Sinclair, Inc. · NASDAQ:SBGI

Sinclair — Merger or Acquisition (May 2019)

18 slides from Sinclair's merger presentation, May 5, 2019

  1. Slide 1: Sinclair: Connecting People with Content Everywhere

    SINCLAIR CONNECTING PEOPLE WITH CONTENT EVERYWHERE

  2. Slide 2: Disclaimer

    Disclaimer Forward-Looking Statements: Certain statements and information in this communication may be deemed to be “forward-looking statements” within the meaning of the Federal Private Securities Litigation Reform Act of 1995. Forward-looking statements may include, but are not limited to, stateme

  3. Slide 3: Local Sports and News Leader

    Local Sports and News Leader  Transformative Transaction  Pro forma CY 2018 revenue of $6.7B and EBITDA of $2.6B(1)  Leading platform of premium local sports and news content  Diversification of content sources and revenue  Acquiring Leader in RSNs  Diversified portfolio consisting of exclusiv

  4. Slide 4: Significant Value Creation

    Significant Value Creation  Implied transaction multiple of 6.5x (5.5x after benefit of tax attributes) – CY 2019 projected EBITDA of $1.6B – Closest pure-play comp trades at ~7.75x (MSGN) – Excludes cost synergies – Reflects $1.5B NPV of tax step-up ($2.4B gross value over 15 years)  ~100% accret

  5. Slide 5: Transaction Summary

    Transaction Summary  $10.6B total enterprise value, all-cash transaction Transaction  $9.6B purchase price adjusted for minority interests Summary  Creates fully siloed entity to acquire Fox RSNs; facilitates potential future RSN equity partnerships  $1.4B cash contributed to Diamond Sports Grou

  6. Slide 6: Largest Collection of RSNs

    Largest Collection of RSNs Sinclair Assets Other Market Participants 42 12 16 15 4 8 14 7 2 5 1 2 2 2 2 2 2 1 4 (2) 4 4 1 (1) (3) Networks 1 14(2) 7 4 1 1 2 1 1 1 1 2018 Subscribers N/A 74(2) 24 14 7 8 7 4 5 3 7 (Millions) Source: SNL Kagan estimates. (1) Joint venture. (2) Excludes YES Network. (3)

  7. Slide 7: Unmatched Portfolio of Sports Media Rights

    Unmatched Portfolio of Sports Media Rights Networks Brands MLB NBA NHL Total: 14(1) 21(1) 14(1) 16 12 (1) Excludes Marquee and Cubs. 6

  8. Slide 8: National Footprint

    National Footprint Note: Media broadcast rights for Chicago Cubs on Marquee Sports Network begin in Q1 2020. 7

  9. Slide 9: Future Growth Opportunities

    Future Growth Opportunities  Drive streaming viewership onto new platforms and experiences  Penetrate vMVPDs to capture broadest consumer base Exploiting • 4.5M+ vMVPD subs in FY 2018 with opportunities for expected growth Digital Rights  New technology-enabled viewing experiences will enhance pr

  10. Slide 10: RSNs are the Destination to Watch Local Games

    RSNs are the Destination to Watch Local Games Current Emerging Future Linear / TV Everywhere vMVPDs Other future delivery methods with AR / VR Live TV Social Media Other Streaming via vMVPD “Portable” Rights Dynamic Ad Insertion in All Devices TV Everywhere Services Nationwide Internet Streams   

  11. Slide 11: The Pay-TV Bundle is Stable but Evolving

    0.0% 2.0% (8.0%) (6.0%) (4.0%) (2.0%) (10.0%) 1.5% 1.0% Source: Wall Street research. 0.5% 0.3% Q4 2010 0.2% vMVPD included vMVPD excluded (0.1%) 0.0% 0.1% Q4 2011 0.1% Year-over-Year Subscriber Growth 0.1% 0.1% 0.0% Q4 2012 (0.2%) (0.2%) (0.2%) Q4 2013 (0.2%) (0.1%) 10 (0.2%) (0.3%) (0.2%) (0.2%) Q

  12. Slide 12: Sports and News Live Viewership Growing Share

    Sports and News Live Viewership Growing Share Share of Live Viewing Hours, Adults 24-54 Sports & News: +26% 0% All Other Content: (6%) 2013 2014 2015 2016 2017 2018 Source: Wall Street research, Nielsen NNTV. Data based on Program Level National Total Day Results; News includes all programs in the N

  13. Slide 13: Local Sports Content Drives Consistent, High-Volume Viewership

    Local Sports Content Drives Consistent, High-Volume Viewership Detroit Team Games – Total Minutes Consumed(1) Detroit Primetime Entertainment – Total Minutes Consumed(1) Minutes in millions Minutes in millions Games 151 81 70 Episodes 22 28 24 141 309 3,228 295 2,624 1,159 2,129 262 305 402 Total lo

  14. Slide 14: Legalized Sports Betting Opportunity

    Legalized Sports Betting Opportunity U.S. sports betting market poised for rapid expansion… ($B) …presents substantial upside for media companies ($B) RSN portfolio offers vast inventory of live sports(1) Projected US sports betting revenue Projected sports betting media spend (2025E) $5.0 $0.3 $1.3

  15. Slide 15: Pro Forma Financial Profile

    Pro Forma Financial Profile Calendar Year Total Revenue(1) ($ in billions) Calendar Year Total Revenue Mix(1) SBGI Standalone Pro Forma 135%+ $6.7B Other 6% Other 3% $3.8B RSNs Advertising Distribution 27% $2.8B 43% Advertising Distribution Legacy 51% 70% $2.8B Sinclair SBGI Standalone Pro Forma Cal

  16. Slide 16: Financing Structure & Pro Forma Leverage

    Financing Structure & Pro Forma Leverage Illustrative Structure(1) Pro Forma Capitalization Leverage Ratio RSN Sports Assets (2) Gross Leverage 5.3x $1.4B $1.4B Preferred Equity Gross Leverage (including preferred equity) 5.9x + Marquee + Marquee $1.0B Net Leverage 4.8x Byron Allen / Net Leverage (i

  17. Slide 17: Key Highlights

    Key Highlights  Leading platform for local sports and news  Diversification of content sources and revenue  Extensive multi-platform expansion opportunities  Prime beneficiaries of emerging legalized sports betting mega trend  Substantial EBITDA and FCF accretion 16

  18. Slide 18: Q&A

    SINCLAIR Q&A

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