Sinclair, Inc. Q1 FY2026 earnings call

Delivered strong first quarter with consistency of broadcast business and growth potential of Tennis Channel. Closed majority of JSA and LMA partner-station buy-ins, expect $30 million annualized synergies in 2026. Completed accretive duopoly transactions. Strategic review of broadcast business ongoing. Ventures generated $12 million cash distributions, ended quarter with $451 million cash. Executed term loan retirement, saved $12 million in annual cash interest expense. Tennis Channel had historic March, record DTC subscribers, investing in content rights, DTC platform, etc. Core advertising grew 4%, benefiting from live sports.

Total revenue of $877 million was up 4% year over year. Adjusted EBITDA of $126 million grew by 13%. Distribution revenue increased by 2% year over year. Core advertising grew 4% year over year. Local Media segment: total revenue of $701 million, distribution revenue $402 million, core advertising revenue $261 million, segment Adjusted EBITDA $117 million. Tennis segment: total revenue of $70 million, Adjusted EBITDA $20 million.

Reaffirming full-year 2026 guidance. Anchored by resilient revenue mix, strong midterm political revenue expectations, sports-heavy broadcast calendar headlined by World Cup, and continued cost discipline.

Industry awaits FCC decisions. Recent California litigation involving Nexstar transaction introduces near-term uncertainty. Fragmentation of live sports programming causing customer frustration and risks to business model funding local news.

Q: Steven Lee Cahall asked about Nexstar - TEGNA merger impact on Sinclair's M&A thinking and Scripps shareholder position.

A: Christopher S. Ripley said DOJ's expanded view of TV ad market is win, future transactions can mitigate risks, still Scripps' largest shareholder but moving forward with other opportunities.

Q: Aaron Watts asked about Local Media core advertising growth, 2Q tracking, war impact on bookings.

A: Robert D. Weisbord said sports-related in 4Q, still comfortable with full-year core guidance, watching headwinds.

Q: Analyst from Hover Research asked about subscriber trends quantification and net retrans outlook.

A: Christopher S. Ripley said mid-single digit churn, MVPD churn improved, expect net retrans growth long term.

Q: Benjamin Soff asked about strategies to mitigate future transaction challenges and appetite for station asset buys.

A: Christopher S. Ripley said setup different for future transactions, interested in duopolies for efficiency.

Q: Daniel Louis Kurnos asked about M&A timing, Tennis Channel as asset, World Cup impact.

A: Christopher S. Ripley and Robert D. Weisbord talked about M&A timing, leaning into Tennis Channel, bullish on World Cup.

Q: David Hamburger asked about Ventures separation contingency, capitalization, balance sheet loan buyback.

A: Christopher S. Ripley and Narinder Sahai talked about Ventures separation contingency, capitalization, loan buyback details.

Q: Analyst from Barclays asked about renewal contention and AI use.

A: Christopher S. Ripley and Narinder Sahai and Robert D. Weisbord talked about renewal not unusual, AI use in cost reduction and revenue growth.