Q2 2024 Sinclair Inc Earnings Call

Speaker Change: Good afternoon everyone and welcome to the Sinclair Broadcast Group's second quarter 2024 earnings conference call.

Operator: First Group, Second Quarter, 2024, Earning Conference Call. At this time, all participants are in a listen-only mode, and we will open for questions following the presentation. If anyone should require operator assistance during the conference, please press star zero on your phone keypad. Please note, this conference is being recorded.

Operator: Coop's second quarter 2024 earnings conference call. At this time, all participants are in a listen-only mode, and we will open the floor for questions following the presentation. If anyone should require operator assistance during the conference, please press star zero on your phone. Please note this conference is being recorded. I will now turn the conference over to your host, Chris King, Vice President of Investor Relations. Chris, the floor is yours.

Speaker Change: At this time, all participants are in a listen-only mode, and we will open for questions following the presentation. If anyone should require operator assistance during the conference, please press star zero on your phone keypad. Please note this conference is being recorded.

Christopher King: I will now turn the conference over to your host, Chris King, Vice President of Investor Relations.

Speaker Change: I will now turn the conference over to your host, Chris King, Vice President of Investor Relations. Chris, the floor is yours.

Operator: Chris, the floor issues. Thank you.

Chris King: Thank you. Good afternoon, everyone.

Christopher King: Good afternoon, everyone, and thank you for joining Sinclair's second quarter 2024 earning 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 Local Media. Before we begin, I want to remind everyone that slides where today's earnings call are available on our website, SBTI.net, on the events and presentation page of the Investor Relations portion of the site. A webcast replay will remain available on our website until our next quarterly earnings release.

Chris King: And thank you for joining Sinclair's second quarter 2024 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 Local Media. Before we begin, I want to remind everyone that slides for today's earnings call are available on our website, sbgi.net, on the events and presentation page of the investor relations portion of the site.

Chris King: Thank you. Good afternoon, everyone, and thank you for joining Sinclair's second quarter 2024 earnings conference call.

Speaker Change: 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 Local Media.

Speaker Change: Before we begin, I want to remind everyone that slides for today's earnings call are available on our website, sbgi.net, on the events and presentation page of the investor relations portion of the site. A webcast replay will remain available on our website until our next quarterly earnings release.

Chris King: A webcast replay will remain available on our website until our next quarterly earnings release. 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 second quarter earnings release.

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 with the SEC and included in our second quarter earnings release. The company undertakes no obligation to update these forward-looking statements.

Chris King: The company undertakes no obligation to update these forward-looking statements. Included in the call will be a discussion of non-GAAP financial measures, specifically adjusted EBITDA. 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. Further discussions and reconciliations of the company's non-GAAP financial measures to comparable GAAP financial measures can be found on our website. Finally, we note the presentation of certain information in our second quarter earnings release and slides may have changed from prior quarters due to the completion of a routine common process with the SEC that we believe other publicly traded broadcasters were recently engaged in as well.

Speaker Change: 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.

Chris King: For example, we have changed the definition of adjusted EBITDA to be based on programming amortization rather than programming payments, which had a positive $2 million impact on adjusted EBITDA during the second quarter, and we have also eliminated adjusted free cash flow from our financial presentation. If you have any questions regarding these changes, please feel free to contact me directly. I will now turn the call over to Chris Ripley.

Speaker Change: Such factors have been set forth in the company's most recent reports as filed with the SEC and included in our second quarter earnings release. The company undertakes no obligation to update these forward-looking statements.

Christopher King: Included on the call will be discussion of non-GAAP financial measures, specifically adjusted EBITDA. These measures are not formulated in accordance with GAP, are not meant to replace GAP measurements, and may differ from other companies' uses or formulations. Further discussions and reconciliations of the company's non-GAAP financial measures to comparable GAAP financial measures can be found on our website.

Speaker Change: Included on the call will be discussion of non-GAAP financial measures, specifically adjusted EBITDA. 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.

Speaker Change: Further discussions and reconciliations of the company's non-GAAP financial measures to comparable GAAP financial measures can be found on our website.

Christopher King: Finally, we note the presentation of certain information in our second quarter earnings release and slides may have changed from prior quarters due to the completion of a routine common process with the SEC that we believe other publicly-traded broadcasters were recently engaged in as well. For example, we have changed the definition of adjusted EBITDA to be based on programming amortization rather than programming payments, which had a positive $2 million impact to adjusted EBITDA during the second quarter, and we have also eliminated adjusted pre-cash flow from our financial presentations. If you have any questions regarding these changes, please feel free to contact me directly.

Speaker Change: Finally, we note the presentation of certain information in our second quarter earnings release and slides may have changed from prior quarters due to the completion of a routine common process with the SEC that we believe other publicly traded broadcasters were recently engaged in as well.

Speaker Change: For example, we have changed the definition of adjusted EBITDA to be based on programming amortization rather than programming payments, which had a positive $2 million impact to adjusted EBITDA during the second quarter. And we have also eliminated adjusted free cash flow from our financial presentations.

Speaker Change: If you have any questions regarding these changes, please feel free to contact me directly. Let me now turn the call over to Chris Ripley.

Christopher Ripley: Let me know from the call to Chris Ripley. Good afternoon, everyone, and thank you for joining us. I'll start on slide three by highlighting our second quarter financial results on a consolidated basis. We delivered strong second quarter results that met our revenue expectations across all major line items. Total distribution and advertising revenue were both in line with our guidance ranges, which contributed to an inline performance in total media revenues during the second quarter.

Chris Ripley: Good afternoon, everyone, and thank you for joining us. I'll start on slide three by highlighting our second quarter financial results on a consolidated basis. We delivered strong second-quarter results that met our revenue expectations across all major line items. Total distribution and advertising revenue were both in line with our guidance ranges, which contributed to an in-line performance in total media revenues during the second quarter, while favorable expenses resulted in adjusted EBITDA exceeding the high end of our guidance range. Lucy will go into more details in a moment.

Chris Ripley: Good afternoon everyone and thank you for joining us. I'll start on slide 3 by highlighting our second quarter financial results on a consolidated basis.

Chris Ripley: We delivered strong second quarter results that met our revenue expectations across all major line items.

Chris Ripley: Total distribution and advertising revenue were both in line with our guidance ranges, which contributed to an in-line performance in total media revenues during the second quarter, while favorable expenses resulted in adjusted EBITDA exceeding our high end of our guidance range.

Christopher Ripley: While favorable expenses resulted in adjusted EBITDA exceeding our high end of our guidance range, Lucy will go into more details in a moment. On slide four, our Ventures portfolio received 109 million total distributions during the quarter, including 105 million of exits. Net of 26 million contributions, we received 83 million of cash from our minority investment portfolio in the quarter. At quarter end, Venturers held 326 million cash, which reflects the 98 million ventures contributed to our diamond settlement payment in April.

Chris Ripley: On slide four, our ventures portfolio received 109 million total distributions during the quarter, including 105 million of exit. Net of $26 million in contributions, we received $83 million of cash from our minority investment portfolio in the quarter. At quarter end, we held $326 million in cash, which reflects the $98 million it contributed to our Diamond Selma payment in April.

Lucy: Lucy will go into more details in a moment.

Lucy: On slide four, our ventures portfolio received 109 million total distributions during the quarter, including 105 million of exits. Net of 26 million in contributions, we received 83 million of cash from our minority investment portfolio in the quarter.

Lucy: At quarter end, Ventures held $326 million in cash, which reflects the $98 million Ventures contributed to our Diamond Selma payment in April .

Chris Ripley: Turning to slide five, I wanted to take a minute to provide an overview of our local media broadcast assets and their value proposition, which tends to get overlooked in the broader media landscape. Sinclair is one of the largest and most diversified television broadcasters with national reach. As you can see, we have a well-diversified portfolio of assets by network affiliate mix, geographic location, and by asset type, with 183 owned and operated stations covering over 38% of U.S. television households today, or 24% based on the UHF discount.

Christopher Ripley: Turning to slide five, I wanted to take a minute to provide an overview of our local media broadcast assets and their value proposition, which tends to get overlooked in the broader media landscape. Sinclair is one of the largest and most diversified television broadcasters with national reach. As you can see, we have a well diversified portfolio of assets by network affiliate mix, geographic location, and by asset type, with 183 owned and operated stations covering over 38% of the U.S. television councils today, or 24% based on the UHF discount. We are in 86 markets across the country, with no single market representing more than 5% of our total advertising release.

Lucy: Turning to slide five, I wanted to take a minute to provide an overview of our local media broadcast assets and their value proposition, which tends to get overlooked in the broader media landscape.

Lucy: Sinclair is one of the largest and most diversified television broadcasters with national reach.

Lucy: As you can see, we have a well-diversified portfolio of assets by network affiliate mix, geographic location, and by asset type, with 183 owned and operated stations covering over 38% of the U.S. television households today, or 24% based on the UHF discount.

Chris Ripley: We're in 86 markets across the country, with no single market representing more than 5% of our total advertising. Additionally, more than 50% of our news operations rank number one or number two in their markets for local news. Moreover, we broadcast more than 2400 hours of local news per week with more than 74 million unique visitors to our website and mobile apps on an average monthly basis. This diversity, both from a geographic and network perspective, as well as strong news operations, is not only important in the election year but also de-risks us more broadly. Let me now turn the call over to Rob Weisbord to go into some additional details on our local broadcast assets as well as an update on our political expectations for the year. Thanks, Chris.

Lucy: We're in 86 markets across the country with no single market representing more than 5% of our total advertising revenues.

Christopher Ripley: More than 50% of our news operations rank number one or number two in their markets for local news. Moreover, we broadcast more than 2,400 hours of local news per week, with more than 74 million unique visitors to our website and mobile apps on an average monthly basis. This diversity, both from a geographic and network perspective, as well as strong news operations, are not only important in the election year, but de-risk us more broadly.

Lucy: More than 50% of our news operations rank number one or number two in their markets for local news.

Lucy: Moreover, we broadcast more than 2400 hours of local news per week with more than 74 million unique visitors to our website and mobile apps on an average monthly basis.

Lucy: This diversity, both from a geographic and network perspective, as well as strong news operations are not only important in the election year, but de-risk us more broadly.

Robert Weisbord: Let me now turn the call over to Rob Whiteford to go into some additional details on our local broadcast assets as well as an update on our political expectations for the year. Thanks, Chris. On slide six, I want to remind the investment community of some of the unique and valued driven characteristics of broadcast television. Our sector has been impacted in recent years by fears of core cutting trends. First, it's important to remember that broadcast TV has the highest reach of any communications platform in the country today. With 80% of adults 18 years of age or older spending time with broadcast television on any given day.

Rob Weisbord: Let me now turn the call over to Rob Weisbord to go into some additional details on our local broadcast assets as well as an update on our political expectations for the year.

Rob Weisbord: Thanks, Chris. On slide six, I want to remind the investment community of some of the unique and value-driven characteristics of broadcast television. Our sector has been impacted in recent years by fears of core cutting trends. First, it's important to remember that broadcast TV has the highest reach of any communications platform in the country today, with 80% of adults 18 years of age or older spending time with broadcast television on any given day. How much time?

Rob Weisbord: Thanks, Chris. On slide six, I want to remind the investment community of some of the unique and value-driven characteristics of broadcast television.

Speaker Change: Our sector has been impacted in recent years by fears of core cutting trends.

Rob Weisbord: First, it's important to remember that broadcast TV has the highest reach of any communications platform in the country today, with 80% of adults 18 years of age or older spending time with broadcast television on any given day.

Robert Weisbord: How much time? Close to four hours per day for the average American adult. No other mass market communications medium comes close to matching broadcast's reach and viewership. Why is that?

Rob Weisbord: Close to four hours per day for the average American adult. No other mass market communications medium comes close to matching broadcast reach and viewership. Why is that? Let's take a look at a couple of differentiated programming apps. One of the most important assets broadcast TV has as an industry are live sports programming assets, which drive the highest viewing audiences of the year. As we noted last quarter, 97 of the top 100 most watched telecasts in 2023 were on broadcast TV, with the other three being college football playoff games.

Rob Weisbord: How much time? Close to four hours per day for the average American adult. No other mass market communications medium comes close to matching broadcast reach and viewership. Why is that? Let's take a look at a couple of differentiated programming assets.

Robert Weisbord: Let's take a look at a couple of differentiated programming assets. One of the most important assets broadcast TV has as an industry are live sports programming assets, which are at the highest viewing audiences of the year. As we noted last quarter, 97 in the top 100 most watched telecasts in 2023 were on broadcast TV, with the other three being college football playoff games. 96 of the top 100 must-watch telecasts were sports programming content, with the National Football League contributing 93 of the top 100. In addition, while much has been made about additional sports content heading to stream platforms, we also see a large amount of sports content coming back to broadcast television.

Rob Weisbord: One of the most important assets broadcast TV has as an industry are live sports programming assets.

Rob Weisbord: which are the highest viewing audiences of the year. As we noted last quarter, 97 of the top 100 most watched telecasts in 2023 were on broadcast TV, with the other three being college football playoff games.

Rob Weisbord: 96 of the top 100 must-watch telecasts were sports programming, with the National Football League contributing 93 of the top 100. In addition, while much has been made about additional sports content heading to streaming platforms, we also see a large amount of sports content coming back to broadcast television. Notably, the College Football Championship game is moving from ESPN to ABC, beginning with the 2026-27 season. Also, the NBA now has two broadcast network television partners for its upcoming Wrights deal, which begins in October of 2025.

Rob Weisbord: 96 of the top 100 must watch telecasts for sports programming content, with the National Football League contributing 93 of the top 100.

Rob Weisbord: In addition, we have several professional franchises beginning to ship more and more of their on-air games to local broadcast stations and away from cable and regional networks. We continue to expect to see strong sports ratings from the biggest events of the year, as evidenced by the Paris Summer Olympics ratings on NBC, which are up almost 80% over the 2021 game. As you can see on slide seven, every one of these sports leagues has broadcast networks at the heart of their licensing rights, with most of those rights agreements in place for an extended period of time, with the earliest renewal not coming until after the quadrennial FIFA World Cup in 2026. More importantly, the National Football League's current rights agreements last for another 10 years.

Rob Weisbord: In addition,

Speaker Change: While much has been made about additional sports content heading to streaming platforms, we also see a large amount of sports content coming back to broadcast television.

Robert Weisbord: Not only the college football championship game is moving from ESPN to ABC beginning with 2026-27 season. Also, the NBA now has two broadcast network television partners for its upcoming right deal, which begins in October of 2025. In addition, we have several professional franchises begin to ship more and more of their on-air games to local broadcast stations and away from cable and regional net. In addition, we have several professional franchises begin to ship more and more of their on-air games and away from cable and regional net. We continue to expect to see strong sports ratings from the biggest fans of the year, as evidenced by the Paris Summer land-based ratings on NBC, which are almost 80% over the 2021 games.

Rob Weisbord: Notably, the college football championship game is moving from ESPN to ABC beginning with 2026-27 season.

Rob Weisbord: Also, the NBA now has two broadcast network television partners for its upcoming rights deal, which begins in October of 2025.

Rob Weisbord: In addition, we have several professional franchises begin to ship more and more of their on-air games to local broadcast stations and away from cable and regional networks.

Rob Weisbord: We continue to expect to see strong sports ratings for the biggest events of the year as evidenced by the Paris Summer Olympics ratings on NBC, which are up almost 80% over the 2021 games.

Robert Weisbord: As you can see in Flight 7, every one of these sports leagues has the broadcast networks at the heart of their licensing rights, with most of those rights agreements in place for the extended period of time, with the earliest renewal not coming until after the Cardenial Feed for World Cup in 2026. More importantly, the National Football League's current rights agreements last for another 10 years, with limited exposure to near-term league renewals across the sports lands. We continue to expect sports programming to be an important driver of broadcast value proposition to our viewers for many years to come.

Rob Weisbord: As you can see on slide 7, every one of these sports leagues has the broadcast networks at the heart of their licensing rights. With most of those rights agreements in place for an extended period of time,

Rob Weisbord: with the earliest renewal not coming until after the quadrennial FIFA World Cup in 2026.

Rob Weisbord: More importantly, the National Football League's current rights agreements last for another ten years.

Rob Weisbord: With limited exposure to near-term league renewals across the sports landscape, we continue to expect sports programming to be an important driver of broadcast value proposition to our viewers for many years to come. Turning to slide 8, I want to do a deeper dive into another key driver of our viewership trends, local news. In this divisive election year, public trust is crucial for any news organization. Reuters recently conducted a large study on U.S. news organizations and found local television news was the most trusted source of information, with 62% of adults trusting their local television news.

Rob Weisbord: With limited exposure to near-term league renewals across the sports landscape, we continue to expect sports programming to be an important driver of broadcast value proposition to our viewers for many years to come.

Robert Weisbord: Turning to Flight 8, I want to do a deeper dive into another key driver of our viewership trends, local news, and this device of election year, public trust is crucial for any news organization. Roy has recently conducted a March study on US news organizations, and found local television news was the most trusted source of information, with 62% of adults trusting their local television news. This is nearly doubled overall trust in the news in the US. In addition, on a weekly basis, adults interact the most with local television news, leading all of the news organizations, and with most of those views tuning in more than three days a week.

Rob Weisbord: This is nearly double the overall trust in the news in the U.S. In addition, on a weekly basis, adults interact with local television news the most, leading all other news organizations, and most of those viewers tune in more than three days a week. On slide nine, another recent viewership study highlighted that local news attracts a highly sought-after politically balanced audience, particularly when compared to cable news networks. We see this as crucial, especially in an election year when campaigns look to target more independent, moderate, and swing voters, particularly in the swing states where we have stations with local news. And you can see that in Sinclair markets, the local news audience meets advertisers' needs by delivering the most politically balanced audience compared to the major news networks.

Speaker Change: Turning to slide 8, I want to do a deeper dive into another key driver of our viewership trends, local news. In this divisive election year, public trust is crucial for any news organization.

Rob Weisbord: All of this, which leads to slide 10, where you can see the strong growth in political advertising over the last 10 years, regardless of the presidential and midterm election years. And we are confident that this year will continue that trend and be another record political year for us. In fact, as of August 1st, we had $146 million in political advertising booked for the second half of the year, which is almost double the amount we had booked on the same date in 2020.

Speaker Change: Roy has recently conducted a large study on U.S. news organizations and found local television news was the most trusted source of information, with 62 percent of adults trusting their local television news.

Rob Weisbord: This has nearly doubled the overall trust in the news in the U.S. In addition, on a weekly basis, adults interact the most with local television news, leading all other news organizations, and with most of those viewers tuning in more than three days a week.

Robert Weisbord: On Flight 9, another recent viewership study highlighted that local news attracts a highly sought-after politically balanced audience, particularly when prepared to cable news networks. We see this as crucial, especially in an election year when campaigns look to target more independent, moderate, and swing voters, particularly in the swing states where we have stations with local needs. And you can see that in the Claire Marcus, the local news audience meets advertisers' needs by delivering the most politically balanced audience compared to the major news networks.

Speaker Change: On slide nine, another recent viewership study highlighted that local news attracts a highly sought-after, politically balanced audience, particularly when compared to cable news networks.

Speaker Change: We see this as crucial, especially in an election year when campaigns look to target more independent, moderate, and swing voters, particularly in the swing states where we have stations with local needs.

Speaker Change: Markets. And you can see that in Sinclair Markets, the local news audience meets advertisers' needs by delivering the most politically balanced audience compared to the major news networks.

Lucy Rutishauser: All of which leads to Flight 10, where you can see the strong growth in political advertising over the last 10 years, regardless of presidential and midterm election years. And we are confident that this year will continue that trend and be another record politically year for us. In fact, as of August 1st, we had 146 million in political advertising booked for the second half of the year, which is almost double the amount we had booked on the same date in 2020. Third party studies have pointed to estimates as high as over 12 billion for total political ads spent this year, which would represent an increase of 29% over 2020 levels.

Speaker Change: All of it, which leads to slide 10, where you can see the strong growth in political advertising over the last 10 years, regardless of presidential and midterm election years.

Speaker Change: We are confident that this year will continue that trend and be another record political year for us. In fact, as of August 1st, we had $146 million in political advertising booked for the second half of the year, which is almost double the amount we had booked on the same date in 2020.

Rob Weisbord: Third-party studies have pointed to estimates as high as over $12 billion for total political ad spend this year, which would represent an increase of 29% over 2020 levels, with a significant portion of that amount going to broadcast TV. And when you consider that we are in hotly contested markets across the country, over half our news content centers are ranked either number one or number two in their market. The large number of down ballot issues this year, the late changes on the Democratic Party presidential ticket, and the assassination attempt on former President Trump, then you have what we expect to be the makings of another record political spending year.

Speaker Change: Third-party studies have pointed to estimates as high as over $12 billion for total political ad spend this year, which would represent an increase of 29% over 2020 levels, with a significant portion of that amount going to broadcast TV.

Lucy Rutishauser: Well, they said, a significant portion of the amount is going to broadcast TV. And when you consider that we are in highly contested markets across the country, over half our news content centers are ranked either number one or number two in their market. The war is number of down ballot issues this year. The late changes on the Democratic Party presidential ticket and the assassination attempt of former President Trump, then you have what we expect to be the makings of another record political spend year. Taking those drivers into consideration, we are providing our full year political revenue guidance of 385 to 410 million, a 10-17% increase over 2020's pre-Georgia runoff amount of 350 million.

Speaker Change: And when you consider that we are in hotly contested markets across the country, over half our news content centers are ranked either number one or number two in their market. The large number of down-ballot issues this year

Speaker Change: The late changes on the Democratic Party presidential ticket and the assassination attempt on former President Trump, then you have what we expect to be the makings of another record political spend year.

Rob Weisbord: Taking those drivers into consideration, we are providing our full-year political revenue guidance of $385 to $410 million, a 10 to 17% increase over the 2020 pre-Georgia runoff amount of $350 million. I will now turn the call over to Lucy to provide a more granular update on our financial results and balance sheet.

Speaker Change: Taking those drivers into consideration, we are providing our full year political revenue guidance of $385 to $410 million, a 10 to 17% increase over 2020's pre-Georgia runoff amount of $350 million.

Lucy Rutishauser: Let me now turn the call over to Lucy to provide a more granular update on our financial results and ballot. Thank you, Rob. As Chris King mentioned at the start of the call, based on our recent SEC routine comment letter process, several non-GAAP items have changed. Adjusted EBITDA has now calculated deducting program amortization rather than program payments, which during the second quarter increased our local media and consolidated adjusted EBITDA by approximately two million for both actual and guidance. In addition, we will no longer be discussing adjusted free cash flow, but it provided the same component line items that we have reported historically.

Lucy: let me now turn the call over to lucy to provide a more grannular update on our financial results and balance sheet

Lucy Rutishauser: Thank you, Rob. As Chris King mentioned at the start of the call, based on our recent SEC routine comment letter process, several non-GAAP items have changed. Adjusted EBITDA is now calculated, deducting program amortization rather than program payments, which during the second quarter increased our local media and consolidated adjusted EBITDA by approximately $2 million for both actuals and guidance. In addition, we will no longer be discussing adjusted free cash flow, but it provides the same component line items that we have reported historically. Turning to slide 11.

Lucy: Thank you, Rob. As Chris King mentioned at the start of the call, based on our recent SEC routine comment letter process,

Lucy: Several non-GAAP items have changed.

Lucy: Adjusted EBITDA is now calculated, deducting program amortization rather than program payments, which during the second quarter increased our local media and consolidated Adjusted EBITDA by approximately $2 million for both actuals and guidance.

Speaker Change: In addition, we will no longer be discussing adjusted free cash flow, but have provided the same component line items that we have reported historically.

Lucy Rutishauser: Turning to slide 11, as Chris touched on earlier, we are pleased with our strong performance during the second quarter, with revenues in line and adjusted EBITDA above guidance on a consolidated basis. Total advertising revenues were up 11% year-over-year, driven by 40 million in political revenues, which easily exceeded our expectations. Distribution revenues were up 4% year-over-year, driven by renewal rate step-ups and new carriage agreements on Tennis Channel over the past year, partially offset by distributor subscriber term. Adjusted EBITDA exceeded the high end of our guidance, driven by media revenues and our continued laser focus on driving down costs and increasing efficiencies throughout the business and cadets, with favorable to guidance, primarily on a large facility buildout coming in below estimates.

Lucy Rutishauser: As Chris touched on earlier, we are pleased with our strong performance during the second quarter, with revenues in line and adjusted EBITDA above guidance on a consolidated basis. Total advertising revenues were up 11% year-over-year, driven by $40 million in political revenues, which easily exceeded our expectations. Distribution revenues were up 4% year-over-year, driven by renewal rate step-ups and new carriage agreements on the Tennis Channel over the past year, partially offset by distributor

Speaker Change: Turning to slide 11, as Chris touched on earlier, we are pleased with our strong performance during the second quarter, with revenues in line and adjusted EBITDA above guidance on a consolidated basis.

Speaker Change: Total advertising revenues were up 11% year-over-year, driven by $40 million in political revenues, which easily exceeded our expectations.

Speaker Change: Distribution revenues were up 4% year-over-year driven by renewal rate step-ups and new carriage agreements on Tennis Channel over the past year partially offset by distributor subscriber churn.

Lucy Rutishauser: Adjusted EBITDA exceeded the high end of our guidance driven by media revenues and our continued laser focus on driving down costs and increasing efficiencies throughout the business, and CAVX was favorable to guidance, primarily on a large facility buildout coming in below estimate. As noted earlier, we also received $109 million in venture distribution.

Speaker Change: Adjusted EBITDA exceeded the high end of our guidance driven by media revenues and our continued laser focus on driving down costs and increasing efficiencies throughout the business.

Speaker Change: and cabex was favorable to guidance primarily on a large facility build out coming in below estimates

Lucy Rutishauser: As noted earlier, we also received 109 million in ventures distributions. Turning to slide 12, consolidated media revenues of 819 million were up 7% in the quarter on the higher political revenue, as well as distribution revenues on recent renewals and added carriage, which exceeded subscriber term impacts. As compared to guidance, the strong political revenues offset modest weakness in poor advertising, while distribution revenues were in line with our expectations. On slide 13, adjusted EBITDA was 158 million, which exceeded the high end of our guidance range. Consolidated media revenues were in line to guidance, and media expenses came in approximately 15 million lower than our expectations on a combination of both timing and permanent savings, with approximately 4 million of the expense reduction attributable to timing and 11 million impermanent savings across a variety of departments and expense lines.

Speaker Change: As noted earlier, we also received 109 million in Ventures distributions.

Lucy Rutishauser: Turning to slide 12, consolidated media revenues of $819 million were up 7% in the quarter on higher political revenue as well as distribution revenues on recent renewals and added carriage, which exceeded subscriber churn impact. As compared to guidance, the strong political revenues offset modest weakness in core advertising, while distribution revenues were in line with our expectations. On slide 13, Adjusted EBITDA was $158 million, which exceeded the high end of our guidance range.

Speaker Change: Turning to slide 12.

Speaker Change: Consolidated Media Revenues of $819 million.

Speaker Change: We're up 7% in the quarter on the higher political revenue, as well as distribution revenues on recent renewals and added carriage, which exceeded subscriber churn impacts.

Speaker Change: As compared to guidance, the strong political revenues offset modest weakness in core advertising while distribution revenues were in line with our expectations.

Speaker Change: On slide 13, Adjusted EBITDA was $158 million, which exceeded the high end of our guidance range.

Lucy Rutishauser: Consolidated media revenues were in line with guidance, and media expenses came in approximately $15 million lower than our expectations on a combination of both timing and permanent savings, with approximately $4 million of the expense reduction attributable to timing and $11 million in permanent savings across a variety of departments and expense lines. As compared to last year, pro forma adjusted EBITDA increased by 39%, driven by stronger political and distribution revenues and modestly lower corporate overhead, which was offset in part by higher network fees and sales costs on the higher revenue.

Speaker Change: consolidated media revenues were in line to guidance and media expenses team in approximately fifteen million lower than our expectations on a combination of theird timing and permanent savings

Speaker Change: With approximately $4 million of the expense reduction attributable to timing and $11 million in permanent savings across a variety of departments and expense lines.

Lucy Rutishauser: As compared to last year, pro forma adjusted EBITDA increased by 39% driven by the stronger political and distribution revenues and modestly lower corporate overhead, which was offset in part by higher network fees and sales cost on the higher revenue.

Speaker Change: As compared to last year, pro forma adjusted EBITDA increased by 39 percent.

Speaker Change: driven by the stronger political and distribution revenues and modestly lower corporate overhead, which was offset in part by higher network fees and sales costs on the higher revenue.

Lucy Rutishauser: Turning to slide 14 for the local media segment, we delivered solid second quarter results that met our guidance expectations, with adjusted EBITDA coming in close to the high end of our guidance range. Within local media, distribution revenue was at the midpoint of guidance, and total advertising revenue in line on stronger than expected political revenues. Although poor advertising came in under guidance, political revenue of 40 million easily exceeded the high end of our expectations for the quarter. So to summarize, our local media statement had a solid quarter, achieving both total media revenue and adjusted EBITDA guidance.

Lucy Rutishauser: Turning to slide 14, for the local media segment, we delivered solid second-quarter results that met our guidance expectations with adjusted EBITDA coming in close to the high end of our guidance range. Within local media, distribution revenue was at the midpoint of guidance, and total advertising revenue was in line on stronger than expected political revenue. Although poor advertising came in under guidance, political revenue of $40 million easily exceeded the high end of our expectations for the quarter.

Speaker Change: Turning to slide 14, for the local media segment, we delivered solid second-quarter results that met our guidance expectations with adjusted EBITDA coming in close to the high end of our guidance range.

Speaker Change: Within local media, distribution revenue was at the midpoint of guidance and total advertising revenue in line on stronger than expected political revenues.

Speaker Change: Although poor advertising came in under guidance, political revenue of $40 million easily exceeded the high end of our expectations for the quarter.

Lucy Rutishauser: So to summarize, our local media segment had a solid quarter, achieving both total media revenue and adjusted EBITDA guidance. Tennis Channel also had a strong quarter, with media revenues up 12% year over year on distribution revenues which grew 11% on renewals and added distribution carriage over the past year. Advertising revenues were flat over the prior year and were modestly softer than expected.

Speaker Change: So to summarize, our local media segment had a solid quarter, achieving both total media revenue and adjusted EBITDA guidance.

Lucy Rutishauser: Tennis Channel also had a strong quarter, with media revenues up 12% year over year on distribution revenues, which grew 11% on renewables and added distribution carriage over the past year. Advertising revenues were flat over the prior year and were modestly softer than expected. Tennis Channel's adjusted EBITDA was slightly above our guidance, with the expenses coming in favorable, in part due to timing of promotional expenses that are expected to occur in the second half of the year. It is important to note that Tennis Channel's 7 million of adjusted EBITDA includes approximately 6 million of operating losses associated with future growth initiatives.

Speaker Change: Tennis Channel also had a strong quarter with media revenues up 12% year-over-year, on distribution revenues which grew 11% on renewals and added distribution carriage over the past year.

Speaker Change: advertising revenues were flat over the prior year and we're modestly sofaster than expected

Lucy Rutishauser: Tennis Channel's adjusted EBITDA was slightly above our guidance, with expenses coming in favorable, in part due to the timing of promotional expenses that are expected to occur in the second half of the year. It is important to note that Tennis Channel's $7 million of adjusted EBITDA includes approximately $6 million of operating losses associated with future growth initiatives. Turning to our balance sheet metrics, on slide 15, you can see our debt maturity stack profile, with our next meaningful maturity two years in the future, in September 2026.

Speaker Change: Tennis Channel's adjusted EBITDA was slightly above our guidance with expenses coming in favorable in part due to timing of promotional expenses that are expected to occur in the second half of the year.

Speaker Change: It is important to note that Tennis Channel's $7 million of adjusted EBITDA includes approximately $6 million of operating losses associated with future growth initiatives.

Lucy Rutishauser: Turning to our balance sheet metrics on slide 15, you can see our debt maturity stack profile with our next meaningful maturity two years in the future in September 2026. Sinclair Television Group's first-line net leverage was 4.5 times and total net leverage 5.6 times at the end of the quarter on a trailing 8-quarter basis. Interest coverage was 2.8 times as of June 30th. Our consolidated cash position was 378 million a quarter end, with 52 million at SBG and 326 million at Ventures, including our undergone revolving commitments. Total liquidity was 605 million. There were 66 million total shares outstanding at quarter end.

Speaker Change: Turning to our balance sheet metrics on slide 15, you can see our debt maturity stack profile with our next meaningful maturity two years in the future in September 2026.

Lucy Rutishauser: Sinclair Television Group's first lien net leverage was four and a half times and total net leverage 5.6 times at the end of the quarter on a trailing eight quarter basis. Interest coverage was 2.8 times as of June 30.

Speaker Change: Television Group's first lien net leverage was 4.5 times and total net leverage 5.6 times at the end of the quarter on a trailing 8 quarter basis.

Speaker Change: Interest coverage was 2.8 times as of June 30th.

Lucy Rutishauser: Our consolidated cash position was $378 million at quarter end, with $52 million at SBG and $326 million at venture. Including our undrawn revolving commitments, total liquidity was $605 million. There were 66 million total shares outstanding at quarter end.

Speaker Change: Our consolidated cash position is $378 million at quarter end with $52 million at SBG and $326 million at Ventures.

Speaker Change: including our undrawn revolving commitments total liquidity was 605 million

Speaker Change: There were 66 million total shares outstanding at quarter end.

Lucy Rutishauser: Slide 16 introduces our third quarter guidance. We are guiding for consolidated media revenues to be in the range of 898 to 929 million, of 17 to 21 percent versus the year ago quarter, which is largely driven by political advertising growth. However, we also expect poor advertising to grow 3 to 7 percent, and distribution revenue to be up 5 percent year over year. It just at EBITOS expected to be 229 to 254 million of 58 to 75 percent over the year-at-go levels.

Lucy Rutishauser: Slide 16 introduces our third quarter guide. We are guiding for consolidated media revenues to be in the range of $898 to $929 million, up 17% to 21% versus the year-ago quarter, which is largely driven by political advertising growth. However, we also expect core advertising to grow 3 to 7% and distribution revenue to be up 5% year over year. Adjusted EBITDA is expected to be $229 to $254 million, up 58 to 75% over the year at year level.

Speaker Change: Slide 16 introduces our third quarter guidance.

Speaker Change: We are guiding for consolidated media revenues to be in the range of $898 to $929 million, up 17 to 21 percent versus the year-ago quarter, which is largely driven by political advertising growth.

Speaker Change: However, we also expect core advertising to grow 3 to 7% and distribution revenue to be up 5% year over year.

Speaker Change: Adjusted EBITDAs expected to be $229 million to $254 million, up 58% to 75% over the year-ago levels.

Lucy Rutishauser: Our full year, 2024 media expense guidance on slide 17 reflects a modest 5 percent increase over 2023, which includes the higher sales cost associated with the revenue growth and the cost for the various initiatives taking place, such as our move to the cloud and tennis channels direct a consumer launch and international expansion, to name just a few. As compared to our prior guidance, media expenses are now 7 million lower at the midpoint. In addition, non-media expense and net interest expense are at each expected to be 4 million lower than our prior guidance level. And we expect capital expenditures to now be within a range of 93 to 98 million, a reduction of 12 million from our prior guidance.

Lucy Rutishauser: Our full year 2024 media expense guidance on slide 17 reflects a modest 5% increase over 2023, which includes the higher sales cost associated with revenue growth and the cost for the various initiatives taking place, such as our move to the cloud and tennis channels direct-to-consumer launch and international expansion, to name just a few, as compared to our prior guidance. However, media expenses are now $7 million lower at the midpoint.

Speaker Change: Our full year 2024 media expense guidance on slide 17 reflects a modest 5% increase over 2023, which includes the higher sales costs associated with the revenue growth,

Speaker Change: And the cost for the various initiatives taking place, such as our move to the cloud and tennis channels direct to consumer launch and international expansion, to name just a few.

Speaker Change: As compared to our prior guidance.

Speaker Change: Immediate Expenses, ...

Speaker Change: are now $7 million lower at the midpoint.

Lucy Rutishauser: In addition, non-media expense and net interest expense are each expected to be $4 million lower than our prior guidance level, and we expect capital expenditures to now be within a range of $93 to $98 million, a reduction of $12 million from our prior guidance. Approximately $2 million of that decline is due to the timing of projects expected to hit in 2025, and $10 million is from permanent savings, primarily a large building project that came in underplanned, as well as lower routine capex.

Speaker Change: In addition, non-media expense and net interest expense are each expected to be $4 million lower than our prior guidance level.

Speaker Change: And we expect capital expenditures to now be within a range of $93 to $98 million, a reduction of $12 million from our prior guidance.

Lucy Rutishauser: Approximately 2 million of that decline is timing of projects expected to hit in 2025, and 10 million is from permanent savings, primarily a large building project that came in under planned, as well as lower routine catbacks. In addition, our four-year net cash tax payment guidance has been lowered by approximately 162 million, which is timing and expected to be paid in the second quarter of 2025 due to the delay in the Diamond Sports bankruptcy process. And finally, the 106 million increase in cash distributions from ventures equity investments, which includes the 105 million received during the second quarter.

Speaker Change: Approximately $2 million of that decline is timing of projects expected to hit in 2025 and $10 million is from permanent savings, primarily a large building project that came in under plan as well as lower routine CapEx.

Lucy Rutishauser: In addition, our full-year net cash tax payment guidance has been lowered by approximately $162 million, which is timing and expected to be paid in the second quarter of 2025 due to the delay in the Diamond Sports bankruptcy process.

Speaker Change: In addition...

Speaker Change: Our full-year net cash tax payment guidance has been lowered by approximately $162 million, which is timing and expected to be paid in the second quarter of 2025.

Chris Ripley: And finally, note the $106 million increase in cash distributions from Ventures Equity Investments, which includes the $105 million received during the second quarter. In terms of political revenues, we are increasing our full-year expectations, given the strong results seen in the first half of the year, as well as the dynamics shaping up in the presidential race. Our full-year political revenue expectation is for $385 to $410 million, which is an increase from our previous guidance of at least $350 million.

Speaker Change: Due to the delay in the Diamond Sports bankruptcy process.

Speaker Change: And finally, note the $106 million increase in cash distributions from Ventures Equity Investments, which includes the $105 million received during the second quarter.

Lucy Rutishauser: In terms of political revenues, we are increasing our four-year expectations given the strong results seen in the first half of the year, as well as the dynamic shaping up in the presidential race. Our four-year political revenue expectation is for 385 to 410 million, which is an increase from our previous guidance of at least 350 million. As you can see, we are bullish on the political spending environment in general, as well as our geographic positioning in swing states and politically attracted news audiences.

Speaker Change: In terms of political revenues, we are increasing our full-year expectations given the strong results seen in the first half of the year, as well as the dynamics shaping up in the presidential race.

Speaker Change: Our full year political revenue expectation is for $385 to $410 million, which is an increase from our previous guidance of at least $350 million.

Chris Ripley: As you can see, we are bullish on the political spending environment in general, as well as our geographic positioning in swing states and politically attractive news audiences. With that, I'd like to turn the call back over to Chris for some closing comments.

Speaker Change: As you can see, we are bullish on the political spending environment in general, as well as our geographic positioning in swing states and politically attractive news audiences.

Christopher Ripley: With that, I'd like to turn the call back over to Chris for some closing comments. Thank you, Lucy. Turning to our key takeaways on slide 18, Sinclair delivered solid second quarter results with adjusted EBITDA exceeding the high end of our quarterly guidance range. Total advertising revenue was up 11% year-to-year. Distribution revenues were up 4% year-to-year, and core advertising trends remained solid. With approximately 60% of our big four subscribers still to be renewed, our two-year KEGUR for net retrans remains forecasted at mid-single digit percentage growth. Political advertising revenue was on track for our largest year ever, which we estimate would be 10 to 17% growth over the 2020 presidential election year, excluding majority runoff.

Chris: With that, I'd like to turn the call back over to Chris for some closing comments.

Chris Ripley: Turning to our key takeaways on slide 18, we delivered solid second-quarter results with adjusted EBITDA exceeding the high end of our quarterly guidance range. Total advertising revenue was up 11% year-over-year. Distribution revenues were up 4% year-over-year, and core advertising trends remained solid. With approximately 60% of our big four subscribers still to be renewed, our two-year CAGR for net retrans remains forecasted at mid-single-digit percentage growth. Political advertising revenue is on track for its largest year ever, which we estimate would be 10 to 17% growth over the 2020 presidential election year, excluding the Georgia runoff.

Chris: Thank you, Lucy. Turning to our key takeaways on slide 18.

Chris: Sinclair delivered solid second quarter results with adjusted EBITDA exceeding the high end of our quarterly guidance range.

Speaker Change: Total advertising revenue was up 11% year-over-year, distribution revenues were up 4% year-over-year, and core advertising trends remained solid.

Speaker Change: With approximately 60% of our Big 4 subscribers still to be renewed, our 2-year kegger for NetRetrans remains...

Speaker Change: Forecasted at mid-single-digit percentage growth.

Speaker Change: Political advertising revenue is on track for our largest year ever, which we estimate would be 10 to 17% growth over the 2020 presidential election year, excluding the Georgia runoff.

Christopher Ripley: In addition, we also received 105 million in cash proceeds related to the exit of a significant investment within our venture investment portfolio during the quarter. As we head into the second half of the year, we have momentum on our side and multiple drivers for cash for generation.

Chris Ripley: In addition, we also received $105 million in cash proceeds related to the exit of a significant investment within our venture investment portfolio during the quarter. As we head into the second half of the year, we have momentum on our side and multiple drivers for cash flow generation. Lucy, Rob, and I will now open up the call to questions. Thank you for joining us today.

Chris: In addition, we also received $105 million in cash proceeds related to the exit of a significant investment within our Venture Investment Portfolio during the quarter.

Lucy Robani: As we head into the second half of the year, we have momentum on our side and multiple drivers for cash flow generation. Lucy, Rob, and I will now open up the call to questions. Thank you for joining us today.

Operator: Lucy, Rob, and I will now open up the call to questions. Thank you for joining us today. Thank you very much. We will now be opening the floor. for questions. If you have any questions, please press star one on your phone keypad now. A confirmation tone will indicate that your line is in the queue. You may press star two if you would like to remove your question from the queue. For anyone using speaker equipment, it might be necessary to pick up your handset before you press the keys. Please wait a moment whilst we pull for questions.

Operator: First Group, Second Quarter, 2024, Earning Conference Call. At this time, all participants are in a listen-only mode, and we will open for questions following the presentation. If anyone should require operator assistance during the conference, please press star zero on your phone, keypad. Please note, this conference is being recorded.

Operator: Thank you very much. We will now be opening the floor for questions. If you have any questions, please press star 1 on your phone keypad now. A confirmation tone will indicate that your line is in the queue. You may press star 2 if you would like to remove your question from the queue. For anyone using speaker equipment, it might be necessary to pick up your handset before you press the keys.

Lucy Robani: Thank you very much. We will now be opening the floor for questions.

Operator: Please wait a moment while we poll for questions. Thank you. Your first question is coming from Dan Kernoff of The Benchmark Company. Dan, your line is live.

Speaker Change: If you have any questions, please press star 1 on your phone keypad now. A confirmation tone will indicate that your line is in the queue. You may press star 2 if you would like to remove your question from the queue. For anyone using speaker equipment, it might be necessary to pick up your handset before you press the keys.

Christopher King: I will now turn the conference over to your host, Chris King, Vice President of Investor Relations. Chris, the floor issues. Thank you.

Chris: Please wait a moment whilst we poll for questions.

Christopher King: Good afternoon, everyone, and thank you for joining Sinclair's second quarter, 2024 Earning 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 Local Media. Before we begin, I want to remind everyone that slides where today's Earnings Call are available on our website, SBTI.net, on the events and presentation page of the Investor Relations portion of the site.

Operator: Thank you.

Daniel Kurnos: Your first question is coming from Dan Kurnos of the Benchmark Company. Dan, your line is live. Great. Thanks.

Speaker Change: Thank you. Your first question is coming from Dan Kernoff of The Benchmark Company. Dan, your line is live.

Dan Kernoff: Great, thanks. Good afternoon. Maybe I just start with Chris, just on ventures. Appreciate the update on the distribution, would love some more color on kind of the progress you're making towards some of the initiatives you talked about, whether, you know, consolidating investments or kind of rebuilding the ventures in the way that you see it going forward.

Christopher Ripley: Good afternoon. Maybe to start with Chris, just on ventures. Appreciate the update on the distribution. Just love some more color on kind of the progress you're making towards something initiatives you talked about, whether consolidating investments or kind of rebuilding the ventures in the way that you see it going forward. Thanks. Thanks, Dan. So, as you saw, we had a very significant exit in Q2 that generated 105 million. So we're very pleased with that. We've got other monetization opportunities in the queue. I think we've done an excellent job so far of picking our spots. And by the way, exiting with rate returns, it was around a 40% IRR that we had in Q2.

Dan Kernoff: Great, thanks, good afternoon. Maybe just start with Chris, just on Ventures, appreciate the update on the distribution, just love some more color on kind of the progress you're making.

Speaker Change: Towards some of the initiatives you talked about, whether, you know, consolidating investments or kind of rebuilding the ventures in the way that you see it going forward. Thanks.

Christopher King: A webcast replay will remain available on our website until our next quarterly earnings release. 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 with the SEC and included in our second quarter earnings release.

Chris Ripley: Thanks, Dan. So, as you saw, we had a very significant exit in Q2 that generated $105 million. So, we're very pleased with that. We've got other monetization opportunities in the queue. I think we've done an excellent job so far of picking our spots. And, by the way, exiting with great returns. That exit was around a 40% IRR that we had in Q2.

Speaker Change: oh

Speaker Change: Thanks Dan. So as you saw, we had a very significant exit in Q2 that generated $105 million. So we're very pleased with that. We've got other monetization opportunities in the queue. I think we've done an excellent job so far.

Speaker Change: Picking our spots and by the way exiting with great returns that that exit was a and it was around a 40% IRR that we had in Q2 and So we're very focused on monetization and turning more of that portfolio into cash

Christopher King: The company undertakes no obligation to update these forward-looking statements. Included on the call will be discussion of non-GAP financial measures, specifically adjusted EBITDA. These measures are not formulated in accordance with GAP, are not meant to replace GAP measurements and may differ from other company's uses or formulations. Further discussions and reconcilations of the company's non-GAP financial measures to comparable GAP financial measures can be found on our website. Finally, we note the presentation of certain information in our second quarter earnings release and slides may have changed from prior quarters due to the completion of a routine common process with the SEC that we believe other publicly-traded broadcasters were recently engaged in as well.

Chris Ripley: And so we're very focused on monetization and turning more of that portfolio into cash, of which we are now sitting on about 330 million in ventures. We are looking at opportunities for reinvestment into consolidated opportunities in areas that have fragmented marketplaces that have high growth opportunities. So we're being very disciplined in terms of, you know, our selection and our criteria. So we're not in a rush. You know, we're looking for the right areas, and in the meantime, you know, there's a big emphasis on modernization, as you can see.

Christopher Ripley: So we're very focused on monetization and turning more of that portfolio into cash, of which we know we're now sitting on about 330 million in ventures. We are looking at opportunities for reinvestment into consolidated opportunities and areas that fragmented marketplaces that have high growth opportunities. But we're being very disciplined in terms of our selection and our criteria. So if we're not in a rush, we're looking for the right areas, and in the meantime, there's a big emphasis on monetization, as you can see. Got it.

Speaker Change: of which we know we now sitting on about three hundredor thirty million adventures we are looking at opportunities for reinvestment into consolidated opportunities in areas the fragmented marketplaces where that that have

Speaker Change: high growth opportunities. So, but we're being very disciplined in terms of, you know, our selection and our criteria. So we're not in a rush. You know, we're looking for

Christopher King: For example, we have changed the definition of adjusted EBITDA to be based on programming amortization rather than programming payments, which had a positive $2 million impact to adjusted EBITDA during the second quarter and we have also eliminated adjusted pre-cash flow from our financial presentations.

Speaker Change: You know the right areas and in the meantime you know that there's a big emphasis on monetization as you can see.

Chris Ripley: Got it. And then just on distribution, just maybe a housekeeping question, the timing of the 60% that's left? Is that like, later in Q3? I mean, we kind of have an idea of what's up, but any kind of help around the timing of when that hits?

Christopher Ripley: And then just on distribution, just maybe a housekeeping. The timing of the 60% that's left. Is that like later in Q3? I mean, we kind of have an idea of what's up, but just any kind of help around the timing of when that hits? Yeah, so the remainder of our distribution deals will come up in the next several months. Okay, and then last, I guess I'll follow up with you on that.

Speaker Change: Got it. And then just on distribution, just maybe a housekeeping, the timing of the 60% that's left, is that like later in Q3? I mean, we kind of have an idea of what's up, but just any kind of help around the timing of when that hits?

Christopher King: If you have any questions regarding these changes, please feel free to contact me directly.

Chris Ripley: Yes, so most of the remainder of our distribution deals will come up in the next several months.

Christopher Ripley: Let me now from the call to Chris Ripley. Good afternoon everyone and thank you for joining us. I'll start on slide three by highlighting our second quarter financial results on a consolidated basis. We delivered strong second quarter results that met our revenue expectations across all major line items. Total distribution and advertising revenue were both in line with our guidance ranges, which contributed to an inline performance in total media revenues during the second quarter.

Speaker Change: Yeah, so look, most of the remainder of our distribution deals will come up in the next several months.

Chris Ripley: Okay, all right. And then last, I guess I'll follow up with you on that.

Christopher Ripley: But on poor, I just, the Q3 guide is super impressive in light of the political crowd out. We heard obviously some weakness from others in Q2, but in Q3 or, you know, to guide up against a crowd out. And I know you guys have been talking about this. I don't know if it's rate. I don't know exactly what's driving that, but just a love additional color categories, whatever what have you in terms of the strength in Q3 on core. Yeah, the first thing is what we've been talking about for several quarters are AI pricing algorithm system that we put in place that allows us to capture the demand ahead of time and to match the pricing to demand, which minimizes our crowd out and preemptions.

Speaker Change: Okay, all right. And then last, I guess I'll follow up with you on that. But on POUR, the Q3 guide is super impressive in light of political crowd out. We heard obviously some weakness from others in Q2, but

Christopher Ripley: While favorable expenses resulted in adjusted EBITDA exceeding our high end of our guidance range, Lucy will go into more details in a moment. On slide four, our Ventures portfolio received 109 million total distributions during the quarter, including 105 million of exits. Net of 26 million contributions we received 83 million of cash from our minority investment portfolio in the quarter. At quarter end, Venturers held 326 million cash, which reflects the 98 million ventures contributed to our diamond settlement payment in April.

Speaker Change: I don't know if it's rate, I don't know exactly what's driving that, but I love additional color categories, whatever, what have you, in terms of the strength in Q3 Encore.

Rob Weisbord: But at core, I just think the Q3 guide is super impressive in light of the political crowd out. We heard obviously some weakness from others in Q2, but in Q3, or, you know, to guide up against the crowd out. And I know you guys have been talking about this, but I don't know if it's true. I don't know exactly what's driving that, but I love additional color categories, whatever, what have you in terms of the strength in Q3 on core.

Speaker Change: yet the first thing is is what we've been talking about for several quarters are ai pricing algorithm system that we have put in place

Speaker Change: that allows us to capture the demand ahead of time

Speaker Change: minimizes our crowd out and preemptions. So that helps us drive our core business and

Christopher Ripley: So that helps us drive our core business. And again, we've seen automotive; we'll see some strength in automotive with Q3, Q4. First half of the year, the tier three auto has struggled due to the fact with high interest rates, and sticker prices increasing. But you don't always see the dealers on the tier three local level have to get further than 24 to make room for the 25. And we're looking to look at rebates. And so we looked for auto to remain positive. It's currently positive in the third quarter. And we expected to remain positive throughout the rest of the year.

Christopher Ripley: Turning to slide five, I wanted to take a minute to provide an overview of our local media broadcast assets and their value proposition, which tends to get overlooked in the broader media landscape. Sinclair is one of the largest and most diversified television broadcasters with national reach. As you can see, we have a well diversified portfolio of assets by network affiliate mix, geographic location, and by asset type, with 183 owned and operated stations covering over 38% of the U.S, television councils today, or 24% based on the UHF discount.

Rob Weisbord: Yeah, the first thing is what we've been talking about for several quarters, our AI pricing algorithm system that we put in place that allows us to capture the demand ahead of time and to match the pricing to demand, which minimizes our crowd out and preemptions. So that helps us drive our core business. And, again, we've seen the automotive, we'll see some strength in the automotive sector in Q3, Q4. In the first half of the year, tier three auto has struggled due to the fact that high interest rates and sticker prices are increasing. But you're going to see the dealers on the tier three local level have to get rid of the 24s to make room for the 25s.

Speaker Change: Again, we've seen automotive.

Speaker Change: We'll see some strength in automotive with Q3, Q4. First half of the year, the Tier 3 auto has struggled due to the fact with high interest rates and sticker prices increasing. But you're going to see...

Speaker Change: The dealers on the Tier 3 local level have to get rid of the 24s to make room for the 25s.

Speaker Change: and we're looking to look at rebates and so...

Rob Weisbord: And we're looking to look at rebates. And so we look for auto to remain positive; it's currently positive in the third quarter, and we expect it to remain positive throughout the rest of the year. We put a major emphasis on the home services category, and we've seen mid team increases in that category as well. And what really makes us feel optimistic is the fact that not one category was down dramatically in the second quarter; they were all pretty much de minimis with a drag outside of pharma. And we expect pharma to return as well in the back half of the year.

Speaker Change: We look for AUDA to remain positive. It's currently positive in the third quarter and we expect it to remain positive throughout the rest of the year.

Christopher Ripley: We are in 86 markets across the country with no single market representing more than 5% of our total advertising release. More than 50% of our news operations rank number one or number two in their markets for local news. Moreover, we broadcast more than 2,400 hours of local news per week with more than 74 million unique visitors to our website to mobile apps on an average monthly basis. This diversity, both from a geographic and network perspective, as well as strong news operations are not only important in the election year, but de-risk us more broadly.

Christopher Ripley: We put a major onus on home services category. And we've seen mid-tea increases in that category as well. And what really makes us feel optimistic is the fact that not one category was down dramatically in the second quarter. They were all with pretty much the minimus with a drag outside of former. And we expect formative return as well in the back half of the year. Now, I'll just add to that that, you know, this has been a multi-year effort around transforming our sellers into true marketing consultants and focusing on share wallet, not just share of, you know, spot sales. And we're really seeing the fruits of that labor over multiple years of upgrading the tools that they use, the products that they sell, and that's contributing, you know, to the overall revenue and the momentum that we're seeing.

Speaker Change: We've put a major onus on home services category, and we've seen mid-teen increases in that category as well.

Speaker Change: really makes us feel optimistic is the fact that not one category was down dramatically in second quarter. They were all pretty much de minimis.

Speaker Change: With the drag outside of Pharma, and we expect Pharma to return as well in the back half of the year.

Chris Ripley: I'll just add to that that this has been a multi-year effort around transforming our sellers into true marketing consultants and focusing on share of wallet, not just share of spot sales. And we're really seeing the fruits of that labor over multiple years of upgrading the tools that they use, the products that they sell. And that's contributing, you know, to the overall revenue momentum.

Speaker Change: I'll just add to that that, you know, this has been a multi-year effort around transforming our sellers into true marketing consultants and focusing on share wallet, not just a share of spot sales.

Robert Weisbord: Let me now turn the call over to Rob Whiteford to go into some additional details on our local broadcast assets as well as an update on our political expectations for the year. Thanks, Chris. On slide six, I want to remind the investment community of some of the unique and valued driven characteristics of broadcast television. Our sector has been impacted in recent years by fears of core cutting trends. First, it's important to remember that broadcast TV has the highest reach of any communications platform in the country today.

Speaker Change: We're really seeing the fruits of that labor over multiple years of upgrading the tools that they use, the products that they sell, and that's contributing to the overall revenue momentum that we're seeing.

Rob Weisbord: And just one last thing, as we get into the podcast slash audio business, we had a very strong upfront for our two national shows. They spoke a little bit about Irving Mayer, Mark Ingram, and Rob Stone hosting the shows as well as Jerry Ferrara, best known as Turtle and Entourage, and Matt Leinert, a former Heisman winner. And so we're really, really optimistic based on the upfront sales that we're heading in the right direction. So as we diversify more and more into a cross-platform media company, we're seeing a lot of success.

Christopher Ripley: And just one last thing is, as we get into the podcast slash audio business, we had a very strong upfront for our two national shows. They spoke a little bit about every mile of marketing room and Rothstone hosting the show, as well as Jerry Ferrara, this known as Turtle in the Anthorosh, and Matt Linder for my high swim winner. And so we're really, really optimistic based on the upfront sales that we're heading the right direction. So, as we diversify into it, more and more into a cross-platform media company, we're seeing a lot of success. That's super helpful, guys. Really appreciate the color.

Speaker Change: And just one last thing is as we get into the podcast slash audio business, we had a very strong upfront for our two national shows. They spoke a little bit about Irving Meyer, Mark Ingram and Rob Stone hosting the show as well as Jerry Ferrara.

Robert Weisbord: With 80% of adults 18 years of age or older spending time with broadcast television on any given day. How much time? Close to four hours per day for the average American adult. No other mass market communications medium comes close to matching broadcasts reach and viewership. Why is that?

Speaker Change: best known as Turtle and the Entourage.

Speaker Change: Matt Leinert, former Heisman winner, and so we're really, really optimistic based on the upfront sales that we're heading in the right direction, so as we diversify into it.

Robert Weisbord: Let's take a look at a couple of differentiated programming assets. One of the most important assets broadcast TV has as an industry are live sports programming assets, which are at the highest viewing audiences of the year. As we noted last quarter, 97 in the top 100 most watched telecasts in 2023 were on broadcast TV with the other three being college football playoff games. 96 of the top 100 must watch telecasts were sports programming content with the national football league contributing 93 of the top 100.

Speaker Change: More and more into a cross-platform media company, we're seeing a lot of success.

Dan Kernoff: That's super helpful, guys. I really appreciate the color. Thank you.

Operator: Thank you. Thanks, Sam.

Speaker Change: That's super helpful, guys. Really appreciate the call. Thank you.

Benjamin Soff: Thank you very much. Your next question is coming from Benjamin Soff of Deutsche Bank. Benjamin, your line is Life. Hey everyone, good afternoon. Thanks for the question.

Benjamin Soff: Thank you very much. Your next question is coming from Benjamin Soff of Deutsche Bank. Benjamin, your line is live.

Jan: Thanks, Jan.

Speaker Change: Thank you very much. Your next question is coming from Benjamin Soff of Deutsche Bank. Benjamin, your line is live.

Benjamin Soff: Hey, everyone. Good afternoon.

Lucy Rutishauser: I wanted to follow up on the core advertising performance, and in particular, did you see any impact this quarter from the auto hack, and did that maybe push anything into three Q. And then I just wanted to double-click on the better-than-expected operating expenses. Is there any color you can add on sort of the initiatives you're working on and the strength you're seeing in margins there. Thank you.

Benjamin Soff: Thanks for the question. I wanted to follow up on the core advertising performance. And, in particular, did you see any impact this quarter from the auto hack? And did that maybe push anything into 3Q?

Speaker Change: Hey, everyone. Good afternoon. Thanks for the question. I wanted to follow up on the core advertising performance and

Benjamin Soff: In particular, did you see any impact this quarter from the auto hack and

Rob Weisbord: And then I just wanted to double-click on the better than expected operating expenses. Is there any color you can add on sort of the initiatives you're working on and the strength you're seeing in margins there? Thank you.

Benjamin Soff: Did that maybe push anything into 3Q? And then I just wanted to double click on the better than expected operating expenses. Is there any color you can add on sort of the initiatives you're working on and the strength you're seeing in margins there? Thank you.

Robert Weisbord: In addition, while much has been made about additional sports content heading to stream platforms, we also see a large amount of sports content coming back to broadcast television. Not only the college football championship game is moving from ESPN to ABC beginning with 2026 27 season. Also the NBA now has two broadcast network television partners for its upcoming right deal which begins in October of 2025. In addition, we have several professional franchises begin to ship more and more of their on air games to local broadcast stations and away from cable and regional net.

Lucy Rutishauser: Yes, we start the auto. We were we were down low single digits. So not a major impact. We have a big effort at this on auto with the auto division inside. So we're able to do cross-platform solutions with our auto group, and we've made our sellers out in our local marketplaces, automotive experts as well. So it helps minimize some of the weaknesses from just plain traditional advertising. So we're comfortable in the direction we've built this business, and it helps mitigate some of the softness that you might be seeing. And I do think it's fair to say that the hack that happened did have an impact on Q2.

Rob Weisbord: Yes. In regards to auto, we were down low single digits, so not a major impact. We have a big emphasis on cars, with an auto division inside Sinclair. So we're able to do cross-platform solutions with our auto group, and we've made our sellers out in our local marketplaces into automotive experts as well. So it helps minimize some of the weakness from just plain traditional advertising. We're comfortable in the direction we've built this business, and it helps mitigate some of the softness that you might be seeing. And I do think it's fair to say that the hack that happened did have an impact on Q2. We're definitely seeing more strength in Q3.

Speaker Change: Yes, in regards to auto, we were down low single digits.

Speaker Change: So not a major impact. We have a big emphasis on auto with an auto division inside Sinclair, so we're able to do cross-platform solutions with

Jan: with our audit group, and we've made our sellers out in our local marketplaces.

Jan: Automotive Experts as well. So it helps minimize

Robert Weisbord: In addition, we have several professional franchises begin to ship more and more of their on air games and away from cable and regional net. We continue to expect to see strong sports ratings from the biggest fans of the year as evidenced by the Paris Summer Land-based ratings on NBC, which are almost 80% over the 2021 games. As you can see in Flight 7, every one of these sports leagues has the broadcast networks at the heart of their licensing rights, with most of those rights agreements in place for the extended period of time, with the earliest renewal, not coming until after the Cardenial Feed for World Cup in 2026.

Jan: Some of the weakness from just...

Speaker Change: playing traditional advertising so we're comfortable in the direction we ve built this business and the helps mitigates some of the soft this that you might pursu and i do think it's fair to say that they is the hack that happened did have an impact on q two

Lucy Rutishauser: And we're definitely seeing more Frank and Q3.

Lucy Rutishauser: Yeah, I'll go ahead and I'll talk about the expenses. So, you know, you're correct in that our expenses have come down as we've gone through the year. As I said in my scripted remarks, we have a focus on cost controls and also increasing efficiencies to make us work smarter and eliminate some waste out of, you know, our processes. And so you're seeing the effects of that.

Lucy Rutishauser: And I'll go ahead and I'll talk about the expenses. So you're correct in that our expenses have come down as we've gone through the year. As I said in my script of remarks, you know, we have a focus on cost controls and also increasing efficiencies to make us work smarter and eliminate some waste out of our processes. And so you're seeing the effects of that as far as some of the initiatives. And I know I mentioned some, you know, we have the cloud. We have tennis as a whole series around direct consumer, international and pickleball, and we have fast channels.

Jan: And we're definitely seeing more strength in Q3.

Robert Weisbord: More importantly, the National Football League's current rights agreements last for another 10 years, with limited exposure to near-term league renewals across the sports lands. We continue to expect sports programming to be an important driver of broadcast value proposition to our viewers for many years to come.

Lucy Rutishauser: As far as some of the initiatives, and I know I mentioned some, you know, we have the cloud, we have, tennis has a whole series around direct to consumer and international and pickleball, and we have fast channels. But what I would say is, if I just take the cloud project itself, and it's granted, we will be in an investment mode for the next couple of years as we continue to move all of our stations to that.

Robert Weisbord: Turning to Flight 8, I want to do a deeper dive into another key driver of our viewership trends, local news, and this device of election year, public trust is crucial for any news organization. Roy has recently conducted a March study on US news organizations, and found local television news was the most trusted source of information, with 62% of adults trusting their local television news. This is nearly doubled overall trust in the news in the US. In addition, on a weekly basis, adults interact the most with local television news, leading all of the news organizations, and with most of those views tuning in more than three days a week.

Lucy Rutishauser: But what I would say is if I just take the cloud project itself and grant it, we will be in an investment mode for the next couple of years as we continue to move all of our stations to that. But, for instance, here in 24, we have already seen some up-backed savings of about $34 million, as well as CapEx cost avoidance of about a little over $7 million. So, just to give you a sense of when we talk about these being growth initiatives or return-generating initiatives for the future, this is exactly what we're referring to.

Lucy Rutishauser: But for instance, here in 24, you know, we have already seen some OPEC savings of about, you know, three, $4 million, as well as CapEx cost avoidance of about a little over $7 million. So just to give you a sense of when we talk about these being, you know, growth initiatives or return-generating initiatives for the future, this is exactly what we're referring to.

Speaker Change: Some opex savings of about three $4 million as well as capex cost avoidance.

Speaker Change: About a little over $7 million. So just to give you a sense of you know when we talk about these being you know growth initiatives, where return generating initiatives for for the future. This is exactly what we're referring to.

Robert Weisbord: On Flight 9, another recent viewership study highlighted that local news attracts a highly sought after politically balanced audience, particularly when prepared to cable news networks. We see this as crucial, especially in an election year when campaigns look to target more independent, moderate, and swing voters, particularly in the swing states where we have stations with local needs. And you can see that in the Claire Marcus, the local news audience, meets advertisers needs by delivering the most politically balanced audience, compared to the major news networks.

Operator: Okay, great. That's super helpful, guys. Thank you. Thank you very much.

Benjamin Soff: Okay, great. That's super helpful, guys. Thank you.

Speaker Change: Okay, Great. That's super helpful guys. Thank you.

Avi Steiner: Thank you very much. Your next question is coming from Avi Steiner of JP Morgan. Avi, your line is live.

Speaker Change: Thank you very much. Your next question is coming from Avi Steiner of J P. Morgan Your line is live.

Avraham Steiner: Your next question is coming from Avy Steiner of JP Morgan. Avy, your line of life. Thank you very much for the questions. I've got a couple here.

Avi Steiner: Thank you very much for the questions. I've got a couple here. Just one, if we could talk about CORE, is that range you gave solely for the local TV group, or is there some on the other assets? And then, while we're talking about core, What do you guys think from the consumer, perhaps in your market? Small and medium-sized businesses, given all the noise economically out there? And then I've got a couple of follow-ups.

Avi Steiner: Thank you very much for the questions Ive got a couple here.

Lucy Rutishauser: Just one, if we could talk about core, is that range you gave solely for the local TV group, or is there some at the other assets? And then, while we're talking about core, what do you guys think from the consumer, perhaps in your markets, small, medium-sized businesses, given all the noise economically out there? And then I've got a couple of follow-ups. Thank you. Yeah, so for the core, that range is whether it's for total consolidated company or for the local media, we're still going to be in that, expect to be in that three to seven percent.

Robert Weisbord: All of which leads to Flight 10, where you can see the strong growth in political advertising over the last 10 years, regardless of presidential and midterm election years. And we are confident that this year will continue that trend and be another record politically year for us. In fact, as of August 1st, we had 146 million in political advertising booked for the second half of the year, which is almost double the amount we had booked on the same date in 2020.

Avi Steiner: If we could talk about core.

Avi Steiner: That range you gave.

Avi Steiner: Solely for the local TV group or is there some at the other assets and then while we're talking about core.

Avi Steiner: What are you guys seeing from the consumer perhaps in your markets small medium sized businesses given all the noise economically out there and then I've got a couple of follow ups. Thank you.

Lucy Rutishauser: Yeah, so for the core, that range is, you know, whether it's for the total consolidated company or for the local media, we're still going to be in that expect to be in that three to seven.

Speaker Change: Yeah, So it's fair for the core.

Speaker Change: That range is.

Robert Weisbord: Third party studies have pointed to estimates as high as over 12 billion for total political ads spent this year, which would represent an increase of 29% over 2020 levels. Well, they said, significant portion of the amount is going to broadcast TV. And when you consider that we are in highly contested markets across the country, over half our news content centers are ranked either number one or number two in their market.

Avi Steiner: Is.

Speaker Change: Is whether it's for total consolidated company, where for the local media, we are still going to be in that expect to be in that 3% to 7%.

Lucy Rutishauser: And I'll let Rob speak a little bit more about the consumer and what he's seeing in terms of categories and whatnot. But we're not seeing a major impact in terms of what we see from the advertising revenues. If you follow our performance so far this year, we're actually expecting our strongest core growth in Q3 when you compare that to Q1 or Q2. So undoubtedly, there's certainly concerns about the consumer slowdown. But so far, I think that's a lot of just hand-wringing. I don't think we've really seen it show up in terms of our performance, but I'll chime in on that.

Lucy Rutishauser: And I'll let Rob speak a little bit more about the consumer and what he's seen in terms of, you know, categories and whatnot. But We're not seeing, you know, a major impact in terms of what we see from advertising revenues. If you understand.

Avi Steiner: And I'll, let Rob speak a little bit more about the consumer and what he's seeing in terms of categories and whatnot, but.

Speaker Change: We're not seeing.

Rob Weisbord: A major impact.

Robert Weisbord: The war is number of down ballot issues this year. The late changes on the Democratic Party presidential ticket and the assassination attempt of former President Trump, then you have what we expect to be the makings of another record political spend year. Taking those drivers into consideration, we are providing our full year political revenue guidance of 385 to 410 million, a 10-17% increase over 2020's pre-Georgia runoff amount of 350 million.

Rob Weisbord: In terms of what we see from the advertising revenues if you follow.

Rob Weisbord: Our performance so far this year. You know, we're actually expecting our strongest core growth in Q3, when you compare that to Q1 or Q2. So, undoubtedly, there are certainly concerns about the, you know, consumer slowdown. And, but so far, I think that's a lot of just hand wringing.

Rob Weisbord: Our performance so far this year.

Rob Weisbord: We're actually expecting our strongest core growth in Q3, when you compare that to Q1 or Q2 so.

Rob Weisbord: Undoubtedly there are certainly concerns about the consumer slowdown any of it but so far I think that's a lot of just hand ringing.

Rob Weisbord: I don't think we've really seen it show up, you know, in terms of our performance, but I'll let Rob chime in on that. Yeah, I think that when you see, you know, one of our top categories in home services, having mid-team growth is where you have high interest rates that might slow down. But again, with automotive, they're going to have to unload those 24s. Obviously, we're not seeing as many homes sold, but we're capitalizing on the fact that people are improving their own properties and doing upgrades to the homes. And then, you know, on a continued advertising basis, we have from large solutions to smaller solutions to keep those advertisers continuing to advertise despite what the economy is.

Rob Weisbord: I don't think we've really seen it show up.

Rob Weisbord: In terms of our performance, but I'll, let Rob chime in on that Yeah, I think that when you see you know our one of our top categories in the home services, having mid teen growth is where we are.

Robert Weisbord: Yeah, I think that when you see one of our top categories in the home services, having been team growth is where you have high interest rates that might slow down. But again, without a motor, they're going to have to unload those 24s. Obviously, we're not seeing as many homes sold, but we're capitalizing on the fact that people are improving their own properties and doing upgrades to the homes. And then, on a continued advertising basis, we have from large solutions to smaller solutions to keep those advertisers continuing to advertise despite what the economy is. Appreciate that.

Lucy Rutishauser: Let me now turn the call over to Lucy to provide a more granular update on our financial results and ballot. Thank you Rob. As Chris King mentioned at the start of the call based on our recent SEC routine comment letter process, several non-gap items have changed. Adjusted EBITDA has now calculated deducting program amortization rather than program payments, which during the second quarter increased our local media and consolidated adjusted EBITDA by approximately two million for both actual and guidance.

Mike: We have high interest rates that Mike.

Rob Weisbord: Slowdown, but again with automotive they're going to have to unload those two for us.

Rob Weisbord: Obviously, we're not seeing as many homes sold but we're capitalizing on the fact that people are improving their own properties and doing upgrades to their homes and so.

Rob Weisbord: And then you know on a continue advertising basis, we have from large solutions to smaller solutions to keep those advertisers.

Lucy Rutishauser: In addition, we will no longer be discussing adjusted free cash flow but it provided the same component line items that we have reported historically. Turning to slide 11, as Chris touched on earlier, we are pleased with our strong performance during the second quarter with revenues in line and adjusted EBITDA above guidance on a consolidated basis. Total advertising revenues were up 11% year-over-year driven by 40 million in political revenues which easily exceeded our expectations.

Rob Weisbord: Continuing to advertise despite what the economy is.

Chris Ripley: Appreciate that. And then, just so I can turn sort of the balance sheet here. So you had this nice exit at Ventures. I think you had mentioned there are some other potential exits in the hopper. I don't know if you can size that roughly. And then how do you think about the enhanced liquidity overall and at that entity in the context of your debt maturities at the television entity? Thank you.

Rob Weisbord: I appreciate that and then.

Christopher Ripley: And then just if I can turn sort of the balance sheet here, so you have this nice exit adventures. I think you had mentioned there are some other potential exits in the hopper. I don't know if you can size that roughly. And then how do you think about, "We're not prepared to give specific guidance on exit state."

Rob Weisbord: If I can turn sort of the balance sheet here so.

Speaker Change: You had this nice exited ventures I think you had mentioned there are some other potential exits in the Hopper I don't know if you can size that roughly.

Speaker Change: And then how do you think about the enhanced liquidity overall and at that entity in the context of your debt maturities at the TV Anthony Thank you.

Chris Ripley: So we're not prepared to give specific guidance on exits. Obviously, the nature of such activity is somewhat lumpy and unpredictable, depending on, you know, whether transactions can happen or not. We do have more in the hopper, and we've got a plan for just about every asset in that portfolio, and when we think it will be the appropriate time to monetize it. So, you know, I think you're going to see sort of a somewhat steady flow because there are quite a few assets in there.

Speaker Change: So we're not prepared to give specific guidance on an exit stay it's obviously the nature of such activity is somewhat lumpy.

Lucy Rutishauser: Distribution revenues were up 4% year-over-year driven by renewal rate step ups and new carriage agreements on tennis channel over the past year, partially offset by distributor subscriber term. Adjusted EBITDA exceeded the high end of our guidance driven by media revenues and our continued laser focus on driving down costs and increasing efficiencies throughout the business and cadets with favorable to guidance, primarily on a large facility buildout coming in below estimates. As noted earlier, we also received 109 million in ventures distributions.

Christopher Ripley: It's obviously the nature of such activity is somewhat lumpy and unpredictable, depending on whether transactions can happen or not, we do have more in the upper and where we've got a plan, we've got a plan, we've got a plan, we've got a plan, we've got a plan, we've got a plan, we've got a plan, we've got a plan, we've got a plan, we've got a plan, we've got a plan, we've got a plan, we've got a plan, we've got a plan, we've got a plan, we've got a plan, we've got a plan, we've got a plan, we've got a plan, we've got a plan, we've got a plan, we've got a plan, we've got a plan, we've got a plan, we've got a plan, we've got a plan, we've got a plan, we've got a plan, we've got a plan, we've got a plan for just about every asset in that portfolio and when we think, we'll be the appropriate time to monetize it.

Speaker Change: And unpredictable depending on.

Speaker Change: Whether transactions can happen or not we do have more in the hopper and where we've got a plan you now for just about every asset in that.

Speaker Change: Portfolio and when we think will be the appropriate time to.

Speaker Change: To monetize it so.

Christopher Ripley: I think you're going to see sort of a somewhat steady flow because there's quite a few assets in there, so that's sort of balanced out, and they'll continue to monetize it. I mentioned before, monetization is of the minority portfolio that we really don't think we're getting much credit for it all. From Wall Street perspective, it is a top priority, and we're being very disciplined in terms of looking at new reinvestment opportunities. And I think what you were alluding to was sort of use of resources between the two credit stacks. And, as we've said many times before, we don't think that's needed; they're meant to be self-sufficient, and it certainly is possible, but it's not something that we foresee.

Speaker Change: I, just I think youre going to see sort of a somewhat steady flow because there's quite a few assets in there. So that was a sort of balance all of them will continue to monetize as I mentioned before.

Chris Ripley: So that sort of balanced out, and they'll continue to monetize. As I mentioned before, monetization of the minority portfolio, which we really don't think we're getting much credit for at all from a Wall Street perspective, is a top priority. And we're being very disciplined in terms of looking at new reinvestment opportunities.

Speaker Change: Monetization is of the minority portfolio that we really don't think we're getting much credit for it all from a wall Street perspective is a top priority.

Lucy Rutishauser: Turning to slide 12, consolidated media revenues of 819 million were up 7% in the quarter on the higher political revenue as well as distribution revenues on recent renewals and added carriage which exceeded subscriber term impacts. As compared to guidance, the strong political revenues offset modest weakness in poor advertising while distribution revenues were in line with our expectations. On slide 13, adjusted EBITDA was 158 million which exceeded the high end of our guidance range.

Speaker Change: And we're being very.

Chris Ripley: And sort of, I think what you were alluding to was the use of resources between the two credit stacks. And, you know, as we've said many times before, we don't think that's needed. They are, they're meant to be self-sufficient. It certainly is possible, but it's not something that we have.

Speaker Change: Discipline in terms of looking at new.

Speaker Change: Reinvestment opportunities and sort of I think what you were alluding to was sort of use of resources between the two.

Speaker Change: Credit stacks and you know as we've said many times before we don't think thats needed there they're meant to be self sufficient.

Speaker Change: It certainly is possible, but it's not something that we foresee.

Operator: Appreciate the time; it's always, thank you.

Avi Steiner: I appreciate the time as always. Thank you.

Speaker Change: I appreciate the time as always thank you.

David Hamburger: Thank you very much. Your next question is coming from David Hamburger of Morgan Stanley. David, your line is live.

Operator: Thank you very much.

Speaker Change: Thank you very much. Your next question is coming from David Hamburger of Morgan Stanley David Your line is life.

David Hamburger: Your next question is coming from David Hamburger of Morgan Stanley. David, your line of life. Hi, thanks. If I could just a couple as well. Maybe on the distribution revenue growth guidance, first, can you give us a turn of what you're seeing in terms of subscribers? And then in the guidance was curious, you know, the 60% that you have coming up for renewals, you know, a couple of large distributors have been, you know, somewhat aggressive in the past with some of your peers in renewals. You know, one of them is actually even dropped a couple of your peers during the negotiation process.

Lucy Rutishauser: Consolidated media revenues were in line to guidance and media expenses came in approximately 15 million lower than our expectations on a combination of both timing and permanent savings, with approximately 4 million of the expense reduction attributable to timing and 11 million impermanent savings across a variety of departments and expense lines. As compared to last year, pro forma adjusted EBITDA increased by 39% driven by the stronger political and distribution revenues and modestly lower corporate overhead which was offset in part by higher network fees and sales cost on the higher revenue.

David Hamburger: Hi, thanks, if I could just ask a couple as well. Maybe on the distribution revenue growth guidance. First, can you give us a churn rate of what you're seeing in the churn of subscribers? And then in the guidance, I was curious about the 60% that you have coming up for renewals. You know, a couple of large distributors that have been, you know, somewhat aggressive in the past with some of your peers in renewals, you know, one of them has actually dropped a couple of your peers during the negotiation process.

David Hamburger: Hi, Thanks, if I could a couple as well maybe on the AR on the distribution revenue growth guidance first can you give us a churn.

David Hamburger: What you're seeing in churn of subscribers and then in the guidance I was curious you know good.

Speaker Change: 60% that you have coming up for renewals.

Speaker Change: A couple.

Speaker Change: A couple of large distributors that have been.

Speaker Change: Somewhat aggressive in the past with some of your peers.

Speaker Change: Renewals you know one of them is actually even dropped a couple of your peers.

Speaker Change: During the negotiation process. So I'm just wondering if you could give us a little color how youre, so confident that youre going to get mid single digit growth over the next two years and then maybe even if we could step back a second.

Lucy Rutishauser: So I'm just wondering if you could give us a little color, how you're so confident that you're going to get mid-single-digit cake or growth over the next two years.

David Hamburger: So I'm just wondering if you could give us a little color on how you're so confident that you're going to get mid single-digit CAGR growth over the next two years. And then maybe even if we could step back a second. What's your expectation after the next couple of years for, you know, some of the distribution revenue trends, maybe just from kind of a high-level perspective?

Lucy Rutishauser: Turning to slide 14 for the local media segment, we delivered solid, second quarter results that met our guidance expectations with adjusted EBITDA coming in close to the high end of our guidance range. Within local media, distribution revenue was at the midpoint of guidance and total advertising revenue in line on stronger than expected political revenues. Although poor advertising came in under guidance, political revenue of 40 million easily exceeded the high end of our expectations for the quarter.

Lucy Rutishauser: And then maybe even if we could step back a second, you know, what's your expectation after the next couple of years for, you know, some of the distribution revenue trends, maybe just from like kind of high level perspective. Sure, so for your first question, turn is still in the mid single digits overall. I will say that in terms of, you know, the summer. Q3 impacting Q3 specifically, there's some seasonality in virtual NEPDs. Through the end of the second quarter and into Q3 before football starts. The verticals tend to be pretty slow in terms of net ads, and then they really pick up when football starts again, so that does have some impact there.

Speaker Change: What's your expectation after the next couple of years for some of the distribution revenue trends that maybe just from like kind of a high level perspective.

Chris Ripley: Sure, so for your first question, CHIRN is still in the mid-single digits overall. I will say that in terms of, you know, the summer quarter, impacting Q3 specifically, there's some seasonality in virtual MDPDs through the end of the second quarter and into Q3 before football starts. The virtuals tend to be pretty slow in terms of net ads, and then they really pick up when football starts again, so that does have some impact there.

Speaker Change: Sure. So for your first question churn is still in the mid single digits overall, I will say that.

Speaker Change: In terms of.

Speaker Change: This summer.

Speaker Change: Q3 <unk>.

Speaker Change: <unk> Q3, specifically there is some seasonality and virtual mvpds.

Lucy Rutishauser: So to summarize, our local media statement had a solid quarter achieving both total media revenue and adjusted EBITDA guidance. Tennis Channel also had a strong quarter with media revenues up 12% year over year on distribution revenues which grew 11% on renewables and added distribution carriage over the past year. Advertising revenues were flat over the prior year and were modestly softer than expected. Tennis Channel's adjusted EBITDA was slightly above our guidance with the expenses coming in favorable in part due to timing of promotional expenses that are expected to occur in the second half of the year.

Speaker Change: Through the end of the second quarter and into Q3 before football starts.

Speaker Change: The the virtual tend to be pretty slow in terms of net adds and then they really pickup when football starts again.

Speaker Change: So that does have some.

Speaker Change: Impact there and.

Lucy Rutishauser: Look, all I can say, I can't speak to, you know, future negotiations. You know, as a policy and from a competitive standpoint, we wouldn't want to reveal anything about current or future negotiations, but we've had many renewals so far this year, and from very large MDPDs to small MDPDs, and they all have met or exceeded our expectations so far. So our confidence is based on our very recent history of successful negotiations and with no blackouts, as I may add. And so not to say that we wouldn't be ready to blackout if we don't feel like we're getting fair compensation for, you know, what we're offering. But, you know, so far so good, and that gives us a very good read on the market and gives us confidence to give you the guidance that we've given.

Chris Ripley: Look, all I can say is I can't speak to, you know, future negotiations. As a policy and from a competitive standpoint, we wouldn't want to reveal anything about current or future negotiations, but we've had many renewals so far this year, and from very large MVPDs to small MVPDs, and they all have met or exceeded our expectations so far. So our confidence is based on our very recent history of successful negotiations all and with no blackouts, as I may add.

Speaker Change: Look all I can say I can't speak to future negotiations.

Speaker Change: Yeah.

Speaker Change: As a policy and from a competitive standpoint, we wouldn't want to reveal anything about current or future negotiations, but.

Speaker Change: We've had Ah <unk>.

Speaker Change: Many renewals so far this year.

Speaker Change: And from very large mvpds to small omni Tvs and they all have met or exceeded our expectations. So far so.

Lucy Rutishauser: It is important to note that Tennis Channel's 7 million of adjusted EBITDA includes approximately 6 million of operating losses associated with future growth initiatives. Turning to our balance sheet metrics on slide 15, you can see our debt maturity stack profile with our next meaningful maturity two years in the future in September 2026. Sinclair Television Group's first-line net leverage was 4.5 times and total net leverage 5.6 times at the end of the quarter on a trailing 8-quarter basis.

Speaker Change: Our confidence is based on our very recent history of successful negotiations.

Chris Ripley: And so not to say that we wouldn't be ready to blackout if we didn't feel like we were getting fair compensation for what we're offering, but so far, so good. And that gives us a very good read on the market, and it gives us confidence to give you the guidance that we've given. Now, obviously, once we get through this year.

Speaker Change: And with no blackouts as I may add.

Speaker Change: And so.

Speaker Change: Not to say that we wouldn't be ready to blackout, if we don't feel like we're getting their compensation for.

Speaker Change: What we're offering.

Speaker Change: But.

Speaker Change: So far so good and.

Speaker Change: That gives us a very good read on the market and it gives us confidence to give you the guidance that we've given.

Lucy Rutishauser: Interest coverage was 2.8 times as of June 30th. Our consolidated cash position was 378 million a quarter end with 52 million at SBG and 326 million at ventures, including our undergone revolving commitments total liquidity was 605 million. There were 66 million total shares outstanding at quarter end.

Lucy Rutishauser: Now, obviously, once we get through this year, I don't expect that, you know, we won't have any major negotiations for quite some time. So, you know, it's, who knows what the market will look like at that point. I think it's a little too far out. We're going to have great certainty, which is a very nice place to be for several years, and I think when you take a look at where the broadcasters are today and the shift of sports back on to broadcasting, and just, you know, it's undoubtedly, to me, that the value proposition of broadcasting within the pay TV universe is going up, not down.

Speaker Change: Now obviously once we get through this year.

Chris Ripley: I don't expect, you know, we won't have any major negotiations for quite some time. So, you know, who knows what the market will look like at that point. I think it's a little too far out.

Speaker Change: I don't expect we won't have any major.

Speaker Change: Negotiations are for for quite some time so.

Speaker Change: Who knows what the market will look like at that point I think it's a little too far out we're going to have rate certainty, which is very nice place to be for for several years.

Chris Ripley: We're going to have great certainty, which is a very nice place to be for several years. And I think when you take a look at where the broadcasters are today, and the shift of sports back onto broadcasting, and just you know, it's undoubtedly to me that the value proposition of broadcasting within the pay TV universe is going up. I don't see that trend changing. And so if you want to be in the pay TV business, you're going to have to have broadcast channels. I don't see that changing in the future. And so I think that bodes well for the next cycle.

Lucy Rutishauser: Slide 16 introduces our third quarter guidance. We are guiding for consolidated media revenues to be in the range of 898 to 929 million of 17 to 21 percent versus the year ago quarter which is largely driven by political advertising growth. However, we also expect poor advertising to grow 3 to 7 percent and distribution revenue to be up 5 percent year over year.

Speaker Change: I think when you take a look at where the broadcasters are today in the shift of sports back on the broadcasting and just.

Speaker Change: It's undoubtedly to me that the value the value proposition of broadcasting within the <unk> universe is going up not down.

Chris Ripley: But, that's certainly outside the scope of any sort of guidance that we can give you.

Lucy Rutishauser: I don't see that trend changing, and so if you want to be in the pay TV business, you're going to have to have the broadcast channels.

Speaker Change: I don't see that trend changing.

Speaker Change: And so if you want to be in the pace of the business you're going to have to have the broadcast channels I don't see that changing.

Lucy Rutishauser: I don't see that changing in the future, and so I think that goes well for the next cycle, but that's certainly outside the scope of any sort of guidance that we can give you.

Lucy Rutishauser: It just at EBITOS expected to be 229 to 254 million of 58 to 75 percent over the year-at-go levels. Our full year, 2024 media expense guidance on slide 17 reflects a modest 5 percent increase over 2023 which includes the higher sales cost associated with the revenue growth and the cost for the various initiatives taking place such as our move to the cloud and tennis channels direct a consumer launch and international expansion to name just a few.

Speaker Change: In the future.

Speaker Change: And so I think that bodes well for the next cycle, but but that's certainly outside the scope of any sort of guidance that we can give you.

David Hamburger: And maybe just to follow up on the sports question, I mean, you mentioned the MBA. I think NBC has said they plan to exclusively stream half of their regular season games on Peacock. No, we heard that the NSL is doing, you know, two Christmas games on Netflix, you know, Amazon next year. We'll have a wild card game, similar to what, you know, Peacock last year.

Chris Ripley: And maybe just to follow up on the sports question, I mean, you mentioned the NBA. I think NBC has said they plan to exclusively stream half of their regular season games on Peacock. You know, we've heard that the NFL is doing, you know, two Christmas games on Netflix. And Amazon next year will have a wild card game similar to what Peacock did last year. What are your thoughts about, you know, simulcasting exclusivity of more and more sports programs, which seems to be the case, although you do mention there are instances, obviously, of some sports coming back to broadcast, but it seems like a fairly splintered or more fragmented distribution strategy going forward. Maybe again, just from a strategic perspective, can you talk a little bit about some of these recent developments in streaming?

Speaker Change: And maybe just to follow up on the sports question. I mean, you mentioned the M. B, a I think N. B C has said they plan to exclusively stream half of their regular season games on Peacock.

Speaker Change: Here that the NFL is doing you know to Christmas games on.

Speaker Change: On Netflix you know Amazon.

Speaker Change: Amazon next year, we'll have a wildcard game are similar to what Peacock last year. What are your thoughts about you know simulcast in exclusivity of more and more sports program, which seems to be the case. Although you didn't mentioned there are instances, obviously, if some sports coming back to broadcast but it seems like.

Robert Weisbord: What are your thoughts about, you know, simulcasting, exclusivity of more and more sports programs, which seems to be the case, although you do mention there are instances, obviously, of some sports coming back to broadcast, but it seems like a fairly splintered or more fragmented distribution strategy going forward. You know, maybe again, just from a strategic perspective, can you talk a little bit about some of these recent developments in streaming with sports? Yeah, I think we're actually more bullish with the MBA. It's from appearances and conversations. It appears that once NSL's over, there'll be Sunday Prime and Tuesday Prime on the network.

Lucy Rutishauser: As compared to our prior guidance, media expenses are now 7 million lower at the midpoint. In addition, non-media expense and net interest expense are at each expected to be 4 million lower than our prior guidance level. And we expect capital expenditures to now be within a range of 93 to 98 million, a reduction of 12 million from our prior guidance. Approximately 2 million of that decline is timing of projects expected to hit in 2025, and 10 million is from permanent savings, primarily a large building project that came in under planned as well as lower routine catbacks.

Speaker Change: Early splintered or more fragmented distribution strategy going forward, maybe again just from a strategic perspective can you talk a little bit about some of these recent developments in streaming live sports.

Rob Weisbord: Yeah, I think we're actually more bullish with the NBA. From appearances and conversations, it appears that once NFL is over, there'll be Sunday Prime and Tuesday Prime on the network, and then Monday would be a stream on Peacock. And we do live in this dual world. And even if there's a simulcast, we show the strength of the broadcast each time that there's a simulcast. You can look at the Amazon Thursday games and see what kind of numbers the local markets pull that are playing.

Speaker Change: Yeah, I think we're actually more bullish with the MBA is.

Speaker Change: From appearances and conversations it appears that.

Speaker Change: Once the NFL over there'll be Sunday, Prime and Tuesday Bryan.

Speaker Change: On the network and then Monday would be a stream on peacock.

Robert Weisbord: And then Monday would be a stream on Peacock. And we do live in this duality world. And even if there's a simulcast, we show the strength of broadcast each time that there's a simulcast. You can look at the Amazon Thursday games, what kind of numbers the local markets pull better playing. And it's the new reality. But again, when you look at the reach, you look at the Paris Olympic numbers; the tune is to the networks because there's nobody that has a greater range than broadcasts at this kind of time. And another great example is the past Super Bowl.

Speaker Change: We do live in this duality world.

Speaker Change: Even if theres a simulcast we show the strength of broadcast each time that Theres a simulcast you sort of look at Amazon Thursday games, what kind of numbers to local markets pull that are playing in.

Lucy Rutishauser: In addition, our four-year net cash tax payment guidance has been lowered by approximately 162 million, which is timing and expected to be paid in the second quarter of 2025 due to the delay in the diamond sports bankruptcy process. And finally, the 106 million increase in cash distributions from ventures equity investments, which includes the 105 million received during the second quarter. In terms of political revenues, we are increasing our four-year expectations given the strong results seen in the first half of the year as well as the dynamic shaping up in the presidential race.

Rob Weisbord: And that's the new reality. But again, when you look at the reach, you look at the Paris Olympic numbers, the tune in is to the networks because there's nobody that has a greater reach than broadcast at this current time.

Speaker Change: And.

Speaker Change: That's the new reality, but again when you look at the reach you look at the Paris Olympic numbers.

Speaker Change: The tune and as to the networks, because there's nobody that has a greater reach than broadcast at this current time.

Rob Weisbord: Another great example is the past Super Bowl, which made new records, about 120 million viewers on broadcasts, and when you take a look at all the other places that it existed, it was a pittance in terms of what it grew up to, what it added to the overall viewership. When you look at just the announcement today in New Orleans, the NBA Bounce, Wealthy, and Pelicans went back to broadcast television. So you're seeing this more and more as a prevalence. To be able to get the greatest reach, the teams in the various leagues are recognizing that they need to be on free over-the-air broadcasts.

Speaker Change: Another Great example is the past Super Bowl.

Lucy Rutishauser: Our four-year political revenue expectation is for 385 to 410 million, which is an increase from our previous guidance of at least 350 million. As you can see, we are bullish on the political spending environment in general as well as our geographic positioning in swing states and politically attracted news audiences.

Robert Weisbord: Made new records, about 120 million viewers on broadcasts. And now, when you take a look at all the other places that existed, it was a pittance in terms of what it came up to, what it added to the overall viewership.

Speaker Change: Made new records about $120 million.

Speaker Change: Viewers on broadcast and now when you take a look at all the other places that it existed it was opinions in terms of Ah, but it came up to what it added to the overall viewership. When you look at just the announcement today in New Orleans the.

Robert Weisbord: And when you look at just the announcement today in New Orleans, the NBA Bounce Wealthy Intelligence went back to broadcast television. So you're seeing this more and more as a prevalence to be able to get the greatest reach to teams in the various leagues are recognizing that they need to be on free over the broadcast.

Speaker Change: EMEA basketball team and Pelicans went back to broadcast television. So youre seeing this more and more as a prevalence to be able to get the greatest reach the teams and the various please.

Speaker Change: Recognizing that they need to be on free over the air broadcast.

Lucy Rutishauser: With that, I'd like to turn the call back over to Chris for some closing comments. Thank you, Lucy. Turning to our key takeaways on slide 18, Sinclair delivered solid second quarter results with adjusted EBITDA exceeding the high end of our quarterly guidance range. Total advertising revenue was up 11% year-to-year. Distribution revenues were up 4% year-to-year and core advertising trends remained solid. With approximately 60% of our big four subscribers still to be renewed, our two-year kegur for net retrans remains forecasted at mid-single digit percentage growth. Political advertising revenue was on track for our largest year ever, which we estimate would be 10 to 17% growth over the 2020 presidential election year excluding majority runoff.

Operator: Thank you very much. Thank you. Thank you very much.

David Hamburger: Thank you very much.

Speaker Change: Okay. Thank you very much.

Speaker Change: Okay.

Speaker Change: Thank you.

Chris Ripley: Thank you very much. We appear to have reached the end of our question and answer session, so I will now turn the call back over to Chris Ripley, the President and CEO, for closing remarks.

Speaker Change: Thank you very much we appear to have reached the end of our question and answer session. So I will now turn the call back over to Chris Ripley, President and CEO for closing remarks.

Christopher Ripley: We appear to have reached the end of our question-and-answer session.

Operator: So I will now turn the call back over to Chris Ripley, the President and CEO for closing remarks. Thank you, operator, and thank you all for joining our second quarter earnings call. Thinks that you have any questions or follow-ups. Please do not hesitate to reach out to us. Thanks. Thank you very much.

Operator: Thank you, operator. And thank you all for joining our second quarter earnings call. If you have any questions or follow-ups, please do not hesitate to reach out to us. Thanks.

Chris Ripley: Thank you operator, and thank you all for joining our second quarter earnings call to extent you have any questions or follow ups. Please do not hesitate to reach out to us.

Operator: Thank you very much. This does conclude today's conference call. You may disconnect your lines at this time and have a wonderful rest of the day. Thank you for your participation.

Speaker Change: Thank you very much. This does conclude today's conference call. You may disconnect. Your lines at this time and have a wonderful rest of the day. Thank you for your participation.

Operator: This does conclude today's conference call. You made disconnect.

Christopher Ripley: In addition, we also received 105 million in cash proceeds related to the exit of a significant investment within our venture investment portfolio during the quarter. As we head into the second half of the year, we have momentum on our side and multiple drivers for cash for generation.

Christopher Ripley: Lucy, Rob and I will now open up the call to questions.

Operator: Thank you for joining us today. Thank you very much.

Operator: We will now be opening the floor, for questions. If you have any questions, please press star one on your phone keypad now. A confirmation tone will indicate that your line is in the queue. You may press star two if you would like to remove your question from the queue. For anyone using speaker equipment, it might be necessary to pick up your handset before you press the keys. Please wait a moment whilst we pull for questions.

Operator: Thank you.

Daniel Kurnos: Your first question is coming from Dan Kurnos of the benchmark company Dan, your line is live. Great. Thanks.

Christopher Ripley: Good afternoon. Maybe to start with Chris, just on ventures, appreciate the update on the distribution. Just love some more color on kind of the progress you're making towards something initiatives you talked about, whether consolidating investments or kind of rebuilding the ventures in the way that you see it going forward. Thanks. Thanks, Dan. So as you saw, we had a very significant exit in Q2 that generated 105 million. So we're very pleased with that.

Christopher Ripley: We've got other monetization opportunities in the queue. I think we've done an excellent job so far of picking our spots. And by the way, exiting with rate returns, it was around a 40% IRR that we had in Q2. So we're very focused on monetization and turning more of that portfolio into cash of which we know we're now sitting on about 330 million in ventures. We are looking at opportunities for reinvestment into consolidated opportunities and areas that fragmented marketplaces that have high growth opportunities.

Christopher Ripley: But we're being very disciplined in terms of our selection and our criteria. So if we're not in a rush, we're looking for the right areas and in the meantime, there's a big emphasis on monetization as you can see. Got it. And then just on distribution, just maybe a housekeeping. The timing of the 60% that's left. Is that like later in Q3? I mean, we kind of have an idea of what's up, but just any kind of help around the timing of when that hits? Yeah, so the remainder of our distribution deals will come up in the next several months. Okay, and then last, I guess I'll follow up with you on that.

Robert Weisbord: But on poor, I just, the Q3 guide is super impressive in light of the political crowd out. We heard obviously some weakness from others in Q2, but in Q3 or, you know, to guide up against a crowd out. And I know you guys have been talking about this. I don't know if it's rate. I don't know exactly what's driving that, but just a love additional color categories, whatever what have you in terms of the strength in Q3 on core.

Robert Weisbord: Yeah, the first thing is what we've been talking about for several quarters are AI pricing algorithm system that we put in place that allows us to capture the demand ahead of time and to match the pricing to demand, which minimizes our crowd out and preemptions. So that helps us drive our core business. And again, we've seen automotive, we'll see some strength in automotive with Q3, Q4. First half of the year, the tier three auto has struggled due to the fact with high interest rates, and sticker prices increasing.

Robert Weisbord: But you don't always see the dealers on the tier three local level have to get further than 24 to make room for the 25. And we're looking to look at rebates. And so we looked for auto to remain positive. It's currently positive in third quarter. And we expected to remain positive throughout the rest of the year. We put a major onus on home services category. And we've seen mid-tea increases in that category as well.

Robert Weisbord: And what really makes us feel optimistic is the fact that not one category was down dramatically in second quarter. They were all with pretty much the minimus with a drag outside of former. And we expect formative return as well in the back half of the year. Now, I'll just add to that that, you know, this has been a multi-year effort around transforming our sellers into true marketing consultants and focusing on share wallet, not just share of, you know, spot sales and and we're really seeing the fruits of that labor over multiple years of upgrading the tools that they use, the products that they sell and that's contributing, you know, to the overall revenue and the momentum that we're seeing.

Unknown Executive: And just one last thing is, as we get into the podcast slash audio business, we had a very strong upfront for our two national shows, they spoke a little bit about every mile of marketing room and Rothstone hosting the show as well as Jerry Ferrara, this known as Turtle in the Anthorosh and Matt Linder for my high swim winner. And so we're really, really optimistic based on the upfront sales, that we're heading the right direction. So as we diversify into it, more and more into a cross-platform media company, we're seeing a lot of success. That's super helpful guys, really appreciate the color. Thank you. Thanks, Sam.

Operator: Thank you very much.

Benjamin Soff: Your next question is coming from Benjamin Soff of Deutsche Bank. Benjamin, your line is life. Hey everyone, good afternoon. Thanks for the question. I wanted to follow up on the core advertising performance and in particular, did you see any impact this quarter from the auto hack and did that maybe push anything into three Q. And then I just wanted to double click on the better than expected operating expenses. Is there any color you can add on sort of the initiatives you're working on and the strength you're seeing in margins there. Thank you.

Robert Weisbord: Yes, we start the auto. We were we were down low single digits. So not a major impact. We have a big effort at this on auto with the auto division inside. So we're able to do cross-platform solutions with with our auto group and we've made our sellers out in our local marketplaces, automotive experts as well. So it helps minimize some of the weakness from just plain traditional advertising. So we're comfortable in the direction we've built this business and it helps mitigate some of the softness that you might be seeing. And I do think it's fair to say that the hack that happened did have an impact on Q2. And we're definitely seeing more frank and Q3.

Lucy Rutishauser: And I'll go ahead and I'll talk about the expenses. So you're correct in that our expenses have come down as we've gone through the year. As I said in my script of remarks, you know, we have a focus on cost controls and also increasing efficiencies to make us work smarter and eliminate some waste out of our processes. And so you're seeing the effects of that as far as some of the initiatives.

Lucy Rutishauser: And I know I mentioned some, you know, we have the cloud. We have tennis as a whole series around direct consumer, international and pickleball and we have fast channels. But what I would say is if I just take the cloud project itself and grant it, we will be in an investment mode for the next couple of years as we continue to move all of our stations to that. But, for instance, here in 24, we have already seen some up-backed savings of about $34 million as well as CapEx cost avoidance about a little over $7 million. So just to give you a sense of when we talk about these being growth initiatives or return generating initiatives for the future, this is exactly what we're referring to.

Unknown Executive: Okay, great, that's super helpful guys. Thank you.

Operator: Thank you very much.

Avraham Steiner: Your next question is coming from Avy Steiner of JP Morgan. Avy, your line of life. Thank you very much for the questions. I've got a couple here.

Lucy Rutishauser: Just one if we could talk about core, is that range you gave solely for the local TV group, or is there some at the other assets? And then while we're talking about core, what do you guys think from the consumer perhaps in your markets, small, medium-sized businesses, given all the noise economically out there? And then I've got a couple of follow-ups. Thank you. Yeah, so for the core, that range is whether it's for total consolidated company or for the local media, we're still going to be in that, expect to be in that three to seven percent.

Lucy Rutishauser: And I'll let Rob speak a little bit more about the consumer and what he's seeing in terms of categories and whatnot. But we're not seeing a major impact in terms of what we see from the advertising revenues. If you follow our performance so far this year, we're actually expecting our strongest core growth in Q3 when you compare that to Q1 or Q2. So undoubtedly, there's certainly concerns about the consumer slowdown. But so far, I think that's a lot of just hand-wringing.

Lucy Rutishauser: I don't think we've really seen it show up in terms of our performance, but I'll chime in on that. Yeah, I think that when you see one of our top categories in the home services, having been team growth is where you have high interest rates that might slow down. But again, without a motor, they're going to have to unload those 24s. Obviously, we're not seeing as many homes sold, but we're capitalizing on the fact that people are improving their own properties and doing upgrades to the homes. And then, on a continued advertising basis, we have from large solutions to smaller solutions to keep those advertisers continuing to advertise despite what the economy is. Appreciate that.

Christopher Ripley: And then just if I can turn sort of the balance sheet here, so you have this nice exit adventures. I think you had mentioned there are some other potential exits in the hopper. I don't know if you can size that roughly. And then how do you think about[inaudible] plan for just about every asset in that portfolio and when we think, we'll be the appropriate time to monetize it. I think you're going to see sort of a somewhat steady flow because there's quite a few assets in there, so that's sort of balanced out and they'll continue to monetize it.

Christopher Ripley: I mentioned before, monetization is of the minority portfolio that we really don't think we're getting much credit for it all, from Wall Street perspective is a top priority and we're being very disciplined in terms of looking at new reinvestment opportunities. And I think what you were alluding to was sort of use of resources between the two credit stacks. And as we've said, many times before we don't think that's needed, they're meant to be self sufficient, and it certainly is possible, but it's not something that we foresee. Appreciate the time, it's always, thank you. Thank you very much.

David Hamburger: Your next question is coming from David Hamburger of Morgan Stanley, David your line of life. Hi, thanks, if I could just a couple as well. Maybe on the distribution revenue growth guidance, first, can you give us a turn of what you're seeing in turn of subscribers? And then in the guidance was curious, you know, the 60% that you have coming up for renewals, you know, a couple of large distributors have been, you know, somewhat aggressive in the past with some of your peers in renewals, you know, one of them is actually even dropped a couple of your peers during the negotiation process. So I'm just wondering if you could give us a little color, how you're so confident that you're going to get mid single digit cake or growth over the next two years.

Lucy Rutishauser: And then maybe even if we could step back a second, you know, what's your expectation after the next couple of years for, you know, some of the distribution revenue trends, maybe just from like kind of high level perspective. Sure, so for for your first question, turn is still in the mid single digits overall, I will say that in terms of, you know, the summer. Q3 impacting Q3 specifically, there's some seasonality in virtual NEPDs.

Lucy Rutishauser: Through the end of the second quarter and into Q3 before football starts. The verticals tend to be pretty slow in terms of net ads and then they really pick up when football starts again, so that does have some impact there. Look, all I can say, I can't speak to, you know, future negotiations, you know, as a policy and from a competitive standpoint, we wouldn't want to reveal anything about current or future negotiations, but we've had many renewals so far this year, and from very large MDPDs to small MDPDs, and they all have met or exceeded our expectations so far.

Lucy Rutishauser: So our confidence is based on our very recent history of successful negotiations and with no blackouts, as I may add, and so not to say that we wouldn't be ready to blackout if we don't feel like we're getting fair compensation for, you know, what we're offering, but, you know, so far so good, and that gives us a very good read on the market and gives us confidence to give you the guidance that we've given. Now, obviously, once we get through this year, I don't expect that, you know, we won't have any major negotiations for quite some time, so, you know, it's, who knows what the market will look like at that point.

Lucy Rutishauser: I think it's a little too far out. We're going to have great certainty, which is a very nice place to be for several years, and I think when you take a look at where the broadcasters are today and the shift of sports back on to broadcasting, and just, you know, it's undoubtedly to me that the value proposition of broadcasting within the pay TV universe is going up, not down. I don't see that trend changing, and so if you want to be in the pay TV business, you're going to have to have the broadcast channels.

Robert Weisbord: I don't see that changing in the future, and so I think that goes well for the next cycle, but that's certainly outside the scope of any sort of guidance that we can give you. And maybe just to follow up on the sports question, I mean, you mentioned the MBA. I think NBC has said they plan to exclusively stream half of their regular season games on peacock. No, we heard that the NSL is doing, you know, to Christmas games on Netflix, you know, Amazon next year.

Robert Weisbord: We'll have a wild card game, similar to what, you know, peacock last year. What are your thoughts about, you know, simul casting, exclusivity of more and more sports program, which seems to be the case, although you do mention there are instances, obviously, of some sports coming back to broadcast, but it seems like a fairly splintered or more fragmented distribution strategy going forward. You know, maybe again, just from a strategic perspective, can you talk a little bit about some of these recent developments in streaming with sports?

Robert Weisbord: Yeah, I think we're actually more bullish with the MBA. It's from appearances and conversations. It appears that once NSL's over, there'll be Sunday Prime and Tuesday Prime on the network. And then Monday would be a stream on peacock. And we do live in this duality world. And even if there's a simul cast, we show the strength of broadcast each time that there's a simul cast. You can look at the Amazon Thursday games, what kind of numbers the local markets pull better playing.

Robert Weisbord: And it's the new reality. But again, when you look at the reach, you look at the Paris Olympic numbers, the tune is to the networks because there's nobody that has a greater range than broadcasts at this kind of time. And another great example is the past Super Bowl. Made new records, about 120 million viewers on broadcasts. And now when you take a look at all the other places that existed, it was a pittance in terms of what it came up to, what it added to the overall viewership.

Robert Weisbord: And when you look at just the announcement today in New Orleans, the NBA bounce wealthy intelligence went back to broadcast television. So you're seeing this more and more as a prevalence to be able to get the greatest reach to teams in the various leagues are recognizing that they need to be on free over the broadcast. Thank you very much. Thank you. Thank you very much.

Operator: We appear to have reached the end of our question and answer session.

Christopher Ripley: So I will now turn the call back over to Chris Ripley, the president and CEO for closing remarks. Thank you operator and thank you all for joining our second quarter earnings call thinks that you have any questions or follow-ups. Please do not hesitate to reach out to us. Thanks. Thank you very much.

Operator: This does conclude today's conference call.

Operator: You made disconnect.