Sinclair Stock Up As Reduction-In-Force News Surfaces


In early after-hours trading on Thursday, Sinclair Broadcast Group shares were trading at $35.77, up from a nine-cent dip in regular trading.

Despite the dip, the current price for SBGI is strong, as the stock has seen significant share growth since late October.

Even so, Sinclair’s fiscal health is far from perfect. That could explain why the Baltimore-based company is engaging in a reduction in force impacting 5% of its employee roster — including those at its headquarters.

According to the Baltimore Sun, nearly 600 jobs will be culled across the U.S. by Sinclair; the company has not issued any formal statement on the reduction in force effort.

Why? “The impact of the COVID-19 pandemic continues to be felt across all sectors of the economy, something that can have a profound impact on a company as diversified as ours,” the company said in a statement to the daily newspaper.

While its unusual for a media company squarely focused on visual media and not audio media, which has seen big staff furloughs and layoffs due to the novel coronavirus, to blame COVID-19 for layoffs, Sinclair is unique among its peers: it invested heavily in the ex-FOX regional sports networks. With no live sports across much of 2020, viewership — and advertising support — plummeted.

That, it appears, has contributed to the fiscal challenges fueling the layoffs about to transpire.

“In response to this, we are currently undergoing enterprise-wide reductions across our workforce, including corporate headquarters, to ensure we are well-positioned for future success,” the statement to the Sun said.

Sinclair’s full-time roster of employees numbers 9,211. Additionally, the company has 2,219 part-timers who are on contract and not considered employees.

Sinclair’s Q4 2020 performance was good: Earnings per share exceeded Wall Street analyst estimates, while revenue came in line with forecasts. However, the RSN arm of Sinclair, battered by COVID-19, is its most underperforming segment. Distribution revenue for Local Sports dipped to $513 million from $724 million, as advertising slid to $14 million from $60 million.