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Sinclair Broadcast Group Inc SBGI

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5-Star Price

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Economic Moat

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Stewardship

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Weak Q2 for Sinclair as the Coronavirus Hammers Ad Revenue; Comcast Renewal a Bright Spot for RSNs

Neil Macker, CFA Senior Analyst

Analyst Note

| Neil Macker, CFA |

Sinclair posted a weak second quarter as the regional sports network segment was a drag on results. Revenue and EBITDA for the quarter came in below FactSet consensus. Both the broadcast and RSN segments took massive ad revenue hits due to the pandemic. The firm did renew its carriage agreement with Comcast for both its local TV stations and RSNs, which ameliorates one of our main worries around the RSN acquisition. We are maintaining our no-moat rating and our fair value estimate of $28.

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Company Profile

Business Description

Sinclair Broadcast Group is the second- largest television station operator in the U.S., with 191 stations in 89 markets. Of the firm's 607 channels, 154 are affiliated with the four national broadcasters--Fox (59), ABC (41), CBS (30), and NBC (24)--with another 86 channels on networks aligned with CBS (47 CW channels) and Fox (39 MyNetworkTV channels). Via the 2019 purchase of Fox Sports Networks from Disney, Sinclair is now the largest owner or operator of regional sports networks with 14 Fox-branded RSNs covering 42 NBA, MLB, and NHL teams along with the new home of the Chicago Cubs, Marquee Sports Network. The firm also owns the Tennis Channel, four multicast networks, and professional wresting promotion Ring of Honor.

Contact
10706 Beaver Dam Road
Hunt Valley, MD, 21030
T +1 410 568-1500
Sector Communication Services
Industry Broadcasting
Most Recent Earnings Mar 31, 2020
Fiscal Year End Dec 31, 2020
Stock Type High Yield
Employees 11,800