Sinclair Broadcast Group Sees Revenues, Income Fall For Third Quarter 2017

Q3 Results

SINCLAIR BROADCAST GROUP reported third quarter revenues declining 3.3% year-to-year to $670.9 million, with net income down from $50.8 million to $30.6 million (54 to 30 cents/diluted share).  Media revenues fell 1.7% to $624.2 million, hit hard by the loss of political revenues -- down from the election year quarter of $45 million to $7.3 million in 2017 -- but digital revenues jumped 55% and market share, excluding political, rose 1%.  Radio revenues for the company's SEATTLE cluster are not broken out in the report.

Executive Chairman DAVID SMITH's comments focused, however, on the bigger picture, the merger that will result in SINCLAIR taking over TRIBUNE MEDIA, which includes News-Talk WGN-A/CHICAGO, and, specifically, the pending ownership rule changes that will ease the way towards FCC approval.  He said, "This month, the Federal Communications Commission will be addressing certain deregulatory rulemakings for the television broadcast industry, recognizing that the competitive marketplace has changed and broadcasters actually do compete against everyone for viewers and advertising dollars.  Their review also recognizes that the current rules no longer reflect the realities of today's media landscape and consumer viewing habits.  We applaud the FCC's action to level the playing field, especially in light of emerging technologies and consolidation in the telecom and cable industries.  We also eagerly anticipate the FCC's approval of ATSC 3.0, ushering in the next generation of broadcast transmission and offering the public advanced nation-wide services and emergency alerting.  Meanwhile, we continue to work with the required governmental agencies towards the successful acquisition of TRIBUNE MEDIA COMPANY, expected to close in early 2018."

President/CEO CHRIS RIPLEY stuck to the operational news, saying, "We exceeded our third quarter adjusted operating income expectations previously provided, that excluded the acquisition of BONTEN MEDIA which closed in SEPTEMBER of this year.  Despite challenges in the quarter, including Hurricanes Harvey and Irma, the loss of certain technical school advertisers versus last year and mainly transaction-related one-time charges, SINCLAIR stations continued to deliver. In the quarter, we grew our share of our markets' revenues, excluding political, versus last year.  Looking ahead to the fourth quarter, our expectation is for pro forma core advertising revenues, including BONTEN, to grow mid-single digit percentage points over the same period last year.

"We continue to make progress in partnering with virtual MVPD providers for the carriage of our signals, adding several new distributors recently.  In addition, we renewed several FOX and CBS network affiliation agreements.  We capitalized on recent share price weakness by repurchasing one million shares in the quarter, while at the same time strengthening our balance sheet, improving our credit statistics to some of their highest quality in our history as a publicly traded company."

The company's board of directors also declared a quarterly cash dividend of 18 cents/share of its Class A and B common stock, payable DECEMBER 15th to shareholders of record as of DECEMBER 1st.

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