Okay, we will get started and continue with the media track here today. I'm Aaron Watts, the Bloomberg's media analyst, and with me on stage next is Sinclair. From the company, we have Chris Ripley, Chief Executive Officer, and Lucy Rutishauser, Chief Financial Officer. Thank you both for being back again this year. So Chris, Sinclair posted strong results in the first half amidst an uncertain economic outlook, an evolving media backdrop broadly, and you just raised your guidance for the back half of the year, which we will dig into more here today. But what about the business and/or the industry has stood out to you most since we last sat on this stage here a year ago? And what are the key components setting up Sinclair for success this year and, and beyond? Thanks, Aaron. Thanks for having us here. You know, I think my key takeaway for the business over the last 12 months is momentum. I think when you take a look at all of our segments, our initiatives, we have momentum across all of them. Take a look at core advertising. We have consistently outperformed our peers over the last six to eight quarters in core advertising. As you just mentioned, we significantly increased our political ad business, and you know, on top of what we already thought was going to be a record year, so just increasing it that much more. We've just reiterated our net retrans guidance over the next couple of years of mid-single digits. That's having gone through a very significant renewal cycle that we currently have completed about 75% of all of our Big Four traditional subscriber renewals, and they've all been either meeting or exceeding our internal expectations. So again, back to momentum. A lot of operating momentum there on the advertising side, on the retransmission side. 3.0, we announced this year our first business case, streaming offload, which we're working on, and that's in addition to things like enhanced GPS, and automotive. Our podcast business, which, you know, we don't talk a lot about, but we just launched two new sports-focused podcasts. I encourage you all to check them out. One called The Triple Option, the other called Throwbacks. This last week, they were the number one and number two sports broadcasts in the country. So having a lot of success there. Tennis Channel, riding a huge wave of momentum, in tennis, where tennis interest in tennis, participation in tennis continues to go to new highs. Tennis Channel specifically has significant amount of operating momentum, expanding into more and more countries, the latest of which is going to be Latin America, and also about to launch its full direct-to-consumer package, here in the Q4, which we think is going to have a significant impact, on the business. And then on, in terms of OpEx on the cost side of the business, we've continued to work really hard, again, leading the industry in terms of cost containment and cost efficiencies. We are implementing a first-of-its-kind cloud transformation, which we're, I'd say, about maybe halfway through, maybe a third of the way through. It is going to transform the way we operate our business, not just from a nuts and bolts perspective, but also from a labor and a CapEx perspective. That and we continue to just find ways to hub and make our business that much more efficient on the expense side. The overall takeaway is that Sinclair has, over the last twelve months, built up a significant amount of operational momentum. Yeah. Now, that really sets the stage well, and we'll dive into a lot of that today here with our discussion. Before we jump into the business themes, I wanted to set the stage on your vision of Sinclair for the future. At present, you have your legacy business comprised of 185 owned and operated stations, covering 38% of the U.S. You have your unrestricted venture silo that contains various assets and investments, including Tennis Channel. And you've stated there's a shifting focus at Ventures. In Q2, you had 105 million of exits there. Additionally, there have been reports, though I know nothing official from you, about a Tennis Channel sale process, as well as advisors being hired to explore selling roughly a third of your TV stations. So on both the station side and the venture side, what does all this mean for the composition or the makeup of Sinclair over time amidst this evolving media landscape? Well, look, I think the key word is what you just said, is an evolving media landscape. There's no doubt that there's a lot of changes afoot in the industry, and we wanna be nimble. And I think we've shown that we are nimble and we don't have any sacred cows. We're here to maximize shareholder value and guide and steward these assets through to their best realization, and if that means that someone else would be better off owning them than us, then you know, that's the right answer, then that's the answer that we'll pursue. And we think we're just incredibly undervalued from some of the parts perspective. If there's a path or if the path to recognizing that is selling assets like we're doing on ventures or monetizing there, because we don't get credit for those minority positions. I get it, so we're gonna monetize them. You know, we're very, very focused on not only transformation, but also value maximization. So that means that you're gonna see us be nimble and reacting to this changing marketplace as quickly as we possibly can. As you monetize positions at ventures, what are the capital allocation priorities for those proceeds? Could any of that be used to accelerate deleveraging efforts or maturity extension efforts at the EV group? We do have the flexibility to move money from ventures to STG. As we currently look at the capital structures, or specifically the capital structure at STG, we do not see a need to do that, although it could be a possibility. And we run those two sides of the house independently. They have their own boards, with independent boards, and they have their own strategies, and growth trajectories. Okay, so one last question on evolution. You've had a very close eye on cost controls and efficiencies this year, all while investing in a cloud project. First, are these permanent or temporary savings that you've achieved? And how should we think about the cost base going forward? And then second, remind us what the cloud investment is all about and what it achieves for the station group. Sure. So these are, these are primarily permanent savings that we're seeing, and it really points to the things that we've been talking about now for quite some time around investments and initiatives that we're doing around return-generating initiatives. So when you think about the cloud and some of the other things, what do they do? They, they increase revenue opportunities for us. They make us more efficient on the cost side. They make us more agile, they automate us, they give us more data-driven information. So for instance, on the cloud, we now have better insights into what it costs to actually operate a channel. Everything from inventory management to playout to network and compute costs, and that allows us to make better decisions. So when I look at the cloud, and as Chris mentioned, you know, we're only about half of the way through, so we still have more investment to make there. But on the stations that we have moved into the cloud, between last year and what we expect this year, we'll have, you know, close to $20 million of savings, primarily CapEx, but also some OpEx savings that comes with it. And, you know, and cost controls is a focus for the company, and not just from Chris and myself, but it, it's really ingrained in all of our business units and all of our department heads. Okay, that's helpful. Now, I do wanna dive in on the advertising environment. Last week, you provided a notable update to your guidance, once again, increasing your Q3 and full year political revenue expectations, and at the same time reiterating your prior net retrans forecast. So I'll focus on the advertising side first. You're now forecasting an even greater record amount of political advertising than you were previously, up by a significant margin over 2020, the Georgia runoff. So between early August, when you reported 2Q earnings and now, what themes have you seen in the marketplace that led to this upside? And I don't recall you providing many updates like this in the past. Why did you decide to give us this early look now? Yeah, so we, you know, granted, we are almost through the end of the quarter, and while political does book in with only a few days of visibility, we do have visibility here at the end of the quarter. We were seeing large uplifts when Kamala came in. She not only got Biden's money, but she has raised a boatload of additional money. The PACs have raised a lot of money, and we're seeing that all get placed. And when you think about the makeup of where we exist, so we are in just about all of the swing states, and there really is not a clear winner yet in any of the polling for the swing states. And we're in those swing states with a lot of news, which is primarily where political monies go to. So again, having insights here at the end of the Q3, which we're, you know, already ahead of the guidance that we gave in August. And then when you look historically at how Q4 typically performs in relation to Q3, you know, it's anywhere from, you know, one point eight to, you know, two time, you know, two point four times. What you do in Q3 is what you do in Q4. And so the guidance isn't even at the one point eight, the implied guidance for Q4 when you look at our full year number. So look, we have a lot of confidence in that number, a lot of confidence in the Q3 number. And you know, and that money will becomes cash in advance. So we don't need to wait for that cash. It's all cash in advance. Not only drives EBITDA, but it drives deleveraging. And, you know, and so that will be very good for, as you think about strengthening the balance sheet and our leverage profile on the back half of the year. Right. And with that increase in political influence, you understandably slightly lowered your core expectations. Was that purely crowd out effect? And I, for one, might have expected a little bit more crowding out going on. Was some of the things you talked about earlier with yield management, was that helpful in balancing that a little more? Yeah. So the decrease in the core advertising was all related to this step up in political and the crowd out effect. But what I would point out, Aaron, is when you get into the third and the Q4 of a political year, you typically will see crowd out to the core. This is the first time, and I've been doing this now almost 26 years, the first time I have ever seen a Q3 for a broadcaster have growth in core advertising. And as far as I know, we are the only broadcaster that is guiding to growth in core. And so it points to the things that Chris talked about, right? We talked about our yield management tools, which better help us not only to price the political, but all the core advertising, manage the preemptions. It's also a focus on specialized selling categories around automotive and legal and other ones. And these are things that are unique to us, that the rest of the peer group is not doing. So not only are we seeing something very unique for Q3 with growth in core, but at Sinclair, we have also outperformed the industry now on core for the past, you know, six to eight quarters. Yeah. So on that, if I look back at the first half of the year, you reported core advertising down low single digits. Though you noted some modest weakness relative to the expectations in 2Q. What are some of the underlying currents in the core ad marketplace now, including, if you could touch on the continued bifurcation of national and local? Yeah. So the first quarter with the core being down was really primarily some premium sports that had moved to the cable, like NCAA Championship, you know, I think one less football playoff game, and then some sports betting that states that came on in Q1 of last year. So that was really the drivers. As we entered into Q2, we were seeing strength, growth in automotive, which is our second largest ad category. And then they had the software outage in June, which, you know, brought that down slightly. But then as we cycled back into the Q3, we saw automotive growing again. So when you think about our top two category, services and automotive, those have done very well this year and here of late. And then when you look at local, national, you know, those monies move around, whether it's local, national. To us, it's all just revenue as well as digital as well, which is a big component of what we do, and we have, you know, some of the best digital sales in the industry there also. So, you know, strength in one or weakness in one is just really a mix of the numbers. And again, for us, it's really about are you transacting with us regardless of if it's local, national, digital, linear? 'Cause we'll package all that up for you. Okay. And I've certainly heard some concerns on the national side about the uneven recovery, whether that may be due to secular pressures rather than cyclical, more cyclical in nature. We've heard about a lot of ad inventory coming online from some of the streaming services now with ad tiers like Netflix and Amazon. Are you feeling that impact at all? And how do you see that impacting the TV ecosystem over the next couple of years? So we have not. It, you know, it's an interesting question on, in terms of, extra ad avails that are coming onto the marketplace, from either FAST channels, AVOD, SVOD. And where you would think you could see it would be potentially in the pricing, on the linear side, and that has not shown up in our core business. And I believe it hasn't shown up on the linear side because we are still the kings by a wide margin of reach, frequency, premium content, you name it, across all the categories, we're the top of the heap when it comes to any sort of comparison. You know, just to give you an idea, 80% of adults, on any given day, interact with broadcast, 56% cable TV, and 43%, if I remember correctly, or 46%, pay for paid streaming. And then, you know, paid streaming, you get to dice that up, you know, between all the various suppliers. So, we have a significant lead in terms of reach, frequency, and the premium nature of our content and people watching it live, specifically like news and sports. And so, this glut of inventory that has come to the marketplace hasn't affected our CPMs on the linear side. And what it has done, interestingly enough, is it's improved our audience extension business. When an advertiser comes to Sinclair, we don't just sell them a slate of linear spots on our networks, we sell them an entire campaign. All right? It's a three sixty, one-stop-shop experience, and that includes things like AdWords and websites and social and, you name it, you know, we do the entire campaign for you. But a major component of that is, here's your linear slate, and here's an audience extension package, which will reach onto these various connected TV and OTT platforms. And so that's a pretty significant portion of the digital business, and because there has been so much inventory made available in that area, we've been able to push down what we pay for the inventory. So it's expanded our margins in that business, which affects both STG, which does a significant amount of business on audience extension, but also Compulse 360, which services our TV sellers, but also services other local media companies and other local ad agencies. The margins there have increased because they've been able to negotiate and push down pricing of all the various publishers that are putting out these ad avails. And, you know, some of that's translated into the pricing that goes to the ultimate, you know, client, but, not all of it, and so margins have been expanding there. Yeah. And that, that's a good segue to what I wanted to ask you about next, which was viewership themes. And, you know, the two areas that have been much more resilient are sports and local news, which are right in your wheelhouse. So on one hand, sports have become less exclusive. We have Amazon and Netflix with NFL games now. Comcast is putting playoffs on Peacock. But on the other hand, we have ABC simulcasting games and NBC reentering the NBA arena, replacing Turner. How do you balance and think about those divergent themes for the industry? I think it goes back to what I was mentioning earlier, is that, if you want reach, which most sports rights holders are very sensitive to, right? They want to maximize their audience, maximize their appeal. That, that's the way that the best way they can ensure the success of their sport in the future, is getting maximum exposure. Broadcast is the place to do that, and you're seeing sports move back to broadcast, say, with the NBA deal with NBC. Now there's gonna be two nights of NBA on NBC stations. You're seeing. We just announced a deal with the Portland Trail Blazers, and they're gonna- we're gonna be their broadcast partner throughout their entire region, which includes you know, cities like Portland and Seattle. We did a similar transaction with the Jazz last year, and that's been phenomenally successful. The Jazz viewership is up significantly, multiples of what it used to be. So, we're not paying them as much as they were getting paid before, but they really value that extra exposure. So not only is it, there's sort of a two-pronged phenomenon going on here, where it's not just about, you know, who can pay the most money, it's about who can give the best experience to the fans and get the most exposure for the sport long term. Although you've seen some stunting and some amount of, you know, premium sports inventory move on to other platforms, the preponderance of it lives on broadcast and is, you know, more broadly on pay TV. So any real sports fan, you know, is still, very much going to be, subscribing to pay TV. And what I think is very significant, over the last, twelve months, you've seen certain players, like Charter, dramatically reduce the net effective cost of pay TV by bundling in these various other SVOD streaming platforms. And I think that can't be understated enough in terms of, what the net cost is and the value proposition to consumers is, has over the last twelve months with things that Charter have done. And what I think is gonna happen over the 12 months is gonna be significantly improved relative to these à la carte SVOD prices, which continue to increase. Okay. All right, so let's shift gears and talk about retransmission fees. You renewed around 40% of your traditional MVPD, big four subs already this year, and I believe you have a majority of your remaining subs up for renewal by year-end, so a material amount. Your recent guidance update noted that your agreements renewal activity has been in line with your expectations. You affirmed your previously provided two-year annualized mid-single-digit growth rate outlook for net retrans. So as of today, what% of your renewals have you wrapped for the year? Has pricing come in as you've expected? And what gives you confidence in getting through the remaining renewals and achieving that same successful outcome? ... So we've had a really, really busy year. We have negotiated and renewed 75% of all of our traditional big four subs. And then we'll do the remainder between now and the end of the year. And so, a lot of activity, a lot of very recent viable market checks on, you know, what retrans should be. We met or exceeded all of our expectations through that cycle. So the remaining 25%, we feel really good on because we've had, we know what the market is, right? We've literally dealt with everyone. And, you know, that is what gives us confidence to reaffirm our guidance. And, it's been a really successful year on the retransmission side. And given all these renewals, safe to say that the next year or two will be a little more quiet in terms of what you have to do there? 100%. When you look at... Again, we don't generally speaking, deals get done in three-year increments, but that, that's not always the case. So sometimes they can be less, sometimes they can be a little bit more, but that's sort of the average. And we, through this year, we're gonna cycle through essentially everyone on the traditional MVPD side. And we had already on the network side renewed three out of four networks out until 2026. So we really have a lot of certainty in terms of what the terms are gonna be over the next couple of years because of that. Okay. And, and in the underlying assumptions as well, can you just talk to what erosion you're seeing in the underlying subscriber base and what assumptions you're making going forward? And then I guess the second half of that question, you talked about what, what Charter's doing with kind of adding some of these streaming services to the bundles. We saw DIRECTV and Disney add some additional flexibility, for smaller and genre-specific bundles. Do you think those can help slow the pace of cord cutting that we've been seeing? Mm-hmm. Yeah. So we continue to see mid-single digit in terms of overall churn, and that's what's implied in our guidance as well. Excuse me. I'm very very bullish on what I'm seeing in the MVPD space. I think the Charter strategy is the right strategy from both a consumer perspective and from an industry perspective. We term it the great rebundling, and Charter is leading the way. And it looks like DIRECTV, with the deal they just did with Disney, appears to be following suit. They secured Disney+, ESPN+, and Hulu to package in to their offering. But it really, when you take a look at what Charter's done over the last 12 months, it's nothing short of revolutionary. They've secured ESPN+, they've secured Disney+, AMC+, Paramount+, and Max. And, you know, we believe that, you know, Peacock's, you know, not in the too distant future. So, but if you just take those core five, you know, big SVOD packages that they're now going to bundle into their expanded basic offering, that's $45 worth of value that the consumer is now getting that they're really not paying, you know, any extra for. So if you were a Charter, you know, Spectrum subscriber a year ago, you're now paying essentially half as much for your net effective rate of pay TV. So your net effective rate on pay TV right now with those five offerings bundled in is around $50, and it's going down, not up. You add Peacock, it goes down, right? You add another service, it goes down even further. Either way, if you wanna look at it as a subtraction from the cost of pay TV, that's the way I like to look at it. But if you wanna look at it in reverse, that same subscriber is now getting double for about the same price that they were before. Oh, and you're bundling it in with internet, you're getting a discount on that. So on and on, you bundle it in with mobile. It's really dramatically changing the value proposition for the consumer, which is important because a big part of the dislocation and the churn that was caused in the industry was the launch of all these streaming services, which were massively underpriced compared to the value that they were delivering. Now, what's happened over the last couple of years? The price of all those SVOD services have skyrocketed. They've cracked down on passwords. They've added ads. So the relative value proposition has gotten worse on a la carte SVOD, and it's getting better on pay TV. Not just a little bit better, a lot better. And the fact that you've seen now DIRECTV follow suit with their new Disney deal, you know, I think it's going to spread through the entire industry, and it's better from a consumer perspective, too. 'Cause if I'm a consumer, A, I'm paying less for my pay TV, but B, I get to get all my video from one source. I get a simple solution. Consumers don't like complicated. They don't like too much choice. They like to have small, medium, large. It's called the tyranny of choice. If you go above that, it actually, consumer satisfaction goes down. They want a good user experience, too, which is also getting rolled out by Charter with their Xumo set-top box solution. So the user experience is improving, the value proposition is improving, and we think that's a big part of what will subside churn for pay TV in the future. Okay. So on the other side of the coin, you touched on this, but just remind us how we should be thinking about your network affiliations as they come up for renewal. What you're—what to think about with network comp growth between now and then, and what are your top priorities as you go into those discussions and what you hope to achieve, given the backdrop we just walked through on the income side of that equation? Yeah. So we don't have a lot ahead of us. You know, we do have our smallest network relationship coming up shortly, but our three largest are set till twenty twenty-six, so there's just not a lot changing for us there. And our expectations are low single digit growth in terms of network compensation. All right. Any traction to speak of on changing the current framework for how you're compensated for distribution on the virtuals? Look, every year it increases, which is nice. And it is a big component of the ecosystem in terms of virtuals and the subscribers that they bring. I think that it's a distinction without a difference, you know, between a virtual and a traditional, and eventually the regulators and the government will fix that inequity. But I view it more holistically as just part of the network relationship and what they pay us, what we pay them. It's a synergistic relationship. To the extent that it's going to be treated differently, then that just becomes a component of how we negotiate our overall relationship with the networks. Okay, I wanted to move on to the capital structure, capital allocation, so maybe this is for you, Lucy. You ended the Q2 with around five and a half times total net leverage. Remind us what you're targeting for leverage, what you see as a realistic timeframe to get there, and capital allocation priorities between now and then. Yeah. So first off, we do believe Q2 is peak leverage for us, particularly as we cycle through the political and all the good things that we just talked about with the guidance that we put in and cash generation, EBITDA generation. So Q2, we believe, is the peak leverage piece for us. The target leverage is still high threes, low fours for total net on a trailing eight. We will certainly move towards that as we cycle towards the end of this year, but we haven't really said when we will actually get down to that. But again, we will... You'll see improvement here as we cycle through the year. And then for capital deployment, you know, so we started the year, we did buy some debt back at the beginning of the year. We're, as Chris mentioned, we are massively undervalued in all parts of the capital structure, whether it's debt or equity. And so, but we are focused on deleveraging. We'll start to look at the twenty-six maturities. We still have two years there, though. And so that will be a focus for us, is addressing near-term maturities and deleveraging for the company. Okay, well, maybe we can end on this. I know your equity isn't valued where you think it should be, nor is your debt trading at levels I would say you think are appropriate. You've highlighted today your confidence in the business and the outlook. What do you think it takes to get the market and investors fully on board as well? Well, we have heard from both the equity and our debt investors that we should focus on the balance sheet, we should focus on deleveraging. So that's what you've seen. You've seen us. We haven't been active in share purchases recently, but we have on the debt repurchase side. So I think, you know, getting that side of the house improved is a major priority for us. We think that will benefit not only obviously the debt trading levels, but also our equity trading levels. And I think if we continue to have this operational momentum that we have, we've developed over the last twelve months that I spoke about, that's gonna translate through in the markets. And as we implement our strategy around transformation and unlocking the sum of the parts valuations by either creative transactions, sales, you name it, you know, that's gonna start to flow through in terms of what we're seeing in the marketplace. Guys, thank you very much. That was a helpful-