Sinclair Ad Revenue Plummets 25%, Regional Sports Blamed

Though strong political ad revenues helped grow Sinclair Broadcast Group’s broadcast operations, overall advertising revenues sank 25% to $366 million during the second quarter of 2022. The drop was due primarily to lower results from Sinclair' regional sports network, the Diamond Sports Group.

Distribution revenue also suffered in the quarter, declining to $430 million, less than half the $1.1 billion it reported a year ago.

Taking out regional sports, Sinclair says its broadcast operations revenue rose 5% to $801 million. On that basis, distribution revenue was up 4%, but advertising fell 3%.

Diamond Sports Group continues to suffer from lower distribution carriage, especially among many virtual pay TV providers.

The company said it has “deconsolidated” Diamond Sports from its financial results starting in March 2022.



A year ago Diamond Sports posted $838 million in revenue, which included $666 million in distribution fees and $162 million in advertising revenue.

Overall, Sinclair narrowed its net loss to $11 million versus $332 million a year earlier. But its cash flow -- the adjusted EBITDA (earnings before interest taxes, depreciation, and amortization) -- sank 58% to $183 million.

Sinclair said it took in $54 million in political political advertising during the quarter, well ahead of the midterm elections.

Chris Ripley, president/chief executive officer of Sinclair, in its earning release, said:

"Year-to-date, political advertising revenue is also at all-time record levels, doubling the amount achieved during 2018, the last midterm election year, and 20% higher than 2020, a Presidential election year," President-CEO Chris Ripley stated in Sinclair's earning release.

At the same time, core advertising during the period sank a big 36% to $312 million due to the lower Diamond Sports results, as well as weaker services and sports betting advertising categories.

Additionally, FCC rules allow political advertisers to get preference in placing ad inventory, forcing core advertising schedules to be disrupted.

Sinclair said it expects third quarter  revenue to rise 10% to 12% to a range of $870 million to $890 million.

While Sinclair expects another strong quarter of political advertising, it projects core ad revenue post small single digit percentage increase or flat results versus the prior year.

Sinclair’s stock rose 2% in early Wednesday morning trading to $22.42.

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