Sinclair, Inc. Q3 FY2025 earnings call

Chris Ripley started by stating the company achieved strong performance in the third quarter with total revenue of $773 million, core revenues up 7% year - over - year on an as - reported basis, and adjusted EBITDA of $100 million exceeding the high end of the guidance range. On Slide 4, progress was reported on station portfolio optimization within the Broadcast segment with 11 partner station acquisitions closed, 12 having FCC approval and awaiting final closing, 10 filed and pending SEC approval, and plans to file several more by year - end, expecting at least $30 million in incremental annualized adjusted EBITDA. The regulatory landscape for broadcasters became more constructive with potential SEC changes to the nationwide ownership cap. Robert Weisbord provided an outlook for record midterm political advertising revenue in 2026 and an update on EdgeBeam. Narinder Sahai discussed the company's capital structure, including redeeming $89 million of 2027 senior unsecured notes and an upcoming $375 million accounts receivable securitization facility, and walked through consolidated third quarter results with key drivers like advertising revenue growth, distribution revenue tracking, and media expenses below guidance.

Distribution revenue in the Local Media segment came in at the high end of the guidance range, driven by improving subscriber churn, while core advertising revenue beat guidance. Tennis channel results were broadly in line with the company's guidance ranges on both total revenue and adjusted EBITDA.

Fourth quarter 2025 media revenue is expected to be in the range of $809 million to $845 million, core advertising revenue in the range of $340 million to $360 million, and distribution revenue in the range of $429 million to $441 million. For 2026, the preliminary outlook includes at least comparable midterm political revenue to the 2022 record, core advertising expected to have flat to low single - digit growth, distribution revenue relatively flat gross year - over - year assuming stable churn levels, and the company will shift to an annual guidance framework starting with the 2026 guidance in February.

There is a dispute between Disney ABC and YouTube TV which is affecting the distribution of local broadcasters' content, and this is seen as an antitrust issue that is hurting local viewers and local journalism.

Q: Obviously, nice print guys. Chris, a little off the wall for you maybe, but since YouTube was so noisy last quarter, just do you have any high - level thoughts on what's going on with sort of YouTube, Disney right now and just the broader ramifications for how these things are going to end up playing out in the MVPD universe? And then one for Narinder, now that you finally had a little bit of time to get your hands behind the wheel here, it looks like you've done a great job already on the expense side. I know you're going to leave no rock unturned, but just how much more would do you think you have to chop here from an efficiency standpoint?

A: Christopher Ripley responded regarding the YouTube - Disney situation, stating it's an antitrust issue hurting local viewers and journalism, and Narinder Sahai said the team is in the middle of business planning and budgeting with more to share in February.

Q: I've got 2, if I could. The first, I'm hoping you could talk a bit more about the core advertising environment for your local stations. It looks like it was down around 5% in the third quarter, but has the potential to be up in 4Q. Aside from the crowd out in the prior year, what's driving that improvement sequentially, whether that's select categories or other items? And any early thoughts on what that signals for station core ads in the new year?

A: Robert Weisbord said key categories are up or flat, driven by live sports ratings growth, and Christopher Ripley added the lifting of economic uncertainty helps.

Q: There have been reports that the NFL may look to open up negotiations on its media rights early. Extending the runway with the most popular content on TV seems like a clear positive, but we've also heard concerns around that, including the potential for increased rights payments, digital outlets taking more games, the risk of a broadcast network maybe being left out, et cetera. Curious if you view that potential early opening of the rights as a positive or a negative development for you and the TV broadcast universe?

A: Christopher Ripley said early renewal is positive with potential for significant extensions and new packages, and Robert Weisbord added over - the - air is attractive for major sports.

Q: Chris, we've talked about your vision for some of the remaining more levered broadcasters to consolidate. And I know you think there's meaningful synergies there. So what needs to happen for those discussions to kind of move aggressively if they haven't already? I think there's some control issues there that maybe could be sticking points. So what do you see as the biggest obstacles to getting 1 or 2 of those parties into a transaction that's to everyone's benefit? And then do you need a transaction in order to separate local from ventures? Or do you think that those 2 businesses are in financially appropriate places for the separation to proceed regardless of whatever else might happen with consolidation on the local side?

A: Christopher Ripley said precedent - setting transactions and control issues are obstacles, and separation can proceed without a merger but a merge and spin is ideal.

Q: I appreciate the color on renewals and potentially the ability to improve reverse comp in your negotiations next year. Any sense for how to think about the outlook for net retrans into 2026 and beyond? And then I have a follow - up.

A: Christopher Ripley said 2026 gross retrans is expected to be flattish, and Narinder Sahai said partner transactions had little impact in 3Q and de minimis in 4Q.