPITAL RESOURCES

Liquidity and Capital Resources

As of September 30, 2024, Sinclair had net working capital of approximately $646 million, including $536 million in cash and cash equivalent balances, and $650 million of available borrowing capacity.

Cash on hand, cash generated by Sinclair's operations, and borrowing capacity under the Bank Credit Agreement are used as Sinclair's primary sources of liquidity.

As of September 30, 2024, SBG had net working capital of approximately $238 million, including $202 million in cash and cash equivalent balances, and $650 million of available borrowing capacity.

Cash on hand, cash generated by SBG's operations, and borrowing capacity under the Bank Credit Agreement are used as SBG's primary sources of liquidity.

The Bank Credit Agreement of STG, a wholly-owned subsidiary of SBG, includes a financial maintenance covenant, the first lien leverage ratio (as defined in the Bank Credit Agreement), which requires such ratio not to exceed 4.5x, measured as of the end of each fiscal quarter, which is only applicable if 35% or more of the capacity (as a percentage of total commitments) under the revolving credit facility, measured as of the last day of each fiscal quarter, is utilized under the revolving credit facility as of such date.

Since there was no utilization under the revolving credit facility as of September 30, 2024, STG was not subject to the financial maintenance covenant under the Bank Credit Agreement.

As of September 30, 2024, the STG first lien leverage ratio was below 4.5x.

The Bank Credit Agreement contains other restrictions and covenants with which STG was in compliance as of September 30, 2024.

During the nine months ended September 30, 2024, STG purchased $27 million aggregate principal amount of the Term Loan B-2, due September 30, 2026, for consideration of $25 million.

During the nine months ended September 30, 2024, Sinclair and SBG entered into agreements which increased estimated contractual amounts owed for network programming rights by $1,592 million which have terms that extend into 2027.

There were no other material changes to Sinclair's or SBG's contractual cash obligations as of September 30, 2024.

Sinclair and SBG anticipate that existing cash and cash equivalents, cash flow from the local media segment's operations, and borrowing capacity under the Bank Credit Agreement will be sufficient to satisfy the local media segment's debt service obligations, capital expenditure requirements, and working capital needs for the next twelve months.

Sinclair anticipates that existing cash and cash equivalents and cash flow from SBG, the tennis segment and other's operations will be sufficient to satisfy SBG's, the tennis segment and other's debt service obligations, capital expenditure requirements, and working capital needs for the next twelve months.

However, certain factors, including but not limited to the war in Ukraine, conflict in the Middle East, and other geopolitical matters, natural disasters, and pandemics, and their resulting effect on the economy, Sinclair's and SBG's advertisers, and Sinclair's and SBG's Distributors and their subscribers, could affect Sinclair's and SBG's liquidity and first lien leverage ratio which could affect Sinclair's and SBG's ability to access the full borrowing capacity under the Bank Credit Agreement.

In addition to the sources described above, Sinclair and SBG may rely upon various sources for long-term liquidity needs, such as but not limited to, the issuance of long-term debt, the issuance of Sinclair equity, for Sinclair only, the issuance of Ventures equity or debt, or other instruments convertible into or exchangeable for Sinclair equity, or the sale of assets.

As of March 31, 2025, Sinclair had net working capital of approximately $780 million, including $631 million in cash and cash equivalent balances, and $650 million of available borrowing capacity, including $575 million under the New Credit Agreement and $75 million under the Amended Credit Agreement.

Cash on hand, cash generated by Sinclair’s operations, and borrowing capacity under the New Credit Agreement and the Amended Credit Agreement are used as Sinclair’s primary sources of liquidity.

As of March 31, 2025, SBG had net working capital of approximately $387 million, including $277 million in cash and cash equivalent balances, and $650 million of available borrowing capacity, including $575 million under the New Credit Agreement and $75 million under the Amended Credit Agreement.

Cash on hand, cash generated by SBG’s operations, and borrowing capacity under the New Credit Agreement and the Amended Credit Agreement are used as SBG’s primary sources of liquidity.

The First-Out Revolving Credit Facility includes a financial maintenance covenant, the first-out first lien leverage ratio (as defined in the New Credit Agreement), which requires such ratio not to exceed 3.5x, measured as of the end of each fiscal quarter, which is only applicable if 35% or more of the capacity (as a percentage of total commitments) under the First-Out Revolving Credit Facility, measured as of the last day of each fiscal quarter, is utilized as of such date.

Since there was no utilization under the First-Out Revolving Credit Facility as of March 31, 2025, STG was not subject to the financial maintenance covenant under the New Credit Agreement.

As of March 31, 2025, the STG first-out first lien leverage ratio was below 3.5x.

The New Credit Agreement contains other restrictions and covenants with which STG was in compliance as of March 31, 2025.

During the three months ended March 31, 2025, STG completed a series of financing transactions (the “Transactions”), including a new money financing and debt recapitalization, which strengthened the Company’s balance sheet and better positioned it for long-term growth.

STG’s nearest term maturity, Term Loan B-2 due 2026, was repaid with proceeds from the issuance of a new first-out first lien secured bond, along with the extension of maturities of other debt tranches, which significantly extended STG’s maturity profile.

Notes Payable, Finance Leases, and Commercial Bank Financing within Sinclair’s Consolidated Financial Statements and Note 3.

Notes Payable, Finance Leases, and Commercial Bank Financing within SBG’s Consolidated Financial Statements , for further information.

In April 2025, STG repurchased $66 million aggregate principal amount of the 5.125% Senior Notes due 2027 for consideration of $62 million.

The 5.125% Senior Notes due 2027 acquired in April 2025 were canceled immediately following their acquisition.

During the three months ended March 31, 2025, there were no material changes to Sinclair’s or SBG’s contractual cash obligations as of March 31, 2025.

Sinclair and SBG anticipate that existing cash and cash equivalents, cash flow from the local media segment’s operations, and borrowing capacity under the New Credit Agreement and the Amended Credit Agreement will be sufficient to satisfy the local media segment’s debt service obligations, capital expenditure requirements, and working capital needs for the next twelve months.

Sinclair anticipates that existing cash and cash equivalents and cash flow from SBG, the tennis segment, and other’s operations will be sufficient to satisfy SBG, the tennis segment, and other’s debt service obligations, capital expenditure requirements, and working capital needs for the next twelve months.

However, certain factors, including but not limited to the war in Ukraine, conflict in the Middle East, other geopolitical matters, natural disasters, pandemics, and potential tariffs and trade restrictions and their resulting effect on the economy, Sinclair’s and SBG’s advertisers, and Sinclair’s and SBG’s Distributors and their subscribers, could affect Sinclair’s and SBG’s liquidity and first lien leverage ratio which could affect Sinclair’s and SBG’s ability to access the full borrowing capacity under the New Credit Agreement.

In addition to the sources described above, Sinclair and SBG may rely upon various sources for long-term liquidity needs, such as but not limited to, the issuance of long-term debt (including, for example, an accounts receivable securitization facility), the issuance of Sinclair equity, for Sinclair only, the issuance of Ventures equity or debt, or other instruments convertible into or exchangeable for Sinclair equity, or the sale of assets.

However, there can be no assurance that additional financing or capital or buyers of assets will be available, or that the terms of any transactions will be acceptable or advantageous to Sinclair or SBG.

In January 2024, Sinclair announced that it had agreed to a global settlement and release of all claims associated with the litigation filed by DSG and DSG’s wholly-owned subsidiary, Diamond Sports Net, LLC, in July 2023 and on March 1, 2024, the court approved the settlement.

The settlement terms included Sinclair’s cash payment to DSG of $495 million.

Additionally, under the terms of the settlement, Sinclair would provide transition services to DSG to allow DSG to become a self-standing entity going forward.

An initial payment of $50 million was made in the first quarter of 2024 and the remaining $445 million was paid in the second quarter of 2024.

Of the total $495 million settlement amount paid, $347 million was paid by STG and $148 million was paid by Ventures.

LIQUIDITY AND CAPITAL RESOURCES

2 unchanged sentences

The following table sets forth Sinclair’s cash flows for the periods presented (in millions):

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

Three Months Ended March 31,

Net cash flows from (used in) operating activities $ 5 $ (4)

1 unchanged sentence

Acquisition of property and equipment $ (16) $ (21)

Acquisition of businesses, net of cash acquired (25) —

Purchases of investments (8) (3)

3 unchanged sentences

Cash flows used in financing activities:

Proceeds from notes payable and commercial bank financing $ 1,430 $ —

Repayments of notes payable, commercial bank financing, and finance leases (1,331) (34)

Dividends paid on Class A and Class B Common Stock (17) (16)

Repurchase of outstanding Class A Common Stock — — — (153)

Repurchase of redeemable subsidiary preferred equity — — — (190)

Debt issuance costs (99) —

Distributions to noncontrolling interests, net (3) (2)

2 unchanged sentences

Operating Activities

Net cash flows from Sinclair's operating activities increased for the three months ended September 30, 2024, when compared to the same period in 2023, primarily due to an increase in cash collections related to political revenue and Distributors, partially offset by an increase in production and overhead costs.

Net cash flows used in Sinclair's operating activities increased for the nine months ended September 30, 2024, when compared to the same period in 2023, primarily due to the payment of the DSG settlement and an increase in production and overhead costs, partially offset by an increase in cash collections related to political revenue and Distributors.

Net cash flows from Sinclair’s operating activities increased for the three months ended March 31, 2025, when compared to the same period in 2024, primarily due to an increase in cash collections from Distributors and a decrease in overhead costs, partially offset by a decrease in cash collections related to political revenue and an increase in production costs.

Investing Activities

Net cash flows used in Sinclair's investing activities decreased for the three months ended September 30, 2024, when compared to the same period in 2023, primarily due to a decrease in the acquisition of property and equipment in the current period, partially offset by an increase in purchases of investments in the current period.

Net cash flows from Sinclair's investing activities decreased for the nine months ended September 30, 2024, when compared to the same period in 2023, primarily due to a decrease in the distributions and proceeds from investments in the current period, partially offset by a decrease in the acquisition of property and equipment in the current period.

Net cash flows used in Sinclair’s investing activities increased for the three months ended March 31, 2025, when compared to the same period in 2024, primarily due to a decrease in the distributions and proceeds from investments and the acquisition of CPX Interactive in the current quarter.

Financing Activities

Net cash flows used in Sinclair's financing activities decreased for the three months ended September 30, 2024, when compared to the same period in 2023, primarily due to a decrease in the repayment of debt in the current period.

Net cash flows used in Sinclair's financing activities decreased for the nine months ended September 30, 2024, when compared to the same period in 2023, primarily due to the repurchase of outstanding Common Stock and the redeemable subsidiary preferred equity in the prior period and a decrease in the repayment of debt in the current period.

LIQUIDITY AND CAPITAL RESOURCES

Sinclair declared a quarterly dividend of $0.25 per share in August 2024 and $0.25 per share in November 2024.

Net cash flows used in Sinclair’s financing activities decreased for the three months ended March 31, 2025, when compared to the same period in 2024, primarily due to the Transactions.

Notes Payable, Finance Leases, and Commercial Bank Financing within Sinclair’s Consolidated Financial Statements for further information.

Sinclair declared a quarterly dividend of $0.25 per share in February 2025 and $0.25 per share in May 2025.

Future dividends on Sinclair’s shares of common stock, if any, will be at the discretion of Sinclair’s Board of Directors and will depend on several factors including Sinclair’s results of operations, cash requirements and surplus, financial condition, covenant restrictions, and other factors that Sinclair’s Board of Directors may deem relevant.

LIQUIDITY AND CAPITAL RESOURCES

Sinclair Broadcast Group, LLC Sources and Uses of Cash

The following table sets forth SBG’s cash flows for the periods presented (in millions):

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

Net cash flows from (used in) operating activities $ 226 $ 50 $ (86) $ 172

Three Months Ended March 31,

Net cash flows from operating activities $ 34 $ 17

Cash flows (used in) from investing activities:

Acquisition of property and equipment $ (15) $ (22)

Purchases of investments (2) — (4) (37)

Distributions and proceeds from investments — 26

2 unchanged sentences

Cash flows used in financing activities:

Proceeds from notes payable and commercial bank financing $ 1,430 $ —

Repayments of notes payable, commercial bank financing, and finance leases (1,331) (34)

Dividends paid on Old Sinclair Class A and Class B Common Stock — — — (18)

Repurchase of outstanding Old Sinclair Class A Common Stock — — — (153)

Repurchase of redeemable subsidiary preferred equity — — — (190)

Debt issuance costs (99) —

Distributions to noncontrolling interests, net (2) (2)

Contributions from (distributions to) member, net (63) (69) 48 (429)

Other, net — — — (3)

(Distributions to) contributions from member, net (31) 32

Net cash flows used in financing activities $ (33) $ (4)

Operating Activities

Net cash flows from SBG's operating activities increased for the three months ended September 30, 2024, when compared to the same period in 2023, primarily due to an increase in cash collections related to political revenue and Distributors, partially offset by an increase in production and overhead costs.

Net cash flows used in SBG's operating activities increased for the nine months ended September 30, 2024, when compared to the same period in 2023, primarily due to the payment of the DSG settlement and an increase in production and overhead costs, partially offset by an increase in cash collections related to political revenue and Distributors, as well as the impact of the Reorganization, as discussed in Company Reorganization under Note 1.

Nature of Operations and Summary of Significant Accounting Policies within SBG's Consolidated Financial Statements.

Net cash flows from SBG’s operating activities increased for the three months ended March 31, 2025, when compared to the same period in 2024, primarily due an increase in cash collections from Distributors and a decrease in overhead costs, partially offset by a decrease in cash collections related to political revenue and an increase in production costs.

Investing Activities

Net cash flows used in SBG's investing activities decreased for the three months ended September 30, 2024, when compared to the same period in 2023, primarily due to an increase in distributions and proceeds from investments and a decrease in the acquisition of property and equipment in the current period.

Net cash flows used in SBG's investing activities increased for the nine months ended September 30, 2024, when compared to the same period in 2023, primarily due to the $193 million A/R Facility principal payment received from DSPV in the prior period, offset by a decrease in the purchases of investments in the current period, as a result of the Reorganization, as discussed in Company Reorganization under Note 1.

Nature of Operations and Summary of Significant Accounting Policies within SBG's Consolidated Financial Statements , and a decrease in the acquisition of property and equipment in the current period.

LIQUIDITY AND CAPITAL RESOURCES

Net cash flows used in SBG’s investing activities increased for the three months ended March 31, 2025, when compared to the same period in 2024, primarily due to a decrease in distributions and proceeds from the sale of broadcast investments, partially offset by a decrease in the acquisition of property and equipment in the current period.

Financing Activities

Net cash flows used in SBG's financing activities decreased for the three months ended September 30, 2024, when compared to the same period in 2023, primarily due to a decrease in the repayment of debt in the current period.

Net cash flows used in SBG's financing activities decreased for the nine months ended September 30, 2024, when compared to the same period in 2023, primarily due to a decrease in the repayment of debt in the current period and an increase in net contributions from member in the current period, as a result of the Reorganization, as discussed in Company Reorganization under Note 1.

Nature of Operations and Summary of Significant Accounting Policies within SBG's Consolidated Financial Statements, and the repurchase of outstanding Old Sinclair Common Stock, dividends paid on Old Sinclair Class A and Class B Common Stock, and the repurchase of the redeemable subsidiary preferred equity in the prior period.

Net cash flows used in SBG’s financing activities increased for the three months ended March 31, 2025, when compared to the same period in 2024, primarily due the Transactions and an increase in distributions to member.

Notes Payable, Finance Leases, and Commercial Bank Financing within SBG’s Consolidated Financial Statements for further information related to the Transactions.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

4 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis