Q2 2025 Sinclair Inc Earnings Call
Open the floor for your questions and comments after the presentation.
It is now my pleasure to turn the floor over to your host Kris King Vice President of Investor Relations, Sir the floor is yours.
Speaker #1: Good day, everyone, and welcome to the Sinclair second quarter 2025 earnings conference call. At this time, all participants are on a listen-only mode. If you have any questions or comments during the presentation, you may press star one on your phone to enter the question queue at any time, and we will open the floor for our questions and comments after the presentation.
Thank you good afternoon, everyone and thank you for joining Sinclair is second quarter of 2025 earnings conference call.
Joining me on the call today are Chris Ripley, our President and Chief Executive Officer, <unk>, <unk>, Our executive Vice President and Chief Financial Officer, Rob Why sport, our COO and president of local media and for Q&A, Lucy <unk>, Our executive Vice President.
Speaker #1: It is now my pleasure to turn the floor over to your host, Chris King, Vice President of Investor Relations. Sir, the floor is yours.
Speaker #2: Thank you. Good afternoon, everyone, and thank you for joining Sinclair's second quarter 2025 earnings conference call. Joining me on the call today are Chris Ripley, our President and Chief Executive Officer; Dorinder Sahai, our Executive Vice President and Chief Financial Officer; Rob Weisbord, our COO and President of Local Media; and for Q&A, Lucy Rutishauser, our Executive Vice President.
Before we begin I want to remind everyone that slides for today's earnings call are available on our website <unk> dot 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.
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.
Speaker #2: Before we begin, I want to remind everyone that slides for today's earnings call are available on our website, svgi.net, on the events and presentation page of the Investor Relations portion of the site.
Speaker #2: 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.
With the SEC and included in our second quarter earnings release, the company undertakes no obligation to update. These forward looking statements included on the call will be a discussion of non-GAAP financial measures specifically adjusted EBITDA. This measure is not formulated in accordance with GAAP is not meant to replace GAAP measurements and may differ from other companies uses or.
Speaker #2: 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.
Speaker #2: 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.
Formulations.
Further discussion and reconciliations of the company's non-GAAP financial measures to comparable GAAP financial measures can be found on our website. Let me now turn the call over to Chris Ripley.
Speaker #2: The company undertakes no obligation to update these forward-looking statements. Included on the call will be a discussion of non-GAAP financial measures specifically adjusted EBITDA.
Good afternoon, everyone and thank you for joining us.
Speaker #2: This measure is not formulated in accordance with GAAP, is not meant to replace GAAP measurements, and may differ from other companies' uses or formulations.
Beginning on slide three I want to introduce <unk> side, our new Chief Financial Officer, <unk> brings more than two decades of strategic financial leadership across multiple industries with deep expertise in capital markets, M&A Investor Relations and financial planning and analysis.
Speaker #2: Further discussions and reconciliations of the company's non-GAAP financial measures to comparable GAAP financial measures can be found on our website. Let me now turn the call over to Chris Ripley.
His broad experience brings fresh perspective that we will inevitably that will be invaluable as we drive our transformation strategy before we continue with our standard earnings call format I would like to turn the call over to <unk> to introduce himself and share his perspective on the Sinclair opportunity.
Speaker #3: Good afternoon, everyone, and thank you for joining us. Beginning on slide three, I want to introduce Dorinder Sahai. Our new Chief Financial Officer. Dorinder brings more than two decades of strategic financial leadership across multiple industries with deep expertise in capital markets, M&A, investor relations, and financial planning and analysis.
Thank you, Chris and Hello, everyone.
First let me express my gratitude to you the entire management team and the board for Entrusting me with this important responsibility.
Speaker #3: His broad experience brings fresh perspective that we will be invaluable as we drive our transformation strategy. Before we continue with our standard earnings call format, I would like to turn the call over to Dorinder to introduce himself and share his perspective on the Sinclair opportunity.
I want to particularly thank Lucy for her outstanding Mentorship during my transition.
Im inheriting a tremendously capable team, which speaks volumes about Lucy is excellent leadership.
Speaker #4: Thank you, Chris, and hello, yone. First, let me express my gratitude to you, the entire management team, and the board for entrusting me with this important responsibility.
I am excited to join <unk>, such a pivotal time in the company's evolution.
<unk> has been a truly transformational company throughout its history.
Speaker #4: I want to particularly thank Lucy for her outstanding mentorship during my transition. I'm inheriting a tremendously capable team with speaks volumes about Lucy's cellent leadership.
We pioneered local marketing agreements executed the first retransmission agreement and have consistently led next gen broadcast development.
This track record of innovation and industry leadership combined with our unique positioning as an integrated media and technology platform creates a compelling value proposition that I believe represents significant upside potential.
Speaker #4: I am excited to join Sinclair as such a pivotal time in the company's evolution. Sinclair has been a truly transformational company throughout its history.
Speaker #4: We pioneered local marketing agreements, executed the first retransmission agreement, and have consistently led next-gen broadcast development. This track record of innovation and industry leadership, combined with our unique positioning as an integrated media and technology platform, creates a compelling value proposition that I believe represents significant upside potential.
With my financial leadership experience and engineering background.
Tremendous untapped potential in our next Gen broadcast technology development operational improvements and distinctive ventures portfolio.
My focus will be on unlocking this value and demonstrating the multiple value drivers across our platform through strong execution.
Speaker #4: With my financial leadership experience and engineering background, I see tremendous untapped potential in our next-gen broadcast technology developments, operational improvements, and distinctive ventures portfolio.
I think the fundamentals are strong and the opportunity is significant.
I look forward to building confidence in the Sinclair story, with our investment community and demonstrating our progress.
Speaker #4: My focus will be on unlocking this value and demonstrating the multiple value drivers across our platform through strong execution. At Sinclair, the fundamentals are strong and the opportunity set is significant.
Those of you who have already reached out thank you for your support.
I look forward to meeting many of you over the coming weeks and months.
Thank you Darin here.
Couldn't be more excited to have you here and I know I speak for the entire Sinclair team when I say that we look forward to your leadership and expertise as we continue this path in the quarters and years to come.
Speaker #4: I look forward to building confidence in the Sinclair story with our investment community and demonstrating our progress. For those of you who have already reached out, thank you for your support.
I also want to acknowledge the appointment of Conrad Clemson as our Chief Executive officer of <unk> wireless or data casting joint venture with our broadcast peers.
Speaker #4: I look forward to meeting many of you over the coming weeks and months.
Speaker #3: Thank you, Dorinder. We couldn't be more excited to have you here, and I know I speak for the entire Sinclair team when I say that we look forward to your leadership and expertise as we continue this path in the quarters and years to come.
Conrad has several decades of leadership experience in the media and telecommunications industries and is well known for its technology innovation leadership. Most recently he served as CEO of added share where he has successfully scaled the company to a high growth enterprise grade.
Speaker #3: I also want to acknowledge the appointment of Conrad Clemson as our Chief Executive Officer of Edge Beam Wireless. Our data casting joint venture with our broadcast peers.
Industry leader as CEO of edge beam Conrad will lead the continued build out of <unk> platform and operations as it continues to move aggressively to fully commercialize the highest value business use cases for next generation data delivery.
Speaker #3: Conrad has several decades of leadership experience in the media and telecommunications industries, and is well known for his technology innovation leadership. Most recently, he served as CEO of EditShare, where he successfully scaled the company to a high-growth enterprise-grade industry leader.
Turning to slide four and what was a challenging quarter and that macroeconomic uncertainty impacting the global economy. We delivered solid results with total advertising revenue coming in within our guidance range and core advertising revenue up year over year on an as reported basis.
Speaker #3: As CEO of Edge Beam, Conrad will lead the continued build-out of Edge Beam's platform and operations as it continues to move aggressively to fully commercialize the highest-value business use cases for next-generation data delivery.
Our distribution revenues were below our expectations as growth from some of our larger virtual mvpds was slower than expected. However, it is important to note that distribution revenue was up year over year in the first half of the year and flat with year ago levels. During the second quarter media expenses were.
Speaker #3: Turning to slide four, in what was a challenging quarter amid macroeconomic uncertainty impacting the global economy, we delivered solid results with total advertising revenue coming in within our guidance range and core advertising revenue up year over year on an as-reported basis.
Materially better than expected driving adjusted EBITDA comfortably above the midpoint of our guidance range.
Speaker #3: Our distribution revenues were below our expectations as growth from some of our larger virtual MVPDs was slower than expected. However, it is important to note that distribution revenue was up year over year in the first half of the year and flat with year-ago levels during the second quarter.
Slide five highlights our ventures portfolio as we continue to track our transformation away from our minority investment holdings and look to position the portfolio for more majority owned assets over time.
Ventures benefited from $6 million of cash distributions and invested $11 million in the quarter as required by our outstanding funding commitments.
Speaker #3: Media expenses were materially better than expected, driving adjusted EBITDA comfortably above the midpoint of our guidance range. Slide five highlights our ventures portfolio as we continue to track our transformation away from our minority investment holdings and look to position the portfolio for more majority-owned assets over time.
<unk> cash balance was 393 million at quarter end up $39 million sequentially.
On slide six I wanted to better highlight a key acquisition that ventures made during the first quarter that we briefly mentioned on last quarter's earnings call in mid March we acquired the remaining 75% stake in digital remedy that we did not already owned for approximately $30 million digital revenue offers omnichannel media.
Speaker #3: Ventures benefited from $6 million in cash distributions and invested $11 million in the quarter as required by our outstanding funding commitments. Ventures' cash balance was $393 million at quarter-end, up $39 million sequentially.
Activation solutions with a focus on connected TV.
Speaker #3: On slide six, I wanted to better highlight a key acquisition that Ventures made during the first quarter that we briefly mentioned on last quarter's earnings call.
As a result of the acquisition can pulse has now rebranded as did a remedy digital remedy as a rule of 40 software company defined as the sum of the company's revenue growth rate and profit margins exceeding a 40%. In addition, Sinclair now comprises only approximately 40% of the digital.
Speaker #3: In mid-March, we acquired the remaining 75% stake in Digital Remedy that we did not already own for approximately $30 million. Digital Remedy offers omnichannel media activation solutions with a focus on connected TV.
Digital revenue as total revenue.
Speaker #3: As a result of the acquisition, Compulse has now rebranded as Digital Remedy. Digital Remedy is a rule of 40 software company defined as the sum of the company's revenue growth rate and profit margins exceeding a 40%.
And that number is declining with new outside clients growing more rapidly.
We are very pleased to have digital revenue join the Sinclair team and we look forward to continued strong growth and value creation trends from this business.
Speaker #3: In addition, Sinclair now comprises only approximately 40% of the Digital Remedy's total revenue. And that number is declining with new outside clients growing more rapidly.
On slide seven I want to highlight the substantial asset value within Sinclair ventures, and how it supports our evolving investment strategy. Our current minority investment portfolio and cash represents over $726 million in book value as of quarter end or above.
Speaker #3: We are very pleased to have Digital Remedy join the Sinclair team and we look forward to continued strong growth and value creation trends from this business.
$10 per share.
Speaker #3: On slide seven, I want to highlight the substantial asset value within Sinclair Ventures. And how it supports our evolving investment strategy. Our current minority investment portfolio and cash represents over $726 million in book value as of quarter-end or about $10 per share.
This excludes tennis channel digital remedy and other consolidated minority owned investments.
With venture with ventures carrying no debt. This represents significant unencumbered capital and we believe the current market value of these assets is significantly higher than the current book value.
Importantly, as we pivot toward majority investments, where we have greater operational control and strategic influence these assets provide substantial and monetization opportunities and capital deployment flexibility the.
Speaker #3: This excludes Tennis Channel, Digital Remedy, and other consolidated minority-owned investments. With Venture's carrying no
Speaker #3: debt, this represents
Speaker #3: significant
Speaker #3: unencumbered capital and we believe
The value we built through our diversified approach now positions us to be more strategic and selective focusing on investments, where we can drive outcomes and create value through active management.
Speaker #3: the current market value
Speaker #3: of these assets is significantly higher
Speaker #3: than the current book
Speaker #3: value. Importantly,
Speaker #3: as we pivot
Speaker #3: toward majority consolidated minority-owned
Speaker #3: investments where we have greater
Let me now turn it over to Rob to continue the discussion about our local media segment.
Speaker #3: operational control and
Speaker #3: strategic influence,
Speaker #3: these assets provide substantial monetization unencumbered capital and opportunities and
Speaker #3: capital deployment
Speaker #3: flexibility.
Speaker #3: The value we've
Speaker #3: built through our
Thanks, Chris and good afternoon, everyone beginning on slide eight I want to focus on several important developments for our local media operations since our last call first was the launch of <unk> for college football podcasts covering.
Speaker #3: diversified approach now
Speaker #3: positions us to be
Speaker #3: more strategic and
Speaker #3: selective focusing on
Speaker #3: investments where we can drive
Speaker #3: outcomes and create value through
Speaker #3: active
Speaker #3: management. Let me
Speaker #3: now turn it over to Rob to
Speaker #3: continue the discussion about
Speaker #3: our local media
Speaker #3: segment.
For the biggest most historic college programs in the country, Ohio State, Alabama, Texas, and Notre Dame and Additionally, we also launched a new <unk> MBA podcast in conjunction with the leaves all star weekend called post moves which features WNBA legend, Kansas.
Speaker #5: Thanks, Chris, and good
Speaker #5: afternoon, everyone.
Speaker #5: Beginning on slide eight, I
Speaker #5: want to focus on
Speaker #5: several important
Speaker #5: developments for our local
Speaker #5: media operations since
Speaker #5: our last
Speaker #5: call. First was the launch of four college football podcasts covering four of the biggest and most historic college programs in the
Parker and Indiana Fever Star.
Elia Boston.
Speaker #5: country:
Speaker #5: Ohio State,
These podcast joined our previously launched sports forecast focused podcasts that quickly become among the most popular sports podcast in the country.
Speaker #5: Alabama,
Speaker #5: Texas, and Notre
Speaker #5: Dame. In addition, we on several important
Speaker #5: also launched a new
Speaker #5: WNBA
Speaker #5: podcast in conjunction
Speaker #5: with the league's
Speaker #5: All-Star Weekend
These podcasts and related social media as a key growth driver for the segment.
Speaker #5: called Post Moves.
Speaker #5: Which features
Speaker #5: WNBA legend Candace
Speaker #5: Parker, an
Speaker #5: Indiana Fever
Their popularity and advertising dollars continue to grow rapidly.
Speaker #5: star
Speaker #5: Aliyah Boston. These
Speaker #5: podcasts join our previously
However, the story does not end there we will shortly be announcing a landmark events in media partnership with a leading sports representation and marketing agency that will include signature live events with our podcast. How these events will include a nationwide tailgate toss.
Speaker #5: launched sports
Speaker #5: forecast-focused
Speaker #5: podcasts that have quickly
Speaker #5: become among the
Speaker #5: most populous sports
Speaker #5: podcasts in the
Speaker #5: country. We
Speaker #2: WNBA legend
Speaker #2: Candace Parker,
Speaker #2: an Indiana Fever
Speaker #2: star, Elijah
Speaker #2: Boston. These
Speaker #2: podcasts join our
Speaker #2: previously launched dollars continue to
Sure during the upcoming college football season, as well as an exclusive hospitality and brand activation event at the Super Bowl in February from Santa Clara, we will be producing original content and Brian Activations at these events.
Speaker #2: sports
Speaker #2: forecast-focused podcasts that
Speaker #2: have quickly become
Speaker #2: among the most populous
Speaker #2: sports podcasts in
Speaker #2: country.
Speaker #2: We view these
Speaker #2: podcasts and related social
Speaker #2: media as a
Speaker #2: key growth driver for the
Speaker #2: segment. As their
Speaker #2: advertising dollars
Which will be distributed across our various media platforms to maximize exposure and engagement for our customers.
Speaker #2: continue to grow
Speaker #2: rapidly,
Speaker #2: however, the story does not
Speaker #2: end there. We
Speaker #2: a landmark events and media partnership with a leading sports representation and marketing agency that will include signature live events with our podcast talent. These events will include a nationwide tailgate tour during the upcoming college football season, as well as an exclusive hospitality and brand activation event at the Super Bowl, in February from Santa Clara.
Turning to slide nine I'd like to take a moment to highlight our multicast networks, which have been delivering record growth in recent quarters.
Driven by the acquisition of popular series and movies and expansive distribution growth and top 10 DMA. These networks are poised for continued strong growth in the coming quarters through the may sweeps, our core networks charge comment War and then there's the.
Our highest year over year coverage.
Speaker #2: We'll be producing original content and brand activations at these events. Which will be distributed across our various media platforms to maximize exposure and engagement for our customers.
Growth among all Nielsen rated broadcast networks and among total viewers and top 10, DMA charts commented raw, so yes year over year growth of 21%, 17% and 40% respectively.
Speaker #2: Turning to slide nine, I'd like take a moment to highlight our multicast networks. Which have been delivering record growth in recent quarters. Driven by the acquisition of popular series and movies and expansive distribution growth in top 10 DMAs, these networks are poised for continued strong growth in the coming quarters.
Looking ahead. These multi cast networks continue to invest in even more big hits for the upcoming TV season, including criminal minds.
Homicide life on the Street Wall Burgers, Xena Warrior Princess and many other fan favorites.
Lastly from a core advertising perspective, I wanted to provide a little color on the current conditions that we're seeing.
Speaker #2: Through the May sweeps, our four networks, Charge, Comet, Roar, and the Nest, add the highest year-over-year coverage growth among all Nielsen-rated broadcast networks. And among total viewers in top 10 DMAs, Charge, Comet, and Roar surpassed year-over-year growth of 21%, 17%, and 40% respectively.
While several large categories remain hampered by macroeconomic and tariff related uncertainty we have started to see signs of improvements over the past several weeks, while I would still characterize our overall visibility is below historical levels.
Speaker #2: Looking ahead, these multicast networks continue to invest in even more big hits for the upcoming television season, including Criminal Minds, Homicide: Life on the Street, Wahlbergers, Zena, Warrior Princess, and many other fan favorites.
Given the uncertainty I do think several key categories have begun to show stronger demand now.
Now, let me turn it back over to Chris to provide a brief regulatory update.
Thanks, Rob.
Turning to slide 10, Sinclair has already begun to complete several transactions given the deregulatory approach that the industry has seen in recent months.
Speaker #2: Lastly, from a core advertising perspective, I wanted to provide a little color on the current conditions that we are seeing. While several large categories remain hampered by macroeconomic and tariff-related uncertainty, we have started to see signs of improvements over the past several weeks.
We have already concluded the purchase of several stations for which we were providing sales and other operating services, while divesting several smaller stations and we continue to explore and work on other M&A opportunities, including highly accretive market swaps and GSA acquisitions.
Speaker #2: While I would still characterize our overall visibility as below historical levels, given the uncertainty, I do think several key categories have begun to show stronger demand.
Notably our opportunities for growth and synergies have increased and the recent ruling by the eighth circuit Court of appeals, which vacated the antiquated SEC prohibition of owning two top four ranked television stations in a local market and the recently adopted inconceivable rules that attempted to risk.
Speaker #2: Now, let me turn it back over to Chris to provide a rief regulatory update.
Speaker #1: Thanks, Rob. Turning to slide 10, Sinclair has already begun to complete several transactions given the deregulatory approach that the industry has seen in recent months.
Our use of our multicast streams.
Speaker #1: We have already concluded the purchase of several stations for which we were providing sales and other operating services, while divesting several smaller stations and we continue to explore and work on other M&A opportunities, including highly accretive market swaps and JSA acquisitions.
Our industry has watched for years as our competitors grew unburdened by these types of ownership rules. So this is a long awaited and much welcomed common sense ruling that has unburdened us and we will open up more opportunity for rational growth within the industry.
Speaker #1: Notably, our opportunities for growth in synergies have increased due to the recent ruling by the Eighth Circuit Court of Appeals, which vacated the antiquated SEC prohibition of owning two top-four ranked TV stations in a local market, as well as the recently adopted inconceivable rules that attempted to restrict our use of our multicast streams.
We're also pleased to see multiple proceedings currently under review by the FCC, including the Sunset of the industry's one Dido spectrum, which would unlock high value spectrum positions for next Gen data distribution business models as well as the review of the current national ownership cap and the recent approval.
Of several duopoly markets for broadcasters.
Speaker #1: Our industry has watched for years as our competitors grew unburdened by these types of ownership rules, so this is a long-awaited and much welcomed common sense ruling that has unburdened us and will open up more opportunity for rational growth within the industry.
I also think it's important to address the current state of the network affiliate relationship.
Recently, Chairman car sent another letter to a network questioning current practices within this relationship and opening an inquiry.
This is not the first time the SEC has reviewed this relationship structure, while we have long appreciated our relationships with our network partners. We believe to allow for continued growth and viability of local journalism and broadcasters. This review of the affiliate network relationship is needed timely and appropriate.
Speaker #1: We're pleased to see multiple proceedings currently under review by the FCC. Including the sunset of the industry's $1.0 spectrum, which would unlock high-value spectrum positions for next-gen data distribution business models, as well as the review of the current national ownership cap and the recent approval of several duopoly markets for broadcasters.
Right.
As of late the burdens, some control and financial obstacles implemented or attempting to be implemented by certain networks are hampering local broadcasters ability to serve their communities.
Speaker #1: I also think it's important to address the current state of the network affiliate relationship. Recently, Chairman Carr sent another letter to a network questioning current practices within this relationship and opening an inquiry.
In particular, we support a review of practices relating to affiliates being forced to industry deals or excluded from entering into independent deals oftentimes with streaming services owned by the networks themselves independents.
Speaker #1: This is not the first time the FCC has reviewed this relationship structure. While we have long appreciated our relationships with our network partners, we believe to allow for continued growth and viability of local journalism and broadcasters this review of the affiliate network relationship is needed, timely, and appropriate.
Independence of local broadcasters is paramount to their ability to produce local independent journalism and provide communities with an option for different voices.
Speaker #1: As of late, the burdensome control and financial obstacles implemented or attempting to be implemented by certain networks are hampering local broadcasters' ability to serve their communities.
As we often see local broadcasters to provide a voice not often heard on national stages and are the most trusted are more trusted than any other source and media.
Speaker #1: In particular, we support a review of practices relating to affiliates being forced to into streaming deals or excluded from entering into independent deals oftentimes with streaming services owned by the networks themselves.
And as certain media companies continue to grow their content distribution holdings. This review is more important than ever.
Again, we welcome FCC chairman cars approach towards the regulatory clarity that supports both strong network partnerships and local editorial independence.
Speaker #1: Independence of local broadcasters is paramount to their ability to produce local independent journalism and provide communities with an option for different voices. As we often see, local broadcasters provide a voice not often heard on national stages and are the most trusted or more trusted than any other source in media.
As both a major station group and content creator Sinclair believes balanced affiliate relations relationships are essential to serving local communities effectively this development reinforces the fundamental value of local broadcasting and our role as a trusted community partners. We continue to view the deregulatory.
Tori environment in Washington is highly constructive and we will continue to work with chairman car and the rest of the SEC on the very welcomed and long overdue approach to protect our local journalism across the country.
Speaker #1: And as tain media companies continue to grow their content and tion holdings, this review is more important than ever. Again, we welcome FCC Chairman Carr's approach towards regulatory clarity that supports both strong network partnerships and local editorial independence.
Now for the first time, let me turn the call over to <unk> to walk through our financial results and guidance.
Thanks, Chris.
Speaker #1: As both a major station group and content creator, Sinclair believes balanced affiliate relations relationships are essential to serving local communities effectively. This development reinforces the fundamental value of local broadcasting and our role as trusted community partners.
I'll cover our financial results in three parts.
I'll review, our balance sheet, net leverage and cash flow related items.
I'll walk through our segment performance as well as consolidated revenue and adjusted EBITDA results for the quarter and third I'll provide our outlook for the third quarter and key financial metrics for full year 2025.
Speaker #1: We continue to view the deregulatory environment in Washington as highly constructive, and we will continue to work with Chairman Carr and the rest of the FCC on the very welcomed and long overdue approach to protect local journalism across the country.
Turning to slide 11, our balance sheet remains the industry's longest maturity profile, but more importantly, it positions us well to participate in what we expect to be a period of renewed M&A activity within the sector.
Speaker #1: Now, for the first time, let me turn the call over to Narinder to walk through our financial results and guidance.
Speaker #3: Thanks, Chris. I'll cover our financial results in three parts. First, I'll review our balance sheet net leverage and cash flow-related items. Second, I'll walk through our segment performance as well as consolidated revenue and adjusted EBITDA results for the quarter.
During the second quarter, we opportunistically repurchased approximately $81 million.
In face value of Stg's 2027 notes for $77 million.
Capturing immediate value.
We ended the quarter with first our first lien net leverage at one eight times and net leverage at five seven times based on a trailing eight quarter calculation.
Speaker #3: And third, I'll provide our outlook for the third quarter and key financial metrics for full year 2025. Turning to slide 11, our balance sheet remains the industry's longest maturity profile, but more importantly, it positions us well to participate in what we expect to be a period of renewed M&A activity within the sector.
Capital expenditures of $17 million or avail below our guidance range, primarily reflecting project timing within the year.
Our liquidity position remains strong with a fully undrawn $650 million revolver and consolidated cash of over $616 million <unk>.
Speaker #3: During the second quarter, we opportunistically repurchased approximately 81 million dollars in face value of STGs 2027 notes for 77 million dollars capturing immediate value.
Including approximately $224 million at STG, and nearly $393 million at ventures.
Speaker #3: We ended the quarter with first out, first lean net leverage at 1.8 times and net leverage at 5.7 times, based on a trailing eight-quarter calculation.
This financial strength combined with no meaningful debt maturities until the end of 2029 gives us significant optionality.
On slide 12.
Speaker #3: Capital expenditures of 17 million dollars were well below our guidance range, primarily reflecting project timing within the year. Our liquidity position remains strong, with a fully undrawn 650 million dollar revolver and consolidated cash of over 616 million dollars including approximately 224 million dollars at STG and nearly 393 million dollars at Ventures.
Highlight our second quarter segment results.
Local media in tennis channel delivered adjusted EBITDA of $99 million and $13 million respectively.
Well above the midpoint of our guidance ranges.
In the local media segment distribution revenue of $380 million was 1% below the prior year quarter and came in slightly below our expectations largely driven by lower than expected subscriber growth for virtual mvpds.
Speaker #3: This financial strength, combined with no meaningful debt maturities until the end of 2029, gives us significant optionality. On slide 12, we highlight our second quarter segment results.
Note that distribution revenue is still up 1% for the first half of 2025% compared to the prior year as Chris referenced earlier.
Speaker #3: Local media and Tennis Channel delivered adjusted EBITDA of 99 million dollars and 13 million dollars respectively, well above the midpoint of our guidance ranges.
Core advertising revenue of $272 million.
It was within our guidance range.
Down by four 7% year over year on as reported basis as macroeconomic and tariff related pressures continued to weigh on certain key categories.
Speaker #3: In the local media segment, distribution revenue of 380 million dollars was 1% below the prior year quarter and came in slightly below our expectations largely driven by lower than expected subscriber growth for virtual MVPDs.
Media expenses of $542 million.
About $23 million favorable to the low end of our guidance range driven by cost savings, resulting from lower sales related and employee costs from open positions.
Speaker #3: Note that distribution revenue is still up 1% for the first half of 2025, compared to the prior year, as Chris referenced earlier. Core advertising revenue of 272 million dollars was within our guidance range.
The FERC timing on certain initiatives and successful resolution of various outstanding FCC matters during the quarter, which allowed us to reverse approximately $13 million in previously accrued expenses.
Speaker #3: What was down by 4.7% year over year on as reported basis as macroeconomic and tariff-related pressures continued to weigh on certain key categories. Media expenses of 542 million dollars for 23 million dollars favorable to the low end of our guidance range driven by cost savings resulting from lower sales-related and employee costs from open positions; the third timing on certain initiatives and successful resolution of various outstanding FCC matters during the quarter; which allowed us to reverse approximately 13 million dollars in previously accrued expenses.
However, please note that only $3 million of these reversals.
Favorable impacting adjusted EBITDA for the quarter.
Tennis channel delivered total revenue of $68 million up 1% versus the prior year quarter, but below our guidance driven by softer advertising trends.
Adjusted EBITDA of $13 million.
Was at the high end of our guidance range.
Turning to slide 13.
Consolidated media revenue of $777 million.
Came in a touch below our guidance range, primarily due to softer than anticipated distribution revenue driven by slower than anticipated virtual mvpds growth.
Speaker #3: However, please note that only 3 million dollars of these reversals are favorably impacting adjusted EBITDA for the quarter. Tennis Channel delivered total revenue of 68 million dollars up 1% versus the prior year quarter.
Year over year performance reflects the expected industry dynamics in a non political year.
Media revenue declined $42 million versus the prior year driven by the expected reduction in political advertising revenue in this non election year and the absence of material Diamond management fees. However.
Speaker #3: But below our guidance, driven by softer advertising trends. Adjusted EBITDA of 13 million dollars was at the high end of our guidance range. Turning to slide 13, consolidated media revenue of 777 million dollars came in a touch below our guidance range primarily due to softer than anticipated distribution revenue driven by slower than anticipated virtual MVPD growth.
However, core advertising revenue grew $13 million year over year on as reported basis, which includes contribution from our digital remedy acquisition.
Note that digital remedy the now combined compose and digital remedy businesses.
The quarter to $38 million of revenue and $7 million of adjusted EBITDA in the second quarter.
Speaker #3: Year over year performance reflects the expected industry dynamics in a non-political year. Media revenue declined 42 million dollars versus the prior year. Driven by the expected reduction in political advertising revenue in this non-election year, and the absence of material diamond management fees.
Distribution revenue for the quarter was essentially flat year over year as rate increases offset subscriber churn.
Turning to slide 14.
Consolidated adjusted EBITDA of $103 million exceeded the midpoint of our guidance range.
Speaker #3: However, core advertising revenue grew 13 million dollars year over year on as reported basis which includes contribution from our digital remedy acquisition. Note that digital remedy the now combined compulsed and digital remedy businesses recorded 38 million dollars of revenue and 7 million dollars of adjusted EBITDA in the second quarter.
This outperformance was driven by lower than anticipated media expenses due to cost savings and reversal of prior FCC expense accruals as noted earlier in segment results.
As compared to last year, adjusted EBITDA declined by $55 million.
Reflecting expected impact of $42 million in lower media revenue combined with an $11 million and higher media expenses, driven by network programming fee increases production costs and annual compensation adjustments.
Speaker #3: Distribution revenue for the quarter was essentially flat year over year as rate increases offset subscriber churn. Turning to slide 14, consolidated adjusted EBITDA of 103 million dollars exceeded the midpoint of our guidance range.
Once again. Please note the media expenses do not reflect the benefit of prior period reversals of certain expense accruals related to FTC matters.
Speaker #3: This outperformance was driven by lower than anticipated media expenses due to cost savings and reversal of prior FCC expense accruals as noted earlier in segment results.
On slide 15, we introduce our detailed third quarter 2025 guidance.
Note that our guidance does not incorporate any anticipated our pending M&A activity.
Speaker #3: As compared to last year, adjusted EBITDA declined by 55 million dollars reflecting expected impact of 42 million dollars in lower media revenue combined with 11 million dollars in higher media expenses driven by network programming fee increases production costs and annual compensation adjustments.
Consolidated media revenue of $744 million to $768 million.
It reflects the anticipated year over year decline in political advertising revenue as we cycle against a strong 2020 for election year.
Speaker #3: Once in, please note the media expenses do not reflect the benefit of prior period reversals of certain expense accruals related to FCC matters. On slide 15, we introduce our detailed third quarter 2025 guidance.
Core advertising revenue is expected to be in the range of $303 million.
To $314 million.
At specific categories remain pressured although as Rob noted earlier, we are seeing some signs of stabilization.
Speaker #3: Note that our guidance does not incorporate any anticipated or pending M&A activity. Consolidated media revenue of 744 million dollars to 768 million dollars reflects the anticipated year over year decline in political advertising revenue as we cycle against the strong 2024 election year.
Distribution revenue is expected to be modestly lower at the midpoint of our range versus prior year driven by several factors.
One traditional mvpds subscriber churn continues so industry wide trends appear to be moderating.
Note that while we are encouraged by improving churn metrics announced by our largest mvpds, we have not yet seen these improvements translate into our subscriber numbers, though.
Speaker #3: Core advertising revenue is expected to be in the range of 330 million dollars to 314 million dollars as specific categories remain pressured, although as Rob noted earlier, we are seeing some signs of stabilization.
We do expect to see some improvement in the coming quarters.
Number two partial offset provided by continued subscriber growth at virtual mvpds, albeit at a slower rate and rate increases later in the quarter.
Speaker #3: Distribution revenue is expected to be modestly lower at the midpoint of our range versus prior year driven by several factors. One, traditional MVPD subscriber churn continues though industry-wide trends appear to be moderating.
And number three keep in mind, we have a negative impact from our completed divestiture of four markets touring Con broadcasting which closed in July.
Speaker #3: Note that while we are encouraged by improving churn metrics announced by our largest MVPDs, we have not yet seen these improvements translate into our subscriber numbers though we do expect to see some improvement in the coming quarters.
Consolidated adjusted EBITDA guidance of $71 million to $93 million reflect these revenue dynamics, while maintaining operational excellence and cost discipline.
Turning to slide 16, we present, our full year 2025 guidance.
Speaker #3: Number two, partial offset provided by continued subscriber growth at virtual MVPDs albeit at a slower rate and rate increases later in the quarter, and number three, keep in mind we have a negative impact from our completed divestiture of four markets to ring con broadcasting which closed in July.
For key financial metrics.
Two things to note here.
Number one the most notable change is that we have substantially reduced our cash tax expense guidance to $46 million at the midpoint.
Which is a $74 million improvement.
<unk> from our guidance provided last quarter.
Speaker #3: Consolidated adjusted EBITDA guidance of 71 million dollars to 93 million dollars reflects these revenue dynamics while maintaining operational excellence and cost discipline. Turning to slide 16, we present our full year 2025 guidance for key financial metrics.
This favorable revision is primarily driven by significantly lower forecasted federal tax payables, resulting from the passage of the one Big Beautiful Bell Act in July.
And number two just as a reminder, net interest expense includes $68 million of refinancing fees and expenses that were expensed in the first quarter. When we completed our comprehensive debt refinancing.
Speaker #3: Two things to note here. Number one, the most notable change is that we have substantially reduced our cash tax expense guidance to 46 million dollars at the midpoint.
With that let me now turn the call back to Chris for closing remarks, before we open the call to Q&A.
Speaker #3: Which a 74 million dollars improvement from our guidance provided last quarter. This favorable revision is primarily driven by significantly lower forecasted federal tax payables resulting from the passage of the one big beautiful bill act in July.
Thanks Mariner.
Turning to slide 18 to wrap up the quarter with our key takeaways we.
We delivered solid financial results with adjusted EBITDA within guidance and successfully repurchased $81 million of our 2027 notes, while reducing our full year cash guidance by $74 million.
Speaker #3: And number two, just as a reminder, net interest expense includes 68 million dollars of refinancing fees and expenses that were expensed in the first quarter when we completed our comprehensive debt refinancing.
<unk> brought in seasoned finance, a seasoned financial executive in our new CFO and announced Conrad Clemson as CEO of <unk> wireless positioning us well for our transformation strategy. Our content initiatives continue gaining momentum digital remedy is driving growth on it as a consolidated asset our multicast networks delivered.
Speaker #3: With that, let me now turn the call back to Chris for closing remarks before we open the call to Q&A.
Record growth in Amp media expanded with five new sports podcast, covering major college programs and the WNBA.
Speaker #1: Thanks, Narinder. Turning to slide 18 to wrap up the quarter with our key takeaways. We delivered solid financial results with adjusted EBITDA within guidance and successfully repurchased 81 million of our 2027 notes while reducing our full year cash guidance by 74 million.
Most importantly, the regulatory environment continues to provide encouraging tailwind for future growth opportunities.
All in all we're very well positioned for continued progress in the quarters ahead. Thank you very much for joining us today and your interest in Sinclair, Rob <unk> and I will now take your questions.
Speaker #1: We brought in seasoned financial executive in our new CFO and announced Conrad Clemson as CEO of Edgememe Wireless. Positioning us well for our transformation strategy.
Certainly everyone. At this time, we'll be conducting a question and answer session. If you have any questions or comments. Please press star one on your phone at this time.
Speaker #1: Our content initiatives continue gaining momentum. Digital remedy is driving growth as a consolidated asset. Our multicast networks delivered record growth and AMP media expanded with five new sports podcasts covering major college programs and the WNBA.
We do ask that will posing your question. Please pickup your handset if youre listening on speaker phone to provide optimum sound quality.
Again, if you have any questions or comments. Please press star one on your phone.
Speaker #1: Most importantly, the regulatory environment continues to provide encouraging tailwinds for future growth opportunities. All in all, we're very well positioned for continued progress in the quarters ahead.
Your first question is coming from Dan <unk> from benchmark Your line is live.
Yes. Thanks, good afternoon, welcome to render a party.
Speaker #1: Thank you very much for joining us today and your interest in Sinclair, Rob, Narinder, and I will now take your questions.
<unk>.
Chris I appreciate the regulatory commentary I mean, obviously, we've got a lot of news, we'll see what happens in the September meeting you guys are positioning yourselves seems more likely to be active on the buyer side.
Speaker #4: Certainly. Everyone at this time will be conducting a question and answer session. If you have any questions or comments, please press star one on your phone at this time.
You talked a little bit about balance sheet flexibility I mean, how aggressive do you think that you can get and do you think youre going to get any remedies on.
Speaker #4: We do ask that while posing your question, please pick up your handset if you're listening on speakerphone to provide optimum sound quality. Once again, if you have any questions or comments, please press star one on your phone.
The network side, which you called out and then separately just additional color on what happens with the virtual distributors does that mean that your sub decline came in a little bit worse than you anticipated because obviously the.
Speaker #4: Your first question is coming from Dan Kernos from Benchmark. Your line is live.
Speaker #5: Yeah, thanks. Good afternoon. Welcome, Narinder. To the party. just, Chris, appreciate the, h, the regulatory commentary. I mean, obviously, we've got a lot of news.
And I know Youre on a 90 day lag with traditional but it sounded like sub trends are getting better.
Right.
Yeah. Thanks, Dan So I'll answer the second question first look I think we're confident that the market trends are working in our favor in terms of reverse compensation and you can see.
Speaker #5: We'll see what happens in the September meeting. You guys have positioned ourselves, it seems, more like to be active on the buyer side. you know, Narinder talked a little bit about balance sheet flexibility.
Speaker #5: I mean, how aggressive do you think that you can get and do you think you're going to get any remedies on, you know, the network side which you called out?
Over the years that we've been able to manage down increases are steady.
Right and we're starting to see.
Speaker #5: and then separately, just additional color on what happens with the virtual distributors. Does that mean that your sub-declines came in a little bit worse than you anticipated?
Decreases in certain of our.
Sure.
Reverse compensation to to networks and so.
Speaker #5: Because viously, the, the, and I ow you're on a 90-day lag with traditionals, but it sounded like sub-trends were getting better there, so I'm just calling that out.
Couple that with the.
The recent launches two networks recently in launching DTC services.
Speaker #6: Yeah, thanks, Dan. So I'll, I'll answer the second question first. Look, I think we're, we're confident that the market trends are working in our favor.
That would be.
SPN and Fox one and.
<unk>.
Think that that just bolsters our position our negotiating position.
Speaker #6: In terms of reverse compensation, and you can see, you know, as, as over the years that, you ow, we've been able to manage down increases at a, at a steady, rate.
I think there is an increasing awareness.
Within the industry and quite frankly the FCC.
That now that exclusivity has essentially gone from the network affiliate relationship that the networks are really grossly overpaid.
Speaker #6: And, and we're ing to see, you ow, decreases in certain, of our, reverse compensation to, to networks. And so, you know, you couple that with, the recent launches, two networks recently launching D2C services, that would be, you know, ESPN and, and, Fox One.
And.
And that's why we continue to believe that we will.
We'll do better and probably should do probably even better than we actually will do.
But.
On your on your other question around subscriber trends.
Speaker #6: And, you know, I think that, that just bolsters our position, our negotiating position, because, you ow, I think it's, there's an increasing awareness within the industry and, quite frankly, the FCC, that now that exclusivity is essentially gone from the network, affiliate relationship, that the networks are really grossly overpaid.
Yes.
A big virtual Mvpds.
And second quarter actually lost subs quarter over quarter.
And a fairly significant way and now we do think.
There'll be a big bump coming back up for football.
Speaker #6: and, and, you ow, that's why we continue to believe that we will, will do better and, and probably should do probably even better than we actually will do.
As we see this trend within the virtual space.
Given that it's a month to month.
Program, where people are coming in and out of.
Speaker #6: but, on your, on your other question around, subscriber trends, yeah, the, a, a, a big virtual MVPD, in second quarter, actually lost subs quarter over quarter.
The virtual space for the football season, and a more exaggerated way.
Now that there is.
<unk> is getting bigger.
Ed is the bigger part of the overall ecosystem.
Speaker #6: in a mu in a, in a fairly significant way. now, we do think there'll a big bump, coming back up, for football. as we see this trend within the virtual space, given that it's a th-to-month, program where people are coming in and out of, the virtual space for the football season in, in a more, exaggerated way.
Thank you. Your next question is coming from Stephen Cahill from Wells Fargo. Your line is live.
Yes. Thank you.
No.
Welcome to broadcast with Dol.
<unk>.
A few questions for me so maybe Chris.
A deal here and you said there are a lot of opportunity can you just help us with what the accretion is from.
But you've announced so far I think there is.
Speaker #6: now that they're, the, the space is getting bigger, is a bigger part of the overall ecosystem.
Austin Duopolies in there.
I think we've thought about these as maybe being sort of double digit million dollars accretive to EBITDA. So I just wanted to know if there was any outlook on the contribution there.
And then to follow up on the Retrans question I think you have guidance for mid single digit net growth, which ended in 2025.
Speaker #4: Thank you. Your next question is coming from Steven Cahill from Wells Fargo. Your line is live.
Speaker #7: Yeah, thank you. and, Narinder welcome, welcome to broadcast. It's definitely never dull. a, a few questions for me. So maybe for Chris, you know, you, you all have a, a ton of als here and you said there's a lot of opportunity.
It's a two year CAGR based on what you are seeing sub declines.
<unk> com is there any risk to that guidance.
And then maybe last a little surprised to see core ads not better in Q3 with.
Speaker #7: Can you just help us with what the accretion is, from the things you've announced so far? I think there's a lot of swaps and duopolies in there.
With the easier.
Wondering if you have kind of EQT I think core or if its still pretty choppy out there. Thank you.
Speaker #7: you know, I think we've thought about these as maybe being sort of double-digit million dollars accretive to EBITDA. So I just wanted to know there was any outlook on, on the contribution there.
Okay.
Alright, well ill, let Rob address.
The last question around core, but I will hit your first two.
Before that and on the M&A.
Speaker #7: and then to follow up on the retrans question, I think you have guidance for mid-single-digit net growth, which ends in 2025. I think that's a, a two-year CAGR, you know, based on what ou're seeing in sub-declines.
M&A front.
I think it's easiest.
Just to give you a scope here and I do think as I mentioned in my comments is very very.
Speaker #7: And reverse comp is, is there any risk to that guidance? and then maybe lastly, a little, little surprise to see Core Ads not better in, Q3.
Important.
<unk>.
Very positive news that the eight eight circuit overturned the two big four rule I think that really accelerates.
Speaker #7: with the easier, digital comps. Wondering if you have kind green suits yet in Core or if it's still pretty choppy out there. Thank ou.
The expected path of deregulation, because the expected outcome was a remand to the SEC and and then we could have been waiting for another year for that process to play out.
Speaker #1: All right. Well, I'll Rob address, the last question around Core, but I will hit your first two. before that, and, you know, on the M&A front, I think it's easiest to, like, just to give you scope here and, and I do think, as I mentioned in my comments, very, very, important, and, you know, very positive news that the, the eighth, eighth circuit, overturned the two big four rule.
But now we're within 90 days of operating in a world where there is no more too big for prohibition, and what I think gets less.
Notoriety is that the multi cast restrictions that were placed on the industry last year.
Were overturned immediately and so both are very very significant and and they are very near term relief items and so you've seen us already be active.
Speaker #1: I think that really accelerates, the expected path of deregulation because the expected outcome a remand to the FCC and, and then we could have been, you ow, waiting for another year for that process to play out.
Closed one station swap for station sales to new station service agreements.
Speaker #1: but now we're, you know, within 90 days of operating in a world where there is no more two big four, prohibition and, what I think gets less notoriety is that the multicast restrictions that were placed last year, were overturned immediately.
But there the pipeline is pretty robust and it's going to accelerate here, especially with these recent ruling so we have 18 more.
JC <unk> planned in the pipe and we're busy working on other transactions like I mentioned station swaps et cetera. So.
Probably the easiest way to think about.
Speaker #1: And so, both are very, very significant and, and they're very near-term, relief items. And so, you've seen us already, be active, we've closed one station swap, four station sales, two new station service agreements.
All of the GSA activity, which youre going to see more coming in there in the near future is that they will contribute tens of millions of dollars of additional EBITDA.
And.
It will be a very small purchase price. So in terms of purchase multiple it would be far less than one times purchase multiple in terms of impact.
Speaker #1: but there's a pipeline's pretty robust and it's going to accelerate here especially with these on the industry recent rulings. So we have 18 more, JSA buy-ins planned, in the pipe and we're, you know, busy working other transactions like I mentioned, station swaps, etc.
And there will be tens of millions of dollars of benefit.
In terms of.
The 23 to 25 CAGR we are.
Speaker #1: So, probably the easiest way to think about, all of the JSA activity, which you're going to see more coming in the, in the, near future, is that they will contribute tens of millions of dollars additional EBITDA and, it will be a very small purchase price.
Guiding now to low single digits on.
<unk> 23 to 25, Retrans CAGR and I'll turn it over to Rob to talk more about <unk> or <unk>.
Add question.
As Steve.
The.
The current environment, it's still a tough right now.
Speaker #1: So, in terms of purchase multiple, it would be far less than one times, purchase multiple in terms of impact. And, and it will be tens of millions of dollars of benefit.
Last week with the jobs announcements as well, but we are cautiously optimistic.
As we move through the summer months into September with the return of college football NFL, we're seeing much larger buys coming down the pipeline.
Speaker #1: in terms of, the, the, the 23 to 25 CAGR, we are, guiding now to low single digits, on, the 23 to 25, retrans CAGR.
Seeing tier two automotive activating as well so.
On a pull forward we saw the tier ones remained strong, but we rely on tier two and tier three and we're starting to see that money flowing so even though the environment remains tough we are optimistic based upon our activity we've seen and then it follows.
Speaker #1: And, I'll turn it over to Rob to talk more about your core ad question.
Speaker #2: Yeah, Steve, with, within the, the current environment, it's still tough right . last week with the, the jobs announcement as well. But we are cautiously optimistic, as we move through the summer months into September.
Coming out of September into the fall with the MBA joining F N.
NBC as well so it's well stock if you saw the updates from the network saw double digit increases on this forward sales, which will put pressure and inventory coming back to the local broadcast.
Speaker #2: With the return of college football and NFL, we're eing much larger, buys coming down the pipeline. We're seeing, tier two automotive, activating as well.
And I just want to emphasize a point there because I think there's a little bit of.
Speaker #2: So, on a pull forward, we saw the tier ones, remain strong, but we rely on tier two and tier three. And we're starting to see that, that money flowing.
Misunderstanding within the marketplace about auto.
We definitely saw tariff induced weakness within auto, but national players didn't necessity necessarily see that and thats, what Rob is referring to so there was pull forward in demand.
Speaker #2: So we, we, even though the environment remains tough, we are optimistic based upon our activity. We've seen, and then it follows, coming out of, out of September into the fall with the NBA joining at, at NBC as well.
<unk> created by the fear of tariffs increasing prices.
That didn't really affect OEM advertising, but it did affect tier two and tier three so down to the dealers the uncertainty caused them to reduce.
Speaker #2: So, it's well stocked. If ou saw the updates from the networks, they had double-digit increases on their sports sales, which will put pressure and inventory coming back to the local broadcast.
And they had demand just walking in the door. So the need to advertise was not that acute we see that unwinding here as it becomes more certain what the future is.
Speaker #1: And I just want to emphasize a point there because I think it's a, there's little bit of, misunderstanding within the marketplace about auto. we definitely saw tariff-induced weakness within auto, but national players didn't necessarily, necessarily see that.
And we don't actually have this pull forward of demand hitting the dealers' floors anymore. So we're seeing signs of that trend unwinding.
Speaker #1: And that's what Rob is referring to. So there was this pull forward in demand, created by the fear of tariffs increasing prices, that didn't really, in fact, OEM advertising, but it did affect tier two and tier three.
Thank you all for the color.
Yeah.
Thank you. Your next question is coming from Benjamin soft from Deutsche Bank. Your line is live.
Speaker #1: So down to the dealers, the uncertainty caused them to reduce, and they had demand just walking in the door. So, the need to advertise was not that acute.
Good afternoon, and thanks for the question I wanted to ask first on guidance. It sounds like the <unk> Guide has some moving pieces from asset sales I'm wondering if you could help us parse out what that is and then appreciate all the color on the sum of the parts for ventures.
Speaker #1: We see that unwinding here as it becomes more certain what the future is. And, you ow, we don't actually have this pull forward of demand, you know, hitting the dealers' floors anymore.
If you guys could just talk about your process for evaluating debentures asset might make sense to monetize thank you.
Speaker #1: So, we're eing signs of that, trend unwinding.
Yes, so look on the guide I think the most important thing that was pointed out in the script.
Speaker #7: Thank you all for the color.
Speaker #4: Thank ou. Your next question is coming from Benjamin Soft from Deutsche Bank. Your line is live.
<unk>.
The sale of four stations.
So there was a decent amount of expense.
Speaker #8: Good afternoon. Thanks for question. I wanted ask first on guidance. It sounds like the three Q guide has some moving pieces from asset sales and wondering if you could help us parse out what that is.
That rolled through.
That closed in July also.
On the.
Instead, we closed in March but the.
So it did affect Q2, but it will affect Q3, there is digital remedy as well.
Speaker #8: And then appreciate all the color on the, some of the parts for ventures. Would ove if you guys could just talk about your process for evaluating if ventures asset might make sense to monetize.
Now in the numbers, adding expense and.
And revenue if you want to get more specific we can follow up.
Speaker #8: Thank you.
Got to walk you through some of those numbers.
Speaker #1: yeah. So look, on the guide, I ink the, the most important thing that was pointed out in the script, was, the sale of four stations.
And then can you repeat your second question I think it was on ventures.
Yeah, just just curious how you guys go about evaluating if adventures asset might make sense to monetize in the future.
Speaker #1: so there was a decent amount of expense, that rolled through, the, the closed in July. Also, you ow, on the, is it closed in March, but, the, so it did affect Q2, but it will, affect Q3.
Yeah. So.
Our core assets within ventures.
Our tennis channel and digital remedy.
Both we are very bullish on their future.
Speaker #1: There is digital remedy as well. now in the numbers, adding expense and, and, and revenue. If you want to get more specific, we can follow up, to g to walk you through some of those numbers.
Growth.
Opportunities.
<unk> channel in particular with new leadership under Jeff Blackburn from from Amazon and did a remedy now combined with the legacy can pulse business.
Speaker #1: Ben, can you repeat your, is your second question? I ink it was on ventures. Is that right?
It's going to really hit its stride in a market and end market that's growing very fast.
Speaker #7: Yeah. Just, just curious how you guys go about evaluating if a ure's asset might make sense to monetize in the ure.
And with a with a product offering that's best in class.
Speaker #1: Yeah. So, our core assets within ventures, are Tennis Channel and Digital Remedy. both we are very bullish on, their future, growth opportunities, Tennis Channel in particular with new leadership under Jeff Blackburn from, from Amazon.
And then we're looking to add additional.
Portfolio companies as I mentioned that we know and we're definitely.
Factoring in.
Favouring quality over speed here, and adding additional portfolio companies, but the rest of the assets, which which on this call we highlighted.
The book value of $726 million.
Speaker #1: And, and Digital Remedy, now combined with the legacy Compulse business, is going to ally hit its stride in a market and in a market that's growing, very fast.
We're look ultimately looking to monetize all of those obviously, a big chunk of the 726 is already cash $393 million.
But that leaves.
Speaker #1: and with a, with a product offering that's best in class. And then we're looking to add additional, portfolio companies as I mentioned, that, you know, when we're, we're itely factoring in, you know, or favoring quality over speed here.
Over or about 340 million or $30 million to $40 million of book value that needs to be.
Monetized and and there will be some additional monetization.
In that portfolio later in that back half of this year. So there's already.
Speaker #1: in adding additional portfolio companies, but the, the rest of the assets which, which on this call we highlighted, have a book value of 726 million.
Some monetization there in the works, but none I would say none of those are long term holds except for the bally stake.
Speaker #1: we're look ultimately looking to, monetize all of those. Obviously, a big chunk of this, the 726 is already cash, 393 million. but, that leaves, you know, over or, you know, about 340 million or 30 or 40 million of, of book value that needs to be, monetized.
Within that group the valley stake is mark to market based on.
It's current.
Over the counter Pinksheets training.
Trading price, we do not think that thinly traded price is reflective of its true value and in fact.
<unk> recently did a very strategic transaction with <unk> in Europe.
Speaker #1: And, and there will be some additional monetizations, in that portfolio later in that back half of this year. So there's, there's already, some monetizations there, in the works, but none, I would say none of those are long-term holds except for the valley stake.
Earlier about three or four weeks ago.
That we think was highly accretive.
<unk> the overall valley story, and we're looking forward to many more catalysts here.
Valley, So we think the growth opportunities within that position.
Speaker #1: within that group, the valley stake is marked to market based on, its current, over-the-counter pink sheets, trading price. We do not think that thinly traded, price is reflective of its true value.
Physician are significant and so that's the only one that really for now we're not thinking theres going to be a.
Our near term monetization event or opportunity.
Hi, This is Linda here, let me just take a crack at addressing two items of whats baked into the guide.
Speaker #1: And in fact, valley's just recently did a very strategic transaction with Interlot in Europe, earlier about, you know, three, four weeks ago. that we think was highly accretive, to the overall valley story.
Digital remedy.
Should not expect any material changes in Q3 to what we disclosed in Q2 in terms of the contribution but keep in mind that.
Speaker #1: And we're looking forward to many more catalysts here, for valley. So I, I we think the growth opportunities within that, position are significant. And so, that's the only one that really, for now, we're thinking there's going to be a, a near-term monetization event or opportunity.
There is a piece of <unk> built into it so not all of that is due to the acquisition.
And number two on the sale of stations serene corn.
The major impact you saw and I called out in my prepared remarks was on the distribution revenue.
Speaker #5: view these podcasts and
Speaker #5: related social
Speaker #5: media as a key growth driver for the
Speaker #5: segment. As their
Speaker #2: Ben, hi. This is Narinder here. let me just, take a crack at, addressing, two items of, what's picked, into the guide. digital remedy, you should not expect any material changes in Q3 to what we disclosed in Q2.
So if you look at the quarter over quarter.
Speaker #5: popularity and advertising
Speaker #5: grow
Speaker #5: rapidly,
With a reduction of our sequential excuse me a reduction in.
Speaker #5: However, the story does not end.
Speaker #5: there. We will shortly
Speaker #5: be announcing a
Distribution I would say nearly half of that is due to bring corn.
Speaker #5: landmark events and
Speaker #5: media partnership
Speaker #5: with a leading sports
Speaker #5: representation
So hopefully that adds some color to what's in the guide.
Speaker #5: and marketing
Speaker #5: agency that will
Speaker #2: In terms of the contribution, but keep in mind that, there is a piece of Compulse built into it. So not all of that is due to the acquisition.
Speaker #5: include Signature
Speaker #5: Live Events with our popularity and
Okay. Yeah, that's really helpful. Thank you both.
Speaker #5: podcast talent.
Speaker #5: These events will
Speaker #5: include a
Okay.
Speaker #5: nationwide tailgate
Speaker #5: tour during the upcoming
Thank you that concludes our Q&A session I will now hand.
Speaker #5: college football will shortly be announcing season, as well as an exclusive
Speaker #2: And number two, on the sale of stations to ring con, the, the major impact you saw, and I called out in my prepared remarks, was on the distribution revenue.
The conference back to Chris <unk> for closing remarks. Please go ahead.
Yes.
Once again, thank you for joining us on today's call to the extent you have any questions. Please feel free to reach out to us directly.
Speaker #2: So if you look at the quarter over quarter, re reduction or sequential, excuse me, reduction in, distribution, I would say nearly half of that is due to ring con.
Thank you well done.
You may disconnect at this time and have a wonderful day.
Thank you for your participation.
Speaker #2: So hopefully that adds some color to what's in the guide.
Speaker #7: Okay. Yeah. That's really helpful. Thank you both.
Speaker #4: Thank you. That concludes our Q&A session. I'll now hand the conference back to Chris Ripley for closing remarks. Please go head.
Speaker #1: once again, thank you for joining us, on today's call. To the extent you have any questions, please feel free to reach out to us directly.
Speaker #4: Thank ou.
Speaker #2: Narinder, well done.