TV broadcasting and media companies Sinclair Inc. reported political revenue of $138 million for the third quarter, which came in slightly below updated guidance.
In September, the company had raised its guidance for the quarter to about $140 million to $145 million, up from the previously announced forecast range of $113 million to $128 million. The company attributed the mistake to political ad cancellations in late September, with $5 million in lost revenue due to late ad cancellations during the quarter.
“We were impacted by some late Nevada political ad cancellations that occurred in the last week of the third quarter as campaigns move money to states, cities outside of our footprint, where the races got tighter,” the company said.
In total, the company said it experienced over 11 million cancellations from Nevada and six million in cancellations in some areas of Pennsylvania, as some in-state money moved to Philadelphia, where Sinclair does not have a presence.
Executives said they next look ahead to “a hotly contested 2026 midterm election and the 2028 presidential election with two open primaries” when it comes to political ad spending. And in the meantime, Sinclair suggested it is looking for a loosening of industry rules and an update to what it says are “outdated broadcast rules,” including the nationwide ownership cap and prohibiting ownership of more than two top four-rated TV stations in the same local market. Sinclair is known to be a conservative-leaning media giant and one who had had a close relationship with Trump.
“It feels like a cloud is lifting over the industry here, and we believe that a much-needed modernization of the regulatory framework is going to happen, and we intend, as we’ve always said, or consistently over the last few years, we intend to participate in that, in M&A in the industry, whether as a buyer as a seller or a merger partner, says Sinclair CEO Chris Ripley.
When asked what makes him more hopeful about this regulatory environment, given the fact that Sinclair’s $3.9 billion merger with Tribune Media fell apart in 2018 during Trump’s first term and FCC scrutiny.
“We really haven’t lived in a world where even the current rules have been in place, or at least followed by the FCC,” Ripley said, adding that FCC Chariman Pai had enacted new rules, including getting rid of cross ownership, during his tenure but it was then challenged in court and then new leadership took over.
“It’s just not consistent with a level playing field compared to big tech or big media. And I think the Republican Party understands that,” he added.
The company noted that it had seen record revenue for the third and fourth quarters, up to and including Election Day, as well as for full-year political advertising.
Estimates for 2024 political revenue are $406 million, a 16 percent increase over the 2020 pre-Georgia total. That total also includes $26 million in cancellations because “dollars moved to states and local markets outside of our footprint.”
Total revenue increased 20 percent to $917 million in the third quarter compared to $767 million in the prior year period. Total ad revenue reached $433 million, up 42 percent from $304 million the previous year.
The net profit attributable to the company was 94 MUSD after a net loss of 46 MUSD in the previous year.
“Sinclair delivered solid results for the third quarter, as core advertising revenue grew 1% year over year, despite record political revenue,” Ripley said in the press release. “This is unprecedented for Sinclair in recent history and perhaps the industry to be able to grow core advertising revenue in the third quarter of a political year. Total advertising revenue was up 42% year over year and distribution revenue was up 5%.
“We have now reached an agreement to renew retransmission consent agreements covering 78% of our Big 4 network MVPD linear subscriber base this year and we are confident in our ability to grow net retransmission revenue in line with our previous mid-digit CAGR estimate from 2023-2025 Our industry-leading core advertising revenue, and with most of our retrans and network connection agreement renewals now behind us, we believe we are well positioned to finish 2024 strongly, he added.
