Sinclair follows rainbow to pot of political gold


SBG / Sinclair Broadcast Group2012 was a growth year for Sinclair Broadcast Group in more ways than one. For example, it brought 30 new stations into its fold. And thanks to the election, it also grew revenues, picking up an additional $100M+, even when measuring on a same-station basis.

Same station net broadcast revenue soared 58.8% from $180.8M to $287.1M, and operating income grew 87.6% from $63.5M to $119.1M. Net income exploded 160% from $22.7M to $59.0M.

“2012 was a remarkable year for our Company,” commented President/CEO David Smith. “We successfully closed on 30 TV stations, recorded record levels of political advertising, benefited from a rebound in the automotive advertising category, and achieved historic levels in key financial metrics.  As we look forward to 2013, we are very excited about our prospects, including starting the year with the Super Bowl on our 11 CBS stations. While we have led the current consolidation trend in the broadcast industry, we believe there are still many opportunities for us to continue to acquire quality television assets, unlock hidden value, and strengthen our competitive position.”

Net revenue for all of 2012 came in at $920.6M, a 42.1% increase over 2011’s total of $648M. Pro forma, the change would have been an increase from $962M in 2011 to $1.103B in 2012, according to Wells Fargo’s Marci Ryvicker.

Political was a major revenue driver, increasing from $4.1M to $54.1M in Q4 and from $8.3M to $96.9M over the course of the year.

Local revenue, including local sales and retransmission consent income, also grew in Q4, up 33.7%. Automotive was up 6.4%.

Sinclair announced that an option held by Fox Television to acquire any of a number of Sinclair stations as part of the WUTB Baltimore deal will not be exercised and as a result, Sinclair will need to make a payment to Fox of $25M by late in April. The assets that will be remaining in the portfolio include stations in Raleigh, NC (WRDC/MNT and WLFL/CW); Las Vegas, NV KVMY/MNT and KVCW/CW); Cincinnati, OH (WSTR/MNT); and Norfolk, VA (WTVZ/MNT),

RBR-TVBR observation: Sinclair is a group that bears watching. It clearly is the type of company that doesn’t wait for the future to happen, it shapes itself aggressively for the future. We’ve seen it divest properties that don’t fit into its overall strategy, but it has been far more likely to buy properties than to sell them. It’s always interesting to follow its continuing evolution.