Sinclair Broadcast Group reported net broadcast revenue of $136.4 million for the third quarter, a 9.1% drop from the same quarter last year. While local advertising revenue was down 13.9% and national down 26.7% in the quarter, Sinclair was buoyed by $28 million worth of revenue from retransmission consent, a big boost over the $17.9 million in retrans it bagged in the previous year's third quarter.
Sinclair's earnings appear a bit brighter than other broadcasters, which have typically reported revenue decreases well into the double-digit percentages for the third quarter.
"We are pleased to report that we have successfully restructured our balance sheet and addressed our cash flow needs," commented Sinclair President/CEO David Smith. "With the proceeds of our new $500 million senior secured second lien notes offering due 2017, we will be able to fund the tender offers of our 3% and 4.875% senior convertible bonds and repay a portion of our bank debt."
Sinclair recently firmed up the future for Cunningham Broadcasting, a significant LMA partner of Sinclair's. "They were successful in renegotiating their bank credit facility to obtain a three-year amortizing extension which will be funded through purchase option deposits made by Sinclair over the next three years," said Smith. "This was a necessary step to provide the liquidity we need to continue to compete and to be in position to capitalize on the opportunities that may come before us under the new digital regime of the television broadcasting industry."
Baltimore-based Sinclair forecasts fourth quarter revenue to be $143-$146 million, an 11%-12.8% decrease over last year's fourth quarter. "We have started to see signs that perhaps the worst of the recession is over," said Executive VP/CFO David Amy. "While we still do not expect to see an immediate robust recovery, improvements in the business are occurring as advertisers are beginning to buy with longer lead times and declines in the core business are getting smaller."