What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-08-08 compared with 2025-05-09 · 185 added, 116 removed, 211 unchanged (59% 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 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 — financial events during the three months ended June 30, 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 and six months ended June 30, 2025 and 2024.

SUMMARY OF SIGNIFICANT EVENTS

Content and Distribution

• 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.

• In April 2025, Tennis Channel and the International Tennis Federation announced a multi-year extension of their long-running partnership with the Billie Jean King Cup by GainbridgeTM and Davis Cup, the World Cup of Tennis events for women and men, respectively.

• In June 2025, WTA Ventures (Womens Tennis Association) and Tennis Channel announced a new six-year media rights deal ensuring that Tennis Channel platforms will continue to be the exclusive home of WTA tennis in the United States through 2032.

• In June, SBG launched two local sports podcasts:

"The Script", a podcast on the Ohio State Buckeyes with former Ohio State stars Cardale Jones and Chris “Beanie” Wells, along with ABC6/FOX28 Sports Director Dave Holmes;

and "The Dynasty", a podcast on the Alabama Crimson Tide with former Alabama stars AJ McCarron and Trent Richardson, along with Chris Stewart, the voice of Alabama football.

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.

• To date in 2025, SBG’s newsrooms have won a total of 208 journalism awards, including 25 RTDNA regional Edward R.

Murrow Awards.

• 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.

• In July 2025, Sinclair Cares ran two campaigns, one raising nearly $200,000 in support of Texas Flood relief and another partnering with the American Cancer Society to raise awareness and support free rides to medical treatments.

NextGen Broadcast (ATSC 3.0)

• 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.

• In July 2025, SBG launched WKOF in Syracuse, New York as an ATSC 3.0 lighthouse, marking the first time a television license was initiated under the NextGen Broadcast (ATSC 3.0) standard.

• In June 2025, SBG purchased the broadcast assets of WSJV in South Bend-Elkhart, IN from Gray Television, Inc.

("Gray"), and sold the broadcast assets of WHOI in Peoria/Bloomington, IL to Gray.

• In June 2025, SBG acquired the license assets of KXVO in Omaha, NE, from Mitts Telecasting Company.

SBG previously oversaw operations of the station under a LMA.

• In June 2025, Sinclair’s digital market agency rebranded under the Digital Remedy brand.

• In July 2025, SBG sold four owned stations within Milwaukee, WI (WVTV), Springfield, IL (WICS/WICD), Ottumwa, IA (KTVO), and Quincy, IL (KHQA).

• In August 2025, SBG acquired the license assets of WOLF in Hazleton, PA and WGFL in High Springs, FL from New Age Media, LLC.

The Company previously oversaw the operations of the stations under MSAs.

• In August 2025, SBG acquired the license assets of KMEG in Sioux City, IA from Waitt Broadcasting.

The Company previously oversaw the operations of the stations under a JSAs.

Financing, Capital Allocation, and Shareholder Returns

• 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.

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

In August 2025, Sinclair declared a quarterly dividend of $0.25 per share.

• In the second quarter of 2025, STG repurchased $81 million aggregate principal amount of the 5.125% Senior Notes due 2027 for consideration of $77 million.

The 5.125% Senior Notes due 2027 acquired in the second quarter of 2025 were canceled immediately following their acquisition.

• In June 2025, Sinclair announced the appointment of Conrad Clemson as Chief Executive Officer of EdgeBeam Wireless, Sinclair’s NextGen Broadcast Joint Venture with industry peers.

• In July 2025, Sinclair announced the appointment of Narinder Sahai as Executive Vice President and Chief Financial Officer, effective immediately.

SINCLAIR, INC.

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RESULTS OF OPERATIONS

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.

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

As of June 30, 2025, we had two reportable segments for accounting purposes, local media and tennis.

Seasonality / Cyclicality

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Three Months Ended

June 30, Six Months Ended

2025 2024 2025 2024

Media revenues $ 777 $ 819 $ 1,547 $ 1,611

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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 March 31, Percent Change Increase / (Decrease)

Three Months Ended June 30, Percent Change Increase / (Decrease) Six Months Ended June 30, Percent Change Increase / (Decrease)

2025 2024 2025 2024

Distribution revenue $ 380 $ 384 (1)% $ 775 $ 768 1%

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Non-media expenses 2 2 —% 4 4 —%

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

Gain on asset dispositions and other, net (28) — n/m (20) — n/m

Operating income $ 65 $ 83 (22)% $ 77 $ 124 (38)%

Interest expense including amortization of debt discount and deferred financing costs $ 82 $ 76 8% $ 226 $ 152 49%

Gain on extinguishment of debt $ 2 $ 1 n/m

Gain on extinguishment of debt $ 4 $ — n/m $ 6 $ 1 n/m

Other income, net $ 3 $ 2 50% $ 6 $ 33 (82)%

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(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.

(a) Includes $3 million and $6 million for the three and six months ended June 30, 2025, respectively, and $3 million and $5 million for the three and six months ended June 30, 2024, respectively, of intercompany revenue related to certain services provided to the tennis segment, which is eliminated in consolidation.

(b) Includes $5 million and $9 million for the three and six months ended June 30, 2025, respectively, and $3 million and $5 million for the three and six months ended June 30, 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 $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.

Distribution revenue, which represents fees earned from Distributors for our broadcast signals, decreased $4 million or 1% for the three months ended June 30, 2025, when compared to the same period in 2024.

Subscriber decreases impacted period-over-period distribution revenue by low-teen percentages for the three months ended June 30, 2025, partially offset by favorable contractual rate increases by low-teen percentages.

Distribution revenue increased $7 million or 1% for the six months ended June 30, 2025, when compared to the same period in 2024.

Contractual rate increases favorably impacted period-over-period distribution revenue by low-teen percentages for the six months ended June 30, 2025, which was offset by a decrease in subscribers by low-teen percentages for the period.

Core advertising revenue.

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.

Core advertising revenue decreased $13 million and $26 million for the three and six months ended June 30, 2025, respectively, when compared to the same periods in 2024, with no particular product/services category dominating the variance.

Political advertising revenue.

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.

Political advertising revenue decreased $34 million and $52 million for the three and six months ended June 30, 2025, respectively, when compared to the same periods 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.

SINCLAIR, INC.

RESULTS OF OPERATIONS

Other media revenues.

Other media revenues decreased $20 million and $33 million for the three and six months ended June 30, 2025, respectively, when compared to the same periods in 2024, primarily due to a decrease related to certain services provided 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 March 31,

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

Syndicated/Other programming 41% 41% 40% 39%

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Percent of Advertising Revenue for the

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

# of Channels 2025 2024 2025 2024

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NBC 24 14% 14% 13% 13%

CW 46 5% 5% 5% 5%

MNT 39 3% 4% 3% 4%

Other 411 8% 6% 8% 7%

Media programming and production expenses.

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 programming and production expenses decreased $2 million for the three months ended June 30, 2025, when compared to the same period in 2024, primarily due to a decrease in litigation and consulting expenses of $6 million, of which, the litigation item related to the reversal of approximately $3 million previously expensed as a result of the FCC consent decree that is further discussed in Litigation, Claims, and Regulatory Matters under Note 4.

Commitments and Contingencies within Sinclair’s Consolidated Financial Statements, which were offset by an increase in fees pursuant to network affiliation agreements and other programming contracts of $4 million as a result of increased contractual rates.

Media programming and production expenses increased $5 million for the six months ended June 30, 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 of $8 million as a result of increased contractual rates, which was offset by a decrease in litigation related expenses of $3 million as a result of the reversal of amounts previously expensed related to the FCC consent decree that is further discussed in Litigation, Claims, and Regulatory Matters under Note 4.

Commitments and Contingencies within Sinclair’s Consolidated Financial Statements .

SINCLAIR, INC.

RESULTS OF OPERATIONS

Media selling, general and administrative expenses.

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.

Media selling, general and administrative expenses decreased $16 million for the three months ended June 30, 2025, when compared to the same period in 2024, primarily due to the FCC consent decree entered into in June 2025 which resulted in a reversal of $10 million previously expensed, as further discussed in Litigation, Claims, and Regulatory Matters under Note 4.

Commitments and Contingencies within Sinclair’s Consolidated Financial Statements, a $3 million decrease in employee compensation cost, and a $2 million decrease in national sales commissions.

Media selling, general and administrative expenses decreased $29 million for the six months ended June 30, 2025, when compared to the same period in 2024, primarily due to a $10 million decrease related to the FCC consent decree, as further discussed in Litigation, Claims, and Regulatory Matters under Note 4.

Commitments and Contingencies within Sinclair’s Consolidated Financial Statements, a $9 million decrease in trade related expenses, a $6 million decrease in employee compensation cost, and a $3 million decrease in national sales commissions.

Corporate general and administrative expenses.

See explanation under Corporate and Unallocated Expenses.

Gain on asset dispositions and other, net.

During the three and six months ended June 30, 2025, we recognized $30 million and $39 million, respectively, of proceeds related to our cyber and directors and officers insurance policies.

During the six months ended June 30, 2025, we recognized an estimated loss expected to be recognized upon closing of the stations sale of approximately $17 million.

See Business Combinations and Station Disposals under Note 1.

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

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

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.

Interest expense increased $6 million and $74 million for the three and six months ended June 30, 2025, respectively, when compared to the same periods in 2024, primarily due to the Transactions, 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.

Included in interest expense for the six months ended June 30, 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.

During the three months ended June 30, 2025, we repurchased $81 million aggregate principal amount of the 5.125% Senior Notes due 2027 for consideration of $77 million and recognized a gain on extinguishment of $4 million for both the three and six months ended June 30, 2025.

For the six months ended June 30, 2025 , in connection with the Transactions, 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.

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Other income, net.

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.

During the six months ended June 30, 2024, we recognized a $26 million gain related to the sale of certain broadcast related assets and $8 million in interest income.

SINCLAIR, INC.

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

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

Three Months Ended June 30, Percent Change Increase / (Decrease) Six Months Ended June 30, Percent Change Increase / (Decrease)

2025 2024 2025 2024

Distribution revenue $ 54 $ 51 6% $ 110 $ 103 7%

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Corporate general and administrative expenses 1 — n/m 1 1 —%

Operating income $ 18 $ 20 (10)%

Operating income $ 8 $ 1 n/m $ 26 $ 21 24%

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(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.

(a) Includes $3 million and $6 million for the three and six months ended June 30, 2025, respectively, and $3 million and $5 million for the three and six months ended June 30, 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 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.

Distribution revenue, which represents fees earned from Distributors for the right to distribute Tennis Channel, increased $3 million or 6% for the three months ended June 30, 2025, when compared to the same period in 2024, primarily due to high-teen percentage increases in contractual rates for the three months ended June 30, 2025 and a high single-digit percentage increase in direct-to-consumer (“DTC”) subscriptions, partially offset by a decrease in subscribers by mid-teen percentages for the period.

Distribution revenue increased $7 million or 7% for the six months ended June 30, 2025, when compared to the same period in 2024, primarily due to low double-digit percentage increases in contractual rates for the six months ended June 30, 2025 and a high single-digit percentage increase in DTC subscriptions, partially offset by a decrease in subscribers by low double-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 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.

Core advertising revenue decreased $1 million for the three months ended June 30, 2025, when compared to the same period in 2024, primarily due to shifts in the 2025 tournament calendar compared to the 2024 tournament calendar.

Core advertising revenue remained flat for the six months ended June 30, 2025, when compared to the same period in 2024.

Media programming and production expenses.

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 programming and production expenses decreased $4 million and $2 million for the three and six months ended June 30, 2025, respectively, when compared to the same periods in 2024, primarily due to a decrease in tournament production costs primarily related to a shift in the 2025 tournament calendar.

Media selling, general and administrative expenses.

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.

Media selling, general and administrative expenses increased $4 million for the six months ended June 30, 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.

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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 March 31, Percent Change Increase / (Decrease)

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

Three Months Ended June 30, Percent Change Increase / (Decrease) Six Months Ended June 30, Percent Change Increase/(Decrease)

2025 2024 2025 2024

Media revenues (a) $ 38 $ 9 n/m $ 53 $ 15 n/m

Non-media revenues (b) $ 8 $ 11 (27)% $ 14 $ 20 (30)%

Operating Expenses:

Media expenses $ 12 $ 5 n/m

Media expenses $ 32 $ 5 n/m $ 44 $ 10 n/m

Non-media expenses (c) $ 12 $ 12 —% $ 21 $ 24 (13)%

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

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

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

Operating income (loss) $ 1 $ — n/m $ — $ (3) n/m

Income (loss) from equity method investments $ — $ 78 n/m $ (5) $ 93 n/m

Other expense, net $ (24) $ (43) (44)% $ (93) $ (37) n/m

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(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.

(a) Media revenues for the three and six months ended June 30, 2025 include $5 million and $9 million, respectively, and for the three and six months ended June 30, 2024 include $3 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 both the three and six months ended June 30, 2025 include $1 million and for the three and six months ended June 30, 2024 include $1 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) Non-media expenses for both the three and six months ended June 30, 2025 include $1 million and for the three and six months ended June 30, 2024 include $1 million and $3 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 $29 million and $38 million for the three and six months ended June 30, 2025, respectively, when compared to the same periods in 2024, primarily due to an increase in advertising revenue related to the acquisition of Digital Remedy, 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.

Non-media revenues decreased $3 million and $6 million for the three and six months ended June 30, 2025, respectively, when compared to the same periods in 2024, primarily due to a decrease in broadcast equipment sales.

Media expenses increased $27 million and $34 million for the three and six months ended June 30, 2025, respectively, when compared to the same periods in 2024, primarily due to an increase in selling, general and administrative expenses related to the acquisition of Digital Remedy, 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 remained flat for the three months ended June 30, 2025 and decreased $3 million for the six months ended June 30, 2025, when compared to the same periods 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.

Income (loss) from equity method investments.

During the three and six months ended June 30, 2024, we recognized gains of $78 million and $93 million, respectively, primarily related to the sales of certain of our investments, which is included in (loss) income from equity method investments in our consolidated statements of operations.

Other expense, net .

During the three months ended June 30, 2025 and 2024, we recognized fair value adjustment losses of $30 million and $45 million, respectively, associated with investments measured at fair value and NAV.

During the six months ended June 30, 2025 and 2024, we recognized fair value adjustment losses of $103 million and $43 million, respectively, associated with investments measured at fair value and NAV.

SINCLAIR, INC.

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The following table presents our corporate and unallocated expenses for the periods presented (in millions):

Three Months Ended

March 31, Percent Change

Three Months Ended June 30, Percent Change

Increase/ (Decrease) Six Months Ended June 30, Percent Change

Increase/ (Decrease)

2025 2024 2025 2024

Corporate general and administrative expenses $ 45 $ 50 (10)% $ 97 $ 108 (10)%

Income tax benefit $ 46 $ 4 n/m

Loss on asset dispositions and other, net $ 9 $ 2 n/m $ 17 $ 2 n/m

Income tax benefit (provision) $ 14 $ (5) n/m $ 60 $ (1) 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 $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.

Corporate general and administrative expenses decreased $5 million and $11 million for the three and six months ended June 30, 2025, respectively, when compared to the same periods in 2024, primarily due to a decrease in legal, consulting, and regulatory costs, primarily related to the litigation discussed under Note 4.

Commitments and Contingencies within Sinclair’s Consolidated Financial Statements and a decrease in employee compensation cost for the six months ended June 30, 2025.

Loss on asset dispositions and other, net.

During the three months ended June 30, 2025, we recognized a loss of $37 million related to the Marquee guarantee as discussed in Debt of Variable Interest Entities and Guarantees of Third-Party Obligations under Note 3.

Notes Payable, Finance Leases, and Commercial Bank Financing within Sinclair’s Consolidated Financial Statements offset by gains of $30 million related to proceeds from our cyber and directors and officers insurance policies, which are further discussed in Local Media Segment under Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations.

During the six months ended June 30, 2025 we recognized an estimated loss of $17 million related to our station sales and a loss of $37 million related to the Marquee guarantee as discussed in Debt of Variable Interest Entities and Guarantees of Third-Party Obligations under Note 3.

Notes Payable, Finance Leases, and Commercial Bank Financing within Sinclair’s Consolidated Financial Statements, which was partially offset by gains of $39 million related to proceeds from our cyber and directors and officers insurance policies.

Income tax benefit (provision).

The effective tax rate for the three months ended June 30, 2025 was a benefit of 18.9% as compared to a provision of 19.0% during the same period in 2024.

The change from provision to benefit is primarily due to a book loss in 2025 compared to book income in 2024.

The effective tax rate for the six months ended June 30, 2025 was a benefit of 21.8% as compared to a provision of 1.7% during the same period in 2024.

The increase in the effective tax rate for the six months ended June 30, 2025, as 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 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.

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

As of June 30, 2025, SBG had one reportable segment for accounting purposes, local media.

Seasonality / Cyclicality

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Three Months Ended

June 30, Six Months Ended

2025 2024 2025 2024

Total media revenues $ 679 $ 750 $ 1,373 $ 1,477

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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 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.

As of June 30, 2025, the unrestricted subsidiaries (as defined in the New Credit Agreement, “Unrestricted Subsidiaries”) represented 0% of SBG’s total assets.

For both the three and six months ended June 30, 2025, the Unrestricted Subsidiaries represented 0% of SBG’s total revenues.

For the three and six months ended June 30, 2025, the Unrestricted Subsidiaries decreased SBG’s total operating income by 8% and 11%, respectively.

As of June 30, 2025 and for the three and six months ended June 30, 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

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The following table presents SBG’s corporate and unallocated expenses for the periods presented (in millions):

Three Months Ended

March 31, Percent Change

Three Months Ended June 30, Percent Change

Increase/ (Decrease) Six Months Ended June 30, Percent Change

Increase/ (Decrease)

2025 2024 2025 2024

Corporate general and administrative expenses $ 27 $ 35 (23)% $ 64 $ 76 (16)%

Income tax benefit $ 26 $ 9 n/m

Loss on asset dispositions and other, net $ 9 $ — n/m $ 17 $ — n/m

Income tax benefit $ 8 $ 1 n/m $ 34 $ 10 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 $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.

Corporate general and administrative expenses decreased by $8 million and $12 million for the three months ended June 30, 2025, respectively, when compared to the same periods in 2024, primarily due to a decrease in legal, consulting, and regulatory costs, primarily related to the litigation discussed under Note 4.

Commitments and Contingencies within SBG’s Consolidated Financial Statements and a decrease in employee compensation cost for the six months ended June 30, 2025.

Loss on asset dispositions and other, net.

During the three months ended June 30, 2025, SBG recognized a loss of $37 million related to the Marquee guarantee as discussed in Debt of Variable Interest Entities and Guarantees of Third-Party Obligations under Note 3.

Notes Payable, Finance Leases, and Commercial Bank Financing within SBG’s Consolidated Financial Statements offset by gains of $30 million related to proceeds from our cyber and directors and officers insurance policies, which are further discussed in Local Media Segment under Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations under Sinclair, Inc.’s Results of Operations.

Notes Payable, Finance Leases, and Commercial Bank Financing within SBG’s Consolidated Financial Statements, which was partially offset by gains of $39 million related to proceeds from our cyber and directors and officers insurance policies, which are further discussed in Local Media Segment under Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations under Sinclair, Inc.’s Results of Operations.

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.

The effective tax rate for the three months ended June 30, 2025 was a benefit of 17.9% as compared to a benefit of 38.5% during the same period in 2024.

The decrease in the effective tax rate for the three months ended June 30, 2025, as compared to the same period in 2024, is primarily due to accrual of interest income attributable to prior years’ pending income tax refund claims.

The effective tax rate for the six months ended June 30, 2025 was a benefit of 19.5% as compared to a benefit of 1717.7% during the same period in 2024.

The decrease in the effective tax rate for the six months ended June 30, 2025, as 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 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.

As of June 30, 2025, Sinclair had net working capital of approximately $687 million, including $616 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.

As of June 30, 2025, SBG had net working capital of approximately $273 million, including $224 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.

Since there was no utilization under the First-Out Revolving Credit Facility as of June 30, 2025, STG was not subject to the financial maintenance covenant under the New Credit Agreement.

As of June 30, 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 June 30, 2025.

During the six months ended June 30, 2025, STG completed 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.

See Credit Agreements and Notes under Note 3.

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

During the three months ended June 30, 2025, STG repurchased $81 million aggregate principal amount of the 5.125% Senior Notes due 2027 for consideration of $77 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.

During the six months ended June 30, 2025, Sinclair entered into agreements which increased estimated contractual amounts owed for tennis programming rights by $163 million which have terms that extend into 2032.

There were no other material changes to Sinclair’s or SBG’s contractual cash obligations as of June 30, 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.

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-out 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.

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

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

Net cash flows from (used in) operating activities $ 122 $ (306) $ 127 $ (310)

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Repayments of notes payable, commercial bank financing, and finance leases (83) (9) $ (1,414) $ (43)

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

Debt issuance costs (11) — (110) —

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

Dividends paid on Class A and Class B Common Stock (17) (17) (34) (33)

Distributions to noncontrolling interests (3) (3) (6) (5)

Other, net — 2 (9) (3)

1 unchanged sentence

Operating Activities

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.

Net cash flows from Sinclair’s operating activities increased for the three months ended June 30, 2025, when compared to the same period in 2024, primarily due to an increase in cash collections from Distributors, the DSG settlement payment that occurred in the prior period, and a decrease in production costs, partially offset by a decrease in cash collections related to political revenue and an increase in overhead costs.

Net cash flows from Sinclair’s operating activities increased for the six months ended June 30, 2025, when compared to the same period in 2024, primarily due to an increase in cash collections from Distributors and the DSG settlement payment that occurred in the prior period, partially offset by a decrease in cash collections related to political revenue and an increase in production and overhead costs.

Investing Activities

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.

Net cash flows used in Sinclair’s investing activities increased for the three months ended June 30, 2025, when compared to the same period in 2024, primarily due to a decrease in distributions and proceeds from investments.

Net cash flows used in Sinclair’s investing activities increased for the six months ended June 30, 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 Digital Remedy in the first quarter of 2025.

Financing Activities

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.

Net cash flows used in Sinclair’s financing activities increased for the three months ended June 30, 2025, when compared to the same period in 2024, primarily due to the repurchase of the 5.125% Senior Notes due 2027 during the current period .

Net cash flows used in Sinclair’s financing activities increased for the six months ended June 30, 2025, when compared to the same period in 2024, primarily due to the Transactions during the first quarter of 2025 and the repurchase of the 5.125% Senior Notes due 2027 during the second quarter of 2025 .

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

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

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

Three Months Ended March 31,

Net cash flows from operating activities $ 34 $ 17

Cash flows (used in) from investing activities:

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

Net cash flows from (used in) operating activities $ 79 $ (329) $ 113 $ (312)

Cash flows used in investing activities:

Acquisition of property and equipment $ (18) $ (22) $ (33) $ (44)

Purchases of investments (1) (2) (1) (2)

Distributions and proceeds from investments — — — 26

Other, net — 1 — 2

Net cash flows (used in) from investing activities $ (15) $ 5

Cash flows used in financing activities:

Net cash flows used in investing activities $ (19) $ (23) $ (34) $ (18)

Cash flows (used in) from financing activities:

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

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Debt issuance costs (11) — (110) —

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

Distributions to noncontrolling interests (3) (3) (5) (5)

(Distributions to) contributions from member, net (16) 79 (47) 111

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

Net cash flows (used in) from financing activities $ (113) $ 67 $ (146) $ 63

Operating Activities

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.

Net cash flows from SBG’s operating activities increased for the three months ended June 30, 2025, when compared to the same period in 2024, primarily due to an increase in cash collections from Distributors, the DSG settlement payment that occurred in the prior period, and a decrease in production and overhead costs, partially offset by a decrease in cash collections related to political revenue.

Net cash flows from SBG’s operating activities increased for the six months ended June 30, 2025, when compared to the same period in 2024, primarily due to an increase in cash collections from Distributors, the DSG settlement payment that occurred in the prior period, 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 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.

Net cash flows used in SBG’s investing activities decreased for the three months ended June 30, 2025, when compared to the same period in 2024, primarily due to 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 six months ended June 30, 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 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.

Net cash flows used in SBG’s financing activities increased for the three months ended June 30, 2025, when compared to the same period in 2024, primarily due to the repurchase of the 5.125% Senior Notes due 2027 during the current period.

Net cash flows used in SBG’s financing activities increased for the six months ended June 30, 2025, when compared to the same period in 2024, primarily due to the Transactions during the first quarter of 2025, the repurchase of the 5.125% Senior Notes due 2027 during the second quarter of 2025, and an increase in distributions to member, net.

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

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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