Why Sinclair Broadcasting Group Is Still Undervalued
Sinclair Broadcast Group Has At Least 30% Upside
Wed, Mar. 9, 2:50 PM
- Sinclair Broadcast Group (SBGI +2.2%) has priced its previously announced debt offering.
- The private offering of $350M in senior unsecured notes will be sold at 100% of par value, bearing 5.875% annual interest. The notes mature in 2026.
- The company's Sinclair Television Group is selling the notes, proceeds of which will be used to pay down a revolver.
Wed, Mar. 9, 10:47 AM
- Sinclair Broadcast Group (SBGI +2.1%) is launching a private offering for $350M in debt.
- The offering comes via its wholly owned subsidiary, Sinclair Television Group. The company will offer $350M in senior unsecured notes, to mature in 2026, and use proceeds to pay down amounts under its revolving credit facility and for general purposes.
- Total debt at Sinclair was last reported at $3.89B, with debt/equity of 862%.
Wed, Feb. 24, 9:53 AM
- Sinclair Broadcast Group (NASDAQ:SBGI) has slipped out of the open, -7.2%, after Q4 earnings where revenues dipped slightly and profits fell nearly 40% and missed expectations.
- The lack of political revenues in an off-election year dinged sales by some $68.5M. The company also took a $9.3M one-time expense to terminate an inherited pension plan.
- Revenue breakout: Media revenues, $545.9M (down 2%); Revenues realized from station barter, $31.4M (down 13.8%); other non-media, $34.5M (up 70%).
- Net debt was $3.704B at year's end, vs. the prior quarter's $3.772B. Capex was $18.9M.
- The company's guiding to "another record-breaking financial year" with significant political advertising expected in the presidential election, along with higher retransmission revenues. For Q1 it sees media revenues (pre-barter) up 10.9%-12%, to $515.6M-$520.7M.
- Press Release
Wed, Jan. 27, 4:30 PM
- After some lengthy talks, Sinclair Broadcast Group (SBGI +1.7%) has agreed to acquire the Tennis Channel for $350M.
- The company -- the nation's biggest local broadcaster -- says it will benefit from more than $200M of net operating loss carry-forward, which Sinclair estimates to be worth about $65M in present value.
- Sinclair had begun talks as of September with the various private-equity owners of the network, including Apollo Partners and Bain Capital Ventures, as well as smaller stakeholders DirecTV (NYSE:T) and Dish Network (NASDAQ:DISH).
- The deal includes established over-the-top subscription services, TC Plus and TV Everywhere, and the channel has rights to 90% of all televised tennis in the U.S.
- "The Company expects 2015 pro forma operating cash flow for the contracted subscriber increases (including the additional license fees and advertising revenues resulting from such increased carriage), to be approximately $60M, the synergies of which will be phased in over 18 months, and resulting in a 2015 pro forma purchase multiple, including the present value of the NOLs, of 4.8x and approximately $0.40 of incremental cash flow per share," says Sinclair CFO Chris Ripley.
- The company will discuss the acquisition in a conference call set for tomorrow at 9 a.m. ET.
- Previously: WSJ: Sinclair in talks to acquire Tennis Channel (Sep. 21 2015)
Dec. 16, 2015, 5:52 PM
- As some reports anticipated, a rider has been attached to an omnibus federal spending bill that's set to weaken a 2014 FCC rule covering broadcast ownership restrictions, in a win for local broadcasters like Sinclair (SBGI +3.4%) and Nexstar (NXST +6.8%), as well as Gray Television (GTN +4.3%) and Scripps (SSP +4.7%).
- The FCC had moved on March 31, 2014 to fight market power gathering by companies controlling two stations in a market, particularly by banning "joint sales agreements" that FCC Chairman Tom Wheeler called de facto control.
- The rider would grandfather in JSAs that existed before the 2014 rule change, for a period of 10 years. Among braodcast chains, Sinclair Broadcast Group and Nexstar have been among the more aggressive users of JSAs in growth.
- The National Association of Broadcasters applauded the move: "This provision would allow TV stations to better serve our viewers in smaller markets, and ensure that constituents in those communities continue to have access to numerous free, local programming options.”
- Previously: Report: Congress to ease pending local broadcast ownership restrictions (Dec. 14 2015)
Dec. 14, 2015, 5:43 PM
- Observers say discussions on Capitol Hill are going well for broadcasters looking for more station ownership freedom.
- Restrictions are in development on broadcasters' ability to control more than one TV station in a given city. But representatives from both parties are supporting leaving alone some joint arrangements that predated tougher rules from the FCC, Bloomberg reports.
- The regulators had taken action to limit station owners controlling the advertising of nearby stations owned by another. Some 85 such arrangements had been approved by the agency from 2008 to last year.
- Execs from Sinclair Broadcast Group (SBGI -2.1%), the nation's biggest local broadcaster, and Nexstar (NXST -2.9%) have been updating investors with expectations that lawmakers would roll back some of the onerous parts of the restrictions.
- The language related to broadcast ownership would be attached to a spending bill on which Congress is trying to beat a Dec. 16 deadline -- which would ease matters for broadcasters who would have to comply with the new duopoly rules next year.
Nov. 4, 2015, 9:57 AM
- Sinclair Broadcast Group (NASDAQ:SBGI) is up 4.9% in early action after solid revenue growth paced a strong Q3 beat and a modest decline in earnings still soundly beat expectations in a year with tough comps from political advertising.
- While overall revenues were up 10.8%, net broadcast revenues rose 11% to $497.4M. Political revenues in this non-election year are $7.8M vs. a year-ago $33.8M.
- Debt (net of cash and equivalents) was $3.772B at quarter's end, down from the previous quarter's $3.825B. Capex was $25.4M for Q3.
- Sinclair is guiding to Q4 net broadcast revenues of $538.4M-$547.4M, down 1.7%-3.3% Y/Y, before barter. For the full year, before barter, it sees net broadcast revenues of $2.002B to $2.011B, up 12.3%-12.8% Y/Y. Capex is expected at $17.7M for Q4 and $90M for 2015.
Oct. 19, 2015, 7:01 PM
- Sinclair Broadcast Group (SBGI -1.6%) says that its new 24-hour sci-fi network will launch on Halloween with the name Comet.
- The network, in partnership with Metro-Goldwyn-Mayer, will tap more than 1,500 hours of programming in MGM's vault for TV shows like The Outer Limits and various Stargates as well as movies including Moonraker and The Terminator.
- It will reach more than 65M homes on stations owned by Sinclair, the nation's largest local broadcaster, as well as some owned by Tribune and Titan.
- MGM and Sinclair had said in June they would partner on the network but hadn't then given it a name or exact time frame.
- Sinclair will own the network while MGM will run operations.
- Previously: Sinclair Broadcast Group, MGM partner on 24/7 sci-fi network (Jun. 29 2015)
Aug. 5, 2015, 7:34 PM
- Sinclair Broadcast Group (NASDAQ:SBGI) closed down 4% today after a Q2 report where it beat expectations across the board.
- CEO David Smith pointed to higher retransmission fees and favorable costs. "We continue to make significant progress with regard to content initiatives and distribution rights, particularly in the areas of sports and first-run programming."
- In its earnings call today, COO David Amy suggested the company could realize up to $2B if it puts spectrum into the FCC's upcoming broadcast incentive auction, without ill effects to its participation in the ATSC 3.0 transmission standard.
- He acknowledged that's dependent on many auction variables, many of which the FCC will vote on tomorrow.
- The company guided to Q3 net broadcast revenues to be $483.3M-$486.5M (up 7.9%-8.6% Y/Y). That includes $7.2M expected in political revenues compared to the prior year's $33.8M.
Jul. 9, 2015, 3:16 PM
- Sinclair Broadcast Group (SBGI +2.1%) has reached a long-term affiliation deal with the CW Network (TWX, CBS) covering 32 stations.
- The deal covers 23 owned stations and nine others for which Sinclair provides services. Sinclair, the nation's largest local broadcaster, is the group with the most CW stations.
- Earlier, Sinclair renegotiated affiliate deals with CBS for 16 markets.
- Today: TWX +1.7%; CBS +0.2%.
Jul. 9, 2015, 1:13 PM
- CBS and Sinclair Broadcast Group (NASDAQ:SBGI) -- the largest local broadcaster -- have renewed affiliation agreements in 16 markets, the companies said.
- The deals cover 6% of the country, serving about 7M households.
- "The long-term renewed agreements include all of our CBS affiliations expiring in 2015, as well as an early renewal of all agreements expiring in 2016," notes Sinclair's Barry Faber, who adds that the visiblity into programming costs will help Sinclair price its retransmission rights.
- SBGI is up 1.2% today.
Jun. 29, 2015, 3:45 PM
- Sinclair Broadcast Group (SBGI -2.5%) -- the country's largest local broadcaster -- and Metro-Goldwyn-Mayer are partnering on a new, 24-hour science fiction network.
- The project, to run across multiple channels, will feature more than 1,500 hours of MGM programming, including TV series like Stargate, Outer Limits and Poltergeist.
- The rollout is set for the fourth quarter covering about 30% of the country, and the two expect to enter more distribution deals prior to launch. Sinclair airs 376 channels from 162 stations, in 79 markets.
Mar. 27, 2015, 3:51 PM
- Sinclair Broadcast Group (NASDAQ:SBGI) is up 1.6% as it launches a unit focused on investment in emerging technologies.
- Sinclair Digital Ventures will put funds into partner companies who can engage Sinclair viewers with advertisers on a series of smaller screens (Web, social media, mobile).
- The unit will be overseen by COO David Amy, CFO Chris Ripley and the COO of Sinclair's Digital Group, Rob Weisbord.
- In its Q4 report last month, Sinclair noted that digital offering revenues were up 70.7%, and Web and mobile platforms had more than 35M unique visitors in December.
- Previously: Sinclair Broadcast Group higher on record results (Feb. 18 2015)
Feb. 18, 2015, 9:01 AM
- Sinclair Broadcast Group (NASDAQ:SBGI) posted record results and 43.5% higher revenues for Q4 as it absorbed $1.3B in net acquisitions and grew out its digital platform.
- Operating income doubled, to $208.9M. Of the $613.8M in revenues, net broadcast revenues of $556.6M were up 45.6%, boosted by election political revenues of $80.3M (vs. prior $6.7M). Excluding political sales, net broadcast revenue was up 26.8%.
- Notably, digital offering revenues were up 70.7% and Web and mobile platforms had more than 35M unique visitors in December.
- Sinclair expressed an optimistic outlook for Q1 with core ad revenues "pacing flat to slightly up" when excluding Super Bowl, Olympic and incremental political revenues. Acquisition of stations in 2014 (Albritton, Macon, New Age, Media General) has been "nearly seamless."
- Shares are up 2.7% premarket.
Jul. 1, 2014, 10:46 AM
- Aereo moves straight into lobbying mode after suspending business operations yesterday.
- CEO Chet Kanojia is out with a letter to clients in which he asks them to contact their Congress reps in order to support cloud-based antenna technology.
- The death of Aereo is still being baked into prices of broadcaster stocks. Sinclair Broadcasting (SBGI +2.1%), Entravision Communications (EVC +2.7%), Gray Television (GTN +1.9%), CBS (CBS +1.6%), and Media General (MEG +1.5%) are all still on the move post-SCOTUS decision.
- Aereo vs. broadcasters timeline
- Related ETF: PBS
Jun. 30, 2014, 11:03 AM
- TV broadcaster stocks are higher off of momentum built up last week after the Supreme Court's ruling in the Aereo case went well for the sector.
- The demise of Aereo means billions of dollars in retransmission fees are protected to a larger degree.
- Advancers: Nexstar Broadcasting (NXST) +3.3%, Sinclair Broadcasting (SBGI) +1.8%, Gray Television (GTN) +2.2%, Media General (MEG) +2.4%.
Sinclair Broadcast Group, Inc. engages in diversified television broadcasting operations. It provides certain programming, operating and sales services to television stations. The company was founded by Julian Sinclair Smith in 1986 and is headquartered in Hunt Valley, MD.
Industry: Broadcasting - TV
Country: United States
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