Sinclair sees broadcast consolidation opportunity as regulatory barriers fall

Sinclair Broadcast Group used its third-quarter earnings call to make a case for large-scale consolidation in the broadcast television sector, with CEO Chris Ripley arguing that recent regulatory changes have created conditions favorable to industry restructuring.

The company reported revenue of $773 million for the quarter, exceeding guidance, while adjusted EBITDA reached $100 million, 22% above the midpoint of its forecast range. But Ripley’s comments focused less on quarterly performance and more on what he characterized as a unique moment for the broadcast industry.

Sinclair says it wants to lead consolidation moves as it begins review of broadcast assets

“The broadcast sector is ripe for consolidation given the various secular and economic challenges we collectively face,” Ripley said during the November 5 call. He pointed to recent Federal Communications Commission decisions and court rulings that have removed longstanding ownership restrictions, including the elimination of prohibitions on owning multiple “Big Four” network affiliates in the same market.

The company anticipates the FCC may raise or eliminate the current 39% nationwide ownership cap during the first half of 2026, which would further remove barriers to acquisition activity.

Ripley suggested that consolidating the industry into two similarly sized broadcast groups could unlock between $600 million and $900 million in annual synergies through distribution revenue optimization, overhead reduction and the creation of multi-station markets where regulations permit.

“While we present this as one potential industry scenario rather than a prediction, the fundamental point is clear,” Ripley said. “The regulatory environment now enables transformational consolidation that can benefit broadcast group shareholders, creditors, employees, and the communities we serve.”

Sinclair has already begun executing on this strategy.

The company closed 11 partner station acquisitions during the quarter, with 12 more awaiting final approval and 10 pending FCC review. Once completed, these transactions are expected to generate at least $30 million in incremental annualized adjusted EBITDA with minimal upfront capital requirements, reaching full run-rate benefits by the second half of 2026.

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The company launched a strategic review of its broadcast business in August and is evaluating a potential separation of its ventures division. CFO Narinder Sahai indicated that ventures’ $404 million cash position could support strategic transactions in the broadcast business as regulatory conditions continue to improve.

Looking ahead to 2026, Sinclair expects political advertising revenue to reach at least $333 million during the midterm election year, matching its 2022 record. The company cited competitive Senate races in North Carolina, Maine, Michigan and Ohio, as well as gubernatorial contests in Nevada as key drivers.

Core advertising revenue is projected to show flat to low single-digit growth, while distribution revenue is expected to remain approximately flat with 2025 levels.

The company also addressed ongoing disputes between programmers and distributors.

Ripley criticized the current conflict between Disney and YouTube TV, arguing that local broadcasters have no control over whether their content reaches viewers through virtual multichannel video programming distributors.

“This was clearly not the intent of the Communications Act and seems to be, from our perspective, an antitrust issue as well,” Ripley said, noting that the FCC has opened an investigation into network affiliation practices that affect local broadcasters.

Rob Weisbord, chief operating officer and president of local media, emphasized the renewed importance of over-the-air broadcasting for live sports. He noted that NBA games are returning to broadcast television via NBC, and MLB is reportedly planning a similar move. The College Football Championship will return to ABC in 2027.

“All points showcased from here forward is that over-the-air is the place that these major sports are coming back to,” Weisbord said.

Beginning with its 2026 guidance in February, Sinclair will shift from quarterly to annual guidance, a change Sahai said better reflects how the company views and manages its business.