Sinclair Broadcast Group, Inc. (NASDAQ:SBGI) Q4 2022 Earnings Call Transcript

Lucy Rutishauser: Yes. And Steve, one other point, net retrans for 2022 for the broadcast is up low single-digits.

Steven Cahall: Yes. Got it. And then on the Fubo issue, this seems like a rather deliberate approach by Paramount. So I’m just wondering how you see this situation getting resolved? And I think that Paramount has YouTube TV coming up in the next few months. And so do you have a view on whether or not something similar might happen? And I can’t help but think of how CBS prior to the merger was often speaking very aggressively about how they expected to reclaim more of net retrans and whether you think those two are related. And I know this is a long question, but maybe just to put in there, is the CBS affiliate renewal part of your cadence for this year?

Chris Ripley: In terms of CBS, the last question you have, we do not have any renewals of CBS, I think, until the year €“ till year-end. And I think this will eventually get resolved here in terms of Fubo. YouTube will have to see these, but my take on it is that it will be resolved at some point between us and the networks in the next couple of months, but I think the bigger issue that we’re highlighting is just one of inequity in terms of how virtuals are dealt with versus traditional. And that is something that there’s a growing consensus within the industry and within D.C that needs to change.

Steven Cahall: Yes. And then maybe just lastly, so we see the Q1 EBITDA guide does look like it’s a decent amount below the Q1 2021 EBITDA number, excluding Diamond’s impact at that point. I was just wondering, do you €“ is there something like on the timing of cost, the Tennis Channel that’s hitting that? Or do you expect EBITDA to grow as you move through the year? And the basis of the question is that on a trailing eight-quarter basis this year, you’ll be swapping essentially 2021 quarters for 2023 quarters. So as we just think about the net leverage of the company, if those 2023 quarters look a lot like the 2021 quarters, then it seems like your leverage could go up this year. So I just wanted to see if I’m missing any pieces there? Thank you.

Lucy Rutishauser: Sure. So what’s really driving the EBITDA is in part the advertising environment that Rob talked about, where the guide is €“ there’s a wide range of guide on core advertising, right. So flat to down mid single-digits, there’s also political that we don’t have in Q1 of this year versus Q1 of last year. We do have step-ups in all of our just sort of normal compensation that’s in there where we fully are loaded for bonuses, assuming that everybody will hit their budgets. We do have some of the initiatives that Chris talked about, it’s $75 million for the year. There is some amount in Q1 of this year. Again, those are all €“ will generate returns as time goes on, and we do have additional Tennis Channel rights that are higher than last year.