Sinclair Reports $89M Loss In 2Q

Sinclair Inc. reported a second quarter loss of $89 million Wednesday, in financial results that no longer include the struggling regional sports networks that are now owned by bankrupt Sinclair subsidiary Diamond Sports Group.

The Baltimore Sun reports the broadcaster had deconsolidated Diamond Sports in March 1, 2022, removing the networks from its financial statements in a corporate reorganization. Diamond filed for bankruptcy protection in March, burdened by more than $8 billion in debt.

Sinclair, the nation’s largest owner of local television stations, reported the loss, equivalent to $1.38 per share, for the three months ended June 30 after the stock market closed Wednesday. The results compared with a loss of $11 million, or 17 cents per share, in the second quarter of 2022.

Quarterly revenue declined 8% to $768 million, the company said. Advertising sales fell 16% to $309 million. Revenue that comes from distributing its networks and content decreased to $418 million from $430 million in the prior year period.

Still, the company has met or beat its guidance in all key areas, said Chris Ripley, Sinclair’s president and CEO, in Wednesday’s announcement.

Chris Ripley

“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,” Ripley said. “Our end goal is to create an even more effective company, designed to use the breadth of our assets to identify and accelerate growth.”

Sinclair Inc. reported a second quarter loss of $89 million Wednesday, in financial results that no longer include the struggling regional sports networks that are now owned by bankrupt Sinclair subsidiary Diamond Sports Group.

Under the reorganization, the newly created Sinclair Ventures subsidiary holds non-broadcast assets, including Tennis Channel, Compulse, a digital advertising platform, real estate and venture capital.

Last month, Diamond Sports, which is independently managed, filed a lawsuit against Sinclair under seal in U.S. Bankruptcy Court for the Southern District of Texas. Diamond had been created to hold the 19 sports networks Sinclair acquired from The Walt Disney Co.

Diamond’s lawsuit accuses Sinclair of receiving about $1.5 billion as a result of alleged misconduct, including fraudulent transfers of assets, unlawful distributions and payments, breaches of contracts, unjust enrichment and breaches of fiduciary duties.

In a Securities and Exchange Commission filing last month, Sinclair said the allegations are without merit.