Sinclair Broadcast Group Conference Summary Company Overview - **Company**: Sinclair Broadcast Group (NasdaqGS: SBGI) - **Event**: 2026 Conference - **Date**: March 03, 2026 Key Points Industry Outlook - **Core Advertising Spend**: Sinclair is guiding a +1% increase in core advertising for 2026 compared to the previous year, driven by a sports-heavy broadcast calendar including the Olympics and the World Cup [4][10] - **Political Advertising**: Preliminary guidance for political ad spend is at least $333 million, comparable to the last midterm cycle in 2022. Political ad spend is expected to increase by 20% compared to the previous midterm cycle, with broadcast expected to capture about half of that spend [7][8] - **Key States for Political Ads**: Significant political ad spending is projected in states like Michigan, Maine, Ohio, Nevada, and Texas, with an estimated $3.1 billion of the total $10.8 billion spend concentrated in these areas [9][10] Revenue Drivers - **Marquee Sports Events**: The completion of the Olympics and the upcoming World Cup are expected to significantly boost revenue through increased viewership and advertising opportunities [12][13] - **Digital Footprint**: Sinclair's digital initiatives, including podcasts, are showing positive traction and contributing to the overall advertising outlook [4][5] Subscriber and Retransmission Insights - **Subscriber Renewals**: A minimal percentage of the subscriber base is up for renewal in 2026, with significant renewals expected in 2027. Approximately 60%-65% of the subscriber base will renew next year [14][15] - **Net Retransmission Expectations**: The company is not factoring significant changes in net retransmission economics for 2026, focusing instead on gross retransmission [15][16] Sports Rights and Affiliates - **Rising Sports Rights Costs**: The increasing value of sports rights, particularly for the NFL, is a concern, with affiliates expected to play a crucial role in managing these costs [17][18] - **Negotiations with NFL**: The NFL is expected to prioritize maintaining a broad fan base and maximizing the value of broadcast rights in upcoming negotiations [20][21] Regulatory Environment - **FCC and Deregulation**: The FCC is revisiting ownership rules, including the national ownership cap, which could facilitate consolidation in the broadcast sector. Sinclair is advocating for this opportunity [25][26] - **DOJ Considerations**: The Department of Justice will assess market power and competition, considering the broader media landscape that includes big tech players [27][28] M&A and Strategic Initiatives - **Window of Opportunity for M&A**: Sinclair is exploring large-scale M&A opportunities and is actively working on JSAs and LMAs, with an estimated $30 million EBITDA contribution expected from these transactions [34][44] - **Sinclair Ventures**: The company is evaluating options for its Ventures segment, which includes significant cash reserves that could facilitate transformative broadcast transactions [44] Future Projections - **Local Broadcast Sector**: The expectation is that the local broadcast sector may consolidate into two large super groups, with urgency for action in the current market environment [55][56] - **Ownership of Local Stations by Networks**: Uncertainty remains regarding whether the big four networks will own local TV stations in three years, as economic factors will heavily influence these decisions [57][58] AI Initiatives - **AI Applications**: Sinclair is taking a measured approach to AI, focusing on efficiency and productivity improvements, particularly in news gathering and sales operations [51][52] Conclusion Sinclair Broadcast Group is positioned for a potentially strong 2026, driven by political and sports advertising, while navigating challenges related to rising sports rights costs and regulatory changes. The company is actively pursuing M&A opportunities and leveraging its Ventures segment to enhance its market position.

Financial Data and Key Metrics Changes - Total advertising revenue was within guidance range, with core advertising revenue up year over year on an as-reported basis [11] - Distribution revenues were below expectations, but still up year over year in the first half of the year and flat in the second quarter [11][30] - Adjusted EBITDA was comfortably above the midpoint of guidance range, driven by better-than-expected media expenses [11][31] - Consolidated media revenue was $777 million, slightly below guidance, reflecting expected industry dynamics in a non-political year [30] - Consolidated adjusted EBITDA was $103 million, exceeding the midpoint of guidance, but down $55 million year over year [31] Business Line Data and Key Metrics Changes - Local Media segment delivered adjusted EBITDA of $99 million, with distribution revenue of $380 million, down 1% year over year [28] - Tennis Channel generated adjusted EBITDA of $13 million, with total revenue of $68 million, up 1% year over year but below guidance [28] - Digital Remedy, now part of Sinclair, recorded $38 million in revenue and $7 million in adjusted EBITDA in the second quarter [30] Market Data and Key Metrics Changes - Multicast networks experienced record growth, with significant year-over-year coverage growth among Nielsen-rated broadcast networks [18] - Core advertising revenue was down 4.7% year over year, impacted by macroeconomic and tariff-related pressures [29] Company Strategy and Development Direction - The company is focusing on transforming its ventures portfolio towards majority-owned assets for greater operational control [11][14] - Sinclair is actively pursuing M&A opportunities following recent deregulation rulings, which are expected to enhance growth and synergies [20][21] - The company aims to leverage its strong balance sheet and financial flexibility to capitalize on M&A activity in the sector [27] Management's Comments on Operating Environment and Future Outlook - Management acknowledged macroeconomic uncertainties but noted signs of improvement in certain advertising categories [19] - The regulatory environment is viewed positively, with recent rulings expected to provide growth opportunities [21][24] - Management expressed confidence in the company's ability to navigate challenges and capitalize on upcoming opportunities, particularly with the return of sports programming [54] Other Important Information - The company appointed a new CFO, Narinder Sahai, who brings extensive financial leadership experience [5][7] - The acquisition of Digital Remedy for approximately $30 million is expected to enhance Sinclair's capabilities in omni-channel media activation [12][30] Q&A Session Summary Question: Regulatory commentary and potential M&A activity - Management indicated a strong position for potential M&A activity following recent deregulation rulings, which are expected to accelerate growth opportunities [20][50] Question: Subscriber trends with virtual distributors - Management noted that a significant virtual MVPD lost subscribers in the second quarter, but expects a rebound with the upcoming football season [43][44] Question: Contribution from announced deals and guidance on retransmission - Management expects tens of millions of dollars in additional EBITDA from upcoming JSA buy-ins and has adjusted retransmission growth guidance to low single digits [51] Question: Core advertising performance outlook - Management remains cautiously optimistic about core advertising performance, anticipating improved demand as sports seasons commence [53][54] Question: Guidance clarification and Ventures monetization process - Management clarified that the sale of four stations impacted Q2 and will affect Q3, and discussed the evaluation process for monetizing Ventures assets [58][62]