As the rest of the TV business has seen, Sinclair Broadcast Group continues to see rapidly rising advertising revenue coming out of the COVID-19 pandemic -- up nearly 110% in the second three months of 2021 and nearly 40% higher for the first six months of the year.
Total ad revenues were $491 million and $862 million, respectively.
Sinclair credits not only its highly scrutinized core advertisers -- up 125% in the second quarter to $486 million -- but credits gains to more professional sports TV programming from the return of Major League Baseball, NBA basketball and other sports content.
At the same time, distribution revenues were virtually flat -- at $1.08 billion from $1.01 billion -- in the period.
Much of the weakness comes from dropped carriage of its regional sports networks and lower subscribers among virtual pay TV providers. A year ago, its regional sports TV network distributors got fee reductions tied to minimum game guarantees.
With regard to its regional sports networks, and Sinclair’s effort to transition more to streaming direct-to-consumer businesses, Chris Ripley, CEO of Sinclair, says the company is looking at a D2C sports service in the first half of 2022.
In a recent filing, Sinclair believes a D2C service could hit 4.4 million subscribers generating around $2 billion in annual revenue. Sinclair claimed to have 52 million cable and pay TV subscribers in 2020 from all its 19 regional cable sports networks.
During the earnings call, Ripley said: “We believe consolidation of the RSN space of other complimentary rights is inevitable.”
Rumors have swirled around the possibility that Comcast Corp. owned-RSNs could merge with Sinclair’s RSNs.
For the current period, Sinclair posted a net loss of $328 million versus net income of $273 million in the yea- ago period. This was due to the recognition of sports media rights expenses in the current period.
Wednesday morning trading of Sinclair’s stock was up 4.4% to $29.51.