Sinclair's Q1 2025: Key Contradictions on ATSC Revenue, Advertising Outlook, and Subscriber Trends

ATSC 3.0 revenue and sunset of ATSC 1.0, advertising revenue outlook, political ad spending and distribution revenue growth, subscribers churn and distribution revenue, advertising trends and visibility are the key contradictions discussed in Sinclair's latest 2025Q1 earnings call.



Financial Performance and Advertising Trends:
- Sinclair, Inc. reported that total media revenue was in line with expectations, with total advertising revenues within their guidance range.
- The core advertising performance was among the strongest among broadcast peers, with a down low single-digits year-over-year.
- The decline in advertising performance was attributed to macroeconomic and tariff-related uncertainties impacting certain top categories.

Distribution Revenue and Subscriber Churn:
- Distribution revenues increased by $15 million year-over-year, although they were $2 million below guidance due to subscriber churn.
- The subscriber churn moderated slightly, but not as expected, affecting distribution revenues.
- The churn improvement was slower than anticipated, and the company expects a two-year mid-single-digit CAGR for retransmission revenues.

Ventures Portfolio and Acquisitions:
- The Ventures portfolio benefited from $10 million in cash distributions and invested $38 million, including $30 million for an acquisition by Compulse.
- The acquisition aims to scale Compulse's platform, which has delivered double-digit growth and healthy margins.
- The move is part of Sinclair's strategy to consolidate in the digital media space and align with shifting consumer habits.

Regulatory Optimism and M&A Opportunities:
- There is optimism for regulatory changes that could modify outdated ownership rules and allow for sensible M&A.
- Sinclair expects more activity in the weeks to come, with an emphasis on station swaps and filing for JSA buy-ins.
- The company believes these changes, coupled with current ownership rule flexibility, will enable further transaction opportunities.