Sinclair, Inc. · NASDAQ:SBGI
Sinclair — Sinclair Broadcast Group — Deutsche Bank Leveraged Finance Conference (September 2015)
27 slides from Sinclair's conference presentation, September 2015
Slide 1: Deutsche Bank Leveraged Finance Conference
OSEAN GIN GIN NOVAWEINGS LEADING - Deuts sche Bank Leveraged Finance Gonrerence — september 29, 2019
Slide 2: Safe Harbor
SAFE HARBOR The following information contains, or may be deemed to contain, "forward-looking statements" (as defined in the U.S. Private Securities Litigation Reform Act of 1995). Any statements about our expectations, beliefs, plans, objectives, assumptions or future events or performance are not
Slide 3: Sinclair - Who We Are
Sinclair - Who We Are • Television broadcast leader • Diversified broadcaster • Revenue innovator • Original content creator • Multi-platform distributor • Technology innovator • Free cash flow generator
Slide 4: Leading Broadcaster
Leading Broadcaster Only Broadcaster with Economies of Scale, National Reach, and Diversified Asset Base: • 163 TV stations • 379 channels • 79 markets • 48 Multi-station markets • 75 news markets • 43M TV households • No market more than 5% of revenue • Largest ABC, CBS, FOX, CW, MNT affiliate grou
Slide 5: Diversified By Content Offerings
Diversified By Content Offerings 2014 Revenues By Content Type 35% 30% 30% 30% 28% 25% 20% 15% 10% 8% 5% 4% 0% Syndicated Local News Network Local Sports Paid/DR Net Time Sales by Content Type
Slide 6: Revenue Drivers
Revenue Drivers • Advertising: • GDP industry growth expectation • Political every 2 years • Developing programmatic solutions • Digital (online, mobile apps, social media): • +17% PF growth YTD • Retrans: • Industry potential to move from $6B to $16B • 60% of subscribers renew in next 9 months
Slide 7: Ad Growth Opportunities in Our Local Markets
Ad Growth Opportunities in Our Local Markets 2014 $49.4B Estimated Ad Revenues in Sinclair TV Markets Broadcast, 14% Direct Mail, Newspaper, 28% 15% 1% conversion of non-TV ad $ is worth $500M incremental Magazines, 2% revenue to Email, 1% SBGI Mobile, 3% Online, 10% Yellow Pages, 4% Cable TV, 5% Ra
Slide 8: Record-Breaking 2016 Political Expected
Record-Breaking 2016 Political Expected Sinclair well- ($ in Millions) 2016 Industry political spend expected to exceed 2012 positioned for 2016: Nation’s capital $254 21 state capitals $161 $147 10 swing states Relevant cities in swing states 2010PF 2012PF 2014PF 2016
Slide 9: Programmatic/Audience Network Sales Strategy
Programmatic/Audience Network Sales Strategy • OxMyx Media Group, JV with Visible World, to sell Audience Network for local broadcast TV. • Develop new revenue streams by aggregating and selling Sinclair and other broadcasters’ impressions on a national scale across multiple dayparts. • Compete for
Slide 10: Net Retrans Expected to Grow by Teen Percents
Net Retrans Expected to Grow by Teen Percents Broadcast should receive at least $16B on 36% audience delivery versus $6B received today $7.44 Monthly rate paid by MVPD per subscriber1 $1.65 $1.12 $1.00 $1.12 $1.09 $0.89 $0.73 $0.64 $0.50 $0.74 $0.39 ESPN & ESPN2 TNT FOX News USA Nick/Nick At Nite CN
Slide 11: Creating Original Content
Creating Original Content • Local news • over 2,200 hours per week • Over 50% of SBG newscasts ranked #1 or #2 in their markets • National news show, ‘Full Measure with Sharyl Attkisson’ • Sports • American Sports Network - College and high school sports, Minor League Baseball, AMA Racing, Dancespor
Slide 12: SBG News Reaching Millenials on Digital Platforms
SBG News Reaching Millenials on Digital Platforms 100% 7% 8% 90% 23% 16% 36% 21% 80% 45% 70% 19% 25% 60% 21% 23% 50% 12% 21% 24% 40% 26% 10% 30% 26% 8% 19% 20% 36% 14% 25% 10% 14% 12% 9% 0% Morning News Early Evening News Late Evening News Digital Unique Visitors Digital Page Views P < 34 P35-49 (P3
Slide 13: Leading Digital Platform
Leading Digital Platform Uniques Page Views 450,000 12,000,000 401,000 10,522,000 400,000 365,000 10,000,000 350,000 300,000 8,000,000 250,000 6,000,000 200,000 4,187,000 150,000 139,000 4,000,000 112,000 100,000 2,000,000 50,000 477,000 274,000 0 0 Vox Vice Buzzfeed Sinclair - KOMO Vox Vice Buzzfee
Slide 14: Sinclair Digital Growing
Sinclair Digital Growing 40 Revenue Growth Cumulative 35 Mobile & Online Unique Visitors 30 (mms) +17% 25 20 15 10 5 -- PF YTD 6/30/14 YTD 6/30/15 2012 2013 2014 2015 YTD 2014 is pro forma for all closed acquisitions through 6/30/2014; 2015 is actual YTD through 6/30/15.
Slide 15: Seeking Regulatory Equality To Grow Business
Seeking Regulatory Equality To Grow Business • Broadcast is the only medium limited on national reach • Broadcast limited on local ownership while MVPDs can own and control multiple distribution channels and content in the same market • Broadcast limited on joint sales agreements while MVPDs achieve
Slide 16: Spectrum Auction
Spectrum Auction SBG opportunity to relinquish licenses valued at approx. $2B at a cost of approx. less than 3% BCF Applications to participate are due Nov/Dec 2015; Bidding process March 29, 2016. Options with respect to the auction: • Keep spectrum: • Improve multicast monetization • Pursue other
Slide 17: Next Generation Broadcast Platform
Next Generation Broadcast Platform • NGBP is a data agnostic wireless IP pipeline • Provides for increased bits that are mobile, universal and IP compatible • NGBP will open opportunities to deliver new services • UHDTV and better HDTV (HDTV+PLUS) in addition to multicast HDTV and SDTV services • Mo
Slide 18: NGBP Economics
NGBP Economics Current Spectrum Future Spectrum Future Spectrum (Additional (Additional (Wireless) Channels) Channels) $1.5bn $146mm $43mm Broadcast Price $.00002(1) $.00002(1) $.0002(2) per Gigabyte Wired / Wireless $0.01 – 0.05 $0.01 – 0.05 $2.00-$3.00 Wholesale Price Wired Wired Wireless per Giga
Slide 19: Financial Highlights
Financial Highlights
Slide 20: Growing Key Financial Metrics
Growing Key Financial Metrics 1,600 2013: $1,500 Acquired 58 1,400 4-Year CAGRS: 2012: stations for Net Broadcast Revenue: 25% Acquired 31 $1.0B 2014: stations for Acquired 14 1,200 EBITDA: 26% $1.1B stations for $1,069 Free Cash Flow: 22% $1.2B 1,000 $784 800 $652 $605 $592 600 $442 400 $341 $320 $
Slide 21: Stable Credit Metrics
Stable Credit Metrics Great Recession 7 6.33x 2012: 2013: 2014: Acquired Acquired Acquired 6 31 stations 58 stations 14 stations for $1.1B for $1.0B for $1.2B 5 4.69x 4.61x 4.18x 4.25x 4.03x 4 3.8x 3 2 1 0 2009 2010 2011 2012 2013 2014 Avg '15/'16 **Stations acquired net of dispositions.
Slide 22: Strong Balance Sheet
Strong Balance Sheet No near-term refinancing risk for 3 years Healthy credit statistics Total Net Leverage (‘14/’15 avg) of 4.7x 4.8% Avg. Cost of Debt $1,700 Revolver Senior Unsecured Notes Term Loans $950 $640 $750 $500 $550 $348 1 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Exclude
Slide 23: Free Cash Flow Generator
Free Cash Flow Generator 14% FCF yield Free Cash Flow ($ in Millions) 51% payout ratio in 2014 80% $403-$442 $4.51 PF FCF per share 2014 $377 70% 68% $4.20-$4.65 avg per share 58% 60% 56% 54% 53% expected over next 2 years 52% 52% $263 50% $213 40% 2014 Uses of FCF: $160 39% Acquisitions/I
Slide 24: Outperforming Equity Returns
Outperforming Equity Returns Ticker: SBGI Market Cap: $2.5B Enterprise Value: $6.4B 200% Equity Performance 2009 - 2015 150% SBGI: 118% p.a. S&P 500: 18% p.a. 100% 50% 0% 2009 2010 2011 2012 2013 2014 2015 SBG S&P 500 -50% Source: Yahoo Finance as of Sep 15, 2015
Slide 25: Major Drivers to Share Price
Major Drivers to Share Price Components Metric Commentary Core Business • Core ad – GDP growth • $4.25-4.65 FCF/share • All segments growing • Net Retrans – Teen gr % average for 2015/2016 • Includes $40M in annual • Digital – High Teen gr % investment expenses with • Political – Every other yr corr
Slide 26: Why Sinclair Broadcast Group
Why Sinclair Broadcast Group • Broadcast leader with scale, reach and diversification • Revenue innovator (programmatic, Digital CMS, retrans) • Original content creator (local news, multicast network, sports) • Multi-platform distributor (OTA, MVPD, digital, mobile) • Technology innovator (NGBP) •
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Sinclair Broadcast Group — Deutsche Bank Leveraged Finance Conference (September 2015) on 6ix