Sinclair Earnings: Cord-Cutting Impact Magnifies Importance of Retransmission Negotiations

Sinclair posted a decent second quarter as the revenue came in at the high end and adjusted EBITDA slightly beat the top end of the guidance range. However, total revenue excluding political advertising fell by 3% versus a year ago due to mid-single-digit subscriber churn and ongoing ad weakness. We expect retransmission renewals and even-year political revenue to assist in counteracting subscriber churn, producing low-single-digit revenue growth over the next five years. We are maintaining our no-moat rating and $22 fair value estimate.