Sinclair’s Q3 Earnings: A Deepening Crisis
Sinclair Broadcast Group, a major U.S. television station operator, reported a 16% year-over-year revenue decline in Q3 2023, swinging to a $12 million net loss—a sharp drop from its $83 million profit in Q3 2022. The results highlight mounting challenges for traditional broadcasters, compounded by Sinclair’s controversial boycott of Jimmy Kimmel Live! earlier this year.
Key Financial Takeaways
- Revenue fell to $767 million (down from $913 million in Q2 2022).
- Political ad slump: Off-cycle elections and softer TV ad demand hurt earnings.
- Stock performance: Shares have dropped 60% over five years, reflecting investor skepticism.
CEO Chris Ripley cited a “challenging macroeconomic environment” but pointed to cost-cutting measures, including layoffs, to offset losses.
The Jimmy Kimmel Boycott: Did It Backfire?
In May 2023, Sinclair’s eight ABC-affiliated stations refused to air Jimmy Kimmel Live! after the host mocked the company’s conservative-leaning “must-run” segments. The move:
– Alienated advertisers: Some brands distanced themselves from Sinclair’s polarizing stance.
– Drove viewers to streaming: Audiences sought alternatives, accelerating cord-cutting trends.
– Damaged reputation: Critics argue the boycott reinforced Sinclair’s partisan image, limiting audience appeal.
Cord-Cutting and Streaming Threats
Sinclair faces industry-wide pressures:
– Pay-TV subscriptions fell 7% YoY (per MoffettNathanson).
– Failed diversification: Its $10.6 billion acquisition of regional sports networks (RSNs) in 2019 has struggled with soaring rights costs.
– Weak digital growth: STIRR, Sinclair’s free streaming service, trails rivals like Roku and YouTube.
2024 Election: A Temporary Lifeline?
Political ad revenue may rebound next year, but long-term trends are grim:
– Digital platforms (Meta, Google) now dominate political ad spending.
– Younger audiences favor streaming over local broadcasts.
Can Sinclair Adapt?
Analysts urge Sinclair to:
1. Expand digital offerings (e.g., bolster STIRR with exclusive content).
2. Repair brand credibility by depoliticizing its broadcasts.
3. Pursue partnerships with streaming platforms or local news startups.
The Bottom Line
Sinclair’s Q3 results underscore the decline of linear TV. With ad revenue shrinking, controversies mounting, and digital rivals surging, the broadcaster must act quickly to avoid irreversible decline.
