Greetings, welcome to Sinclair Broadcast Group fourth quarter 2020 earnings conference call. At this time, all participants are in a listen only mode. A question- and- answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. I will now turn this conference over to your host, Lucy Rutishauser, Executive Vice President and Chief Financial Officer. Please begin. Thank you, Operator. Good morning, everyone. Participating on the call with me today are Chris Ripley, President and CEO, Rob Weisbord, President of Broadcast and Chief Advertising Revenue Officer, and Steve Zenker, Vice President, Investor Relations. Before we begin, Billie- Jo McIntire will make our forward-looking statement disclaimer. Certain matters discussed on this call may include forward-looking statements regarding, among other things, future operating results. Such statements are subject to a number of risks and uncertainties. Actual results in the future could differ from those described in the forward-looking statements as a result of various important factors. Such factors have been set forth in the company's most recent reports as filed with the SEC and included in our fourth quarter earnings release. The company undertakes no obligation to update those forward-looking statements. The company uses its website as a key source of company information, which can be accessed at www.sbgi.net. In accordance with Regulation FD, this call is being made available to the public. A webcast replay will be available on our website and will remain available until our next quarterly earnings release. Included on the call will be a discussion of non-GAAP financial measures, specifically adjusted EBITDA, adjusted free cash flow, and leverage. The company considers adjusted EBITDA to be an indicator of the operating performance of its assets. The company also believes that adjusted EBITDA is frequently used by industry analysts, investors, and lenders as a measure of valuation. These measures are not formulated in accordance with GAAP and are not meant to replace GAAP measurements and may differ from other companies' use of or formulations. The company does not provide reconciliations on a forward-looking basis. Further discussions and reconciliations of the company's non-GAAP financial measures to comparable GAAP financial measures can be found on its website, www.sbgi.net. Chris Ripley will now take you through our operating highlights. Good morning, everyone. Looking back on 2020, it certainly was a year that will stand out for a number of reasons. Of course, top of mind is the pandemic and its impact on people's lives, the economy, and businesses. We saw just how resilient our company could be and how well our employees could respond and adapt to a different way of doing business. The media industry and Sinclair faced and continue to face many disruptions in core advertising, distribution revenues, and live sporting events. However, built-in hedges to shorten professional sports seasons as well as record political revenues helped to offset some of the declines brought about by the pandemic. The strong demand from political advertisers validates the importance of the TV medium in effectively reaching mass audiences. We learned, as an organization, how to dial back costs while retaining productivity and efficiency, despite less than ideal working conditions and 60% of our workforce working remotely. A special thank you to those employees who ensured we continued broadcasting to provide important news and COVID updates, as well as other content, including sports to our consumers. 2020 was also notable for the advancement in important initiatives to fuel our growth in the years ahead. Perhaps the most significant was our strategically important long-term agreement with Bally's to partner in gamification initiatives, including the fast-growing legal sports betting industry. This enterprise-wide partnership brings the mass audience reach of our assets, including our television stations, RSNs, Tennis Channel, Stadium, and STIRR, to drive awareness engagement for Bally's betting platform, which in turn should drive our viewership and revenue, as well as the value of our equity stake in Bally's. In addition, the RSNs are being renamed Bally Sports and will receive a naming rights payment as well as a percentage of Bally's advertising budget. Sports betting is just one component of our gamification efforts. We are in the process of developing a new app which will encourage viewers to actively participate in the sports viewing experience by offering interactive elements such as free-to-play contests, rewards, and the ability to engage and interact with other fans. The idea is to make watching sports similar to playing a video game. During the year, we also made significant progress in our efforts around NEXTGEN broadcasting, launching in 11 markets. The technology allows for our broadcast signal to be mobile, personalized, and IP compatible, and early results indicate the signal strength and picture quality have met or exceeded our expectations. Over 20 television sets capable of receiving the enhanced signal were introduced into the marketplace during the year. We're proud to say that the first ONE Media and Saankhya Labs prototype mobile phone, aptly named the Mark One after our own Mark Aitken, who helped develop the ATSC 3.0 standard, were developed to us for validation and testing of the functionality and performance of receiving the new signals through mobile devices. Our OTT and connected TV assets, STIRR and NewsON, which are Free Ad-supported Streaming Television platforms or FAST in industry lingo, had breakout years and exceeded expectations with viewership up significantly. Driving this growth was the importance of local TV during this pandemic. STIRR, featuring over 120 channels, including two commercial-free ones dedicated to specific timely news areas, one covering local and national elections and one focused on COVID-19 developments, including live press conferences across the country. Another channel featuring horse auctions demonstrates the unique ways these streaming platforms can monetize diverse opportunities. NewsON, a leading purveyor of local broadcast news, features not only Sinclair news stations but also many of the other local leading broadcasters. Finally, in 2020, we directly donated over $1 million and helped raise an additional $30 million for charitable causes across the country, including natural disasters and to aid those impacted by COVID-19. Before the pandemic, we were an early adopter of raising the minimum wage for our workers to $15 an hour, and during COVID, we offered our employees increased flexibility around sick leave to aid with dependent care, allowed flexibility around cashing out vacation hours to assist with financial hardship, and revamped how we paid our commissioned employees due to the pandemic's impact on our advertising sales. While we continue to make difficult decisions, some of which impact our employees, I believe Sinclair will emerge from the pandemic more flexible in how it operates and well-positioned to capitalize on growth opportunities as we move into 2021 and beyond. As it relates to fourth quarter trends, the quarter ended up better than we expected, with EBITDA coming in towards the upper end of our guidance range, despite additional distributor rebate accruals due to shortened NBA and NHL seasons. Stronger than expected core and political advertising revenues and lower than expected expenses also drove the results. Core broadcast and other advertising revenues were above our expectations for the quarter as November improved to down low single-digit percent, and December was relatively flat, likely due to the pent-up demand after a record-setting political season. Speaking of which, we had a record quarter for political advertising, political for the year was $373 million, which was approximately 40% better than our prior record year. For the first quarter, we're expecting broadcast and other core advertising to be down mid-single digit percentages with COVID cases still high, new strains of the virus spreading throughout the country, and vaccinations just rolling out. As we look out over 2021, there is still much uncertainty and limited visibility. COVID remains a challenge. Subscriber churn continues at elevated levels. Leage schedules are still being defined and could change quickly. Timing for further distributor and team rebates is uncertain, and of course, 2021 is a non-election year. Nonetheless, we remain focused on our priorities for this year, which I'd like to share with you. This spring, around the time the MLB season commences, we expect to unveil our new Bally Sports app, which will allow viewers a more personalized and interactive viewing experience. The app will provide significant enhanced functionality and a new design that will be a key enabler for our initiatives around the gamification of sports viewing. Just to give you an idea of the improvement of the new app and its increased capabilities, when we initially launch, the first phase of the app will allow authenticated users the ability to watch games with features like being able to rewind and view a replay, easily search for enhanced statistics and programming, including all the content that airs on our RSNs, as well as enjoy increased news coverage about the teams and games. Importantly, the new app will allow us to better monetize hundreds of millions of digital impressions that are currently not being fully optimized on the existing Fox Sports Go app. We expect the new app will be an important component in helping drive increased revenue growth and profitability for our Local Sports business in the future. A little more color around the gamification initiatives we are undertaking. Our goal is to reach and engage as many consumers as possible through gamification across our entire enterprise of assets by implementing an array of gamification elements, each aligned with and authentic to the content and activity in which they are offered. We will engage users while personalizing and customizing their experience for them based on their preferences and habits. We plan to roll out various gamification elements throughout 2021, starting with our sports assets. You should expect to see gaming elements being incorporated into our sports network and digital programming as soon as the third quarter of this year. In addition, we are working on a direct-to-consumer product that is expected to launch in 2022 and will allow unauthenticated users the ability to access and even subscribe to certain content from our RSNs, as well as other unique content. Gaming activities are especially appealing to the 18- 34 year-old demographic. In our market studies, approximately 60% of this cohort indicated that they would be interested in betting on a live sports event. This group has grown up with video games and seeks interactivity and community. We believe our initiative of making watching sports more dynamic and incorporating gamification into the viewing experience will resonate with them. This includes ways to interact with other fans, to share their passion in real time, and be able to discuss what's going on in the game. A bad call, an awesome home run, our new platform will give them that opportunity. It will also enable them to engage in contests and, where legal, facilitate sports betting, enhancing the game experience. Another exciting initiative for 2021, which premiered in January, is The National Desk, a new national news program that airs weekday mornings on 67 of our stations across the U.S. and on STIRR. The program utilizes content from Sinclair's local news stations to provide viewers timely news coverage of noteworthy local stories that are of interest to national audiences and free of commentary. Viewer feedback from the show has been encouraging, and we look forward to building on the successful launch as we move through the year. Of course, we will be continuing the rollout of NEXTGEN TV. The industry expects that by the end of 2021, NEXTGEN TV will be available in 45 markets, covering over 60% of U.S. TV households. The ability for it to provide superior audio and visual experience to target the household or device and be used for data casting are just a few ways we believe this important IP transmission technology can be monetized for the future. Also during 2021, we will be transitioning our current RSN operations, which currently are housed in the Disney facilities in The Woodlands, Texas, to a brand-new, state-of-the-art 25,000 sq ft Sports Media Operations Center at Encompass Digital Media in Atlanta, Georgia. This facility can run up to 50 RSN channels, including provisions for ultra-high definition channels in the future. The new digital facility in Atlanta will allow us to take advantage of new business models, and we're eager to make the move later this year. Finally, I want to highlight another important initiative upcoming in 2021. We are targeting new solutions for advertisers to utilize our extensive combined reach into 70% of U.S. TV households by pursuing a unified advertising platform that can give advertisers access to our vast advertising inventory across our entire portfolio of 186 stations, 21 RSN brands, Tennis Channel, STIRR, Stadium, and NewsON. This new platform is intended to give a look across all Sinclair business units, audience, and inventory that allow us to engage advertisers in multi-year deals that enable them to reach viewers on a local level through one simplified access point. As we move forward in 2021, there's no question we still face many challenges and uncertainties. We continue to look ahead and make investments in initiatives that will enable significant new growth opportunities. I'll now turn it over to Lucy. Thank you, Chris. First, some housekeeping items to note. As a reminder, the RSNs were acquired in late August of 2019, and so while 2020 fourth quarter results do reflect a full period comparison to the prior year, full year 2020 results do not. As such, for more meaningful comparative purposes, I will also include pro forma 2019 results, which assumes we own the RSNs for the entire year. I will also be referencing certain pro forma numbers for our Broadcast business, which reflects the sale of three stations, Harlingen and Lexington, which were sold in 2020, and Paducah, which was sold in February of this year. Of course, as-reported numbers can be found in this morning's earnings release. As we discussed on our last two earnings calls, the shortened professional sports seasons in 2020 and 2021 impact the accounting for our Local Sports segment in a few significant ways. First, 2020 distribution revenue reflects an accrual for estimated rebates to be paid to our distributors based on the number of games delivered versus the minimum game guaranteed in our agreement. Due to the NBA and NHL's shortened 2020-2021 season, we increased our fourth quarter accrual for these rebates by approximately $49 million, bringing the full year 2020 distributor rebate accruals to approximately $420 million. Of that, approximately $220 million is contracted to be paid over 2021, and the remaining $200 million is contracted to be paid in the first half of 2022. As you may recall, offsetting this amount are reduced sports rights payments that the teams owe to us due to shortfalls in minimum games. Including the reduction in the 2020-2021 NBA and NHL seasons, minimum game delivery shortfalls totaled approximately $697 million, which is approximately $125 million more than what we guided to last quarter. Of this total, of the $697 million due to us, $542 million was realized in 2020, and $155 million is expected to be realized in the first half of 2021. Please note that with league schedules and game counts subject to change, these estimates from the teams to the distributors may also change. On to the financial highlights. I'll go through the segments in detail and then do a sum of the parts for the consolidated company. Starting with the Broadcast and Other segments. Media revenues of $986 million for the fourth quarter exceeded the high end of our guidance range by $25 million. The quarter benefited from the strongest political ad revenue we have ever experienced in a quarter, totaling $204 million, or $10 million higher than our guidance as a result of the Georgia runoff election. Political was the primary driver for the 20% increase in media revenue versus the same period last year. At the same time, core advertising also exceeded guidance. Declining only high single-digit percent rather than the mid-teen percent we were forecasting. As Chris mentioned, November and December were stronger than expected after October's political crowd out. Pro forma distribution revenues increased 8% compared to the fourth quarter last year, despite mid-single-digit percent subscriber churn on a year-over-year basis. Media expenses of $533 million were also favorable compared to our guidance range due to lower production and programming expenses and lower G&A. Compared to the prior year, media expenses were $23 million higher due to increased network programming costs, offset in part by cost controls. Adjusted EBITDA, $408 million, with $132 million increase over the prior year and exceeded our expectations, due primarily to the higher advertising revenues and lower costs than we were forecasting for the quarter. For the year, broadcast and other media revenues were $3,259,000,000, and adjusted EBITDA was $1,046,000,000. Turning to the Local Sports segment, results for the quarter were better than anticipated, but timing around the start of the NHL and NBA seasons, timing of the team rebates, as well as the higher distributor rebate accrual, resulted in lower revenues and EBITDA. Media revenues of $531 million in the fourth quarter were $257 million lower than the prior year, driven in large part by the total $168 million of distributor rebates we accrued in the quarter, the dropped carriage by several distributors in the second half of 2020, the elevated subscriber churn, and a decline in advertising as a result of fewer live games in the fourth quarter of 2020. Compared to guidance, media revenues of $531 million came in $26 million below the low end of our range as a result of the incremental distributor rebate accrual that we took, without which media revenue would have exceeded the high end of the range by $17 million on higher than expected results in advertising and distribution revenues. Local Sports media expenses of $163 million were $434 million, or 73% lower than the fourth quarter a year ago, with the vast majority of the decrease due to the timing of the sports rights amortization expense with the NBA regular season being delayed until the end of December and the NHL season delayed until 2021. Whereas in 2019, both seasons began in October. Compared to guidance, media expenses were about $10 million higher due to the NBA's decision to resume play in December versus our forecast that they would wait until 2021 to return. That led to both higher game-related production expenses as well as higher sports rights amortization for those NBA games that were played in December. Excluding the timing of the sports rights amortization and production of those unanticipated games, media expenses were approximately $20 million less than guidance. Local Sports adjusted EBITDA was $209 million for the quarter, $26 million below guidance due to the additional distributor rebate accrual and timing of some team rebates that slipped into 2021. Excluding these two things, the Local Sports segment would have beaten the high end of the adjusted EBITDA guidance by more than $40 million, driven by the higher carriage fees and lower expenses than we were forecasting. For the year, Local Sports media revenues were $2,686,000,000, and adjusted EBITDA was $841 million. Summing the parts of the consolidated company, Sinclair achieved total company media revenue of $1,490,000,000 in the fourth quarter, which was within our previously provided guidance range and $91 million lower than the previous year's fourth quarter for the reasons that I just went through. Adjusted EBITDA was $617 million, which was higher than the high end of our guidance range and $167 million better than fourth quarter 2019. Adjusted free cash flow for the quarter was $416 million. For the full year 2020, the total company media revenues were $5,843,000,000. Adjusted EBITDA for the year, excluding the third quarter impairment charge, as well as other non-recurring legal, litigation and regulatory costs during the year, was $1,888,000,000, down 12% versus the prior year pro forma. For the year, adjusted free cash flow was $1,123,000,000, or approximately $14 per share. Turning to the consolidated company balance sheet. Consolidated cash at the end of the quarter was $1,259,000,000, which included $783 million of cash at Diamond. Now, as a reminder of the $420 million of accrued distributor rebates, approximately $220 million is contracted to be repaid in 2021, and approximately $200 million in the first half of 2022. In addition, Diamond is expecting $155 million of lower team payments in the first half of 2021 as a result of the minimum game guarantees. As mentioned earlier, there are still many moving parts to the league schedules and game counts, which could affect the expectation of the distributor and team rebates. During the fourth quarter, neither credit silos revolver was drawn. Total debt at year-end 2020 was $12,551,000,000, and the net leverage ratio for consolidated Sinclair at quarter end was 6x. Sinclair Television Group's first lien indebtedness ratio on a trailing eight quarters was 2.7x on a covenant of 4.5x, and 4x on a net leverage basis through the bonds, which is within STG's net leverage goal of high threes, low 4x. Diamond's first lien indebtedness ratio on a trailing four quarters was 6.3x on a covenant of 6.25x, which only springs if the revolver is drawn over 35%, and I remind you that none of the revolver was drawn. Through the bonds, Diamond was leveraged 8.3x on a total net basis. Turning to our first quarter and full year 2021 guidance. The uncertainty of COVID and the pace of the vaccine rollout, continued struggles in the economy, evolving and continued elevated subscriber churn, and unannounced league schedules continue to make visibility for the business difficult and challenging to forecast. Nonetheless, given investor and creditor interest around Diamond's performance and outlook, we are providing full year guidance for Diamond and certain of the expense side for STG, with the disclaimer that the outlook is subject to change for all the reasons I just mentioned. For our Broadcast and Other segments, our first quarter media revenue guidance is $730 million-$745 million, down approximately 4%-6% from last year's pro forma $774 million. The pro forma numbers exclude the results of Lexington, Harlingen, and Paducah. The decrease is the result of a full quarter of the pandemic versus really just two weeks last year, as well as this year being a non-presidential election year. For the quarter, we are forecasting same station subscriber churn of down mid-single digit percent, which is little change to the current trends. First quarter adjusted EBITDA for the Broadcast and Other segments is expected to be between $122 million-$135 million compared to last year's pro forma $219 million. The decrease is due to higher network payments and the lower advertising revenues. As a reminder, and as discussed on our last quarter earnings call, due to timing of network versus distributor contracts, the continued elevated subscriber churn and only having one major distributor renewal in the back half of the year, we are estimating gross retrans to grow by low single digit percent. We project net distribution revenue to decline by mid-single digit percent for 2021 due to a third of our big four affiliate subscribers resetting at or near the end of 2020. For the Local Sports segment, first quarter media revenue is expected to be $746 million- $754 million, down 7%-8% from last year's $812 million, driven by continued elevated subscriber churn and dropped carriage by several distributors in the back half of 2020, offset in part by increased ad revenues from higher game counts. First quarter adjusted EBITDA is expected to be a - $55 million to - $63 million, due primarily to the impact of the lost distribution and sub churn, and offset in part by the benefit of having more NBA and NHL games this quarter. Also, keep in mind that first quarter is typically the lowest EBITDA quarter of the year due to the acceleration of the MLB team rights payments. For the consolidated company, first quarter media revenues are expected to be $1,448,000,000-$1,471,000,000. First quarter adjusted EBITDA is expected to be $59 million-$80 million, and first quarter adjusted free cash flow of -$85 million to -$108 million. Just very quickly turning to full year 2021 guidance. Our Broadcast and Other segment full-year expense and other financial highlights are in this morning's earnings release, so I'm not going to repeat them here. For the Local Sports segment, media revenues for the full year are expected to be $3,054,000,000-$3,326,000,000, and that's up from $2,685,000,000 in 2020. The wide range reflects the uncertainty around the possible outcomes for this year, particularly around the distributor side of the business. Keep in mind that 2021 does not anticipate distributor rebate accruals, which were included in 2020, although this could change if game counts change. We also expect more games this year, which should drive more advertising revenue. The range assumes continued same distributor, elevated subscriber churn of high single-digit percent. Local sports adjusted EBITDA for the year is expected to be $441 million-$709 million, versus $841 million in 2020. This decrease is a result of higher sports rights payments, primarily as 2020 reflected higher minimum game delivery rebates, as well as higher production expenses on this year's expected higher game counts, offset in part by the increased media revenues. With that, I would like to open it up to questions. Operator? Thank you. At this time, we will conduct a question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Once again, that's star one to ask a question at this time. One moment please while we pull our first question. Our first question comes from Dan Kurnos with The Benchmark Company. Please proceed. Close. Good morning, everyone. Lucy and Chris, thanks for all of the clarifications on the additional numbers. Super helpful. Two questions, just one on the Broadcast side. Just on the distribution, I know, Lucy, you mentioned that we know that this year was going to be kind of a tough one from timing. Can you just remind us of the MVPD renewal schedule this year, and then just kind of your thoughts on net retrans heading into 2022 after kind of the big reverse step-up, this year? On the RSN side, as much as I'd love to ask a question about Bally's acquisition of Monkey Knife Fight and any ramifications for you, I think I'll stick with the more generic. The distribution, again, is very wide. I think Q4 was a little bit lower than people were expecting, and then kind of Q1 a lot higher. I'm just trying to understand what you guys are assuming in your distribution numbers and then subsequently the impact on guide. Are there things like the potential for Hulu, YouTube coming back? I just want to understand sort of what's going into your forecast. Thanks. I'll let Lucy answer the second one. I'll take your first question, Dan. The only thing of significance that happens on the retrans side for Broadcast is DISH this summer. Certainly, this is a unique set of circumstances that we're dealing with, where, as Lucy mentioned, one-third of our big four affiliates had significant step-ups at or near year-end. It's the first time that's really happened for us. On the distributor side, outside of DISH, there really isn't other renewal opportunities there to offset. Yeah. Dan, on your other question regarding Q4, remember, we booked an additional $49 million of rebates to the distributors that we weren't expecting. That was because of the shortened NBA and NHL season. We'll get the team rights rebate in 2021 on that. That's why Q4 looks a lot higher, lower on the distribution revenues. If you exclude that rebate, we actually beat our guidance for distribution revenue in fourth quarter. On your assumptions, just around the go forward, are there things included in there like Hulu and YouTube coming back? Is there a wide range of outcomes to kind of get to that big range of adjusted EBITDA guide? Is it just around sports rights and reimbursements? Just want to make sure that we understand sort of your thought process on that. Yeah, I mean, look, it's a wide range for a lot of reasons, right? There's a lot of potential outcomes that could happen, but what's in that range is some assumption for some amount of carriage renewals to come back on. We're not going to get into who, how much, when, or anything like that. That's why we have a range there. Okay, great. Actually, I don't know what you're going to do with it. I thought it was interesting, you guys picking up the rest of ZypMedia. Sort of just more of a ancillary curiosity, given everything going on in the ad tech space. Just curious how that kind of fits into the equation. Yep. We had a piece of it. We wanted to buy out the whole entirety because we have a business plan to focus on building out platforms for the local small and medium-sized businesses, being able to compete with the larger agencies out there in acquiring CTV inventory, OTT inventory. We've had significant success. Utilizing the platform, and by taking it internally, we think we can have a growth into a major SaaS business as well. Got it. Appreciate all the color. Thanks, guys. Thanks. Thanks, Dan. Our next question comes from John Janedis with Wolfe Research. Please proceed. Hi, thanks. Lucy, you talked a little bit about this in your comments, maybe a slight follow-up to Dan, but I may have missed it. How are you thinking about churn this year? Do you think the launch or increased content on streaming services will have an impact in the other direction? You didn't say much about it, on capital allocation, with the move the stock has had now over the past few months, how are you thinking about the buyback into 2021? Thanks. What we've built into our assumptions on the Diamond side for this year is high single-digit churn, right? Which is kind of what we're seeing right now and what the MVPDs themselves have put out there. That's what we're building in again, we don't have full year broadcast out there. For first quarter, we're looking at mid-single digit churn on the Broadcast side. I think that's consistent with what you're hearing from other broadcasters as well. John, on the capital allocation front, we have $880 million left on our authorization. Last year, we retired 21% of our shares outstanding, which is more than, by a significant margin, than any of our peers. We have received some feedback from investors that we need to make sure we have a healthy float to attract new investors, so we want to keep that balanced. Of course, we always consider what our future investment opportunities are as we look to deploy cash. I think it goes without saying, we think our stock is an incredible value even as it stands today. Thank you. Our next question comes from Steven Cahall with Wells Fargo. Please proceed. Thank you. Chris, maybe first, could you talk about how you're thinking about approaching some of the performance criteria that allows you to take the additional options in Bally's? Maybe what's kind of execution strategy there, since it seems like that's a really significant opportunity for value creation. Then Lucy, I'd love to dig into the RSN just a little bit more. If we took out the $155 million cost benefit for this year and took your midpoint kind of guidance, do you think that's a good run rate for earnings power at the RSNs, or does that really underestimate them? Maybe lastly, on Diamond, do you think you'll need to draw on the revolver this year? Thanks. Okay. On Bally's and our performance warrants, first I'll say that the bar is very low, at least in our opinion, as to what needs to be delivered. We think we will deliver well in excess of those user thresholds. Also importantly, it's users to the Bally Bet platform from any source. As you know, it's oftentimes to track attribution. We are promoting Bally's across all of our platforms. We're rebranding the network. We're going to have deep integrations across our digital properties, across our newscast, talk shows, pre and post game. It's going to be a wide-ranging integration strategy, which should drive significant audience and users into the Bally Bet platform. The strategy is really to be as tightly integrated as if the companies were one. In fact, we even think about users as one. A Bally Bet user is the same as a Bally Sports user. We want it to be a seamless integration there, and we think that will drive more and more users over time to Bally Sports betting app, which should launch this spring. We should easily achieve the targets that were put on those performance warrants. Okay. Steve, your other question was around, I believe, the EBITDA run rate without the rebates. Yep. Look, we've given you a range for this year, right? We've got a lot of moving parts that are happening this year. As we've mentioned multiple times throughout our scripted remarks, there's a lot of lack of visibility that we have into the year. Right now we've given you the range for this year. We have a lot of the growth opportunities that we talked about since we bought the RSNs, right? That sort of got put on hold because of COVID and disruption in gameplay, et cetera. Look, we haven't really started to implement a lot of the things that Chris has talked about now for the past year and a half. I can't really tell you beyond 2021 because there's still a lot of moving parts there. You do have a range for this year for our EBITDA expectations. I think you had one other question. Yes. Its revolver draw this year is not expected. Yeah. Not expected. Let me just follow- up with that, because remember, Q1 is the lowest EBITDA quarter, typically for the RSNs. We're not drawing under the revolver right now. Again, assuming our current assumptions, we would not expect we would need to draw the revolver. Great. Thank you. Thank you. Our next question comes from David Hamburger with Morgan Stanley. Please proceed. Hi. Thank you. Good morning. If I could, I have one clarification and then two bigger picture questions. If I heard you right, Lucy, I think you said you had $420 million of distributor accruals in total, and then you mentioned $697 million in reduced sports rights payments. Does that mean the net benefit to EBITDA in sum total was $277 million? I think last quarter you had mentioned the net benefit would be about $200 million. I'm wondering if that's the right math. That goes over two years. Right. All the $420 million is accrued in Q4 of 2020, but only $542 million of the team rebates, gave me benefit in Q4 of 2020. The other $155 million, you won't see in the numbers until 2021. Right. Okay. It was a total of $277 million. Okay, thanks. Kind of bigger picture. I believe in January, ViacomCBS renewed their affiliate agreement with Hulu + Live TV, and at the time, Sinclair did not opt into that renewal for the CBS affiliates that you own. My understanding, if you could verify this, is that you did opt back in just before the Super Bowl for the CBS affiliates at Sinclair. Yet, I believe you didn't get carriage of the RSNs once again with Hulu. I'm wondering if discussions with Hulu around that opt-in before the Super Bowl for the CBS affiliates had or had not included a discussion of carriage of the RSNs once again. If not, I'm wondering why not, and would this kind of negotiation differ from, say, how you'd approach DISH this summer with the renewal at the Sinclair level versus again, carrying the RSNs? Yeah. Look, we always come and talk to distributors about all of our content assets. We don't get into specific negotiations on specific distributors because those are confidential. We are satisfied with the deal we did with Hulu. RSN carriage is only just one form of consideration in the mix, and I think, as you know, it's a little bit different with the virtual MVPDs as it relates to how that works. There is a decision to be made with opt-ins, and we maximize the value of that decision. In terms of your question going forward on DISH, we've had tremendous success with all the traditional MVPDs coming with incentives to take broader packages of content. I would expect us to continue to have that success in the future. If I might just follow. Could you kind of characterize what's different about the relationship with the vMVPDs? I notice as well with YouTube last year, they only renewed for the baseball season, which is certainly not traditional, what you've seen historically with MVPDs. Should we anticipate, again, this greater level of volatility in the distribution contract with the vMVPDs? Yeah. Look, the vMVPDs have a different business model. They're skinnier bundles, lower priced, targeting the lower socioeconomic strata for consumer. There is a difference in the way we interact with them. The networks do a master agreement with the virtuals, then we opt in. There is a difference in the way that mechanic works, and there's a difference in their business model as well, in terms of what they can afford and what they value. That does tend to lead to different outcomes. Mm-hmm. Okay. If I could, just one more question. We noticed you put out a press release that you renewed your programming contract with the Milwaukee Brewers. I was curious, last year with the Kansas City Royals, you had given the Royals equity in the station. I'm wondering as well if that renewal included giving the Brewers equity in the station, and do you have any other renewals upcoming, where if you did, where you would approach the negotiations in a similar manner? Sure. We have binding term sheets for all the teams that we had near-term expirations on, which included the Brewers and the Marlins. Both included equity participation, which, as we've been saying for a while now, we prefer because it variabilizes more of the compensation, aligns interest, and so both of those deals had that component. We have, generally every year, there's a few teams that come up. We have some more that will expire for next season. Those discussions are just getting started. Equity, because of the reasons that I stated in terms of variabilization and alignment of interest, it will be increasingly a component of the mix of consideration. Are you able to discuss the dimension of the variabilization of the cash compensation? Maybe even just directionally, how we might expect sports rights payments over the near term or intermediate term might trend as a result of these types of transactions? Yeah. Contrary to the national market, which you're hearing about NFL wants to double and big increases happening across the board, the local market, where we play in, is much less competitive. We're not seeing those types of cost pressures. We're not expecting rights to escalate by very much at all. When you give a team equity consideration as part of the mix, it's in lieu of cash fixed rights payments. It's really just a rights payment, but in a different form and a different sort of risk-return dynamic for them. Okay. Thank you very much. Thanks for the questions. Thanks, David. Our next question comes from Alexia Quadrani with JPMorgan. Please proceed. Thank you. On the sports side, I'm curious what has been the feedback or the response from the sports leagues, NBA, NHL, MLB, for example, on Bally's partnership and plans for gamification of the presentation. Just sort of staying on that sort of topic, the return of the NBA, NHL, and the upcoming MLB season, has that accelerated conversations, talks with DISH, Hulu, or YouTube? The response has been overwhelmingly positive from the leagues and our team partners. They're very excited about the new branding, about our efforts around gamification. There is a keen interest amongst those parties to increase engagement among younger audiences. As I noted in my remarks, all of our data and research points to a high propensity for sports betting in the younger cohorts for gamification. They're the video game culture, and sports betting is a great tonic to increase that engagement among the younger viewers, which still have great affinity for these sports, just don't consume the games in nearly the same capacity as their parents. In having interactive engagement, having rewards, we believe, and all the data points to that being a key to unlocking their fandom. The leagues and teams are perfectly aligned with that and very excited about it. Very excited about the Bally's partnership. Bally's just announced they've become an authorized partner of the NHL. Essentially, we're bringing the leagues a new customer, which they definitely appreciate. Nothing but good news in terms of the new partnership and the implications it has for the teams and the leagues. In terms of your second question, look, undoubtedly, the return of sports is very important to us in terms of our value proposition to distributors. These are some of the highest-rated programs on television. They have tremendous value, and that definitely plays a role in our discussions with distributors. Thank you very much. Once again ladies and getlemen, to ask a question, please press star one on your telephone keypad. Our next question comes from Aaron Watts with Deutsche Bank. Please proceed. Hi, everyone. Thanks for having me on. Couple questions. First, on the station side, core advertising seems to be moving in the right direction. Could you just highlight some of the things that are driving the improvement and what's still lagging? Perhaps you can mention auto specifically in there. What's your current view on when or if core advertising can ultimately recover to pre-pandemic levels? Yeah, I'll take that, Aaron. Fourth quarter automotive, quarter-over-quarter, was up 38.5%, so we're very encouraged that the supply chain gets fixed, that the spend will continue to see upward increases. Services was up 27% quarter-over-quarter. We're bullish on this ad revenue business. We established the Sinclair Sports Group, and that will unlock value across the RSNs broadcast and the Tennis Channel as well. We're working on several deals that will be unique to what we've done in the past. Once COVID seems to stabilize, we see advertising returning to the pre-pandemic levels and coming out of first quarter with the vaccinations, even though there's uncertainty, we're very confident on that. We will exceed the budgeted first quarter revenue numbers from an ad perspective. All that leads to very good optimism. Also, the sports fantasy gaming category will see a breakout year from expenditures as well. It'll be a new category that will help drive our ad growth. Yeah. I want to just add to that, Aaron, that we were very pleasantly surprised by the strength of core advertising in Q4, given all the political we were absorbing. As I mentioned, December was basically flat. Lots of markets are still in shutdown. Businesses are not fully operational. As I'm sure you've read, as I've read, economic indicators are very strong for a strong recovery next year in the general economy, and advertising is a derivative of that economic activity. To be where we are, where we were back in March and April compared to now, I'm very pleased with what's going on in the core. When you start to lift some of the reduction in activity levels from COVID, which we're having a very strong rollout of the vaccine, in terms of numbers of people getting it, and I'm very optimistic about how that release of economic activity will impact our core. Two other factors that lead us to be optimistic is that across most of our day parts, we've seen audience share grow, which leads to more revenue for us, as well as Chris mentioned, the launch of TND, and that expansion. It gives many of our stations that weren't in the news game a news outlet, and it's gotten some critical acclaim from our viewers, which leads us to believe that the ratings will follow as well. It opens up a new day part for revenue for us. All right, great. That is really helpful. If I could shift gears over to the Diamond Sports side, just two quick ones. Thinking about the cost base in 2021 versus 2020 and trying to set aside kind of the shifting team payments. Can you highlight how much incremental cost comes into play in 2021 that wasn't part of 2020, perhaps related to the app launch or other things along those lines? Aaron, we probably have Remember, there's initiatives related to launching the app and rebranding, but there's also cost in there as we move off of the Disney and Fox TSAs and we get out of The Woodlands and into the Encompass facilities that Chris talked about in his remarks. You're looking at, I would say for these transitional and initiative growth opportunity costs, probably about $100 million that are embedded in 2021. Again, these are all either things that we are required to do and then we'll save TSA costs that we're paying to Disney or Fox as a result of those, or these are things that are going to propel the growth opportunities that we've been talking about. Okay, got it. Last one from me, and I appreciate the time. You completed a debt exchange last summer, in part, I think, to capture discounted trading levels on the Diamond Sports debt. As you consider ways to bring down leverage and/or the interest burden now at that entity, is another exchange offer or liability management exercise still being considered? If so, any sense of timing you can give us on that? Yes. No, we're very interested in that. We have active discussions. Timing, I can't predict. We're more interested in doing the right deal as opposed to just any deal. Another exchange, I think, could be very likely. Okay. Thank you again. Thank you. Thank you. We have reached the end of the question- and- answer session, and I would like to now turn the call over to Chris Ripley, President and Chief Executive Officer, for closing remarks. Thank you all for joining us today, and if you should need more information or have additional questions, please don't hesitate to give us a call. This concludes today's conference. You may disconnect your lines at this time, and thank you for your participation.