Sinclair, Inc.: Form 10-Q for the period ended Sep 30, 2025

The following Management’s Discussion and Analysis provides qualitative and quantitative information about Sinclair’s and SBG’s financial performance and condition and should be read in conjunction with Sinclair’s and SBG’s consolidated financial statements and the accompanying notes to those statements. This discussion consists of the following sections:

Summary of Significant Events — financial events during the three months ended September 30, 2025 and through the date this Report on Form 10-Q is filed.

Results of Operations — an analysis of Sinclair’s and SBG’s revenue and expenses for the three and nine months ended September 30, 2025 and 2024.

Liquidity and Capital Resources — a discussion of Sinclair’s and SBG’s primary sources of liquidity and an analysis of Sinclair’s and SBG’s cash flows from or used in operating activities, investing activities, and financing activities during the three and nine months ended September 30, 2025.

SUMMARY OF SIGNIFICANT EVENTS

Content and Distribution

• In August 2025, Tennis signed extensions with the International Tennis Federation for the Davis Cup (through 2028) and Billie Jean King Cup (through 2027).
• In September 2025, Sinclair’s AMP Media launched the THE TUNDRA: A Podcast on The Green Bay Packers.

Corporate Social Responsibility Practices

• To date in 2025, SBG’s newsrooms have won a total of 227 journalism awards, including 25 RTDNA regional Edward R. Murrow Awards.
• In July 2025, Sinclair Cares ran two campaigns, one raising nearly $200,000 in support of Texas flood relief and another partnering with the American Cancer Society to raise awareness and support free rides to medical treatments.
• In August 2025, Sinclair awarded scholarships to 15 university students as a part of its annual scholarship program.

NextGen Broadcast (ATSC 3.0)

• In July 2025, SBG launched WKOF in Syracuse, New York as an ATSC 3.0 lighthouse, marking the first time a television license was initiated under the NextGen Broadcast (ATSC 3.0) standard.

Transactions

• In July 2025, SBG sold four owned stations within Milwaukee, WI (WVTV), Springfield, IL (WICS/WICD), Ottumwa, IA (KTVO), and Quincy, IL (KHQA).
• In August 2025, SBG acquired the license assets of WOLF in Hazleton, PA and WGFL in High Springs, FL from New Age Media, LLC. SBG previously oversaw the operations of the stations under Management Service Agreements.
• In August 2025, SBG acquired the license assets of KMEG in Sioux City, IA from Waitt Broadcasting. SBG previously oversaw the operations of the station under a JSA.
• In August 2025, SBG acquired the license assets of KNSN in Reno, NV, KBTV in Beaumont, TX, and WSTR in Cincinnati, OH from Deerfield Media. SBG previously oversaw the operations of the stations under JSAs.
• In September 2025, SBG acquired the non-license assets of WLNE in Providence, RI.

Financing, Capital Allocation, and Shareholder Returns

• In August 2025, Sinclair declared a quarterly dividend of $0.25 per share. In November 2025, Sinclair declared a quarterly dividend of $0.25 per share.
• In October 2025, STG repurchased the remaining $89 million aggregate principal amount of the 5.125% Senior Notes due 2027 for consideration of $89 million. The 5.125% Senior Notes due 2027 acquired in the second quarter of 2025 were canceled immediately following their acquisition.

Other Events

• In July 2025, Sinclair announced the appointment of Narinder Sahai as Executive Vice President and Chief Financial Officer, effective immediately.

SINCLAIR, INC. RESULTS OF OPERATIONS

Any references to the first, second, or fourth quarters are to the three months ended March 31, June 30, or December 31, respectively, for the year being discussed. As of September 30, 2025, we had two reportable segments for accounting purposes, local media and tennis.

Seasonality / Cyclicality

The operating results of our local media segment are usually subject to cyclical fluctuations from political advertising. In even numbered years, political spending is usually significantly higher than in odd numbered years due to advertising expenditures preceding local and national elections. Additionally, every four years, political spending is usually elevated further due to advertising expenditures preceding the presidential election. Also, the second and fourth quarter operating results are usually higher than the first and third quarters’ because advertising expenditures are increased in anticipation of certain seasonal and holiday spending by consumers.

The operating results of our tennis segment are usually subject to cyclical fluctuations due to the number and significance of tournaments that take place in the respective quarters during the year. The first and fourth quarter operating results are usually higher than the second and third quarters’ because of the number and significance of tournaments that are played during those periods.

Operating Data

The following table sets forth our consolidated operating data for the periods presented (in millions):

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Local Media Segment

The following table sets forth our revenue and expenses for our local media segment for the periods presented (in millions):

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(a) Includes $3 million and $8 million for the three and nine months ended September 30, 2025, respectively, and $2 million and $7 million for the three and nine months ended September 30, 2024, respectively, of intercompany revenue related to certain services provided to the tennis segment, which is eliminated in consolidation.

(b) Includes $5 million and $14 million for the three and nine months ended September 30, 2025, respectively, and $4 million and $9 million for the three and nine months ended September 30, 2024, respectively, of intercompany expense related to certain services provided by other, which is eliminated in consolidation.

Revenue

Distribution revenue. Distribution revenue, which represents fees earned from Distributors for our broadcast signals, decreased $13 million or 3% for the three months ended September 30, 2025, when compared to the same period in 2024. Subscriber decreases impacted period-over-period distribution revenue by mid-teen percentages for the three months ended September 30, 2025, partially offset by favorable contractual rate increases by low-teen percentages. Distribution revenue decreased $6 million or 1% for the nine months ended September 30, 2025, when compared to the same period in 2024. Subscriber decreases impacted period-over-period distribution revenue by mid-teen percentages for the nine months ended September 30, 2025, partially offset by favorable contractual rate increases by low-teen percentages.

Core advertising revenue. Core advertising revenue decreased $14 million and $40 million for the three and nine months ended September 30, 2025, respectively, when compared to the same periods in 2024, with no particular product/services category dominating the variance.

Political advertising revenue. Political advertising revenue decreased $132 million and $184 million for the three and nine months ended September 30, 2025, respectively, when compared to the same periods in 2024, primarily due to 2025 being an off-year election cycle, and therefore having only a small number of political races and correspondingly less political advertising spending compared to 2024 which was a presidential political year.

Other media revenue. Other media revenue decreased $19 million and $52 million for the three and nine months ended September 30, 2025, respectively, when compared to the same periods in 2024, primarily due to a decrease related to certain services provided under management services agreements.

The following table sets forth our primary types of programming and their approximate percentages of advertising revenue for the periods presented:

(a) Sports programming includes both local and network sports programming. Network programming is exclusive of any network sports programming.

The following table sets forth our affiliate percentages of advertising revenue for the periods presented:

Expenses

Media programming and production expenses. Media programming and production expenses decreased $6 million for the three months ended September 30, 2025, when compared to the same period in 2024, primarily due to a $2 million decrease in both litigation and consulting related expenses and employee compensation cost, respectively. Media programming and production expenses decreased $1 million for the nine months ended September 30, 2025, when compared to the same period in 2024, primarily due to a decrease in litigation and consulting expenses of $7 million, of which the litigation item related to the reversal of approximately $3 million previously expensed as a result of the FCC consent decree that is further discussed in Litigation, Claims, and Regulatory Matters under Note 4. Commitments and Contingencies within Sinclair’s Consolidated Financial Statements, which were offset by an increase in fees pursuant to network affiliation agreements and other programming contracts of $6 million as a result of increased contractual rates.

Media selling, general and administrative expenses. Media selling, general and administrative expenses decreased $23 million for the three months ended September 30, 2025, when compared to the same period in 2024, primarily due an $8 million decrease in national sales commissions, a $6 million decrease in costs relating to our digital business, a $4 million decrease in employee compensation cost, and a $2 million decrease in information technology cost. Media selling, general and administrative expenses decreased $52 million for the nine months ended September 30, 2025, when compared to the same period in 2024, primarily due to an $11 million decrease in national sales commissions, a $10 million decrease in employee compensation cost, a $10 million decrease related to the FCC consent decree, as further discussed in Litigation, Claims, and Regulatory Matters under Note 4. Commitments and Contingencies within Sinclair’s Consolidated Financial Statements, a $9 million decrease in costs relating to our digital business, an $8 million decrease in trade related expenses, and a $4 million decrease in credit card fees.

Corporate general and administrative expenses. See explanation under Corporate and Unallocated Expenses.

Gain on asset dispositions and other, net. During the nine months ended September 30, 2025, we recognized $35 million of proceeds related to our cyber and directors and officers insurance policies, offset by a loss related to the sale of certain of our stations of approximately $8 million. See Acquisitions and Station Disposals under Note 1. Nature of Operations and Summary of Significant Accounting Policies within Sinclair’s Consolidated Financial Statements.

Interest expense including amortization of debt discount and deferred financing costs. Interest expense increased $7 million and $81 million for the three and nine months ended September 30, 2025, respectively, when compared to the same periods in 2024, primarily due to the Transactions, as described in Credit Agreement and Notes under Note 3. Notes Payable, Finance Leases, and Commercial Bank Financing within Sinclair’s Consolidated Financial Statements. Included in interest expense for the nine months ended September 30, 2025 is $68 million of one-time financing costs that will not recur in future periods.

Gain on extinguishment of debt. For the nine months ended September 30, 2025, we repurchased $81 million aggregate principal amount of the 5.125% Senior Notes due 2027 for consideration of $77 million and recognized a gain on extinguishment of $4 million. For the nine months ended September 30, 2025, in connection with the Transactions, we recognized a gain on extinguishment of the 4.125% Senior Secured Notes due 2030 and 5.125% Senior Notes due 2027 of $5 million and $3 million, respectively, and a loss on extinguishment of the Term Loan B-2 of $6 million. See Credit Agreement and Notes under Note 3. Notes Payable, Finance Leases, and Commercial Bank Financing within Sinclair’s Consolidated Financial Statements.

Other income, net. During the nine months ended September 30, 2025, we recognized $8 million in interest income. During the nine months ended September 30, 2024, we recognized a $26 million gain related to the sale of certain broadcast related assets and $9 million in interest income.

Tennis Segment

The following table sets forth our revenue and expenses for our tennis segment for the periods presented (in millions):

(a) Includes $3 million and $8 million for the three and nine months ended September 30, 2025, respectively, and $2 million and $7 million for the three and nine months ended September 30, 2024, respectively, of intercompany expense related to certain services provided by the local media segment, which is eliminated in consolidation.

Revenue

Distribution revenue. Distribution revenue, which represents fees earned from Distributors for the right to distribute Tennis Channel, increased $1 million or 2% for the three months ended September 30, 2025, when compared to the same period in 2024, primarily due to high-teen percentage increases in contractual rates and a high single-digit percentage increase in direct-to-consumer (“DTC”) subscriptions, partially offset by a decrease in subscribers by high-teen percentages for the period. Distribution revenue increased $8 million or 5% for the nine months ended September 30, 2025, when compared to the same period in 2024, primarily due to low-teen percentage increases in contractual rates and a high single-digit percentage increase in DTC subscriptions, partially offset by a decrease in subscribers by low-teen percentages for the period.

Core advertising revenue. Core advertising revenue is primarily generated from sales of commercial time within Tennis Channel programming. Core advertising revenue increased $6 million for both the three and nine months ended September 30, 2025, when compared to the same periods in 2024, primarily due to stronger linear sales, as well as higher advertising sales within the DTC platform as a result of increased subscribers.

Expenses

Media programming and production expenses. Media programming and production expenses increased $5 million and $3 million for the three and nine months ended September 30, 2025, respectively, when compared to the same periods in 2024, primarily due to an increase in tournament production costs, increases in contractual rates for tournament rights and increases in development costs related to the DTC platform.

Media selling, general and administrative expenses. Media selling, general and administrative expenses increased $2 million for the three months ended September 30, 2025, when compared to the same period in 2024, primarily due to an increase in costs associated with the launch of the DTC platform. Media selling, general and administrative expenses increased $6 million for the nine months ended September 30, 2025, when compared to the same period in 2024, primarily due to an increase in costs associated with the launch of the DTC platform and an increase in expenses related to certain services provided by the local media segment, which is eliminated in consolidation.

Corporate general and administrative expenses. See explanation under Corporate and Unallocated Expenses.

Other

The following table sets forth our revenue and expenses for our non-broadcast digital and internet solutions, technical services, and non-media investments (collectively, other) for the periods presented (in millions):

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(a) Media revenue for the three and nine months ended September 30, 2025 includes $5 million and $14 million, respectively, and for the three and nine months ended September 30, 2024 includes $4 million and $9 million, respectively, of intercompany revenue related to certain services and sales provided to the local media segment, which is eliminated in consolidation.

(b) Non-media revenue for the three and nine months ended September 30, 2025 includes $2 million and $3 million, respectively, and for the three and nine months ended September 30, 2024 includes $1 million and $5 million, respectively, of intercompany revenue related to certain services and sales provided to the local media segment, which is eliminated in consolidation.

(c) Non-media expenses for the three and nine months ended September 30, 2025 include $2 million and $3 million, respectively, and for the nine months ended September 30, 2024 include $3 million of intercompany expense related to certain services and sales provided by the local media segment, which is eliminated in consolidation.

Revenue. Media revenue increased $29 million and $67 million for the three and nine months ended September 30, 2025, respectively, when compared to the same periods in 2024, primarily due to an increase in advertising revenue related to the acquisition of Digital Remedy, as discussed in Acquisitions and Station Disposals under Note 1. Nature of Operations and Summary of Significant Accounting Policies within Sinclair’s Consolidated Financial Statements. Non-media revenue decreased $6 million for the nine months ended September 30, 2025, when compared to the same period in 2024, primarily due to a decrease in broadcast equipment sales.

Expenses. Media expenses increased $24 million and $58 million for the three and nine months ended September 30, 2025, respectively, when compared to the same periods in 2024, primarily due to an increase in selling, general and administrative expenses related to the acquisition of Digital Remedy, as discussed in Acquisitions and Station Disposals under Note 1. Nature of Operations and Summary of Significant Accounting Policies within Sinclair’s Consolidated Financial Statements. Non-media expenses decreased $3 million for the nine months ended September 30, 2025, when compared to the same period in 2024, primarily due to a decrease in expenses associated with lower broadcast equipment sales.

(Loss) income from equity method investments. During the nine months ended September 30, 2024, we recognized gains of $93 million primarily related to the sales of certain of our investments, which is included in (loss) income from equity method investments in our consolidated statements of operations.

Other income (expense), net. During the three months ended September 30, 2025 and 2024, we recognized fair value adjustment gains of $19 million and $15 million, respectively, associated with investments measured at fair value and NAV. During the nine months ended September 30, 2025 and 2024, we recognized fair value adjustment losses of $84 million and $28 million, respectively, associated with investments measured at fair value and NAV.

Corporate and Unallocated Expenses

The following table presents our corporate and unallocated expenses for the periods presented (in millions):

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Corporate general and administrative expenses. The table above and the explanation that follows cover total consolidated corporate general and administrative expenses. Corporate general and administrative expenses decreased $12 million for the nine months ended September 30, 2025, when compared to the same period in 2024, primarily due to a decrease in legal, consulting, and regulatory costs, primarily related to the litigation discussed under Note 4. Commitments and Contingencies within Sinclair’s Consolidated Financial Statements, and a decrease in employee compensation cost.

Gain on asset dispositions and other, net. During the nine months ended September 30, 2025, we recognized a loss of $8 million related to our station sales and a loss of $15 million related to the Marquee guarantee as discussed in Debt of Variable Interest Entities and Guarantees of Third-Party Obligations under Note 3. Notes Payable, Finance Leases, and Commercial Bank Financing within Sinclair’s Consolidated Financial Statements. These losses were offset by gains of $45 million related to proceeds from our cyber and directors and officers insurance policies, which are further discussed above in Local Media Segment and Other under Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Income tax benefit (provision). The effective tax rate for the three months ended September 30, 2025, was a benefit of 188.6% as compared to a provision of 23.0% during the same period in 2024. The increase in the effective tax rate for the three months ended September 30, 2025, as compared to the same period in 2024, is primarily due to a small book loss in 2025 compared to book income in 2024.

The effective tax rate for the nine months ended September 30, 2025, was a benefit of 22.1% as compared to a provision of 17.4% during the same period in 2024. The increase in the effective tax rate for the nine months ended September 30, 2025, as compared to the same period in 2024, is primarily due to an immaterial $7.5 million correcting adjustment related to the accrual of interest income attributable to prior years’ pending income tax refund claims in 2024.

SINCLAIR BROADCAST GROUP, LLC RESULTS OF OPERATIONS

SINCLAIR BROADCAST GROUP, LLC RESULTS OF OPERATIONS

Any references to the first, second, or fourth quarters are to the three months ended March 31, June 30, or December 31, respectively, for the year being discussed. As of September 30, 2025, SBG had one reportable segment for accounting purposes, local media.

Seasonality / Cyclicality

The operating results of SBG’s local media segment are usually subject to cyclical fluctuations from political advertising. In even numbered years, political spending is usually significantly higher than in odd numbered years due to advertising expenditures preceding local and national elections. Additionally, every four years, political spending is usually elevated further due to advertising expenditures preceding the presidential election. Also, the second and fourth quarter operating results are usually higher than the first and third quarters’ because advertising expenditures are increased in anticipation of certain seasonal and holiday spending by consumers.

Operating Data

The following table sets forth SBG’s consolidated operating data for the periods presented (in millions):

Local Media Segment

Refer to Local Media Segment above under Sinclair, Inc.’s Results of Operations for a discussion of SBG’s local media segment, which is the same as Sinclair’s local media segment for the three and nine months ended September 30, 2025 and 2024.

As of September 30, 2025, the unrestricted subsidiaries (as defined in the New Credit Agreement, “Unrestricted Subsidiaries”) represented 0% of SBG’s total assets. For both the three and nine months ended September 30, 2025, the Unrestricted Subsidiaries represented 0% of SBG’s total revenue. For the three and nine months ended September 30, 2025, the Unrestricted Subsidiaries decreased SBG’s total operating income by 4% and 7%, respectively.

As of September 30, 2025 and for the three and nine months ended September 30, 2025 there were no restricted subsidiaries that were non-guarantors (as defined in the New Credit Agreement) of SBG.

SINCLAIR BROADCAST GROUP, LLC RESULTS OF OPERATIONS

Corporate and Unallocated Expenses

The following table presents SBG’s corporate and unallocated expenses for the periods presented (in millions):

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Corporate general and administrative expenses. The table above and the explanation that follows cover total consolidated corporate general and administrative expenses. Corporate general and administrative expenses decreased by $3 million and $15 million for the three and nine months ended September 30, 2025, respectively, when compared to the same periods in 2024, primarily due to a decrease in legal, consulting, and regulatory costs, primarily related to the litigation discussed under Note 4. Commitments and Contingencies within SBG’s Consolidated Financial Statements.

Gain on asset dispositions and other, net. During the nine months ended September 30, 2025, SBG recognized a loss of $8 million related to station sales and a loss of $15 million related to the Marquee guarantee as discussed in Debt of Variable Interest Entities and Guarantees of Third-Party Obligations under Note 3. Notes Payable, Finance Leases, and Commercial Bank Financing within SBG’s Consolidated Financial Statements. These losses were offset by gains of $35 million related to proceeds from SBG’s cyber and directors and officers insurance policies, which are further discussed in Local Media Segment under Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations under Sinclair, Inc.’s Results of Operations.

Income tax benefit (provision). The effective tax rate for the three months ended September 30, 2025, was a benefit of 18.2% as compared to a provision of 22.8% during the same period in 2024. The decrease in the effective tax rate for the three months ended September 30, 2025, as compared to the same period in 2024, is primarily due to a book loss in 2025 compared to book income in 2024.

The effective tax rate for the nine months ended September 30, 2025, was a benefit of 19.3% as compared to a provision of 13.6% during the same period in 2024. The increase in the effective tax rate for the nine months ended September 30, 2025, as compared to the same period in 2024, is primarily due to an immaterial $7.5 million correcting adjustment related to the accrual of interest income attributable to prior years’ pending income tax refund claims in 2024.

LIQUIDITY AND CAPITAL RESOURCES

Liquidity and Capital Resources

As of September 30, 2025, Sinclair had net working capital of approximately $673 million, including $526 million in cash and cash equivalent balances, and $650 million of available borrowing capacity, including $575 million under the New Credit Agreement and $75 million under the Amended Credit Agreement. Cash on hand, cash generated by Sinclair’s operations, and borrowing capacity under the New Credit Agreement and the Amended Credit Agreement are used as Sinclair’s primary sources of liquidity.

As of September 30, 2025, SBG had net working capital of approximately $208 million, including $122 million in cash and cash equivalent balances, and $650 million of available borrowing capacity, including $575 million under the New Credit Agreement and $75 million under the Amended Credit Agreement. Cash on hand, cash generated by SBG’s operations, and borrowing capacity under the New Credit Agreement and the Amended Credit Agreement are used as SBG’s primary sources of liquidity.

The First-Out Revolving Credit Facility includes a financial maintenance covenant, the first-out first lien leverage ratio (as defined in the New Credit Agreement), which requires such ratio not to exceed 3.5x, measured as of the end of each fiscal quarter, which is only applicable if 35% or more of the capacity (as a percentage of total commitments) under the First-Out Revolving Credit Facility, measured as of the last day of each fiscal quarter, is utilized as of such date. Since there was no utilization under the First-Out Revolving Credit Facility as of September 30, 2025, STG was not subject to the financial maintenance covenant under the New Credit Agreement. As of September 30, 2025, the STG first-out first lien leverage ratio was below 3.5x. The New Credit Agreement contains other restrictions and covenants with which STG was in compliance as of September 30, 2025.

During the nine months ended September 30, 2025, STG completed the Transactions, including a new money financing and debt recapitalization, which strengthened the Company’s balance sheet and better positioned it for long-term growth. STG’s nearest term maturity, Term Loan B-2 due 2026, was repaid with proceeds from the issuance of a new first-out first lien secured bond, along with the extension of maturities of other debt tranches, which significantly extended STG’s maturity profile. See Credit Agreement and Notes under Note 3. Notes Payable, Finance Leases, and Commercial Bank Financing within Sinclair’s Consolidated Financial Statements and Credit Agreement and Notes under Note 3. Notes Payable, Finance Leases, and Commercial Bank Financing within SBG’s Consolidated Financial Statements, for further information.

During the nine months ended September 30, 2025, STG repurchased $81 million aggregate principal amount of the 5.125% Senior Notes due 2027 for consideration of $77 million. The 5.125% Senior Notes due 2027 acquired in April 2025 were canceled immediately following their acquisition. In October 2025, STG repurchased the remaining $89 million aggregate principal amount of the 5.125% Senior Notes due 2027 for consideration of $89 million.

During the nine months ended September 30, 2025, Sinclair entered into agreements which increased estimated contractual amounts owed for tennis programming rights by $165 million which have terms that extend into 2032. There were no other material changes to Sinclair’s or SBG’s contractual cash obligations as of September 30, 2025.

Sinclair and SBG anticipate that existing cash and cash equivalents, cash flow from the local media segment’s operations, and borrowing capacity under the New Credit Agreement and the Amended Credit Agreement will be sufficient to satisfy the local media segment’s debt service obligations, capital expenditure requirements, and working capital needs for the next twelve months. Sinclair anticipates that existing cash and cash equivalents and cash flow from SBG, the tennis segment, and other’s operations will be sufficient to satisfy SBG, the tennis segment, and other’s debt service obligations, capital expenditure requirements, and working capital needs for the next twelve months. However, certain factors, including but not limited to the war in Ukraine, conflict in the Middle East, other geopolitical matters, natural disasters, pandemics, and potential tariffs and trade restrictions and their resulting effect on the economy, Sinclair’s and SBG’s advertisers, and Sinclair’s and SBG’s Distributors and their subscribers, could affect Sinclair’s and SBG’s liquidity and first-out first lien leverage ratio which could affect Sinclair’s and SBG’s ability to access the full borrowing capacity under the New Credit Agreement. In addition to the sources described above, Sinclair and SBG may rely upon various sources for long-term liquidity needs, such as but not limited to, the issuance of long-term debt, the issuance of Sinclair equity, for Sinclair only, the issuance of Ventures equity or debt, or other instruments convertible into or exchangeable for Sinclair equity, or the sale of assets. However, there can be no assurance that additional financing or capital or buyers of assets will be available, or that the terms of any transactions will be acceptable or advantageous to Sinclair or SBG.

LIQUIDITY AND CAPITAL RESOURCES

Sinclair, Inc. Sources and Uses of Cash

The following table sets forth Sinclair’s cash flows for the periods presented (in millions):

Operating Activities

Net cash flows used in Sinclair’s operating activities increased for the three months ended September 30, 2025, when compared to the same period in 2024, primarily due to a decrease in cash collections from Distributors, a decrease in cash collections related to political revenue, and an increase in overhead costs, partially offset by cash receipts from insurance policies in the current period and a decrease in production costs. Net cash flows from Sinclair’s operating activities increased for the nine months ended September 30, 2025, when compared to the same period in 2024, primarily due to an increase in cash collections from Distributors, cash receipts from insurance policies in the current period, and the DSG settlement payment that occurred in the prior period, partially offset by a decrease in cash collections related to political revenue and an increase in production and overhead costs.

Investing Activities

Net cash flows used in Sinclair’s investing activities increased for the three months ended September 30, 2025, when compared to the same period in 2024, primarily due to an increase in the acquisition of property and equipment in the current period. Net cash flows used in Sinclair’s investing activities increased for the nine months ended September 30, 2025, when compared to the same period in 2024, primarily due to a decrease in the distributions and proceeds from investments and the acquisition of Digital Remedy in the first quarter of 2025.

Financing Activities

Net cash flows used in Sinclair’s financing activities decreased for the three months ended September 30, 2025, when compared to the same period in 2024, primarily due to a decrease in repayments of debt during the current period due to the Transactions during the first quarter of 2025. Net cash flows used in Sinclair’s financing activities increased for the nine months ended September 30, 2025, when compared to the same period in 2024, primarily due to the Transactions during the first quarter of 2025 and the repurchase of the 5.125% Senior Notes due 2027 during the second quarter of 2025. See Note 3. Notes Payable, Finance Leases, and Commercial Bank Financing within Sinclair’s Consolidated Financial Statements for further information related to the Transactions.

LIQUIDITY AND CAPITAL RESOURCES

Sinclair declared a quarterly dividend of $0.25 per share in August 2025 and $0.25 per share in November 2025. Future dividends on Sinclair’s shares of common stock, if any, will be at the discretion of Sinclair’s Board of Directors and will depend on several factors including Sinclair’s results of operations, cash requirements and surplus, financial condition, covenant restrictions, and other factors that Sinclair’s Board of Directors may deem relevant.

Sinclair Broadcast Group, LLC Sources and Uses of Cash

The following table sets forth SBG’s cash flows for the periods presented (in millions):

Operating Activities

Net cash flows used in SBG’s operating activities increased for the three months ended September 30, 2025, when compared to the same period in 2024, primarily due to a decrease in cash collections from Distributors and a decrease in cash collections related to political revenue, partially offset by cash receipts from insurance policies in the current period and a decrease in production and overhead costs. Net cash flows from SBG’s operating activities increased for the nine months ended September 30, 2025, when compared to the same period in 2024, primarily due to an increase in cash collections from Distributors, cash receipts from insurance policies in the current period, the DSG settlement payment that occurred in the prior period, and a decrease in production and overhead costs, partially offset by a decrease in cash collections related to political revenue.

Investing Activities

Net cash flows used in SBG’s investing activities increased for the three months ended September 30, 2025, when compared to the same period in 2024, primarily due to a decrease in distributions and proceeds from the sale of broadcast investments. Net cash flows used in SBG’s investing activities increased for the nine months ended September 30, 2025, when compared to the same period in 2024, primarily due to a decrease in distributions and proceeds from the sale of broadcast investments, partially offset by a decrease in the acquisition of property and equipment in the current period.

Financing Activities

Net cash flows used in SBG’s financing activities decreased for the three months ended September 30, 2025, when compared to the same period in 2024, primarily due to a decrease in distributions to member, net and a decrease in repayments of debt during the current period due to the Transactions during the first quarter of 2025. Net cash flows used in SBG’s financing activities increased for the nine months ended September 30, 2025, when compared to the same period in 2024, primarily due to the Transactions during the first quarter of 2025, the repurchase of the 5.125% Senior Notes due 2027 during the second quarter of 2025, and an increase in distributions to member, net. See Note 3. Notes Payable, Finance Leases, and Commercial Bank Financing within SBG’s Consolidated Financial Statements for further information related to the Transactions.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

There were no changes to the critical accounting policies and estimates from those disclosed in Critical Accounting Policies and Estimates under Part II. Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations within our Annual Report on Form 10-K for the year ended December 31, 2024.

There have been no material changes from the quantitative and qualitative discussion about market risk previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2024.

Evaluation of Disclosure Controls and Procedures

Each of Sinclair’s and SBG’s management, under the supervision and with the participation of its respective Chief Executive Officer and Chief Financial Officer, evaluated the design and effectiveness of its disclosure controls and procedures as of September 30, 2025.

The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to provide reasonable assurance that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to provide reasonable assurance that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to our management, including its principal executive and principal financial officers, as appropriate, to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

Assessment of Effectiveness of Disclosure Controls and Procedures

Based on the evaluation of its disclosure controls and procedures as of September 30, 2025, each of Sinclair’s and SBG’s Chief Executive Officer and Chief Financial Officer concluded that, as of such date, Sinclair’s and SBG’s disclosure controls and procedures, respectively, were effective at the reasonable assurance level.

Changes in Internal Control over Financial Reporting

There have been no changes in either Sinclair’s or SBG’s internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended September 30, 2025, that have materially affected, or are reasonably likely to materially affect, its internal control over financial reporting.

Limitations on the Effectiveness of Controls

Management, including each of Sinclair’s and SBG’s Chief Executive Officer and Chief Financial Officer, does not expect that Sinclair’s and SBG’s disclosure controls and procedures or its internal control over financial reporting will prevent all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within each company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management’s override of the control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

CONSOLIDATED BALANCE SHEETS

(in millions, except share and per share data) (Unaudited)

The accompanying notes are an integral part of these unaudited consolidated financial statements.

(a) Our consolidated total assets as of September 30, 2025 and December 31, 2024 include total assets of variable interest entities (“VIE”) of $78 million and $70 million, respectively, which can only be used to settle the obligations of the VIEs. Our consolidated total liabilities as of September 30, 2025 and December 31, 2024 include total liabilities of VIEs of $9 million and $16 million, respectively, for which the creditors of the VIEs have no recourse to us. See Note 7. Variable Interest Entities.

CONSOLIDATED STATEMENTS OF OPERATIONS

(in millions, except share and per share data) (Unaudited)

The accompanying notes are an integral part of these unaudited consolidated financial statements.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

(in millions) (Unaudited)

The accompanying notes are an integral part of these unaudited consolidated financial statements.

CONSOLIDATED STATEMENTS OF EQUITY AND NONCONTROLLING INTERESTS

(in millions, except share and per share data) (Unaudited)

The accompanying notes are an integral part of these unaudited consolidated financial statements.

CONSOLIDATED STATEMENTS OF EQUITY AND NONCONTROLLING INTERESTS

(in millions, except share and per share data) (Unaudited)

The accompanying notes are an integral part of these unaudited consolidated financial statements.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions) (Unaudited)

The accompanying notes are an integral part of these unaudited consolidated financial statements.

1. NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Nature of Operations

Sinclair, Inc. (“Sinclair”) is a diversified media company with national reach and a strong focus on providing high-quality content on our local television stations and digital platforms. The content, distributed through our broadcast platform and third-party platforms, consists of programming provided by third-party networks and syndicators, local news, other original programming produced by us and our owned networks and professional sports. Additionally, we own digital media companies that are complementary to our extensive portfolio of television station related digital properties and we have interests in, own, manage, and/or operate technical and software services companies, research and development companies for the advancement of broadcast technology, and other media and non-media related businesses and assets, including real estate, venture capital, private equity, and direct investments.

For the quarter ended September 30, 2025, we had two reportable segments: local media and tennis. The local media segment consists primarily of our 179 broadcast television stations in 81 markets, which we own, provide programming and operating services pursuant to agreements commonly referred to as local marketing agreements (“LMA”), or provide sales services and other non-programming operating services pursuant to other outsourcing agreements (such as joint sales agreements (“JSA”) and shared services agreements (“SSA”)). These stations broadcast 646 channels as of September 30, 2025. For the purpose of this report, these 179 stations and 646 channels are referred to as “our” stations and channels. The tennis segment consists of Tennis Channel, a cable network which includes coverage of many of tennis’ top tournaments and original professional sports and tennis lifestyle shows; Tennis Channel International streaming service; Tennis Channel streaming service; TennisChannel 2, a 24-hour a day free ad-supported streaming television channel; and Tennis.com.

Principles of Consolidation

The consolidated financial statements include our accounts and those of our wholly-owned and majority-owned subsidiaries, and VIEs for which we are the primary beneficiary. Noncontrolling interests represent a minority owner’s proportionate share of the equity in certain of our consolidated entities. All intercompany transactions and account balances have been eliminated in consolidation.

We consolidate VIEs when we are the primary beneficiary. We are the primary beneficiary of a VIE when we have the power to direct the activities of the VIE that most significantly impact the economic performance of the VIE and have the obligation to absorb losses or the right to receive returns that would be significant to the VIE. See Note 7. Variable Interest Entities for more information on our VIEs.

Investments in entities over which we have significant influence but not control are accounted for using the equity method of accounting. Income from equity method investments represents our proportionate share of net income generated by equity method investees.

Interim Financial Statements

The consolidated financial statements for the three and nine months ended September 30, 2025 and 2024 are unaudited. In the opinion of management, such financial statements have been presented on the same basis as the audited consolidated financial statements and include all adjustments, consisting only of normal recurring adjustments necessary for a fair statement of the consolidated balance sheets, consolidated statements of operations, consolidated statements of comprehensive (loss) income, consolidated statements of equity and noncontrolling interests, and consolidated statements of cash flows for these periods as adjusted for the adoption of recent accounting pronouncements.

As permitted under the applicable rules and regulations of the Securities and Exchange Commission (the “SEC”), the consolidated financial statements do not include all disclosures normally included with audited consolidated financial statements and, accordingly, should be read together with the audited consolidated financial statements and notes thereto in our Annual Report on Form 10-K for the year ended December 31, 2024 filed with the SEC. The consolidated statements of operations presented in the accompanying consolidated financial statements are not necessarily representative of operations for an entire year.

Use of Estimates

The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses in the consolidated financial statements and in the disclosures of contingent assets and liabilities. Actual results could differ from those estimates.

Recent Accounting Pronouncements

In December 2023, the FASB issued guidance to enhance the transparency and decision usefulness of income tax disclosures, requiring annual disclosure of consistent categories and greater disaggregation of information in the rate reconciliation table; additional information for reconciling items that meet a quantitative threshold (if the effect of those reconciling items is equal to or greater than 5 percent of the amount computed by multiplying pretax income or loss by the applicable statutory income tax rate); income taxes paid disaggregated by jurisdiction; and income or loss before income tax disaggregated between foreign and domestic. The guidance is effective for annual periods beginning after December 15, 2024, applied prospectively. Early adoption is permitted. We are currently evaluating the impact of this guidance but do not expect it to have a material impact on our consolidated financial statements.

In November 2024, the FASB issued guidance requiring disclosure of disaggregated information about certain income statement expense line items. The guidance is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. We are currently evaluating the impact of this guidance.

Broadcast Television Programming

We have agreements with programming syndicators for the rights to television programming over contract periods, which generally run from one to three years. Contract payments are made in installments over terms that are generally equal to or shorter than the contract period. Pursuant to accounting guidance for the broadcasting industry, an asset and a liability for the rights acquired and obligations incurred under a license agreement are reported on the balance sheet when the cost of each program is known or reasonably determinable, the program material has been accepted by the licensee in accordance with the conditions of the license agreement, and the program is available for its first showing or telecast. The portion of program contracts which becomes payable within one year is reflected as a current liability in the accompanying consolidated balance sheets.

The rights to this programming are reflected in the accompanying consolidated balance sheets at the lower of unamortized cost or fair value. Program costs are amortized on a straight-line basis except for contracts greater than three years which are amortized utilizing an accelerated method. Program costs estimated by management to be amortized in the succeeding year are classified as current assets. Payments of program contract liabilities are typically made on a scheduled basis and are not affected by amortization or fair value adjustments.

We assess our program costs on a quarterly basis to ensure the costs are recorded at the lower of unamortized cost or fair value.

Hedge Accounting

We entered into an interest rate swap effective February 7, 2023 and terminating on February 28, 2026 in order to manage a portion of our exposure to variable interest rates. The swap agreement has a notional amount of $600 million, bears a fixed interest rate of 3.9%, and we receive a floating rate of interest based on the Secured Overnight Financing Rate (“SOFR”).

We have determined that the interest rate swap meets the criteria for hedge accounting. The initial value of the interest rate swap and any changes in value in subsequent periods are included in accumulated other comprehensive income, with a corresponding change recorded in assets or liabilities depending on the position of the swap. Gains or losses on the monthly settlement of the interest rate swap are reflected in interest expense in our consolidated statements of operations. Cash flows related to the interest rate swap are classified as operating activities in our consolidated statements of cash flows. See Interest Rate Swap within Note 3. Notes Payable, Finance Leases, and Commercial Bank Financing for further discussion.

Non-cash Investing and Financing Activities

Leased assets obtained in exchange for new operating lease liabilities were $7 million and $4 million for the nine months ended September 30, 2025 and 2024, respectively. Leased assets obtained in exchange for new finance lease liabilities were $17 million for the nine months ended September 30, 2024. Non-cash investing activities included property and equipment purchases of $4 million and $5 million for the nine months ended September 30, 2025 and 2024, respectively.

We received equity shares in investments valued at $21 million and $4 million for the nine months ended September 30, 2025 and 2024, respectively, in exchange for an obligation to deliver a similar value of advertising spots.

We completed the acquisition and sale of certain television stations as described in Acquisitions and Station Disposals below for non-cash consideration of $32 million and $36 million, respectively, during both the three and nine months ended September 30, 2025.

Revenue Recognition

The following table presents our revenue disaggregated by type and segment (in millions):

13

Distribution Revenue. We generate distribution revenue through fees received from these Distributors for the right to distribute our stations and other properties. Distribution arrangements are generally governed by multi-year contracts and the underlying fees are based upon a contractual monthly rate per subscriber. These arrangements represent licenses of intellectual property; revenue is recognized as the signal or network programming is provided to our customers (as usage occurs) which corresponds with the satisfaction of our performance obligation. Revenue is calculated based upon the contractual rate multiplied by an estimated number of subscribers. Our customers will remit payments based upon actual subscribers a short time after the conclusion of a month, which generally does not exceed 120 days. Historical adjustments to subscriber estimates have not been material.

Core Advertising Revenue. We generate core advertising revenue primarily from the sale of non-political advertising spots/impressions within our broadcast television and digital platforms.

Political Advertising Revenue. We generate political advertising revenue primarily from the sale of political advertising spots/impressions within our broadcast television and digital platforms.

In accordance with ASC 606, we do not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) distribution arrangements which are accounted for as a sales/usage-based royalty.

Deferred Revenue. We record deferred revenue when cash payments are received or due in advance of our performance, including amounts which are refundable. We classify deferred revenue as either current in other current liabilities or long-term in other long-term liabilities in our consolidated balance sheets based on the timing of when we expect to satisfy our performance obligations. Deferred revenue was $169 million and $170 million as of September 30, 2025 and December 31, 2024, respectively, of which $94 million and $112 million, respectively, was reflected in other long-term liabilities in our consolidated balance sheets. Deferred revenue recognized for the nine months ended September 30, 2025 and 2024, included in the deferred revenue balance as of December 31, 2024 and 2023, was $49 million and $40 million, respectively.

For the three months ended September 30, 2025, two customers accounted for 11% and 10%, respectively, of our total revenue. For the nine months ended September 30, 2025, two customers accounted for 11% and 11%, respectively, of our total revenue. For the three months ended September 30, 2024, one customer accounted for 10% of our total revenue. For the nine months ended September 30, 2024, two customers accounted for 11% and 10%, respectively, of our total revenue. As of September 30, 2025, one customer accounted for 12% of our accounts receivable, net. As of December 31, 2024, four customers accounted for 11%, 11%, 10%, and 10%, respectively, of our accounts receivable, net. For purposes of this disclosure, a single customer may include multiple entities under common control.

Acquisitions and Station Disposals

In March 2025, Sinclair Ventures, LLC (“Ventures”) completed the acquisition of CPX Interactive LLC (“Digital Remedy”) for approximately $30 million in cash, net of cash acquired of $5 million, in which Ventures acquired the remaining 75% of the business they did not already own. The acquired assets and liabilities were recorded at fair value as of the closing date of the transactions, which included $22 million of definite-lived intangible assets and $17 million of goodwill.

In July 2025, we sold our owned stations within Milwaukee, WI (WVTV), Springfield, IL (WICS/WICD), Ottumwa, IA (KTVO), and Quincy, IL (KHQA) for consideration valued at $36 million. For the nine months ended September 30, 2025, we recorded a net loss of $8 million related to the sale, which is included within gain on asset dispositions and other, net within our consolidated statements of operations and our local media segment within Note 6. Segment Data.

In September 2025, we acquired the non-license assets of WLNE in Providence, RI for consideration valued at $32 million. The acquired assets and liabilities were recorded at fair value as of the closing date of the transaction. Based upon our preliminary purchase price allocation, we recorded $27 million of definite-lived intangible assets, $1 million of property and equipment, and $4 million of net working capital.

Income Taxes

Our income tax provision for all periods consists of federal and state income taxes. The tax provision for the three and nine months ended September 30, 2025 and 2024 is based on the estimated effective tax rate applicable for the full year after taking into account discrete tax items and the effects of the noncontrolling interests. We provide a valuation allowance for deferred tax assets if we determine that it is more likely than not that some or all of the deferred tax assets will not be realized. In evaluating our ability to realize net deferred tax assets, we consider all available evidence, both positive and negative, including our past operating results, tax planning strategies, current and cumulative losses, and forecasts of future taxable income. In considering these sources of taxable income, we must make certain judgments that are based on the plans and estimates used to manage our underlying businesses on a long-term basis. A valuation allowance has been provided for deferred tax assets related to a substantial amount of our available state net operating loss carryforwards based on past operating results, expected timing of the reversals of existing temporary basis differences, alternative tax strategies, and projected future taxable income.

On July 4, 2025, the One Big, Beautiful Bill (“OBBB”) was enacted. The OBBB is a comprehensive tax reform package that includes several provisions which have, and will continue to, reduce our taxes paid in 2025. We do not expect the legislation to have a material impact on our financial statements.

Our effective income tax rate for the three months ended September 30, 2025 was greater than the statutory rate primarily due to accrual of interest income attributable to prior years’ pending income tax refund claims. Our effective income tax rate for the nine months ended September 30, 2025 approximated the statutory rate. Our effective income tax rate for the three months ended September 30, 2024 was greater than the statutory rate primarily due to non-deductible expenses. Our effective income tax rate for the nine months ended September 30, 2024 was less than the statutory rate primarily due to an immaterial $7.5 million correcting adjustment related to the accrual of interest income attributable to prior years’ pending income tax refund claims.

We do not believe that our liability for unrecognized tax benefits would be materially impacted, in the next twelve months, as a result of the expected statute of limitations expirations, the application of limits under available state administrative practice exceptions, and the resolution of examination issues and settlements with federal and certain state tax authorities.

Reclassifications

Certain reclassifications have been made to prior years’ consolidated financial statements to conform to the current year’s presentation.

Subsequent Events

In November 2025, our Board of Directors declared a quarterly dividend of $0.25 per share, payable on December 15, 2025, to holders of record at the close of business on December 1, 2025.

2. OTHER ASSETS:

Other assets as of September 30, 2025 and December 31, 2024 consisted of the following (in millions):

15

Equity Method Investments

We have a portfolio of investments in a number of entities that are primarily focused on the development of real estate and other media and non-media businesses. No investments were individually significant for the periods presented.

Other Investments

We measure our investments, excluding equity method investments, at fair value or, in situations where fair value is not readily determinable, we have the option to value investments at cost plus observable changes in value, less impairment. Additionally, certain investments are measured at net asset value (“NAV”).

As of September 30, 2025 and December 31, 2024, we held $132 million and $228 million, respectively, in investments measured at fair value. As of September 30, 2025 and December 31, 2024, we held $144 million and $116 million, respectively, in investments measured at NAV. We recognized a fair value adjustment gain of $19 million and loss of $84 million for the three and nine months ended September 30, 2025, respectively, and a fair value adjustment gain of $15 million and loss of $28 million for the three and nine months ended September 30, 2024, respectively, associated with these investments, which are reflected in other income (expense), net in our consolidated statements of operations. As of September 30, 2025 and December 31, 2024, our unfunded commitments related to our investments valued using the NAV practical expedient totaled $45 million and $60 million, respectively.

Investments accounted for utilizing the measurement alternative were $54 million and $38 million as of September 30, 2025 and December 31, 2024, respectively. There were no adjustments to the carrying amount of investments accounted for utilizing the measurement alternative for any of the three and nine months ended September 30, 2025 and the three months ended September 30, 2024. We recorded a $2 million impairment related to one investment for the nine months ended September 30, 2024, which is reflected in other income (expense), net in our consolidated statements of operations.

3. NOTES PAYABLE, FINANCE LEASES, AND COMMERCIAL BANK FINANCING:

Credit Agreement and Notes

During the first quarter of 2025, Sinclair Television Group, Inc. (“STG”), a wholly-owned subsidiary of Sinclair Broadcast Group, LLC (“SBG”), completed a series of financing transactions (the “Transactions”) as follows:

Exchanged $711.4 million aggregate principal amount outstanding of the $714 million Term Loan B-3, which mature April 1, 2028 and bear interest at SOFR plus 3.00%, into second-out first lien Term Loan B-6 issued under a new credit agreement dated February 12, 2025 (the “New Credit Agreement”), which mature December 31, 2029 and bear interest at SOFR plus 3.30%. Exchanged all of the $731.3 million aggregate principal amount outstanding of Term Loan B-4, which matured on April 21, 2029 and bore interest at SOFR plus 3.75%, into second-out first lien Term Loan B-7 issued under the New Credit Agreement, which mature December 31, 2030 and bear interest at SOFR plus 4.10%.

Exchanged $575 million of commitments under the existing revolving credit facility into $575 million first-out first lien revolving commitments (the “First-Out Revolving Credit Facility”) under the New Credit Agreement, which mature February 12, 2030 and borrowings thereunder will bear interest at SOFR plus 2.00%.

The existing bank credit agreement was amended as of February 12, 2025 (the “Amended Credit Agreement”) concurrent with the Transactions and entering into the New Credit Agreement, subordinating the secured obligations thereunder and eliminating substantially all covenants and certain events of default. As a result, the remaining $3 million of Term Loan B-3 and the remaining $75 million of commitments under the existing revolving credit facility are ranked as third lien obligations.

STG issued $1,430 million aggregate principal amount of 8.125% first-out first lien secured notes due 2033 (the “8.125% First-Out Notes”), which mature on February 15, 2033. The proceeds from the 8.125% First-Out Notes were used to repay in full the $1,175 million aggregate principal amounts outstanding of Term Loan B-2 due 2026, approximately $63.6 million aggregate principal amount of 4.125% Senior Secured Notes due 2030 at 84% of the principal amount, and approximately $104 million aggregate principal amount of 5.125% Senior Notes due 2027 at 97% of the principal amount and to pay fees and expenses related to the Transactions.

Exchanged $432 million aggregate principal amount of the existing 4.125% Senior Secured Notes due 2030 into 9.750% senior secured second lien notes due 2033 (the “9.750% Second Lien Notes”), which mature on February 15, 2033. Exchanged $238 million aggregate principal amount of the existing 4.125% Senior Secured Notes due 2030 into 4.375% second-out first lien secured notes due 2032 (the “4.375% Second-Out Notes”), which mature on December 31, 2032. The remaining 4.125% Senior Secured Notes due 2030 of $4 million became unsecured obligations as the related indenture was amended to release all liens on the collateral and eliminate substantially all covenants and certain events of default.

For the nine months ended September 30, 2025, we recognized a gain on extinguishment of the 4.125% Senior Secured Notes due 2030 and 5.125% Senior Notes due 2027 of $5 million and $3 million, respectively, and a loss on extinguishment of the Term Loan B-2 of $6 million.

The New Credit Agreement and the indentures for the 8.125% First-Out Notes, 4.375% Second-Out Notes, and 9.750% Second Lien Notes (collectively, the “New Indentures”) contain certain restrictive covenants including, but not limited to, restrictions on indebtedness, liens, restricted payments (including repayment of certain subordinated debt), investments, mergers, consolidations, sales and other dispositions of assets and affiliate transactions. These covenants are subject to a number of exceptions and limitations as described in the New Credit Agreement and New Indentures. The New Credit Agreement and New Indentures also include events of default, including certain cross-default and cross-acceleration provisions with other debt of STG, customary for agreements of its type.

Prior to February 15, 2028, December 1, 2025, and February 15, 2027, we may redeem the 8.125% First-Out Notes, 4.375% Second-Out Notes, and 9.750% Second Lien Notes, respectively, in whole or in part, at any time or from time to time at a price equal to 100% of the principal amount of the respective notes, plus accrued and unpaid interest, if any, to the redemption date, plus a “make-whole” premium as set forth in the New Indentures. On or prior to February 15, 2028 and February 15, 2027, we may redeem up to 40% of the aggregate principal amount of the 8.125% First-Out Notes and 9.750% Second Lien Notes, respectively, at a price equal to 108.125% and 109.750% of the principal amount of the 8.125% First-Out Notes and 9.750% Second Lien Notes, respectively, plus accrued and unpaid interest, if any, to, but not including, the date of redemption using the proceeds of certain equity offerings. Prior to February 15, 2028 and February 15, 2027, we may redeem the 8.125% First-Out Notes and 9.750% Second Lien Notes, respectively, in whole but not in part, at a redemption price equal to 108.125% and 109.750% of the principal amount of the 8.125% First-Out Notes and 9.750% Second Lien Notes, respectively, plus accrued and unpaid interest, if any, to, but not including, the redemption date upon certain change of control transactions or certain significant acquisitions. Beginning on December 1, 2025, we may redeem some or all of the 4.375% Second-Out Notes at any time or from time to time at the redemption prices set forth in the New Indentures, plus accrued and unpaid interest, if any, to, but not including, the redemption date. In addition, upon the sale of certain of STG’s assets or certain changes of control, we may be required to offer to repurchase some or all of the 8.125% First-Out Notes, 4.375% Second-Out Notes, and 9.750% Second Lien Notes.

The First-Out Revolving Credit Facility includes a financial maintenance covenant, the first-out first lien leverage ratio (as defined in the New Credit Agreement), which requires such ratio not to exceed 3.5x, measured as of the end of each fiscal quarter, which is only applicable if 35% or more of the capacity (as a percentage of total commitments) under the First-Out Revolving Credit Facility, measured as of the last day of each fiscal quarter, is utilized as of such date. Since there was no utilization under the First-Out Revolving Credit Facility as of September 30, 2025, STG was not subject to the financial maintenance covenant under the New Credit Agreement. As of September 30, 2025, the STG first-out first lien leverage ratio was below 3.5x. The New Credit Agreement contains other restrictions and covenants with which STG was in compliance as of September 30, 2025.

During the second quarter of 2025, we repurchased $81 million aggregate principal amount of the 5.125% Senior Notes due 2027 for consideration of $77 million. We recognized a gain on extinguishment of the 5.125% Senior Notes due 2027 of $4 million for the nine months ended September 30, 2025. In October 2025, we repurchased the remaining $89 million aggregate principal amount of the 5.125% Senior Notes due 2027 for consideration of $89 million. The 5.125% Senior Notes due 2027 acquired were canceled immediately following their acquisition.

During the nine months ended September 30, 2024, we repurchased $27 million aggregate principal amount of Term Loan B-2 for consideration of $25 million. The portions of Term Loan B-2 purchased were canceled immediately following their acquisition. We recognized a gain on extinguishment of the Term Loan B-2 of $1 million for the nine months ended September 30, 2024.

Finance Leases to Affiliates

The current portion of notes payable, finance leases, and commercial bank financing in our consolidated balance sheets includes finance leases to affiliates of $3 million as of both September 30, 2025 and December 31, 2024. Notes payable, finance leases, and commercial bank financing, less current portion, in our consolidated balance sheets includes finances leases to affiliates of $7 million and $9 million as of September 30, 2025 and December 31, 2024, respectively. See Note 8. Related Person Transactions.

Debt of Variable Interest Entities and Guarantees of Third-Party Obligations

STG jointly, severally, unconditionally, and irrevocably guaranteed $2 million of debt of certain third parties as of both September 30, 2025 and December 31, 2024, all of which related to consolidated VIEs and is included in our consolidated balance sheets as of both September 30, 2025 and December 31, 2024. We provide a guarantee of certain obligations of the Marquee Sports Network (“Marquee”) subject to a maximum aggregate amount of $455 million for the years 2025 through 2029. We accrued $15 million related to this obligation for the nine months ended September 30, 2025, included in gain on asset dispositions and other, net in our consolidated statements of operations. As of September 30, 2025, $8 million of this obligation is reflected in accounts payable and accrued liabilities in our consolidated balance sheets. See Note 4. Commitments and Contingencies for further discussion.

Interest Rate Swap

We entered into an interest rate swap effective February 7, 2023 and terminating on February 28, 2026 in order to manage a portion of our exposure to variable interest rates. The swap agreement has a notional amount of $600 million, bears a fixed interest rate of 3.9%, and we receive a floating rate of interest based on SOFR. See Hedge Accounting within Note 1. Nature of Operations and Summary of Significant Accounting Policies for further discussion. The fair value of the interest rate swap was a liability of $0.1 million as of September 30, 2025, which is recorded in other current liabilities in our consolidated balance sheets, and an asset of $1 million as of December 31, 2024, which is recorded in other assets in our consolidated balance sheets.

Accounts Receivable Securitization Facility

On November 6, 2025, STG and one of its subsidiaries entered into a three-year, up to $375 million revolving accounts receivable securitization facility (the “AR Facility”) with Wells Fargo Bank, N.A., as administrative agent (“Wells”) in order to enable STG to raise incremental, low-cost capital.

4. COMMITMENTS AND CONTINGENCIES:

Litigation, Claims, and Regulatory Matters

We are a party to lawsuits, claims, and regulatory matters from time to time in the ordinary course of business. Actions currently pending are in various stages and no material judgments or decisions have been rendered by hearing boards or courts in connection with such actions. Except as noted below, we do not believe the outcome of these matters, individually or in the aggregate, will have a material effect on our financial statements.

FCC Matters

On May 22, 2020, the Federal Communications Commission (“FCC”) released an Order and Consent Decree pursuant to which the Company agreed to pay $48 million to resolve the matters covered by a Notice of Apparent Liability for Forfeiture (“NAL”) issued in December 2017 proposing a $13 million fine for alleged violations of the FCC’s sponsorship identification rules by the Company and certain of its subsidiaries, the FCC’s investigation of the allegations raised in the Hearing Designation Order issued in connection with the Company’s proposed acquisition of Tribune, and a retransmission related matter. The Company submitted the $48 million payment on August 19, 2020. As part of the consent decree, the Company also agreed to implement a four-year compliance plan (which terminated on May 29, 2024). Two petitions were filed on June 8, 2020 seeking reconsideration of the Order and Consent Decree. The Company filed an opposition to the petitions on June 18, 2020, and the petitions remain pending.

On September 1, 2020, one of the individuals who filed a petition for reconsideration of the Order and Consent Decree filed a petition to deny the license renewal application of WBFF(TV), Baltimore, MD, and the license renewal applications of two other Baltimore, MD stations with which the Company has a JSA or LMA, Deerfield Media station WUTB(TV) and Cunningham Broadcasting Corporation (“Cunningham”) station WNUV(TV). On January 18, 2024, a motion was filed to request substitution of the petitioner, who is deceased. On June 27, 2025, the FCC (i) denied the motion for substitution; (ii) dismissed the petition to deny; and (iii) granted the license renewal applications of WBFF(TV), WUTB(TV), and WNUV(TV). An application for review of the FCC’s decision was filed on July 28, 2025 on behalf of the individual who unsuccessfully sought to be substituted for the petitioner in the proceeding. The Company timely filed an opposition to the application for review and the matter remains pending. On April 14, 2025, the same attorney who filed the petition against the renewal applications filed a similar petition to deny, on behalf of a different client, assignment applications filed by the Company seeking FCC consent to sell certain stations to a third party. On July 1, 2025, the FCC dismissed that petition to deny and granted the applications. An application for review of the decision to grant the assignment applications was filed on behalf of the petitioner on July 30, 2025. The Company timely filed an opposition to the application for review and the matter remains pending.

On September 2, 2020, the FCC adopted a Memorandum Opinion and Order and NAL against the licensees of several stations with whom the Company has LMAs, JSAs, and/or SSAs in response to a complaint regarding those stations’ retransmission consent negotiations. The NAL proposed a $0.5 million penalty for each station, totaling $9 million. The licensees filed a response to the NAL on October 15, 2020, asking the FCC to dismiss the proceeding or, alternatively, to reduce the proposed forfeiture to $25,000 per station. On July 28, 2021, the FCC issued a forfeiture order in which the $0.5 million penalty was upheld for all but one station. A Petition for Reconsideration of the forfeiture order was filed on August 7, 2021. On March 14, 2022, the FCC released a Memorandum Opinion and Order and Order on Reconsideration, which reaffirmed the forfeiture order, dismissed (and in the alternative, denied) the Petition for Reconsideration, and stated that because the fines were not paid within the period stated in the July 2021 forfeiture order the FCC may refer the case to the U.S. Department of Justice (“DOJ”) for enforcement of the forfeiture pursuant to Section 504 of the Communications Act. Our understanding is that enforcement remains pending. The Company is not a party to this forfeiture order.

On September 21, 2022, the FCC released an NAL against the licensees of a number of stations, including 83 Company stations and several stations with whom the Company has LMAs, JSAs, and/or SSAs, for violation of the FCC’s limitations on commercial matter in children’s television programming related to KidsClick network programming distributed by the Company in 2018. The NAL proposed a fine of $2.7 million against the Company, and fines ranging from $20,000 to $26,000 per station for the other licensees, including the LMA, JSA, and/or SSA stations, for a total of $3.4 million. On October 21, 2022, the Company filed a written response seeking reduction of the proposed fine amount. On September 6, 2024, the FCC issued a forfeiture order imposing the fine as proposed in the NAL. The Company and all other affected licensees filed a joint petition for reconsideration of the forfeiture order on October 7, 2024. On June 27, 2025, the FCC adopted an Order and Consent Decree pursuant to which the Company agreed to make a voluntary contribution of $500,000 to resolve, without any admission of liability, the forfeiture order (with respect to Company stations), a closed captioning investigation of Company station WUHF in Rochester, NY, and matters relating to certain of the Company’s pending station renewal applications. As part of the consent decree, the Company also agreed to implement a two-year compliance plan relating to the FCC’s limits on commercial matter in children’s programming and closed captioning rules, and the FCC agreed to grant the license renewal applications of all Company stations involved in the matters resolved by the consent decree. The consent decree states the forfeiture order will be resolved by separate action with respect to the non-Company licensees named in the forfeiture order, and to the Company’s knowledge all but one of such non-Company licensees have entered into non-monetary consent decrees with the FCC and agreed to similar compliance plans with respect to the FCC’s limits on commercial matter in children’s programming. The Company made the $500,000 voluntary contribution on July 9, 2025.

Other Matters

On November 6, 2018, the Company agreed to enter into a proposed consent decree with the DOJ. This consent decree resolves the DOJ’s investigation into the sharing of pacing information among certain stations in some local markets. The DOJ filed the consent decree and related documents in the U.S. District Court for the District of Columbia on November 13, 2018. The U.S. District Court for the District of Columbia entered the consent decree on May 22, 2019. The consent decree is not an admission of any wrongdoing by the Company and does not subject the Company to any monetary damages or penalties. The Company believes that even if the pacing information was shared as alleged, it would not have impacted any pricing of advertisements or the competitive nature of the market. The consent decree requires the Company to adopt certain antitrust compliance measures, including the appointment of an Antitrust Compliance Officer, consistent with what the DOJ has required in previous consent decrees in other industries. The consent decree also requires the Company’s stations not to exchange pacing and certain other information with other stations in their local markets, which the Company’s management had already instructed them not to do.

The Company is aware of twenty-two putative class action lawsuits that were filed against the Company following published reports of the DOJ investigation into the exchange of pacing data within the industry. On October 3, 2018, these lawsuits were consolidated in the Northern District of Illinois. The consolidated action alleges that the Company and thirteen other broadcasters conspired to fix prices for commercials to be aired on broadcast television stations throughout the United States and engaged in unlawful information sharing, in violation of the Sherman Antitrust Act. The consolidated action seeks damages, attorneys’ fees, costs and interest, as well as injunctions against adopting practices or plans that would restrain competition in the ways the plaintiffs have alleged. The Court denied the defendants’ motion to dismiss on November 6, 2020. Discovery commenced shortly after that and is continuing. On December 8, 2023, the Court granted final approval of the settlements the plaintiffs had reached with four of the original defendants (CBS, Fox, Cox Media, and ShareBuilders), who agreed to pay a total of $48 million to settle the plaintiffs’ claims against them. The plaintiffs are continuing to pursue their claims against the Company and the other non-settling defendants. Under the current schedule set by the Court, fact discovery is scheduled to close 90 days after a Special Master completes his review of the plaintiffs’ objections to the defendants’ privilege claims. On December 6, 2024, the plaintiffs filed a motion seeking sanctions against the Company in connection with the loss of certain cell phone data. On February 4, 2025, following briefing on that motion, the Court heard arguments and took the motion under advisement. On February 20, 2025, Special Master Richard Levie issued Report and Recommendation No. 3 addressing plaintiffs’ challenges to certain of defendants’ privilege log entries (“Levie R&R No. 3”), which recommended that the Court compel disclosure of certain documents Sinclair and the other non-settling defendants withheld from discovery based on assertions of privilege. Sinclair and the other co-defendants filed objections to Levie R&R No. 3. At a March 18, 2025 status conference, the Court set a tentative trial date of April 1, 2026, and stated its expectations that depositions will resume. At a Status Conference on October 1, 2025, the Court indicated that it would be setting a new schedule with a trial date occurring after April 1, 2026. Sinclair and the other parties are awaiting issuance of the new scheduling order. On October 20, 2025, the Court issued an order adopting Levie R&R No. 3 and denying the objections to Levie R&R No. 3 made by Sinclair and the other non-settling defendants, compelling the production of 6,313 documents Sinclair withheld as privileged. On September 29, 2025, Special Master Wayne R. Andersen issued Report and Recommendation No. 3 (“Andersen R&R No. 3”) and on October 23, 2025, Special Master Andersen issued Report and Recommendation No. 6 (“Andersen R&R No. 6”), addressing certain of plaintiffs’ additional challenges to certain of Sinclair’s privilege log entries. Andersen R&R No. 3 and Andersen R&R No. 6 each recommended granting in part and denying in part plaintiffs’ challenges. No party has appealed Andersen R&R No. 3, which compelled the production of two documents Sinclair withheld as privileged. The plaintiffs filed an objection to Anderson R&R No. 6 on November 6, 2025. Sinclair intends to file a response in opposition to that objection. Discovery and the Special Master’s review of plaintiffs’ challenges to the defendants’ privilege claims remain ongoing. The Company continues to believe the lawsuits are without merit and intends to vigorously defend itself against all such claims.

On July 19, 2023, as part of the bankruptcy proceedings of Diamond Sports Group, LLC (“DSG”), at such time, an independently managed and unconsolidated subsidiary of Sinclair, DSG and its wholly-owned subsidiary, Diamond Sports Net, LLC, filed a complaint (the “Diamond Litigation”), under seal, in the United States Bankruptcy Court for the Southern District of Texas naming certain subsidiaries of Sinclair, including SBG and STG and certain officers of SBG and STG, as defendants.

In the complaint, plaintiffs challenged a series of transactions involving SBG and certain of its subsidiaries, on the one hand, and DSG and its subsidiaries, on the other hand, since SBG acquired the former Fox Sports regional sports networks from The Walt Disney Company in August 2019. The complaint alleged, among other things, that the management services agreement (the “MSA”) entered into by STG and DSG was not fair to DSG and was designed to benefit STG and SBG; that the Bally’s Corporation (“Bally’s”) transaction in November 2020 through which Bally’s acquired naming rights to certain regional sports networks was not fair to DSG and was designed to benefit STG and SBG; and that certain distributions made by DSG that were used to pay down preferred equity of DSH, were inappropriate and were conducted at a time when DSG was insolvent. The complaint also alleged that SBG and its subsidiaries (other than DSG and its subsidiaries) received payments or indirect benefits of approximately $1.5 billion as a result of the alleged misconduct. The complaint asserted a variety of claims, including certain fraudulent transfers of assets, unlawful distributions and payments, breaches of contracts, unjust enrichment and breaches of fiduciary duties. The plaintiffs sought, among other relief, avoidance of fraudulent transfers and unlawful distributions, and unspecified monetary damages to be determined.

On March 1, 2024, the court approved a global settlement and release of all claims associated with the Diamond Litigation, which settlement included an amendment to the MSA. Sinclair entered into the settlement, without admitting any fault or wrongdoing. The settlement terms included, among other things, DSG’s dismissal with prejudice of its $1.5 billion litigation against Sinclair and all other defendants, along with the full and final satisfaction and release of all claims in that litigation against all defendants, including Sinclair and its subsidiaries, in exchange for Sinclair’s cash payment to DSG of $495 million. Additionally, under the terms of the settlement, Sinclair would provide transition services to DSG to allow DSG to become a self-standing entity going forward. During the first quarter of 2024, we paid $50 million related to the settlement. The final settlement payment was made during the second quarter of 2024 and of the total $495 million settlement amount paid, $347 million was paid by STG and $148 million was paid by Ventures. On January 2, 2025, DSG announced that it had emerged from bankruptcy, at which time, Sinclair’s equity interest in DSG was terminated.

We have provided a guarantee that requires us to provide funding to Marquee under certain circumstances. On July 19, 2024, Marquee sent us a funding notice seeking $29 million under the Marquee guarantee by August 1, 2024 purportedly to make payments under certain agreements to affiliates of the Chicago Cubs, an affiliate of which is also a co-owner of Marquee. Based on the information provided to us by Marquee, Marquee has sufficient cash to make such payments without funding under the Marquee guarantee. For this and other reasons, we do not believe we are contractually required to provide funding under the Marquee guarantee at this time and have so informed Marquee. On August 2, 2024, Marquee sent us another letter claiming that our failure to timely pay the amounts subject to Marquee’s funding notice constitutes a breach of the Marquee guarantee and requesting payment of such amounts no later than August 17, 2024 at which time Marquee has stated it will pursue any and all available remedies pursuant to the Marquee guarantee. As of January 1, 2025, we determined we had no further obligations under the guarantee agreement. Marquee disputed this position, and on June 9, 2025, we entered into a binding term sheet to settle the matter. As part of the settlement, the parties agreed that the guarantee would be in effect through 2029; however, the maximum obligation under the guarantee agreement was reduced. As a result of the execution of this binding term sheet, we have concluded that our obligation to pay under a portion of the guarantee is probable and the loss related thereto could be reasonably estimated, thus recorded an estimated obligation related to this arrangement during the nine months ended September 30, 2025 (as further discussed in Note 3. Notes Payable, Finance Leases, and Commercial Bank Financing). Because loss contingencies are inherently unpredictable and unfavorable developments can occur, the assessment requires judgment about future events. Moreover, there is no assurance that contingencies will be satisfied and the ultimate loss may differ materially from the estimated obligation we have recorded.

5. EARNINGS PER SHARE:

The following table reconciles income (numerator) and shares (denominator) used in our computations of basic and diluted earnings per share for the periods presented (in millions, except share amounts which are reflected in thousands):

The following table shows the weighted-average stock-settled appreciation rights and outstanding stock options (in thousands) that are excluded from the calculation of diluted earnings per common share as the inclusion of such shares would be anti-dilutive:

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6. SEGMENT DATA:

We measure segment performance based on operating income (loss). For the quarter ended September 30, 2025, we had two reportable segments, local media and tennis. Our local media segment includes our television stations, original networks and content and provides these through free over-the-air programming to television viewing audiences for stations in markets located throughout the continental United States, as well as distributes the content of these stations to MVPDs for distribution to their customers in exchange for contractual fees. See Revenue Recognition under Note 1. Nature of Operations and Summary of Significant Accounting Policies for further detail. Our tennis segment provides viewers coverage of many of tennis’ top tournaments and original professional sport and tennis lifestyle shows. Other and corporate are not reportable segments but are included for reconciliation purposes. Other primarily consists of non-broadcast digital and internet solutions, technical services, and non-media investments. Corporate costs primarily include our costs to operate as a public company and to operate our corporate headquarters location. All our businesses are located within the United States. The local media segment assets are owned and operated by SBG, the assets of the tennis segment are owned and operated by Ventures, and the assets in other and corporate are owned and operated by Ventures.

Segment financial information is included in the following tables for the periods presented (in millions):

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NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

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NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(a) Other segment items relate primarily to non-media expenses.

(b) Includes $5 million and $14 million for the three and nine months ended September 30, 2025, respectively, and $4 million and $9 million for the three and nine months ended September 30, 2024, respectively, of revenue for services provided by other to local media, which is eliminated in consolidation.

7. VARIABLE INTEREST ENTITIES:

Certain of our stations provide services to other station owners within the same respective market through agreements, such as LMAs, where we provide programming, sales, operational, and administrative services, and JSAs and SSAs, where we provide non-programming, sales, operational, and administrative services. In certain cases, we have also entered into purchase agreements or options to purchase the license related assets of the licensee. We typically own the majority of the non-license assets of the stations, and in some cases where the licensee acquired the license assets concurrent with our acquisition of the non-license assets of the station, we have provided guarantees to the bank for the licensee’s acquisition financing. The terms of the agreements vary but generally have initial terms of over five years with several optional renewal terms. Based on the terms of the agreements and the significance of our investment in the stations, we are the primary beneficiary when, subject to the ultimate control of the licensees, we have the power to direct the activities which significantly impact the economic performance of the VIE through the services we provide and we absorb losses and returns that would be considered significant to the VIEs. The fees paid between us and the licensees pursuant to these arrangements are eliminated in consolidation.

The carrying amounts and classification of the assets and liabilities of the VIEs mentioned above, which have been included in our consolidated balance sheets as of the dates presented, were as follows (in millions):

The amounts above represent the combined assets and liabilities of the VIEs described above, for which we are the primary beneficiary. Total liabilities associated with certain outsourcing agreements and purchase options with certain VIEs, which are excluded from the above, were $152 million as of September 30, 2025 and $128 million as of December 31, 2024, as these amounts are eliminated in consolidation. The assets of each of these consolidated VIEs can only be used to settle the obligations of the VIE. As of September 30, 2025, all of the liabilities are non-recourse to us except for the debt of certain VIEs. See Debt of Variable Interest Entities and Guarantees of Third-Party Obligations under Note 3. Notes Payable, Finance Leases, and Commercial Bank Financing for further discussion. The risk and reward characteristics of the VIEs are similar.

Other VIEs

We have several investments in entities which are considered VIEs. However, we do not participate in the management of these entities, including the day-to-day operating decisions or other decisions which would allow us to control the entity, and therefore, we are not considered the primary beneficiary of these VIEs.

The carrying amounts of our investments in these VIEs for which we are not the primary beneficiary were $73 million and $79 million as of September 30, 2025 and December 31, 2024, respectively, and are included in other assets in our consolidated balance sheets. See Note 2. Other Assets for more information related to our equity investments. Our maximum exposure is equal to the carrying value of our investments. The income and loss related to equity method investments and other investments are recorded in (loss) income from equity method investments and other income (expense), net, respectively, in our consolidated statements of operations. We recorded losses of $4 million and $6 million for the three and nine months ended September 30, 2025, respectively, and losses of $55 million and $77 million for the three and nine months ended September 30, 2024, respectively, related to these investments.

8. RELATED PERSON TRANSACTIONS:

Transactions With Our Controlling Shareholders

David, Frederick, J. Duncan, and Robert Smith (collectively, the “controlling shareholders”) are brothers and hold substantially all of our Class B Common Stock and some of our Class A Common Stock. We engaged in the following transactions with them and/or entities in which they have substantial interests:

Leases. Certain assets used by us and our operating subsidiaries are leased from entities owned by the controlling shareholders. Lease payments made to these entities were $2 million and $5 million for the three and nine months ended September 30, 2025, respectively, and $2 million and $5 million for the three and nine months ended September 30, 2024, respectively. For further information, see Note 3. Notes Payable, Finance Leases, and Commercial Bank Financing.

Charter Aircraft. We lease aircraft owned by certain controlling shareholders. For all leases, we incurred expenses of $0.2 million for the nine months ended September 30, 2025 and less than $0.1 million and $0.1 million for the three and nine months ended September 30, 2024, respectively.

The Baltimore Sun. David Smith is the majority shareholder of The Baltimore Sun. We have entered into agreements with The Baltimore Sun to provide independent contractor services, sales representation, news resource sharing, and content sharing. In relation to these agreements, we recorded revenue of $0.6 million and $0.9 million for the three and nine months ended September 30, 2025, respectively.

Cunningham Broadcasting Corporation

Cunningham owns a portfolio of television stations, including: WNUV-TV Baltimore, Maryland; WRGT-TV Dayton, Ohio; WVAH-TV Charleston, West Virginia; WMYA-TV Anderson, South Carolina; WTTE-TV Columbus, Ohio; WDBB-TV Birmingham, Alabama; WBSF-TV Flint, Michigan; WGTU-TV/WGTQ-TV Traverse City/Cadillac, Michigan; WEMT-TV Tri-Cities, Tennessee; WYDO-TV Greenville, North Carolina; KBVU-TV/KCVU-TV Eureka/Chico-Redding, California; WPFO-TV Portland, Maine; KRNV-DT/KENV-DT Reno, Nevada/Salt Lake City, Utah; and KTXD-TV in Dallas, Texas (collectively, the “Cunningham Stations”). Certain of our stations provide services to the Cunningham Stations pursuant to LMAs or JSAs and SSAs. See Note 7. Variable Interest Entities, for further discussion of the scope of services provided under these types of arrangements.

All the non-voting stock of the Cunningham Stations is owned by trusts for the benefit of the children of our controlling shareholders. We consolidate certain subsidiaries of Cunningham with which we have variable interests through various arrangements related to the Cunningham Stations.

The services provided to WNUV-TV, WMYA-TV, WTTE-TV, WRGT-TV and WVAH-TV are governed by a master agreement which has a current term that expires on July 1, 2028 and there is one additional five-year renewal term remaining with final expiration on July 1, 2033. We also executed purchase agreements to acquire the license related assets of these stations from Cunningham, which grant us the right to acquire, and grant Cunningham the right to require us to acquire, subject to applicable FCC rules and regulations, 100% of the capital stock or the assets of these individual subsidiaries of Cunningham. Pursuant to the terms of this agreement we are obligated to pay Cunningham an annual fee for the television stations equal to the greater of (i) 3% of each station’s annual net broadcast revenue or (ii) $6 million. The aggregate purchase price of these television stations increases by 6% annually. A portion of the fee is required to be applied to the purchase price to the extent of the 6% increase. The cumulative prepayments made under these purchase agreements were $72 million and $69 million as of September 30, 2025 and December 31, 2024, respectively. The remaining aggregate purchase price of these stations, net of prepayments, as of both September 30, 2025 and December 31, 2024, was approximately $54 million. Additionally, we provide services to WDBB-TV pursuant to an LMA, which expires April 22, 2030, and have a purchase option to acquire for $0.2 million. Under these agreements, we paid Cunningham $3 million and $9 million for the three and nine months ended September 30, 2025, respectively, and $3 million and $9 million for the three and nine months ended September 30, 2024, respectively.

The agreements with KBVU-TV/KCVU-TV, KRNV-DT/KENV-DT, WBSF-TV, WDBB-TV, WEMT-TV, WGTU-TV/WGTQ-TV, WPFO-TV, and WYDO-TV expire between December 2028 and August 2033 and certain stations have renewal provisions for successive eight-year periods.

As we consolidate the licensees as VIEs, the amounts we earn or pay under the arrangements are eliminated in consolidation and the gross revenue of the stations are reported in our consolidated statements of operations. Our consolidated revenue includes $33 million and $97 million for the three and nine months ended September 30, 2025, respectively, and $41 million and $109 million for the three and nine months ended September 30, 2024, respectively, related to the Cunningham Stations.

We have an agreement with Cunningham to provide master control equipment and provide master control services to a station in Johnstown, PA with which Cunningham has an LMA that expires in December 2025. Under the agreement, Cunningham paid us an initial fee of $1 million and pays us $0.3 million annually for master control services plus the cost to maintain and repair the equipment. In addition, we have an agreement with Cunningham to provide a news share service with the Johnstown, PA station for an annual fee of $0.6 million, which increases by 3% on each anniversary and expires in November 2025.

We have multi-cast agreements with Cunningham Stations in the Eureka/Chico-Redding, California; Tri-Cities, Tennessee; Anderson, South Carolina; Baltimore, Maryland; Portland, Maine; Charleston, West Virginia; Dallas, Texas; and Greenville, North Carolina markets. In exchange for carriage of these networks in their markets, we paid $0.3 million and $1 million for the three and nine months ended September 30, 2025, respectively, and $0.2 million and $1 million for the three and nine months ended September 30, 2024, respectively, under these agreements.

Leased Property by Real Estate Ventures

Prior to September 2024, certain of our real estate ventures entered into leases with entities owned by members of the Smith Family. Total rent payments received under these leases were $0.3 million and $1 million for the three and nine months ended September 30, 2024, respectively.

WG Communications Group

The wife of Robert Weisbord, our Chief Operating Officer and President of Local Media, has an ownership interest in WG Communications Group (“WGC”). We received revenue from advertisers represented by WGC of $0.1 million and $0.2 million for the three and nine months ended September 30, 2025, respectively, and $0.1 million and $0.2 million for the three and nine months ended September 30, 2024, respectively, and made payments to WGC of less than $0.1 million for all of the nine months ended September 30, 2025 and three and nine months ended September 30, 2024.

Employees

Jason Smith, an employee of the Company, is the son of Frederick Smith, who is a Vice President of the Company and a member of the Company’s Board of Directors. Jason Smith received total compensation of $0.3 million for both the three months ended September 30, 2025 and 2024 and $0.9 million and $0.8 million for the nine months ended September 30, 2025 and 2024, respectively, consisting of salary and bonus, and was granted 159,607 and 37,566 shares of restricted stock, vesting over two years, for the nine months ended September 30, 2025 and 2024, respectively, and 500,000 stock appreciation rights, vesting over two years, for the nine months ended September 30, 2024.

Ethan White, an employee of the Company, is the son-in-law of J. Duncan Smith, who is a Vice President of the Company and Secretary of the Company’s Board of Directors. Ethan White received total compensation of $0.1 million for both the three months ended September 30, 2025 and 2024 and $0.2 million for both the nine months ended September 30, 2025 and 2024, respectively, consisting of salary, and was granted 3,244 and 1,503 shares of restricted stock, vesting over two years, for the nine months ended September 30, 2025 and 2024, respectively.

Ryan McCoy, an employee of the Company, is the son-in-law of J. Duncan Smith. Ryan McCoy received total compensation of less than $0.1 million for both the three months ended September 30, 2025 and 2024 and $0.1 million for both the nine months ended September 30, 2025 and 2024, consisting of salary.

Amberly Thompson, an employee of the Company, is the daughter of Donald Thompson, who is an Executive Vice President and Chief Human Resources Officer of the Company. Amberly Thompson received total compensation of less than $0.1 million for both the three months ended September 30, 2025 and 2024 and $0.1 million for both the nine months ended September 30, 2025 and 2024, consisting of salary, and was granted 285 shares of restricted stock, vesting over two years, during the nine months ended September 30, 2025.

Frederick Smith is the brother of David Smith, Executive Chairman of the Company and Chairman of the Company’s Board of Directors; Robert Smith, a member of the Company’s Board of Directors; and J. Duncan Smith. Frederick Smith received total compensation of $0.1 million and $0.2 million for the three months ended September 30, 2025 and 2024, respectively, and $0.5 million and $0.6 million for the nine months ended September 30, 2025 and 2024, respectively, consisting of salary and bonus.

J. Duncan Smith is the brother of David Smith, Frederick Smith, and Robert Smith. J. Duncan Smith received total compensation of $0.1 million and $0.2 million for the three months ended September 30, 2025 and 2024, respectively, and $0.5 million and $0.6 million for the nine months ended September 30, 2025 and 2024, respectively, consisting of salary and bonus.

9. FAIR VALUE MEASUREMENTS:

Accounting guidance provides for valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow), and the cost approach (cost to replace the service capacity of an asset or replacement cost). A fair value hierarchy using three broad levels prioritizes the inputs to valuation techniques used to measure fair value. The following is a brief description of those three levels:

• Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.
• Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.
• Level 3: Unobservable inputs that reflect the reporting entity’s own assumptions.

The following table sets forth the face value and fair value of our financial assets and liabilities for the periods presented (in millions):

N/A - Not applicable

(a) Consists of warrants to acquire marketable common equity securities. The fair value of the warrants are derived from the quoted trading prices of the underlying common equity securities less the exercise price.

(b) The fair value of the interest rate swap was a liability as of September 30, 2025 and an asset as of December 31, 2024. For further information, see Hedge Accounting within Note 1. Nature of Operations and Summary of Significant Accounting Policies and Interest Rate Swap within Note 3. Notes Payable, Finance Leases, and Commercial Bank Financing.

(c) Amounts are carried in our consolidated balance sheets net of debt discount and deferred financing cost, which are excluded in the above table, of $56 million and $36 million as of September 30, 2025 and December 31, 2024, respectively.

(d) STG completed a series of financing transactions, including a new money financing and debt recapitalization, during the nine months ended September 30, 2025. In October 2025, STG repurchased the remaining $89 million aggregate principal amount of the 5.125% Senior Notes due 2027. For further information, see Note 3. Notes Payable, Finance Leases, and Commercial Bank Financing.

(e) Amounts primarily relate to warrants and options to acquire common equity in Bally’s. We recorded a fair value adjustment loss of $8 million for the nine months ended September 30, 2025 and gains of $18 million and $10 million for the three and nine months ended September 30, 2024, respectively. The fair value of the warrants is primarily derived from the quoted trading prices of the underlying common equity. The fair value of the options is derived utilizing the Black Scholes valuation model. The most significant inputs include the trading price of the underlying common stock and the exercise price of the options, which range from $30 to $45 per share. All outstanding awards to acquire common equity in Bally’s were converted to warrants and transferred to Level 2 during the nine months ended September 30, 2025.

The following table summarizes the changes in financial assets measured at fair value on a recurring basis and categorized as Level 3 under the fair value hierarchy for the three and nine months ended September 30, 2025 and 2024 (in millions):

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