Local TV stations have been hit hard recently by the growth of cord cutting and the drop in ad revenues. Now Sinclair has announced a 27% drop in ad revenues during the 2nd quarter of 2023.
Sinclair’s total revenues decreased 27% to $1,541 million versus $2,125 million in during the same period the prior year. Media revenues for Sinclair dropped 27% to $1,527 million versus $2,106 million in the prior year period.
A lot of these losses come from Bally Sports and its parent company, the Diamond Sports Group. If you remove the Bally Sports losses, Sinclair’s total revenues decreased just 8% from $1,669 million in the prior year period and media revenues decreased just 7% from $1,650 million in the prior year period.
“Sinclair is continuing to see a solid start to 2023, meeting or beating guidance on all key financial metrics,” said Chris Ripley, Sinclair’s President & Chief Executive Officer. “As we continue our evolution from a traditional broadcast company to a diversified content and data distributor, we have finalized the process of reorganizing our company structure to increase transactional flexibility and transparency around the value of assets being held in each business unit, Sinclair Broadcast Group and its subsidiaries (`SBG’) and Sinclair Ventures and its subsidiaries (`Ventures’). SBG holds the pure-play local media assets, while Ventures holds the company’s non-local media assets. Our end goal is to create an even more effective company, designed to use the breadth of our assets to identify and accelerate growth.”
Cord cutting is continuing to grow in 2023, impacting Sicnalir’s deals with cable TV companies. Sinclair, like many companies, is struggling with a weak ad market that has seen Paramount lay off a large number of staff at its TV networks.
Sinclair has recently expanded the reach of several of its national networks, including the Tennis Channel, T2, Comet, and CHARGE!. Earlier this year, YouTube TV readded these networks. Now Sinclair has reached a deal with Hulu + Live TV to add these networks in 2024.
For now, the biggest issue Sinclair is facing is its relationship with Bally Sports through the Diamond Sports Group, which has negatively impacted its revenues. Currently, Diamond Sports Group is in bankruptcy as Sinclair tries to break free from the heavy losses the network is experiencing.
Sinclair also announced that as of last July, ATSC 3.0 NextGen TV is now available in 69% of TV households within its footprint. In total, Sinclair has turned on the new ATSC 3.0 NextGen TV signal in 41 markets.
There is some bright light at the end of the runner for Sinclair. 2024 is a presidential election year that typically helps drive up ad revenue. For now, though, we will have to wait and see how fast cord cutting grows in the second half of 2023.