Sinclair, Inc. Class A Common Stock 2026 Q2 Earnings Call

Good afternoon, everyone, thank you for joining Sinclair's second quarter 2026 earnings conference call. Joining me on the call today are Chris Ripley, our President and Chief Executive Officer, Narinder Sahai, our Executive Vice President and Chief Financial Officer, Rob Weisbord, our Chief Operating Officer and President of Local Media. Before we begin, I want to remind everyone that the slides for today's earnings call are available on our website, sbgi.net, on the Events and Presentations 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 several risks and uncertainties. Actual results in the future could differ from those described in the forward-looking statements because of various important factors.

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. The company undertakes no obligation to update these forward-looking statements. Including on the call will be a discussion of non-GAAP financial measures, specifically Adjusted EBITDA. This measure is not formulated in accordance with GAAP and is not meant to replace GAAP measurements and may differ from other companies' uses or formulations. Further discussions or reconciliations of the company's non-GAAP financial measures to comparable GAAP financial measures can be found on our website. Please note that unless otherwise noted, all year-over-year comparisons throughout today's call are presented on an as reported basis. Let me now turn the call over to Chris Ripley.

Thank you, Chris, good afternoon, everyone. Let me begin on slide three. We delivered a strong second quarter with results that reflected the early strength of the 2026 political cycle, continued distribution revenue growth, disciplined execution across the business. For the quarter, total revenue was $840 million, up 7% year-over-year, while Adjusted EBITDA was $149 million, up 45%. Growth was led by political advertising the early pace of demand reinforces our confidence in the strength of the cycle the value of our broad station footprint in many of the country's most competitive races. Distribution revenue continued to grow, supported by the partner station buy-ins completed over the past year. The combination of broadcast, connected television, digital, podcast inventory continues to expand the solutions we offer advertisers positions us well as political demand builds through the remainder of the year.

Core advertising was softer as we expected, reflecting record political demand crowding out inventory in our most competitive markets and caution in a handful of cost-pressured advertiser categories. Narinder will take you through the details. Live sports once again demonstrated the reach of broadcast television led by record World Cup audiences on Fox. Rob will take you through that shortly. Tennis Channel also sustained its audience momentum with growth across its linear, direct-to-consumer, Tennis Channel 2, and Pickleball TV platforms. Within Ventures, the portfolio continued to generate cash distributions and ended the quarter with $489 million cash on hand. That liquidity continues to provide meaningful flexibility as we evaluate opportunities across the portfolio and advance our broader strategic priorities. We also made substantial progress on deleveraging as we repaid or retired approximately $320 million of debt in the quarter. Deleveraging our balance sheet remains our top priority for the company.

Based on our first half performance and current outlook, we are increasing our full year Adjusted EBITDA and political advertising guidance. Narinder will discuss the updated outlook in more detail later in the call. On slide four, we highlight what we expect to be a historic day for the broadcast industry tomorrow with the expectation of an FCC vote to remove the national ownership cap of 39%, a development that the industry has been supporting for many years. The removal of the national ownership cap would set the stage for broadcasters to be able to compete on a more level playing field as the industry finds itself competing against big tech and streamers that are not subjected to comparable regulatory constraints. It would strengthen broadcasters' ability to invest in local news across the country as we continue to serve our local communities.

As we continue our strategic review process, the increased clarity and support from an improved regulatory environment could help facilitate M&A activity across the industry. Sinclair is well prepared to participate in value-creating consolidation, and we will remain disciplined in how and when we do so. The slide also summarizes the other proceedings moving in the same constructive direction, the ATSC 3.0 transition, the network affiliation review, and modernized local ownership rules. With that, let me turn the call over to Rob to discuss our operating highlights in more detail.

Thank you, Chris, and good afternoon, everyone. Turning to slide five, the 2026 midterm election cycle is off to a strong start across our footprint.

We operate in all of the 10 top 10 states currently projected to receive the highest levels of political advertising spending. Importantly, these states include six competitive Senate, seven competitive gubernatorial, and 33 competitive House races, according to a recent Staten and Forest analysis. That combination of geographic reach, local audience scale, and competitive races positions us well as campaign spending expands through the second half of the year. Second quarter political revenue of $59 million was 9% above the second quarter of 2022. Demand has been broad-based across our markets, with candidates, parties, and issue advertisers beginning to reserve inventory earlier in the cycle. Recent changes to campaign finance rules are also enabling party committees to invest earlier and at greater scale.

Given the strength we have seen to date and the current outlook for competitive races across our footprint, we are increasing full-year political advertising revenue guidance to at least $375 million. Narinder will take you through the updated outlook. Political spending is always back-end loaded towards the weeks immediately preceding election day, and timing can vary by race and market. However, the early activity we are seeing supports our expectation for a robust cycle and underscores the differentiated value of local broadcast television for reaching voters at scale. Turning to slide six, the FIFA World Cup provided another clear example of the power of broadcast-led live sports and the value of our Fox affiliate portfolio. The tournament delivered record soccer audiences on broadcast and generated strong advertising demand across our local markets.

For some perspective, 128.4 million Americans watched some portion of the World Cup on Fox, FS1 and 2, and the World Cup final drew an audience of 66.4 million viewers, which was the largest U.S. audience for any non-Super Bowl sports event in more than 30 years. Sinclair took this opportunity to expand well beyond the linear broadcast. Its media brands allowed advertisers to add targeted cross-platform reach, while our Unfiltered Soccer podcast featuring Landon Donovan and Tim Howard gave brands another way to engage highly interested soccer fans around the tournament. In addition, three live activations around the World Cup let consumers physically experience our advertisers' products, deepening engagement with their campaigns. This coordinated approach across broadcast, digital, and podcast platforms is increasingly important to advertisers.

Broadcast provides mass reach and live engagement, while our digital capabilities, along with live activations, add audience targeting, frequency, and measurable extensions beyond the telecast. Premium live sports remain one of the most powerful drivers of appointment viewing, and broadcast delivers that content with unmatched reach. As we head into the third quarter, we look to build on the World Cup successes with the return of college football and the NFL. Our operational takeaways on slide seven highlight the strong early political demand across our markets during the quarter. With political revenue ahead of the comparable 2022 period, our broad station footprint, local sales relationships, and expanding digital capabilities position us well as campaign activity builds through the remainder of the cycle. Distribution also remains solid, supported by our partner station buy-ins.

The value of broadcast remains clear, particularly around live news, premium sports, and other programming that consistently brings audience together at scale. Advertisers are increasingly looking for integrated campaigns that combine the broad reach and live engagement of broadcast with the targeting and measurement available through digital. Our portfolio allows us to deliver both, creating more value for the advertiser while deepening engagement with audiences across platforms. Client demand is consolidating total video with linear and streaming bought together. That is exactly what we have built towards. The World Cup was the template with broadcast reach, streaming, digital podcasts, and live activations sold as integrated campaigns. Across the business, we remain disciplined on expenses while continuing to support the content, technology, and sales capabilities that can drive long-term growth.

In summary, strong early political demand, expanding cross-platform capabilities, and the audience strength of broadcast-led live sports position us well for the second half of the year. With that, let me turn the call over to Narinder to review the second quarter financial results and our updated outlook.