Sinclair Revises 3Q Expectations Upward

HUNT VALLEY, MD.: Sinclair is predicting to finish the third quarter in better shape than it previously expected. The broadcaster said it expects net broadcast revenues for the three months ended Sept. 30, 2009 to come in at $136 million, down 9.4 percent from last year.

In early August, Sinclair was shooting for $126.6 million, down 15.7 percent from 3Q08.

“The third quarter’s better-than-expected results came from a variety of categories, including the government’s extension of the Cash for Clunkers program, higher political ad spending on health care and state-related issues, higher retransmission revenues, as well as increased advertising spending across many categories in August and September--a trend which appears to be continuing into the fourth quarter.” said David Amy, executive vice president and chief financial officer of Sinclair.

The company will provide more detailed 2009 guidance when it releases its final third-quarter results Nov. 4, 2009.

Sinclair announced last week that it had reached deals to refinance its debt and assist one of its operational partners with that company’s debt. Investor rating service provider Moody’s responded by putting Sinclair (NASDAQ: SBGI) on review for an upgrade.

Shares of Sinclair shot up nearly 14 percent on the revised 3Q expectation announcement, opening at $3.72 and trading in mid-afternoon at $4.23.
-- Deborah D. McAdams

More on Sinclair:
October 12, 2009: “Moody’s Reviews Sinclair for Upgrade”
Moody’s Investor Service placed Sinclair on review for a potential upgrade after the broadcaster commenced a debt refinance and a new agreement with an operational partner.

October 8, 2009: “Sinclair Commences Tender Offer”
Sinclair also announced that it has entered into a Memorandum of Understanding with Cunningham Broadcasting Corp., contingent upon the refinancing of the notes. SBGI makes around $77 million a year from local marketing agreements with Cunningham, which defaulted on a loan over the summer.

August 5, 2009: “Sinclair Reports Time Sales Dip in 2Q
Sinclair Broadcast Group said today that time sales fell $1 million between the first and second quarters, a reversal of the typical trend.

August 3, 2009: “Sinclair’s LMA Partner Gets Extension”
Cunningham Broadcasting, a management partner of Sinclair Broadcast Group, received an extension on its $33.5 million loan due July 31. The company now has until Oct. 30, providing it makes $200,000 principal payments on each of its term loans on the first business day of August, September and October.

July 15, 2009: “Analyst Deems Sinclair Bankruptcy ‘Remote’
“To be blunt, we think management is posturing. We believe that management is painting the most dire scenario in a public forum as part of its negotiations with convert holders. There are still 10 months before these converts can be put to the company.”

July 14, 2009: “Sinclair Positions for Bankruptcy”
Sinclair Broadcasting group may have to file for bankruptcy if it can’t renegotiate the terms of some of its debt. In a filing with the Securities and Exchange Commission dated July 10, the company said it had $488.5 million due over the next 18 months.

June 19, 2009Standard & Poor’s Cuts Sinclair
“We believe that sluggish TV advertising in a nonelection, recession year will cause Sinclair’s EBITDA to decline further and leverage to continue to rise,” wrote Deborah Kinzer, an S&P credit analyst. “The negative rating outlook reflects our concerns about the company’s deteriorating credit metrics and its ability to refinance potential upcoming puts.”