Good day, everyone, welcome to the Sinclair First Quarter 2023 Earnings Conference Call. At this time, all participants have been placed on a listen-only mode, we will open the floor for your questions and comments after the presentation. It is now my pleasure to turn the floor over to your host, Lucy Rutishauser, Executive Vice President and Chief Financial Officer of Sinclair. Ma'am, the floor is yours. Thank you, operator. Participating on the call with me today are Chris Ripley, President and CEO, and Rob Weisbord, President Broadcast and Chief Operating Officer. I would like to also introduce our new Vice President of Investor Relations, Chris King, who we're excited is joining us. Chris comes to us from Windstream Communications, where he was Vice President of Investor Relations. Before that, Curo Health Services, where he served as Vice President of Investor Relations and Financial Planning and Analysis. Before transitioning to the corporate side, Chris was a Senior Equity Research Analyst at Stifel Nicolaus, where he won numerous awards for his stock picking and earnings analysis in the TMT space. Welcome, Chris. Before we begin, I want to remind everyone that slides and supplemental information for today's earnings call are available on our website, sbgi.net, on the investor information page and on the earnings webcast page. I also want to remind you that today's call is a Sinclair-only call. Because we are currently soliciting proxies from our stockholders in connection with the previously announced holding company reorganization, our statements regarding the reorganization will be limited to statements contained in Sinclair, Inc.'s prospectus and Sinclair Broadcast Group's definitive proxy statement, each filed with the SEC on April 26th, 2023, as well as the reorganization Q&A, followed by Sinclair Broadcast Group with the SEC on April 2nd. Our stockholders are urged to read these documents because they contain important information regarding the reorganization. Now, 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 first quarter earnings release. The company undertakes no obligation to update these 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' uses 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. In addition, given the deconsolidation of Diamond on March first of 2022, and in order to have a meaningful discussion around comparative results and trends, all discussions of prior financial reporting periods during this call reflect Sinclair-only pro forma numbers, and thus exclude Diamond and any intercompany transactions with them and exclude businesses sold in the prior 12 months. For actual results, including the periods that Diamond was consolidated, please refer to this morning's earnings release. Chris Ripley will now give an update on the strategic direction of the company. Thank you, Billie- Jo. I want to begin with our announcement to reorganize under our holding company. Under the new structure, which we expect to close in June, Sinclair, Inc. will become the publicly traded parent of Sinclair Broadcast and its subsidiaries, which will hold the pure-play broadcasting assets and a new subsidiary, Sinclair Ventures, that will hold this company's non-broadcasting assets. We believe this will provide greater flexibility for creating value within the company. This simplifies the corporate structure and improves the transparency of financial results and disclosures on the value drivers of the business. Another way to think about the new structure is that our broadcast assets will remain in Sinclair Broadcast Group, while our non-broadcasting assets, including Tennis Channel, Compulse, and our non-media assets like real estate, venture capital, private equity, and direct investments will be in Ventures. While we're optimistic about the future prospects of our core broadcasting business and its continued transformation through investments in news programming, cloud, and NEXTGEN Broadcast, continued regulatory uncertainty is causing us to think differently about the allocation of capital. With continued governmental restrictions on broadcasters' ability to transact, transform, and negotiate, we intend to allocate more capital to growing non-broadcast holdings, such as future opportunities in India, where NEXTGEN technologies are swiftly advancing. This reorganization will allow more flexibility for transactions, transparency around the sum of the parts. Ultimately creating a non-broadcast division free to raise debt or equity financing to grow its assets and a broadcast division that is pure play and focused, unlocking overall value for our organization. Speaking of value creation, in recent weeks and in advance of NAB, we made several exciting announcements around the advancement of NEXTGEN Broadcast technology. In particular, we announced that Sinclair, along with our partners, CAST.ERA, SK Telecom, and Saankhya Labs, will build and operate a NEXTGEN Broadcast data distribution core network. This will create an interconnected platform available to all broadcasters to provide commercial services and solutions for national data distribution. This platform will manage data casting across the U.S. and will help stations capitalize on NEXTGEN opportunities, which independent studies estimate at a $10 billion revenue opportunity for the industry by 2030. We believe data distribution is the next step in the evolution of broadcasting, allowing us to continue to provide exceptional and enhanced video programming with interactive services, while at the same time repurposing the remaining capacity of our channels to meet the needs of data users nationwide. These business use cases provide a data-agnostic IP pipeline to serve communities better on market-disrupting terms that can increase the value of spectrum for all broadcasters. We expect our data distribution core network and platform to go live in Q1 of 2024. We're also continuing to deploy NEXTGEN Broadcast technology in additional markets. In April, Des Moines and Rochester were the latest of our markets to roll out the service, with Sinclair serving as a NEXTGEN host in both markets. NEXTGEN Broadcast was also deployed in San Francisco, and although it is not our market, we are pleased the technology is now increasingly available in the top 10 markets. These deployments bring NEXTGEN Broadcast technology to nearly 70 markets covering over 60% of the country with an industry goal of 75% U.S. coverage by year-end. One of NEXTGEN Broadcast's key features is advanced emergency information. We will be launching the nation's first pilot project to use that capability to disseminate this critical service with enhanced broadcast features. Through a partnership with the Metropolitan Washington Council of Governments, we will provide free over-the-air redundancy and enhancements to emergency messaging currently sent by local governments via text, email, social media, and other systems. Initially, the pilot launching this quarter will focus on Arlington and Fairfax counties in Northern Virginia and the District of Columbia, but will expand to other jurisdictions in the coming months. We also announced an agreement for watermarking technology that will allow owners of NEXTGEN-capable TVs to access the broadcast app experience no matter how they get their broadcast programming, over the air or via pay TV services. This increases the addressable market for TV homes that can access the broadcast app 4-fold. As part of Sinclair's continued evolution, we also are reimagining much of our operational workflow and adding enhanced capabilities to our technology, news gathering, and and media operation systems. We have entered into partnerships with several providers and platforms that align with our vision for transformation. We have begun migrating our existing media and playout operations to the cloud, which will help further our goal to create compelling multi-platform local news and sports content that can be distributed across fixed and mobile devices, as well as interactive experiences for communities and fans. It will also enable enhanced tools to be integrated across our networks for advertisers and partners. To that end, we announced we will launch the first over-the-air local broadcast station affiliate playout origination in the cloud, which is set to go live in Raleigh, North Carolina, in June 2023. Sinclair will also be adopting an innovative cloud-based workflow for news gathering, integrated news production, and software to increase the speed of news content delivery to our audiences, reduce connectivity costs, and enrich the flow of news metadata. As mentioned last quarter, the cloud migration costs are included in our full-year expense guidance. We will be in investment mode for the next 18 to 24 months and anticipate to generate a positive ROI thereafter. As a company, we continually seek to optimize our workflows for the best ROI and operational outcomes and believe these partnerships are another step towards our multi-platform transformation. In Q1 of this year, we announced several partnerships agreements, most recently with YouTube TV to add carriage of Tennis Channel and T2 to its lineup beginning June 1st to coincide with Roland-Garros, the French Open. The agreement also adds Charge and TBD to YouTube TV's service offering and renews carriage of Comet, bringing all three of Sinclair's national multicast television networks to YouTube TV's lineup, offering subscribers access to top fan-favorite series and franchises. The agreement extends YouTube TV's existing carriage of Sinclair's CBS and MyTV affiliated television broadcast stations. We also reached an agreement in principle with Hulu, which saw the return of our ABC stations to Hulu + Live TV. Those stations began airing on Hulu's platform a couple of weeks ago. Our CBS-affiliated stations have returned to Fubo after the CBS affiliate board, Paramount and Fubo reached an agreement last month. We recently re-released our first annual ESG report, which highlighted the continued upgrades we are making to energy-efficient equipment and our commitment to lowering our energy usage overall. We also expanded employee programs to further strengthen diversity and equal employment opportunities, furthering our community outreach and enhanced governance and risk management. Throughout our history, Sinclair has prioritized giving back with an unwavering commitment to the people and communities we proudly serve. Through our latest Sinclair Cares initiative, we partnered with the National Alliance on Mental Illness to launch Sinclair Cares Mental Health Support and Hope, a company-wide on-air campaign to encourage mental health awareness and suggest resources with a particular focus on young adults. Sinclair also entered into a multiyear national agreement with USC Shoah Foundation – The Institute for Visual History and Education, to assist with the recording of interviews with genocide survivors as part of the Institute's Last Chance Testimony Collection Initiative, an effort to collect testimonies from the last living survivors and witnesses to the Holocaust and other genocides. On April twelfth, we launched our first Sinclair Day of Service, an employee-led initiative encouraging all of our employees company-wide to dedicate the day to giving back to our local communities. The day saw thousands of employees across the company volunteering their time and skills to local nonprofit organizations, including food banks, homeless shelters, veterans organizations, diaper banks, community cleanups, and animal shelters in our local communities. The Sinclair Day of Service will return to our calendar each spring. By prioritizing sustainability, diversity, and good governance, and an emphasis on giving back to our local communities, we are not only doing what is right for our neighbors, our people, and our planet, but we are creating long-term value. Speaking of the long term, I wanna congratulate Tennis Channel, which celebrates its 20th anniversary this year. In just two decades, Tennis Channel has created an enduring business with exciting growth opportunities to build on their many past successes and solid financial performance. Now, I'll turn it over to Rob for an operational update. Thanks, Chris. Coming off a record midterm election year in 2022, political spending has started off strong with over $3 million booked in Q1, which is double the spending of Q1 2019. We are excited to see the strength in political candidate and issue spending this early in the year. We are projecting political spend to continue and set us up nicely for our highly contested presidential race in 2024, which we expect to be record-breaking once again. Our success in selling high-profile time periods such as Super Bowl and March Madness resulted in advertising in the first quarter, achieving the high end of our guidance. Core advertising decreased slightly in the first quarter compared to the same period a year ago. The automotive category has been steadily rebounding since the beginning of the year. We are seeing low single-digit% increases in Q2 pace, along with the strength in legal and retail categories. These positives are offset by softness in the insurance category. Second quarter is expected to decline low single digits, but in line with Q1 core, when you exclude the Super Bowl and March Madness. This quarter, we began rolling out the first phase of our unified ad platform, which combines all of Sinclair's advertising, linear and digital assets, and allows our sellers to increase velocity of cross-platform ad campaigns by highlighting the combined reach and frequency. The technology makes us the first local broadcaster to consolidate all sellable inventory into a single system. Our goal is to make sure all of our inventory is easy to package, price, and maximize revenue while meeting the goals of our clients. We've also completed the national rollout of our yield management platform with dynamic pricing. The platform uses artificial intelligence and machine learning, so the algorithms get smarter based on history, and pricing will be adjusted based on the current supply and demand. By ensuring pricing aligns with supply and demand of the marketplace will allow us to reduce preemptions, save time, and make it easier for our sales folks to figure out how much they should charge for campaigns, also allowing us to maximize revenue yield. Tennis Channel is off to a stellar start in Q1. We've seen increase in our audience in adults 25 to 54, which was up 15%. Adults 18 to 49, up 8%. Total view is up 8%, and households were up 7%. The strength of tournaments in Indian Wells and Miami led to March having the highest average audience in key demos since 2019, and it was the second-best March ever for both households and total views. Our second channel, T2, has also set records in 2023, with Indian Wells and Miami leading to March becoming the top month in its history in both users and hours watched. Our live and VOD subscription service, Tennis Channel Plus, has more than 3.5 million hours streamed in the quarter and year-over-year. Total subscribers are up 33%. Outside of the U.S., Tennis Channel International has grown 73% in number of sessions year-over-year. International distribution has grown as well. We've added LG as a partner and now reach approximately 2/3 of the smart television sets in Germany, Austria, and Switzerland. At the end of May, Tennis will become a French Open dedicated network for 2 weeks, and we anticipate airing over 2,000 hours in the tournament across Tennis Channel, T2, Tennis Channel Plus. Off air, we're launching a partnership with a leading digital retailer to launch a white label Tennis Channel shop, which will allow us to create a merchandising revenue stream. TennisShop.com will launch sometime in 2Q. Our broadcast stations continue to be recognized for their dedication to community advocacy journalism. As of March, our stations won dozens of local awards for their reporting. In Baltimore, WBFF's investigative unit, Project Baltimore, was honored with a national IRE award for their investigation into the Baltimore public school system, which was found to be denying students with disabilities a proper education and violating their federal education rights. In our station in Cincinnati, WKRC was named a finalist this year for reporting on radioactive contamination in Ohio. This is the fifth consecutive year that Sinclair stations were honored with national IRE awards and the fourth IRE award for WBFF. We're also seeing our Sinclair Cares community outreach program receive recognition. This year, Sinclair received 2 Anthem Awards for humanitarian action for our 2022 fundraising campaign, Sinclair Cares Summer Hunger Relief. As Chris mentioned, we have a partnership with the National Alliance on Mental Illness and recently aired a town hall special to encourage mental health awareness in teens. We'll be expanding that partnership with a town hall special to address opioid addiction and the epidemic facing the country. Our news division will also be tackling the topical subjects of artificial intelligence as well as cybersecurity and identity theft prevention in upcoming town hall specials in response to our viewers' requests for the information. Two of our local podcasts, Missing Erica Baker, about a missing child, produced by our station in Dayton, and Unsolved: Carolina, which focused on the Murdaugh murders, produced by our station in Charleston, South Carolina, employed a cross-platform strategy across YouTube, TikTok, and other social platform, which led to millions of views and downloads across the country. In Utah, news coverage of the destructive floods was shared across multiple platforms, and the video was viewed over 50 million times on TikTok, which illustrates the power of local journalism and solid local reporting while using all platforms. We're incredibly proud of reporting on our communities and the work we are doing within the communities. I, like Chris, would like to thank our employees for the Day of Service and giving back to the communities that we live in. Now I'll turn it over to Lucy. Thank you, Rob. As a reminder, our slide deck and our financial supplements are on our website, and we'll help you follow along. The $766 million of media revenues came in at the high end of our guidance range, with core advertising achieving expectation and political and distribution revenues surpassing the high end of guidance. The beat on distribution revenue was on slightly better subscriber churn than expected. As compared to the first quarter of 2022, media revenues were down 6%, driven by the absence of political ad revenues, subscriber churn, the Diamond management fee deferral, and core advertising. adjusted EBITDA of $120 million for the quarter exceeded expectations due to media revenues coming in at the higher end of guidance and media expenses being better than expectation, primarily on timing and to a lesser extent, cost controls. For the quarter, adjusted EBITDA decreased 40% compared to the first quarter of last year. This was the result of the lower media revenues as discussed and higher corporate and media expenses. The driver of corporate overhead was group and general insurance costs, annual compensation increases, and one-time expenses for professional fees. The media expense lift compared to last year was also due to annual compensation step-ups as well as timing of tennis tournaments and investments in technology. This was partially offset by a reduction in sales expenses. Media expenses were also impacted by higher programming fees to the networks. Speaking of which, as a reminder on net retrans, we previously reported that since we don't have material distributor contracts renewing until the latter part of this year and with continued subscriber churn of mid-single digit% expected, our expectation is for net retrans in 2023 to be lower than 2022, grow in 2024 and 2025 as distributor contracts renew over the next 12 months. As a result, our three-year net retrans growth rate is expected to be low single digit%. Adjusted free cash flow of $71 million in the quarter also exceeded our guidance range with adjusted free cash flow per share of $1.00 for the quarter and diluted earnings per share of $2.64. We ended the quarter with a cash balance of $623 million. Combined with our undrawn revolver, our liquidity was almost $1.3 billion at quarter end. Total debt at the end of the first quarter was $4.3 billion, STG's first lien indebtedness ratio on a trailing 8 quarters was 3.5 times, while total net leverage through the bonds was 4.4 times. As discussed on last quarter's call, we do expect total net leverage to increase this year to mid-5 times and then improve by the end of 2024, primarily on a strong political year. During the quarter, we repurchased approximately 3.6 million common shares under a 10b5-1 stock buyback program and an additional 5.2 million shares since March 31st, representing approximately 13% of the total shares outstanding at the beginning of the year. Our total share count at the end of the quarter was $68 million. Turning to second quarter guidance, we expect media revenues to decline compared to second quarter 2022 due to the absence of political spending and continued year-over-year mid-single digit subscriber churn. Second quarter core advertising is expected to be down low single digit% versus the second quarter of last year, with the decline in core primarily driven by macroeconomic weakness, as Rob discussed. Second quarter adjusted EBITDA is expected to be between $84 million and $104 million as compared to $184 million pro forma last year, primarily the result of the lower revenue, higher network programming fees, timing of expenses from the first quarter and investment in technology enablers and NEXTGEN Broadcast and sales platform costs that Chris and Rob discussed. Adjusted free cash flow for the quarter is expected to be negative $6 million to positive $16 million. While we haven't provided full year guidance for adjusted EBITDA or free cash flow, there are a few things you need to keep in mind as you think about 2023, which make it an atypical year. First, as we have noted on prior calls, due to the timing of distribution renewals, we are expecting net retrans to be down year-over-year. Second, we are investing roughly $75 million in our infrastructure this year, such as moving to the cloud, NEXTGEN technologies and marketing services platforms that are expected to yield future returns. Finally, there is still uncertainty surrounding the macroeconomic conditions, which could impact the consumer generally and the advertising side of our business. We are seeing positive changes in auto and some other categories, as Rob discussed, but there continues to be softness in services, which is our biggest category and which we'll need to continue to monitor closely. Despite the uniqueness of this year, free cash flow is expected to be positive as we head into another expected record-breaking political year in 2024. With that operator, I'd like to open it up for questions. Certainly. At this time, we'll be conducting a question and answer session. If you have any questions or comments, please press star one on your phone at this time. We do ask that while posing your question, please pick up your handset if you're listening on speakerphone to provide optimum sound quality. Once again, if you have any questions or comments, please press star one on your phone. Please hold while we poll for questions. Your first question is coming from Steven Cahall from Wells Fargo. Your line is live. There we go. Thank you. I've got a few maybe just to start off on the leverage going to the mid-5s. You bought back a lot of stock in the quarter. As we just think about the moving parts to leverage, is a lot of that cash coming off the balance sheet for investments and stock repurchases, combined with some of the investments dragging EBITDA. We'd just love to get the components of the change to leverage from the 4.4 this quarter to the mid-5s. Yeah. What's in there, Steven, is, you know, the 2nd quarter stock repurchases is a piece of that. As I talked about, just the direction of adjusted EBITDA this year, which again is a non-political year, net retrans being down, the absence of political, the investments in the infrastructure. Those are the things that are sort of driving the EBITDA. You do have the 2nd quarter repurchase in there. That 5.5 also assumes a successful closing for Holdco and Tennis shifting out of the STG attributable EBITDA for leverage. As we said in our Q&A around Holdco, that was worth 0.3, 0.3 turns of leverage. Got it. That's very helpful. Chris, you've talked a lot about the value of the investments in ventures and that marketing that you've got at $1.3 billion. Could we expect any incremental financial disclosure to understand the components of that? I'm thinking specifically about real estate and PE and the venture capital investments and just how we might think about those. Relatedly, how do we think about the accounts receivable facility given Diamond's current financial condition? Sure. We have to be careful about additional information around holding company because we do have an outstanding share exchange offering. We really can't say anything more than what is in that document without triggering an amendment requirement. I will point you to that document for your questions there. We will, once that closes, which is expected to be voted on May 24th and then the closing in June 1st, we will come out with a more detailed, you know, vision around ventures. You know, enhanced disclosure is definitely part of the plan. You know, it's just, you know, what's driving this move, as I mentioned in my comments is this big dislocation between our sum of the parts and what's in the public marketplace. You can see we put our money where our mouth was, repurchasing the stock recently because of that. We're very focused on how do we, how do we get the right assets and the right information in your hands so that we can get properly valued. We're, we're, you know, looking at all options in that regard. In terms of your question around the AR facility, I would expect, you know, that AR facility to get refinanced at some point in the future. You know, We're happy to continue to hold it, provides a reasonably good return, and it has high quality security in the form of AR. Our expectation is at some point that would be refinanced. Then just the last one for me. I think the recent reorganization filing did have a new risk factor that wasn't in the 10-K, suggesting that the Diamond bankruptcy could mean either legal action or adverse tax consequences. Can you just help us frame any material risk that you see at this point or financial liability related to the Diamond bankruptcy? We really can't speculate at this point as it relates to Diamond. You know, it would be just pure speculation. We'll be back when we know more in terms of Diamond's future and emergence. Great. Thank you. Thank you. Your next question is coming from Benjamin Soff from Deutsche Bank. Your line is live. Hey, guys. Thanks for the question. Just a couple quick ones. First, I was wondering if you could help us quantify the impact of the expenses shifting from 1Q into 2Q. I also noticed that the value of the investment portfolio went up. I was just kind of curious, you know, which assets saw their value increase, and maybe if you could talk a little bit more about that dynamic. Thanks. Sure. Ben Soff, I'll take the first one. The sequentially on the expenses increasing from media expenses increasing from Q1 to Q2. There is some timing from 1, probably about $10 million of timing from Q1 's favorable variance that goes into Q2. You need to recognize that Tennis Channel has a different seasonality profile than the broadcast asset. Whereas for broadcast, you know, our biggest quarter is typically in the fourth quarter, both revenue and expense-wise. For tennis, their biggest expense quarter is the second quarter because that's when Roland-Garros happens. That's their big tournament, a lot of production costs around that. Just because we haven't talked tennis in a few years, but just to kind of put their seasonality back in front of everybody. From an EBITDA standpoint, historically, Q1 would be their best quarter, followed by Q4, then Q 3. Those are kind of typically close to each other, though. Q2 is their lowest EBITDA quarter, and that's because their expenses are highest around some of the slams and tournaments and production costs. That's gonna be a big driver of that sequential Q1 to Q2 move. In terms of the investment portfolio, It's hard for me to point to any one asset. There were several assets that went up in value in Q1 due to just improved performance on the underlying fundamentals. We also had realizations in the quarter of $36 million. Those were really high returns, you know, great MOICs, apartment buildings that were sold in Q1. They were more conservatively marked before exited at higher values and, you know, are now sitting in cash. The combination of those realizations with, you know, several assets just continuing to perform increased the value. Gotcha. Would you guys be willing to share a little bit more color about the EBITDA that Tennis Channel is generating, just roughly? That will come out in our quarters to come here after we, you know, finish the Holding Company reorg. Okay. Awesome. Thanks, guys. Thank you. Your next question's coming from Dan Kurnos from The Benchmark Company. Your line is live. Good morning. Chris, since you were gracious enough to give us just a little more color around sort of the vision going forward, maybe I'll ask it that way and try to keep it high level. Just note that your peer group has obviously invested in things that are tangential, typically, to broadcast or have synergistic properties with it. You clearly have a more diversified portfolio in what will eventually be ventures. I'm just wondering if you think about sort of future capital allocation, you know, how important it is to you that things be in or around sort of core competencies or historical legacy buckets versus new opportunities. It's a great question. When we take a look at the performance of our investment portfolio, which is currently sitting at an IRR of about 19% since 2013, that, you know, without... It is kind of an obvious statement to say that that's outperformed our equity value over that same period. You know, then that, and that really is a quite diversified set of assets. Private equity, real estate, there are some assets in there that are complementary to our core business like Playfly, for instance, which is focused on college MMR, and Saankhya Labs, which is focused on NEXTGEN Broadcast technologies. So it... When we take a look at what we've been able to do there, it's, you know, it's obvious to us, and especially given the regulatory backdrop that I mentioned in my comments, that there are, you know, better returns for our capital in other areas. We're not limiting ourselves just to adjacencies within our core business. Though if we do find good investment opportunities there, we will, we'll be, you know, that kind of view that as a cherry on top, if you will. It is a more diversified outlook, and I think it's and it's instructed by our history and success in those areas. If we can find adjacencies or synergies with our core business, then we'll be all over that. Got it. That's super helpful. Just on distribution, particularly around Tennis, you announced the YouTube deal. I thought I heard you say that the, you know, the Hulu station issue, you had an agreement in principle, but I don't know if they took Tennis. How do we just think about kind of the opportunity for incremental Tennis carriage from here? Well, look, I think it's a very significant win for the company that YouTube TV is going to be carrying Tennis Channel and all our multicast, T2. We will update you on the agreement in principle with Hulu once it's inked. I can't really get into more details there. I think there are incremental opportunities for Tennis. You know, it had not been on the virtuals for a few years. Fubo was really sort of the only one it had. Now it's adding YouTube TV. I'm optimistic about ensuring that Tennis Channel is fully distributed on all platforms. Got it. Maybe just the last kind of odd one for you or Rob, just on the writers strike, if there's any kind of a nice flow through or anything. Just be curious your opinion there if there's any impact? Yeah. We're not really concerned about the writers strike. If it happens, the networks have a lot of library ready to go, as well as they could spin up reality shows fairly quickly. The reality shows are, right now, trending with higher ratings. We don't see that impacting us at all. All right. Perfect. Thanks for all the color, guys. Really appreciate it. Thanks, Dan. Thank you. Your next question's coming from Courtney Bahlman from Barclays. Your line is live. Hi. Morning, guys. Thanks for the question and congrats on the results. I have a little bit more of a general question. How do we think about kind of the upcoming negotiations you guys have scheduled for the second half of 23 in the context of what you already might have negotiated earlier this year? Are the contracts, and I know you guys are probably limited in what you can disclose, but are the contracts both kind of, you know, a function of subscriber metrics, or are part of them fixed? How are those structured? I assume you're referring to our MVPD contracts. Correct. Yep. Yeah, in the latter half of the back half of this year, we have about 50% of our Big 4 subs coming up with the MVPDs, then another 40% actually, front-end loaded to the beginning of 2024. It's a big period of time there, back half of 2023, beginning of 2024, where a lot of our Big 4 subscribers get repriced. Those are done on a per subscriber basis with the MVPDs. Okay. On the national side, are the majority of the contracts, fixed or also on a per subscriber basis, so they're kind of moving with, you know, any subscriber attrition that you're seeing on the MVPD side? Yeah. On the network side, we've got a couple of 2 big negotiations coming up at the end of this year. Those, it's not universal, but they are more fixed than variable. You know, we do those every 2-3 years and adjust as subscriber trends change. Okay. No, that's helpful. Thank you. Thank you. Thank you. Your next question's coming from Edward Reilly from EF Hutton. Your line is live. Hi, guys. Just some housekeeping. On the $75 million in tech infrastructure spending on this year, how much has been outlaid in the first quarter? Is this bucketed in the corporate G&A line within the other and corporate segment? Yeah. so we spent about $10 million of it in the first quarter. there you're gonna see that in media expenses. What's driving the corporate, you know, down versus guidance was really around group and general insurance in the quarter. Okay. Okay. Gotcha. That's it. Thanks. Thank you. Your next question coming from Avi Steiner from J.P. Morgan. Your line is live. Thank you for taking the question, 2 here. Just on the ad environment, I apologize if I missed this in the opening remarks, but can you just talk about how it's trending in Q2, better or worse? Maybe parse it out local, national, then talk about some categories. I've got 1 more follow-up. Thank you. Yeah. We were watching the headwinds, but right now, like we gave the guidance, low single digits. Local is outperforming national, which tends to be that way when the macroeconomics have some headwinds. We have a strength on our local side by creating specialty units in auto, legal, where we're seeing positive results, from those categories. Again, we'll keep our eye on it, but we're not seeing much differentiation from 1st quarter, and we aren't taking any major cancellations. Appreciate that color. Then one last one for me. Chris, you noted the regulatory backdrop and a reallocation. I'm trying to paraphrase you as best I can. Reallocation of investment capital to non-broadcast holdings. Is M&A in that silo going to be funded by the TV silo, or do you envision raising debt potentially at Sinclair Ventures? I ask this obviously in the context of leverage and everything else. Thank you. Sure. You know, there are significant resources on both sides of the house, if you will. You know, there's no need for, you know, either side to be supporting the other. You know, we'll have to just take it as it, as it comes in terms of, you know, what opportunities there are and where, you know, each division is in terms of its goals around leverage, et cetera. Thank you. Thank you. Your next question is coming from Barton Crockett from Rosenblatt. Your line is live. Okay, great. One of the things I was curious about was, you know, last quarter there was the discussion about Fubo and the desire of the affiliate groups to negotiate directly with the virtual MVPDs versus being represented by the broadcast networks. Now, you know, you're striking deals with the vMVPDs. Are you able to negotiate directly, or is that still not something you're able to do and any prospect for that to change at some point? No, we are not able to negotiate directly, as of now. You know, we, as I stated in the last quarter, and you probably heard from many in the industry, believe that is a wrong that needs to be righted. Feel that, you know, there is change afoot, when it comes to, you know, looking at that sector, which was sort of, at least in the beginning, viewed as an upstart, you know, small, area that has now grown into a pretty significant part of the ecosystem. The rules of the road need to be conformed to, you know, the change in maturity and size and scope of what the virtuals are. We're very much focused on that. You know, that, you know, from both a regulatory perspective and also just how our relationships work with the networks. You know, there's sort of the 2 ends of the coin that we're focused on, you know, getting that right-sized. Okay. All right. Then, one of the other things that came out last quarter that I was curious for an update, if there's any, was the need, the desire to have the FCC drop this requirement to broadcast the, you know, the current kind of ATSC versus the NextGen, so you're able to kind of more fully tap that capacity. Is there any progress there? Anything to say? You know, how long do you think it might take for there to be some action on that front? There actually has been quite a significant event as it relates to that question. While we were at NAB, Chairwoman Jessica Rosenworcel announced that the FCC, at the request of the industry, specifically NAB, our industry association, is forming a task force to accelerate and complete the deployment of 3.0 in the marketplace. That's something that we were very focused on getting as an industry. The details of that task force are being worked on now. But certainly sunsetting the 1.0 signals will be a key area of engagement on that task force. There's really two important things from our perspective and really the industry's perspective on the task force. One is, that it shows that the FCC, who, you know, is largely taking up time, you know, regulating much larger industries than ours, you know, is on the same page as the industry in terms of advancing the 3.0 standard, which is very, you know, positive from a consumer perspective, from a competitive and competition perspective. There is, you know, alignment there between us and the regulators where there might not be alignment on other issues like ownership, for instance. That is an important, I think, statement. Then the second part is having a task force of both industry participants and regulators that are focused with the goal of accelerating 3.0, we believe will accomplish that goal of accelerating 3.0, getting it over the hump, getting it through to the rest of the country, figuring out when we can sunset 1.0. When you can sunset 1.0 is when you're going to open up a significant amount of spectrum capacity that will really unlock the revenue and value opportunities that we've been talking about on 3.0, as it relates not only to better, higher quality and interactive programming for our communities, but also to data casting opportunities around things like enhanced GPS, IoT devices, low latency sports, mobile video. These are all, we think, excellent use cases that will amount to significant economic opportunities for the industry. It's a big reason why we announced that we're building the core network to be able to facilitate those use cases at scale. You need to have a network, an operating system, if you will, if you're going to do that. The last piece of the puzzle is opening up much larger amounts of capacity to do those use cases. That's, that's going to mean sunsetting 1.0, and we think the task force is a big step towards getting that done. I'll reference back to what Chris said earlier, is independent studies have valued it as being a $10 billion unlocking of revenue for broadcasters. We can't lose sight of, once 1.0 gets sunsetted, what that revenue potential is. Thank you. Thank you. Your next question's coming from David Karnovsky from J.P. Morgan. Your line is live. Hi. Thank you. Lucy, just one on the Q2 guide. Can you just confirm if other media revenue line includes a management fee from Diamond? If it does, how do we think about any risk to that going forward, just given Diamond's Chapter 11 process? Thanks. Yeah. There is a management fee that's in there, you know, based on status quo from the March 2022 restructuring. In terms of, you know, It's currently paying at the level that was agreed to back in March of 2022, which is on a deferred basis. We expect that to continue until a new agreement is reached with Diamond. There isn't a new agreement at this point in time, so. Until that happens, we can't speculate. Okay, thank you. Thank you. Your next question's coming from Aaron Watts from Deutsche Bank. Your line is live. Hi, thanks for getting me in. You've covered a lot of ground. I just had two quick ones. One really a clarifier. As you move past the $75 million of infrastructure investments you highlighted that you'll be making this year, will Sinclair Ventures be self-funding via cash flows or distributions, or should we expect cash from the stations to continue to provide support? There was two different things there, Aaron. You know, the $75 million investment doesn't really have anything to do with ventures per se. That's focused on our main broadcast operations and investing in their transformation. I wanna make sure we don't conflate those two. In terms of your question on ventures, you will see a much fuller financial picture of that once we complete the reorg in June. It is expected that entity will be self-sustaining. Okay, great. Then maybe pointed at Lucy with this last one. Just given the current rate environment, macro backdrop, secular evolutions continue to play out in the industry, has your mindset around where you'd like leverage to live for the business changed at all? You talked about how you bought back stock in the quarter and post-quarter end. How do you balance that opportunity against buying back your debt, which is currently trading at a discount to par value? Yeah. Aaron Watts, that's actually great question because the debt is also massively undervalued from where it should trade. That's something that we're taking a look at. And to your leverage target question, look, our for broadcast STG, the target remains high 3s, low 4s. As I said, you know, we are going to be over that this year, and then it will start to come back down next year with political. And one thing to just keep in mind from a leverage standpoint, because it's a trailing eight quarter calculation. What you have going on also in part this year is that 2023's EBITDA is less than 2021's. Even when we get into next year with 2024's political year, we expect it to be higher than 2022's. We still have this drag from 23 in there. You know, we've gotta kinda deal with, you know, everything that's happening, and we've talked about quite a bit around, you know, the negative net retrans and absence of political and the investments. We'll need to live with that here through the end of 24 in that leverage calculation. It doesn't mean that the fundamentals of the business and the returns that we get on some of the things that we're doing now, aren't playing out. The focus for broadcast will be to get back down over time to that target leverage. Okay. Thanks, Lucy. Thanks, Chris. Thank you. Thank you. That concludes our Q&A session. I will now hand the conference back to Chris Ripley, President and CEO, for closing remarks. Please go ahead. Thank you all for joining us today. If you should need more information or have additional questions, please don't hesitate to give us a call. Thank you, everyone. This concludes today's event. You may disconnect at this time and have a wonderful day. Thank you for your participation.