Sinclair, Inc. (NASDAQ: SBGI) is experiencing a surge in its stock performance on the US market today, with shares rising by an impressive 12.78% to reach $15.36 in the current session. The upward trajectory in SBGI stock is coming on the heels of significant developments.
Sinclair (SBGI) in a joint announcement with FOX Corporation unveiled that their broadcast divisions have successfully negotiated a multi-year renewal for all FOX affiliations in Sinclair markets. The renewal extends to markets where Sinclair provides sales and other services under joint sales agreements or master service agreements. This comprehensive agreement encompasses 41 markets, collectively catering to approximately 19 million TV households.
Of particular note is the early renewal of affiliations in 17 markets. In an era where premier sports, such as the NFL, Super Bowl, Baseball Night in America, the World Series, and college football and basketball, hold heightened significance, Sinclair’s ability to continue pairing FOX’s exclusive sports and entertainment programming with top-notch local news and syndicated content is solidified for the foreseeable future.
Simultaneously, Sinclair announced its commitment to a global settlement, pending definitive documentation and final court approval, regarding the litigation filed by Diamond Sports Group, LLC (DSG) and its subsidiary, Diamond Sports Net, LLC, in July 2023. The settlement terms involve the withdrawal of DSG’s $1.5 billion litigation against Sinclair and all other defendants.
In exchange for this withdrawal, Sinclair will make a cash payment of $495 million to DSG. After factoring in corresponding tax benefits, additional Management Services Agreement payments to Sinclair Television Group, LLC (STG), and other assets received in connection with the settlement, Sinclair anticipates a net cost ranging from $250-325 million.
This cash payment will be funded through cash on hand at Sinclair Ventures, LLC, Sinclair Television Group, LLC, and/or a loan backed by Sinclair Ventures, LLC. As part of the settlement, Sinclair has committed to providing transition services to DSG, facilitating its evolution into a self-standing entity moving forward.
