Good afternoon, everyone. My name is Avi Steiner, and I am the media analyst here at J.P. Morgan. It's our pleasure to have with us back at the conference once again, Sinclair Broadcast Group. With us from Sinclair today is the Chief Financial Officer, Narinder Sahai. Narinder, thank you for joining us at the conference this year. Avi, it's great to be here. We're going to start, as we always do with these fireside chats, with questions from my end, and then towards the very end, we will open it up to the audience. There's a lot to cover here. Let's start, if we can, Narinder, maybe with the company's outlook for core advertising spend in 2026. Remind us what you said on the recent call, really would love to know what's behind the outlook. Yeah, sure. On core advertising for total company, we are guiding at the midpoint, +1% versus the prior year. There are, you know, several, you know, puts and takes here, if you will. I think obviously, we feel confident with the sports-heavy broadcast calendar, just concluded, the Olympics, the Super Bowl, and then, you're gonna have, the World Cup, on Fox later on this year. What's also gives us confidence is our digital footprint, is a bright spot for us. In addition to that, you know, our audio podcast work is starting to sort show traction. That's, you know, part of the guide as well. We are factoring in normal crowd out, Avi, for political. I know it can feel, you know, we're guiding up in a political year, but, you know, all of these things kinda give us confidence. Wanna give a shout out to the team, you know, listening. They have executed really well and I have full confidence that they will, continue to execute. Okay, great. You touched on crowd out, and I think it's a nice natural segue to political. I don't think I need to tell everyone in this room that our electorate and politics seem as fractured as ever, but that seems like a good setup for political this year. I believe your guidance was at least as much as 2022. You'll correct me if I'm wrong. Just wanna get a refresh on that and maybe discuss the competition for political ad dialers that the company and the industry might be seeing, whether that's from digital channels like cell phones or whether that's CTV platforms, what have you. Would love to hear your outlook. Yeah, sure. Let me take it in the order. First, refresh the guide. We provided preliminary guidance of at least $333 million back in November, which is the number comparable to the last, you know, midterm cycle in 2022. We reiterated that position just, you know, when we announced our full year results last week. I think it's too early in the year for us to move off of that, although, you know, if you look at some of the reputable, you know, trackers, the political ad spend is expected to be up 20% versus the prior midterm cycle. If you look at, you know, the share of broadcast in that, it's expected to be roughly, you know, half of that spend. I also wanna point out that, while CTV is growing, we do play in that space. You know, we, through our Digital Remedy, you know, business, which is a marketing AdTech platform, we do have, you know, assets to address the CTV side of the equation as well. I don't want folks to think, you know, some of those due to mixture of some of those political ad dollars are lost. This actually represents incremental, you know, opportunity for us. If you look at overall, you know, 2026, we expect it to be a record, you know, political year. Obviously, you know, we are present where some of the key, you know, key races are, you know, starting with Michigan, Maine, Ohio, Nevada, you know, Texas. If you look at, you know, the projections in these states, roughly, you know, $3.1 billion of the, you know, $10.8 billion or $10.9 billion of spend is going to be in these states. We feel really, you know, confident. We feel good about, you know, where we are and how we are guiding. As we kind of progress, through the year and see how some of these races are shaping up, we'll come back with an update, but, feel good about where we are today. Excellent. I definitely was not fishing for new guidance, but I appreciate it, Narinder. Thank you. Beyond political, I wanna go back to something you touched on in the earlier question, and that's just the number of marquee sports events that we have this year. The Olympics just completed, as you said. We have the World Cup coming in a number of U.S. locations, which I think is probably more important than ever. How additive can you maybe frame it for us to revenue that those events might be for the company this year? Yeah. like I mentioned, you know, at the start of our conversation, you know, sports-heavy broadcast calendar kinda gives us confidence in the +1% guide in core advertising. Obviously, you know, the Olympics just concluded, and we have the World Cup coming up. Those are key. I think the key point here to understand is, you know, when you have live marquee sports event, the reach of the broadcast is just unparalleled, you know, in terms of, you know, delivery, in terms of audience and fans and how far and wide it reaches. I think that continues to be a key, you know, proposition. If you look at, you know, how we are continuing to engage the audiences through our cross-platform initiatives, whether it's these are podcasts or activations, you know, leading up to the event, such as Super Bowl that we did in San Francisco this year, you know, all of that is, gives us confidence that the core guide can be up this year. Terrific. I'm going to shift to another part of the income statement and then maybe go to the expense side. Can you remind us what percentage of the company subscribers are up for renewal this year, and what are your net retrans expectations for 2026? Yeah. Let me address the subscriber side first. We don't have very meaningful subscriber base renewing this year. We have some, you know, virtuals renewing later on this year. We do have meaningful subscriber renewals coming up next year. I think it's roughly 60-65% of our subscriber base is renewing next year. What's meaningful this year that we are keeping an eye on is our network affiliate renewals. We have some coming up in August, some in November, and some, you know, later part of this year in December. I think those obviously will affect the reverse side of the equation and therefore, the net retrans economics. We are not factoring in a significant, you know, move one way or another, in our guide that we have provided, which we, you know, we don't talk about the net retrans, but we talk about gross retrans. We have assumed, subscriber, you know, stable subscriber churn, consistent with what we have seen in that guide, Avi. Terrific. Then if I can stick on the reverse piece of it for a minute, I'm curious if you can maybe delve into a little more of what you're seeing. I ask because sports rights are continuing to rise, and I'm curious if the affiliates at some point might be expected to shoulder some of that increased cost. Yeah, it's a good question. As far as, you know, the value of some of the sports rights continues to go up because there are audiences for those events, right? It's just the economics. When we think about some of these sports rights, specifically the NFL, we do think that, you know, affiliates have a very key part to play. Broadcast has a very key part to play in that distribution. I think some of that factors into our conversations with the networks as well. You know, if you think about it from a commercial standpoint, I think you have to look at, you know, where and how the value is delivered. You know, affiliates bring broad distribution to the networks. You know, networks obviously have their cost for content and sports programming, and you have to kinda see where, you know, some of those intersect and how you think about the economics there. I think that factors into those conversations. The second part of this is also the exclusivity of the content. Content, you know, if you go back, you know, several years, maybe decades, the content used to be very exclusive. You know, with the advent of the streaming platforms that these networks have, that content is not, you know, exclusive anymore. You know, that commercial aspect is part of this. I think there's overall, I think regulatory support in making sure that the affiliates are healthy, they can compete effectively and fulfill their public interest mandate, as well as, you know, deliver their local news, local engagement, local journalism, that only broadcasters can do. All of that, you know, Avi, kind of factors into those conversations. Okay. Maybe this dovetails into our first, sort of big question here, tying the sports front, tying into costs and everything else. The NFL is about to reopen its rights agreement with its existing broadcast partners three years early. I'm curious how you think those negotiations play out, and is there a risk that one of the broadcast networks potentially loses their NFL package? Yeah. This is how I would think about it. I think from an NFL standpoint, they absolutely wanna make sure that they have engaged in a broad, you know, fan base. I think that's number one. I think that's really where the value of these franchises come from, is because of the very passionate fan base. I think absolutely need to protect that. I think number two is, you know, broadening the reach of the game, perhaps internationally. I think that's kinda number 2. I think, you know, number three would be to make sure that the value of those rights are monetized at market values. If you keep some of these things in mind, I think NFL has been really good about introducing, you know, different partners and different packages to do so. I think I would see, you know, this conversation around, you know, reopening or opening the negotiations kind of part of that strategy to continue to make sure that the value of the rights is maximized. I think it remains to be seen how that progresses. I think if you look at some of the broadcasters in the Sunday afternoon space, perhaps, you know, those conversations are had with that group first. If there are more, you know, rights to be paid, I think the support for all of that is gonna be the continuing increase in the audience levels, right? That has to be supportive here. That, you know, increases the value of the, you know, ad inventory, et cetera. When you put all of that together, you know, then you get into the conversations around how some of these perhaps increased, you know, fees are, you know, divided up across the entire ecosystem. I think you think about the fees from the MVPDs to the affiliates and then the reverse fees to the networks as a part of that equation. Then, you know, I started with the fans. If you keep the fans at the center of this, you know, the FCC's Media Bureau recently opened a docket inquiry into, you know, the sports rights marketplace. I think the FCC is asking the right questions. You know, given the fragmentation here, I think their estimates are it takes about, you know, more than $1,500 for an NFL fan to actually get all the games. They're also looking at how, you know, some of these increased right fees that affiliates and the local broadcasters may need to shoulder, how does that impact the economics and their ability to fulfill their, you know, public interest, you know, mandate? I think you have that on the other end. I think all of these things kinda have to come together in these conversations, and see, you know, to find the best solution, you know, for the fans, for the networks, for the affiliates, as well as, you know, the right owners. That was super comprehensive. Thank you. You touched on the FCC, which is where I'm going next, and I'd love to get your thoughts on how they might proceed with deregulation. Do you expect the commission to remove the national ownership cap entirely by issuing a new rule? Do you think they do it via the Media Bureau and take action on a deal-by-deal basis which may or may not be ideal, depending on your perspective, or will the FCC look to approve consolidation by waiver without a vote at all and perhaps muddying the waters a little bit more? Would love your thoughts. Yeah. It's very hard for me to, you know, kinda handicap which way the FCC is going to go, but I think we should look at the facts. I think the facts here are that, you know, FCC is supportive of, you know, revisiting some of these rules, you know, whether it's a national ownership cap, you know, whether it's local, you know, ownership rules, and I would even expand to say, you know, how some of the new next-gen broadcast standards, like ATSC 3.0, gets, you know, commercialized on a larger scale, and whether it's network affiliate relationships. I think the FCC overall is asking the right questions. They're probing on the right things here. Look, you know, they have all of these, you know, levers at their disposal to facilitate, you know, consolidation in the broadcast sector, whether it's, you know, waivers or lifting or eliminating the caps or any other tools, you know, at their disposal. You know, I would say that, very, FCC is very supportive. I think, the window of opportunity is now for, you know, local broadcasters to capitalize on that opportunity and look at, you know, consolidation in a, in a very serious manner, and we've been, you know, vocal advocates of that. I definitely wanna come back to those words, window of opportunity. Before we go there, you touched on the FCC. I'm basically asking you to be a lawyer, so I recognize it's unfair of me. Most of the press has been focused on the FCC, but I'm curious what the company might be hearing from the DOJ, the Department of Justice. Any thoughts on how they might view in-market concentration on the one hand, and does Gail Slater's departure even matter? Yeah. You know, from a DOJ standpoint, I think they obviously will look at the end markets, the market power and competition and pricing. I think those are the questions, obviously, you know, they need to answer. In all of this, I think the market definition becomes important. I think we have said long ago, and we've, you know, reiterated it recently, and we continue to be of the belief, and I think other local broadcasters are in the same bucket that we are not competing with the other, you know, local broadcasters alone. The field has shifted. You've got, you know, big media players. You've got big tech players here, and those all have to be taken into consideration when, you know, looking at these transactions. We feel, you know, that's, that, you know, falls in DOJ's buckets, and I think they have their work cut out for themselves, and I think we'll see with the how they proceed with the large, you know, transactions that's out there that the president has publicly supported. Okay. I'm gonna go back to your words, window of opportunity, and then maybe ask a couple questions around that. I'm sure you can't speak for Scripps. Let's start off by saying that. It seemed to us that Sinclair had enough in the offer to at least create a basis of conversation to get to a deal. What can you share about what happened with the transaction discussions, and is it possible that at some point in the future, this all gets revisited? Yeah, I would, you know, answer that a little bit more broadly. I think I mentioned to you that the window of opportunity is now, you know, looking at that window of opportunity. You know, we're looking at all options for large-scale M&A, you know, with any and all potential partners, as well as, you know, things which, you know, we can better control. For example, the JSAs and the LMA transactions we have done recently. You know, specifically on Scripps, I think, you know, we feel the industrial logic, the financial logic of a, of a deal is very, very compelling. We've put our best foot forward. The offer is public. obviously, you know, I would say, you know, it's for Scripps and the management team and the board there to decide, you know, how they wanna proceed. nothing incremental to add there, Avi, other than what's, already out in the public. Okay, fair enough. Since you just touched on it, I'd love to get a quick refresher. You had some of your buy-ins on the JSA and LMAs approved, I believe. If you can just remind us, if you have it handy, how many have been approved, how much are left to approve, and what the expected EBITDA contribution from those- Yeah ...stations to be. Yeah, good question. On the JSAs and LMAs, you know, we started with, you know, various different categories, where we fit these JSAs and LMAs into, you know, what is actually required. I would say, you know, roughly, you know, 30 +, you know, transactions. I would say, you know, we are 70% of the way working through those. Some of these, you know, obviously, you know, are as simple as, you know, getting it approved and we assume at day one. Others, you know, we have, you know, transferred the affiliation to our station, and there's a step two in terms of, you know, closing on the licensed assets. I would say we are 70% of the way there. We have estimated, you know, $30 million of EBITDA lift or contribution on a run rate basis from completing all of the scope JSA, LMA transactions. I would say in 2026, we expect to complete the remainder of our work, you know, by the 2nd quarter of this year. We would expect that when we exit 2026, that you will be at the $30 million exit run rate. So $30 million will not be fully in the numbers for 2026 just because of the timing, you know, of these transactions, you know, working through the year and what it takes for us to, you know, realize the benefits that I just talked about. I would say, you know, that's how you should think about it. Terrific. We are at a leveraged finance conference, so I'm gonna throw a couple of debt balance sheet questions your way. I'd like to start, if we can, Narinder, on refreshing us, refreshing the audience on the company's leverage target. How does the company get there? M&A of structured with equity is certainly gonna be helpful, but is M&A needed to achieve your leverage goal? Great question. I'm gonna start at the end of your question. I would say that, you know, our plan to, you know, de-lever, strengthen our balance sheet, and do what we need to do is not dependent on just M&A alone. You know, we are very, very heavily focused on things we can do, things we control, you know, controlling the controllables. I've said that from day one. We have a very, very strong core business. We have very stable distribution, you know, trends. We are very focused on making sure very effective and efficient on our cost structure, we continue to, you know, generate, you know, cash, especially in the political cycles like 2026, use that cash to de-lever and continue that work through 2027, continue that work in another marquee, you know, political year in 2028, which is expected to be even, you know, bigger than 2026. I think there are things which are in our control, Avi, things we can do, things we are executing on, you saw us do that with the Q4 print. You saw us, you know, set a very robust, I would say, guide for this year. You know, we are fully aligned in using all of the incremental cash flow we generate, to continue to strengthen the balance sheet and de-lever. That's what we are focused on. I am not evading your question when I say I have not set a definite leverage target yet. More to come on that. This is how I would think about the pieces. Okay. I will take the stay tuned for a leverage target. That's perfect. You touched on something else that, I'm interested in, which is obviously the healthy free cash flow. We're in an even year, as you mentioned. You're gonna have a lot of cash coming in, primarily in the second half, and that's gonna be very helpful to the company. You've talked about de-leveraging, but at the same time, from where I sit, I see no near-term maturities. I see bonds and bank loans trading at a discount, but I see no near-term maturities. How should investors think about where you might apply that free cash flow going forward? Or is it just the build? I don't want to give you too much, but go ahead. Yeah, you know, cash obviously, can build, but I think I've said this before that we gotta deploy that cash to actually look at, you know, gross debt reduction. We have, you know, several, you know, levers available to us to do that, and we are, you know, continuing to think through all of those options there, Avi. From open market, you know, purchases to, you know, other, interesting options. For example, you know, a Dutch auction or maybe a negotiated, you know, purchases of debt from our, you know, nearest maturity holders. All of those things are on the table, but, you know, rest assured, we wanna make sure we are getting, you know, good return on the investment. We are building, you know, our credibility with our debt investors. I think the deal in February, you know, went a long way in doing that, and I fully intend to continue on that path and continue to show, you know, free cash generation ability of the business and continue to delever as we go. All those options are on the table. More to come, like I said, on the, you know, leverage target and how we intend to execute on those. Rest assured, you know, it's a top priority for me. It's a top priority for the management team and the board. I think the audience, but I'll speak for myself, I think my hearing it as top priority is good news, frankly. Sinclair Ventures, and I told the audience I would open it up for Q&A in a few. If I can touch on a couple more questions. Can you update us on Sinclair Ventures? When the company announced the strategic re-review, I think the plan included evaluating a possible spin or split or other transaction for Ventures. Where does that stand? Is it possible, I think you got this question on your most recent conference call, but is it possible that cash from Ventures, which is healthy, could play a role in any future broadcast M&A? Yeah. Let me first maybe recap what Sinclair Ventures is for the benefit of those listening. Sinclair Ventures includes a variety of investments from minority investments to direct investments, private equity, real estate, as well as, you know, consolidated investments like the Tennis Channel, the AdTech platform, Digital Remedy, our antenna business, Dielectric, our stake in Volius. There is, you know, if I leave the consolidated investments on the side for a minute, there's $880 million of net book value, not even market value, net book value of these assets in Ventures. When I look at Ventures and I look at broadcast and I look at, you know, where we trade, clearly, you know, it's the Ventures assets or you can say the total company is not being fully valued, right? Part of the strategic review is, you know, how do we monetize and how do we, you know, lend clarity, bring clarity to the Ventures asset? That's where, you know, we started on this journey to separate Ventures. That work has already started. Work actually started late last year. That's, you know, preparation of, you know, carve out financials, getting them audited, getting any advanced opinions from the IRS, you know, running it through the SEC process. That takes, you know, good, you know, nine months or so. We are, you know, firmly down that path. Having said that, I would also say that the ideal sequence of events here for us, Avi, is going to be a spin merge, right? We have a broadcast transaction on the tape and we do, you know, separation of the Ventures, you know, concurrently with that. You know, I think it remains to be seen. You know, some things here clearly not in our control although we are working, you know, very hard on the, on the broadcast M&A side. Then just to, you know, answer your question around availability of the Ventures cash, and we have said that, there's $465 million of cash as of the end of the year in Ventures and we have the optionality or the flexibility to deploy, you know, that cash to facilitate a transformative broadcast transaction. That thought process, you know, is still there. Terrific. I'm gonna ask one more before opening it up to the audience. You had touched on ATSC 3.0. It's been a little bit quiet, perhaps. I've sat in on so many different presentations over my career, and it seems like we're getting closer. With that, can you update us on the latest? My question which I've asked before is how far are we from seeing meaningful revenue from ATSC 3.0? We are definitely closer. Okay. Is what I would say. Look, I think there is very a renewed focus there with our broadcast, you know, partners. We hired a world-class, you know, CEO in Conrad, you know, Clemson to run EdgeBeam for us. EdgeBeam is the joint venture between us, Scripps, Gray, and Nexstar to monetize, you know, ATSC 3.0. You know, Conrad is busy working, putting a plan together, building his team and how do we move that forward. I would say that there is revenue currently being recorded in ATSC 3.0 in EdgeBeam although, you know, it's not very meaningful at the moment. I expect, you know, as Conrad kind of builds that team and as we see, you know, more, you know, movement on the ATSC 3.0 front on the FCC, they have obviously a proceeding here, looking at that very closely. You know, I expect all of that to accelerate. Generate some meaningful, you know, revenue and cash flow for not too distant future, I would say a few years. Not sure I can say what those few years are. You know, I would say, you know, if Conrad was sitting next to me, I would tell him, you know, less than three. We'll see, you know, how all that goes. I'm gonna hold you to that. Audience, if anyone has a question, now is your time. All I ask is that you speak into the mic. If not, I've got two more ending questions for Narinder. Any questions from the audience? There's one right there. One second. Thank you. Hi. Can you speak about the AI initiatives? Were you guys thinking about that? How are you applying? Are you applying in the, in the front side of the business or more in the back office kinda things? Yeah. Thank you for the question. On AI, I think there's lots made of AI, and there's, I think, a lot more noise there than facts. I would say, from a Sinclair perspective, you know, we are taking a very measured approach on AI. I would say that I think the benefits of AI are visible, when you look at it purely as an efficiency tool, a productivity tool in our day-to-day work. I think we are definitely seeing that. I think beyond that, where we think AI can be really beneficial is in some of our news gathering operations, and how we, you know, format some of that content, for availability, you know, what's resonating with the audiences, you know, some of the recommendation engine that AI might have. We've started on that journey. I wouldn't say we are, you know, leading in that front or towards the end on that, but that's a very, you know, key part of the AI conversation within Sinclair. One of the other areas where we are looking at AI very closely is in all of our, you know, sales and go-to-market motion. You know, significant benefits there in terms of, you know, better understanding our audiences, better understanding, you know, what's working, what's not working, what's the value of a salesperson, and so on and so forth. I think those would be some of the things, you know, I would point to. You will see some of those initiatives, you know, start to accelerate over the coming few years. Nothing, you know, I would say to you is baked into our guide or something that is gonna meaningfully change things in 2026. We are experimenting with it. We are making sure we are generating return on those investments and we are being, you know, very considerate and thoughtful around it. Excellent. Okay. I said I have two more questions. I am going to squeeze them in here. I'm gonna ask you, I've asked you to put on your regulatory hat and your CFO hat, and now we're gonna ask you to take out your crystal ball. What do you think the local broadcast sector looks like three years from now? Are we looking at two to four super groups, or will the wheels of consolidation perhaps turn more slowly, particularly if we get an, I don't wanna say adverse, but a different outcome in the midterms than perhaps from the party in power today? Yeah. I wish Chris was here to answer this question. I've never heard anyone answer that question, you know, better than Chris. I would just say that, you know, we are looking at an end state or, in the sector where you have maybe two large super groups. You know, are there maybe two large super groups and maybe a few smaller players perhaps? I would say, you know, that's kind of the end state we are driving towards. I think that's needed for us to, you know, compete effectively with big tech and big media. I have referenced the window of opportunity that's available now, and I'm, you know, thinking about that window of opportunity, you know, day in and day out, and I'm hoping that some of that urgency is shared elsewhere in the sector. That's I'm still gonna hold to that. Excellent. It sounds like you're definitely gonna be a part of it. My very last question as we end here, and it's a bonus looking into the future question: Do you think the big four networks will own their local TV stations three years from now? Very hard for me to say. I think the networks will definitely look at it from an economic standpoint. You know, what are the economics of, you know, owning a station or a market or not owning it? You know, there's obviously, you know, retrans and the distribution economics tied to it, but then also the economics tied to, you know, running and operating these, you know, stations. I think that's the hat they would put on. I think there's probably some headroom for the networks to own, you know, stations within the current, you know, caps. Hard for me to, you know, specifically say, I think it's gonna vary from network to network as well. Some networks might be in the camp and the others may not be. Excellent. Narinder, thank you for the time. Thank you, Sinclair. Thank you, Avi. Great. Thank you.