Sinclair: Diamond Sports Settlement Hits Our Fair Value Estimate

Sinclair announced the resolution of claims by Diamond Sports Group against Sinclair as a part of DSG’s bankruptcy and reorganization. In July 2023, DSG filed suit against Sinclair seeking $1.5 billion for alleged misappropriation of funds from Diamond prior to its bankruptcy filing. Sinclair has now agreed to pay DSG $495 million in cash, which will result in an estimated post-tax net cost to Sinclair of $250 million-$325 million. We previously believed DSG would provide no value for Sinclair, but we also didn’t expect Sinclair would be forced into this large a settlement. We are reducing our fair value estimate to $13 from $15.