That’s how Sinclair Broadcast Group Executive Chairman David Smith summarizes the state of his broadcast media company, which saw its Q1 total net revenue increase to $649.9 million, from $578.9 million, as its net income surged to $57.2 million (61 cents per diluted share) from $24.1 million (25 cents).
Why is 2017 shaping up to be a pivotal year for Sinclair?
Smith singles out three things: The FCC’s recent reinstatement of the UHF discount, the expected approval of the next-gen ATSC 3.0 broadcast platform, and what he calls “much needed modernization of antiquated broadcast regulations.”
Smith said, “Positive movements by the FCC on these fronts will allow us, among other things, to better serve our local communities through increased investment in local news and other quality local programming.”
In anticipation of ATSC 3.0’s approval, Sinclair has been laying the groundwork for development of a nationwide network, and the design of 3.0 chipsets, and plans to test single frequency network technology and advanced business models later this summer. “The Next Gen technology will transform how we interact with consumers and allow us to implement value-enhancing business models as the convergence and emergence of alternative platforms and companies proliferate,” Smith said.
A good chunk of Sinclair’s Q1 net income is tied to its sale of Alarm Funding Associates for $53 million. Still, without this sale the company would have seen net income of $30 million — a nice gain against what many media companies are seeing as tough comps due to political dollars in Q1 2016.
Sinclair’s political revenue was $2.1 million in Q1, versus $24.4 million in the first quarter of 2016.
In further good news for investors, Sinclair’s Board of Directors declared a quarterly cash dividend of $0.18 per share on the company’s Class A and Class B common stock. The dividend is payable on June 15 to holders of record at the close of business on June 1.
Sinclair was the first company out of the gate following the restoration of the “UHF discount” by the FCC to make a deal with another broadcast TV entity, taking advantage of the increase in national ownership limits. In late April, Sinclair agreed to acquire Bonten Media for $240 million, while overseeing key Sinclair LMA partner Cunningham Broadcasting Corp.’s purchase of the membership interest in Bonten partner Esteem Broadcasting.
This deal followed the March 2017 acquisition of Tennis Media Company, the owner of Tennis.com and Tennis Magazine, for $8 million cash on hand (plus an additional $6 million earn-out potential based on certain contingencies).
Sinclair has also been a leader in the transition to ATSC 3.0, and in mid-March announced that it had teamed with Nexstar Media Group to form a consortium designed to promote spectrum aggregation, innovation and monetization while enhancing their abilities to compete in the wireless data transmission sector.
Also in March, Sinclair subsidiary ONE Media 3.0 finalized a deal with Saankhya Labs, a leader in the development of Cognitive Software Defined Radio chips, to accelerate the development of ATSC 3.0 chipsets that will enable various types of consumer devices to receive the next-gen broadcast TV standard.
RBR + TVBR
