Sinclair, Inc. (SBGI) Q3 2026 earnings review
Sinclair rides record election ads, but it drops spin-off plan
Record midterm election spending lifted Sinclair, a local television station owner and operator of Tennis Channel, while its regular business shrank. Third-quarter revenue rose 16% to $893 million and cash profit more than doubled because political ad sales beat the 2022 midterm pace by 55%. Excluding political ads, revenue slipped 1% by our math as everyday brand advertising fell and cable distribution fees barely grew.
| Revenue excluding political ads | $757M -1.3% from a year ago by our math |
|---|---|
| Political advertising revenue | $136M +55% vs the 2022 midterm quarter |
| Adjusted EBITDA (cash profit) | $213M +113% from a year ago |
| Full-year Adjusted EBITDA outlook | Raised $85M middle of the range: $830M |
⚖️ Verdict: ⚪ Neutral
The story is unchanged because a one-time election boom and a stalled break-up plan offset each other. Management lifted its full-year cash profit outlook by $85 million on preliminary political ad sales of $455 million and signed new station deals with ABC and CBS. On the other hand, the board dropped its plan to spin off the cash-rich Ventures unit, trimmed the top of its regular advertising outlook by $30 million, and kept debt leverage above five times.
The question now is whether this election cash reduces debt enough before political ads vanish in 2027. Either fourth-quarter cash paydowns and upcoming cable renewals stabilize the station business, or off-year profit drops back while core advertising keeps sliding. Full-year debt figures and the initial 2027 outlook next quarter will tell.
🐂 Bull Case
Midterm Ad Spending Topped the 2024 Presidential Record
Television broadcasters rely on even-year elections to bring in high-margin advertising cash. Two years ago, campaigns pulled money out of Sinclair's markets late in the race, so management had to prove this cycle would hold up through Election Day. The chief executive said "battleground races and the overall political environment helped drive record demand across our footprint" during the second half of the year.
- Third-quarter political ad sales: $136 million, up 55% from the 2022 midterm quarter and above the roughly $99 million our math showed the prior plan needed
- Fourth-quarter political ad sales: about $242 million implied by the full-year outlook
- Full-year political ad sales: about $455 million, beating the 2024 presidential record of $405 million and the 2022 midterm record of $333 million
Because the company released these results right at the November election, the $455 million figure is preliminary actuals rather than an early estimate, which settles the worry about late campaign cancellations for 2026. What to watch: fourth-quarter cash debt repayments when full-year results arrive in February. A large debt paydown would show Sinclair turned this one-time election windfall into permanent interest savings before the off-year drop in 2027.
Fixed Station Costs Turned Ad Dollars Into Profit
Running local television stations costs roughly the same whether ad slots sell to low-rate local businesses or high-rate political campaigns. Sinclair kept its station expenses nearly flat this quarter while political revenue poured in. Media programming and production — the cost of network fees and local news — rose $6 million to $419 million, while station sales and administrative overhead rose $4 million to $207 million.
Because revenue grew 16%, programming costs dropped by 6.5 percentage points of revenue and sales and overhead dropped by 3.1 percentage points by our math, lifting operating margin by 7.5 percentage points to 15.0%. That operating leverage allowed management to raise its full-year Adjusted EBITDA — cash profit before interest, taxes and depreciation — by $85 million at the middle of the range to $830 million.
What to watch: media programming and production expenses in the fourth quarter and the initial 2027 outlook. If programming costs jump after the recent ABC and CBS network renewals, higher fees to the networks will eat into the cash the stations keep.
🐻 Bear Case
Political Ads Hide a Shrinking Everyday Business
The chief executive highlighted that the new $825 million to $835 million cash profit plan is "higher than our 2024 Adjusted EBITDA of $816 million excluding the Diamond-related management fees received in that year". That comparison rests entirely on a $50 million jump in election spending over 2024. Outside of political ads, Sinclair runs on two everyday streams: distribution revenue from cable and satellite operators, and core advertising from regular brands.
- Revenue excluding political ads: $757 million in the third quarter, down 1.3% from a year ago by our math
- Core advertising revenue: $301 million, down 4.4% from a year ago, with the top of the full-year outlook trimmed by $30 million
- Distribution revenue: $426 million, up 0.9% from a year ago and down 4.1% from the second quarter after the St. Louis ABC station lost its affiliation in late August
By our math, the full-year plan leaves fourth-quarter core advertising down 9.3% and distribution revenue down 2.5% from a year ago. Management did sign new affiliation deals with ABC and CBS in recent weeks, removing the risk of station blackouts. What to watch: the initial 2027 distribution and core advertising outlook next quarter. A flat or negative number would show that cable cord-cutting and network fees still outweigh rate increases.
Sinclair Dropped Its Ventures Spin-Off With No Station Deal
A year ago, Sinclair opened a strategic review to merge or swap its broadcast stations and spin off Sinclair Ventures, the subsidiary that holds Tennis Channel, digital agency Digital Remedy, an investment portfolio and $489 million in cash. Because Ventures holds nearly three-quarters of the company's $659 million cash pile and none of its debt, separating it was the clearest path to unlocking value beyond the indebted television stations.
This quarter, the board closed that path and "determined at this time not to separate Ventures in a standalone transaction". On the television side, management said only that it will "continue to evaluate various broadcast transactions" as it awaits broadcast deregulation. That leaves investors holding the same combined structure while the Ventures investment portfolio recorded another $40 million in losses over the first nine months of 2026.
What to watch: any signed station swap, merger or sale announcement by the middle of 2027. Without a broadcast deal, the year-long strategic review ends with no structural change to the business.
Debt Leverage Barely Budged In a Record Election Year
Sinclair Television Group (STG), the broadcast subsidiary, carries all $4,035 million of the company's debt and only $170 million of its cash. In the third quarter, STG retired $25 million of its B7 term loan at a discount and closed out the rest of its B3 term loan, lowering total debt by $24 million from the second quarter.
Even with record midterm cash flow, STG's total leverage ratio — net debt divided by average profit over the past eight quarters — only ticked down to 5.1 times from 5.2 times in the second quarter and 5.3 times at the end of 2025. Because the eight-quarter formula drops the huge 2024 presidential election quarters as 2026 enters, the debt ratio stays above five times.
What to watch: STG's total leverage ratio at the end of 2026. If it stays above 5.0 times after the fourth-quarter political cash arrives, the broadcaster will enter the 2027 off-year with a heavy debt load.
Risks this quarter didn't answer
Several standing items from prior quarters depend on conference call remarks or the quarterly Form 10-Q filing, which were not part of the earnings release.
- Pay-TV subscriber churn and net distribution revenue: the release does not state how fast cable subscribers fell or what Sinclair kept after paying ABC and CBS; the filing and call will show whether churn stayed in the low-single digits.
- Broadcast spectrum monetization: management gave no update on leasing or selling next-generation ATSC 3.0 broadcast data capacity; any commercial contract would test its value claims.
- Antitrust lawsuit and regional sports guarantees: updates on the November 2027 ad-sharing trial and Marquee Sports Network obligations await the legal footnotes in the Form 10-Q.
👓 Other Themes
Tennis Channel Costs Held Back Segment Profit
Sinclair is spending on tournament rights and a direct-to-consumer streaming app to grow Tennis Channel outside traditional cable bundles. Segment revenue rose 6.0% from a year ago to $71 million on higher distribution and ad sales. However, programming and production costs rose from $35 million to $39 million, so Tennis Channel's Adjusted EBITDA slipped from $16 million to $15 million following a second-quarter drop as well.
💲 Other KPIs
Operating cash flow rebounded in the third quarter after a second-quarter dip caused by slower payments from pay-TV distributors. By our math, subtracting first-half cash flow from the $238 million nine-month total yields $129 million for the quarter, up from $66 million in the second quarter, as net customer receivables fell from $647 million to $604 million.
Sinclair's share count kept climbing through stock-based compensation grants with no share buybacks to offset them. Diluted average shares rose 4.0% from a year ago to 72.5 million, up from 69.7 million in the third quarter of 2025, while the broadcaster paid out $55 million in cash dividends over the first nine months.
🔮 Guidance
Raised. The middle of the full-year range moved up by $95 million to $3,565 million, or 12.5% growth over 2025 by our math. That leaves $1,025 million for the fourth quarter, up 22.6% from last year's off-election fourth quarter, driven entirely by midterm political spending.
Raised. Management lifted the broadcast station division's target by $75 million at the middle of the range to $3,135 million. Subtracting $2,221 million of nine-month station sales leaves $914 million for the fourth quarter by our math, up 24.5% from a year ago.
Raised. The full-year cash profit target rose $85 million at the middle of the range to $830 million, up 71.8% from 2025. After holding the target in the first quarter, management raised it by $25 million in the second and $85 million now. By our math, the plan leaves $342 million for the fourth quarter, more than double a year ago.
Raised. The station division's cash profit outlook increased by $85 million at the middle of the range to $810 million, matching the entire company-wide increase. With $471 million earned through September, the outlook points to $339 million in the fourth quarter by our math, compared with $153 million a year ago.
Raised. Released right at Election Day, this preliminary full-year figure is $80 million above the floor set in August and 36.6% above the 2022 midterm record. With $213 million booked through September, the target leaves $242 million for the fourth quarter by our math.
Unchanged at the middle of the range. Management narrowed the band by $15 million on each side, keeping the middle at $1,755 million, or 0.6% growth for the year. By our math, that leaves $427 million for the fourth quarter, down 2.5% from a year ago after the St. Louis ABC loss.
Unchanged at the middle of the range. The station division's distribution range tightened by $15 million on both ends around the same $1,540 million center. Subtracting $1,151 million of nine-month revenue leaves $389 million for the fourth quarter by our math.
Cut. Management kept the $1,220 million floor but trimmed the top of the range by $30 million, lowering the middle by $15 million to $1,235 million, a 3.3% drop for the year. That follows a $40 million cut last quarter and leaves $321 million for the fourth quarter by our math, down 9.3% from a year ago as election ads crowd out regular spots.
Cut. The broadcast group trimmed the top of its station core ad range by $30 million, moving the middle down $15 million to $1,050 million. With $779 million booked in the first nine months, the plan points to $271 million in the fourth quarter by our math.
Unchanged. The full-year equipment spending plan stays at $75 million to $80 million for a fourth straight report. With $55 million spent over the first nine months, the budget leaves $20 million to $25 million for the fourth quarter by our math.
Unchanged. Cash interest expense stays at $290 million to $295 million after management lowered it by $12.5 million last quarter following term-loan paydowns. That leaves $73 million to $78 million for the fourth quarter by our math.
Unchanged. The full-year cash tax forecast remains at roughly $50 million despite the $85 million increase in expected full-year cash profit.
❓ Key Questions
What do the new ABC and CBS deals cost?
Sinclair renewed its station agreements with ABC and CBS in recent weeks, but it has not shared net distribution growth since last year. Investors need to know whether network fee increases will eat up the cable rate step-ups expected in 2027.
Why did the board cancel the Ventures spin-off?
Sinclair Ventures holds $489 million in cash and no debt, while the broadcast stations carry $4,035 million in debt. Management did not explain why a separation fails to create value or whether the station group needs access to Ventures cash.
Where will the debt ratio land after Q4 political cash?
Because the eight-quarter profit formula drops the 2024 presidential election at year-end, STG's leverage ratio stayed at 5.1 times in Q3. Management has not stated how much fourth-quarter cash will go to debt paydowns or where year-end leverage will finish.
How much did the lost St. Louis affiliation hurt Q3?
The St. Louis station lost its ABC affiliation at the end of August, and Local Media distribution revenue fell from $389 million in Q2 to $373 million in Q3. Separating that station loss from overall cable cord-cutting is key to reading the 2027 baseline.