Sinclair (SBGI) investor relations material

Regulatory and M&A environment

• FCC's repeal of the 39% ownership cap and other rule changes have created a favorable federal regulatory environment for broadcast M&A, though legal challenges and state-level scrutiny remain overhangs.

• Market-by-market optimizations are prioritized in the near term, with a robust pipeline of smaller transactions expected to be accretive and de-leveraging over the next two years.

• Willing counterparties and control issues are key gating factors for large-scale consolidation, more so than financing or valuation.

• Leverage targets for future M&A are set at high 3s to low 4s, with multiple strategies to achieve this, including spectrum monetization and cash flow from political cycles.

• No major large-scale M&A discussions are currently reported, but market-by-market deals are anticipated.

Political advertising and revenue outlook

• The 2025–2026 political cycle is projected to reach $11.6 billion in total spending, with broadcast expected to capture $5.6 billion, surpassing previous cycles.

• Strong positioning in top political markets and competitive races supports confidence in achieving at least $375 million in political revenue for the cycle.

• Recent legislative rulings have increased eligibility for lowest unit charge, boosting demand but requiring careful yield and pricing management.

• Broadcast maintains a structural advantage in reach and trust, especially for undecided voters, despite competition from Connected TV and digital platforms.

• Political ad revenue continues to grow cycle over cycle, even as new media channels emerge.

Core advertising, audience measurement, and retransmission

• Core advertising trends remain pressured in consumer-facing categories, with persistent macro headwinds and political crowd-out, but no broad-based deterioration.

• Nielsen's recent measurement upgrades, including co-viewing, have led to a 4% lift for marquee broadcast events, supporting the view that broadcast audiences have been undercounted.

• Retransmission revenue outlook is positive, driven by improved churn, favorable renewal dynamics, and a rebalancing of content costs toward streaming platforms.

• Price growth in retransmission is expected to continue, supported by the value proposition of bundled streaming and broadcast content.

• Rising sports rights costs are being absorbed by streaming platforms rather than passed through to broadcast affiliates.