Q4 2023 Sinclair Inc Earnings Call

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Operator: Greetings, and welcome to the Sinclair fourth quarter 2023 earnings call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone.

Speaker Change: Greetings and welcome to the Sinclair fourth quarter 2023 earnings Conference call. At this time all participants are in a listen only mode. A question and answer session will follow the formal presentation, but one should require operator assistance. During the conference. Please press star zero on your telephone keypad.

Operator: Please note, this conference is being recorded. We'll now turn the conference over to your host, Chris King, Vice President of Investor Relations. You may begin. Thank you. Good afternoon, everyone.

Speaker Change: Note. This conference is being recorded I will now turn the conference over to your host Kris King Vice President of Investor Relations you may begin.

Christopher King: Thank you good afternoon, everyone and thank you for joining <unk> fourth quarter 2023 earnings conference call.

Christopher King: And thank you for joining Sinclair's fourth quarter 2023 earnings conference call. Joining me on the call today are Chris Ripley, our President and Chief Executive Officer, Lucy Rutishauser, our Executive Vice President and Chief Financial Officer, and Rob Weisbord, our Chief Operating Officer and President of LocalPay. Before we begin, I want to remind everyone that slides and supplemental information for today's earnings call are available on our website, SPGI.net, on the investor information page and on the earnings webcast page. Certain matters discussed on this call may include forward-looking statements regarding, among other things, future operating results. Such statements are subject to a number of risks and uncertainties. The actual results in the future could differ from those described in the forward-looking statements as a result of various important factors. Such factors have been set forth in the company's most recent reports as filed with the SEC and included in our fourth quarter earnings release. However, the company undertakes no obligation to update these forward-looking statements.

Christopher King: With me on the call today are Chris <unk>, our President and Chief Executive Officer Lou <unk>.

Christopher King: Our executive Vice President and Chief Financial Officer, and Rob <unk>, Our Chief operating officer, and President of local media.

Christopher King: Before we begin I want to remind everyone that slides and supplemental information for today's earnings call are available on our website SPG I dot net on the Investor information page and on the earnings webcast page.

Christopher King: Certain matters discussed on this call may include forward looking statements regarding among other things future operating results such statements are subject to a number of risks and uncertainties actual results in the future could differ from those described in the forward looking statements as a result of various important factors such factors have been set forth in the company's most recent reports as filed.

Christopher King: With the SEC and included in our fourth quarter earnings release, the company undertakes no obligation to update these forward looking statements. The company uses its website as a key source of company information, which can be accessed at www dot SPG I dot net and.

Christopher King: The company uses its website as a key source of company information, which can be accessed at www.sbgi.net. In accordance with Regulation FD, this call is being made available to the public. A webcast replay will be available on our website and will remain available until our next quarterly earnings release. Included on the call will be a discussion of non-GAAP financial measures, specifically adjusted EBITDA, adjusted free cash flow, and leverage. The company considers Adjusted EBITDA to be an indicator of the company's operating performance and the ability to service its debt. It also believes that Adjusted EBITDA is frequently used by industry analysts, investors, and lenders as a measure of valuation and the ability to service debt.

Christopher King: In accordance with regulation FD. This call is being made available to the public a webcast replay will be available on our website and will remain available until our next quarterly earnings release included on the call will be discussion of non-GAAP financial measures, specifically adjusted EBITDA adjusted free cash flow and leverage the company considers adjusted EBITDA would be.

Christopher King: An indicator of the company's operating performance and the ability to service its debt. The company also believes that adjusted EBITDA is frequently used by industry analysts investors and lenders as a measure of valuation and the ability to service debt. The company also discloses segment adjusted EBITDA as an indicator of the operating performance of its segments.

Christopher King: The company also discloses segment Adjusted EBITDA as an indicator of the operating performance of its segments in accordance with ASC 280 segment reporting. Additionally, the company considers adjusted pre-cast flow to be an indicator of the company's operating performance. The company also believes that pre-cast flow is a commonly used measure of valuation for companies in the local media industry. In addition, this measure is frequently used by industry analysts, investors, and lenders as a measure of value for local media companies. These measures are not formulated in accordance with GAAP, are not meant to replace GAAP measurements, and may differ from other companies' uses or formulations.

Christopher King: In accordance with ASC 280, <unk> segment reporting.

Christopher King: The company considers adjusted free cash flow to be an indicator of the company's operating performance. The company also believes the free cash flow is a commonly used measure evaluation for companies in the local media industry. In addition, this measure is frequently used by industry analysts investors and lenders as a measure of evaluation for local media companies. These measures are not formulated in.

Christopher King: With gap are not meant to replace GAAP measurements and may differ from other companies uses or formulations. The company does not provide reconciliations on a forward looking basis further discussions and reconciliations of the company's non-GAAP financial measures to comparable GAAP financial measures can be found on our website www dot SPG I dot net.

Christopher King: The company does not provide reconciliations on a forward-looking basis. Further discussions and reconciliations of the company's non-GAAP financial measures to comparable GAAP financial measures can be found on our website, www.sbgi.net. Any discussion of pro forma numbers as compared to 2022 will exclude Diamond Sports, which was deconsolidated March 1, 2022, and any business sold since the beginning of 2022. For actual results, including the periods that Diamond was consolidated, please refer to this afternoon's earnings release. Let me now turn the call over to Chris Ripley.

Christopher King: Any discussion of pro forma numbers as compared to 2022 will exclude diamond sports, which was de consolidated March one 2022, and any business sold since the beginning of 2022 for actual results, including the periods. The Diamond was consolidated please refer to this afternoon's earnings release, let me now turn the call over to Chris.

Christopher S. Ripley: Good afternoon, everyone, and thank you for joining us. I'll start on slide four by introducing an overview of our fourth quarter financial results. As you can see, Sinclair delivered solid fourth-quarter results that met our guidance expectations in our local media segment, while Tennis Channel exceeded expectations across the board. As a result, we work comfortably within the consolidated guidance ranges for total revenues, adjusted EBITDA, and adjusted free cash flow. Turning to slide five.

Chris: Good afternoon, everyone and thank you for joining us I'll start on slide four by early to see an overview of our fourth quarter financial results.

Chris: As you can see Sinclair delivered solid fourth quarter results that met our guidance expectations in our local media segment, while tennis channel exceeded expectations across the board.

Chris: As a result, we were comfortably within the consolidated guidance ranges for total revenues adjusted EBITDA and adjusted free cash flow.

Chris: Turning to slide five.

Christopher S. Ripley: I wanted to highlight our strong commitment to our stakeholders through our return of free cash flow generation during the past year. In 2023, we paid approximately $65 million in quarterly dividends. During the year and up through January, we purchased $91 million of face value of debt at an average discount to par of 19%.

Chris: Wanted to highlight our strong commitment to our stakeholders through our return of free cash flow generation during the past year in 2023, we paid approximately $65 million of quarterly dividend.

Chris: During the year and up through January we purchased $91 million of face value of debt at an average discount to par of 19%.

Christopher S. Ripley: This amount excludes our scheduled amortization payments, which allowed us to retire an additional $28 million of debt in 2023. In early 2023, we also repurchased nearly 9 million shares of our common stock. Our commitment to maximizing value for all of our stakeholders remains a top priority for the Attorney to Sly Stick.

Chris: This amount excludes our scheduled amortization payments, which allowed us to retire an additional $28 million of debt in 2023.

Chris: In early 2023, we also repurchased nearly 9 million shares of our common stock our commitment to maximizing value for all of our stakeholders remains a top priority for the company.

Chris: Turning to slide six.

Christopher S. Ripley: As we've stated in the past, we remain dedicated to our traditional local media business with the realization that the industry needs to transform due to subscriber churn and regulatory constraints. With that being said, we believe Sinclair, as well as the broader industry, has multiple growth drivers as we head into a presidential election. First, we expect to see record-breaking political advertising revenues in 2024, which equates to exceeding 2020's political revenues of $350 million, which excludes the impact of the Georgia runoff. We saw 2023 political revenues trend above both 2021 and 2019 levels, and we expect the strong growth of issue-oriented political advertising in what appears to be several close Senate and House races in our footprint to accelerate this growth significantly as we get closer to this year's election. Given the lack of hyper-competitive primaries, we do expect political advertising spend to be more heavily weighted to the third and fourth quarters.

Chris: As we've stated in the past we remain dedicated to our traditional local media business with the realization that the industry needs to transform due to subscriber churn and regulatory constraints with that being said, we believe Sinclair as well as the broader industry has multiple growth drivers as we head into a presidential election year.

Chris: First we expect to see record breaking political advertising revenues in 2024, which equates to exceeding 2000, twenty's political revenues of $350 million, which excludes the impact of the Georgia runoff we.

Chris: We start 2023 political revenues trend above both 2021, and 2019 levels and we expect the strong growth of issue oriented political advertising and what appears to be several close Senate and house races in our footprint to accelerate this growth significantly as we get closer to this year's election.

Chris: Given the lack of hyper competitive primaries, we do expect political advertising spend to be more heavily weighted to the third and fourth quarters. As we anticipate most of the spend at the presidential level will be focused on the general election.

Christopher S. Ripley: As we anticipate, most of the spend at the presidential level will be focused on the general election. Second, our focus on high-demand, differentiated local news and sports content, as well as syndicated programming, continues to drive strong and loyal viewership, with 43% of viewer impressions across our station portfolio driven by non-network content. In addition, with nearly all of our big four traditional subscribers renewing by the end of 2024, we expect a mid-single-digit net retrans two-year CAGR growth rate from 2023 through 2025. Next Gen Broadcast is becoming a reality as well.

Chris: Second our focus on high demand differentiated local news and sports content as well as syndicated programming continues to drive strong and loyal viewership with 43% of viewer impressions across our station portfolio driven by non network content.

Chris: In addition, with nearly all of our big four traditional subscribers renewing by the end of 2024, we expect a mid single digit net retrans two year kind of growth rate from 2023 through 2025.

Chris: Next Gen broadcast is becoming a reality as well we now have three data coverage and half of our 86 markets and over 75% of the U S. As of January of this year.

Christopher S. Ripley: We now have 3.0 coverage in half of our 86 markets and over 75% of the U.S. as of January this year. Over 10 million next-gen TVs have been sold thus far, and we are excited about next gen's future potential. And while the regulatory environment is far from positive overall for broadcasters, particularly from a relative perspective to our big tech and big media competitors, we are cautiously optimistic regarding long-term changes for a couple of industry items, including guidelines regarding the sunset of the industry's 1.0 spectrum as next-gen 3.0 spectrum is used more widely, and the ability to negotiate directly with virtual MVPs. In the interim, our focus on sales excellence drove over 3% core advertising growth in Turning to slide seven.

Chris: Over 10 million next Gen TV had been sold thus far and we are excited about next gen future potential and while the regulatory environment is far from positive overall for broadcasters, particularly from a relative perspective to our big Tech and data media competitors. We are cautiously optimistic regarding long term changes for a couple of industry.

Chris: Items, including guidelines regarding the sunset of the industry is one of those spectrum as next Gen. Three outer spectrum is used more widely and the ability to negotiate directly with virtual mvpds.

Chris: In the interim our focus on sales excellence drove over 3% core advertising growth in the fourth quarter, the highest growth rate in our publicly traded peer group.

Chris: Turning to slide seven.

Chris: In mid January we announced a global settlement with Diamond Sports Group eliminates all outstanding litigation claims between the two companies.

Chris: Her this settlement.

Christopher S. Ripley: In mid-January, we announced a global settlement with Diamond Sports Group that eliminates all outstanding litigation claims between the two companies. Per the settlement that the court approved earlier this week, pending the finalization of certain final documents, Sinclair will pay a total of $495 million, with the first $50 million expected to be due this week, which is being paid by Ventures, and the rest is expected to be paid, as determined, within 60 days. In exchange, Diamond has agreed to drop the $1.5 billion lawsuit against Sinclair and others.

Chris: The court approved earlier this week pending the Finalization of certain final documents Sinclair will pay a total of $495 million with the first 50 million expected to be due this week, which is being paid by ventures and the rest is expected to be paid as determined within 60 days.

Chris: In exchange Diamond has agreed to dropped a $1 5 billion litigation against Sinclair and others. We estimate the gross amount of $495 million results in a net cost of approximately $250 million to $325 million when including tax benefits associated with the settlement increased management fees from diamond.

Chris: And other assets.

Chris: Importantly, we believe the settlement and the approval of Diamond's reorganization plan helps safeguard the future of Diamond and Thats the broader regional sports network environment. We believe the continued existence of local sports in the pay TV bundle, including being a <unk>, we will get key asset in driving rate re bundling and the.

Christopher S. Ripley: We estimate the gross amount of $495 million results in a net cost of approximately $250 to $325 million when including tax benefits associated with the settlement, increased management fees from Diamond, and other assets. Importantly, we believe the settlement and the approval of Diamond's reorganization plan helps safeguard the future of Diamond and thus the broader regional sports network environment. We believe the continued existence of local sports in the PayTV bundle, including via the RSNs, will be a key asset in driving great rebundling and the PayTV bundle going forward. In light of this development, as well as the Disney Charter Carriage Agreement that we discussed on our third quarter call, it is our view that the relative value of the pay TV bundle as compared to Alicard DTC offerings remains strong and is, in fact, improving as the environment shifts and continues to shift in favor of the pay TV bundle.

Chris: Pay TV bundle going forward.

Chris: In light of this development as well as the Disney Charter carriage agreement that we discussed on our third quarter call. It is our view that the relative value of the of the pay TV bundle ads compared to Ala Carte D. D to C offerings remains strong and is in fact, improving as the environment shifts continues to shift in favor of the <unk>.

Chris: We also believe that the recent Fox Disney Warner Brothers Discovery Sports bundle announcement will not negatively impact us as we expect our Fox and ABC stations to be carried on the streaming platform, which would allow us to receive compensation.

Chris: We look forward to continue discussions with our networks and distribution partners as to how we can add content and other value to consumers and attract more subscribers back to the value of the bundle.

Christopher S. Ripley: We also believe that the recent Fox, Disney, and Warner Bros. Discovery Sports Bundle announcement will not negatively impact us as we expect our Fox and ABC stations to be carried on the streaming platform, which would allow us to receive compensation. We look forward to continued discussions with our networks and distribution partners as to how we can add content and other value to consumers and attract more subscribers back to the value of the bundle. And speaking of value, this year's Super Bowl highlighted the value of broadcast television in the media ecosystem, with Super Bowl 58 setting a viewership record in January of this year with 123.7 million viewers, making it the most watched telecast in U.S. history with an estimated 112 million viewers on linear CBS alone, which represents the highest single audience on any one network in U.S. history.

Chris: And speaking of value this year's Super Bowl highlighted the value of broadcast television in the media ecosystem.

Chris: With Super Bowl 58, setting as viewership record in January of this year with $123 7 million viewers, making it the most watched telecast in U S history with an estimated 112 million viewers on linear CBS alone, which represents the highest.

Chris: Single audience on any one network in the U S in U S history.

Chris: Our 30 CBS affiliate stations played a significant role in delivering the game and helped to contribute to that record breaking audience underscoring the importance of broadcast television.

Chris: Now, let me turn it over to Rob to discuss our local media strategy. Thanks, Chris turning to slide eight I wanted to begin by touching on the broad advertising environment and our industry, leading core advertising growth pro forma advertising, excluding political was up approximately two 5% year over year during the fourth.

Robert D. Weisbord: Our 30 CBS-affiliated stations played a significant role in delivering the game and helped to contribute to that record-breaking audience, underscoring the importance of broadcast television. Now, I turn it over to Rob to discuss our local media strategy. Thanks, Chris.

Rob: Quarter in our local media business segment, while on a consolidated basis, we delivered growth of three 2% in the fourth quarter.

Rob: Before I jump into our category breakdown I wanted to follow up on Chris's highlight on the importance of broadcast for the media landscape in regards to the superbowl not only was this year the highest swaps broadcast in history. We also grew our AD revenue, 43% over last time that CBS posted the superb.

Robert D. Weisbord: Turning to slide eight, I wanted to begin by touching on the broad advertising environment and our industry-leading core advertising growth. For the former, advertising, excluding political, was up approximately 2.5% year-over-year during the fourth quarter in our local media business segment, while on a consolidated basis, we delivered growth of 3.2% in the fourth quarter. Before I jump into our category breakdown, I wanted to follow up on Chris's point about the importance of broadcasts to the media landscape in regards to the Super Bowl. Not only was this year the highest-watched broadcast in history, but we also grew our ad revenue 43% over the last time that CBS hosted the Super Bowl, showcasing the power of live sports. Now onto categories.

Rob: <unk> showcasing the power of live sports.

Rob: The categories services continue to be a top performer up 8% year over year in the quarter, while automotive remains strong up 5% and retail up 9% driven by home products and nutrition heading into 2024 retail services and legal remained strong while medical and drug cat.

Rob: <unk> as well as food or slightly down during the first two months of the year. In addition, we expect modest pressures in the auto category during the first quarter due to less premium sports programming than in the year ago period.

Rob: On slide nine I wanted to provide a quick update on political ad spend.

Robert D. Weisbord: Services continue to be a top performer of 8% year over year in the quarter, while automotive remains strong, up 5%, and retail, up 9%, driven by home products and nutrition. Heading into 2024, retail services and legal remain strong, while medical and drug categories as well as food are slightly down during the first two months of the year. In addition, we expect modest pressures in the auto category during the first quarter due to less premium sports programming than in the year-ago period.

Rob: As we look forward to 2024, we booked 24 million political advertising in the fourth quarter of 2023, just shy of our quarterly guidance, but hitting a non election year record of $44 million for the year.

Rob: Modest 1 million minutes of our guidance range was largely due to timing of spend and the early withdrawal of several Republican candidates from the Iowa caucus, while we anticipate political revenues will be backend loaded. This year, we continue to see strong trends from Pacs and Super Pac one racing.

Rob: And the heavy spend forecasted to continue for issue based advertising.

These items lead us to continue to expect a record breaking election year for us in 2024.

Robert D. Weisbord: On slide nine, I wanted to provide a quick update on political ad spend. As we look forward to 2024, we booked 24 million in political advertising in the fourth quarter of 2023, just shy of our quarterly guidance but hitting a non-election year record of 44 million for the year. The modest 1 million miss of our guidance range was largely due to timing of spending and the early withdrawal of several Republican candidates from the Iowa caucus.

Rob: Turning to slide 10, we have signed two distribution agreements in recent months.

<unk> multi year deals with both Verizon and N CTC nearly all of the remaining traditional big four network subscribers are on agreements that expire between now and the end of 2024. In addition, we announced an extended affiliation partnership with box and all 41 of our box markets COVID-19 million.

So this includes the early renewal of 17 markets.

Robert D. Weisbord: While we anticipate political revenues will be back-end loaded this year, we continue to see strong trends from PAC and SuperPAC fundraising and heavy spend forecasted to continue for issue-based advertising. These items lead us to continue to expect a record-breaking election year for us in 2024. Turning to slide 10, we have signed two distribution agreements in recent months. This includes multi-year deals with both Verizon and NCTC. Nearly all of the remaining traditional Big Four Network subscribers are on agreements that expire between now and the end of 2024. In addition, we announced an extended affiliation partnership with Fox in all 41 of our Fox markets, covering 19 million households. This includes the early renewal of 17 more. We now have only one big four network affiliation that expires before the back half of 2026.

Rob: We now have only one big four network affiliation that expires before the back half of 2026.

Rob: With our negotiation schedule in mind, we expect a mid single digit two year CAGR for net Retrans from 2023 through 2020 as Chris highlighted earlier, we continue to see positive industry trends regarding the long term stability of net retransmission revenues now let me turn the call back over to Chris to provide.

Chris: And update all our Nextgen broadcast plans as well as our venture segment. Thanks, Rob on Slide 11, I wanted to provide a couple of quick updates regarding nexgen broadcast technology, which has now been deployed in half of our markets and nationwide coverage is over 75% as the industry continue.

To improve next gen reach.

Chris: Tcl as Julian Sony Samsung and high census television manufacturers with models that have built in next Gen. TV capabilities. In fact, Sony is including next Gen availability in every set itself in the U S. Today.

Christopher S. Ripley: With our negotiation schedule in mind, we expect a mid single-digit two-year CAGA for net retransmission revenue from 2023 through 2025. As Chris highlighted earlier, we continue to see positive industry trends regarding the long-term stability of net retransmission revenue. Now, I will turn the call back over to Chris to provide an update on our next-gen broadcast plans, as well as our Ventures sector. Thanks, Rob. On slide 11, I wanted to provide a couple of quick updates regarding next-gen broadcast technology, which has now been deployed in half of our market, and nationwide coverage is over 75% as the industry continues to improve next-gen reach. TCL has joined Sony, Samsung, and Hisense as TV manufacturers with models that have built-in next-gen TV capabilities.

Rob: We continue to play a leading role in accelerating the adoption of the Ddos model and the continued transformation of local broadcast capabilities not only in the U S but globally.

Rob: As seen on slide 12, the tennis channel recorded another strong quarter with 54 million in total revenue and $22 million and adjusted EBITDA, both well in excess of our quarterly guidance.

Rob: For the full year tennis channel delivered $228 million in revenues and 72 million in adjusted EBITDA or 80 million when excluding tenants initiative losses.

Rob: We expect continued strong growth metrics from tennis channel.

Rob: Moving to slide 13.

Rob: The average number of households, watching tennis channel in the fourth quarter grew by 36% year over year, while total viewers grew by 25% and social media impressions grew by 58% year over year once again tennis channel ratings growth outpaced all other English language sports networks in the world.

Christopher S. Ripley: In fact, Sony is including next-gen availability in every set itself in the US today. We continue to play a leading role in accelerating the adoption of the DDAS model and the continued transformation of local broadcast capabilities, not only in the US but globally. As seen on slide 12, the Tennis Channel recorded another strong quarter with $54 million in total revenue and $22 million in adjusted EBITDA, both well in excess of our quarterly guidance. For the full year, the Tennis Channel delivered $228 million in revenues and $72 million in adjusted EBITDA, or $80 million when excluding Tennis Initiative losses. We expect continued strong growth metrics from tennis champs. Moving to slide 13. The average number of households watching the Tennis Channel in the fourth quarter grew by 36% year-over-year, while total viewers grew by 25%, and social media impressions grew by 58% year-over-year. Once again, Tennis Channel ratings growth outpaced all other English-language sports networks in the world.

Rob: <unk>.

Rob: The Tc plus streaming platform increased monthly subscribers by 7% year over year, while authentic catered viewing for anti PD customers grew by 3%.

Rob: The key to fast channel grew by 36% year over year as its exclusive tennis content continues to drive strong growth across multiple delivery platforms. In addition, and as Shannon will launch a direct to consumer offering in 2024, which will provide a new leg of growth.

Rob: We also believe pickle ball will drive even stronger growth metrics for tennis channel in the coming quarters inter.

Rob: Internationally tennis channel continues to grow its portfolio of rights recently acquiring the WK rights for both India and Spain.

Rob: Furthermore, we see multi language version and using artificial intelligence as a way to enhance both revenue streams international markets as well as expense reductions we.

Christopher S. Ripley: The TC Plus streaming platform increased monthly subscribers by 7% year-over-year, while authenticated viewing for MDPD customers grew by 3%. The T2 Fast Channel grew by 36% year-over-year as its exclusive tennis content continues to drive strong growth across multiple delivery platforms. In addition, the Tennis Channel will launch a direct consumer offering in 2024, which will provide a new leg of growth. We also believe Pickleball will drive even stronger growth metrics for the Tennis Channel in the coming quarters. Internationally, the Tennis Channel continues to grow its portfolio of rights, recently acquiring the WTA rights for both India and Spain.

Rob: We see many opportunities ahead for tennis channel.

Rob: I want to provide a brief update on our ventures investment portfolio on slide 14, which we know excludes consolidated assets tennis channel and can policies as well as other consolidated holdings.

Rob: As of December 31, the minority investment portfolios market value was $1 2 billion, which includes a cash position of $343 million.

Of note during the quarter the company made additional cash capital contributions of approximately $28 million in minority investments for.

Rob: For the full year, we contributed $72 million in minority investments and received 45 million of distributions.

Rob: As we've stated in the past our goal over time is to transition a significant amount of these minority investments into other majority owned investments that we can that we expect to have long term growth potential and consolidation opportunities as well as providing greater visibility into the performance of venture's assets we.

Christopher S. Ripley: Furthermore, we see multi-language versioning using artificial intelligence as a way to enhance both revenue streams, international markets, as well as expense reduction. We see many opportunities ahead for tennis. I want to provide a brief update on our Ventures Investment Portfolio on slide 14, which, as we know, excludes Consolidated Assets, Tennis Channel, and Compulse, as well as other consolidated holdings. As of December 31st, the Minority Investment Portfolio's market value was $1.2 billion, which included a cash position of $343 million.

Rob: We will continue to update our investors on a regular basis as we transform the investment portfolio.

Before I turn the call over to Lucy to discuss the financial results I wanted to highlight our awards and charitable endeavors over the past year Sinclair. One 276 broadcast awards in 2023, including 16 National Awards, one of which was the prestigious National Edward R. Murrow Award for our Seattle station.

Christopher S. Ripley: Of note, during the quarter, the company made additional cash capital contributions of approximately $28 million in minority investments. For the full year, we contributed $72 million in minority investments and received $45 million in distributions. As we've stated in the past, our goal over time is to transition a significant amount of these minority investments into other majority-owned investments that we expect to have long-term growth potential and consolidation opportunities, as well as to provide greater visibility into the performance of venture assets. We will continue to update our investors on a regular basis as we transform the investment portfolio. Before I turn the call over to Lucy to discuss the financial results, I wanted to highlight our awards and charitable endeavors over the past year. Sinclair won 276 broadcast awards in 2023, including 16 national awards, one of which was the prestigious National Edward R. Murrow Award for our Seattle station, Como.

Lucy: Promo on the charitable front, we partnered with more than 400 nonprofit and civic organizations across the country in an effort to be supported and engaged members of the communities in which we serve we raised nearly $30 million and collected more than $2 3 million pounds of food.

Rob: <unk>.

Rob: 3700 kinds of blood over 642000, diapers and almost 100000 toys.

Rob: We also provided over $300000 in tuition assistance over the past 10 years through our annual diversity scholarship and held our first companywide data service in April which saw almost 1700 employees volunteering their time to provide over 4800 hours of service during that single day alone.

Speaker Change: I want to take the opportunity to thank our employees for their charitable efforts and look forward to another successful day of service this year.

Speaker Change: Now, let me turn it over to Lucy to provide additional details on our financial results for the quarter.

Lucy: Thank you, Chris and good afternoon, everyone beginning.

Lucy: Beginning on slide 16 on a consolidated basis, we delivered media revenues during the fourth quarter that met our guidance range as core advertising net and distribution revenues exceeded our guidance as.

Christopher S. Ripley: On the charitable front, we partnered with more than 400 non-profit and civic organizations across the country in an effort to be supportive and engaged members of the communities in which we serve. We raised nearly $30 million and collected more than 2.3 million pounds of food, 3,700 pints of blood, over 642,000 diapers, and almost 100,000 toys.

Lucy: As compared to last year, which was a midterm election year consolidated media revenues decreased to $821 million during the quarter, primarily on the lower political revenues in a non election year.

Offset in part by increases in distribution revenue and core advertising.

Lucy A. Rutishauser: We have also provided over $300,000 in tuition assistance over the past 10 years through our annual diversity scholarship and held our first company-wide day of service in April, which saw almost 1,700 employees volunteering their time to provide over 4,800 hours of service during that single day alone. I want to take this opportunity to thank our employees for their charitable efforts and look forward to another successful day of service this year. Now, let me turn it over to Lucy to provide additional details on our financial results for the quarter. Beginning on slide 16, on a consolidated basis, we delivered media revenues during the fourth quarter that met our guidance range as core advertising net and distribution revenues exceeded our guidance. As compared to last year, which was a midterm election year, consolidated media revenues decreased to $821 million during the quarter, primarily due to lower political revenues in a non-election year, offset in part by increases in distribution revenue and core advertising.

Lucy: On slide 17 consolidated adjusted EBITDA also was within our guidance range with Opex costs coming in as expected.

Lucy: As compared to last year on a pro forma basis consolidated adjusted EBITDA in the quarter decreased from the 2022 period as expected with media revenues contributing nearly all the decline as a result of the lower political revenues and an off cycle political year.

Lucy: <unk> expenses rose slightly year over year, while corporate overhead and other fell modestly excluding the impact of the diamond settlement and other nonrecurring costs during the quarter.

Okay.

Lucy: Slide 18 shows our consolidated adjusted free cash flow results coming in above the midpoint of our forecast.

Lucy: As expected adjusted free cash flow declined year over year on a pro forma basis.

Lucy: Due to the decline in adjusted EBITDA as just discussed on the previous slide as well as higher interest expense on floating rate debt higher cash taxes due to a cash tax refund and higher cash distributions from our minority investments.

Lucy A. Rutishauser: On slide 17, consolidated adjusted EBITDA also was within our guidance range, with OPEX costs coming in as expected. However, as compared to last year on a pro forma basis, consolidated adjusted EBITDA in the quarter decreased from the 2022 period, as expected, with media revenues contributing nearly all the decline as a result of the lower political revenues in an off-cycle political year. Media expenses rose slightly year over year while corporate overhead and other costs fell modestly, excluding the impact of the diamond settlement and other non-recurring costs during the quarter.

Lucy: We received in the fourth quarter of last year offset by lower Capex.

Lucy: Slide 19 walks through our balance sheet metrics with the next meaningful maturity more than two years away Stg's first lien net leverage was four two times and its total net leverage was five two times at the end of the year on a trailing eight quarter basis interest coverage was three one.

Lucy: Times as of December 31.

Lucy: Our consolidated cash position was 662 million at year end with $319 million of cash in S. E T and $343 million of cash adventures there were $63 5 million total shares outstanding at year end.

Lucy A. Rutishauser: Slide 18 shows our consolidated adjusted free cash flow results coming in above the midpoint of our forecast. As expected, adjusted free cash flow declined year-over-year on a pro forma basis due to the decline in adjusted EBITDA, as just discussed on the previous slide, as well as higher interest expense on floating rate debt, higher cash taxes due to a cash tax refund, and higher cash distributions from our minority investments, both received in the fourth quarter of last year, offset by lower capex. Slide 19 walks through our balance sheet metrics, with the next meaningful maturity more than two years away. STG's first lean net leverage was 4.2 times, and its total net leverage was 5.2 times at the end of the year on a trailing eight quarter basis. Insurance coverage was 3.1 times as of December 31st. Our consolidated cash position was $662 million at year end, with $319 million of cash at SBG and $343 million of cash at Ventures. There were 63.5 million total shares outstanding at year end.

Lucy: Of note earlier this week as BJ received $25 6 million in pre tax proceeds from the closing of the previously announced sale of broadcast music.

Lucy: Slide 20 provides our full year financial results.

Lucy: Sinclair generated over $3 1 billion and media revenues during 2023.

Lucy: $549 million, and adjusted EBITDA, and $234 million and adjusted free cash flow.

Lucy: Slide 21 introduces our 2024 first quarter guidance, which calls for total media revenues in the $787 million to $800 million range.

3% to 5% year over year in the quarter driven primarily by political.

Lucy: We anticipate pro forma core advertising revenues to be roughly flat year over year in the quarter, given our lower exposure to the Super Bowl on CBS. This year versus Fox last year, while distribution revenue is expected to be up low single digit percent year over year in the quarter.

Lucy A. Rutishauser: Of note, earlier this week, SBG received $25.6 million in pre-tax proceeds from the closing of the previously announced Seattle Broadcast Museum. Slide 20 provides our full-year financial results. Of note, Sinclair generated over $3.1 billion in media revenues during 2023, $549 million in adjusted EBITDA, and $234 million in adjusted free cash flow.

Lucy: At the midpoint of our guidance.

Lucy: We expect adjusted EBITDA in the quarter to be in the range of 128% to 139 million up from the pro forma $123 million of adjusted EBITDA in the year ago period.

Lucy A. Rutishauser: Slide 21 introduces our 2024 first quarter guidance, which calls for total media revenues in the $787 to $800 million range, up 3 to 5% year-over-year in the quarter, driven primarily by political. We anticipate pro forma core advertising revenues to be roughly flat year-over-year in the quarter given our lower exposure to the Super Bowl on CBS this year versus Fox last year, while distribution revenue is expected to be up low single-digit percent year-over-year in the quarter at the midpoint of our guidance. We expect Adjusted EBITDA for the quarter to be in the range of $128 to $139 million, up from the pro-form $123 million of Adjusted EBITDA for the year-agreed period, due largely to higher political advertising revenue in an election year, which we anticipate being modestly offset by higher production costs, network programming fees, and tennis channel growth initiatives. We anticipate adjusted free cash flow of $100 to $114 million in the quarter, up significantly versus the first quarter of 2023.

Lucy: Due largely to the higher political advertising revenue in an election year, which we anticipate being modestly offset by higher production cost network programming fees and tennis channel growth initiatives.

Lucy: We anticipate adjusted free cash flow of $100 million to $114 million in the quarter up significantly versus the first quarter of 2023.

Lucy: Turning to slide 22, you can see our 2020 for full year guidance for certain expenses, which includes approximately $45 million per initiative spending excluding tennis channel's initiatives.

Lucy: Primarily around our move to the cloud Ddos and other technology projects, which is lower than the $52 million spent in 2023.

Lucy: Collected in our 2000 and for guidance or approximately $5 million of Opex savings and $10 million of Capex cost avoidance as a result of our move to the cloud.

Lucy: When excluding the impact of the initiatives Commission expense on the higher revenues and nonrecurring cost media expenses are estimated to increase approximately 4% for the.

Lucy A. Rutishauser: Turning to slide 22, you can see our 2024 full-year guidance for certain expenses, which includes approximately 45 million for initiative spending, excluding tennis channel initiatives, primarily around our move to the cloud, DDAS, and other technology projects, which is lower than the $52 million spent in 2023. Reflected in our 24 guidance are approximately 5 million in OpEx savings and 10 million in CapEx cost avoidance as a result of our move to the cloud. When excluding the impact of the initiatives, commission expense on the higher revenues, and non-recurring costs, media expenses are estimated to increase approximately 4% for the first quarter and for the full year.

Lucy: First quarter and for the full year.

Lucy: So in this slide is full year guidance for Capex cash distributions from our investment portfolio and cash taxes and with that I'd like to turn the call back over to Chris for some closing comments.

Chris: Thank you Lucy.

Chris: Turning to our key takeaways on slide 23, Sinclair delivered solid fourth quarter results as we met our guidance expectations on our local media segment with tennis channel exceeding expectations. In addition, our commitment to Delevering has been on full display as we've repurchased more than $91 million.

Chris: This value of debt and an average 19% discount to par through open market purchases since the beginning of June 2023 through early January of this year. In addition to the $28 million of scheduled amortization payments in 2023.

Christopher S. Ripley: Also on the slide is full-year guidance for CapEx, cash distributions from our investment portfolio, and cash tax. And with that, I'd like to turn the call back over to Chris for some closing comments. Thank you, Lucy.

Christopher S. Ripley: Turning to our key takeaways on slide 23, Sinclair delivered solid fourth-quarter results as we met guidance expectations on our local media segment, with Tennis Channel exceeding expectations. In addition, our commitment to delivering has been on full display as we've repurchased more than $91 million in face value debt at an average 19% discount to par through open market purchases since the beginning of June 2023 through early January of this year, in addition to the $28 million of scheduled amortization payments in 2023. And while traditional subscriber churn continues, we also have significant retransmission agreements that are coming up for renewal in the next 10 months, and only one network affiliation agreement, leading us to forecast a mid-single-digit two-year CAGR and net retransmission revenue from 2023 through 2025. The Diamond Settlement we announced last month removed a significant overhang from our capital structure, and Diamond's reorganization plan gives the regional sports network business model some certainty going forward, which we view positively as we believe local sports remains an important component of the pay TV bond hold.

Chris: And while traditional subscriber churn continues we also have significant retransmission agreements that are coming up for renewal in the next 10 months and only one network affiliation agreement, leading us to forecast a mid single digit two year CAGR and net retrans from 2023 through 2025.

Chris: The Diamond settlement, we announced last months removed a significant overhang from our capital structure and Diamond's reorganization plan give us the regional sports network business model, some certainty going forward, which we view positively as we believe mobile sports remains an important component of the pay TV bundle.

Chris: In summary, Sinclair is in a strong position for both the short and long term with our emphasis on growing net retrans and maintaining industry leadership in core advertising growth.

Chris: This strategic Rep focus aligns with the anticipated anticipation of a record breaking of presidential year contributing to robust growth in adjusted EBITDA and free cash flow throughout 2024.

Chris: We have laid the groundwork for a promising future and were excited about the opportunities that lie ahead of us.

Speaker Change: Lucy Robert and I will now open the call to questions. Thank you for joining us today.

Lucy A. Rutishauser: Thank you at this time, we will be conducting a question and answer session. If you would like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue. You May press star two if you'd like to remove your question from the queue for participants using speaker equipment. It may be necessary to pick up your handset before.

Operator: In summary, Sinclair is in a strong position for both the short and the long term, with our emphasis on growing net retrends and maintaining industry leadership and core advertising growth. This strategic focus aligns with the anticipated anticipation of a record-breaking presidential year contributing to robust growth in adjusted EBITDA and pre-cash flow throughout 2024. We have laid the groundwork for a promising future, and we are excited about the opportunities that lie ahead of us. Lucy, Rob, and I will now open the call to questions. Thank you for joining us today.

Lucy A. Rutishauser: Pressing the star Keys, one moment, please while we poll for questions. Once again. Please press star one if you have a question or comment.

Lucy A. Rutishauser: The first question comes from Dan <unk> with Benchmark Company. Please proceed.

Dan: Great. Thanks, Good afternoon, Chris.

Dan: There's obviously been a lot of noise around distribution and you guys have a bit of a unique position this year given the magnitude.

Operator: Thank you. At this time, we will be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to remove your question from the queue.

Dan: Renewals that you have and you don't have to negotiate yarns and so I'm just kind of curious sort of underlying as you go through these conversations one just how you're feeling about kind of ability to get rate here.

Operator: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key. One moment, please, while we poll for questions. Once again, please press star one if you have a question or a comment. Our first question comes from Dan Kumos with Benchmark Company. Great, thanks. Good afternoon.

You've given the net guys. So that's obviously super helpful.

Dan: And you know.

Dan: Obviously, you've said before you don't anticipate any blackout. So we've seen a couple in the space.

Dan: Just kind of curious on your confidence levels there to start thanks.

Speaker Change: Yeah. Thanks, Dan So look we have not had a blackout for quite some time and.

Daniel Louis Kurnos: Um, Chris, there's obviously been a lot of noise around distribution, and you guys have a bit of a unique position this year given the magnitude of, Transcripts provided by Transcription Outsourcing, LLC, www.youtube.com.au in the space. I am curious on your confidence levels there to start. Yeah, thanks, Dad.

Dan: We we.

Dan: We hope that will be the case through 2024, certainly we knew we renewed Verizon and CTC.

Dan: We have an active negotiation going on right now with charter and through.

Dan: Through all of those and and all of the all the renewals we did.

In 2022, we have either met or exceeded our internal targets. So.

Christopher S. Ripley: So look, we have not had a blackout for quite some time. And, you know, we hope that will be the case through 2024. Certainly, we renewed Verizon and CPC. We have an active negotiation going on right now with Charter, and through all of those and all the renewals we did in 2022, we have either met or exceeded our internal targets. So we're very bullish on the renewals that we have in front of us, and it's been so far, so good. And then just maybe on capital allocation, Chris, you know, appreciate all the color around tenors. Transcription by CastingWords, color, you know, with the settlement of the lawsuit and the debt coming up.

Dan: We're very bullish on on the renewal set that we have in front of us.

Dan: And.

Dan: It's been so so far so good.

Dan: Okay.

Speaker Change: And then just maybe on capital allocation.

Speaker Change: And all the color around tenants in DTC and sort of what you're doing as well as the ventures color with the settlement of a lawsuit in the debt coming up in 2000 and snacks.

Speaker Change: How are you thinking about either you know.

Speaker Change: Selling assets or feel confident in the cash flow generation to cover the refi and then obviously you mentioned some stock buyback given where the stock's trading so I would just love to get any incremental color or do you think about that.

Speaker Change: Sure. So we will continue to be optimistic on both the equity and debt side as we always have been we were last year, our stakeholders, both equity and debt have given us feedback that they are they would like us to focus on the leverage side, So I think thats where.

Christopher S. Ripley: How are you thinking about either selling assets or feeling confident in the cash flow generation to cover the refi? And then, obviously, you mentioned some stock buyback to give them an idea of where the stocks are trading. I would love to get any incremental color. Sure. So we will continue to be opportunistic on both the equity and debt side, as we always have been and as we were last year. Our stakeholders, both equity and debt, have given us feedback that they would like us to focus on the leverage side. So I think that's where we're going to be focused, here, likely in the near term. But we don't feel like we need to do anything special on the capital structure side. We should be heading into a natural deleveraging cycle here, and we're going to produce significant free cash flow. And so we like our position. Great. Thanks, Chris. I appreciate it.

Speaker Change: We're going to be focused here likely in the near term.

Speaker Change: But we don't feel like we need to do anything special on the capital structure side, we should be heading into a natural deleveraging cycle here, we're going to produce significant free.

Speaker Change: Free cash flow and so we like our position.

Speaker Change: Great. Thanks, Chris appreciate it.

Speaker Change: Next question is from Benjamin <unk> with Deutsche Bank. Please proceed.

Speaker Change: Yeah.

Benjamin: Hey, guys. Thanks for taking the question.

Benjamin: Just wanted to dig into political a little bit.

Pickle presidential year can you guys breakdown, how much comes from the candidates versus congressional elections versus tissue based spending.

Benjamin Soff: Next question is from Benjamin Soff with Deutsche Bank. Please proceed. Hey guys, thanks for taking the question. Um, just wanted to dig into politics a little bit. In a typical presidential year, can you guys break down how much comes from the candidates versus congressional elections versus issue-based spending?

Benjamin: Just curious to get a little bit more on your thoughts around the sports JV and the puts and takes there. Thanks.

Speaker Change: Yes, so we're looking for.

Speaker Change: To break it down other than the fact that we see ourselves.

Speaker Change: That's it.

Christopher S. Ripley: And I was just curious to get a little bit more on your thoughts around the sports JV and the puts and takes there. Thanks. Yeah, so we're looking for, it's hard to break it down other than the fact that we see ourselves in contested Senate races in many of our cities. We are in gubernatorial races as well. And then, from the latest update last week, the PACs and super PACs continue to raise money at a record level. So we're looking for a lot of money being spent by the PACs and super PACs as well as issue advertising. And then the candidates will follow that.

Race in many of our cities we are in gubernatorial races, as well and then.

Speaker Change: From the latest update last week, the Pacs and Super Pacs continue to raise money at a record level. So we have we're looking for a lot of money.

Speaker Change: Spent by the Pacs and Super Pacs as well as issue advertising and then the candidates will follow that.

Speaker Change: We've seen significant dollars spent by the Super Pacs are already into the third and fourth quarter as they played in baas.

Christopher S. Ripley: And we've seen significant dollars spent by the Super PACs already in the third and fourth quarter as they've made buys. And on your second question around the sports streaming JV, our perspective on that is that it's an incremental development, not a game-changing development. We don't believe it's going to have mass.

Speaker Change: And on your second question around the.

Speaker Change: The sports streaming JV.

Speaker Change: Our perspective on that is that it's an incremental debt element is not a game changing development.

Speaker Change: We don't believe it's going to have mass.

Christopher S. Ripley: Customer or Consumer Appeal. But we are happy that our ABC and Fox stations are going to be included in this package and be paid for their content. So it's a nice, Page PAGE of NUMPAGES www.verbalink.com Page PAGE of NUMPAGES, Got it. Thanks, guys. Up next is Barton Crockett with Rosenblatt.

Speaker Change: Our customer our consumer appeal.

Speaker Change: But.

Speaker Change: We are happy that our CVR ABC and Fox stations are going to be included in this package and he paid for their content. So it's a nice.

Speaker Change: Addition from from that perspective, but we we don't see it being necessarily a game changer in terms of.

Speaker Change: Now the pay TV environment.

Speaker Change: Got it thanks guys.

Speaker Change: Up next is Barton Crockett with Rosenblatt. Please proceed.

Barton Evans Crockett: Please proceed. Hi there, thanks for taking my questions. I guess just a couple of things, first of all: the trend in pay TV homes. I'm not sure I've heard any commentary around that.

Barton Evans Crockett: Hi, there thanks for taking my.

Barton Evans Crockett: Great questions.

Barton Evans Crockett: I guess just.

Barton Evans Crockett: <unk> I'm not sure I heard any commentary around that but I was wondering.

Christopher S. Ripley: But I was wondering if you could just update us on what you're seeing there, if there's any change or things are continuing kind of like they were. And then, in terms of, Then, let's just start with the step-up from a low-single-digit KAGER to a mid-single-digit KAGER and that retrend. What is it that makes you more confident? Is it the rates that you're seeing from the deals you're negotiating on the top line or on the expense side, or the trend in cord-cutting? What is it that makes you more confident?

Barton Evans Crockett: If you could just update us on what Youre seeing there or if there's any change or things are continuing kind of like the war.

Barton Evans Crockett: And then in terms of.

Barton Evans Crockett: The.

Barton Evans Crockett: The step up to the.

Barton Evans Crockett: Low single digit CAGR from a low single digit to mid single digit CAGR on net retrans.

What is it that makes you more confident now and what is that just the rates that youre seeing from the deals you're negotiating.

Barton Evans Crockett: On the top line or on the expense side or the trend in cord cutting.

Christopher S. Ripley: So, in terms of churn, your first question, churn has been stable for us; we're still in mid-single digits. And that's what's reflected in our guidance. And I did want to make sure that it's clear we've turned the page on our guidance since we used to talk about 22 to 25. 22 is kind of ancient history now.

Barton Evans Crockett: What is it that makes you more confident there.

Barton Evans Crockett: So in terms of churn your first question.

Barton Evans Crockett: And churn has been stable for us we're still in the mid single digits and.

Barton Evans Crockett: And that's what's reflected.

Barton Evans Crockett: In our guidance and I did want to make sure that it's clear our we've turned the page on our guidance since we used to we used to talk about 'twenty two to 'twenty five 'twenty two just kind of ancient history now so we're guiding for 'twenty three which is now in the books from now to 25, we see a mid <unk>.

Christopher S. Ripley: So we're guiding from 23, which is now in the books, kind of from now to 25. We see a mid-single-digit CAGR, and we think that's a more useful guidance there. But in terms of your question about confidence... Um, you know, we have obviously had several, uh, engagements, uh, over the last six months with very significant, uh, MDPDs. And I think we have a very good sense of the market, where we are, and what's ahead of us. We've also locked in pretty much all of our reverse for our biggest three network affiliations, that is, ABC, Fox, and CBS. Those are our multi-year agreements. We only have NBC, which is our smallest group, up at the end of this year.

Barton Evans Crockett: Our digit CAGR, we we can get some more useful.

Barton Evans Crockett: Guidance are there, but in terms of your question about confidence.

Barton Evans Crockett: We have obviously had several of them.

Barton Evans Crockett: Engagements over the last six months with very significant mvpds.

Barton Evans Crockett: And.

Barton Evans Crockett: I think we have a very good sense of the market, where we are what's ahead of US. We've also locked in pretty much all of our reverse for all of our big biggest three.

Barton Evans Crockett: Network affiliations ABC Fox and Cvs those are multi year agreements, we only we have.

Barton Evans Crockett: NBC, which is our smallest group up at.

Barton Evans Crockett: At the end of this year. So it's we have a lot of uncertainty on the reverse side.

Christopher S. Ripley: So we have a lot of certainty on the reverse side, and we have good market data with major MDPDs, with recent renewals that give us confidence for our outlook, which most of those deals that I mentioned, really what will set the next two years or even three years are going to be those renewals over the next 10 months. That's helpful. And then just one other quick thing, if I could, on the resettlement. The Diamond Group

Barton Evans Crockett: And we have good market data with major Mvpds with recent renewals that give us confidence for our outlook, which most of those deals that I mentioned really what will set the next two years or even three years is going to be those renewals over the next.

Barton Evans Crockett: 10 months.

Speaker Change: Okay. That's helpful. And then just one other quick thing if I could.

Speaker Change: On the risk on the settlement with the Diamond group.

Christopher S. Ripley: Is there any potential impact on that settlement if the restructuring is not approved, if they aren't able to emerge? Seems like they probably will, but is there any tie between that and actually completing the restructuring? Now, there are no contingencies related to the broader restructuring.

Speaker Change: Is there any potential impact on that settlement the.

Barton Evans Crockett: The restructuring is not approved with.

Barton Evans Crockett: Aren't able to emerge it seems like they probably will but is there any tie between that and actually completing the restructuring.

Barton Evans Crockett: No there is no contingencies related to the broader restructuring on Monday.

Christopher S. Ripley: On Monday, the judge approved both the dip financing for Diamond and this settlement. So that was the only sort of contingency that we had that the judge would need to approve. There's some documentation that we're looking to finish up here in the next couple of days. But you know, that should not be an issue in terms of getting to the finish line.

Barton Evans Crockett: Judge approved both the dip financing for Diamond, but also this settlement so that was the only.

Barton Evans Crockett: Sort of contingency that we had that the judge would need two approved there are some documentation that we're looking to finish up here in the next couple of days.

Barton Evans Crockett: But that should not be an issue in terms of getting.

Barton Evans Crockett: Getting to the finish line and and then from there there's.

Aaron Lee Watts: And then from there, there's no other contingency. Thank you. If there are any remaining questions, please indicate so by pressing star 1. The next question comes from Aaron Watts with Deutsche Bank. Everyone, thanks for having me on.

Barton Evans Crockett: No other contingencies.

Barton Evans Crockett: Okay.

Barton Evans Crockett: Okay.

Barton Evans Crockett: If there are any remaining questions.

Barton Evans Crockett: By pressing star one the next question comes from Aaron Watts with Deutsche Bank. Please proceed.

Aaron Lee Watts: Hi, everyone. Thanks for having me on just a couple of questions I'll start on the core advertising front, you and others seem to be seeing a modest slowdown here to start the year any signs you can point to that give confidence on an improving picture as we move through the year acknowledging you'll probably have some crowd out to deal with.

Christopher S. Ripley: A couple questions. I'll start on the core advertising front. You and others seem to be seeing a modest slowdown here to start the year. Any signs you can point to that give confidence on an improving picture as we move through the year? Acknowledging you'll probably have some crowd out to deal with later on, let me jump in and then I'll let Rob, you know, add some color, but one of the things that affects our Q1 is that we have significant sporting events, including the Super Bowl and March Madness. And we had Fox do the Super Bowl last year, and we had CBS do the Super Bowl this year. We have way more Foxes than CBSes.

Aaron Lee Watts: Later on this year.

Speaker Change: Let me jump in and I'll, let Rob.

Rob: Add some color but.

Rob: One of the things that.

Rob: FX, our Q1 is there we have significant.

Barton Evans Crockett: Sporting events, including the Super Bowl and March Madness.

Barton Evans Crockett: And we.

Barton Evans Crockett: We had fox due to Super Bowl last year, and we had Cvs due to Super Bowl. This year, we have way more boxes than Cvs.

Christopher S. Ripley: But when you take out the impact of the Super Bowl and March Madness, we're actually still trending in line with what we saw last year. So, you know, the slowness, at least when you really dissect the numbers, hasn't shown up yet. I'll let Rob add any more color if he wants.

Barton Evans Crockett: But when you take out the impact of Super Bowl and March Madness.

Barton Evans Crockett: We're actually still trending.

Barton Evans Crockett: In line with what we saw last year so.

Barton Evans Crockett: The the slowness at least when you need to hit when you really dissect the numbers.

Speaker Change: It hasnt shown up yet and I'll, let Rob I didn't even more color if he wants sure.

Robert D. Weisbord: Sure. You know, national had a very soft January and has recovered as the months have gone on in the quarter. Meanwhile, local has remained steady.

Rob: You know Nashville.

Rob: Very soft January and has recovered as the months have gone on in the quarter local has remained steady.

Robert D. Weisbord: I think our shifting to a full media company mentality and selling all screens and being trained over the past decade has aided our core business and been able to offset any weaknesses that we may have because we are focused on marketing solutions versus just selling spots and dots. So that helps offset any pure core weakness because of our tool sets and our specialty cells that we focus on in the service industry, the legal industry, and the auto industry. So they're all run by experts coming out of those categories, and it allows us, I believe, a first mover's advantage, which led to the 23 results heading into 24 with safe consistency. Okay, thank you. Helpful context And then maybe a bit of a housekeeping question for Lucy.

Rob: Our shift to it.

Rob: A full media company mentality and selling all screens being.

Rob: Being trading over the past decade.

Rob: It is our core business to be able to offset any weaknesses that we are focused on marketing solutions versus just selling spots and dots. So that helps offset any pure core weakness because of our tool sets and our specialty cells that we focus on in the service.

Rob: The industry is illegal industry the auto industry. So they are all run by experts coming out of those categories and it allows us I believe we're first movers advantage is which led to the 23 results heading into 'twenty four with assistance systems.

Speaker Change: Okay. Thank you helpful context.

Speaker Change: And then maybe a bit of a housekeeping question for Lucie about what the Diamond settlement. You noted you'll pay 15 million to start this week out of the venture silo any further clarity you can provide on how much of the remaining payments will be paid from ventures versus S. T D.

Lucy A. Rutishauser: But with the diamond settlement, you noted you'll pay $50 million to start this week out of the venture silo. Any further clarity you can provide on how much of the remaining payments will be paid from ventures versus STG? That is something that will be determined over the next 60 days. The independent board members of the two silos are going through a process to determine that. Okay, got it. And then lastly, Chris or Lucy, I heard your comments that capital allocation likely stays focused on the debt side near term. With that in mind, and given the increased investor scrutiny on leverage around the space, where would you like to see leverage live? And when do you see being able to get there on a blended even on your base?

Lucie: That is something that will be determined over the next 60 days the independent board members of the two silos.

Lucie: Are going.

Lucie: Going through a process to determine that.

Speaker Change: Okay got it and then <unk>.

Speaker Change: Lastly, just Christopher Lucy I heard your comment.

Speaker Change: That capital allocation likely stay focused on the debt side near term with that in mind and given the increased investor scrutiny on leverage around the space, where would you like to see leverage live and when do you see being able to get there on a blended even on year basis.

Lucy A. Rutishauser: Yeah, so Aaron, our target leverage, which is, you know, high threes, low fours, that target has not changed. Now, we, you know, pro forma for the diamond settlement, we do expect leverage to naturally decline this year on the strength of political and EBITDA. Okay, got it.

Speaker Change: Yeah. So yeah, so erinn, our target leverage which is high threes low fours that that target has not changed.

Speaker Change: Now.

Lucie: Pro forma for the Diamond settlement.

Lucie: We do expect leverage to naturally decline this year on the strength of political and EBITDA.

Lucie: Okay.

Lucie: Yeah.

Aaron Lee Watts: Thank you very much. We have reached the end of the question and answer session, and I will now turn the call over to Chris Ripley, President and Chief Executive Officer, for a closing remarks. Thank you for joining us today. If you have any additional questions, please do not hesitate to reach out to our IR department. This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.

Speaker Change: Okay got it thank you very much.

Lucie: Yeah.

Lucie: We have reached the end of the question and answer session and I will now turn the call over to Chris Ripley, President and Chief Executive Officer for closing remarks.

Christopher S. Ripley: Thank you for joining us today, if you have any additional questions. Please do not hesitate to reach out to our IR Department.

Christopher S. Ripley: Yeah.

Christopher S. Ripley: Okay.

Speaker Change: This concludes today's conference and you may disconnect. Your lines at this time. Thank you for your participation.

Lucie: Okay.