With the local digital side of its business believed to be grossly underappreciated, Sinclair Broadcast Group may restructure to have digital be a standalone business, said David Smith, Sinclair president and CEO. Smith said the valuations of digital companies such as BuzzFeed and Gawker are driving the notion.
“We’re not getting the valuation because, in reality, we’re not looked at in that way yet,” said Smith. “The fact of the matter is, we are fundamentally no different than what a Buzzfeed is, or Gawker, or a Vice or anything else. The difference is, we produce the news every day—live, real time, and on the internet. We’re not recognized for being in that business.”
Smith expressed surprise at Vice’s recent valuations, which climbed to $2.5 billion last fall. “All they do is throw stories up on internet,” he said. “We do that every day, and people actually pay attention to them.”
With 2,200 hours a week of local news, Sinclair is the “largest news producers in the country,” said Smith.
“You should assume,” Smith added, “that at some point in time, we will enter that space, possibly as separate, discrete, standalone enterprise, just to get the proper valuation on it.”
Sinclair’s digital revenue grew 70.7% in the fourth quarter, the company announced Feb. 18, with overall revenue of $613.8 million, an increase of 43.5% over the same quarter in the previous year.
“The biggest growth right now is in the digital end,” said Steve Marks, VP and COO. “That’s gonna continue.”
Acquisitions fueled Sinclair’s boffo earnings. Christopher Ripley, CFO, said M&A would occur “at a much slower pace” this year, but that he “would expect some activity there.”