|
|
Maryland
|
|
52-1494660
|
(State or other jurisdiction of Incorporation or organization)
|
|
(I.R.S. Employer Identification No.)
|
Title of each class
|
|
Trading Symbol
|
|
Name of each exchange on which registered
|
Class A Common Stock, par value $ 0.01 per share
|
|
SBGI
|
|
The NASDAQ Stock Market LLC
|
Yes
|
☒
|
|
No
|
☐
|
Yes
|
☒
|
|
No
|
☐
|
Large accelerated filer
|
☒
|
|
Accelerated filer
|
☐
|
|
Non-accelerated filer
|
☐
|
|
Smaller reporting company
|
☐
|
|
Emerging growth company
|
☐
|
Yes
|
☐
|
|
No
|
☒
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Our consolidated total assets as of March 31, 2020 and December 31, 2019 include total assets of variable interest entities (VIEs) of $212 million and $228 million, respectively, which can only be used to settle the obligations of the VIEs. Our consolidated total liabilities as of both March 31, 2020 and December 31, 2019 include total liabilities of VIEs of $27 million for which the creditors of the VIEs have no recourse to us. See Note 8. Variable Interest Entities.
|
|
Three Months Ended
March 31, |
||||||
|
2020
|
|
2019
|
||||
Net income
|
$
|
151
|
|
|
$
|
23
|
|
Comprehensive income
|
151
|
|
|
23
|
|
||
Comprehensive income attributable to the redeemable noncontrolling interests
|
(20
|
)
|
|
—
|
|
||
Comprehensive income attributable to the noncontrolling interests
|
(8
|
)
|
|
(1
|
)
|
||
Comprehensive income attributable to Sinclair Broadcast Group
|
$
|
123
|
|
|
$
|
22
|
|
|
Three Months Ended March 31, 2019
|
||||||||||||||||||||||||||||||||
|
Sinclair Broadcast Group Shareholders
|
|
|
|
|
||||||||||||||||||||||||||||
|
Class A
Common Stock
|
|
Class B
Common Stock
|
|
Additional
Paid-In
Capital
|
|
Retained Earnings
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Noncontrolling
Interests
|
|
Total Equity
|
||||||||||||||||||||
|
Shares
|
|
Values
|
|
Shares
|
|
Values
|
|
|
|
|
|
|||||||||||||||||||||
BALANCE, December 31, 2018
|
68,897,723
|
|
|
$
|
1
|
|
|
25,670,684
|
|
|
$
|
—
|
|
|
$
|
1,121
|
|
|
$
|
517
|
|
|
$
|
(1
|
)
|
|
$
|
(38
|
)
|
|
$
|
1,600
|
|
Dividends declared and paid on Class A and Class B Common Stock ($0.20 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(18
|
)
|
|
—
|
|
|
—
|
|
|
(18
|
)
|
|||||||
Class B Common Stock converted into Class A Common Stock
|
143,002
|
|
|
—
|
|
|
(143,002
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Repurchases of Class A Common Stock
|
(3,493,194
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(105
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(105
|
)
|
|||||||
Class A Common Stock issued pursuant to employee benefit plans
|
694,321
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
22
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
22
|
|
|||||||
Distributions to noncontrolling interests, net
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
(3
|
)
|
|||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
22
|
|
|
—
|
|
|
1
|
|
|
23
|
|
|||||||
BALANCE, March 31, 2019
|
66,241,852
|
|
|
$
|
1
|
|
|
25,527,682
|
|
|
$
|
—
|
|
|
$
|
1,038
|
|
|
$
|
521
|
|
|
$
|
(1
|
)
|
|
$
|
(40
|
)
|
|
$
|
1,519
|
|
|
Three Months Ended March 31, 2020
|
|||||||||||||||||||||||||||||||||||||
|
|
|
|
Sinclair Broadcast Group Shareholders
|
|
|
|
|
||||||||||||||||||||||||||||||
|
Redeemable Noncontrolling Interests
|
|
|
Class A
Common Stock
|
|
Class B
Common Stock
|
|
Additional
Paid-In
Capital
|
|
Retained Earnings
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Noncontrolling
Interests
|
|
Total Equity
|
||||||||||||||||||||||
|
|
|
Shares
|
|
Values
|
|
Shares
|
|
Values
|
|
|
|
|
|
||||||||||||||||||||||||
BALANCE, December 31, 2019
|
$
|
1,078
|
|
|
|
66,830,110
|
|
|
$
|
1
|
|
|
24,727,682
|
|
|
$
|
—
|
|
|
$
|
1,011
|
|
|
$
|
492
|
|
|
$
|
(2
|
)
|
|
$
|
192
|
|
|
$
|
1,694
|
|
Dividends declared and paid on Class A and Class B Common Stock ($0.20 per share)
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(19
|
)
|
|
—
|
|
|
—
|
|
|
(19
|
)
|
||||||||
Repurchases of Class A Common Stock
|
—
|
|
|
|
(9,957,297
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(176
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(176
|
)
|
||||||||
Class A Common Stock issued pursuant to employee benefit plans
|
—
|
|
|
|
1,479,684
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
29
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
29
|
|
||||||||
Distributions to noncontrolling interests, net
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
(3
|
)
|
||||||||
Distributions to redeemable noncontrolling interests
|
(378
|
)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Redemption of redeemable noncontrolling interests
|
(198
|
)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Net income
|
20
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
123
|
|
|
—
|
|
|
8
|
|
|
131
|
|
||||||||
BALANCE, March 31, 2020
|
522
|
|
|
|
58,352,497
|
|
|
$
|
1
|
|
|
24,727,682
|
|
|
$
|
—
|
|
|
$
|
864
|
|
|
$
|
596
|
|
|
$
|
(2
|
)
|
|
$
|
197
|
|
|
$
|
1,656
|
|
|
Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
CASH FLOWS (USED IN) FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
||
Net income
|
$
|
151
|
|
|
$
|
23
|
|
Adjustments to reconcile net income to net cash flows from operating activities:
|
|
|
|
|
|
||
Depreciation of property and equipment
|
24
|
|
|
23
|
|
||
Amortization of definite-lived intangible and other assets
|
150
|
|
|
43
|
|
||
Amortization of program contract costs and net realizable value adjustments
|
23
|
|
|
24
|
|
||
Stock-based compensation
|
17
|
|
|
11
|
|
||
Deferred tax benefit
|
22
|
|
|
2
|
|
||
Gain on asset disposition and other, net of impairment
|
(32
|
)
|
|
(8
|
)
|
||
Loss from equity method investments
|
6
|
|
|
14
|
|
||
Distributions from investments
|
24
|
|
|
1
|
|
||
Amortization of sports programming rights
|
391
|
|
|
—
|
|
||
Sports programming rights payments
|
(612
|
)
|
|
—
|
|
||
Gain on extinguishment of debt
|
(2
|
)
|
|
—
|
|
||
Change in assets and liabilities, net of acquisitions:
|
|
|
|
|
|
||
Decrease in accounts receivable
|
34
|
|
|
16
|
|
||
Decrease (increase) in prepaid expenses and other current assets
|
44
|
|
|
(23
|
)
|
||
Decrease in accounts payable and accrued and other current liabilities
|
(240
|
)
|
|
(18
|
)
|
||
Net change in net income taxes payable/receivable
|
(34
|
)
|
|
1
|
|
||
Decrease in program contracts payable
|
(23
|
)
|
|
(24
|
)
|
||
Other, net
|
18
|
|
|
14
|
|
||
Net cash flows (used in) from operating activities
|
(39
|
)
|
|
99
|
|
||
CASH FLOWS USED IN INVESTING ACTIVITIES:
|
|
|
|
|
|
||
Acquisition of property and equipment
|
(46
|
)
|
|
(29
|
)
|
||
Spectrum repack reimbursements
|
24
|
|
|
8
|
|
||
Proceeds from the sale of assets
|
18
|
|
|
—
|
|
||
Purchases of investments
|
(25
|
)
|
|
(28
|
)
|
||
Other, net
|
6
|
|
|
2
|
|
||
Net cash flows used in investing activities
|
(23
|
)
|
|
(47
|
)
|
||
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES:
|
|
|
|
|
|
||
Proceeds from notes payable and commercial bank financing
|
873
|
|
|
—
|
|
||
Repayments of notes payable, commercial bank financing, and finance leases
|
(20
|
)
|
|
(11
|
)
|
||
Repurchase of outstanding Class A Common Stock
|
(176
|
)
|
|
(105
|
)
|
||
Dividends paid on Class A and Class B Common Stock
|
(18
|
)
|
|
(18
|
)
|
||
Redemption of redeemable subsidiary preferred equity
|
(198
|
)
|
|
—
|
|
||
Distributions to noncontrolling interests, net
|
(3
|
)
|
|
(2
|
)
|
||
Distributions to redeemable noncontrolling interests
|
(378
|
)
|
|
—
|
|
||
Other, net
|
(9
|
)
|
|
(1
|
)
|
||
Net cash flows from (used in) financing activities
|
71
|
|
|
(137
|
)
|
||
NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH
|
9
|
|
|
(85
|
)
|
||
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, beginning of period
|
1,333
|
|
|
1,060
|
|
||
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, end of period
|
$
|
1,342
|
|
|
$
|
975
|
|
For the three months ended March 31, 2020
|
Local News and Marketing Services
|
|
Sports
|
|
Other
|
|
Eliminations
|
|
Total
|
||||||||||
Distribution revenue
|
$
|
355
|
|
|
$
|
752
|
|
|
$
|
49
|
|
|
$
|
—
|
|
|
$
|
1,156
|
|
Advertising revenue
|
310
|
|
|
55
|
|
|
35
|
|
|
—
|
|
|
400
|
|
|||||
Other media, non-media, and intercompany revenues
|
36
|
|
|
5
|
|
|
44
|
|
|
(32
|
)
|
|
53
|
|
|||||
Total revenues
|
$
|
701
|
|
|
$
|
812
|
|
|
$
|
128
|
|
|
$
|
(32
|
)
|
|
$
|
1,609
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
For the three months ended March 31, 2019
|
Local News and Marketing Services
|
|
Sports
|
|
Other
|
|
Eliminations
|
|
Total
|
||||||||||
Distribution revenue
|
$
|
320
|
|
|
$
|
—
|
|
|
$
|
32
|
|
|
$
|
—
|
|
|
$
|
352
|
|
Advertising revenue
|
288
|
|
|
—
|
|
|
20
|
|
|
—
|
|
|
308
|
|
|||||
Other media, non-media, and intercompany revenue
|
11
|
|
|
—
|
|
|
55
|
|
|
(4
|
)
|
|
62
|
|
|||||
Total revenues
|
$
|
619
|
|
|
$
|
—
|
|
|
$
|
107
|
|
|
$
|
(4
|
)
|
|
$
|
722
|
|
Cash and cash equivalents
|
$
|
824
|
|
Accounts receivable, net
|
606
|
|
|
Prepaid expenses and other current assets
|
175
|
|
|
Property and equipment, net
|
25
|
|
|
Customer relationships, net
|
5,439
|
|
|
Other definite-lived intangible assets, net
|
1,286
|
|
|
Other assets
|
52
|
|
|
Accounts payable and accrued liabilities
|
(181
|
)
|
|
Other long-term liabilities
|
(396
|
)
|
|
Goodwill
|
2,615
|
|
|
Fair value of identifiable net assets acquired
|
$
|
10,445
|
|
Redeemable noncontrolling interests
|
(380
|
)
|
|
Noncontrolling interests
|
(248
|
)
|
|
Gross purchase price
|
$
|
9,817
|
|
Purchase price, net of cash acquired
|
$
|
8,993
|
|
|
Three Months Ended March 31, 2019
|
||
Total revenue
|
$
|
1,671
|
|
Net income
|
$
|
92
|
|
Net income attributable to Sinclair Broadcast Group
|
$
|
34
|
|
Basic earnings per share attributable to Sinclair Broadcast Group
|
$
|
0.37
|
|
Diluted earnings per share attributable to Sinclair Broadcast Group
|
$
|
0.37
|
|
(in millions)
|
|
||
2020 (remainder)
|
$
|
1,223
|
|
2021
|
1,784
|
|
|
2022
|
1,529
|
|
|
2023
|
1,479
|
|
|
2024
|
1,409
|
|
|
2025 and thereafter
|
8,215
|
|
|
Total
|
$
|
15,639
|
|
|
Three Months Ended
March 31, |
||||||
|
2020
|
|
2019
|
||||
Income (Numerator)
|
|
|
|
||||
Net income
|
$
|
151
|
|
|
$
|
23
|
|
Net income attributable to the redeemable noncontrolling interests
|
(20
|
)
|
|
—
|
|
||
Net income attributable to the noncontrolling interests
|
(8
|
)
|
|
(1
|
)
|
||
Numerator for basic and diluted earnings per common share available to common shareholders
|
$
|
123
|
|
|
$
|
22
|
|
|
|
|
|
||||
Shares (Denominator)
|
|
|
|
|
|
||
Weighted-average common shares outstanding
|
90,609
|
|
|
92,302
|
|
||
Dilutive effect of stock-settled appreciation rights and outstanding stock options
|
617
|
|
|
916
|
|
||
Weighted-average common and common equivalent shares outstanding
|
91,226
|
|
|
93,218
|
|
|
Three Months Ended
March 31, |
||||
|
2020
|
|
2019
|
||
Weighted-average stock-settled appreciation rights and outstanding stock options excluded
|
2,814
|
|
|
950
|
|
As of March 31, 2020
|
|
Local News and Marketing Services
|
|
Sports
|
|
Other & Corporate
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Assets
|
|
$
|
4,758
|
|
|
$
|
10,846
|
|
|
$
|
1,774
|
|
|
$
|
(18
|
)
|
|
$
|
17,360
|
|
For the three months ended March 31, 2020
|
|
Local News and Marketing Services
|
|
Sports
|
|
Other & Corporate
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Revenue
|
|
$
|
701
|
|
|
$
|
812
|
|
|
$
|
128
|
|
|
$
|
(32
|
)
|
(b)
|
$
|
1,609
|
|
Depreciation of property and equipment and amortization of definite-lived intangibles and other assets
|
|
58
|
|
|
110
|
|
|
6
|
|
|
—
|
|
|
174
|
|
|||||
Amortization of sports programming rights (a)
|
|
—
|
|
|
391
|
|
|
—
|
|
|
—
|
|
|
391
|
|
|||||
Amortization of program contract costs and net realizable value adjustments
|
|
23
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
23
|
|
|||||
Corporate general and administrative expenses
|
|
44
|
|
|
2
|
|
|
3
|
|
|
—
|
|
|
49
|
|
|||||
Gain on asset dispositions and other, net of impairment
|
|
(32
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(32
|
)
|
|||||
Operating income (loss)
|
|
152
|
|
|
165
|
|
|
19
|
|
|
(9
|
)
|
|
327
|
|
|||||
Interest expense including amortization of debt discount and deferred financing costs
|
|
1
|
|
|
123
|
|
|
59
|
|
|
(3
|
)
|
|
180
|
|
|||||
Income (loss) from equity method investments
|
|
—
|
|
|
6
|
|
|
(12
|
)
|
|
—
|
|
|
(6
|
)
|
For the three months ended March 31, 2019
|
|
Local News and Marketing Services
|
|
Sports
|
|
Other & Corporate
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Revenue
|
|
$
|
619
|
|
|
$
|
—
|
|
|
$
|
107
|
|
|
$
|
(4
|
)
|
|
$
|
722
|
|
Depreciation of property and equipment and amortization of definite-lived intangibles and other assets
|
|
63
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
66
|
|
|||||
Amortization of program contract costs and net realizable value adjustments
|
|
24
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
24
|
|
|||||
Corporate general and administrative expenses
|
|
26
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
28
|
|
|||||
Gain on asset dispositions and other, net of impairment
|
|
(8
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8
|
)
|
|||||
Operating income (loss)
|
|
95
|
|
|
—
|
|
|
2
|
|
|
(3
|
)
|
|
94
|
|
|||||
Interest expense including amortization of debt discount and deferred financing costs
|
|
1
|
|
|
—
|
|
|
57
|
|
|
(4
|
)
|
|
54
|
|
|||||
Loss from equity method investments
|
|
—
|
|
|
—
|
|
|
(14
|
)
|
|
—
|
|
|
(14
|
)
|
|
(a)
|
The amortization of sports programming rights is included within media programming and production expenses on our consolidated statements of operations. Due to the outbreak of COVID-19 and postponement of professional sports leagues, we stopped recording amortization of our sports contracts during the month of March 2020.
|
(b)
|
Includes $24 million of revenue and selling, general, and administrative expenses, respectively, for services provided by local news and marketing services to sports and other, which are eliminated in consolidation.
|
|
As of March 31,
2020 |
|
As of December 31,
2019 |
||||
ASSETS
|
|
|
|
|
|
||
Current assets:
|
|
|
|
|
|
||
Cash and cash equivalents
|
$
|
17
|
|
|
$
|
39
|
|
Accounts receivable, net
|
34
|
|
|
39
|
|
||
Other current assets
|
30
|
|
|
16
|
|
||
Total current assets
|
81
|
|
|
94
|
|
||
|
|
|
|
||||
Property and equipment, net
|
17
|
|
|
15
|
|
||
Operating lease assets
|
7
|
|
|
8
|
|
||
Goodwill and indefinite-lived intangible assets
|
18
|
|
|
15
|
|
||
Definite-lived intangible assets, net
|
87
|
|
|
93
|
|
||
Other assets
|
2
|
|
|
3
|
|
||
Total assets
|
$
|
212
|
|
|
$
|
228
|
|
|
|
|
|
||||
LIABILITIES
|
|
|
|
|
|
||
Current liabilities:
|
|
|
|
|
|
||
Other current liabilities
|
$
|
20
|
|
|
$
|
19
|
|
|
|
|
|
||||
Notes payable, finance leases and commercial bank financing, less current portion
|
14
|
|
|
15
|
|
||
Operating lease liabilities, less current portion
|
6
|
|
|
6
|
|
||
Program contracts payable, less current portion
|
6
|
|
|
7
|
|
||
Other long-term liabilities
|
1
|
|
|
1
|
|
||
Total liabilities
|
$
|
47
|
|
|
$
|
48
|
|
•
|
Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.
|
•
|
Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.
|
•
|
Level 3: Unobservable inputs that reflect the reporting entity’s own assumptions.
|
|
As of March 31, 2020
|
|
As of December 31, 2019
|
||||||||||||
|
Carrying Value
|
|
Fair Value
|
|
Carrying Value
|
|
Fair Value
|
||||||||
Level 1:
|
|
|
|
|
|
|
|
||||||||
STG:
|
|
|
|
|
|
|
|
||||||||
Money market funds
|
$
|
826
|
|
|
$
|
826
|
|
|
$
|
354
|
|
|
$
|
354
|
|
Deferred compensation assets
|
33
|
|
|
33
|
|
|
36
|
|
|
36
|
|
||||
Deferred compensation liabilities
|
28
|
|
|
28
|
|
|
33
|
|
|
33
|
|
||||
DSG:
|
|
|
|
|
|
|
|
||||||||
Money market funds
|
256
|
|
|
256
|
|
|
559
|
|
|
559
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Level 2 (a):
|
|
|
|
|
|
|
|
||||||||
STG:
|
|
|
|
|
|
|
|
||||||||
5.875% Senior Unsecured Notes due 2026
|
350
|
|
|
310
|
|
|
350
|
|
|
368
|
|
||||
5.625% Senior Unsecured Notes due 2024
|
550
|
|
|
507
|
|
|
550
|
|
|
566
|
|
||||
5.500% Senior Unsecured Notes due 2030
|
500
|
|
|
414
|
|
|
500
|
|
|
511
|
|
||||
5.125% Senior Unsecured Notes due 2027
|
400
|
|
|
338
|
|
|
400
|
|
|
411
|
|
||||
Term Loan B
|
1,325
|
|
|
1,259
|
|
|
1,329
|
|
|
1,326
|
|
||||
Term Loan B-2
|
1,294
|
|
|
1,216
|
|
|
1,297
|
|
|
1,300
|
|
||||
Revolving Credit Facility (b)
|
648
|
|
|
648
|
|
|
—
|
|
|
—
|
|
||||
DSG:
|
|
|
|
|
|
|
|
||||||||
6.625% Senior Unsecured Notes due 2027
|
1,820
|
|
|
1,217
|
|
|
1,825
|
|
|
1,775
|
|
||||
5.375% Senior Secured Notes due 2026
|
3,050
|
|
|
2,478
|
|
|
3,050
|
|
|
3,085
|
|
||||
Term Loan
|
3,284
|
|
|
2,528
|
|
|
3,292
|
|
|
3,284
|
|
||||
Revolving Credit Facility (b)
|
225
|
|
|
225
|
|
|
—
|
|
|
—
|
|
||||
Debt of variable interest entities
|
20
|
|
|
20
|
|
|
21
|
|
|
21
|
|
||||
Debt of non-media subsidiaries
|
18
|
|
|
18
|
|
|
18
|
|
|
18
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Level 3
|
|
|
|
|
|
|
|
||||||||
DSG:
|
|
|
|
|
|
|
|
||||||||
Variable payment obligations (c)
|
235
|
|
|
235
|
|
|
239
|
|
|
239
|
|
|
(a)
|
Amounts are carried in our consolidated balance sheets net of debt discount and deferred financing cost, which are excluded in the above table, of $223 million and $231 million as of March 31, 2020 and December 31, 2019, respectively.
|
(b)
|
On March 17, 2020, we drew down $648 million and $225 million under the STG Revolving Credit Facility and DSG Revolving Credit Facility, respectively. See Note 3. Notes Payable and Commercial Bank Financing for further information.
|
(c)
|
The Company records its variable payment obligations at fair value on a recurring basis. These liabilities are further described in Other Liabilities within Note 5. Commitments and Contingencies. Significant unobservable inputs used in the fair value measurement are projected future operating income before depreciation and amortization; and weighted average discount rate of 9%. Significant increases (decreases) in projected future operating income would generally result in a significantly higher (lower) fair value measurement. Significant increases (decreases) in discount rates, would result in a significantly (lower) higher fair value measurement.
|
|
Variable Payment Obligations
|
||
Fair value at December 31, 2019
|
$
|
239
|
|
Payments
|
(7
|
)
|
|
Measurement adjustments
|
3
|
|
|
Fair value at March 31, 2020
|
$
|
235
|
|
|
Sinclair
Broadcast Group, Inc. |
|
Sinclair
Television Group, Inc. |
|
Guarantor
Subsidiaries and KDSM, LLC |
|
Non-
Guarantor Subsidiaries |
|
Eliminations
|
|
Sinclair
Consolidated |
||||||||||||
Cash and cash equivalents
|
$
|
—
|
|
|
$
|
840
|
|
|
$
|
3
|
|
|
$
|
499
|
|
|
$
|
—
|
|
|
$
|
1,342
|
|
Accounts receivable, net
|
—
|
|
|
1
|
|
|
538
|
|
|
561
|
|
|
—
|
|
|
1,100
|
|
||||||
Other current assets
|
2
|
|
|
46
|
|
|
258
|
|
|
373
|
|
|
(52
|
)
|
|
627
|
|
||||||
Total current assets
|
2
|
|
|
887
|
|
|
799
|
|
|
1,433
|
|
|
(52
|
)
|
|
3,069
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Property and equipment, net
|
1
|
|
|
35
|
|
|
678
|
|
|
98
|
|
|
(26
|
)
|
|
786
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Investment in consolidated subsidiaries
|
2,120
|
|
|
3,595
|
|
|
—
|
|
|
—
|
|
|
(5,715
|
)
|
|
—
|
|
||||||
Goodwill
|
—
|
|
|
—
|
|
|
2,091
|
|
|
2,625
|
|
|
—
|
|
|
4,716
|
|
||||||
Indefinite-lived intangible assets
|
—
|
|
|
—
|
|
|
144
|
|
|
14
|
|
|
—
|
|
|
158
|
|
||||||
Definite-lived intangible assets, net
|
—
|
|
|
—
|
|
|
1,384
|
|
|
6,476
|
|
|
(46
|
)
|
|
7,814
|
|
||||||
Other long-term assets
|
79
|
|
|
1,604
|
|
|
277
|
|
|
529
|
|
|
(1,672
|
)
|
|
817
|
|
||||||
Total assets
|
$
|
2,202
|
|
|
$
|
6,121
|
|
|
$
|
5,373
|
|
|
$
|
11,175
|
|
|
$
|
(7,511
|
)
|
|
$
|
17,360
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Accounts payable and accrued liabilities
|
$
|
28
|
|
|
$
|
98
|
|
|
$
|
256
|
|
|
$
|
197
|
|
|
$
|
(53
|
)
|
|
$
|
526
|
|
Current portion of long-term debt
|
—
|
|
|
27
|
|
|
5
|
|
|
40
|
|
|
(1
|
)
|
|
71
|
|
||||||
Other current liabilities
|
1
|
|
|
1
|
|
|
117
|
|
|
124
|
|
|
—
|
|
|
243
|
|
||||||
Total current liabilities
|
29
|
|
|
126
|
|
|
378
|
|
|
361
|
|
|
(54
|
)
|
|
840
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Long-term debt
|
700
|
|
|
4,991
|
|
|
37
|
|
|
8,529
|
|
|
(1,026
|
)
|
|
13,231
|
|
||||||
Other long-term liabilities
|
13
|
|
|
48
|
|
|
1,364
|
|
|
550
|
|
|
(864
|
)
|
|
1,111
|
|
||||||
Total liabilities
|
742
|
|
|
5,165
|
|
|
1,779
|
|
|
9,440
|
|
|
(1,944
|
)
|
|
15,182
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Redeemable noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
522
|
|
|
—
|
|
|
522
|
|
||||||
Total Sinclair Broadcast Group equity
|
1,460
|
|
|
956
|
|
|
3,594
|
|
|
1,020
|
|
|
(5,571
|
)
|
|
1,459
|
|
||||||
Noncontrolling interests in consolidated subsidiaries
|
—
|
|
|
—
|
|
|
—
|
|
|
193
|
|
|
4
|
|
|
197
|
|
||||||
Total liabilities, redeemable noncontrolling interests, and equity
|
$
|
2,202
|
|
|
$
|
6,121
|
|
|
$
|
5,373
|
|
|
$
|
11,175
|
|
|
$
|
(7,511
|
)
|
|
$
|
17,360
|
|
|
Sinclair
Broadcast Group, Inc. |
|
Sinclair
Television Group, Inc. |
|
Guarantor
Subsidiaries and KDSM, LLC |
|
Non-
Guarantor Subsidiaries |
|
Eliminations
|
|
Sinclair
Consolidated |
||||||||||||
Cash and cash equivalents
|
$
|
—
|
|
|
$
|
357
|
|
|
$
|
3
|
|
|
$
|
973
|
|
|
$
|
—
|
|
|
$
|
1,333
|
|
Accounts receivable, net
|
—
|
|
|
—
|
|
|
561
|
|
|
571
|
|
|
—
|
|
|
1,132
|
|
||||||
Other current assets
|
5
|
|
|
41
|
|
|
264
|
|
|
188
|
|
|
(50
|
)
|
|
448
|
|
||||||
Total current assets
|
5
|
|
|
398
|
|
|
828
|
|
|
1,732
|
|
|
(50
|
)
|
|
2,913
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Property and equipment, net
|
1
|
|
|
31
|
|
|
659
|
|
|
96
|
|
|
(22
|
)
|
|
765
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Investment in consolidated subsidiaries
|
2,270
|
|
|
3,558
|
|
|
—
|
|
|
—
|
|
|
(5,828
|
)
|
|
—
|
|
||||||
Goodwill
|
—
|
|
|
—
|
|
|
2,091
|
|
|
2,625
|
|
|
—
|
|
|
4,716
|
|
||||||
Indefinite-lived intangible assets
|
—
|
|
|
—
|
|
|
144
|
|
|
14
|
|
|
—
|
|
|
158
|
|
||||||
Definite-lived intangible assets, net
|
—
|
|
|
—
|
|
|
1,426
|
|
|
6,598
|
|
|
(47
|
)
|
|
7,977
|
|
||||||
Other long-term assets
|
82
|
|
|
1,611
|
|
|
279
|
|
|
618
|
|
|
(1,749
|
)
|
|
841
|
|
||||||
Total assets
|
$
|
2,358
|
|
|
$
|
5,598
|
|
|
$
|
5,427
|
|
|
$
|
11,683
|
|
|
$
|
(7,696
|
)
|
|
$
|
17,370
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Accounts payable and accrued liabilities
|
$
|
142
|
|
|
$
|
109
|
|
|
$
|
286
|
|
|
$
|
296
|
|
|
$
|
(51
|
)
|
|
$
|
782
|
|
Current portion of long-term debt
|
—
|
|
|
27
|
|
|
4
|
|
|
41
|
|
|
(1
|
)
|
|
71
|
|
||||||
Other current liabilities
|
—
|
|
|
1
|
|
|
133
|
|
|
147
|
|
|
—
|
|
|
281
|
|
||||||
Total current liabilities
|
142
|
|
|
137
|
|
|
423
|
|
|
484
|
|
|
(52
|
)
|
|
1,134
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Long-term debt
|
700
|
|
|
4,348
|
|
|
32
|
|
|
8,317
|
|
|
(1,030
|
)
|
|
12,367
|
|
||||||
Other long-term liabilities
|
13
|
|
|
53
|
|
|
1,418
|
|
|
547
|
|
|
(934
|
)
|
|
1,097
|
|
||||||
Total liabilities
|
855
|
|
|
4,538
|
|
|
1,873
|
|
|
9,348
|
|
|
(2,016
|
)
|
|
14,598
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Redeemable noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
1,078
|
|
|
—
|
|
|
1,078
|
|
||||||
Total Sinclair Broadcast Group equity
|
1,503
|
|
|
1,060
|
|
|
3,554
|
|
|
1,069
|
|
|
(5,684
|
)
|
|
1,502
|
|
||||||
Noncontrolling interests in consolidated subsidiaries
|
—
|
|
|
—
|
|
|
—
|
|
|
188
|
|
|
4
|
|
|
192
|
|
||||||
Total liabilities, redeemable noncontrolling interests, and equity
|
$
|
2,358
|
|
|
$
|
5,598
|
|
|
$
|
5,427
|
|
|
$
|
11,683
|
|
|
$
|
(7,696
|
)
|
|
$
|
17,370
|
|
|
Sinclair
Broadcast Group, Inc. |
|
Sinclair
Television Group, Inc. |
|
Guarantor
Subsidiaries and KDSM, LLC |
|
Non-
Guarantor Subsidiaries |
|
Eliminations
|
|
Sinclair
Consolidated |
||||||||||||
Net revenue
|
$
|
—
|
|
|
$
|
24
|
|
|
$
|
739
|
|
|
$
|
893
|
|
|
$
|
(47
|
)
|
|
$
|
1,609
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Media programming and production expenses
|
—
|
|
|
—
|
|
|
328
|
|
|
516
|
|
|
(16
|
)
|
|
828
|
|
||||||
Selling, general and administrative expenses
|
3
|
|
|
44
|
|
|
168
|
|
|
67
|
|
|
(23
|
)
|
|
259
|
|
||||||
Depreciation, amortization and other operating expenses
|
—
|
|
|
1
|
|
|
51
|
|
|
147
|
|
|
(4
|
)
|
|
195
|
|
||||||
Total operating expenses
|
3
|
|
|
45
|
|
|
547
|
|
|
730
|
|
|
(43
|
)
|
|
1,282
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Operating (loss) income
|
(3
|
)
|
|
(21
|
)
|
|
192
|
|
|
163
|
|
|
(4
|
)
|
|
327
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Equity in earnings of consolidated subsidiaries
|
129
|
|
|
173
|
|
|
—
|
|
|
—
|
|
|
(302
|
)
|
|
—
|
|
||||||
Interest expense
|
(3
|
)
|
|
(55
|
)
|
|
(1
|
)
|
|
(127
|
)
|
|
6
|
|
|
(180
|
)
|
||||||
Other (expense) income
|
(2
|
)
|
|
(2
|
)
|
|
(9
|
)
|
|
8
|
|
|
(3
|
)
|
|
(8
|
)
|
||||||
Total other income (expense)
|
124
|
|
|
116
|
|
|
(10
|
)
|
|
(119
|
)
|
|
(299
|
)
|
|
(188
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Income tax benefit (provision)
|
2
|
|
|
29
|
|
|
(6
|
)
|
|
(13
|
)
|
|
—
|
|
|
12
|
|
||||||
Net income
|
123
|
|
|
124
|
|
|
176
|
|
|
31
|
|
|
(303
|
)
|
|
151
|
|
||||||
Net income attributable to the redeemable noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
(20
|
)
|
|
—
|
|
|
(20
|
)
|
||||||
Net income attributable to the noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
(8
|
)
|
|
—
|
|
|
(8
|
)
|
||||||
Net income attributable to Sinclair Broadcast Group
|
$
|
123
|
|
|
$
|
124
|
|
|
$
|
176
|
|
|
$
|
3
|
|
|
$
|
(303
|
)
|
|
$
|
123
|
|
Comprehensive income
|
$
|
123
|
|
|
$
|
124
|
|
|
$
|
176
|
|
|
$
|
31
|
|
|
$
|
(303
|
)
|
|
$
|
151
|
|
|
Sinclair
Broadcast Group, Inc. |
|
Sinclair
Television Group, Inc. |
|
Guarantor
Subsidiaries and KDSM, LLC |
|
Non-
Guarantor Subsidiaries |
|
Eliminations
|
|
Sinclair
Consolidated |
||||||||||||
Net revenue
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
656
|
|
|
$
|
83
|
|
|
$
|
(17
|
)
|
|
$
|
722
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Media programming and production expenses
|
—
|
|
|
—
|
|
|
301
|
|
|
30
|
|
|
(12
|
)
|
|
319
|
|
||||||
Selling, general and administrative expenses
|
2
|
|
|
26
|
|
|
156
|
|
|
5
|
|
|
(1
|
)
|
|
188
|
|
||||||
Depreciation, amortization and other operating expenses
|
|
|
|
1
|
|
|
78
|
|
|
44
|
|
|
(2
|
)
|
|
121
|
|
||||||
Total operating expenses
|
2
|
|
|
27
|
|
|
535
|
|
|
79
|
|
|
(15
|
)
|
|
628
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Operating (loss) income
|
(2
|
)
|
|
(27
|
)
|
|
121
|
|
|
4
|
|
|
(2
|
)
|
|
94
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Equity in earnings of consolidated subsidiaries
|
24
|
|
|
89
|
|
|
—
|
|
|
—
|
|
|
(113
|
)
|
|
—
|
|
||||||
Interest expense
|
—
|
|
|
(53
|
)
|
|
(1
|
)
|
|
(4
|
)
|
|
4
|
|
|
(54
|
)
|
||||||
Other income (expense)
|
—
|
|
|
1
|
|
|
(12
|
)
|
|
(1
|
)
|
|
—
|
|
|
(12
|
)
|
||||||
Total other income (expense)
|
24
|
|
|
37
|
|
|
(13
|
)
|
|
(5
|
)
|
|
(109
|
)
|
|
(66
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Income tax benefit (provision)
|
—
|
|
|
12
|
|
|
(17
|
)
|
|
—
|
|
|
—
|
|
|
(5
|
)
|
||||||
Net income (loss)
|
22
|
|
|
22
|
|
|
91
|
|
|
(1
|
)
|
|
(111
|
)
|
|
23
|
|
||||||
Net income attributable to the noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
1
|
|
|
(1
|
)
|
||||||
Net income (loss) attributable to Sinclair Broadcast Group
|
$
|
22
|
|
|
$
|
22
|
|
|
$
|
91
|
|
|
$
|
(3
|
)
|
|
$
|
(110
|
)
|
|
$
|
22
|
|
Comprehensive income (loss)
|
$
|
23
|
|
|
$
|
22
|
|
|
$
|
91
|
|
|
$
|
(1
|
)
|
|
$
|
(112
|
)
|
|
$
|
23
|
|
•
|
Requirement of our RSNs to pay professional sports team minimum rights fees, regardless of the number of games played in a season;
|
•
|
potential need to reimburse vMVPD and MVPD affiliation fees related to canceled professional sporting events;
|
•
|
loss of advertising revenue due to postponement or cancellation of professional sporting events;
|
•
|
loss of advertising revenue as advertisers may be more reluctant to purchase advertising spots due to reduced consumer spending as a result of shelter in place and stay at home orders; and
|
•
|
cybersecurity and operational risks as a result of work-from-home arrangements.
|
•
|
The impact of changes in national and regional economies and credit and capital markets;
|
•
|
loss of consumer confidence;
|
•
|
the potential impact of changes in tax law;
|
•
|
the activities of our competitors;
|
•
|
terrorist acts of violence or war and other geopolitical events;
|
•
|
natural disasters and pandemics that impact our advertisers, our stations and networks; and
|
•
|
cybersecurity breaches.
|
•
|
The business conditions of our advertisers, particularly in the political, automotive and service categories;
|
•
|
competition with other broadcast television stations, radio stations, multi-channel video programming distributors (MVPDs), internet and broadband content providers, and other print and media outlets serving in the same markets;
|
•
|
the performance of networks and syndicators that provide us with programming content, as well as the performance of internally originated programming;
|
•
|
the loss of appeal of our sports programming, which may be unpredictable, the impact of strikes caused by collective bargaining between players and sports leagues, and increased programming costs may have a material negative effect on our business and our results of operations;
|
•
|
the availability and cost of programming from networks and syndicators, as well as the cost of internally originated programming;
|
•
|
our relationships with networks and their strategies to distribute their programming via means other than their local television affiliates, such as over-the-top (OTT) or direct-to-consumer content;
|
•
|
the effects of the Federal Communications Commission’s (FCC) National Broadband Plan, the impact of the repacking of our broadcasting spectrum, as a result of the incentive auction, within a limited timeframe and funding allocated;
|
•
|
the potential for additional governmental regulation of broadcasting or changes in those regulations and court actions interpreting those regulations, including ownership regulations limiting over-the-air television's ability to compete effectively (including regulations relating to Joint Sales Agreements (JSA), Shared Services Agreements (SSA), cross ownership rules, and the national ownership cap), arbitrary enforcement of indecency regulations, retransmission consent regulations, and political or other advertising restrictions, such as payola rules;
|
•
|
the impact of FCC and Congressional efforts which may restrict a television station's retransmission consent negotiations;
|
•
|
the impact of FCC rules requiring broadcast stations to publish, among other information, political advertising rates online;
|
•
|
the impact of foreign government rules related to digital and online assets;
|
•
|
labor disputes and legislation and other union activity associated with film, acting, writing, and other guilds and professional sports leagues;
|
•
|
the broadcasting community’s ability to develop and adopt a viable mobile digital broadcast television (mobile DTV) strategy and platform, such as the adoption of a next generation broadcast standard (NEXTGEN TV), and the consumer’s appetite for mobile television;
|
•
|
the impact of programming payments charged by networks pursuant to their affiliation agreements with broadcasters requiring compensation for network programming;
|
•
|
the potential impact from the elimination of rules prohibiting mergers of the four major television networks;
|
•
|
the effects of declining live/appointment viewership as reported through rating systems and local television efforts to adopt and receive credit for same day viewing plus viewing on-demand thereafter;
|
•
|
changes in television rating measurement methodologies that could negatively impact audience results;
|
•
|
the ability of local MVPDs to coordinate and determine local advertising rates as a consortium;
|
•
|
the ability to negotiate terms at least as favorable as those in existence with MVPDs and others;
|
•
|
changes in the makeup of the population in the areas where stations are located;
|
•
|
the operation of low power devices in the broadcast spectrum, which could interfere with our broadcast signals;
|
•
|
OTT technologies and their potential impact on cord-cutting;
|
•
|
the impact of MVPDs, virtual MVPDs (vMVPDs), and OTTs offering "skinny" programming bundles that may not include television broadcast stations, regional sports networks, or other programming that we distribute;
|
•
|
the effect of a potential decline in the number of subscribers to MVPD services;
|
•
|
fluctuations in advertising rates and availability of inventory;
|
•
|
the ability of others to retransmit our signal without our consent; and
|
•
|
the ability to renew media rights agreements with various professional sports teams which have varying durations and terms that are at least as favorable as those in existence.
|
•
|
The effectiveness of our management;
|
•
|
our ability to attract and maintain local, national, and network advertising and successfully participate in new sales channels such as programmatic and addressable advertising through business partnership ventures and the development of technology;
|
•
|
our ability to service our debt obligations and operate our business under restrictions contained in our financing agreements;
|
•
|
our ability to successfully implement and monetize our own content management system (CMS) designed to provide our viewers significantly improved content via the internet and other digital platforms;
|
•
|
our ability to successfully renegotiate retransmission consent and distribution agreements for our existing and acquired businesses;
|
•
|
the ability of stations which we consolidate, but do not negotiate on their behalf, to successfully renegotiate retransmission consent and affiliation fees (cable network fees) agreements;
|
•
|
our ability to secure distribution of our programming to a wide audience;
|
•
|
our ability to renew our FCC licenses;
|
•
|
our ability to obtain FCC approval for any future acquisitions, as well as, in certain cases, customary antitrust clearance for any future acquisitions;
|
•
|
our exposure to any wrongdoing by those outside the Company, but which could affect our business or pending acquisitions;
|
•
|
our ability to identify media business investment opportunities and to successfully integrate any acquired businesses, as well as the success of our new content and distribution initiatives in a competitive environment, including CHARGE!, TBD, Comet, STIRR, Marquee, other original programming, mobile DTV, and our recent acquisition of and investments in the RSNs;
|
•
|
our ability to maintain our affiliation and programming service agreements with our networks and program service providers and at renewal, to successfully negotiate these agreements with favorable terms;
|
•
|
our joint venture arrangements related to our regional sports networks are subject to a number of operational risks that could have a material adverse effect on our business, results of operations, and financial condition;
|
•
|
our ability to generate synergies and leverage new revenue opportunities;
|
•
|
our ability to renew contracts with leagues and sports teams;
|
•
|
our ability to effectively respond to technology affecting our industry and to increasing competition from other media providers;
|
•
|
our ability to deploy NEXTGEN TV nationwide;
|
•
|
the strength of ratings for our local news broadcasts including our news sharing arrangements; and
|
•
|
the results of prior year tax audits by taxing authorities.
|
|
Three Months Ended
March 31, |
||||||
|
2020
|
|
2019
|
||||
Statement of Operations Data:
|
|
|
|
|
|
||
Media revenues (a)
|
$
|
1,574
|
|
|
$
|
673
|
|
Non-media revenues
|
35
|
|
|
49
|
|
||
Total revenues
|
1,609
|
|
|
722
|
|
||
|
|
|
|
||||
Media programming and production expenses
|
828
|
|
|
319
|
|
||
Media selling, general and administrative expenses
|
210
|
|
|
160
|
|
||
Depreciation and amortization expenses (b)
|
174
|
|
|
66
|
|
||
Amortization of program contract costs and net realizable value adjustments
|
23
|
|
|
24
|
|
||
Non-media expenses
|
30
|
|
|
39
|
|
||
Corporate general and administrative expenses
|
49
|
|
|
28
|
|
||
Gain on asset dispositions and other, net of impairment
|
(32
|
)
|
|
(8
|
)
|
||
Operating income
|
327
|
|
|
94
|
|
||
|
|
|
|
||||
Interest expense including amortization of debt discount and deferred financing costs
|
(180
|
)
|
|
(54
|
)
|
||
Gain from extinguishment of debt
|
2
|
|
|
—
|
|
||
Loss from equity method investments
|
(6
|
)
|
|
(14
|
)
|
||
Other (expense) income, net
|
(4
|
)
|
|
2
|
|
||
Income before income taxes
|
139
|
|
|
28
|
|
||
Income tax benefit (provision)
|
12
|
|
|
(5
|
)
|
||
Net income
|
$
|
151
|
|
|
$
|
23
|
|
Net income attributable to the redeemable noncontrolling interests
|
(20
|
)
|
|
—
|
|
||
Net income attributable to the noncontrolling interests
|
(8
|
)
|
|
(1
|
)
|
||
Net income attributable to Sinclair Broadcast Group
|
$
|
123
|
|
|
$
|
22
|
|
|
|
|
|
||||
Basic and Diluted Earnings Per Common Share Attributable to Sinclair Broadcast Group:
|
|
|
|
|
|
||
Basic earnings per share
|
$
|
1.36
|
|
|
$
|
0.23
|
|
Diluted earnings per share
|
$
|
1.35
|
|
|
$
|
0.23
|
|
|
As of March 31, 2020
|
|
As of December 31, 2019
|
||||
Balance Sheet Data:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
1,342
|
|
|
$
|
1,333
|
|
Total assets
|
$
|
17,360
|
|
|
$
|
17,370
|
|
Total debt (c)
|
$
|
13,302
|
|
|
$
|
12,438
|
|
Redeemable noncontrolling interests
|
$
|
522
|
|
|
$
|
1,078
|
|
Total equity
|
$
|
1,656
|
|
|
$
|
1,694
|
|
|
(a)
|
Media revenues are defined as; distribution revenue; advertising revenue; and other media revenues.
|
(b)
|
Depreciation and amortization expenses include depreciation of property and equipment and amortization of definite-lived intangible and other assets.
|
(c)
|
Total debt is defined as current and long-term notes payable, finance leases, and commercial bank financing, including finance leases of affiliates.
|
•
|
In January 2020, a minority partner in one of our RSNs exercised their right to sell the entirety of their non-controlling interest to the Company for $376 million.
|
•
|
In January 2020, STIRR launched an original channel, "2020 LIVE", to offer a continuous stream of live election coverage, giving viewers live access to daily campaign event feeds from across the country, including town hall meetings and stump speeches.
|
•
|
In March 2020, the Company launched a new channel on STIRR, the Company's fast-growing, free ad-supported streaming service. The new channel is dedicated to COVID-19 coverage, including live feeds of press conferences as well as other local and national news. STIRR finished the quarter with strong momentum, setting all-time highs across all key metrics with total impressions increasing 25% over the fourth quarter of 2019.
|
•
|
In April 2020, the Company made significant changes to the content across three, company-owned networks; Comet, Charge!, and TBD, including adding some of the most popular classic television series, as well as TBD's first-ever original series, The Link.
|
•
|
In April 2020, the Company's Nashville affiliate, WZTV FOX17, was named AP Outstanding News Operation in the state of Tennessee. The station was awarded the honor for its remarkable agility in chasing breaking news and demonstrating a sustained commitment to public service.
|
•
|
In April 2020, the Company won four National Headliner Awards and for the second consecutive year, Sinclair's Project Baltimore investigative reporting team received Investigative Reporters and Editors Inc. (IRE) recognition for exposing local education issues that reflected governmental neglect and lack of oversight.
|
•
|
In January 2020, the Company reached an agreement in principle to renew ten affiliation agreements with FOX Broadcasting Company.
|
•
|
In February 2020, Marquee announced a carriage agreement with Hulu. Including Hulu and previously announced agreements with over-the top platform AT&T TV Now and traditional MVPDs Charter, AT&T U-Verse, DirecTV, and Mediacom, Marquee has signed affiliation agreements with 43 distributors.
|
•
|
In March 2020, the Company and YouTube TV reached agreement for continued carriage of 19 RSNs across the country.
|
•
|
In January 2020, the Company and SK Telecom announced Cast.era, a joint venture focused on cloud infrastructure for broadcasting, ultra-low latency OTT broadcasting, and targeted advertising.
|
•
|
In February 2020, the Company became a member of Pearl TV, a business organization of U.S. broadcast companies with a shared interest in exploring forward-looking broadcasting opportunities, including innovative ways of promoting local broadcast TV content and developing digital media and wireless platforms for the broadcast industry.
|
•
|
In January 2020, we redeemed 200,000 units of redeemable subsidiary preferred equity for an aggregate redemption price equal to $200 million plus accrued and unpaid dividends. See Redeemable Subsidiary Preferred Equity under Note 4: Redeemable Noncontrolling Interests within the Consolidated Financial Statements for further discussion.
|
•
|
During the quarter ended March 31, 2020, we repurchased approximately 10 million shares of Class A Common Stock for $176 million. As of May 8, 2020, we repurchased an additional 3.1 million shares of Class A Common Stock for $47 million during the second quarter.
|
•
|
In February 2020 and May 2020, we declared quarterly cash dividends of $0.20 per share.
|
•
|
In January 2020, the Company and Nexstar agreed to settle the outstanding lawsuit between the Company and Tribune Media Company, which Nexstar acquired in September 2019. See Litigation under Note 5. Commitments and Contingencies within the Consolidated Financial Statements for further discussion.
|
•
|
In January 2020, the Company opened its Broadcast Diversity Scholarship for applications. Since launching the scholarship program, the Company has distributed over $148,000 in financial assistance to students demonstrating a promising future in the broadcast industry.
|
•
|
In February 2020, the Company promoted Lucy Rutishauser to Executive Vice President & Chief Financial Officer, Del Parks to Executive Vice President & Chief Technology Officer, Don Thompson to Executive Vice President & Chief Human Resources Officer, Scott Shapiro to Senior Vice President/Chief Development Officer, Brian Bark to Senior Vice President/Chief Information Officer, and Don Roberts to VP/Sports Engineering and Production Systems.
|
•
|
In March 2020, the Company, in partnership with the Salvation Army, held a day of giving with its stations participating in on-air, digital and social media efforts to encourage viewers to donate and help local communities recover from damage caused by tornadoes in Nashville, Tennessee. In total, the initiative raised almost $100,000, including $25,000 from Sinclair.
|
•
|
In March 2020, in direct response to the COVID-19 pandemic, the Company made available advances to offer financial support to nearly 1,300 eligible freelancers who work across the Acquired RSNs and Marquee, as the COVID-19 pandemic has indefinitely halted the production of live sports, depriving these freelancers of work.
|
•
|
In March 2020 and April 2020, the Company partnered with the Salvation Army on the “Sinclair Cares: Your Neighbor Needs You” initiative which has raised over $750,000 for those financially impacted by COVID-19, including $100,000 from Sinclair. In addition, the Company delivered over 2,200 masks to the Red Cross and donated millions of dollars of air time for public service announcements around the COVID-19 pandemic.
|
•
|
In April 2020, the Company entered into a new public service initiative, in partnership with the University of Maryland School of Medicine, to provide consumers with important and timely news and information about COVID-19.
|
|
Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
Media revenues
|
$
|
1,574
|
|
|
$
|
673
|
|
Non-media revenues
|
35
|
|
|
49
|
|
||
Total revenues
|
1,609
|
|
|
722
|
|
||
Media programming and production expenses
|
828
|
|
|
319
|
|
||
Media selling, general and administrative expenses
|
210
|
|
|
160
|
|
||
Depreciation and amortization expenses
|
174
|
|
|
66
|
|
||
Amortization of program contract costs and net realizable value adjustments
|
23
|
|
|
24
|
|
||
Non-media expenses
|
30
|
|
|
39
|
|
||
Corporate general and administrative expenses
|
49
|
|
|
28
|
|
||
Gain on asset dispositions and other, net of impairment
|
(32
|
)
|
|
(8
|
)
|
||
Operating income
|
$
|
327
|
|
|
$
|
94
|
|
Net income attributable to Sinclair Broadcast Group
|
$
|
123
|
|
|
$
|
22
|
|
|
Three Months Ended March 31,
|
|
Percent Change Increase / (Decrease)
|
||||||
|
2020
|
|
2019
|
|
|||||
Revenue:
|
|
|
|
|
|
||||
Distribution revenue
|
$
|
355
|
|
|
$
|
320
|
|
|
11%
|
Advertising revenue
|
310
|
|
|
288
|
|
|
8%
|
||
Other media revenues
|
36
|
|
|
11
|
|
|
227%
|
||
Media revenues
|
$
|
701
|
|
|
$
|
619
|
|
|
13%
|
|
|
|
|
|
|
||||
Operating Expenses:
|
|
|
|
|
|
||||
Media programming and production expenses
|
$
|
316
|
|
|
$
|
289
|
|
|
9%
|
Media selling, general and administrative expenses
|
140
|
|
|
130
|
|
|
8%
|
||
Depreciation and amortization expenses
|
58
|
|
|
63
|
|
|
(8)%
|
||
Amortization of program contract costs and net realizable value adjustments
|
23
|
|
|
24
|
|
|
(4)%
|
||
Corporate general and administrative expenses
|
44
|
|
|
26
|
|
|
69%
|
||
Gain on asset dispositions and other, net of impairment
|
(32
|
)
|
|
(8
|
)
|
|
300%
|
||
Operating income
|
$
|
152
|
|
|
$
|
95
|
|
|
60%
|
|
Percent of Advertising Revenue (Excluding Digital) for the
|
||
|
Three Months Ended March 31,
|
||
|
2020
|
|
2019
|
Local news
|
33%
|
|
33%
|
Syndicated/Other programming
|
28%
|
|
29%
|
Network programming
|
25%
|
|
25%
|
Sports programming
|
10%
|
|
9%
|
Paid programming
|
4%
|
|
4%
|
|
|
|
Percent of Advertising Revenue for the
|
||
|
|
|
Three Months Ended March 31,
|
||
|
# of Channels
|
|
2020
|
|
2019
|
ABC
|
59
|
|
29%
|
|
29%
|
FOX
|
41
|
|
28%
|
|
24%
|
CBS
|
29
|
|
19%
|
|
22%
|
NBC
|
24
|
|
13%
|
|
13%
|
CW
|
48
|
|
6%
|
|
6%
|
MNT
|
39
|
|
4%
|
|
4%
|
Other (a)
|
391
|
|
1%
|
|
2%
|
Total
|
631
|
|
|
|
|
|
(a)
|
We broadcast other programming from the following providers on our channels including: Antenna TV, Azteca, Bounce Network, CHARGE!, Comet, Dabl, Estrella TV, Get TV, Grit, Me TV, Movies!, Stadium, TBD, Telemundo, This TV, UniMas, Univision, and Weather.
|
|
Three Months Ended
March 31, 2020 |
||
Revenue:
|
|
||
Distribution revenue
|
$
|
752
|
|
Advertising revenue
|
55
|
|
|
Other media revenue
|
5
|
|
|
Media revenue
|
$
|
812
|
|
|
|
||
Operating Expenses:
|
|
||
Media programming and production expenses
|
$
|
478
|
|
Media selling, general and administrative expenses (a)
|
57
|
|
|
Depreciation and amortization expenses
|
110
|
|
|
Corporate general and administrative
|
2
|
|
|
Operating income (a)
|
$
|
165
|
|
Income from equity method investments
|
$
|
6
|
|
|
(a)
|
Includes $23 million of intercompany expense related to certain services provided by the local news and marketing services segment under a management services agreement, which is eliminated in consolidation.
|
|
Three Months Ended March 31,
|
|
Percent Change Increase / (Decrease)
|
||||||
|
2020
|
|
2019
|
|
|||||
Revenue:
|
|
|
|
|
|
||||
Distribution revenue
|
$
|
49
|
|
|
$
|
32
|
|
|
53%
|
Advertising revenue
|
35
|
|
|
20
|
|
|
75%
|
||
Other media revenues
|
1
|
|
|
2
|
|
|
(50)%
|
||
Media revenues
|
$
|
85
|
|
|
$
|
54
|
|
|
57%
|
Non-media revenues (a)
|
$
|
43
|
|
|
$
|
53
|
|
|
(19)%
|
|
|
|
|
|
|
||||
Operating Expenses:
|
|
|
|
|
|
||||
Media expenses (b)
|
$
|
70
|
|
|
$
|
60
|
|
|
17%
|
Non-media expenses
|
$
|
30
|
|
|
$
|
39
|
|
|
(23)%
|
Operating income
|
$
|
22
|
|
|
$
|
2
|
|
|
n/m
|
Loss from equity method investments
|
$
|
(12
|
)
|
|
$
|
(14
|
)
|
|
(14)%
|
|
(a)
|
Non-media revenue for the three months ended March 31, 2020 and 2019 includes $8 million and $4 million, respectively, of intercompany revenue related to certain services provided to the local news and marketing services segment, which are eliminated in consolidation.
|
(b)
|
Media expenses for the three months ended March 31, 2020 include $1 million of intercompany expense primarily related to certain services provided by the local news and marketing services segment under a management services agreement, which is eliminated in consolidation.
|
|
Three Months Ended March 31,
|
|
Percent Change
Increase/ (Decrease)
|
||||||
|
2020
|
|
2019
|
|
|||||
Corporate general and administrative expenses
|
$
|
49
|
|
|
$
|
28
|
|
|
75%
|
Interest expense including amortization of debt discount and deferred financing costs
|
$
|
180
|
|
|
$
|
54
|
|
|
233%
|
Income tax benefit (provision)
|
$
|
12
|
|
|
$
|
(5
|
)
|
|
n/m
|
Net income attributable to the redeemable noncontrolling interests
|
$
|
(20
|
)
|
|
$
|
—
|
|
|
n/m
|
Net income attributable to the noncontrolling interests
|
$
|
(8
|
)
|
|
$
|
(1
|
)
|
|
700%
|
|
|
Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
Net cash flows (used in) from operating activities
|
$
|
(39
|
)
|
|
$
|
99
|
|
|
|
|
|
||||
Cash flows used in investing activities:
|
|
|
|
||||
Acquisition of property and equipment
|
$
|
(46
|
)
|
|
$
|
(29
|
)
|
Proceeds from the sale of assets
|
18
|
|
|
—
|
|
||
Spectrum repack reimbursements
|
24
|
|
|
8
|
|
||
Other, net
|
(19
|
)
|
|
(26
|
)
|
||
Net cash flows used in investing activities
|
$
|
(23
|
)
|
|
$
|
(47
|
)
|
|
|
|
|
||||
Cash flows from (used in) financing activities:
|
|
|
|
|
|||
Proceeds from notes payable and commercial bank financing
|
$
|
873
|
|
|
$
|
—
|
|
Repayments of notes payable, commercial bank financing and finance leases
|
(20
|
)
|
|
(11
|
)
|
||
Dividends paid on Class A and Class B Common Stock
|
(18
|
)
|
|
(18
|
)
|
||
Repurchase of outstanding Class A Common Stock
|
(176
|
)
|
|
(105
|
)
|
||
Redemption of redeemable subsidiary preferred equity
|
(198
|
)
|
|
—
|
|
||
Distributions to redeemable noncontrolling interests
|
(378
|
)
|
|
—
|
|
||
Other, net
|
(12
|
)
|
|
(3
|
)
|
||
Net cash flows from (used in) financing activities
|
$
|
71
|
|
|
$
|
(137
|
)
|
•
|
pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets;
|
•
|
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP and that our receipts and expenditures are being made in accordance with authorizations of management or our Board of Directors; and
|
•
|
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material adverse effect on our financial statements.
|
•
|
the suspension, and possible cancellation, of some or all of the MLB, NBA and NHL seasons;
|
•
|
the requirement of our RSNs to pay professional sports team minimum rights fees, regardless of the number of games played in a season;
|
•
|
potential need to reimburse vMVPD and MVPD affiliation fees related to canceled professional sporting events;
|
•
|
loss of advertising revenue due to postponement or cancellation of professional sporting events;
|
•
|
loss of advertising revenue as advertisers may be more reluctant to purchase advertising spots due to reduced consumer spending as a result of shelter in place and stay at home orders;
|
•
|
lack of liquidity and access to capital resources and may cause one or more MVPDs or advertisers to be unable to meet their obligations to us or to otherwise seek modifications of such obligations;
|
•
|
we may be unable to access debt and equity capital on favorable terms, if at all, or a severe disruption and instability in the global financial markets or deteriorations in credit and financing conditions may affect our access to capital necessary to fund business operations, pursue acquisition and development opportunities, refinance existing debt, and increase our future interest expense;
|
•
|
the financial impact of COVID-19 could negatively affect our future compliance with financial and other covenants of the STG Credit Agreement, DSG Credit Agreement, and the indentures governing the STG Notes and the DSG Notes, and the failure to comply with such covenants could result in a default that accelerates the payment of such indebtedness; and
|
•
|
the potential negative impact on the health of our executive officers, employees or Board of Directors, particularly if a significant number are impacted, or the impact of government actions or restrictions, including stay-at-home orders, restricting access to our headquarters located in Hunt Valley, Maryland, could result in a deterioration in our ability to ensure business continuity during a disruption.
|
Period
|
|
Total Number of Shares Purchased (a)
|
|
|
Average Price Per Share
|
|
|
Total Number of Shares Purchased as Part of a Publicly Announced Program
|
|
|
Approximate Dollar Value of Shares That May Yet Be Purchased Under the Program (in millions)
|
|
||
Class A Common Stock: (b)
|
|
|
|
|
|
|
|
|
||||||
01/01/20 – 01/31/20
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
02/01/20 – 02/29/20
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
03/01/20 – 03/31/20
|
|
9,957,297
|
|
|
$
|
17.65
|
|
|
9,957,297
|
|
|
$
|
547
|
|
|
(a)
|
All repurchases were made in open-market transactions.
|
(b)
|
On August 9, 2018, the Board of Directors authorized an additional $1 billion share repurchase authorization, in addition to the previous repurchase authorization of $150 million. There is no expiration date and currently, management has no plans to terminate this program. As of March 31, 2020, the remaining authorization under the program was $547 million.
|
Exhibit
Number
|
|
Description
|
10.1*
|
|
|
|
|
|
10.2*
|
|
|
|
|
|
10.3*
|
|
|
|
|
|
10.4*
|
|
|
|
|
|
31.1**
|
|
|
|
|
|
31.2**
|
|
|
|
|
|
32.1**
|
|
|
|
|
|
32.2**
|
|
|
|
|
|
101*
|
|
The Company's Consolidated Financial Statements and related Notes for the quarter ended March 31, 2020 from this Quarterly Report on Form 10-Q, formatted in iXBRL (Inline eXtensible Business Reporting Language).*
|
|
|
|
104
|
|
Cover Page Interactive Data File (included in Exhibit 101).
|
|
SINCLAIR BROADCAST GROUP, INC.
|
|
|
|
|
|
|
|
|
By:
|
/s/ David R. Bochenek
|
|
|
David R. Bochenek
|
|
|
Senior Vice President/Chief Accounting Officer/Corporate Controller
|
|
|
(Authorized Officer and Chief Accounting Officer)
|
Employee:
|
Employee’s then current address on file with Sinclair Broadcast Group, Inc.
|
Employee:
|
Employee’s then current address on file with Sinclair Broadcast Group, Inc.
|
Employee:
|
Employee’s then current address on file with Sinclair Broadcast Group, Inc.
|
Employee:
|
Employee’s then current address on file with Sinclair Broadcast Group, Inc.
|
Date:
|
May 11, 2020
|
|
|
|
|
|
|
|
|
|
/s/ Christopher S. Ripley
|
|||
|
Signature:
|
Christopher S. Ripley
|
||
|
|
Chief Executive Officer
|
Date:
|
May 11, 2020
|
|
|
|
|
|
|
|
|
|
/s/ Lucy A. Rutishauser
|
|||
|
Signature:
|
Lucy A. Rutishauser
|
||
|
|
Chief Financial Officer
|
/s/ Christopher S. Ripley
|
|
Christopher S. Ripley
|
|
Chief Executive Officer
|
|
May 11, 2020
|
|
/s/ Lucy A. Rutishauser
|
|
Lucy A. Rutishauser
|
|
Chief Financial Officer
|
|
May 11, 2020
|
|