Sinclair Q3 Earnings Call Highlights

Key Points

• Political advertising drove a strong quarter: Q3 revenue rose 16% to $893 million and adjusted EBITDA increased 113% to $213 million. Sinclair now expects a record $455 million in political ad revenue for the year, up from its prior forecast of at least $375 million.
• Sinclair raised its 2026 outlook: Revenue guidance increased to $3.53 billion–$3.6 billion and adjusted EBITDA guidance to $825 million–$835 million, with political advertising and cost discipline driving the upgrades.
• The company is prioritizing flexibility and debt reduction: Sinclair ruled out a standalone separation of its Ventures portfolio for now while keeping a spin-merge and larger broadcast deals in consideration. It repaid or retired about $355 million of debt principal year to date, and STG net leverage fell to 5.1 times.

Sinclair NASDAQ: SBGI raised its 2026 revenue and earnings outlook after political advertising fueled a 16% increase in third-quarter revenue. The broadcaster also said it would not separate its Ventures portfolio on a standalone basis, though it continues to consider larger broadcast transactions.

Third-quarter revenue rose to $893 million, while adjusted EBITDA increased 113% to $213 million. Political advertising revenue reached $136 million, up 55% from the third quarter of 2022, the previous midterm election cycle.

President and CEO Chris Ripley said political demand exceeded the company’s expectations in almost every contested state. Sinclair now expects approximately $455 million in political revenue for the full year, compared with its August forecast of at least $375 million and its February forecast of at least $333 million.

Political Advertising Lifts Outlook

The projected $455 million would be a record political year for Sinclair, representing growth of 12% from the 2024 presidential cycle and 37% from the 2022 midterms, according to Chief Operating Officer and President of Local Media Rob Weisbord.

Weisbord said 38% of political spending came from parties and candidates, with the remaining 62% coming from issue-focused political action committees. He said the company was positioned in contested Senate, governor and House races and expects early, aggressive spending in the 2028 presidential cycle.

Political advertising displaced some core advertising, contributing to a 4% decline in that category during the third quarter. CFO Narinder Sahai also cited caution among some consumer-facing advertisers facing fuel volatility and inflation.

Weisbord said auto advertising was stable in the third quarter but was down slightly heading into the fourth. He added that Sinclair plans to encourage advertisers crowded out by political spots to return to broadcast next year.

For 2026, Sinclair raised its consolidated revenue forecast to $3.53 billion–$3.6 billion, an increase of $95 million at the midpoint. It raised adjusted EBITDA guidance to $825 million–$835 million, up $85 million at the midpoint. Sahai said political advertising was the largest driver of the increase, alongside cost discipline.

The company narrowed its full-year core advertising forecast to $1.22 billion–$1.25 billion and its distribution revenue forecast to $1.735 billion–$1.775 billion. The midpoint of the distribution range was unchanged.

Ventures Decision and Debt Reduction

Sinclair evaluated a spin-off, split-off or other separation of Ventures but decided against a standalone transaction for now. Ripley said a separation could create value on paper but would reduce strategic flexibility. A spin-merge remains a priority, he said.

Sahai said broadcast free cash flow remains dedicated to reducing debt at Sinclair Television Group, or STG. Ventures will continue to monetize minority investments, seek returns and invest in Tennis Channel and Digital Remedy. Its cash also gives Sinclair options for a larger broadcast transaction, he said.

At quarter end, Sinclair had approximately $4 billion in total debt and $659 million in consolidated cash, including $170 million at STG and $489 million at Ventures. Including available borrowing capacity, liquidity was approximately $1.4 billion. STG net leverage fell to 5.1 times from 5.2 times in the prior quarter and 6 times a year earlier.

Sinclair repurchased and retired $25 million in face value of its B7 term loan at a discount during the quarter and repaid and terminated its remaining B3 term loan balance. Year to date, it had repaid or retired approximately $355 million of debt principal.

Ripley said Sinclair has acquired three in-market station groups over the past 12 months, in addition to partner station buy-ins. He said a resolution to the Nexstar-TEGNA situation could help create a more constructive environment for larger deals.

Distribution and Tennis Growth

Third-quarter distribution revenue rose 1%, supported by partner station buy-ins and moderating subscriber churn. Ripley said overall churn remained in the mid-single digits, with improvement among traditional distributors led mainly by Charter and DirecTV.

Sinclair has completed renewals of its ABC and CBS affiliation agreements and is negotiating with Fox, Ripley said. He added that nearly all major traditional pay-TV distributor agreements will come up for negotiation over the next year.

Tennis revenue rose 6% to $71 million in the quarter. Core advertising revenue at the business increased 21%, and distribution revenue rose 2%, supported by direct-to-consumer subscriber growth. Tennis adjusted EBITDA declined by approximately $1 million to $15 million, reflecting higher programming and production costs and investment in the streaming platform.

Ripley said Sinclair plans to deliver new Tennis Channel apps in December and is investing in content, technology and marketing to acquire streaming subscribers.

Early View of 2027

Sahai said Sinclair will provide full-year 2027 guidance with its fourth-quarter results in late February. He cautioned that next year will not benefit from the Olympics or World Cup and that ongoing Major League Baseball labor negotiations create uncertainty for advertising.

Offsetting factors include advertising inventory freed up after the political cycle and growth in Sinclair’s digital, cross-platform and podcast businesses. Ripley said the company’s distribution agreements do not require a minimum number of MLB games; Sahai said any impact from a disruption would primarily affect core advertising.

About Sinclair (NASDAQ:SBGI)

Sinclair, Inc is a diversified media company that owns and operates local television stations across the United States. Its broadcast portfolio includes ABC, CBS, FOX, NBC, and other network-affiliated stations, as well as independent stations. Sinclair's local media operations produce news, weather, sports, and community-focused programming for viewers in markets throughout the country.

The company also develops and distributes national and regional content through cable networks, digital platforms, and streaming services.

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