Core Viewpoint - Jimmy Kimmel's late-night talk show "Jimmy Kimmel Live!" continues to be blacked out in numerous cities due to the actions of major ABC affiliate owners Nexstar Media Group and Sinclair Broadcast Group, following Kimmel's controversial comments regarding conservative activist Charlie Kirk's killing [1][6][9]. Group 1: Blackout Status - Nexstar Media Group has decided to preempt "Jimmy Kimmel Live!" on its ABC-affiliated local television stations while evaluating the show's status [2][4]. - Sinclair Broadcast Group has also opted to replace Kimmel's show with news programming on its ABC outlets, further contributing to the blackout [6][8]. Group 2: Corporate Dynamics - The ongoing situation indicates a struggle between Disney, which owns ABC, and its two largest affiliate owners, Nexstar and Sinclair, over the airing of Kimmel's show [6][9]. - Disney is reportedly in discussions with Nexstar to ensure the program aligns with the diverse interests of the communities served [4]. Group 3: Potential Legal Implications - The conflict between Disney and the affiliate owners may escalate into legal battles, as affiliates risk breaching contracts by not airing the show [9][10]. - Both Nexstar and Sinclair require FCC approval for significant deals, which adds a layer of complexity to the situation, especially given the political context surrounding Kimmel's remarks [10]. Group 4: Alternative Distribution Strategies - Disney is considering alternative distribution methods for Kimmel's show through secondary networks if affiliates continue to refuse to air it [13]. - There is a possibility that Kimmel could be rerouted through platforms like Home Shopping Network, which are not directly owned by ABC [14]. Group 5: Financial Considerations - Despite facing declining ratings and an estimated annual loss of $20 million, Disney maintains Kimmel's show due to the revenue generated from affiliate fees, sponsorships, and online content [14].

Core Viewpoint - The suspension of Jimmy Kimmel's show by local affiliates Nexstar and Sinclair highlights the complex relationship between local TV stations and national broadcasters, particularly in the context of differing audience values and programming decisions [1][16]. Group 1: Company Overview - Nexstar Media Group operates 28 ABC affiliates and owns or partners with over 200 stations across 116 U.S. markets, including major cities like Nashville and New Orleans [5][6]. - Sinclair Broadcast Group operates 38 local ABC affiliates and owns or provides services to 178 TV stations in 81 markets, maintaining a conservative viewpoint in its broadcasts [7][8]. Group 2: Recent Developments - Nexstar announced a $6.2 billion deal to acquire TEGNA Inc., which owns 64 additional TV stations, pending changes to FCC rules on station ownership [6][17]. - Sinclair has decided to preempt Kimmel's show with local news programming, indicating ongoing discussions with ABC regarding the show's potential return [7][17]. Group 3: Industry Dynamics - Local affiliates rely on national broadcasters for programming while also producing their own local content, sharing advertising revenue [9][10]. - The balance of power may favor ABC over local affiliates, as the ABC network constitutes a small percentage of Disney's overall revenue, allowing for alternative distribution methods [15][16]. Group 4: Controversies and Influence - Sinclair faced backlash in 2018 for requiring local anchors to read identical statements, showcasing the influence of corporate directives on local news [12][17]. - The current situation with Kimmel reflects a broader tension between national programming and the values of conservative-leaning communities served by affiliates like Sinclair and Nexstar [15][16].

Core Viewpoint - Disney's reinstatement of "Jimmy Kimmel Live!" has intensified the conflict between ABC and local TV broadcasters Sinclair and Nexstar, who collectively own nearly a third of ABC affiliate stations in the US and have decided not to air the show, opting instead for local news [1][2]. Group 1: ABC's Situation - ABC suspended "Jimmy Kimmel Live!" indefinitely due to backlash from Sinclair and Nexstar, as well as pressure from FCC chair Brendan Carr, who threatened to review local broadcast licenses if the show continued to air [2]. - If Sinclair and Nexstar do not air Kimmel's show, ABC's audience may decline, potentially leading to "makegoods" for ad buyers and a long-term decrease in ad rates, further impacting ABC's already declining TV revenue [3]. Group 2: Local Broadcasters' Risks - Local broadcasters may face backlash for boycotting Kimmel, as viewers who support him might turn to streaming services, resulting in a loss of audience for local TV [4]. - Sinclair and Nexstar experienced a decline in ad revenue, with Sinclair's revenue falling by 6% and Nexstar's by 9% in the second quarter, as viewers continue to migrate away from traditional TV [5]. Group 3: Industry Dynamics - Sinclair and Nexstar have gained significant power through consolidation, with Sinclair owning or operating 185 stations and 646 channels, including 40 ABC affiliates, while Nexstar has about 30 ABC affiliates among its 201 stations [11]. - The consolidation has provided these broadcasters with leverage to negotiate better terms and influence ABC's programming, especially in light of perceived biases in late-night TV [12][18]. Group 4: Political Influence - Both Sinclair and Nexstar have conservative-leaning ownership, which may influence their decision to boycott Kimmel's show, reflecting a broader trend of local broadcasters seeking more power in their relationships with networks [16][18]. - Sinclair has made demands for Kimmel's show to return, including an apology to Charlie Kirk's family, indicating a desire to correct perceived biases in late-night programming [17]. Group 5: Late-Night TV Landscape - The late-night TV format is under pressure from both political influences and a challenging business model, with CBS recently canceling Stephen Colbert's show due to financial losses [18]. - Analysts suggest that the decision to deplatform Kimmel aligns with a broader trend of declining relevance for late-night TV, which is seen as less culturally impactful than before [19].

Core Viewpoint - Sinclair Inc. will preempt "Jimmy Kimmel Live!" on its ABC affiliate stations, replacing it with news programming, despite The Walt Disney Co. announcing the show's return [1][2][5]. Group 1: Sinclair Inc. - Sinclair operates the largest network of local television stations, owning, operating, or providing service to 185 television stations in 85 markets [9]. - The company also owns the Tennis Channel and multicast networks such as Comet, Charge!, and The Nest, delivering content through multiple platforms [9]. - Sinclair's history dates back to 1971, founded by Julian Sinclair Smith, and has grown significantly over the decades [10][11][13]. Group 2: Disney's Decision - Disney initially suspended "Jimmy Kimmel Live!" to avoid inflaming a tense situation following comments made about the assassination of Charlie Kirk [5][6]. - After discussions with Jimmy Kimmel, Disney decided to resume production of the show [6]. Group 3: Financial Implications - The preemption of "Jimmy Kimmel Live!" by Sinclair and Nexstar Media Group Inc. may lead to financial repercussions for ABC, as it shuts out certain advertisers [3][11].

Core Viewpoint - Sinclair Broadcast Group has decided to preempt "Jimmy Kimmel Live!" across its ABC affiliate stations, replacing it with news programming, affecting numerous key markets [1][4][5] Group 1: Sinclair Broadcast Group's Decision - Sinclair will not air "Jimmy Kimmel Live!" starting Tuesday night, replacing it with news programming across its ABC affiliates [1][4] - The decision impacts major ABC affiliates in cities such as Washington, DC; Seattle; St. Louis; Portland; and Rochester [4][5] - Sinclair controls over 180 stations nationwide, with 41 affiliated with Disney-owned ABC, making it the largest owner of ABC affiliates [5][9] Group 2: Kimmel's Suspension and Controversy - Kimmel was suspended by Disney after making remarks linking conservative activist Charlie Kirk's accused killer to the "MAGA gang," which led to protests and calls for a boycott of Disney [5][9][10] - Disney stated the suspension was to avoid further inflaming a tense situation, labeling Kimmel's comments as "ill-timed and thus insensitive" [7][9] - Sinclair has demanded Kimmel issue a direct apology to the Kirk family and donate to Turning Point USA, a conservative group co-founded by Kirk [8][10] Group 3: Ongoing Discussions and Potential Impact - Discussions between Sinclair and ABC regarding Kimmel's potential return are ongoing [2] - Nexstar, which operates 32 ABC affiliates, has not yet decided whether to follow Sinclair's lead, representing nearly a quarter of ABC's household reach [11]

Core Viewpoint - Nexstar has decided to preempt Jimmy Kimmel Live! due to comments made by the host that were deemed "ill-timed and insensitive," affecting nearly a quarter of ABC's affiliate reach [1][2]. Group 1: Nexstar's Decision - Nexstar's decision to preempt the show is based on the need for respectful dialogue in the markets they serve [2]. - The company emphasizes that while Kimmel's show will not air on their stations, it remains available on Disney-owned streaming platforms [2]. Group 2: Industry Reactions - Sinclair Broadcast Group, which has the largest number of ABC affiliates, also announced it would not broadcast Kimmel's show [2]. - The FCC chairman warned ABC and its affiliates of potential repercussions following the controversy surrounding Kimmel's comments [3].

Core Insights - Sinclair Ventures has appointed Craig Blank as Principal to oversee its minority-owned investment portfolio [1] - The new role will focus on shaping long-term investment strategy and driving growth across various asset classes [1] - Sinclair Ventures includes the company's minority-owned investment portfolio, The Tennis Channel, and other assets [1]

Core Viewpoint - Sinclair, Inc. (NASDAQ: SBGI) shares were purchased after a significant pullback post-earnings, indicating a belief in attractive valuation ahead of potential industry mergers and acquisitions [1]. Group 1 - The company has a history of managing substantial assets, previously overseeing $10-20 billion in treasury assets and currently part of a team managing nearly $30 billion [1]. - The investment strategy is influenced by the expectation of upcoming industry consolidation, which may enhance the value of Sinclair shares [1]. Group 2 - The analyst holds a beneficial long position in SBGI shares through various financial instruments, indicating confidence in the stock's future performance [2]. - Other stocks mentioned in relation to personal and client accounts include GTN, NXST, and TGNA, suggesting a diversified investment approach within the media sector [2].

Group 1 - Sinclair Broadcast Group Inc. is launching a strategic review of its broadcast business, which may lead to a merger [1] - The company has engaged in discussions with potential merger partners, although no deal is guaranteed [2] - Sinclair is also considering spinning off its Ventures business, which includes the Tennis Channel, with board approval already obtained [2] Group 2 - The media industry anticipates deregulation under the Trump administration, particularly in the broadcast sector, potentially leading to increased mergers and acquisitions [3]

[PART I. FINANCIAL INFORMATION](index=9&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section presents the unaudited consolidated financial information for Sinclair, Inc. and its subsidiary, Sinclair Broadcast Group, LLC [ITEM 1. FINANCIAL STATEMENTS](index=9&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS) This section presents the unaudited consolidated financial statements for both Sinclair, Inc. and its subsidiary, Sinclair Broadcast Group, LLC [ITEM 1A. FINANCIAL STATEMENTS OF SINCLAIR, INC. (UNAUDITED)](index=9&type=section&id=ITEM%201A.%20FINANCIAL%20STATEMENTS%20OF%20SINCLAIR,%20INC.%20(UNAUDITED)) This sub-section provides the unaudited consolidated financial statements for Sinclair, Inc., including balance sheets, statements of operations, comprehensive income, equity, and cash flows [CONSOLIDATED BALANCE SHEETS](index=10&type=section&id=CONSOLIDATED%20BALANCE%20SHEETS) Sinclair, Inc.'s balance sheets show decreased total assets and equity, with liabilities slightly up | Metric | As of June 30, 2025 (in millions) | As of December 31, 2024 (in millions) | | :--------------------------------- | :---------------------------------- | :----------------------------------- | | Total assets | $5,670 | $5,885 | | Total liabilities | $5,377 | $5,369 | | Total equity | $293 | $516 | | Cash and cash equivalents | $616 | $697 | | Accounts payable and accrued liabilities | $558 | $416 | - Total assets decreased by **$215 million** (**3.65%**) from December 31, 2024, to June 30, 2025. Total equity decreased by **$223 million** (**43.22%**) over the same period[26](index=26&type=chunk) [CONSOLIDATED STATEMENTS OF OPERATIONS](index=11&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) Sinclair, Inc. reported a net loss for Q2 and H1 2025, driven by lower revenues and increased interest expense | Metric | Three Months Ended June 30, 2025 (in millions) | Three Months Ended June 30, 2024 (in millions) | Six Months Ended June 30, 2025 (in millions) | Six Months Ended June 30, 2024 (in millions) | | :------------------------------------------------- | :--------------------------------------------- | :--------------------------------------------- | :------------------------------------------- | :------------------------------------------- | | Total revenues | $784 | $829 | $1,560 | $1,627 | | Operating income | $21 | $64 | $35 | $106 | | Interest expense | $(82) | $(76) | $(226) | $(152) | | (Loss) income from equity method investments | $(1) | $78 | $(7) | $92 | | Other expense, net | $(18) | $(42) | $(84) | $(2) | | Net (loss) income attributable to Sinclair | $(64) | $17 | $(220) | $40 | | Basic earnings per share | $(0.91) | $0.27 | $(3.20) | $0.61 | - Net income attributable to Sinclair shifted from a gain of **$17 million** in Q2 2024 to a loss of **$64 million** in Q2 2025, and from a gain of **$40 million** in H1 2024 to a loss of **$220 million** in H1 2025. This represents a significant decline in profitability[29](index=29&type=chunk) - Interest expense for the six months ended June 30, 2025, more than doubled to **$226 million** from **$152 million** in the prior year, contributing significantly to the net loss[29](index=29&type=chunk) [CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME](index=12&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20COMPREHENSIVE%20(LOSS)%20INCOME) Sinclair, Inc. reported a comprehensive loss for Q2 and H1 2025, a substantial decrease from prior year income | Metric | Three Months Ended June 30, 2025 (in millions) | Three Months Ended June 30, 2024 (in millions) | Six Months Ended June 30, 2025 (in millions) | Six Months Ended June 30, 2024 (in millions) | | :----------------------------------------- | :--------------------------------------------- | :--------------------------------------------- | :------------------------------------------- | :------------------------------------------- | | Net (loss) income | $(62) | $19 | $(216) | $44 | | Comprehensive (loss) income attributable to Sinclair | $(64) | $18 | $(221) | $45 | - Comprehensive income attributable to Sinclair shifted from a gain of **$18 million** in Q2 2024 to a loss of **$64 million** in Q2 2025, and from a gain of **$45 million** in H1 2024 to a loss of **$221 million** in H1 2025[30](index=30&type=chunk) [CONSOLIDATED STATEMENTS OF EQUITY AND NONCONTROLLING INTERESTS](index=13&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20EQUITY%20AND%20NONCONTROLLING%20INTERESTS) Sinclair, Inc.'s total equity decreased to $293 million due to net loss and dividends, increasing the accumulated deficit | Metric | As of June 30, 2025 (in millions) | As of December 31, 2024 (in millions) | | :--------------------------------- | :---------------------------------- | :----------------------------------- | | Total equity | $293 | $516 | | (Accumulated deficit) retained earnings | $(244) | $10 | | Dividends declared and paid (H1) | $(34) | $(33) | - The company's accumulated deficit increased from **$10 million** (retained earnings) at December 31, 2024, to an accumulated deficit of **$244 million** at June 30, 2025, reflecting the net loss incurred[26](index=26&type=chunk)[34](index=34&type=chunk) [CONSOLIDATED STATEMENTS OF CASH FLOWS](index=15&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) Sinclair, Inc. experienced a net decrease in cash for H1 2025, driven by financing activities despite positive operating cash flow | Metric | Six Months Ended June 30, 2025 (in millions) | Six Months Ended June 30, 2024 (in millions) | | :------------------------------------------------- | :------------------------------------------- | :------------------------------------------- | | Net cash flows from (used in) operating activities | $127 | $(310) | | Net cash flows (used in) from investing activities | $(65) | $110 | | Net cash flows used in financing activities | $(143) | $(84) | | Net decrease in cash, cash equivalents, and restricted cash | $(81) | $(284) | | Cash, cash equivalents, and restricted cash, end of period | $616 | $378 | - Operating activities generated **$127 million** in cash for the six months ended June 30, 2025, a significant improvement from a **$310 million** cash outflow in the same period of 2024[37](index=37&type=chunk) - Financing activities used **$143 million** in cash in H1 2025, an increase from **$84 million** used in H1 2024, largely due to debt issuance costs and repayments[37](index=37&type=chunk) [NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS](index=16&type=section&id=NOTES%20TO%20UNAUDITED%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) These notes detail Sinclair, Inc.'s accounting policies, financial statement line items, and significant events [1. NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES](index=16&type=section&id=1.%20NATURE%20OF%20OPERATIONS%20AND%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) Sinclair operates in local media and tennis segments, with policies covering revenue recognition, hedge accounting, and recent acquisitions - Sinclair operates two reportable segments: local media (**185** broadcast television stations in **85** markets) and tennis (Tennis Channel, streaming services, and Tennis.com)[41](index=41&type=chunk) Total Revenues by Segment (in millions) | Segment | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :-------- | :------ | :------ | :------ | :------ | | Local Media | $679 | $750 | $1,373 | $1,477 | | Tennis | $68 | $67 | $136 | $130 | | Other | $46 | $20 | $67 | $35 | | Eliminations | $(9) | $(8) | $(16) | $(15) | | **Total** | **$784**| **$829**| **$1,560**| **$1,627**| - In March 2025, Sinclair Ventures acquired the remaining **75%** of Digital Remedy for approximately **$30 million** cash, adding **$22 million** in definite-lived intangible assets and **$17 million** in goodwill[65](index=65&type=chunk) - Four owned stations (WVTV, WICS/WICD, KTVO, KHQA) were classified as held-for-sale as of June 30, 2025, with an estimated loss of **$17 million** accrued[66](index=66&type=chunk) [2. OTHER ASSETS](index=20&type=section&id=2.%20OTHER%20ASSETS) Sinclair's other assets decreased to $617 million, primarily due to reduced investments and fair value adjustment losses Other Assets (in millions) | Asset Category | As of June 30, 2025 | As of December 31, 2024 | | :--------------- | :------------------ | :---------------------- | | Equity method investments | $32 | $48 | | Other investments | $298 | $382 | | Total other assets | $617 | $710 | - Fair value adjustment losses on investments measured at fair value or NAV were **$30 million** for Q2 2025 and **$103 million** for H1 2025, compared to **$45 million** and **$43 million** for the same periods in 2024, respectively[78](index=78&type=chunk) [3. NOTES PAYABLE, FINANCE LEASES, AND COMMERCIAL BANK FINANCING](index=21&type=section&id=3.%20NOTES%20PAYABLE,%20FINANCE%20LEASES,%20AND%20COMMERCIAL%20BANK%20FINANCING) STG completed significant debt refinancing in Q1 2025, extending maturities and resulting in a net gain on extinguishment - STG exchanged **$711.4 million** of Term Loan B-3 into Term Loan B-6 (due Dec 31, 2029, SOFR + **3.30%**) and **$731.3 million** of Term Loan B-4 into Term Loan B-7 (due Dec 31, 2030, SOFR + **4.10%**)[80](index=80&type=chunk) - STG issued **$1,430 million** of **8.125%** First-Out First Lien Secured Notes due 2033, using proceeds to repay **$1,175 million** Term Loan B-2 and portions of **4.125%** Senior Secured Notes and **5.125%** Senior Notes[83](index=83&type=chunk) - For H1 2025, Sinclair recognized a net gain on extinguishment of debt of **$6 million**, including gains on **4.125%** Senior Secured Notes (**$5M**) and **5.125%** Senior Notes (**$3M**), offset by a loss on Term Loan B-2 (**$6M**)[85](index=85&type=chunk) - The company repurchased **$81 million** of **5.125%** Senior Notes due 2027 for **$77 million** in Q2 2025, resulting in a **$4 million** gain on extinguishment[90](index=90&type=chunk) - An interest rate swap with a notional amount of **$600 million** (fixed rate **3.9%**, receives SOFR) is in effect until February 28, 2026, and qualifies for hedge accounting[95](index=95&type=chunk) [4. COMMITMENTS AND CONTINGENCIES](index=23&type=section&id=4.%20COMMITMENTS%20AND%20CONTINGENCIES) Sinclair faces FCC matters, antitrust lawsuits, settled Diamond Litigation, and accrued a Marquee Sports Network guarantee - FCC matters include pending petitions for reconsideration of a **$48 million** consent decree (2020) and a **$3.4 million** NAL for children's TV programming violations (2022). Sinclair agreed to a **$500,000** voluntary contribution in June 2025 to resolve the latter and related matters[97](index=97&type=chunk)[101](index=101&type=chunk) - Twenty-two putative class action lawsuits alleging antitrust violations (price-fixing and information sharing) are consolidated in Illinois. Sinclair denies wrongdoing and is vigorously defending the claims[105](index=105&type=chunk) - The Diamond Litigation, challenging transactions with Diamond Sports Group (DSG), was settled in March 2024 for **$495 million** cash payment from Sinclair, with DSG emerging from bankruptcy in January 2025 and Sinclair's equity interest terminated[108](index=108&type=chunk) - Sinclair accrued a **$37 million** estimated obligation in Q2 2025 related to a guarantee for Marquee Sports Network, following a binding term sheet to settle a funding dispute, with the guarantee in effect through 2029[94](index=94&type=chunk)[110](index=110&type=chunk) [5. EARNINGS PER SHARE](index=26&type=section&id=5.%20EARNINGS%20PER%20SHARE) Sinclair, Inc. reported a basic and diluted net loss per common share for Q2 and H1 2025, a significant decline | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Net (loss) income attributable to Sinclair | $(64) million | $17 million | $(220) million | $40 million | | Basic earnings per share | $(0.91) | $0.27 | $(3.20) | $0.61 | | Diluted earnings per share | $(0.91) | $0.27 | $(3.20) | $0.61 | | Basic weighted average common shares outstanding (in thousands) | 69,589 | 66,189 | 68,545 | 65,172 | - The company excluded **5,226 thousand** and **5,330 thousand** weighted-average stock-settled appreciation rights and outstanding stock options from diluted EPS calculations for the three and six months ended June 30, 2025, respectively, as their inclusion would be anti-dilutive due to the net loss[111](index=111&type=chunk) [6. SEGMENT DATA](index=27&type=section&id=6.%20SEGMENT%20DATA) Local media revenue and operating income decreased, while tennis segment revenue grew and operating income improved - Local media segment assets totaled **$4,416 million** as of June 30, 2025, while tennis segment assets were **$286 million**[114](index=114&type=chunk) Operating Income (Loss) by Segment (in millions) | Segment | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :---------------- | :------ | :------ | :------ | :------ | | Local Media | $65 | $83 | $77 | $124 | | Tennis | $8 | $1 | $26 | $21 | | Other & Corporate | $(52) | $(20) | $(68) | $(39) | | **Consolidated** | **$21** | **$64** | **$35** | **106** | - Local Media revenue decreased by **9%** in Q2 2025 and **7%** in H1 2025 compared to the prior year, primarily due to lower political and core advertising revenue[115](index=115&type=chunk)[116](index=116&type=chunk) - Tennis segment revenue increased by **1%** in Q2 2025 and **5%** in H1 2025, driven by distribution revenue growth[115](index=115&type=chunk)[116](index=116&type=chunk) [7. VARIABLE INTEREST ENTITIES](index=30&type=section&id=7.%20VARIABLE%20INTEREST%20ENTITIES) Sinclair consolidates certain VIEs with $61 million in assets and $12 million in liabilities, and holds other VIE investments Consolidated VIE Assets and Liabilities (in millions) | Metric | As of June 30, 2025 | As of December 31, 2024 | | :-------------------------------- | :------------------ | :---------------------- | | Total assets of VIEs | $61 | $70 | | Total liabilities of VIEs | $12 | $21 | - Assets of consolidated VIEs can only be used to settle their own obligations, and creditors of these VIEs generally have no recourse to Sinclair, except for certain guaranteed debt[27](index=27&type=chunk)[120](index=120&type=chunk) - Investments in other VIEs where Sinclair is not the primary beneficiary had a carrying value of **$77 million** as of June 30, 2025, and resulted in losses of **$1 million** (Q2 2025) and **$2 million** (H1 2025)[123](index=123&type=chunk) [8. RELATED PERSON TRANSACTIONS](index=31&type=section&id=8.%20RELATED%20PERSON%20TRANSACTIONS) Sinclair engages in various transactions with controlling shareholders and related entities, including leases and intercompany agreements - Lease payments to entities owned by controlling shareholders were **$1 million** (Q2 2025) and **$3 million** (H1 2025)[124](index=124&type=chunk) - Sinclair consolidates certain Cunningham subsidiaries as VIEs, with consolidated revenues from Cunningham Stations totaling **$31 million** (Q2 2025) and **$65 million** (H1 2025)[132](index=132&type=chunk) - Payments to Cunningham under LMA/JSA/SSA agreements were **$3 million** (Q2 2025) and **$6 million** (H1 2025)[130](index=130&type=chunk) - Several family members of controlling shareholders and executives are employed by the company, receiving compensation and, in some cases, restricted stock or stock appreciation rights[138](index=138&type=chunk)[139](index=139&type=chunk)[140](index=140&type=chunk)[141](index=141&type=chunk)[142](index=142&type=chunk)[143](index=143&type=chunk) [9. FAIR VALUE MEASUREMENTS](index=33&type=section&id=9.%20FAIR%20VALUE%20MEASUREMENTS) Sinclair measures financial assets and liabilities using a fair value hierarchy, with Level 3 investments significantly decreasing Fair Value of Financial Assets and Liabilities (in millions) | Category | As of June 30, 2025 (Fair Value) | As of December 31, 2024 (Fair Value) | | :----------------------------------------- | :------------------------------- | :----------------------------------- | | Level 1: Money market funds | $440 | $601 | | Level 2: Investments in equity securities (warrants) | $111 | $141 | | Level 2: Interest rate swap | $1 | $1 | | Level 2: STG Notes Payable (various) | $4,052 | $4,048 | | Level 3: Investments in equity securities (warrants/options) | $2 | $68 | - Level 3 financial assets decreased by **$66 million** from December 31, 2024, to June 30, 2025, primarily due to a **$58 million** transfer to Level 2 and **$8 million** in measurement adjustments[148](index=148&type=chunk) [ITEM 1B. FINANCIAL STATEMENTS OF SINCLAIR BROADCAST GROUP, LLC (UNAUDITED)](index=36&type=section&id=ITEM%201B.%20FINANCIAL%20STATEMENTS%20OF%20SINCLAIR%20BROADCAST%20GROUP,%20LLC%20(UNAUDITED)) This section presents the unaudited consolidated financial statements for Sinclair Broadcast Group, LLC (SBG) [CONSOLIDATED BALANCE SHEETS](index=37&type=section&id=CONSOLIDATED%20BALANCE%20SHEETS_SBG) SBG's balance sheets show decreased total assets and increased liabilities, resulting in a larger accumulated member's deficit | Metric | As of June 30, 2025 (in millions) | As of December 31, 2024 (in millions) | | :--------------------------------- | :---------------------------------- | :----------------------------------- | | Total assets | $4,484 | $4,689 | | Total liabilities | $5,267 | $5,315 | | Total deficit | $(783) | $(626) | | Cash and cash equivalents | $224 | $291 | | Accounts payable and accrued liabilities | $458 | $374 | - Total assets decreased by **$205 million** (**4.37%**) from December 31, 2024, to June 30, 2025. The total deficit increased by **$157 million** (**25.08%**) over the same period[151](index=151&type=chunk) [CONSOLIDATED STATEMENTS OF OPERATIONS](index=38&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS_SBG) SBG reported a net loss for Q2 and H1 2025, driven by lower media revenues and increased interest expense | Metric | Three Months Ended June 30, 2025 (in millions) | Three Months Ended June 30, 2024 (in millions) | Six Months Ended June 30, 2025 (in millions) | Six Months Ended June 30, 2024 (in millions) | | :----------------------------------------- | :--------------------------------------------- | :--------------------------------------------- | :------------------------------------------- | :------------------------------------------- | | Total media revenues | $679 | $750 | $1,373 | $1,477 | | Operating income | $28 | $77 | $40 | $118 | | Interest expense | $(82) | $(76) | $(226) | $(152) | | Net (loss) income attributable to SBG | $(41) | $2 | $(143) | $7 | - Net income attributable to SBG shifted from a gain of **$2 million** in Q2 2024 to a loss of **$41 million** in Q2 2025, and from a gain of **$7 million** in H1 2024 to a loss of **$143 million** in H1 2025[154](index=154&type=chunk) - Interest expense for the six months ended June 30, 2025, increased to **$226 million** from **$152 million** in the prior year, significantly impacting profitability[154](index=154&type=chunk) [CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME](index=39&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20COMPREHENSIVE%20(LOSS)%20INCOME_SBG) SBG reported a comprehensive loss for Q2 and H1 2025, a significant decline from prior year income due to net loss | Metric | Three Months Ended June 30, 2025 (in millions) | Three Months Ended June 30, 2024 (in millions) | Six Months Ended June 30, 2025 (in millions) | Six Months Ended June 30, 2024 (in millions) | | :----------------------------------------- | :--------------------------------------------- | :--------------------------------------------- | :------------------------------------------- | :------------------------------------------- | | Net (loss) income | $(39) | $4 | $(140) | $10 | | Comprehensive (loss) income attributable to Sinclair | $(41) | $3 | $(144) | $12 | - Comprehensive income attributable to SBG shifted from a gain of **$3 million** in Q2 2024 to a loss of **$41 million** in Q2 2025, and from a gain of **$12 million** in H1 2024 to a loss of **$144 million** in H1 2025[155](index=155&type=chunk) [CONSOLIDATED STATEMENTS OF MEMBER'S DEFICIT AND NONCONTROLLING INTERESTS](index=40&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20MEMBER%27S%20DEFICIT%20AND%20NONCONTROLLING%20INTERESTS_SBG) SBG's accumulated deficit increased to $715 million due to net loss and distributions to its member | Metric | As of June 30, 2025 (in millions) | As of December 31, 2024 (in millions) | | :--------------------------------- | :---------------------------------- | :----------------------------------- | | Accumulated deficit | $(715) | $(560) | | Distributions to member, net (H1) | $(11) | $(111) | - The accumulated deficit increased by **$155 million** (**27.68%**) from December 31, 2024, to June 30, 2025[159](index=159&type=chunk) [CONSOLIDATED STATEMENTS OF CASH FLOWS](index=42&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS_SBG) SBG experienced a net decrease in cash for H1 2025, driven by financing activities despite positive operating cash flow | Metric | Six Months Ended June 30, 2025 (in millions) | Six Months Ended June 30, 2024 (in millions) | | :------------------------------------------------- | :------------------------------------------- | :------------------------------------------- | | Net cash flows from (used in) operating activities | $113 | $(312) | | Net cash flows used in investing activities | $(34) | $(18) | | Net cash flows (used in) from financing activities | $(146) | $63 | | Net decrease in cash, cash equivalents, and restricted cash | $(67) | $(267) | | Cash, cash equivalents, and restricted cash, end of period | $224 | $52 | - Operating activities generated **$113 million** in cash for the six months ended June 30, 2025, a significant improvement from a **$312 million** cash outflow in the same period of 2024[162](index=162&type=chunk) - Financing activities used **$146 million** in cash in H1 2025, a reversal from **$63 million** generated in H1 2024, largely due to debt issuance costs and repayments[162](index=162&type=chunk) [NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS](index=43&type=section&id=NOTES%20TO%20UNAUDITED%20CONSOLIDATED%20FINANCIAL%20STATEMENTS_SBG) These notes detail SBG's accounting policies, financial statement line items, and significant events [1. NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES](index=43&type=section&id=1.%20NATURE%20OF%20OPERATIONS%20AND%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES_SBG) SBG operates solely in local media, with policies covering revenue recognition, hedge accounting, and station disposals - SBG's sole reportable segment is local media, comprising **185** broadcast television stations in **85** markets[166](index=166&type=chunk) SBG Total Revenues by Type (in millions) | Revenue Type | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :------------- | :------ | :------ | :------ | :------ | | Distribution revenue | $380 | $384 | $775 | $768 | | Core advertising revenue | $272 | $285 | $543 | $569 | | Political advertising revenue | $6 | $40 | $12 | $64 | | Other media | $21 | $41 | $43 | $76 | | **Total Revenues** | **$679**| **$750**| **$1,373**| **$1,477**| - SBG classified four owned stations as held-for-sale as of June 30, 2025, with an estimated loss of **$17 million** accrued, and the sale completed on July 8, 2025[194](index=194&type=chunk) - SBG made **$57 million** in dividends to Sinclair, Inc. in H1 2025 to fund its portion of shareholder dividends and parent company expenses, offset by an **$11 million** contribution from Sinclair Ventures related to tax payments[184](index=184&type=chunk) [2. OTHER ASSETS](index=48&type=section&id=2.%20OTHER%20ASSETS_SBG) SBG's other assets increased to $232 million, primarily due to an increase in investments SBG Other Assets (in millions) | Asset Category | As of June 30, 2025 | As of December 31, 2024 | | :--------------- | :------------------ | :---------------------- | | Investments | $31 | $14 | | Income tax receivable | $147 | $144 | | Total other assets | $232 | $212 | - Investments measured at NAV increased from **$5 million** to **$12 million**, and those utilizing the measurement alternative increased from **$8 million** to **$17 million** from December 31, 2024, to June 30, 2025[203](index=203&type=chunk) [3. NOTES PAYABLE, FINANCE LEASES, AND COMMERCIAL BANK FINANCING](index=48&type=section&id=3.%20NOTES%20PAYABLE,%20FINANCE%20LEASES,%20AND%20COMMERCIAL%20BANK%20FINANCING_SBG) STG completed significant debt refinancing in Q1 2025, extending maturities and resulting in a net gain on extinguishment - STG exchanged **$711.4 million** of Term Loan B-3 into Term Loan B-6 (due Dec 31, 2029, SOFR + **3.30%**) and **$731.3 million** of Term Loan B-4 into Term Loan B-7 (due Dec 31, 2030, SOFR + **4.10%**)[204](index=204&type=chunk) - STG issued **$1,430 million** of **8.125%** First-Out First Lien Secured Notes due 2033, using proceeds to repay **$1,175 million** Term Loan B-2 and portions of **4.125%** Senior Secured Notes and **5.125%** Senior Notes[208](index=208&type=chunk) - For H1 2025, SBG recognized a net gain on extinguishment of debt of **$6 million**, including gains on **4.125%** Senior Secured Notes (**$5M**) and **5.125%** Senior Notes (**$3M**), offset by a loss on Term Loan B-2 (**$6M**)[210](index=210&type=chunk) - SBG repurchased **$81 million** of **5.125%** Senior Notes due 2027 for **$77 million** in Q2 2025, resulting in a **$4 million** gain on extinguishment[214](index=214&type=chunk) - SBG guarantees **$2 million** of debt for certain consolidated VIEs and has a guarantee for Marquee Sports Network obligations up to **$455 million** through 2029, accruing **$37 million** for this obligation in Q2 2025[218](index=218&type=chunk) [4. COMMITMENTS AND CONTINGENCIES](index=51&type=section&id=4.%20COMMITMENTS%20AND%20CONTINGENCIES_SBG) SBG faces FCC matters, antitrust lawsuits, settled Diamond Litigation, and accrued a Marquee Sports Network guarantee - FCC matters include pending petitions for reconsideration of a **$48 million** consent decree (2020) and a **$3.4 million** NAL for children's TV programming violations (2022). SBG agreed to a **$500,000** voluntary contribution in June 2025 to resolve the latter and related matters[222](index=222&type=chunk)[226](index=226&type=chunk) - SBG is a defendant in twenty-two putative class action lawsuits alleging antitrust violations (price-fixing and information sharing), which it intends to vigorously defend[228](index=228&type=chunk) - The Diamond Litigation, challenging transactions with Diamond Sports Group (DSG), was settled in March 2024 for **$495 million** cash payment from Sinclair (of which **$347 million** was paid by STG), with DSG emerging from bankruptcy in January 2025 and SBG's equity interest terminated[232](index=232&type=chunk) - SBG accrued a **$37 million** estimated obligation in Q2 2025 related to a guarantee for Marquee Sports Network, following a binding term sheet to settle a funding dispute, with the guarantee in effect through 2029[233](index=233&type=chunk) [5. SEGMENT DATA](index=54&type=section&id=5.%20SEGMENT%20DATA_SBG) SBG operates solely in local media, with decreased operating income due to lower revenues - SBG's only reportable segment is local media, which includes its television stations, original networks, and content[235](index=235&type=chunk) SBG Operating Income (Loss) by Segment (in millions) | Segment | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :---------------- | :------ | :------ | :------ | :------ | | Local Media | $65 | $83 | $77 | $124 | | Corporate | $(37) | $(6) | $(37) | $(6) | | **Consolidated** | **$28** | **$77** | **$40** | **$118**| - Local Media revenue decreased by **9%** in Q2 2025 and **7%** in H1 2025 compared to the prior year, primarily due to lower political and core advertising revenue[187](index=187&type=chunk) [6. VARIABLE INTEREST ENTITIES](index=55&type=section&id=6.%20VARIABLE%20INTEREST%20ENTITIES_SBG) SBG consolidates certain VIEs with $61 million in assets and $12 million in liabilities, with restricted assets SBG Consolidated VIE Assets and Liabilities (in millions) | Metric | As of June 30, 2025 | As of December 31, 2024 | | :-------------------------------- | :------------------ | :---------------------- | | Total assets of VIEs | $61 | $70 | | Total liabilities of VIEs | $12 | $21 | - SBG is the primary beneficiary of VIEs where it directs activities significantly impacting economic performance and absorbs significant losses or returns, typically through LMAs, JSAs, and SSAs with other station owners[238](index=238&type=chunk) - All liabilities of consolidated VIEs are non-recourse to SBG, except for the debt of certain VIEs[152](index=152&type=chunk)[240](index=240&type=chunk) [7. RELATED PERSON TRANSACTIONS](index=56&type=section&id=7.%20RELATED%20PERSON%20TRANSACTIONS_SBG) SBG engages in various transactions with controlling shareholders and related entities, including leases and intercompany services - Lease payments to entities owned by Sinclair controlling shareholders were **$1 million** (Q2 2025) and **$3 million** (H1 2025)[241](index=241&type=chunk) - SBG consolidates certain Cunningham subsidiaries as VIEs, with consolidated revenues from Cunningham Stations totaling **$31 million** (Q2 2025) and **$65 million** (H1 2025)[249](index=249&type=chunk) - SBG recorded revenue of **$3 million** (Q2 2025) and **$6 million** (H1 2025) for sales services provided to Sinclair, Inc. and its subsidiaries, and expenses of **$5 million** (Q2 2025) and **$9 million** (H1 2025) for digital advertising services received from Sinclair, Inc[254](index=254&type=chunk)[255](index=255&type=chunk) - SBG made net cash distributions of **$36 million** (Q2 2025) and **$82 million** (H1 2025) to Sinclair, Inc. and its subsidiaries[256](index=256&type=chunk) [8. FAIR VALUE MEASUREMENTS](index=59&type=section&id=8.%20FAIR%20VALUE%20MEASUREMENTS_SBG) SBG measures financial assets and liabilities using a fair value hierarchy, with money market funds as Level 1 SBG Fair Value of Financial Assets and Liabilities (in millions) | Category | As of June 30, 2025 (Fair Value) | As of December 31, 2024 (Fair Value) | | :----------------------------------------- | :------------------------------- | :----------------------------------- | | Level 1: Money market funds | $200 | $253 | | Level 2: Interest rate swap | $1 | $1 | | Level 2: STG Notes Payable (various) | $4,052 | $4,048 | | Level 3: Investments in equity securities | $0 | $0 | [ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=60&type=section&id=ITEM%202.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) This section discusses Sinclair's and SBG's financial performance, condition, and liquidity, highlighting key events [SUMMARY OF SIGNIFICANT EVENTS](index=60&type=section&id=SUMMARY%20OF%20SIGNIFICANT%20EVENTS) Sinclair and SBG experienced new product launches, media rights extensions, asset transactions, and debt repurchases - SBG launched WKOF in Syracuse, New York, as the first ATSC **3.0** lighthouse television license[274](index=274&type=chunk) - Sinclair received FAA authorization to fly drones over people and vehicles for news gathering, a first for a broadcast company[276](index=276&type=chunk) - Tennis Channel extended partnerships with Billie Jean King Cup and Davis Cup, and secured a new six-year media rights deal with WTA Ventures through 2032[276](index=276&type=chunk) - SBG sold four owned stations in July 2025 and acquired license assets for KXVO in Omaha, NE, WOLF in Hazleton, PA, WGFL in High Springs, FL, and KMEG in Sioux City, IA[278](index=278&type=chunk) - Sinclair declared quarterly dividends of **$0.25** per share in May and August 2025[278](index=278&type=chunk) - STG repurchased **$81 million** aggregate principal amount of **5.125%** Senior Notes due 2027 for **$77 million** in Q2 2025[278](index=278&type=chunk) [SINCLAIR, INC. RESULTS OF OPERATIONS](index=63&type=section&id=SINCLAIR,%20INC.%20RESULTS%20OF%20OPERATIONS) Sinclair's Q2 and H1 2025 results show declining revenues and operating income, primarily due to lower political advertising [Seasonality / Cyclicality](index=63&type=section&id=Seasonality%20/%20Cyclicality) Sinclair's local media segment is impacted by political advertising cycles and seasonal advertising in Q2 and Q4 - Local media segment operating results are subject to cyclical fluctuations from political advertising, with even-numbered years (and presidential election years) showing significantly higher spending[280](index=280&type=chunk) - Q2 and Q4 operating results are typically higher for local media due to increased advertising expenditures for seasonal and holiday spending[280](index=280&type=chunk) - Tennis segment operating results fluctuate based on tournament schedules, with Q1 and Q4 usually higher due to the number and significance of tournaments[281](index=281&type=chunk) [Operating Data](index=63&type=section&id=Operating%20Data) Sinclair's consolidated operating data shows decreased total revenues and operating income, with a widened net loss | Metric | Three Months Ended June 30, 2025 (in millions) | Three Months Ended June 30, 2024 (in millions) | Six Months Ended June 30, 2025 (in millions) | Six Months Ended June 30, 2024 (in millions) | | :----------------------------------------- | :--------------------------------------------- | :--------------------------------------------- | :------------------------------------------- | :------------------------------------------- | | Total revenues | $784 | $829 | $1,560 | $1,627 | | Operating income | $21 | $64 | $35 | $106 | | Net (loss) income attributable to Sinclair | $(64) | $17 | $(220) | $40 | - Total revenues decreased by **5.4%** in Q2 2025 and **4.18%** in H1 2025 year-over-year. Operating income decreased by **67.19%** in Q2 2025 and **67.0%** in H1 2025 year-over-year[282](index=282&type=chunk) [Local Media Segment](index=64&type=section&id=Local%20Media%20Segment) Sinclair's local media segment experienced decreased revenue and operating income due to lower political and core advertising Local Media Segment Revenue (in millions) | Revenue Type | Q2 2025 | Q2 2024 | % Change (QoQ) | H1 2025 | H1 2024 | % Change (YoY) | | :------------- | :------ | :------ | :------------- | :------ | :------ | :------------- | | Distribution revenue | $380 | $384 | (1)% | $775 | $768 | 1% | | Core advertising revenue | $272 | $285 | (5)% | $543 | $569 | (5)% | | Political advertising revenue | $6 | $40 | (85)% | $12 | $64 | (81)% | | Other media revenues | $21 | $41 | (49)% | $43 | $76 | (43)% | | **Total Media revenues** | **$679**| **$750**| **(9)%** | **$1,373**| **$1,477**| **(7)%** | - Political advertising revenue decreased by **$34 million** (**85%**) in Q2 2025 and **$52 million** (**81%**) in H1 2025 due to 2025 being an off-year election cycle[287](index=287&type=chunk) - Distribution revenue decreased by **1%** in Q2 2025 due to subscriber decreases (low-teen percentages), partially offset by contractual rate increases (low-teen percentages). For H1 2025, it increased by **1%** due to contractual rate increases offsetting subscriber declines[285](index=285&type=chunk) - Media programming and production expenses decreased by **$2 million** (**1%**) in Q2 2025, primarily due to a **$6 million** decrease in litigation and consulting expenses (including a **$3 million** reversal from an FCC consent decree), partially offset by a **$4 million** increase in network affiliation fees[291](index=291&type=chunk) - Media selling, general and administrative expenses decreased by **$16 million** (**9%**) in Q2 2025, driven by a **$10 million** reversal related to the FCC consent decree, **$3 million** in employee compensation cost reduction, and **$2 million** in national sales commissions decrease[293](index=293&type=chunk) [Tennis Segment](index=67&type=section&id=Tennis%20Segment) Sinclair's tennis segment reported increased media revenues and significantly improved operating income Tennis Segment Revenue (in millions) | Revenue Type | Q2 2025 | Q2 2024 | % Change (QoQ) | H1 2025 | H1 2024 | % Change (YoY) | | :------------- | :------ | :------ | :------------- | :------ | :------ | :------------- | | Distribution revenue | $54 | $51 | 6% | $110 | $103 | 7% | | Core advertising revenue | $13 | $14 | (7)% | $24 | $24 | —% | | Other media revenues | $1 | $2 | (50)% | $2 | $3 | (33)% | | **Total Media revenues** | **$68** | **$67** | **1%** | **$136**| **$130**| **5%** | - Operating income for the tennis segment increased significantly from **$1 million** in Q2 2024 to **$8 million** in Q2 2025, and from **$21 million** in H1 2024 to **$26 million** in H1 2025[299](index=299&type=chunk) - Distribution revenue increased by **6%** in Q2 2025 and **7%** in H1 2025, driven by high-teen percentage increases in contractual rates and high single-digit percentage increases in direct-to-consumer (DTC) subscriptions, partially offset by subscriber decreases[300](index=300&type=chunk) - Media programming and production expenses decreased by **$4 million** (**9%**) in Q2 2025 and **$2 million** (**3%**) in H1 2025, primarily due to shifts in the 2025 tournament calendar[302](index=302&type=chunk) [Other](index=68&type=section&id=Other) The 'Other' segment saw increased media revenues due to Digital Remedy acquisition, but fair value losses impacted results Other Segment Revenue and Operating Income (in millions) | Metric | Q2 2025 | Q2 2024 | % Change (QoQ) | H1 2025 | H1 2024 | % Change (YoY) | | :-------------------------------- | :------ | :------ | :------------- | :------ | :------ | :------------- | | Media revenues | $38 | $9 | n/m | $53 | $15 | n/m | | Non-media revenues | $8 | $11 | (27)% | $14 | $20 | (30)% | | Operating income (loss) | $1 | $0 | n/m | $0 | $(3) | n/m | | Income (loss) from equity method investments | $0 | $78 | n/m | $(5) | $93 | n/m | | Other expense, net | $(24) | $(43) | (44)% | $(93) | $(37) | n/m | - Media revenues increased by **$29 million** in Q2 2025 and **$38 million** in H1 2025, primarily due to the acquisition of Digital Remedy[309](index=309&type=chunk) - Fair value adjustment losses on investments measured at fair value and NAV were **$30 million** in Q2 2025 and **$103 million** in H1 2025, significantly impacting 'Other expense, net'[312](index=312&type=chunk) - In H1 2024, the segment recognized significant gains from equity method investments (**$93 million**) and the sale of broadcast-related assets (**$26 million**), which did not recur in H1 2025[297](index=297&type=chunk)[311](index=311&type=chunk) [Corporate and Unallocated Expenses](index=69&type=section&id=Corporate%20and%20Unallocated%20Expenses) Corporate G&A expenses decreased due to lower legal and employee costs, but a Marquee guarantee loss was recognized Corporate and Unallocated Expenses (in millions) | Metric | Q2 2025 | Q2 2024 | % Change (QoQ) | H1 2025 | H1 2024 | % Change (YoY) | | :-------------------------------- | :------ | :------ | :------------- | :------ | :------ | :------------- | | Corporate general and administrative expenses | $45 | $50 | (10)% | $97 | $108 | (10)% | | Loss on asset dispositions and other, net | $9 | $2 | n/m | $17 | $2 | n/m | | Income tax benefit (provision) | $14 | $(5) | n/m | $60 | $(1) | n/m | - Corporate G&A expenses decreased by **$5 million** (**10%**) in Q2 2025 and **$11 million** (**10%**) in H1 2025, mainly due to lower legal, consulting, and regulatory costs, and reduced employee compensation[313](index=313&type=chunk) - A **$37 million** loss related to the Marquee guarantee was recognized in Q2 2025, partially offset by **$30 million** in insurance proceeds from cyber and D&O policies[314](index=314&type=chunk) - The effective income tax rate for Q2 2025 was an **18.9%** benefit (vs. **19.0%** provision in Q2 2024) and for H1 2025 was a **21.8%** benefit (vs. **1.7%** provision in H1 2024), primarily due to a book loss in 2025[315](index=315&type=chunk)[316](index=316&type=chunk) [SINCLAIR BROADCAST GROUP, LLC RESULTS OF OPERATIONS](index=70&type=section&id=SINCLAIR%20BROADCAST%20GROUP,%20LLC%20RESULTS%20OF%20OPERATIONS) SBG reported decreased total media revenues and operating income, primarily due to lower political advertising [Seasonality / Cyclicality](index=70&type=section&id=Seasonality%20/%20Cyclicality_SBG) SBG's local media segment is impacted by political advertising cycles and seasonal advertising in Q2 and Q4 - SBG's local media segment operating results are subject to cyclical fluctuations from political advertising, with even-numbered years (and presidential election years) showing significantly higher spending[319](index=319&type=chunk) - Q2 and Q4 operating results are typically higher for local media due to increased advertising expenditures for seasonal and holiday spending[319](index=319&type=chunk) [Operating Data](index=70&type=section&id=Operating%20Data_SBG) SBG's consolidated operating data shows decreased total media revenues and operating income, with a widened net loss | Metric | Three Months Ended June 30, 2025 (in millions) | Three Months Ended June 30, 2024 (in millions) | Six Months Ended June 30, 2025 (in millions) | Six Months Ended June 30, 2024 (in millions) | | :----------------------------------------- | :--------------------------------------------- | :--------------------------------------------- | :------------------------------------------- | :------------------------------------------- | | Total media revenues | $679 | $750 | $1,373 | $1,477 | | Operating income | $28 | $77 | $40 | $118 | | Net (loss) income attributable to SBG | $(41) | $2 | $(143) | $7 | - Total media revenues decreased by **9.47%** in Q2 2025 and **7.04%** in H1 2025 year-over-year. Operating income decreased by **63.64%** in Q2 2025 and **66.10%** in H1 2025 year-over-year[320](index=320&type=chunk) [Local Media Segment](index=70&type=section&id=Local%20Media%20Segment_SBG) SBG's local media segment results mirror Sinclair's, showing decreased revenues and operating income - SBG's local media segment results are identical to Sinclair's local media segment for the periods presented[321](index=321&type=chunk) [Corporate and Unallocated Expenses](index=71&type=section&id=Corporate%20and%20Unallocated%20Expenses_SBG) SBG's corporate G&A expenses decreased, but a significant loss related to the Marquee guarantee was recognized SBG Corporate and Unallocated Expenses (in millions) | Metric | Q2 2025 | Q2 2024 | % Change (QoQ) | H1 2025 | H1 2024 | % Change (YoY) | | :-------------------------------- | :------ | :------ | :------------- | :------ | :------ | :------------- | | Corporate general and administrative expenses | $27 | $35 | (23)% | $64 | $76 | (16)% | | Loss on asset dispositions and other, net | $9 | $0 | n/m | $17 | $0 | n/m | | Income tax benefit | $8 | $1 | n/m | $34 | $10 | n/m | - Corporate G&A expenses decreased by **$8 million** (**23%**) in Q2 2025 and **$12 million** (**16%**) in H1 2025, mainly due to lower legal, consulting, and regulatory costs, and reduced employee compensation[324](index=324&type=chunk) - A **$37 million** loss related to the Marquee guarantee was recognized in Q2 2025, partially offset by **$30 million** in insurance proceeds from cyber and D&O policies[325](index=325&type=chunk) - The effective income tax rate for Q2 2025 was a **17.9%** benefit (vs. **38.5%** benefit in Q2 2024) and for H1 2025 was a **19.5%** benefit (vs. **1717.7%** benefit in H1 2024)[326](index=326&type=chunk)[327](index=327&type=chunk) [Liquidity and Capital Resources](index=72&type=section&id=Liquidity%20and%20Capital%20Resources) Sinclair and SBG maintain liquidity, completed debt refinancing, and saw improved operating cash flows - As of June 30, 2025, Sinclair had **$616 million** in cash and cash equivalents and **$650 million** in available borrowing capacity. SBG had **$224 million** in cash and cash equivalents and **$650 million** in available borrowing capacity[329](index=329&type=chunk)[330](index=330&type=chunk) - STG completed a new money financing and debt recapitalization in Q1 2025, repaying Term Loan B-2 due 2026 and extending other debt maturities[332](index=332&type=chunk) - During Q2 2025, STG repurchased **$81 million** of **5.125%** Senior Notes due 2027 for **$77 million**[333](index=333&type=chunk) - Sinclair's operating cash flows increased to **$127 million** in H1 2025 from **$(310) million** in H1 2024, primarily due to increased cash collections from Distributors and the prior period's DSG settlement payment[337](index=337&type=chunk) - SBG's operating cash flows increased to **$113 million** in H1 2025 from **$(312) million** in H1 2024, driven by similar factors as Sinclair[342](index=342&type=chunk) - Sinclair's financing activities used **$143 million** in H1 2025 (vs. **$84 million** in H1 2024), and SBG's used **$146 million** (vs. generated **$63 million** in H1 2024), largely due to debt refinancing and repurchases[339](index=339&type=chunk)[344](index=344&type=chunk) [Sinclair, Inc. Sources and Uses of Cash](index=73&type=section&id=Sinclair,%20Inc.%20Sources%20and%20Uses%20of%20Cash) Sinclair's cash flows show improved operating cash, but increased investing and financing cash usage | Cash Flow Activity | Three Months Ended June 30, 2025 (in millions) | Three Months Ended June 30, 2024 (in millions) | Six Months Ended June 30, 2025 (in millions) | Six Months Ended June 30, 2024 (in millions) | | :------------------------------------------------- | :--------------------------------------------- | :--------------------------------------------- | :------------------------------------------- | :------------------------------------------- | | Net cash flows from (used in) operating activities | $122 | $(306) | $127 | $(310) | | Net cash flows (used in) from investing activities | $(23) | $56 | $(65) | $110 | | Net cash flows used in financing activities | $(114) | $(27) | $(143) | $(84) | [Operating Activities](index=73&type=section&id=Operating%20Activities) Sinclair's operating cash flows significantly increased due to higher cash collections and no prior DSG settlement - Operating cash flows increased from **$(306) million** in Q2 2024 to **$122 million** in Q2 2025, and from **$(310) million** in H1 2024 to **$127 million** in H1 2025[336](index=336&type=chunk)[337](index=337&type=chunk) - Key drivers for the increase include higher cash collections from Distributors and the non-recurrence of the DSG settlement payment from the prior period[337](index=337&type=chunk) [Investing Activities](index=73&type=section&id=Investing%20Activities) Sinclair's investing cash usage increased due to lower distributions from investments and Digital Remedy acquisition - Investing cash flows shifted from generating **$56 million** in Q2 2024 to using **$23 million** in Q2 2025, and from generating **$110 million** in H1 2024 to using **$65 million** in H1 2025[336](index=336&type=chunk)[338](index=338&type=chunk) - The increase in cash used was mainly due to lower distributions and proceeds from investments and the acquisition of Digital Remedy[338](index=338&type=chunk) [Financing Activities](index=73&type=section&id=Financing%20Activities) Sinclair's financing cash usage increased due to debt refinancing, issuance costs, and senior notes repurchases - Financing cash flows used **$114 million** in Q2 2025 (vs. **$27 million** in Q2 2024) and **$143 million** in H1 2025 (vs. **$84 million** in H1 2024)[336](index=336&type=chunk)[339](index=339&type=chunk) - Key factors include the Q1 2025 debt refinancing transactions and the repurchase of **$81 million** of **5.125%** Senior Notes due 2027[339](index=339&type=chunk) - Sinclair declared quarterly dividends of **$0.25** per share in May and August 2025[340](index=340&type=chunk) [Sinclair Broadcast Group, LLC Sources and Uses of Cash](index=74&type=section&id=Sinclair%20Broadcast%20Group,%20LLC%20Sources%20and%20Uses%20of%20Cash) SBG's cash flows show improved operating cash, but increased investing and financing cash usage | Cash Flow Activity | Three Months Ended June 30, 2025 (in millions) | Three Months Ended June 30, 2024 (in millions) | Six Months Ended June 30, 2025 (in millions) | Six Months Ended June 30, 2024 (in millions) | | :------------------------------------------------- | :--------------------------------------------- | :--------------------------------------------- | :------------------------------------------- | :------------------------------------------- | | Net cash flows from (used in) operating activities | $79 | $(329) | $113 | $(312) | | Net cash flows used in investing activities | $(19) | $(23) | $(34) | $(18) | | Net cash flows (used in) from financing activities | $(113) | $67 | $(146) | $63 | [Operating Activities_SBG](index=74&type=section&id=Operating%20Activities_SBG) SBG's operating cash flows significantly increased due to higher cash collections and no prior DSG settlement - Operating cash flows increased from **$(329) million** in Q2 2024 to **$79 million** in Q2 2025, and from **$(312) million** in H1 2024 to **$113 million** in H1 2025[341](index=341&type=chunk)[342](index=342&type=chunk) - Key drivers for the increase include higher cash collections from Distributors and the non-recurrence of the DSG settlement payment from the prior period[342](index=342&type=chunk) [Investing Activities_SBG](index=74&type=section&id=Investing%20Activities_SBG) SBG's investing cash usage increased for H1 2025 due to lower distributions from investments - Investing cash flows used **$19 million** in Q2 2025 (vs. **$23 million** in Q2 2024) and **$34 million** in H1 2025 (vs. **$18 million** in H1 2024)[341](index=341&type=chunk)[343](index=343&type=chunk) - The H1 2025 increase in cash used was mainly due to lower distributions and proceeds from the sale of broadcast investments[343](index=343&type=chunk) [Financing Activities_SBG](index=74&type=section&id=Financing%20Activities_SBG) SBG's financing cash usage increased due to debt refinancing, repurchases, and increased distributions - Financing cash flows used **$113 million** in Q2 2025 (vs. generated **$67 million** in Q2 2024) and used **$146 million** in H1 2025 (vs. generated **$63 million** in H1 2024)[341](index=341&type=chunk)[344](index=344&type=chunk) - Key factors include the Q1 2025 debt refinancing transactions, the repurchase of **$81 million** of **5.125%** Senior Notes due 2027, and increased distributions to its member[344](index=344&type=chunk) [ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=75&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) No material changes to market risk disclosures have occurred since the December 31, 2024, Annual Report - No material changes to market risk disclosures since the December 31, 2024, Annual Report on Form 10-K[346](index=346&type=chunk) [ITEM 4. CONTROLS AND PROCEDURES](index=75&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) Sinclair's and SBG's disclosure controls and procedures were effective as of June 30, 2025, with no material changes - Sinclair's and SBG's disclosure controls and procedures were deemed effective at the reasonable assurance level as of June 30, 2025[349](index=349&type=chunk) - No material changes in internal control over financial reporting occurred during the quarter ended June 30, 2025[350](index=350&type=chunk) - Management recognizes that control systems provide only reasonable assurance and cannot prevent all errors or fraud due to inherent limitations[351](index=351&type=chunk) [PART II. OTHER INFORMATION](index=76&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section covers legal proceedings, risk factors, equity sales, defaults, mine safety, other information, and exhibits [ITEM 1. LEGAL PROCEEDINGS](index=76&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) Sinclair and SBG are involved in various lawsuits and claims in the ordinary course of business - Sinclair and SBG are parties to lawsuits, claims, and regulatory matters in the ordinary course of business, with no material judgments rendered[353](index=353&type=chunk) - Further details on legal proceedings are provided in Note **4**, 'Commitments and Contingencies,' within Sinclair's and SBG's Consolidated Financial Statements[353](index=353&type=chunk)[354](index=354&type=chunk) [ITEM 1A. RISK FACTORS](index=76&type=section&id=ITEM%201A.%20RISK%20FACTORS) No material changes to risk factors have occurred since the December 31, 2024, Annual Report - No material changes to risk factors since the December 31, 2024, Annual Report on Form 10-K[355](index=355&type=chunk) [ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS](index=76&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) There were no unregistered sales of equity securities or use of proceeds to report - No unregistered sales of equity securities or use of proceeds to report[356](index=356&type=chunk) [ITEM 3. DEFAULTS UPON SENIOR SECURITIES](index=76&type=section&id=ITEM%203.%20DEFAULTS%20UPON%20SENIOR%20SECURITIES) There were no defaults upon senior securities to report - No defaults upon senior securities to report[357](index=357&type=chunk) [ITEM 4. MINE SAFETY DISCLOSURES](index=76&type=section&id=ITEM%204.%20MINE%20SAFETY%20DISCLOSURES) There were no mine safety disclosures to report - No mine safety disclosures to report[358](index=358&type=chunk) [ITEM 5. OTHER INFORMATION](index=76&type=section&id=ITEM%205.%20OTHER%20INFORMATION) No directors, managers, or officers adopted or terminated Rule 10b5-1 trading arrangements during Q2 2025 - No directors, managers, or officers adopted or terminated Rule 10b5-1 trading arrangements during Q2 2025[359](index=359&type=chunk) [ITEM 6. EXHIBITS](index=77&type=section&id=ITEM%206.%20EXHIBITS) This section lists the exhibits filed with the Form 10-Q, including corporate documents and certifications - Key exhibits include Articles of Amendment and Restatement of Sinclair, Inc., an employment agreement for Narinder Sahai, CEO/CFO certifications (Rule **13a-14(a)** and Section **906**), a Stockholders' Agreement, and iXBRL formatted financial statements[360](index=360&type=chunk) [SIGNATURES](index=78&type=section&id=SIGNATURES) The Form 10-Q was duly signed by David R. Bochenek, Senior Vice President/Chief Accounting Officer - The Form 10-Q was signed by David R. Bochenek, Senior Vice President/Chief Accounting Officer, on August **8**, 2025[362](index=362&type=chunk)