10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One) 

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 For the quarterly period ended September 30, 2020

OR

☐         TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 For the transition period from                      to                       .

COMMISSION FILE NUMBER: 000-26076

SINCLAIR BROADCAST GROUP, INC.

(Exact name of Registrant as specified in its charter)

 

Maryland	52-1494660
(State or other jurisdiction of Incorporation or organization)	(I.R.S. Employer Identification No.)

10706 Beaver Dam Road

Hunt Valley, Maryland 21030

(Address of principal executive office, zip code)

(410) 568-1500

(Registrant’s telephone number, including area code)

None

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol	Name of each exchange on which registered
Class A Common Stock, par value $ 0.01 per share	SBGI	The NASDAQ Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such file).

Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company.  See definitions of "large accelerated filer", "accelerated filer" and "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act. 

Large accelerated filer ☒ Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company ☐ Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock as of the latest practicable date.    

	Number of shares outstanding as of
Title of each class	November 5, 2020
Class A Common Stock	49,252,898
Class B Common Stock	24,727,682

SINCLAIR BROADCAST GROUP, INC.

FORM 10-Q

FOR THE QUARTER ENDED SEPTEMBER 30, 2020

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION	3
ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)	3
CONSOLIDATED BALANCE SHEETS	4
CONSOLIDATED STATEMENTS OF OPERATIONS	5
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME	6
CONSOLIDATED STATEMENTS OF EQUITY AND REDEEMABLE NONCONTROLLING INTERESTS	7
CONSOLIDATED STATEMENTS OF CASH FLOWS	9
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS	10
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	44
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	60
ITEM 4. CONTROLS AND PROCEDURES	61
PART II. OTHER INFORMATION	63
ITEM 1. LEGAL PROCEEDINGS	63
ITEM 1A. RISK FACTORS	63
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	65
ITEM 3. DEFAULTS UPON SENIOR SECURITIES	65
ITEM 4. MINE SAFETY DISCLOSURES	65
ITEM 5. OTHER INFORMATION	65
ITEM 6. EXHIBITS	66
SIGNATURE	67

2

PART I. FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

3

SINCLAIR BROADCAST GROUP, INC.

CONSOLIDATED BALANCE SHEETS

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

	As of September 30, 2020			As of December 31, 2019
ASSETS
Current assets:
Cash and cash equivalents	$	632		$	1,333
Accounts receivable, net of allowance for doubtful accounts of $4 and $8, respectively	1,108			1,132
Income taxes receivable	248			103
Prepaid sports rights	335			113
Prepaid expenses and other current assets	218			232
Total current assets	2,541			2,913
Property and equipment, net	814			765
Operating lease assets	206			223
Deferred tax assets	259			—
Restricted cash	1			—
Goodwill	2,092			4,716
Indefinite-lived intangible assets	163			158
Customer relationships, net	4,384			5,979
Other definite-lived intangible assets, net	1,363			1,998
Other assets	660			618
Total assets (a)	$	12,483		$	17,370
LIABILITIES, REDEEMABLE NON-CONTROLLING INTERESTS, AND EQUITY
Current liabilities:
Accounts payable and accrued liabilities	$	466		$	782
Current portion of notes payable, finance leases, and commercial bank financing	72			71
Current portion of operating lease liabilities	38			38
Current portion of program contracts payable	111			88
Other current liabilities	287			155
Total current liabilities	974			1,134
Notes payable, finance leases, and commercial bank financing, less current portion	12,391			12,367
Operating lease liabilities, less current portion	203			217
Program contracts payable, less current portion	34			39
Deferred tax liabilities	—			407
Other long-term liabilities	364			434
Total liabilities (a)	13,966			14,598
Commitments and contingencies (See Note 5)
Redeemable noncontrolling interests	194			1,078
Shareholders' equity:
Class A Common Stock, $.01 par value, 500,000,000 shares authorized, 49,170,850 and 66,830,110 shares issued and outstanding, respectively	1			1
Class B Common Stock, $.01 par value, 140,000,000 shares authorized, 24,727,682 and 24,727,682 shares issued and outstanding, respectively, convertible into Class A Common Stock	—			—
Additional paid-in capital	711			1,011
Retained (deficit) earnings	(2,438		)	492
Accumulated other comprehensive loss	(11		)	(2		)
Total Sinclair Broadcast Group shareholders’ (deficit) equity	(1,737		)	1,502
Noncontrolling interests	60			192
Total (deficit) equity	(1,677		)	1,694
Total liabilities, redeemable noncontrolling interests, and equity	$	12,483		$	17,370

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

(a) Our consolidated total assets as of September 30, 2020 and December 31, 2019 include total assets of variable interest entities (VIEs) of $237 million and $228 million, respectively, which can only be used to settle the obligations of the VIEs. Our consolidated total liabilities as of September 30, 2020 and December 31, 2019 include total liabilities of VIEs of $53 million and $27 million, respectively, for which the creditors of the VIEs have no recourse to us. See Note 8. Variable Interest Entities.

4

SINCLAIR BROADCAST GROUP, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

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

	Three Months Ended   September 30,						Nine Months Ended   September 30,
	2020			2019			2020			2019
REVENUES:
Media revenues	$	1,519		$	1,070		$	4,353		$	2,465
Non-media revenues	20			55			78			153
Total revenues	1,539			1,125			4,431			2,618
OPERATING EXPENSES:
Media programming and production expenses	1,077			560			2,288			1,215
Media selling, general and administrative expenses	212			185			608			510
Amortization of program contract costs	19			22			63			68
Non-media expenses	18			42			69			120
Depreciation of property and equipment	25			24			75			69
Corporate general and administrative expenses	30			237			111			317
Amortization of definite-lived intangible and other assets	149			96			449			183
Impairment of goodwill and definite-lived intangible assets	4,264			—			4,264			—
Gain on asset dispositions and other, net of impairment	(39		)	(35		)	(99		)	(57		)
Total operating expenses	5,755			1,131			7,828			2,425
Operating (loss) income	(4,216		)	(6		)	(3,397		)	193
OTHER INCOME (EXPENSE):
Interest expense including amortization of debt discount and deferred financing costs	(157		)	(129		)	(502		)	(237		)
Gain on extinguishment of debt	—			—			5			—
Loss from equity method investments	(10		)	(12		)	(23		)	(38		)
Other income, net	169			3			169			12
Total other income (expense), net	2			(138		)	(351		)	(263		)
Loss before income taxes	(4,214		)	(144		)	(3,748		)	(70		)
INCOME TAX BENEFIT	847			95			805			88
NET (LOSS) INCOME	(3,367		)	(49		)	(2,943		)	18
Net income attributable to the redeemable noncontrolling interests	(19		)	(11		)	(51		)	(11		)
Net loss (income) attributable to the noncontrolling interests	130			—			113			(3		)
NET (LOSS) INCOME ATTRIBUTABLE TO SINCLAIR BROADCAST GROUP	$	(3,256	)	$	(60	)	$	(2,881	)	$	4
EARNINGS PER COMMON SHARE ATTRIBUTABLE TO SINCLAIR BROADCAST GROUP:
Basic earnings per share	$	(43.53	)	$	(0.65	)	$	(35.17	)	$	0.05
Diluted earnings per share	$	(43.53	)	$	(0.65	)	$	(35.17	)	$	0.05
Basic weighted average common shares outstanding (in thousands)	74,810			92,086			81,922			92,050
Diluted weighted average common and common equivalent shares outstanding (in thousands)	74,810			92,086			81,922			93,271

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

5

SINCLAIR BROADCAST GROUP, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in millions) (Unaudited)

	Three Months Ended   September 30,						Nine Months Ended   September 30,
	2020			2019			2020			2019
Net (loss) income	$	(3,367	)	$	(49	)	$	(2,943	)	$	18
Share of other comprehensive loss of equity method investments	—			—			(9		)	—
Comprehensive (loss) income	(3,367		)	(49		)	(2,952		)	18
Comprehensive income attributable to the redeemable noncontrolling interests	(19		)	(11		)	(51		)	(11		)
Comprehensive loss (income) attributable to the noncontrolling interests	130			—			113			(3		)
Comprehensive (loss) income attributable to Sinclair Broadcast Group	$	(3,256	)	$	(60	)	$	(2,890	)	$	4

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

6

SINCLAIR BROADCAST GROUP, INC.

CONSOLIDATED STATEMENTS OF EQUITY AND REDEEMABLE NONCONTROLLING INTERESTS

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

	Nine Months Ended September 30, 2019
				Sinclair Broadcast Group Shareholders
	Redeemable Noncontrolling Interests			Class A Common Stock				Class B Common Stock				Additional Paid-In Capital			Retained Earnings			Accumulated Other Comprehensive Loss			Noncontrolling Interests			Total Equity
				Shares		Values		Shares		Values
BALANCE, December 31, 2018	$	—		68,897,723		$	1	25,670,684		$	—	$	1,121		$	518		$	(1	)	$	(39	)	$	1,600
Issuance of redeemable subsidiary preferred equity, net of issuance costs	985			—		—		—		—		—			—			—			—			—
Dividends declared and paid on Class A and Class B Common Stock ($0.60 per share)	—			—		—		—		—		—			(55		)	—			—			(55		)
Class B Common Stock converted into Class A Common Stock	—			643,002		—		(643,002	)	—		—			—			—			—			—
Repurchases of Class A Common Stock	—			(3,993,194	)	—		—		—		(125		)	—			—			—			(125		)
Class A Common Stock issued pursuant to employee benefit plans	—			1,515,606		—		—		—		32			—			—			—			32
Noncontrolling interest acquired in a business combination	380			—		—		—		—		—			—			—			231			231
Distributions to noncontrolling interests, net	(14		)	—		—		—		—		—			—			—			(15		)	(15		)
Net income	11			—		—		—		—		—			4			—			3			7
BALANCE, September 30, 2019	$	1,362		67,063,137		$	1	25,027,682		$	—	$	1,028		$	467		$	(1	)	$	180		$	1,675
	Three Months Ended September 30, 2019
				Sinclair Broadcast Group Shareholders
	Redeemable Noncontrolling Interests			Class A Common Stock				Class B Common Stock				Additional Paid-In Capital			Retained Earnings			Accumulated Other Comprehensive Loss			Noncontrolling Interests			Total Equity
				Shares		Values		Shares		Values
BALANCE, June 30, 2019	$	—		67,032,088		$	1	25,027,682		$	—	$	1,024		$	545		$	(1	)	$	(40	)	$	1,529
Issuance of redeemable subsidiary preferred equity, net of issuance costs	985			—		—		—		—		—			—			—			—			—
Dividends declared and paid on Class A and Class B Common Stock ($0.20 per share)	—			—		—		—		—		—			(18		)	—			—			(18		)
Class A Common Stock issued pursuant to employee benefit plans	—			31,049		—		—		—		4			—			—			—			4
Noncontrolling interest acquired in a business combination	380			—		—		—		—		—			—			—			231			231
Distributions to noncontrolling interests, net	(14		)	—		—		—		—		—			—			—			(11		)	(11		)
Net (loss) income	11			—		—		—		—		—			(60		)	—			—			(60		)
BALANCE, September 30, 2019	$	1,362		67,063,137		$	1	25,027,682		$	—	$	1,028		$	467		$	(1	)	$	180		$	1,675

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

7

SINCLAIR BROADCAST GROUP, INC.

CONSOLIDATED STATEMENTS OF EQUITY AND REDEEMABLE NONCONTROLLING INTERESTS

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

	Nine Months Ended September 30, 2020
				Sinclair Broadcast Group Shareholders
	Redeemable Noncontrolling Interests			Class A Common Stock				Class B Common Stock			Additional Paid-In Capital			Retained Earnings			Accumulated Other Comprehensive Loss			Noncontrolling Interests			Total Equity
				Shares		Values		Shares	Values
BALANCE, December 31, 2019	$	1,078		66,830,110		$	1	24,727,682	$	—	$	1,011		$	492		$	(2	)	$	192		$	1,694
Dividends declared and paid on Class A and Class B Common Stock ($0.60 per share)	—			—		—		—	—		—			(49		)	—			—			(49		)
Repurchases of Class A Common Stock	—			(19,418,934	)	—		—	—		(343		)	—			—			—			(343		)
Class A Common Stock issued pursuant to employee benefit plans	—			1,759,674		—		—	—		43			—			—			—			43
Noncontrolling interests issued	22			—		—		—	—		—			—			—			—			—
Distributions to noncontrolling interests, net	(32		)	—		—		—	—		—			—			—			(19		)	(19		)
Distributions to redeemable noncontrolling interests	(378		)	—		—		—	—		—			—			—			—			—
Redemption of redeemable noncontrolling interests	(547		)	—		—		—	—		—			—			—			—			—
Other comprehensive loss	—			—		—		—	—		—			—			(9		)	—			(9		)
Net income (loss)	51			—		—		—	—		—			(2,881		)	—			(113		)	(2,994		)
BALANCE, September 30, 2020	194			49,170,850		$	1	24,727,682	$	—	$	711		$	(2,438	)	$	(11	)	$	60		$	(1,677	)
	Three Months Ended September 30, 2020
				Sinclair Broadcast Group Shareholders
	Redeemable Noncontrolling Interests			Class A Common Stock				Class B Common Stock			Additional Paid-In Capital			Retained Earnings			Accumulated Other Comprehensive Loss			Noncontrolling Interests			Total Equity
				Shares		Values		Shares	Values
BALANCE, June 30, 2020	$	510		53,342,336		$	1	24,727,682	$	—	$	787		$	832		$	(11	)	$	202		$	1,811
Dividends declared and paid on Class A and Class B Common Stock ($0.20 per share)	—			—		—		—	—		—			(14		)	—			—			(14		)
Repurchases of Class A Common Stock	—			(4,274,004	)	—		—	—		(82		)	—			—			—			(82		)
Class A Common Stock issued pursuant to employee benefit plans	—			102,518		—		—	—		6			—			—			—			6
Noncontrolling interests issued	22			—		—		—	—		—			—			—			—			—
Distributions to noncontrolling interests, net	(7		)	—		—		—	—		—			—			—			(12		)	(12		)
Redemption of redeemable noncontrolling interests	(350		)	—		—		—	—		—			—			—			—			—
Net income (loss)	19			—		—		—	—		—			(3,256		)	—			(130		)	(3,386		)
BALANCE, September 30, 2020	194			49,170,850		$	1	24,727,682	$	—	$	711		$	(2,438	)	$	(11	)	$	60		$	(1,677	)

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

8

SINCLAIR BROADCAST GROUP, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions) (Unaudited)

	Nine Months Ended September 30,
	2020			2019
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income	$	(2,943	)	$	18
Adjustments to reconcile net (loss) income to net cash flows from operating activities:
Impairment of goodwill and definite-lived intangible assets	4,264			—
Depreciation of property and equipment	75			69
Amortization of definite-lived intangible and other assets	449			183
Amortization of program contract costs	63			68
Amortization of sports programming rights	1,028			193
Stock-based compensation	39			26
Deferred tax benefit	(660		)	(51		)
Gain on asset dispositions and other, net of impairment	(101		)	(50		)
Loss from equity method investments	23			38
Distributions from investments	26			4
Sports programming rights payments	(1,124		)	(118		)
Gain on extinguishment of debt	(5		)	—
Measurement adjustment gain on variable payment obligations	(168		)	—
Change in assets and liabilities, net of acquisitions:
Decrease in accounts receivable	24			63
Decrease (increase) in prepaid expenses and other current assets	4			(56		)
(Decrease) increase in accounts payable and accrued and other current liabilities	(106		)	210
Net change in net income taxes payable/receivable	(145		)	(73		)
Decrease in program contracts payable	(70		)	(72		)
Increase in other long-term liabilities	120			3
Other, net	46			39
Net cash flows from operating activities	839			494
CASH FLOWS USED IN INVESTING ACTIVITIES:
Acquisition of property and equipment	(130		)	(96		)
Acquisition of business, net of cash acquired	(7		)	(9,006		)
Spectrum repack reimbursements	72			50
Proceeds from the sale of assets	36			—
Purchases of investments	(85		)	(431		)
Other, net	16			6
Net cash flows used in investing activities	(98		)	(9,477		)
CASH FLOWS (USED IN) FROM FINANCING ACTIVITIES:
Proceeds from notes payable and commercial bank financing	947			9,453
Repayments of notes payable, commercial bank financing, and finance leases	(945		)	(715		)
Proceeds from the issuance of redeemable subsidiary preferred equity, net	—			985
Repurchase of outstanding Class A Common Stock	(343		)	(125		)
Dividends paid on Class A and Class B Common Stock	(49		)	(55		)
Dividends paid on redeemable subsidiary preferred equity	(32		)	(10		)
Redemption of redeemable subsidiary preferred equity	(547		)	—
Debt issuance costs	(7		)	(182		)
Distributions to noncontrolling interests, net	(19		)	(30		)
Distributions to redeemable noncontrolling interests	(378		)	—
Other, net	(68		)	1
Net cash flows (used in) from financing activities	(1,441		)	9,322
NET (DECREASE) INCREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH	(700		)	339
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, beginning of period	1,333			1,060
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, end of period	$	633		$	1,399

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

9

SINCLAIR BROADCAST GROUP, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

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

Nature of Operations

Sinclair Broadcast Group, Inc. (the Company) is a diversified television media company with national reach and a strong focus on providing high-quality content on our local television stations, regional sports networks, 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, college and professional sports, and other original programming produced by us. Additionally, we own digital media products that are complementary to our extensive portfolio of television station related digital properties. Outside of our media related businesses, we operate technical services companies focused on supply and maintenance of broadcast transmission systems as well as research and development for the advancement of broadcast technology, and we manage other non-media related investments.

As of September 30, 2020, we had two reportable segments for accounting purposes, broadcast and local sports. The broadcast segment consists primarily of our 190 broadcast television stations in 88 markets, which we own, provide programming and operating services pursuant to agreements commonly referred to as local marketing agreements (LMAs), or provide sales services and other non-programming operating services pursuant to other outsourcing agreements (such as joint sales agreements (JSAs) and shared services agreements (SSAs)). These stations broadcast 627 channels as of September 30, 2020. For the purpose of this report, these 190 stations and 627 channels are referred to as "our" stations and channels. The local sports segment consists primarily of 21 regional sports network brands (the Acquired RSNs), the Marquee Sports Network (Marquee) joint venture, and a 20% equity interest in the Yankee Entertainment and Sports Network, LLC (YES Network). We refer to the Acquired RSNs and Marquee as "the RSNs." The RSNs and YES Network own the exclusive rights to air, among other sporting events, the games of professional sports teams.

Principles of Consolidation

The consolidated financial statements include our accounts and those of our wholly-owned and majority-owned subsidiaries, including the operating results of the RSNs acquired on August 23, 2019, as discussed in Note 2. Acquisitions and Dispositions of Assets, 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. Noncontrolling interests which may be redeemed by the holder, and the redemption is outside of our control, are presented as redeemable noncontrolling interests. 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 8. 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, 2020 and 2019 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 income, consolidated statements of equity and redeemable noncontrolling interests, and consolidated statements of cash flows for these periods as adjusted for the adoption of recent accounting pronouncements discussed below.

As permitted under the applicable rules and regulations of the Securities and Exchange Commission (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, 2019 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.

10

Equity 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. Investments accounted for utilizing the measurement alternative were $26 million, net of $7 million of cumulative impairments, as of September 30, 2020 and $28 million, net of $7 million of cumulative impairments, as of December 31, 2019. There were no adjustments to the carrying amount of investments accounted for utilizing the measurement alternative for the three and nine months ended September 30, 2020 and the three months ended September 30, 2019. We recorded a $2 million impairment related to one investment for the nine months ended September 30, 2019, which is included in other income, net in our consolidated statements of operations.

YES Network Investment. On August 29, 2019, an indirect subsidiary of Diamond Sports Group, LLC (DSG), an indirect wholly-owned subsidiary of the Company, acquired a 20% equity interest in YES Network for cash consideration of $346 million as part of a consortium led by Yankee Global Enterprises. We account for our investment in the YES Network as an equity method investment, which is recorded within other assets in our consolidated balance sheets, and in which our proportionate share of the net income generated by the investment is included within loss from equity method investments in our consolidated statements of operations. During the three and nine months ended September 30, 2020, we recorded a loss of $3 million and income of $3 million, respectively, related to our investment. During both the three and nine months ended September 30, 2019, we recorded income of $1 million related to our investment. There were no impairment charges resulting from our interim impairment assessment of our investment in the YES Network for the quarter ended September 30, 2020.

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, revenues, and expenses in the consolidated financial statements and in the disclosures of contingent assets and liabilities. Actual results could differ from those estimates.

The impact of the outbreak of the novel coronavirus (COVID-19) continues to create significant uncertainty and disruption in the global economy and financial markets. It is reasonably possible that these uncertainties could further materially impact our estimates related to, but not limited to, revenue recognition, goodwill and intangible assets, program contract costs, sports programming rights, and income taxes. As a result, many of our estimates and assumptions require increased judgment and carry a higher degree of variability and volatility. Our estimates may change as new events occur and additional information emerges, and such changes are recognized or disclosed in our consolidated financial statements.

Recent Accounting Pronouncements

In June 2016, the FASB issued amended guidance on the accounting for credit losses on financial instruments. Among other provisions, this guidance introduces a new impairment model for most financial assets and certain other instruments. For trade and other receivables, held-to-maturity debt securities, loans and other instruments, entities will be required to use a forward-looking “expected loss” model that will replace the current “incurred loss” model that will generally result in the earlier recognition of allowances for losses. We adopted this guidance during the first quarter of 2020. The impact of the adoption did not have a material impact on our consolidated financial statements.

In August 2018, the FASB issued guidance which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software, with the capitalized implementation costs of a hosting arrangement that is a service contract expensed over the term of the hosting arrangement. We adopted this guidance during the first quarter of 2020. The impact of the adoption did not have a material impact on our consolidated financial statements.

In October 2018, the FASB issued guidance for determining whether a decision-making fee is a variable interest. The amendments require organizations to consider indirect interests held through related parties under common control on a proportional basis rather than as the equivalent of a direct interest in its entirety, as currently required in generally accepted accounting principles (GAAP). We adopted this guidance during the first quarter of 2020. The impact of the adoption did not have a material impact on our consolidated financial statements.

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In March 2019, the FASB issued guidance which requires that an entity test a film or license agreement within the scope of Subtopic 920-350 for impairment at the film group level, when the film or license agreement is predominantly monetized with other films and/or license agreements. We adopted this guidance during the first quarter of 2020. The impact of the adoption did not have a material impact on our consolidated financial statements. See Broadcast Television Programming below for further information on our accounting for television program contracts.

In December 2019, the FASB issued guidance which is intended to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. ASU 2019-12 will be effective for interim and annual periods beginning after December 15, 2020. Early adoption is permitted. We early adopted this guidance during the third quarter of 2020. The impact of the adoption did not have a material impact on our consolidated financial statements.

In March 2020, the FASB issued guidance providing optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by the discontinuation of the London Interbank Offered Rate (LIBOR) or by another reference rate expected to be discontinued. The guidance was effective for all entities immediately upon issuance of the update and may be applied prospectively to applicable transactions existing as of or entered into from the date of adoption through December 31, 2022. We are currently evaluating the impact of this guidance, if elected, but do not expect a material impact on our consolidated financial statements.

Broadcast Television Programming

We have agreements with rights holders for the rights to television programming over contract periods, which generally run from one to seven years. Contract payments are made in installments over periods 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 contract costs are amortized on a straight-line basis except for contracts greater than three years which are amortized utilizing an accelerated method. Program contract 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.

Fair value is determined utilizing a discounted cash flow model based on management’s expectation of future advertising revenues, net of sales commissions, to be generated by the program material. We assess our program contract costs on a quarterly basis to ensure the costs are recorded at the lower of unamortized cost or fair value.

Sports Programming Rights

We have multi-year program rights agreements that provide the Company with the right to produce and telecast professional live sports games within a specified territory in exchange for a rights fee. A prepaid asset is recorded for rights acquired related to future games upon payment of the contracted fee. The assets recorded for the acquired rights are classified as current or non-current based on the period when the games are expected to be aired. Liabilities are recorded for any program rights obligations that have been incurred but not yet paid at period end. We amortize these programing rights as an expense over each season based upon contractually stated rates. Amortization is accelerated in the event that the stated contractual rates over the term of the rights agreement results in an expense recognition pattern that is inconsistent with the projected growth of revenue over the contractual term.

On March 12, 2020, the National Basketball Association (NBA), the National Hockey League (NHL) and Major League Baseball (MLB) suspended or delayed the start of their seasons as a result of the COVID-19 pandemic. On that date, the Company suspended the recognition of amortization expense associated with prepaid program rights agreements with teams within these leagues. Amortization expense resumed for the NBA, NHL, and MLB over the modified seasons when the games commenced during the third quarter of 2020.

Certain rights agreements with professional teams contain provisions which require the rebate of rights fees paid by the Company if a contractually minimum number of live games are not delivered. Rights fees paid in advance of expense recognition, inclusive of any contractual rebates due to the Company, are included within prepaid sports rights in our consolidated balance sheets.

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Non-cash Investing and Financing Activities

Non-cash transactions related to finance lease obligations were $6 million during the nine months ended September 30, 2020. Leased assets obtained in exchange for new operating lease liabilities were $10 million during both the nine months ended September 30, 2020 and 2019. Non-cash transactions related to sports rights were $22 million during the nine months ended September 30, 2020.

Revenue Recognition

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

For the three months ended September 30, 2020	Broadcast		Local sports		Other		Eliminations			Total
Distribution revenue	$	356	$	597	$	50	$	—		$	1,003
Advertising revenue	344		124		31		1			500
Other media, non-media, and intercompany revenues	34		6		24		(28		)	36
Total revenues	$	734	$	727	$	105	$	(27	)	$	1,539
For the three months ended September 30, 2019	Broadcast		Local sports		Other		Eliminations			Total
Distribution revenue	$	340	$	306	$	33	$	—		$	679
Advertising revenue	302		43		32		(1		)	376
Other media, non-media, and intercompany revenue	19		3		64		(16		)	70
Total revenues	$	661	$	352	$	129	$	(17	)	$	1,125
For the nine months ended September 30, 2020	Broadcast		Local sports		Other		Eliminations			Total
Distribution revenue	$	1,059	$	1,959	$	150	$	—		$	3,168
Advertising revenue	861		182		92		—			1,135
Other media, non-media, and intercompany revenues	106		14		96		(88		)	128
Total revenues	$	2,026	$	2,155	$	338	$	(88	)	$	4,431
For the nine months ended September 30, 2019	Broadcast		Local sports		Other		Eliminations			Total
Distribution revenue	$	995	$	306	$	97	$	—		$	1,398
Advertising revenue	904		43		78		(1		)	1,024
Other media, non-media, and intercompany revenues	40		3		179		(26		)	196
Total revenues	$	1,939	$	352	$	354	$	(27	)	$	2,618

Distribution Revenue. We generate distribution revenue through fees received from multi-channel video programming distributors (MVPDs) and virtual MVPDs (vMVPDs, and together with MVPDs, "Distributors") for the right to distribute our stations, RSNs, 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.

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Certain of our distribution arrangements contain provisions that require the Company to deliver a minimum number of live professional sports games or tournaments during a defined period which usually corresponds with a calendar year. If the minimum threshold is not met, we may be obligated to refund a portion of the distribution fees received if shortfalls are not cured within a specified period of time. Our ability to meet these requirements is primarily driven by the delivery of games by the professional sports leagues. The Company has not historically paid any material rebates under these contractual provisions as it is unusual for there to be an event which is significant enough to preclude the Company from meeting or exceeding these thresholds. The COVID-19 pandemic has resulted in significant disruptions to the normal operations of the professional sports leagues resulting in delays and uncertainty with respect to regularly scheduled games. Decisions made by the leagues during the second quarter of 2020 regarding the timing and format of the revised 2020 seasons have resulted, in some cases, in our inability to meet these minimum requirements and the need to reduce revenue based upon estimated rebates due to our distribution customers. These estimated rebates will be recognized over the measurement period of the rebate which is the year ended December 31, 2020. For the three and nine months ended September 30, 2020, we reduced revenue by, and accrued corresponding rebates to Distributors of $128 million and $252 million, respectively. See Subsequent Events within Note 1. Nature of Operations and Summary of Significant Accounting Policies.

Advertising Revenue. We generate advertising revenue primarily from the sale of advertising spots/impressions within our broadcast television, RSN, 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. Deferred revenue was $75 million and $54 million as of September 30, 2020 and December 31, 2019, respectively. Deferred revenue recognized during the nine months ended September 30, 2020 and 2019, included in the deferred revenue balance as of December 31, 2019 and 2018, was $45 million and $65 million, respectively.

For the three months ended September 30, 2020, three customers accounted for 17%, 15%, and 12%, respectively, of our total revenues. For the nine months ended September 30, 2020, three customers accounted for 19%, 17%, and 12%, respectively, of our total revenues. For the three months ended September 30, 2019, three customers accounted for 17%, 14%, and 11%, respectively, of our total revenues. For the nine months ended September 30, 2019, two customers accounted for 14% and 12%, respectively, of our total revenues. As of September 30, 2020, three customers accounted for 18%, 16%, and 13%, respectively, of our accounts receivable, net. For purposes of this disclosure, a single customer may include multiple entities under common control.

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Impairment of Goodwill and Definite-Lived Intangible Assets

Our RSNs included in the local sports segment have been negatively impacted by the recent loss of two Distributors. In addition, our existing Distributors are experiencing elevated levels of subscriber erosion which we believe is influenced, in part, by shifting consumer behaviors resulting from media fragmentation, the current economic environment, the COVID 19 pandemic and related uncertainties. Most of these factors are also expected to have a negative impact on future projected revenue and margins of our RSNs. As a result of these factors, we performed an impairment test of the RSN reporting units' goodwill and long-lived asset groups during the quarter ending September 30, 2020.

The long-lived asset impairment test requires a comparison of undiscounted cash flows expected to be generated over the useful life of an asset group to the carrying value of the asset group. Assets are grouped at the lowest level for which identifiable cash flows are largely independent of the cash flows of other groups of assets and liabilities. We have concluded that each of our RSNs individually qualify as an asset group and therefore the test was performed at each RSN level accordingly. We estimated the projected undiscounted cash flows over the remaining useful life of each asset group. The more significant inputs used in determining our estimate of the projected cash flows included future revenue growth and projected margins. We identified 10 RSNs which had carrying values in excess of the future undiscounted cash flows; and therefore, for these RSNs an impairment loss was measured as the amount by which the carrying value of each asset group exceeded the fair value of each asset group. The calculated impairment was then allocated to the long-lived assets within the asset group, which primarily consists of definite lived intangible assets, based upon relative fair value.

The fair value of the asset groups, reporting units and definite lived intangible assets were determined based upon a discounted cash flow analysis which uses the present value of projected cash flows. The projected cash flows were based upon our estimates of future revenues and margins, among other inputs. The discount rates used in the valuation were based on a weighted-average cost of capital determined from relevant market comparisons and taking into consideration the risk specifically associated with our asset groups and underlying assets. Terminal values were determined based upon the final year of projected cash flows which reflected our estimate of stable perpetual growth. The more sensitive inputs used in the discounted cash flow analysis include projected revenue and margins, as well as the discount rates used to calculate the present value of future cash flows. Projected revenue was based on the consideration of historical experience of the business, market data surrounding subscriber projections and advertising growth, our ability to retain existing customers and our ability to obtain new customers. Our revenue projections could be negatively impacted by the further loss of key Distributors, inability to obtain new or retain existing Distributors on terms similar to those expiring, greater than expected consumer migration away from traditional linear Distributors, or our inability to successfully develop alternative revenue streams, among other factors. Our future margins may also be affected by our inability to renew sports rights agreements on terms favorable to us.

During the three months ended September 30, 2020, we recorded a non-cash impairment charge on customer relationships of $1,218 million and other definite-lived intangible assets of $431 million, included within impairment of goodwill and definite-lived intangible assets in our consolidated statements of operations. As of September 30, 2020, the remaining balance of the customer relationship intangible asset was $3,756 million and the aggregate remaining balance of the other definite-lived intangible assets was $673 million. After the recognition of these impairments, there were no asset groups which have a heightened risk of further impairment because the projected undiscounted cash flows of the individual asset groups were substantially greater than their carrying values. However, significant deterioration in the factors described above could result in future material impairments.

The remaining customer relationships and other definite-lived intangible assets will both be amortized over a remaining weighted average useful life of 11 years on a straight-line basis.

We tested the RSN reporting units' goodwill for impairment on an interim basis by comparing the fair value of each of the RSN reporting units to their revised carrying value after adjustments were made related to the impairments of the asset groups, as described above. To the extent that the carrying value of the respective reporting units exceeded the fair value, a goodwill impairment charge was recorded. The fair value of the reporting units was determined based upon a discounted cash flow analysis, as described above.

For the quarter ended September 30, 2020, the carrying value exceeded the fair value of all reporting units. We recorded a non-cash goodwill impairment charge of $2,615 million, included within impairment of goodwill and definite-lived intangible assets in our consolidated statements of operations. As of September 30, 2020, there was no remaining goodwill within our local sports segment.

Based upon these events, we performed a qualitative impairment assessment related to our broadcast reporting unit, concluding it was not more likely than not that an impairment existed.

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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, 2020 and 2019 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 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 limitations on interest expense deductibility, and certain state net operating loss (NOL) carryforwards and other state attributes. During three and nine months ended September 30, 2020, we increased our valuation allowance by $215 million and $219 million, respectively. The increase in valuation allowance was primarily due to the change in judgment in the realizability of certain deferred tax assets relating to the reduction in forecasts of future taxable income. See further discussion under Impairment of Goodwill and Definite-Lived Intangible Assets under Note 1. Nature of Operations and Summary of Significant Accounting Policies within our Consolidated Financial Statements.

Our effective income tax rate for the three and nine months ended September 30, 2020 approximated the statutory rate. During the three and nine months ended September 30,2020, we recorded a $68 million and an $83 million, respectively, discrete benefit as a result of the CARES Act allowing for the estimated 2020 federal net operating loss to be carried back to pre-2018 years when the federal tax rate was 35%.

Our effective income tax rate for the three months ended September 30, 2019 was greater than the statutory rate primarily due to a $34 million benefit related to a change in the treatment of the gain from the sale of certain broadcast spectrum in connection with the Broadcast Incentive Auction and a $16 million benefit related to a release of valuation allowance on certain state net operating losses. Our effective income tax rate for the nine months ended September 30, 2019 was greater than the statutory rate primarily due to a $34 million benefit related to a change in the treatment of the gain from the sale of certain broadcast spectrum in connection with the Broadcast Incentive Auction, $18 million federal tax credits related to investments in sustainability initiatives, and a $16 million benefit related to a release of valuation allowance on certain state net operating losses.

We believe it is reasonably possible that our liability for unrecognized tax benefits related to continuing operations could be reduced by up to $6 million in the next twelve months, as a result of 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. In August 2020, we received an approval from the Joint Committee on Taxation of a settlement agreement with the Internal Revenue Service with respect to the audit of our 2013-2015 federal income tax returns. There was no material impact on our financial statements as a result of this settlement.

Share Repurchase Program

On August 4, 2020, the Board of Directors authorized an additional $500 million share repurchase authorization in addition to the previous repurchase authorization of $1 billion. There is no expiration date and currently, management has no plans to terminate this program. During the three and nine months ended September 30, 2020, we repurchased approximately 4 million shares for $82 million and 19 million shares for $343 million, respectively. As of September 30, 2020, the total remaining purchase authorization was $880 million.

Subsequent Events    

In November 2020, our Board of Directors declared a quarterly dividend of $0.20 per share, payable on December 15, 2020 to holders of record at the close of business on December 1, 2020.

The Company is closely monitoring the impact of the COVID-19 pandemic on all aspects of its business, including how it has already impacted, and will impact, its advertisers, Distributors, and agreements with professional sports leagues. While the NBA, NHL, and MLB were able to complete modified season schedules during 2020, there can be no assurance that the MLB, NBA, or NHL will complete full or abbreviated seasons in the future. As of November 9, 2020, both the NBA and NHL have announced that their 2020-2021 seasons are currently on hold with delayed starts likely to be announced later this year. Any reduction in the number of games played by the leagues may have an adverse impact on our operations and cash flows. The Company is currently unable to predict the full extent that the COVID-19 pandemic will have on its financial condition, results of operations, and cash flows in future periods due to numerous uncertainties.

Reclassifications

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

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2.              ACQUISITIONS AND DISPOSITIONS OF ASSETS:

Acquisitions

RSN Acquisition. In May 2019, DSG entered into a definitive agreement to acquire controlling interests in 21 Regional Sports Network brands and Fox College Sports (collectively, the Acquired RSNs), from The Walt Disney Company (Disney) for $9.6 billion plus certain adjustments. On August 23, 2019 we completed the acquisition for an aggregate preliminary purchase price, including cash acquired, and subject to an adjustment based upon finalization of working capital, net debt, and other adjustments, of $9,817 million, accounted for as a business combination under the acquisition method of accounting. The acquisition provides an expansion to our premium sports programming including the exclusive regional distribution rights to 42 professional teams consisting of 14 MLB teams, 16 NBA teams, and 12 NHL teams. The Acquired RSNs are reported within our local sports segment. See Note 7. Segment Data.

The transaction was funded through a combination of debt financing raised by DSG and Sinclair Television Group, Inc. (STG), and redeemable subsidiary preferred equity.

The following table summarizes the fair value of acquired assets, assumed liabilities, and noncontrolling interests of the Acquired RSNs (in millions):

Cash and cash equivalents	$	824
Accounts receivable, net	606
Prepaid expenses and other current assets	175
Property and equipment, net	25
Customer relationships, net	5,439
Other definite-lived intangible assets, net	1,286
Other assets	52
Accounts payable and accrued liabilities	(181		)
Other long-term liabilities	(396		)
Goodwill	2,615
Fair value of identifiable net assets acquired	$	10,445
Redeemable noncontrolling interests	(380		)
Noncontrolling interests	(248		)
Gross purchase price	$	9,817
Purchase price, net of cash acquired	$	8,993

The final purchase price allocation presented above is based upon management's estimates of the fair value of the acquired assets, assumed liabilities, and noncontrolling interest using valuation techniques including income and cost approaches. The fair value estimates are based on, but not limited to, projected revenue, projected margins, and discount rates used to present value future cash flows. The adjustments made to the initial allocation were based on more detailed information obtained about the specific assets acquired and liabilities assumed and did not result in material changes to the amortization expense recorded in previous quarters.

The definite-lived intangible assets of $6,725 million are primarily comprised of customer relationships, which represent existing advertiser relationships and contractual relationships with Distributors of $5,439 million, the fair value of contracts with sports teams of $1,271 million, and tradenames/trademarks of $15 million. The intangible assets will be amortized over a weighted average useful life of 2 years for tradenames/trademarks, 13 years for customer relationships, and 12 years for contracts with sports teams on a straight-line basis. The fair value of the sports team contracts will be amortized over the respective contract term. Acquired property and equipment will be depreciated on a straight-line basis over the respective estimated remaining useful lives. Goodwill is calculated as the excess of the consideration transferred over the fair value of the identifiable net assets acquired and represents the future economic benefits expected to arise from other intangible assets acquired that do not qualify for separate recognition, as well as expected future synergies. We estimate that $2.4 billion of goodwill, which represents our interest in the Acquired RSNs, will be deductible for tax purposes. Refer to Impairment of Goodwill and Definite-Lived Intangible Assets within Note 1. Nature of Operations and Summary of Significant Accounting Policies for discussion of the impairment of the acquired goodwill and definite-lived intangible assets during the third quarter of 2020.

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In connection with the acquisition, we recognized $0.4 million and $4 million for the three and nine months ended September 30, 2020, respectively, and $85 million and $94 million for the three and nine months ended September 30, 2019, respectively, of transaction costs that we expensed as incurred and classified as corporate general and administrative expenses in our consolidated statements of operations. Revenue and operating loss, excluding the effects of intercompany expenses, of the Acquired RSNs included in our consolidated statements of operations were $673 million and $4,435 million, respectively, for the three months ended September 30, 2020. Revenue and operating loss, excluding the effects of intercompany expenses, of the Acquired RSNs included in our consolidated statements of operations were $2,076 million and $3,830 million, respectively, for the nine months ended September 30, 2020. Revenue and operating income, excluding the effects of intercompany expenses and the transaction costs above, of the Acquired RSNs included in our consolidated statements of operations were $352 million and $46 million, respectively, for both the three and nine months ended September 30, 2019.

Pro Forma Information. The table below sets forth unaudited pro forma results of operations, assuming that the RSN Acquisition, along with transactions necessary to finance the acquisition, occurred at the beginning of the period presented (in millions, except per share data):

	Three Months Ended   September 30, 2019			Nine Months Ended   September 30, 2019
Total revenue	$	1,632		$	5,067
Net income	$	9		$	434
Net (loss) income attributable to Sinclair Broadcast Group	$	(41	)	$	274
Basic earnings per share attributable to Sinclair Broadcast Group	$	(0.44	)	$	2.98
Diluted earnings per share attributable to Sinclair Broadcast Group	$	(0.44	)	$	2.94

This pro forma financial information is based on historical results of operations, adjusted for the allocation of the purchase price and other acquisition accounting adjustments, and is not indicative of what our results would have been had we operated the Acquired RSNs for the period presented because the pro forma results do not reflect expected synergies. The pro forma adjustments reflect depreciation expense and amortization of intangible assets related to the fair value of the assets acquired and any adjustments to interest expense to reflect the debt financing of the transactions, if applicable. Depreciation and amortization expense are higher than amounts recorded in the historical financial statements of the acquirees due to the fair value adjustments recorded in purchase accounting.

Other Acquisitions.  During the nine months ended September 30, 2020, we completed the acquisition of the license asset and certain non-license assets of a radio station for $7 million, reported within our broadcast segment. The acquisition was completed using cash on hand. In June 2020, we entered into an agreement to acquire the license assets and certain non-license assets of two television stations for $9 million. The transaction closed during the fourth quarter of 2020, was completed using cash on hand, and will be reported within our broadcast segment.

Dispositions

Broadcast Sales. In January 2020, we agreed to sell the license and non-license assets of WDKY-TV in Lexington, KY and certain non-license assets associated with KGBT-TV in Harlingen, TX for an aggregate purchase price of $36 million. The KGBT-TV transaction closed during the first quarter of 2020 and we recorded a gain of $8 million which is included within gain on asset dispositions and other, net of impairment in our consolidated statements of operations. The WDKY-TV transaction closed during the third quarter of 2020 and we recorded a gain of $21 million which is included within gain on asset dispositions and other, net of impairment in our consolidated statements of operations.

Broadcast Incentive Auction. Congress authorized the Federal Communications Commission (FCC) to conduct so-called "incentive auctions" to auction and re-purpose broadcast television spectrum for mobile broadband use. Pursuant to the auction, television broadcasters submitted bids to receive compensation for relinquishing all or a portion of their rights in the television spectrum of their full-service and Class A stations. Low power stations were not eligible to participate in the auction and are not protected and therefore may be displaced or forced to go off the air as a result of the post-auction repacking process.

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In the repacking process associated with the auction, the FCC has reassigned some stations to new post-auction channels. We do not expect reassignment to new channels to have a material impact on our coverage. We have received notification from the FCC that 100 of our stations have been assigned to new channels. Legislation has provided the FCC with a $3 billion fund to reimburse reasonable costs incurred by stations that are reassigned to new channels in the repack. We expect that the reimbursements from the fund will cover the majority of our expenses related to the repack. We recorded gains related to reimbursements for spectrum repack costs incurred of $20 million and $72 million for the three and nine months ended September 30, 2020, respectively, and $28 million and $50 million for the three and nine months ended September 30, 2019, respectively, which are included within gain on asset dispositions and other, net of impairment in our consolidated statements of operations. Capital expenditures related to the spectrum repack were $13 million and $54 million for the three and nine months ended September 30, 2020, respectively, and $16 million and $41 million for the three and nine months ended September 30, 2019, respectively.

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

Bank Credit Agreements

Each of STG’s and DSG’s bank credit agreements (the Bank Credit Agreements) provide a $650 million five-year revolving credit facility, whereby STG’s revolving credit facility (the STG Revolving Credit Facility) is priced at LIBOR plus 2.00% and DSG’s revolving credit facility (the DSG Revolving Credit Facility and, together with the STG Revolving Credit Facility, the Revolving Credit Facilities) is priced at LIBOR plus 3.00%, subject to decrease if the specified first lien leverage ratio (as defined in the respective Bank Credit Agreements) is less than or equal to certain levels.  On March 17, 2020, we drew $648 million and $225 million under the STG Revolving Credit Facility and the DSG Revolving Credit Facility, respectively, as a precautionary measure given the COVID-19 pandemic.  During the quarter ended June 30, 2020, the Company fully repaid the amounts outstanding under each of the Revolving Credit Facilities.

The Bank Credit Agreements each include a financial maintenance covenant, the first lien leverage ratio (as defined in the respective Bank Credit Agreements), which requires such applicable ratio not to exceed 4.5x and 6.25x, measured as of the end of each fiscal quarter, for STG and DSG, respectively. The respective financial maintenance covenant is only applicable if 35% or more of the capacity (as a percentage of total commitments) under the respective revolving credit facility, measured as of the last day of each quarter, is utilized under such revolving credit facility as of such date. Since there was no utilization under either of the Revolving Credit Facilities as of September 30, 2020, neither STG nor DSG was subject to the respective financial maintenance covenant under their applicable Bank Credit Agreement. As of September 30, 2020, the STG first lien leverage ratio was below 4.5x and the DSG first lien leverage ratio exceeded 6.25x. We expect that the DSG first lien leverage ratio will remain above 6.25x for at least the next 12 months, which will restrict our ability to utilize the full DSG Revolving Credit Facility.  We do not currently expect to have more than 35% of the capacity of the DSG Revolving Credit Facility outstanding as of any quarterly measurement date during the next twelve months, therefore we do not expect DSG will be subject to the financial maintenance covenant.  The Bank Credit Agreements contain other restrictions and covenants which the respective entities were in compliance with as of September 30, 2020.

STG Notes

On May 21, 2020, we purchased $2.5 million aggregate principal amount of STG's 5.875% Notes due 2026 (the STG 5.875% Notes) in open market transactions for consideration of $2.3 million. The STG 5.875% Notes acquired in May 2020 were canceled immediately following their acquisition. We recognized a gain on extinguishment of the STG 5.875% Notes of $0.2 million for the nine months ended September 30, 2020. As of September 30, 2020, the balance of the STG 5.875% Notes, net of deferred financing costs, was $344 million.

DSG Notes

In March 2020 and June 2020, we purchased a total of $15 million aggregate principal amount of DSG's 6.625% Notes due 2027 (the DSG 6.625% Notes) in open market transactions for consideration of $10 million. The DSG 6.625% Notes acquired in March 2020 and June 2020 were canceled immediately following their acquisition. We recognized a gain on extinguishment of the DSG 6.625% Notes of $5 million for the nine months ended September 30, 2020.

On June 10, 2020, we exchanged $66.5 million aggregate principal amount of the DSG 6.625% Notes for cash payments of $10 million, including accrued but unpaid interest, and $31 million aggregate principal amount of newly issued senior secured notes, which bear interest at a rate of 12.750% per annum and mature on December 1, 2026 (the DSG 12.750% Secured Notes and, together with the DSG 6.625% Notes and DSG's 5.375% Senior Secured Notes due 2026, the DSG Notes). As of September 30, 2020, the balance of the DSG 6.625% Notes, net of deferred financing costs, was $1,709 million and the balance of the DSG 12.750% Secured Notes was $55 million, inclusive of a $24 million premium.

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Prior to August 15, 2022, we may redeem the DSG 12.750% Secured Notes, 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 applicable DSG 12.750% Secured Notes plus accrued and unpaid interest, if any, to the date of redemption, plus a ‘‘make-whole’’ premium (assuming for purposes of the calculation of such “make-whole” premium that interest were to accrue on the DSG 12.750% Secured Notes at a rate for such “make-whole” period equal to 5.375% per annum). Beginning on August 15, 2022, we may redeem the DSG 12.750% Secured Notes, in whole or in part, at any time or from time to time at certain redemption prices, plus accrued and unpaid interest, if any, to the date of redemption. In addition, on or prior to August 15, 2022, we may redeem up to 40% of the DSG 12.750% Secured Notes using the proceeds of certain equity offerings. If the notes are redeemed during the twelve-month period beginning August 15, 2022, 2023, and 2024 and thereafter, then the redemption prices for the DSG 12.750% Secured Notes are 102.688%, 101.344%, and 100%, respectively.

DSG’s obligations under the DSG 12.750% Secured Notes are jointly and severally guaranteed by Diamond Sports Intermediate Holdings LLC (DSIH), DSG’s direct parent, and certain wholly-owned subsidiaries of DSIH. The DSG 12.750% Secured Notes are not guaranteed by the Company, STG, or any of STG’s subsidiaries.

Accounts receivable securitization facility

On September 23, 2020 (the Closing Date), the Company's and DSG's indirect wholly-owned subsidiary, Diamond Sports Finance SPV, LLC (DSPV), entered into a $250 million accounts receivable securitization facility (the A/R Facility) which matures on September 23, 2023, in order to enable DSG to raise incremental funding for the ongoing business needs of DSG and its subsidiaries.

The A/R Facility was entered into pursuant to a Loan and Security Agreement (the Loan Agreement), dated September 23, 2020, among DSPV, as borrower, the persons from time to time party thereto, as lenders (the Lenders), and Fox Sports Net, LLC (FSN), a wholly-owned direct subsidiary of DSG, as initial servicer, Credit Suisse AG, New York Branch, as administrative agent and Wilmington Trust, National Association, as collateral agent, paying agent and account bank. The Lenders will provide certain loans, which loans will be secured by certain accounts receivable (Pool Receivables) purchased by DSPV pursuant to a Purchase and Sale Agreement (the Purchase Agreement, and together with the Loan Agreement, the A/R Agreements), dated September 23, 2020, among FSN, certain indirect wholly owned subsidiaries of DSG identified therein as originators (the Originators) and DSPV as purchaser, pursuant to which the Originators will sell certain accounts receivable to DSPV and FSN will continue to service such accounts receivable.

The maximum funding availability under the A/R Facility is $250 million, subject to borrowing base and certain other restrictions. The amount of actual availability under the A/R Facility is subject to change based on the level of eligible receivables sold by the Originators to DSPV and certain reserves. Eligibility of the receivables is determined by a variety of factors, including, but not limited to, credit ratings of the Originators’ customers, customer concentration levels, and certain characteristics of the accounts receivable being transferred. In addition, subsequent to November 1, 2020, the total commitment under the A/R Facility will be the lesser of $250 million and the sum of the lowest aggregate loan balance since November 1, 2020 plus $50 million.

Borrowings under the A/R Facility generally bear interest at a rate per annum equal to LIBOR, which is subject to an interest rate floor of 0% per annum, plus 4.97% or, if the aggregate outstanding principal amount of loans is less than $125 million on or after November 1, 2020, 5.47%. We are required to pay a commitment fee on unutilized commitments under the A/R Facility.

We may voluntarily prepay outstanding loans or terminate commitments under the A/R Facility at any time without premium or penalty, other than customary breakage costs with respect to LIBOR rate loans, except (1) any voluntary prepayment (x) from the proceeds of a voluntary repurchase in accordance with the Purchase Agreement by any Originator of any Pool Receivables on or prior to the date that is 18 months after the Closing Date or (y) from the proceeds of a new accounts receivable financing entered into by DSPV or an affiliate thereof and requiring the purchase of Pool Receivables from DSPV after the date that is 18 months after the Closing Date but on or prior to the date that is 36 months after the Closing Date or (2) certain terminations of commitments on or prior to the date that is 18 months after the Closing Date, shall in each case be subject to a prepayment premium of 1.00% of the principal amount of the loans prepaid or commitments terminated, as the case may be.

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DSPV, FSN, and the Originators provide customary representations and covenants under the A/R Agreements. Receivables in the A/R Facility are subject to certain eligibility criteria, concentration limits and reserves. The Loan Agreement provides for certain events of default upon the occurrence of which the administrative agent may declare the facility’s termination date to have occurred and declare the outstanding loan and all other obligations of DSPV to be due and payable. The Purchase Agreement provides for certain early amortization events upon the occurrence of which DSPV may terminate the sale and contribution of accounts receivable and related assets thereunder, including an early amortization event which would occur upon Consolidated EBITDA (as defined in the DSG Bank Credit Agreement as in effect at such time) of DSIH and its restricted subsidiaries under the DSG Bank Credit Agreement, less Consolidated Interest Expense (as defined in the DSG Bank Credit Agreement as in effect at such time) of DSIH and its restricted subsidiaries under the DSG Bank Credit Agreement, being less than zero as of the last day of any fiscal quarter (measured on a trailing four fiscal quarter basis).

As of September 30, 2020, the balance of the loans under the A/R Facility was $74 million and the balance of the receivables held by DSPV as part of the A/R Facility was $124 million, included in accounts receivable, net in our consolidated balance sheets. On October 22, 2020, the A/R Facility provided additional funding of $122 million, bringing the outstanding balance of the loans under the A/R Facility to $196 million.

The performance by the Originators of their respective obligations under the A/R Facility is guaranteed by FSN pursuant to a performance guaranty by FSN in favor of Credit Suisse AG, New York Branch, as administrative agent under the Loan Agreement.

Notes payable and 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 $2 million as of both September 30, 2020 and December 31, 2019. 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, 2020 and December 31, 2019, respectively.

Debt of variable interest entities and guarantees of third-party debt

STG jointly, severally, unconditionally, and irrevocably guaranteed $51 million and $57 million of debt of certain third parties as of September 30, 2020 and December 31, 2019, respectively, of which $17 million and $20 million, net of deferred financing costs, related to consolidated VIEs that are included in our consolidated balance sheets as of September 30, 2020 and December 31, 2019, respectively. These guarantees primarily relate to the debt of Cunningham Broadcasting Corporation (Cunningham) as discussed under Cunningham Broadcasting Corporation within Note 9. Related Person Transactions. We have determined that, as of September 30, 2020, it is not probable that we would have to perform under any of these guarantees.

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4.              REDEEMABLE NONCONTROLLING INTERESTS:

We account for redeemable noncontrolling interests in accordance with ASC 480, Distinguishing Liabilities from Equity, and classify them as mezzanine equity in our consolidated balance sheets because their possible redemption is outside of the control of the Company. Our redeemable non-controlling interests consist of the following:

Redeemable Subsidiary Preferred Equity. On August 23, 2019, Diamond Sports Holdings LLC (DSH), an indirect parent of DSG and indirect wholly-owned subsidiary of the Company, issued preferred equity (the Redeemable Subsidiary Preferred Equity).

On January 21, 2020, we redeemed 200,000 units of the Redeemable Subsidiary Preferred Equity for an aggregate redemption price equal to $200 million plus accrued and unpaid dividends, representing 100% of the unreturned capital contribution with respect to the units redeemed, plus accrued and unpaid dividends with respect to the units redeemed up to, but not including, the redemption date, and after giving effect to any applicable rebates.

In August 2020, we redeemed 350,000 units of the Redeemable Subsidiary Preferred Equity for an aggregate redemption price equal to $350 million, representing 100% of the unreturned capital contribution with respect to the units redeemed, plus $4 million in accrued and unpaid dividends, with respect to the units redeemed up to, but not including, the redemption date, for a total redemption amount of $354 million.

Dividends accrued during the three and nine months ended September 30, 2020 were $7 million and $32 million, respectively, and during both the three and nine months ended September 30, 2019 were $10 million and are reflected in net income attributable to the redeemable noncontrolling interests in our consolidated statements of operations. The dividends paid in cash accrue at a rate equal to 1-month LIBOR (with a 0.75% floor) plus 7.5%, which is 0.5% lower than the rate payable if the dividends were paid-in-kind during the quarter. The dividends accrued for the third quarter were paid in cash in September 2020. Dividends accrued during the three months ended March 31, 2020 of $13 million were paid-in-kind and added to the liquidation preference. In June 2020, we redeemed units of the Redeemable Subsidiary Preferred Equity for an aggregate redemption price equal to $13 million.

The balance of the Redeemable Subsidiary Preferred Equity as of September 30, 2020 was $170 million, net of issuance costs.

Subsidiary Equity Put Right. A noncontrolling equity holder of one of our subsidiaries had the right to sell their interest to the Company at a fair market sale value of $376 million, plus any undistributed income, which was exercised and settled in January 2020.

A noncontrolling equity holder of one of our subsidiaries has the right to sell their interest to the Company at any time during the 30-day period following September 30, 2025. The initial value of this redeemable noncontrolling interest was recorded at $22 million.

5.              COMMITMENTS AND CONTINGENCIES:

Sports Programming Rights

We are contractually obligated to make payments to purchase sports programming rights. The following table presents our annual non-cancellable commitments relating to our local sports segment's sports programming rights agreements as of September 30, 2020. These commitments assume that sports teams fully deliver the contractually committed games, and do not reflect the impact of rebates expected to be paid by the teams.

(in millions)
2020 (remainder)	$	515
2021	1,820
2022	1,575
2023	1,525
2024	1,457
2025 and thereafter	8,281
Total	$	15,173

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Other Liabilities

In connection with the RSN Acquisition, we assumed certain fixed payment obligations which are payable through 2027. We recorded these obligations in purchase accounting at estimated fair value. As of September 30, 2020, $57 million was recorded within other current liabilities and $100 million was recorded within other long-term liabilities in our consolidated balance sheets. Interest expense of $2 million and $6 million was recorded for the three and nine months ended September 30, 2020, respectively and $0.5 million was recorded for both the three and nine months ended September 30, 2019.

In connection with the RSN Acquisition, we assumed certain variable payment obligations which are payable through 2030. These contractual obligations are based upon the excess cash flow of certain RSNs. We recorded these obligations in purchase accounting at estimated fair value. As of September 30, 2020, $20 million was recorded within other current liabilities and $44 million was recorded within other long-term liabilities in our consolidated balance sheets. These obligations are measured as the amount of cash that would be paid under the terms of the contracts if they were to settle at each reporting date. Total measurement adjustment gains of $168 million for both the three and nine months ended September 30, 2020 were recorded within other income, net in our consolidated statements of operations. The measurement adjustment gains were a result of a decrease in the projected excess cash flows of the related RSNs, as further discussed in Impairment of Goodwill and Definite-Lived Intangible Assets under Note 1. Nature of Operations and Summary of Significant Accounting Policies . For further information, see Note 10. Fair Value Measurements.

Litigation

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 the Company's financial statements. 

FCC Litigation Matters

On December 21, 2017, the FCC issued a Notice of Apparent Liability for Forfeiture (NAL) proposing a $13 million fine for alleged violations of the FCC's sponsorship identification rules by the Company and certain of its subsidiaries. We filed a response disputing the Commission's findings and the proposed fine.

On July 19, 2018, the FCC released a Hearing Designation Order (HDO) to commence a hearing before an Administrative Law Judge (ALJ) with respect to the Company’s proposed acquisition of Tribune. The HDO asked the ALJ to determine (i) whether Sinclair was the real party in interest to the sale of WGN-TV, KDAF(TV), and KIAH(TV), (ii) if so, whether the Company engaged in misrepresentation and/or lack of candor in its applications with the FCC and (iii) whether consummation of the overall transaction would be in the public interest and compliance with the FCC’s ownership rules. The Company maintains that the overall transaction and the proposed divestitures complied with the FCC’s rules, and strongly rejects any allegation of misrepresentation or lack of candor. The Merger Agreement was terminated by Tribune on August 9, 2018, on which date the Company subsequently filed a letter with the FCC to withdraw the merger applications and have them dismissed with prejudice and filed with the ALJ a Notice of Withdrawal of Applications and Motion to Terminate Hearing (Motion). On August 10, 2018, the FCC's Enforcement Bureau filed a responsive pleading with the ALJ stating that it did not oppose dismissal of the merger applications and concurrent termination of the hearing proceeding. The ALJ granted the Motion and terminated the hearing on March 5, 2019. As part of a discussion initiated by the Company to respond to allegations raised in the HDO, the FCC’s Media Bureau sent the Company a letter of inquiry.

On May 22, 2020, the FCC released an Order and Consent Decree pursuant to which the Company agreed to pay $48 million to resolve the FCC’s investigation of the allegations raised in the HDO, the matters covered by the NAL, 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 4-year compliance plan. 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. For the nine months ended September 30, 2020, we recorded an expense of $2.5 million for the above legal matters, which is reflected within selling, general, and administrative expenses in our consolidated statements of operations.

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 station WNUV(TV). The Company filed an opposition to the petition on October 1, 2020, and the petition remains pending.

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On September 2, 2020, the FCC adopted a Memorandum Opinion and Order and Notice of Apparent Liability for Forfeiture (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 Commission to dismiss the proceeding or, alternatively, to reduce the proposed forfeiture to $25,000 per station. The Company is not a party to that proceeding and cannot predict whether or how the proceeding will affect the Company’s financial statements. However, we accrued an expense for the above legal matters during the three months ended September 30, 2020, as we consolidate these stations as VIEs.

Other Litigation Matters

On November 6, 2018, the Company agreed to enter into a proposed consent decree with the Department of Justice (DOJ). This consent decree resolves the Department of Justice’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 Sinclair 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 Department of Justice 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 has 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. Defendants in this action filed a motion to dismiss the consolidated action, but that motion was denied. The Company believes the lawsuits are without merit and intends to vigorously defend itself against all such claims.

On August 9, 2018, Edward Komito, a putative Company shareholder, filed a class action complaint in the United States District Court for the District of Maryland (the "District of Maryland") against the Company, Christopher Ripley and Lucy Rutishauser, which action is now captioned In re Sinclair Broadcast Group, Inc. Securities Litigation, case No. 1:18-CV-02445-CCB (the "Securities Action"). On March 1, 2019, lead counsel in the Securities Action filed an amended complaint, adding David Smith and Steven Marks as defendants, and alleging that defendants violated the federal securities laws by issuing false or misleading disclosures concerning (a) the Merger prior to the termination thereof; and (b) the DOJ investigation concerning the alleged exchange of pacing information. The Securities Action seeks declaratory relief, money damages in an amount to be determined at trial, and attorney’s fees and costs. On May 3, 2019, Defendants filed a motion to dismiss the amended complaint, which motion was opposed by lead plaintiff. On February 4, 2020, the Court issued a decision granting the motion to dismiss in part and denying the motion to dismiss in part. On February 18, 2020, plaintiffs filed a motion for reconsideration or, in the alternative, to certify dismissal as final and appealable. Defendants filed an opposition to this motion. On July 20, 2020, the Court issued a decision denying plaintiffs’ motion and dismissing the remaining claims (which the Court previously had not dismissed in its February 4, 2020 decision) based on lack of standing. The plaintiffs did not appeal this decision, and the Securities Action therefore has concluded.

In addition, beginning in late July 2018, Sinclair received letters from two putative Company shareholders requesting that the Board of Directors of the Company investigate whether any of the Company’s officers and directors committed nonexculpated breaches of fiduciary duties in connection with, or gross mismanagement with respect to: (i) seeking regulatory approval of the Tribune Merger and (ii) the HDO, and the allegations contained therein. A committee consisting of independent members of the board of directors has been formed to respond to these demands (the "Special Litigation Committee"). The members of the Special Litigation Committee are Martin R. Leader, Larry E. McCanna, and the Honorable Benson Everett Legg, with Martin Leader as its designated Chair.

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On November 29, 2018, putative Company shareholder Fire and Police Retiree Health Care Fund, San Antonio filed a shareholder derivative complaint in the District of Maryland against the members of the Company’s Board of Directors, Mr. Ripley, and the Company (as a nominal defendant), which action is captioned Fire and Police Retiree Health Care Fund, San Antonio v. Smith, et al., Case No. 1:18-cv-03670-RDB (the "San Antonio Action"). On December 26, 2018, putative Company shareholder Teamsters Local 677 Health Services & Insurance Plan filed a shareholder derivative complaint in the Circuit Court of Maryland for Baltimore County (the "Circuit Court") against the members of the Company’s Board of Directors, Mr. Ripley, and the Company (as a nominal defendant), which action is captioned Teamsters Local 677 Health Services & Insurance Plan v. Friedman, et al., Case No. 03-C-18-12119 (the "Teamsters Action"). A defendant in the Teamsters Action removed the Teamsters action to the District of Maryland, and the plaintiff in that case has moved to remand the case back to the Circuit Court. That motion is fully briefed and awaiting decision. On December 21, 2018, putative Company shareholder Norfolk County Retirement System filed a shareholder derivative complaint in the District of Maryland against the members of the Company’s Board of Directors, Mr. Ripley, and the Company (as a nominal defendant), which action is captioned Norfolk County Retirement System v. Smith, et al., Case No. 1:18-cv-03952-RDB (the "Norfolk Action," and together with the San Antonio Action and the Teamsters Action, the "Derivative Actions"). The plaintiffs in each of the Derivative Actions allege breaches of fiduciary duties by the defendants in connection with (i) seeking regulatory approval of the Tribune Merger and (ii) the HDO, and the allegations contained therein. The plaintiffs in the Derivative Actions seek declaratory relief, money damages to be awarded to the Company in an amount to be determined at trial, corporate governance reforms, equitable or injunctive relief, and attorney’s fees and costs. Additionally, the plaintiffs in the Teamsters and Norfolk Actions allege that the defendants were unjustly enriched, in the form of their compensation as directors and/or officers of the Company, in light of the alleged breaches of fiduciary duty, and seek restitution to be awarded to the Company. These allegations are the subject matter of the review being conducted by the Special Litigation Committee, as noted above. On April 30, 2019, the Special Litigation Committee moved to dismiss and, in the alternative, to stay the San Antonio and Norfolk Actions, which motion was opposed by the plaintiffs. The Company and the remaining individual defendants joined in this motion. On October 23, 2019, the court granted the plaintiff’s motion in the Teamsters Action to remand that action back to the Circuit Court. On December 9, 2019, the court denied defendants’ motions to dismiss and, in the alternative, to stay the San Antonio and Norfolk Actions without prejudice, subject to potential renewal following limited discovery.

On July 20, 2020, the parties to the Derivative Actions executed a Stipulation and Agreement of Settlement, Compromise and Release (the “Settlement Stipulation”) reflecting the terms of the settlement of the Derivative Actions (the “Settlement”), which Settlement is subject to final approval by the District Court of Maryland. In connection with the Settlement, (a) the Company’s Board of Directors has agreed to implement a series of corporate governance measures (as described in Exhibit A to the Settlement Stipulation); (b) defendants’ insurers will pay $20.5 million into a settlement fund, which, after a deduction for an award of fees and expenses to plaintiffs’ counsel in an amount to be determined by the Court, will be paid to the Company; (c) the Board of Directors will designate an aggregate amount of $5 million of the settlement fund to be used, over a period of five years, for the implementation and operation of the corporate governance measures and certain compliance programs in connection with an FCC consent decree that was previously announced on May 6, 2020; and (d) the Company’s Executive Chairman David D. Smith will forgo, cancel, or return a grant of SARs of 638,298 shares of Sinclair Class A common stock that was awarded to him in February 2020. In exchange for the consideration described above, and subject to final court approval, the Derivative Actions will be dismissed and defendants will be released of any claims relating to the Tribune Merger or the HDO (provided that the release will not include the Securities Action). On July 23, 2020, and pursuant to the Settlement, the Teamsters Action was voluntarily dismissed. Also on July 23, 2020, the plaintiffs in the Norfolk Action and the San Antonio Action filed the settlement papers with the District of Maryland and moved for preliminary approval of the Settlement as fair, reasonable, and adequate, and providing for notice to shareholders of the Settlement. On August 6, 2020, the court entered an order preliminarily approving the settlement and providing for notice of a final settlement hearing to be held on October 27, 2020. On October 27, 2020, the court held the final settlement hearing and indicated that the court would review the submissions and issue a written decision. Defendants have not admitted any liability or wrongdoing in connection with the Settlement and have entered into the Settlement to avoid the costs, risks, distraction, and uncertainties of continued litigation.

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6.              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):

	Three Months Ended   September 30,						Nine Months Ended   September 30,
	2020			2019			2020			2019
Income (Numerator)
Net (loss) income	$	(3,367	)	$	(49	)	$	(2,943	)	$	18
Net income attributable to the redeemable noncontrolling interests	(19		)	(11		)	(51		)	(11		)
Net loss (income) attributable to the noncontrolling interests	130			—			113			(3		)
Numerator for basic and diluted earnings per common share available to common shareholders	$	(3,256	)	$	(60	)	$	(2,881	)	$	4
Shares (Denominator)
Basic weighted-average common shares outstanding	74,810			92,086			81,922			92,050
Dilutive effect of stock-settled appreciation rights and outstanding stock options	—			—			—			1,221
Diluted weighted-average common and common equivalent shares outstanding	74,810			92,086			81,922			93,271

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:

	Three Months Ended   September 30,		Nine Months Ended   September 30,
	2020	2019	2020	2019
Weighted-average stock-settled appreciation rights and outstanding stock options excluded	3,456	1,349	3,406	317

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7.              SEGMENT DATA:

We measure segment performance based on operating income (loss). We have two reportable segments: broadcast and local sports. Our broadcast segment, previously referred to as our local news and marketing services segment, provides free over-the-air programming to television viewing audiences and includes stations in 88 markets located throughout the continental United States. Our local sports segment, previously referred to as our sports segment, provides viewers with live professional sports content and includes 23 regional sports network brands. Other and corporate are not reportable segments but are included for reconciliation purposes. Other primarily consists of original networks and content, including Tennis, non-broadcast digital and internet solutions, technical services, and other non-media investments. Corporate costs primarily include our costs to operate as a public company and to operate our corporate headquarters location. All of our businesses are located within the United States. 

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

As of September 30, 2020	Broadcast		Local sports		Other & Corporate		Eliminations			Consolidated
Assets	$	4,673	$	6,211	$	1,641	$	(42	)	$	12,483

For the three months ended September 30, 2020	Broadcast			Local sports			Other & Corporate			Eliminations				Consolidated
Revenue	$	734		$	727		$	105		$	(27	)	(b)	$	1,539
Depreciation of property and equipment and amortization of definite-lived intangibles and other assets	60			109			6			(1		)		174
Amortization of sports programming rights (a)	—			632			—			—				632
Amortization of program contract costs	19			—			—			—				19
Corporate general and administrative expenses	25			3			2			—				30
(Gain) loss on asset dispositions and other, net of impairment	(41		)	—			2			—				(39		)
Impairment of goodwill and definite-lived intangible assets	—			4,264			—			—				4,264
Operating income (loss)	221			(4,450		)	10			3				(4,216		)
Interest expense including amortization of debt discount and deferred financing costs	2			111			48			(4		)		157
Loss from equity method investments	—			(2		)	(8		)	—				(10		)

For the three months ended September 30, 2019	Broadcast			Local sports			Other & Corporate			Eliminations				Consolidated
Revenue	$	661		$	352		$	129		$	(17	)	(b)	$	1,125
Depreciation of property and equipment and amortization of definite-lived intangibles and other assets	61			54			6			(1		)		120
Amortization of sports programming rights (a)	—			193			—			—				193
Amortization of program contract costs	22			—			—			—				22
Corporate general and administrative expenses	23			92			123			(1		)		237
Gain on asset dispositions and other, net of impairment	(29		)	—			(6		)	—				(35		)
Operating income (loss)	154			(56		)	(102		)	(2		)		(6		)
Interest expense including amortization of debt discount and deferred financing costs	1			73			58			(3		)		129
Income (loss) from equity method investments	—			1			(13		)	—				(12		)

27

For the nine months ended September 30, 2020	Broadcast			Local sports			Other & Corporate			Eliminations				Consolidated
Revenue	$	2,026		$	2,155		$	338		$	(88	)	(b)	$	4,431
Depreciation of property and equipment and amortization of definite-lived intangibles and other assets	178			328			19			(1		)		524
Amortization of sports programming rights (a)	—			1,028			—			—				1,028
Amortization of program contract costs	63			—			—			—				63
Corporate general and administrative expenses	95			7			9			—				111
(Gain) loss on asset dispositions and other, net of impairment	(101		)	—			2			—				(99		)
Impairment of goodwill and definite-lived intangible assets	—			4,264			—			—				4,264
Operating income (loss)	455			(3,885		)	38			(5		)		(3,397		)
Interest expense including amortization of debt discount and deferred financing costs	4			351			156			(9		)		502
Income (loss) from equity method investments	—			6			(29		)	—				(23		)

For the nine months ended September 30, 2019	Broadcast			Local sports			Other & Corporate			Eliminations				Consolidated
Revenue	$	1,939		$	352		$	354		$	(27	)	(b)	$	2,618
Depreciation of property and equipment and amortization of definite-lived intangibles and other assets	183			54			16			(1		)		252
Amortization of sports programming rights (a)	—			193			—			—				193
Amortization of program contract costs	68			—			—			—				68
Corporate general and administrative expenses	82			92			144			(1		)		317
Gain on asset dispositions and other, net of impairment	(51		)	—			(6		)	—				(57		)
Operating income (loss)	384			(56		)	(128		)	(7		)		193
Interest expense including amortization of debt discount and deferred financing costs	4			73			170			(10		)		237
Income (loss) from equity method investments	—			1			(39		)	—				(38		)

(a) The amortization of sports programming rights is included within media programming and production expenses on our consolidated statements of operations. Due to the outbreak of COVID-19 and postponement of professional sports leagues, we did not record amortization of our sports contracts during the month of March 2020 and three months ended June 30, 2020. Amortization expense resumed when the games commenced during the three months ended September 30, 2020.

(b) Includes $26 million and $75 million for the three and nine months ended September 30, 2020, respectively, and $9 million for both the three and nine months ended September 30, 2019 of revenue for services provided by broadcast to local sports and other, which are eliminated in consolidation.

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8.              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.

We are party to a joint venture associated with Marquee. Marquee is party to a long term telecast rights agreement which provides the rights to air certain live game telecasts and other content, which we guarantee. In connection with the RSN Acquisition, we became party to a joint venture associated with one other regional sports network. We participate significantly in the economics and have the power to direct the activities which significantly impact the economic performance of these regional sports networks, including sales and certain operational services. We consolidate these regional sports networks because they are variable interest entities and we are the primary beneficiary.

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):

	As of September 30, 2020		As of December 31, 2019
ASSETS
Current assets:
Cash and cash equivalents	$	37	$	39
Accounts receivable, net	89		39
Prepaid sports rights	10		10
Other current assets	7		6
Total current assets	143		94
Property and equipment, net	17		15
Operating lease assets	6		8
Goodwill and indefinite-lived intangible assets	15		15
Definite-lived intangible assets, net	55		93
Other assets	1		3
Total assets	$	237	$	228
LIABILITIES
Current liabilities:
Other current liabilities	$	35	$	19
Notes payable, finance leases and commercial bank financing, less current portion	11		15
Operating lease liabilities, less current portion	5		6
Program contracts payable, less current portion	4		7
Other long-term liabilities	14		1
Total liabilities	$	69	$	48

29

The amounts above represent the consolidated 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 $130 million and $127 million as of September 30, 2020 and December 31, 2019, respectively, 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, 2020, 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 debt 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 $78 million and $71 million as of September 30, 2020 and December 31, 2019, respectively. 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 from equity method investments and other income, net, respectively, in our consolidated statements of operations. We recorded losses of $7 million and $29 million for the three and nine months ended September 30, 2020, respectively, and losses of $13 million and $38 million for the three and nine months ended September 30, 2019, respectively.

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9.              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 $1 million for both the three months ended September 30, 2020 and 2019 and $4 million for both the nine months ended September 30, 2020 and 2019. 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 less than $1 million for both the three and nine months ended September 30, 2020. For all leases, we incurred expenses of $1 million for the three months ended September 30, 2019 and $2 million for the nine months ended September 30, 2019.

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; and KRNV-DT/KENV-DT Reno, Nevada/Salt Lake City, Utah (collectively, the Cunningham Stations). Certain of our stations provide services to the Cunningham Stations pursuant to LMAs or JSAs and SSAs. See Note 8. Variable Interest Entities, for further discussion of the scope of services provided under these types of arrangements. As of September 30, 2020, we have jointly and severally, unconditionally, and irrevocably guaranteed $42 million of Cunningham's debt, of which $8 million, net of $0.4 million deferred financing costs, relates to the Cunningham VIEs that we consolidate.

The voting stock of Cunningham is owned by an unrelated party. All of the non-voting stock 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, 2023 and there are two additional 5-year renewal terms 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) $5 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 $53 million and $51 million as of September 30, 2020 and December 31, 2019, respectively. The remaining aggregate purchase price of these stations, net of prepayments, as of both September 30, 2020 and December 31, 2019, was approximately $54 million. Additionally, we provide services to WDBB-TV pursuant to an LMA, which expires April 22, 2025, and have a purchase option to acquire for $0.2 million. We paid Cunningham, under these agreements, $2 million for both the three months ended September 30, 2020 and 2019 and $6 million for both the nine months ended September 30, 2020 and 2019.

The agreements with KBVU-TV/KCVU-TV, KRNV-DT/KENV-DT, WBSF-TV, WEMT-TV, WGTU-TV/WGTQ-TV, WPFO-TV, and WYDO-TV expire between December 2020 and August 2025 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 revenues of the stations are reported in our consolidated statements of operations. Our consolidated revenues include $39 million and $38 million for the three months ended September 30, 2020 and 2019, respectively, and $111 million for both the nine months ended September 30, 2020 and 2019, related to the Cunningham Stations.

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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 June 2022. Under the agreement, Cunningham paid us an initial fee of $1 million and pays us $0.2 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 $1 million that expires in October 2021.

Atlantic Automotive Corporation

We sell advertising time to Atlantic Automotive Corporation (Atlantic Automotive), a holding company that owns automobile dealerships and an automobile leasing company. David D. Smith, our Executive Chairman, has a controlling interest in, and is a member of the Board of Directors of, Atlantic Automotive. We received payments for advertising totaling less than $0.1 million for both the three and nine months ended September 30, 2020 and $0.2 million for both the three and nine months ended September 30, 2019.

Leased property by real estate ventures

Certain of our real estate ventures have entered into leases with entities owned by members of the Smith Family. Total rent received under these leases was $0.3 million for both the three months ended September 30, 2020 and 2019 and $0.7 million for both the nine months ended September 30, 2020 and 2019.

Equity method investees

YES Network. In August 2019, YES Network, an equity method investee, entered into a management services agreement with the Company, in which the Company provides certain services for an initial term that expires on August 29, 2025. The agreement will automatically renew for two 2-year renewal terms, with a final expiration on August 29, 2029. Pursuant to the terms of the agreement, the YES Network paid us a management services fee of $1 million and $4 million for the three and nine months ended September 30, 2020, respectively, and $0.4 million for both the three and nine months ended September 30, 2019.

In conjunction with the acquisition of the RSNs on August 23, 2019, as discussed in Note 2. Acquisitions and Dispositions of Assets, we assumed a minority interest in certain mobile production companies, which we account for as equity method investments. We made payments for production services to these entities totaling $7 million and $16 million for the three and nine months ended September 30, 2020, respectively, and $4 million for both the three and nine months ended September 30, 2019.

Sports Programming Rights

The Company paid $15 million and $221 million, net of rebates, for the three and nine months ended September 30, 2020, respectively, and $38 million for both the three and nine months ended September 30, 2019, under sports programming rights agreements covering the broadcast of regular season games, to six professional teams who have non-controlling equity interests in certain of our RSNs. These agreements expire on various dates during the fiscal years ended 2025 through 2032.

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10.              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.

33

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

	As of September 30, 2020				As of December 31, 2019
	Carrying Value		Fair Value		Carrying Value		Fair Value
Level 1:
STG:
Money market funds	$	239	$	239	$	354	$	354
Deferred compensation assets	37		37		36		36
Deferred compensation liabilities	32		32		33		33
DSG:
Money market funds	47		47		559		559
Level 2 (a):
STG:
5.875% Senior Unsecured Notes due 2026	348		342		350		368
5.625% Senior Unsecured Notes due 2024	550		547		550		566
5.500% Senior Unsecured Notes due 2030	500		464		500		511
5.125% Senior Unsecured Notes due 2027	400		373		400		411
Term Loan B	1,319		1,282		1,329		1,326
Term Loan B-2	1,287		1,252		1,297		1,300
DSG:
12.750% Senior Secured Notes due 2026 (b)	31		25		—		—
6.625% Senior Unsecured Notes due 2027 (b)	1,744		908		1,825		1,775
5.375% Senior Secured Notes due 2026	3,050		2,158		3,050		3,085
Term Loan	3,267		2,597		3,292		3,284
Accounts receivable securitization facility (c)	74		74		—		—
Debt of variable interest entities	18		18		21		21
Debt of non-media subsidiaries	18		18		18		18
Level 3
DSG:
Variable payment obligations (d)	64		64		239		239

(a) Amounts are carried in our consolidated balance sheets net of debt discount, premium, and deferred financing cost, which are excluded in the above table, of $182 million and $231 million as of September 30, 2020 and December 31, 2019, respectively.

(b) On June 10, 2020, we exchanged $66.5 million aggregate principal amount of the DSG 6.625% Notes for cash payments of $10 million, including accrued but unpaid interest, and $31 million aggregate principal amount of the newly issued DSG 12.750% Secured Notes. See Note 3. Notes Payable, Finance Leases, and Commercial Bank Financing for further information.

(c) We entered into the A/R Facility on September 23, 2020. As of September 30, 2020, the balance of the loans under the A/R Facility was $74 million. See Note 3. Notes Payable, Finance Leases, and Commercial Bank Financing for further information.

(d) The Company records its variable payment obligations at fair value on a recurring basis. These liabilities are further described in Other Liabilities within Note 5. Commitments and Contingencies. Significant unobservable inputs used in the fair value measurement are projected future operating income before depreciation and amortization; and weighted average discount rate of 10%. Significant increases (decreases) in projected future operating income would generally result in a significantly higher (lower) fair value measurement. Significant increases (decreases) in discount rates, would result in a significantly (lower) higher fair value measurement.

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The following table summarizes the changes in financial liabilities 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, 2020 (in millions):

	Variable Payment Obligations
Fair value at June 30, 2020	$	235
Payments	(6		)
Measurement adjustments	(165		)
Fair value at September 30, 2020	$	64
	Variable Payment Obligations
Fair value at December 31, 2019	$	239
Payments	(16		)
Measurement adjustments	(159		)
Fair value at September 30, 2020	$	64

11.              CONDENSED CONSOLIDATING FINANCIAL STATEMENTS:

Sinclair Television Group, Inc. (STG), a wholly-owned subsidiary and the television operating subsidiary of Sinclair Broadcast Group, Inc. (SBG), is the primary obligor under the STG Bank Credit Agreement, 5.625% Notes, 5.875% Notes, 5.125% Notes, and 5.500% Notes (collectively, the Notes are referred to as the "STG Notes"), and, until they were redeemed, STG's 5.375% Notes and 6.125% Notes. STG’s 5.625% Notes were publicly registered on a Registration Statement on Form S-3ASR (No. 333-203483), effective April 17, 2015, and, until they were redeemed, STG’s 6.125% Notes were publicly registered on a Registration Statement on Form S-4 (No. 333-187724), effective April 16, 2013. Our Class A Common Stock and Class B Common Stock as of September 30, 2020, were obligations or securities of SBG and not obligations or securities of STG. SBG is a guarantor under the STG Bank Credit Agreement, 5.625% Notes, 5.875% Notes, 5.125% Notes, 5.500% Notes and, until they were redeemed, STG's 5.375% Notes and 6.125% Notes. As of September 30, 2020, our consolidated total debt, net of deferred financing costs and debt discounts, of $12,463 million included $4,415 million related to STG and its subsidiaries of which SBG guaranteed $4,375 million.

SBG, KDSM, LLC, a wholly-owned subsidiary of SBG, and STG’s wholly-owned subsidiaries (guarantor subsidiaries) have fully and unconditionally guaranteed, subject to certain customary automatic release provisions, all of STG’s obligations. Those guarantees are joint and several. There are certain contractual restrictions on the ability of SBG, STG, or KDSM, LLC to obtain funds from their subsidiaries in the form of dividends or loans.

The following condensed consolidating financial statements present the consolidated balance sheets, consolidated statements of operations and comprehensive income, and consolidated statements of cash flows of SBG, STG, KDSM, LLC and the guarantor subsidiaries, the direct and indirect non-guarantor subsidiaries of SBG and the eliminations necessary to arrive at our information on a consolidated basis.

These statements are presented in accordance with the disclosure requirements under SEC Regulation S-X, Rule 3-10.

35

CONDENSED CONSOLIDATING BALANCE SHEET

AS OF SEPTEMBER 30, 2020

(in millions) (unaudited)

	Sinclair Broadcast Group, Inc.			Sinclair Television Group, Inc.		Guarantor Subsidiaries and KDSM, LLC		Non- Guarantor Subsidiaries			Eliminations			Sinclair Consolidated
Cash and cash equivalents	$	—		$	262	$	4	$	366		$	—		$	632
Accounts receivable, net	—			—		510		598			—			1,108
Other current assets	9			55		403		416			(82		)	801
Total current assets	9			317		917		1,380			(82		)	2,541
Property and equipment, net	1			32		704		104			(27		)	814
Investment in equity of consolidated subsidiaries	331			3,516		—		—			(3,847		)	—
Restricted cash	—			—		—		1			—			1
Goodwill	—			—		2,082		10			—			2,092
Indefinite-lived intangible assets	—			—		149		14			—			163
Definite-lived intangible assets, net	—			—		1,299		4,491			(43		)	5,747
Other long-term assets	84			1,768		282		1,225			(2,234		)	1,125
Total assets	$	425		$	5,633	$	5,433	$	7,225		$	(6,233	)	$	12,483
Accounts payable and accrued liabilities	$	15		$	61	$	262	$	210		$	(82	)	$	466
Current portion of long-term debt	—			27		5		41			(1		)	72
Other current liabilities	1			1		192		242			—			436
Total current liabilities	16			89		459		493			(83		)	974
Long-term debt	700			4,331		35		8,363			(1,038		)	12,391
Investment in deficit of consolidated subsidiaries	1,434			—		—		—			(1,434		)	—
Other long-term liabilities	12			121		1,427		457			(1,416		)	601
Total liabilities	2,162			4,541		1,921		9,313			(3,971		)	13,966
Redeemable noncontrolling interests	—			—		—		194			—			194
Total Sinclair Broadcast Group (deficit) equity	(1,737		)	1,092		3,512		(2,338		)	(2,266		)	(1,737		)
Noncontrolling interests in consolidated subsidiaries	—			—		—		56			4			60
Total liabilities, redeemable noncontrolling interests, and equity	$	425		$	5,633	$	5,433	$	7,225		$	(6,233	)	$	12,483

36

CONDENSED CONSOLIDATING BALANCE SHEET

AS OF DECEMBER 31, 2019

(in millions)

	Sinclair Broadcast Group, Inc.		Sinclair Television Group, Inc.		Guarantor Subsidiaries and KDSM, LLC		Non- Guarantor Subsidiaries		Eliminations			Sinclair Consolidated
Cash and cash equivalents	$	—	$	357	$	3	$	973	$	—		$	1,333
Accounts receivable, net	—		—		561		571		—			1,132
Other current assets	5		41		264		188		(50		)	448
Total current assets	5		398		828		1,732		(50		)	2,913
Property and equipment, net	1		31		659		96		(22		)	765
Investment in consolidated subsidiaries	2,270		3,558		—		—		(5,828		)	—
Goodwill	—		—		2,091		2,625		—			4,716
Indefinite-lived intangible assets	—		—		144		14		—			158
Definite-lived intangible assets, net	—		—		1,426		6,598		(47		)	7,977
Other long-term assets	82		1,611		279		618		(1,749		)	841
Total assets	$	2,358	$	5,598	$	5,427	$	11,683	$	(7,696	)	$	17,370
Accounts payable and accrued liabilities	$	142	$	109	$	286	$	296	$	(51	)	$	782
Current portion of long-term debt	—		27		4		41		(1		)	71
Other current liabilities	—		1		133		147		—			281
Total current liabilities	142		137		423		484		(52		)	1,134
Long-term debt	700		4,348		32		8,317		(1,030		)	12,367
Other long-term liabilities	13		53		1,418		547		(934		)	1,097
Total liabilities	855		4,538		1,873		9,348		(2,016		)	14,598
Redeemable noncontrolling interests	—		—		—		1,078		—			1,078
Total Sinclair Broadcast Group equity	1,503		1,060		3,554		1,069		(5,684		)	1,502
Noncontrolling interests in consolidated subsidiaries	—		—		—		188		4			192
Total liabilities, redeemable noncontrolling interests, and equity	$	2,358	$	5,598	$	5,427	$	11,683	$	(7,696	)	$	17,370

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CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2020

(in millions) (unaudited)

	Sinclair Broadcast Group, Inc.			Sinclair Television Group, Inc.			Guarantor Subsidiaries and KDSM, LLC			Non- Guarantor Subsidiaries			Eliminations			Sinclair Consolidated
Net revenue	$	—		$	25		$	774		$	786		$	(46	)	$	1,539
Media programming and production expenses	—			—			322			772			(17		)	1,077
Selling, general and administrative expenses	2			27			160			77			(24		)	242
Impairment of goodwill and definite-lived intangible assets	—			—			—			4,264			—			4,264
Depreciation, amortization and other operating expenses	1			1			40			133			(3		)	172
Total operating expenses	3			28			522			5,246			(44		)	5,755
Operating (loss) income	(3		)	(3		)	252			(4,460		)	(2		)	(4,216		)
Equity in (loss) earnings of consolidated subsidiaries	(3,252		)	302			—			—			2,950			—
Interest expense	(3		)	(45		)	(1		)	(114		)	6			(157		)
Other income (expense)	1			5			(11		)	168			(4		)	159
Total other (expense) income	(3,254		)	262			(12		)	54			2,952			2
Income tax benefit	1			55			64			727			—			847
Net (loss) income	(3,256		)	314			304			(3,679		)	2,950			(3,367		)
Net income attributable to the redeemable noncontrolling interests	—			—			—			(19		)	—			(19		)
Net loss attributable to the noncontrolling interests	—			—			—			130			—			130
Net (loss) income attributable to Sinclair Broadcast Group	$	(3,256	)	$	314		$	304		$	(3,568	)	$	2,950		$	(3,256	)
Comprehensive (loss) income	$	(3,256	)	$	314		$	304		$	(3,679	)	$	2,950		$	(3,367	)

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CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2019

(in millions) (unaudited)

	Sinclair Broadcast Group, Inc.			Sinclair Television Group, Inc.			Guarantor Subsidiaries and KDSM, LLC			Non- Guarantor Subsidiaries			Eliminations			Sinclair Consolidated
Net revenue	$	—		$	9		$	702		$	445		$	(31	)	$	1,125
Media programming and production expenses	—			—			312			262			(14		)	560
Selling, general and administrative expenses	122			24			162			124			(10		)	422
Depreciation, amortization and other operating expenses	—			(6		)	55			104			(4		)	149
Total operating expenses	122			18			529			490			(28		)	1,131
Operating (loss) income	(122		)	(9		)	173			(45		)	(3		)	(6		)
Equity in earnings of consolidated subsidiaries	35			202			—			—			(237		)	—
Interest expense	(1		)	(55		)	(1		)	(76		)	4			(129		)
Other income (expense)	1			(2		)	(12		)	6			(2		)	(9		)
Total other income (expense)	35			145			(13		)	(70		)	(235		)	(138		)
Income tax benefit	27			4			43			21			—			95
Net (loss) income	(60		)	140			203			(94		)	(238		)	(49		)
Net income attributable to the redeemable noncontrolling interests	—			—			—			(11		)	—			(11		)
Net (loss) income attributable to Sinclair Broadcast Group	$	(60	)	$	140		$	203		$	(105	)	$	(238	)	$	(60	)
Comprehensive (loss) income	$	(60	)	$	140		$	203		$	(94	)	$	(238	)	$	(49	)

39

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2020

(in millions) (unaudited)

	Sinclair Broadcast Group, Inc.			Sinclair Television Group, Inc.			Guarantor Subsidiaries and KDSM, LLC			Non- Guarantor Subsidiaries			Eliminations			Sinclair Consolidated
Net revenue	$	—		$	74		$	2,140		$	2,350		$	(133	)	$	4,431
Media programming and production expenses	—			—			962			1,371			(45		)	2,288
Selling, general and administrative expenses	8			97			479			207			(72		)	719
Impairment of goodwill and definite-lived intangible assets	—			—			—			4,264			—			4,264
Depreciation, amortization and other operating expenses	1			6			143			416			(9		)	557
Total operating expenses	9			103			1,584			6,258			(126		)	7,828
Operating (loss) income	(9		)	(29		)	556			(3,908		)	(7		)	(3,397		)
Equity in (loss) earnings of consolidated subsidiaries	(2,866		)	542			—			—			2,324			—
Interest expense	(10		)	(147		)	(3		)	(361		)	19			(502		)
Other income (expense)	—			11			(30		)	180			(10		)	151
Total other (expense) income	(2,876		)	406			(33		)	(181		)	2,333			(351		)
Income tax benefit	4			75			24			702			—			805
Net (loss) income	(2,881		)	452			547			(3,387		)	2,326			(2,943		)
Net income attributable to the redeemable noncontrolling interests	—			—			—			(51		)	—			(51		)
Net loss attributable to the noncontrolling interests	—			—			—			113			—			113
Net (loss) income attributable to Sinclair Broadcast Group	$	(2,881	)	$	452		$	547		$	(3,325	)	$	2,326		$	(2,881	)
Comprehensive (loss) income	$	(2,881	)	$	452		$	547		$	(3,396	)	$	2,326		$	(2,952	)

40

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2019

(in millions) (unaudited)

	Sinclair Broadcast Group, Inc.			Sinclair Television Group, Inc.			Guarantor Subsidiaries and KDSM, LLC			Non- Guarantor Subsidiaries			Eliminations			Sinclair Consolidated
Net revenue	$	—		$	9		$	2,064		$	616		$	(71	)	$	2,618
Media programming and production expenses	—			—			931			325			(41		)	1,215
Selling, general and administrative expenses	143			82			481			133			(12		)	827
Depreciation, amortization and other operating expenses	—			(3		)	203			193			(10		)	383
Total operating expenses	143			79			1,615			651			(63		)	2,425
Operating (loss) income	(143		)	(70		)	449			(35		)	(8		)	193
Equity in earnings of consolidated subsidiaries	116			410			—			—			(526		)	—
Interest expense	(2		)	(160		)	(2		)	(85		)	12			(237		)
Other income (expense)	2			3			(35		)	5			(1		)	(26		)
Total other income (expense)	116			253			(37		)	(80		)	(515		)	(263		)
Income tax benefit	31			33			3			21			—			88
Net income (loss)	4			216			415			(94		)	(523		)	18
Net income attributable to the redeemable noncontrolling interests	—			—			—			(11		)	—			(11		)
Net income attributable to the noncontrolling interests	—			—			—			(3		)	—			(3		)
Net income (loss) attributable to Sinclair Broadcast Group	$	4		$	216		$	415		$	(108	)	$	(523	)	$	4
Comprehensive income (loss)	$	4		$	216		$	415		$	(94	)	$	(523	)	$	18

41

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2020

(in millions) (unaudited)

	Sinclair Broadcast Group, Inc.			Sinclair Television Group, Inc.			Guarantor Subsidiaries and KDSM, LLC			Non- Guarantor Subsidiaries			Eliminations			Sinclair Consolidated
NET CASH FLOWS (USED IN) FROM OPERATING ACTIVITIES	$	(115	)	$	(39	)	$	481		$	510		$	2		$	839
NET CASH FLOWS USED IN INVESTING ACTIVITIES
Acquisition of property and equipment	—			(7		)	(110		)	(19		)	6			(130		)
Acquisition of businesses, net of cash acquired	—			—			(7		)	—			—			(7		)
Spectrum repack reimbursements	—			—			72			—			—			72
Proceeds from the sale of assets	—			—			36			—			—			36
Purchases of investments	(2		)	(30		)	(33		)	(20		)	—			(85		)
Other, net	1			—			(2		)	17			—			16
Net cash flows used in investing activities	(1		)	(37		)	(44		)	(22		)	6			(98		)
NET CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES
Proceeds from notes payable and commercial bank financing	—			648			—			299			—			947
Repayments of notes payable, commercial bank financing and finance leases	—			(670		)	(3		)	(272		)	—			(945		)
Repurchase of outstanding Class A Common Stock	(343		)	—			—			—			—			(343		)
Dividends paid on Class A and Class B Common Stock	(49		)	—			—			—			—			(49		)
Dividends paid on redeemable subsidiary preferred equity	—			—			—			(32		)	—			(32		)
Redemption of redeemable subsidiary preferred equity	—			—			—			(547		)	—			(547		)
Debt issuance costs	—			—			—			(7		)	—			(7		)
Distributions to noncontrolling interests, net	—			—			—			(19		)	—			(19		)
Distributions to redeemable noncontrolling interests	—			—			—			(378		)	—			(378		)
Increase (decrease) in intercompany payables	507			3			(433		)	(69		)	(8		)	—
Other, net	1			—			—			(69		)	—			(68		)
Net cash flows from (used in) financing activities	116			(19		)	(436		)	(1,094		)	(8		)	(1,441		)
NET (DECREASE) INCREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH	—			(95		)	1			(606		)	—			(700		)
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, beginning of period	—			357			3			973			—			1,333
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, end of period	$	—		$	262		$	4		$	367		$	—		$	633

42

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2019

(in millions) (unaudited)

	Sinclair Broadcast Group, Inc.			Sinclair Television Group, Inc.			Guarantor Subsidiaries and KDSM, LLC			Non- Guarantor Subsidiaries			Eliminations			Sinclair Consolidated
NET CASH FLOWS (USED IN) FROM OPERATING ACTIVITIES	$	(4	)	$	(188	)	$	538		$	157		$	(9	)	$	494
NET CASH FLOWS USED IN INVESTING ACTIVITIES
Acquisition of property and equipment	—			(2		)	(99		)	(4		)	9			(96		)
Acquisition of businesses, net of cash acquired	—			—			—			(9,006		)	—			(9,006		)
Spectrum repack reimbursements	—			—			50			—			—			50
Purchases of investments	(2		)	(36		)	(42		)	(351		)	—			(431		)
Other, net	—			2			—			4			—			6
Net cash flows used in investing activities	(2		)	(36		)	(91		)	(9,357		)	9			(9,477		)
NET CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES
Proceeds from notes payable and commercial bank financing	—			1,294			—			8,159			—			9,453
Repayments of notes payable, commercial bank financing and finance leases	—			(706		)	(3		)	(26		)	20			(715		)
Proceeds from the issuance of redeemable subsidiary preferred equity, net	—			—			—			985			—			985
Repurchase of outstanding Class A Common Stock	(125		)	—			—			—			—			(125		)
Dividends paid on Class A and Class B Common Stock	(55		)	—			—			—			—			(55		)
Dividends paid on redeemable subsidiary preferred equity	—			—			—			(10		)	—			(10		)
Debt issuance costs	—			(15		)	—			(167		)	—			(182		)
Distributions to noncontrolling interests	—			—			—			(30		)	—			(30		)
Increase (decrease) in intercompany payables	186			(1,074		)	(454		)	1,362			(20		)	—
Other, net	—			1			—			—			—			1
Net cash flows from (used in) financing activities	6			(500		)	(457		)	10,273			—			9,322
NET (DECREASE) INCREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH	—			(724		)	(10		)	1,073			—			339
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, beginning of period	—			962			19			79			—			1,060
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, end of period	$	—		$	238		$	9		$	1,152		$	—		$	1,399

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ITEM 2.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

FORWARD-LOOKING STATEMENTS

This report includes or incorporates forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act), and the U.S. Private Securities Litigation Reform Act of 1995. We have based these forward-looking statements on our current expectations and projections about future events. These forward-looking statements are subject to risks, uncertainties and assumptions about us, including, among other things, the following risks:

COVID-19 risks

• Requirement of our RSNs to pay professional sports team minimum rights fees, but thereafter unable to obtain rebates from sports teams for fewer games played;

• need to reimburse Distributors affiliation fees related to canceled professional sporting events;

• loss of advertising revenue due to postponement or cancellation of professional sporting events;

• loss of advertising revenue as advertisers may be more reluctant to purchase advertising spots due to reduced consumer spending as a result of shelter in place and stay at home orders, or lower audience engagement;

• loss of advertising revenue as advertisers may be less likely to advertise for certain goods or services with low supply, due to interruptions in the supply chain;

• loss of advertising revenue as advertisers may go out of business;

• potential that our workforce may contract COVID-19 which could impact operations and increase health care costs;

• COVID-19's overall effect on the national and regional economies and credit and capital markets;

• the significant disruption to the operations of the professional sports leagues and the macroeconomy caused by COVID-19 may result in the recognition of further impairment charges on our goodwill and definite-lived intangible assets; and

• cybersecurity and operational risks as a result of work-from-home arrangements.

General risks

• The impact of changes in national and regional economies and credit and capital markets;

• loss of consumer confidence;

• the potential impact of changes in tax law;

• the activities of our competitors;

• terrorist acts of violence or war and other geopolitical events;

• natural disasters and pandemics that impact our advertisers, our stations and networks; and

• cybersecurity breaches.

Industry risks

• The business conditions of our advertisers, particularly in the political, automotive and service categories;

• competition with other broadcast television stations, radio stations, Distributors, internet and broadband content providers, and other print and media outlets serving in the same markets;

• the performance of networks and syndicators that provide us with programming content, as well as the performance of internally originated programming;

• subscriber erosion due to the fragmentation of content distribution platforms;

• the loss of appeal of our sports programming, which may be unpredictable, the impact of strikes caused by collective bargaining between players and sports leagues, and increased programming costs may have a material negative effect on our business and our results of operations;

• the availability and cost of programming from networks and syndicators, as well as the cost of internally originated programming;

• our relationships with networks and their strategies to distribute their programming via means other than their local television affiliates, such as over-the-top (OTT) or direct-to-consumer content;

• the effects of the FCC's National Broadband Plan, the impact of the repacking of our broadcasting spectrum, as a result of the incentive auction, within a limited timeframe and funding allocated;

• the potential for additional governmental regulation of broadcasting or changes in those regulations and court actions interpreting those regulations, including ownership regulations limiting over-the-air television's ability to compete effectively (including regulations relating to JSA, SSA, cross ownership rules, and the national ownership cap), arbitrary

44

enforcement of indecency regulations, retransmission consent regulations, and political or other advertising restrictions, such as payola rules;

• the impact of FCC and Congressional efforts which may restrict a television station's retransmission consent negotiations;

• the impact of FCC rules requiring broadcast stations to publish, among other information, political advertising rates online;

• the impact of foreign government rules related to digital and online assets;

• labor disputes and legislation and other union activity associated with film, acting, writing, and other guilds and professional sports leagues;

• the broadcasting community’s ability to develop and adopt a viable mobile digital broadcast television (mobile DTV) strategy and platform, such as the adoption of a next generation broadcast standard (NEXTGEN TV), and the consumer’s appetite for mobile television;

• the impact of programming payments charged by networks pursuant to their affiliation agreements with broadcasters requiring compensation for network programming;

• the potential impact from the elimination of rules prohibiting mergers of the four major television networks;

• the effects of declining live/appointment viewership as reported through rating systems and local television efforts to adopt and receive credit for same day viewing plus viewing on-demand thereafter;

• changes in television rating measurement methodologies that could negatively impact audience results;

• the ability of local Distributors to coordinate and determine local advertising rates as a consortium;

• the ability to negotiate terms at least as favorable as those in existence with Distributors and others;

• changes in the makeup of the population in the areas where stations are located;

• the operation of low power devices in the broadcast spectrum, which could interfere with our broadcast signals;

• OTT technologies and their potential impact on cord-cutting;

• the impact of Distributors, and OTTs offering "skinny" programming bundles that may not include television broadcast stations, regional sports networks, or other programming that we distribute;

• the effect of a potential decline in the number of subscribers to Distributor services;

• fluctuations in advertising rates and availability of inventory;

• the ability of others to retransmit our signal without our consent; and

• the ability to renew media rights agreements with various professional sports teams which have varying durations and terms that are at least as favorable as those in existence.

Risks specific to us

• The effectiveness of our management;

• our ability to attract and maintain local, national, and network advertising and successfully participate in new sales channels such as programmatic and addressable advertising through business partnership ventures and the development of technology;

• our ability to service our debt obligations and operate our business under restrictions contained in our financing agreements;

• our ability to successfully implement and monetize our own content management system (CMS) designed to provide our viewers significantly improved content via the internet and other digital platforms;

• our ability to successfully renegotiate retransmission consent and distribution agreements for our existing and acquired businesses;

• the ability of stations which we consolidate, but do not negotiate on their behalf, to successfully renegotiate retransmission consent and affiliation fees (cable network fees) agreements;

• our ability to secure distribution of our programming to a wide audience;

• our ability to renew our FCC licenses;

• our ability to obtain FCC approval for any future acquisitions, as well as, in certain cases, customary antitrust clearance for any future acquisitions;

• our exposure to any wrongdoing by those outside the Company, but which could affect our business or pending acquisitions;

• our ability to identify media business investment opportunities and to successfully integrate any acquired businesses, as well as the success of our new content and distribution initiatives in a competitive environment, including CHARGE!, TBD, Comet, STIRR, Marquee, other original programming, mobile DTV, and our recent acquisition of and investments in the RSNs;

• our ability to maintain our affiliation and programming service agreements with our networks and program service providers and at renewal, to successfully negotiate these agreements with favorable terms;

• our joint venture arrangements related to our regional sports networks are subject to a number of operational risks that could have a material adverse effect on our business, results of operations, and financial condition;

• our ability to generate synergies and leverage new revenue opportunities;

• our ability to successfully migrate in a timely manner from various transition services provided by sellers of assets we have acquired, which includes standing up our own services;

45

• our ability to renew contracts with leagues and sports teams;

• our ability to effectively respond to technology affecting our industry and to increasing competition from other media providers;

• our ability to deploy NEXTGEN TV nationwide;

• the strength of ratings for our local news broadcasts including our news sharing arrangements; and

• the results of prior year tax audits by taxing authorities.

Other matters set forth in this report, including the Risk Factors set forth in Item 1A of this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K for the year ended December 31, 2019, may also cause actual results in the future to differ materially from those described in the forward-looking statements. However, additional factors and risks not currently known to us or that we currently deem immaterial may also cause actual results in the future to differ materially from those described in the forward-looking statements. You are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date on which they are made. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. In light of these risks, uncertainties, and assumptions, events described in the forward-looking statements discussed in this report might not occur.

The following table sets forth certain operating data for the periods presented:

STATEMENTS OF OPERATIONS DATA

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

	Three Months Ended   September 30,						Nine Months Ended   September 30,
	2020			2019			2020			2019
Statement of Operations Data:
Media revenues (a)	$	1,519		$	1,070		$	4,353		$	2,465
Non-media revenues	20			55			78			153
Total revenues	1,539			1,125			4,431			2,618
Media programming and production expenses	1,077			560			2,288			1,215
Media selling, general and administrative expenses	212			185			608			510
Depreciation and amortization expenses (b)	174			120			524			252
Amortization of program contract costs	19			22			63			68
Non-media expenses	18			42			69			120
Corporate general and administrative expenses	30			237			111			317
Impairment of goodwill and definite-lived intangible assets	4,264			—			4,264			—
Gain on asset dispositions and other, net of impairment	(39		)	(35		)	(99		)	(57		)
Operating (loss) income	(4,216		)	(6		)	(3,397		)	193
Interest expense including amortization of debt discount and deferred financing costs	(157		)	(129		)	(502		)	(237		)
Gain on extinguishment of debt	—			—			5			—
Loss from equity method investments	(10		)	(12		)	(23		)	(38		)
Other income, net	169			3			169			12
Loss before income taxes	(4,214		)	(144		)	(3,748		)	(70		)
Income tax benefit	847			95			805			88
Net (loss) income	$	(3,367	)	$	(49	)	$	(2,943	)	$	18
Net income attributable to the redeemable noncontrolling interests	(19		)	(11		)	(51		)	(11		)
Net loss (income) attributable to the noncontrolling interests	130			—			113			(3		)
Net (loss) income attributable to Sinclair Broadcast Group	$	(3,256	)	$	(60	)	$	(2,881	)	$	4
Basic and Diluted Earnings Per Common Share Attributable to Sinclair Broadcast Group:
Basic earnings per share	$	(43.53	)	$	(0.65	)	$	(35.17	)	$	0.05
Diluted earnings per share	$	(43.53	)	$	(0.65	)	$	(35.17	)	$	0.05

46

	As of September 30, 2020			As of December 31, 2019
Balance Sheet Data:
Cash and cash equivalents	$	632		$	1,333
Total assets	$	12,483		$	17,370
Total debt (c)	$	12,463		$	12,438
Redeemable noncontrolling interests	$	194		$	1,078
Total (deficit) equity	$	(1,677	)	$	1,694

(a) Media revenues are defined as distribution revenue, advertising revenue, and other media revenues.

(b) Depreciation and amortization expenses include depreciation of property and equipment and amortization of definite-lived intangible and other assets.

(c) Total debt is defined as current and long-term notes payable, finance leases, and commercial bank financing, including finance leases of affiliates.

The following Management’s Discussion and Analysis provides qualitative and quantitative information about our financial performance and condition and should be read in conjunction with our 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, 2020 and through the date this Report on Form 10-Q is filed.

Results of Operations — an analysis of our revenues and expenses for the three and nine months ended September 30, 2020 and 2019, including comparisons between quarters and expectations for the three months ended December 31, 2020.

Liquidity and Capital Resources — a discussion of our primary sources of liquidity and an analysis of our cash flows from or used in operating activities, investing activities, and financing activities during the three and nine months ended September 30, 2020.

Summary of Significant Events and Financial Highlights

Content and Distribution

• In July 2020, the Company entered into multi-year content carriage agreements with Comcast for all Sinclair television stations and RSNs in Comcast’s cable television footprint, including Marquee and the YES Network, as well as continued distribution of the Tennis Channel.

• In September 2020, the Company invested in Playfly sports, a leading company in the management of exclusive college and high school sports and esport multi-media rights across the U.S.

• In August 2020, the Kansas City Royals and the Company entered into a multi-year media rights agreement beginning with the 2020 baseball season for FOX Sports Kansas City (FSKC) to continue as the television home of the Royals. In conjunction with this agreement, the Royals received a minority interest ownership percentage in FSKC.

• As of September 1, 2020, Frontier Communications no longer carries the Company's RSNs.

• In September 2020, the Company reported that YouTube TV would no longer carry the Company's RSNs.

• In October 2020, the Company reported that Hulu would no longer carry the Company's 21 RSNs, YES Network, and Marquee.

• Year-to-date, Sinclair's newsrooms have won a total of 305 journalism awards, including 1 National RTDNA Edward. R. Murrow awards, 28 Regional RTDNA Edward R. Murrow awards, and 72 regional Emmy awards.

NEXTGEN TV

• As of the end of October, the Company, in coordination with other broadcasters, has deployed NEXTGEN TV, powered by ATSC 3.0, in eight markets, with several more planned by year end.

47

Financing, Capital Allocation, and Shareholder Returns

• In August 2020, the Board of Directors authorized an additional $500 million share repurchase authorization.

• In August 2020, we redeemed 350,000 units of the Redeemable Subsidiary Preferred Equity for an aggregate redemption price equal to $350 million, representing 100% of the unreturned capital contribution with respect to the units redeemed, plus $4 million in accrued and unpaid dividends, with respect to the units redeemed up to, but not including, the redemption date, for a total redemption amount of $354 million.

• In September 2020, the Company's and DSG's indirect wholly-owned subsidiary, DSPV, entered into a $250 million accounts receivable securitization facility which matures on September 23, 2023.

• During the quarter ended September 30, 2020, we repurchased approximately 4 million shares of Class A Common Stock for $82 million. Year-to-date, the Company has repurchased 19 million or 21% of its outstanding shares.

• In August 2020 and November 2020, we declared quarterly cash dividends of $0.20 per share.

Other Events

• Since March, the Company has partnered with the Salvation Army on numerous Sinclair Cares relief initiatives, raising over $1.2 million for those impacted by the western wildfires, the Iowa derecho, and the COVID-19 pandemic.

• In July 2020, the Company announced that Scott Shapiro has assumed the newly-created role of Chief Strategy Officer/Sport in addition to his current role as Chief Development Officer.

• In August 2020, the Company announced that it was named one of the Baltimore Business Journal's 2020 Best Places to Work award finalists.

• In September 2020, Steve Rosenberg, a broadcasting industry executive with over 30 years of experience, assumed the role of President of local sports.

• In September 2020, the Company announced the hiring of J.R. McCabe in the newly-created role of Chief Business Officer of D2C/Gamification.

• In September 2020, the Company received the Award for Achievement in Local Broadcasting, part of the TV of Tomorrow annual awards for leadership in interactive and multi-platform television. The award honors Sinclair Broadcast Group as the company that has demonstrated the greatest achievement in local broadcasting over the past year, recognizing its wholly-owned subsidiary, ONE Media 3.0, as the broadcast industry’s vanguard in advancing NEXTGEN TV from research and development to deployment.

• In October 2020, Lucy Rutishauser, the Company's Executive Vice President and Chief Financial Officer, was named one of The Baltimore Sun's 2020 Women to Watch.

• In November 2020, the Company announced the hiring of John Zeigler in the newly-created role of Chief Marketing Officer.

48

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. We have two reportable segments, "broadcast" and "local sports," that are disclosed separately from our other and corporate activities.

SEASONALITY/CYCLICALITY

The operating results of our broadcast 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 local sports segment are usually subject to cyclical fluctuations based on the timing and overlap of the seasons for professional baseball, basketball, and hockey. Usually, the second and third quarter operating results are higher than first and fourth quarters.

With the exception of political advertising, our usual seasonality and cyclicality, as described above, may not occur in 2020 for either segment due to the COVID-19 pandemic.

Operating Data

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

	Three Months Ended   September 30,						Nine Months Ended   September 30,
	2020			2019			2020			2019
Media revenues	$	1,519		$	1,070		$	4,353		$	2,465
Non-media revenues	20			55			78			153
Total revenues	1,539			1,125			4,431			2,618
Media programming and production expenses	1,077			560			2,288			1,215
Media selling, general and administrative expenses	212			185			608			510
Depreciation and amortization expenses	174			120			524			252
Amortization of program contract costs	19			22			63			68
Non-media expenses	18			42			69			120
Corporate general and administrative expenses	30			237			111			317
Impairment of goodwill and definite-lived intangible assets	4,264			—			4,264			—
Gain on asset dispositions and other, net of impairment	(39		)	(35		)	(99		)	(57		)
Operating (loss) income	$	(4,216	)	$	(6	)	$	(3,397	)	$	193
Net (loss) income attributable to Sinclair Broadcast Group	$	(3,256	)	$	(60	)	$	(2,881	)	$	4

49

The Impact of COVID-19 on our Results of Operations

Overview

On March 11, 2020, the World Health Organization declared COVID-19 a pandemic, and by the end of the following day, each of the MLB, NBA, and NHL had suspended their seasons. On March 13, 2020, the United States declared a national state of emergency. Since that time, efforts to contain the spread of COVID-19 have intensified. Several countries, including the United States, have taken steps to restrict travel, temporarily close businesses and issue quarantine orders, and it remains unclear how long such measures will remain in place regionally.

Broadcast segment

Advertising revenue was negatively impacted in the second quarter and late first quarter due to lower local and national net times sales. During the nine months ended September 30, 2020, as compared to the prior year, we saw decreases in certain advertising categories, notably a $77 million decrease in automotive, a $20 million decrease in entertainment, a $16 million decrease in furniture, a $12 million decrease in services, and an $11 million decrease in medical, primarily as a result of the impact of the COVID-19 pandemic. These decreases were partially offset by a $152 million increase in political advertising revenue, primarily due to strong demand in the third quarter. Distribution revenue was negatively impacted by subscriber erosion experienced by certain Distributors resulting from the effect of COVID-19, among other factors.

Local sports segment

The MLB, NBA, and NHL returned to operation during the three months ended September 30, 2020 and were able to complete their modified seasons during the early part of the fourth quarter of 2020. Due to the interruptions and modified seasons, advertising revenue was down in the second quarter of 2020 as compared to the first quarter of 2020. However, with the resumption of some events during the third quarter of 2020, advertising revenue increased to $124 million during the period as compared to $3 million in the second quarter of 2020. Distribution revenue was negatively impacted by subscriber erosion experienced by certain Distributors resulting from the effect of COVID-19, among other factors. As of November 9, 2020, both the NBA and the NHL have announced that their 2020-2021 seasons are currently on hold with delayed starts likely to be announced later this year. There can be no assurance that the MLB, NBA, or NHL will complete full or abbreviated seasons in the future. Any reduction in the actual number of games played by the leagues may have an adverse impact on our operations and the cash flows of our local sports segment. See Distribution Revenue in Revenue Recognition and Sports Programming Rights under Note 1. Nature of Operations and Summary of Significant Accounting Policies within our Consolidated Financial Statements for a further discussion on how COVID-19 has impacted distribution revenue and sports rights expense, respectively, including the need for us to provide rebates to our Distributors as well as seek rebate from or reduce future payments to certain of the sports teams.

During the three months ended September 30, 2020, we recorded a total impairment loss in the local sports segment of $4,264 million relating to goodwill and definite-lived intangible assets of $2,615 million and $1,649 million, respectively. See further discussion under Impairment of Goodwill and Definite-Lived Intangible Assets under Note 1. Nature of Operations and Summary of Significant Accounting Policies within our Consolidated Financial Statements.

Business continuity

Within the United States, our business has been designated an essential business, which allows us to continue to serve our customers, however, the COVID-19 pandemic has disrupted our operations. Certain of our facilities have experienced temporary disruptions as a result of the COVID-19 pandemic, and we cannot predict whether our facilities will experience more significant disruptions in the future and how long these disruptions will last. The COVID-19 pandemic has heightened the risk that a significant portion of our workforce will suffer illness or otherwise be unable to work. Furthermore, reductions in our workforce may become necessary as a result of declines in our business caused by the COVID-19 pandemic. If we take such actions, we cannot assure that we will be able to rehire our workforce once our business has recovered.

50

BROADCAST SEGMENT

The following table sets forth our revenue and expenses for our broadcast segment, previously known as our local news and marketing services segment, for the periods presented (in millions):

	Three Months Ended September 30,						Percent Change Increase / (Decrease)	Nine Months Ended September 30,						Percent Change Increase / (Decrease)
	2020			2019				2020			2019
Revenue:
Distribution revenue	$	356		$	340		5%	$	1,059		$	995		6%
Advertising revenue	344			302			14%	861			904			(5)%
Other media revenues (a)	34			19			79%	106			40			165%
Media revenues	$	734		$	661		11%	$	2,026		$	1,939		4%
Operating Expenses:
Media programming and production expenses	$	313		$	294		6%	$	935		$	875		7%
Media selling, general and administrative expenses	137			136			1%	401			398			1%
Depreciation and amortization expenses	60			61			(2)%	178			183			(3)%
Amortization of program contract costs	19			22			(14)%	63			68			(7)%
Corporate general and administrative expenses	25			23			9%	95			82			16%
Gain on asset dispositions and other, net of impairment	(41		)	(29		)	41%	(101		)	(51		)	98%
Operating income	$	221		$	154		44%	$	455		$	384		18%

(a) Includes $26 million and $75 million for the three and nine months ended September 30, 2020, respectively, and $9 million for both the three and nine months ended September 30, 2019 of intercompany revenue related to certain services provided to local sports and other under management services agreements, which is eliminated in consolidation.

Revenue

Distribution revenue. Distribution revenue, which includes payments from Distributors for our broadcast signals, increased $16 million and $64 million for the three and nine months ended September 30, 2020, respectively, when compared to the same periods in 2019, primarily due to an increase in rates, partially offset by a decrease in subscribers.

Advertising revenue. Advertising revenue increased $42 million for the three months ended September 30, 2020 when compared to the same period in 2019, primarily related to an increase in political advertising revenue of $99 million as 2020 is a political year. The increase is partially offset by a decrease in certain categories, notably a $26 million decrease in automotive, a $7 million decrease in entertainment, a $5 million decrease in furniture, and a $3 million decrease in restaurants, medical, retail, and grocery food, respectively, primarily as a result of the impact of the COVID-19 pandemic. We expect political revenue for the three months ended December 31, 2020 to increase as compared to the three months ended September 30, 2020, as we enter the peak political season. For the month of October 2020, advertising revenue increased 53% as compared to October 2019. As a result of the increase in political revenue, we expect total advertising revenue for the fourth quarter ended December 31, 2020 to be higher than the same period in 2019.

Advertising revenue decreased $43 million for the nine months ended September 30, 2020 when compared to the same period in 2019. The decrease is primarily due to the decrease in certain categories, notably a $77 million decrease in automotive, a $20 million decrease in entertainment, a $16 million decrease in furniture, a $12 million decrease in services, and an $11 million decrease in medical, primarily as a result of the impact of the COVID-19 pandemic. The decrease is partially offset by an increase in political advertising revenue of $152 million as 2020 is a political year.

51

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

	Percent of Advertising Revenue (Excluding Digital) for the
	Three Months Ended September 30,		Nine Months Ended September 30,
	2020	2019	2020	2019
Local news	36%	34%	35%	34%
Syndicated/Other programming	28%	30%	29%	30%
Network programming	25%	23%	25%	25%
Sports programming	8%	10%	8%	8%
Paid programming	3%	3%	3%	3%

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

		Percent of Advertising Revenue for the
		Three Months Ended September 30,		Nine Months Ended September 30,
	# of Channels	2020	2019	2020	2019
ABC	41	29%	29%	29%	30%
FOX	58	23%	25%	25%	24%
CBS	29	22%	19%	21%	20%
NBC	24	16%	14%	15%	13%
CW	48	5%	7%	5%	6%
MNT	39	4%	5%	4%	5%
Other (a)	388	1%	1%	1%	2%
Total	627

(a) We broadcast other programming from the following providers on our channels including: Antenna TV, Azteca, Bounce Network, CHARGE!, Comet, Dabl, Estrella TV, Get TV, Grit, Me TV, Movies!, Stadium, TBD, Telemundo, This TV, UniMas, Univision, and Weather.

Other Media Revenue. For the three and nine months ended September 30, 2020, other media revenue increased $15 million and $66 million, respectively, when compared to the same periods in 2019, primarily due to $26 million and $75 million, respectively, in intercompany revenue from local sports and other related to providing certain services under a management services agreement, which are eliminated in consolidation.

Expenses

Media programming and production expenses. Media programming and production expenses increased $19 million for the three months ended September 30, 2020 when compared to the same period in 2019. The increase is primarily related to a $28 million increase in fees pursuant to network affiliation agreements, partially offset by a $4 million decrease in advertising cost and a $3 million decrease in employee compensation cost and travel expenses. Media programming and production expenses increased $60 million for the nine months ended September 30, 2020 when compared to the same period in 2019, which is primarily related to a $76 million increase in fees pursuant to network affiliation agreements, partially offset by a $10 million decrease in advertising cost and a $3 million decrease in employee compensation cost and travel expenses.

52

Media selling, general and administrative expenses. Media selling, general and administrative expenses increased $1 million for the three months ended September 30, 2020 when compared to the same period in 2019. The increase is primarily due to a $4 million increase in national sales commissions, partially offset by a $2 million decrease in employee travel expenses and $1 million decrease in third-party fulfillment costs from our digital business. Media selling, general and administrative expenses increased $3 million for the nine months ended September 30, 2020 when compared to the same period in 2019, primarily due to a $4 million increase in national sales commissions and a $3 million increase in information technology cost, partially offset by a $1 million decrease in employee compensation cost and travel expenses and a $1 million decrease in third-party fulfillment costs from our digital business.

Amortization of program contract costs. The amortization of program contract costs decreased $3 million and $5 million for the three and nine months ended September 30, 2020, respectively, when compared to the same periods in 2019, and is primarily related to the timing of amortization on long-term contracts and reduced renewal costs.

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

Gain on asset dispositions and other, net of impairments. For the three and nine months ended September 30, 2020, we recorded gains of $20 million and $72 million, respectively, related to reimbursements from the spectrum repack. For the nine months ended September 30, 2020, we recorded a gain of $29 million, related to the sale of KGBT-TV and WDKY-TV. For the three and nine months ended September 30, 2019, we recorded gains of $28 million and $50 million, respectively, related to reimbursements from the spectrum repack. See Dispositions under Note 2. Acquisitions and Dispositions of Assets within our Consolidated Financial Statements for further discussion.

LOCAL SPORTS SEGMENT

Our local sports segment, previously known as our sports segment, reflects the results of our 21 regional sports network brands, Marquee, and a 20% equity interest in the YES Network. The RSNs and YES Network own the exclusive rights to air, among other sporting events, the games of professional sports teams.

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

	Three Months Ended September 30,						Nine Months Ended September 30,
	2020			2019			2020			2019
Revenue:
Distribution revenue	$	597		$	306		$	1,959		$	306
Advertising revenue	124			43			182			43
Other media revenue	6			3			14			3
Media revenue	$	727		$	352		$	2,155		$	352
Operating Expenses:
Media programming and production expenses	$	732		$	234		$	1,260		$	234
Media selling, general and administrative expenses (a)	69			28			181			28
Depreciation and amortization expenses	109			54			328			54
Corporate general and administrative	3			92			7			92
Impairment of goodwill and definite-lived intangible assets	4,264			—			4,264			—
Operating loss (a)	$	(4,450	)	$	(56	)	$	(3,885	)	$	(56	)
(Loss) income from equity method investments	$	(2	)	$	1		$	6		$	1

(a) Includes $25 million and $73 million for the three and nine months ended September 30, 2020, respectively, and $9 million for both the three and nine months ended September 30, 2019 of intercompany expense related to certain services provided by the broadcast segment under a management services agreement, which is eliminated in consolidation.

53

Media revenue. Media revenue was $727 million and $2,155 million for the three and nine months ended September 30, 2020, respectively, and $352 million for each of the three and nine months ended September 30, 2019 and is primarily derived from distribution and advertising revenue. The increase in the periods was primarily due to the results of the acquired RSNs being included in the full three and nine month periods in the current year, versus a partial period in the prior year, as the acquisition of the RSNs closed on August 23, 2019. Distribution revenue is generated through fees received from Distributors for the right to distribute our RSNs. As discussed under Distribution Revenue in Revenue Recognition under Note 1. Nature of Operations and Summary of Significant Accounting Policies within our Consolidated Financial Statements, for the three and nine months ended September 30, 2020, we reduced revenue and accrued corresponding rebates to Distributors of $128 million and $252 million, respectively. See Subsequent Events under Note 1. Nature of Operations and Summary of Significant Accounting Policies within our Consolidated Financial Statements. We expect distribution revenue to decrease for the three months ended December 31, 2020 as compared to the three months ended September 30, 2020 primarily due to the recent loss of two Distributors and elevated levels of subscriber erosion. Advertising revenue is primarily generated from sales of commercial time within the regional sports networks' programming. Due to the interruptions and modified seasons, advertising revenue was down in the second quarter of 2020 as compared to the first quarter of 2020. However, with the resumption of some events during the third quarter of 2020, advertising revenue increased to $124 million during the period as compared to $3 million in the second quarter of 2020. We expect advertising revenue for the three months ended December 31, 2020 to decrease as compared to the three months ended September 30, 2020 primarily due to the delay of the NBA and NHL 2020-2021 seasons. The extent of this decrease will depend on the number of games played and other macro-economic factors associated with the COVID-19 pandemic. See discussion under The Impact of COVID-19 on our Results of Operations for further discussion.

Media programming and production expenses. Media programming and production expenses were $732 million and $1,260 million for the three and nine months ended September 30, 2020, respectively, and $234 million for both the three and nine months ended September 30, 2019 and are primarily related to amortization of our sports programming rights with MLB, NBA, and NHL teams, and the costs of producing and distributing content for our brands including live games, pre-game and post-game shows, and backdrop programming. The increase in the periods was primarily due to the results of the acquired RSNs being included in the full three and nine month periods in the current year, versus a partial period in the prior year, as the acquisition of the RSNs closed on August 23, 2019. Amortization of sports programming rights was $632 million and $1,028 million for the three and nine months ended September 30, 2020, respectively, and $193 million for both the three and nine months ended September 30, 2019. We expect media programming and production expenses for the three months ended December 31, 2020 to decrease as compared to the three months ended September 30, 2020 primarily due to the delay of the NBA and NHL 2020-2021 seasons. The extent of this decrease will depend on the number of games played and other macro-economic factors associated with the COVID-19 pandemic. See discussion under The Impact of COVID-19 on our Results of Operations for further discussion.

Media selling, general, and administrative expenses. Media selling, general, and administrative expenses were $69 million and $181 million for the three and nine months ended September 30, 2020, respectively, and are primarily related to $25 million and $73 million of management services agreement fees, respectively, employee compensation cost, advertising expenses, and consulting fees. Media selling, general, and administrative expenses were $28 million for both the three and nine months ended September 30, 2019 and are primarily related to $9 million of management services agreement fees, employee compensation cost, advertising expenses, and consulting fees.

Depreciation and amortization expenses. Depreciation and amortization expenses were $109 million and $328 million for the three and nine months ended September 30, 2020, respectively, and $54 million for both the three and nine months ended September 30, 2019 and are related to the depreciation of definite-lived assets and other assets.

Impairment of goodwill and definite-lived intangible assets. During the three months ended September 30, 2020, we recorded a total impairment loss of $4,264 million relating to goodwill and definite-lived intangible assets of $2,615 million and $1,649 million, respectively. See further discussion under Impairment of Goodwill and Definite-Lived Intangible Assets under Note 1. Nature of Operations and Summary of Significant Accounting Policies within our Consolidated Financial Statements.

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

(Loss) income from equity method investments. For the three months ended September 30, 2020 we recognized a loss from equity method investments of $2 million, primarily related to our investment in YES. For the nine months ended September 30, 2020 and 2019, income from equity method investments was $6 million and $1 million, respectively, and is primarily related our investment in YES.

54

OTHER

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

	Three Months Ended September 30,						Percent Change Increase / (Decrease)	Nine Months Ended September 30,						Percent Change Increase/(Decrease)
	2020			2019				2020			2019
Revenue:
Distribution revenue	$	50		$	33		52%	$	150		$	97		55%
Advertising revenue	31			32			(3)%	92			78			18%
Other media revenues	2			2			—%	5			9			(44)%
Media revenues	$	83		$	67		24%	$	247		$	184		34%
Non-media revenues (a)	$	22		$	62		(65)%	$	91		$	170		(46)%
Operating Expenses:
Media expenses (c)	$	66		$	62		6%	$	195		$	200		(3)%
Non-media expenses (b)	$	19		$	46		(59)%	$	75		$	128		(41)%
Operating income	$	11		$	13		(15)%	$	46		$	8		n/m
Loss from equity method investments	$	(8	)	$	(13	)	(38)%	$	(29	)	$	(39	)	(26)%

n/m — not meaningful

(a) Non-media revenues for the three and nine months ended September 30, 2020 includes $2 million and $13 million, respectively, and for the three and nine months ended September 30, 2019 includes $7 million and $17 million, respectively, of intercompany revenues related to certain services and sales provided to the broadcast segment, which are eliminated in consolidation.

(b) Non-media expenses for the three and nine months ended September 30, 2020 includes $1 million and $6 million, respectively, and for the three and nine months ended September 30, 2019 includes $4 million and $8 million, respectively, of intercompany expenses related to certain services and sales provided by the broadcast segment, which are eliminated in consolidation.

(c) Media expenses for the three and nine months ended September 30, 2020 include $1 million and $2 million, respectively, of intercompany expense primarily related to certain services provided by the broadcast segment under a management services agreement, which is eliminated in consolidation.

Revenue. Media revenue increased $16 million and $63 million for the three and nine months ended September 30, 2020, respectively, when compared to the same periods in 2019, and is primarily related to an increase in distribution related to our owned networks. Non-media revenue decreased $40 million and $79 million for the three and nine months ended September 30, 2020, respectively, when compared to the same periods in 2019, and is primarily related to a decrease in broadcast equipment sales due to the winding down of the FCC's National Broadband Plan repack process.

Expenses. Media expenses increased $4 million for the three months ended September 30, 2020 when compared to the same period in 2019 and is primarily related to our owned networks. The increase is partially offset by our non-broadcast digital initiatives. Media expenses decreased $5 million for the nine months ended September 30, 2020 when compared to the same period in 2019 and is primarily related to our owned networks and content. Non-media expenses decreased $27 million and $53 million for the three and nine months ended September 30, 2020, respectively, when compared to the same periods in 2019, and is primarily related to a decrease in the costs of our broadcast equipment sales.

55

CORPORATE AND UNALLOCATED EXPENSES

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

	Three Months Ended September 30,						Percent Change Increase/ (Decrease)	Nine Months Ended September 30,						Percent Change Increase/ (Decrease)
	2020			2019				2020			2019
Corporate general and administrative expenses	$	30		$	237		(87)%	$	111		$	317		(65)%
Interest expense including amortization of debt discount and deferred financing costs	$	157		$	129		22%	$	502		$	237		112%
Income tax benefit	$	847		$	95		n/m	$	805		$	88		n/m
Net income attributable to the redeemable noncontrolling interests	$	(19	)	$	(11	)	73%	$	(51	)	$	(11	)	n/m
Net loss (income) attributable to the noncontrolling interests	$	130		$	—		n/m	$	113		$	(3	)	n/m

n/m — not meaningful

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 in total by $207 million for the three months ended September 30, 2020, when compared to the same period in 2019, primarily due to a $208 million decrease in legal, consulting, and regulatory cost, primarily related to the litigation discussed under Note 5. Commitments and Contingencies within our Consolidated Financial Statements and the acquisition of the Acquired RSNs.

Corporate general and administrative expenses decreased in total by $206 million for the nine months ended September 30, 2020, when compared to the same period in 2019, primarily due to a $223 million decrease in legal, consulting, and regulatory cost, primarily related to the litigation discussed under Note 5. Commitments and Contingencies within our Consolidated Financial Statements and the acquisition of the Acquired RSNs, partially offset by a $15 million increase in employee compensation cost.

We expect corporate general and administrative expenses to increase in the fourth quarter of 2020.

Interest expense including amortization of debt discount and deferred financing costs. The table above and explanation that follows cover total consolidated interest expense. Interest expense increased by $28 million for the three months ended September 30, 2020, when compared to the same period in 2019, primarily due to $38 million of interest expenses related to our Acquired RSNs, partially offset by an $11 million decrease in STG interest expense due to refinancing of existing indebtedness and decreases in LIBOR. Interest expense increased by $265 million for the nine months ended September 30, 2020, when compared to the same period in 2019, primarily due to $278 million of interest expenses related to our Acquired RSNs, partially offset by net decreases in STG interest expense due to refinancing of existing indebtedness and decreases in LIBOR.

We expect interest expense to remain flat in amount in the fourth quarter of 2020.

Income tax benefit. The effective tax rate for the three months ended September 30, 2020 was a benefit of 20.1% as compared to a benefit of 66.2% during the same period in 2019. The decrease in the effective tax rate for the three months ended September 30, 2020, as compared to the same period in 2019, is primarily due to a $34 million benefit in 2019 related to a change in the treatment of the gain from the sale of certain broadcast spectrum in connection with the Broadcast Incentive Auction, and a $16 million benefit in 2019 related to a release of valuation allowance on certain state net operating losses.

The effective tax rate for the nine months ended September 30, 2020 was a benefit of 21.5% as compared to a benefit of 126.2% during the same period in 2019. The decrease in the effective tax rate for the nine months ended September 30, 2020, as compared to the same period in 2019, is primarily due to a $34 million benefit in 2019 related to a change in the treatment of the gain from the sale of certain broadcast spectrum in connection with the Broadcast Incentive Auction, a $16 million benefit in 2019 related to a release of valuation allowance on certain state net operating losses, and a greater benefit impact in 2019 from federal tax credits related to investments in sustainability initiatives.

56

Net income attributable to the redeemable noncontrolling interests. Net income attributable to the redeemable noncontrolling interests was $19 million and $51 million for the three and nine months ended September 30, 2020, respectively, and $11 million for each of the three and nine months ended September 30, 2019, and is primarily related to dividends accrued and distributed related to our Redeemable Subsidiary Preferred Equity.

Net loss (income) attributable to the noncontrolling interests. Net loss attributable to the noncontrolling interests was $130 million and $113 million for the three and nine months ended September 30, 2020, respectively, and is primarily related to the portion of the non-cash impairment charge on customer relationships, other definite-lived intangible assets and goodwill that is attributable to the noncontrolling interests, partially offset by income attributable to the noncontrolling interest.

LIQUIDITY AND CAPITAL RESOURCES

As of September 30, 2020, we had net working capital of approximately $1,567 million, including $632 million in cash and cash equivalent balances. Cash on hand, cash generated by our operations, and borrowing capacity under the Bank Credit Agreements are used as our primary sources of liquidity.

On September 23, 2020, the Company's and DSG's indirect wholly-owned subsidiary, DSPV, entered into the A/R Facility, which matures on September 23, 2023, in order to enable DSG to raise incremental funding for the ongoing business needs of DSG and its subsidiaries. The maximum funding availability under the A/R Facility is $250 million, subject to borrowing base and certain other restrictions. The amount of actual availability under the A/R Facility is subject to change based on the level of eligible receivables sold by the Originators to DSPV and certain reserves. Eligibility of the receivables is determined by a variety of factors, including, but not limited to, credit ratings of the Originators’ customers, customer concentration levels, and certain characteristics of the accounts receivable being transferred. In addition, subsequent to November 1, 2020, the total commitment under the A/R Facility will be the lesser of $250 million and the sum of the lowest aggregate loan balance since November 1, 2020 plus $50 million. As of September 30, 2020, the balance of the loans under the A/R Facility was $74 million. On October 22, 2020, the A/R Facility provided additional funding of $122 million, bringing the outstanding balance of the loans under the A/R Facility to $196 million.

On March 17, 2020, we drew $648 million and $225 million under the STG Revolving Credit Facility and the DSG Revolving Credit Facility, respectively, as a precautionary measure given the COVID-19 pandemic.  During the quarter ended June 30, 2020, the Company fully repaid the amounts outstanding under each of the Revolving Credit Facilities.

The Bank Credit Agreements each include a financial maintenance covenant, the first lien leverage ratio (as defined in the respective Bank Credit Agreements), which requires such applicable ratio not to exceed 4.5x and 6.25x, measured as of the end of each fiscal quarter, for STG and DSG, respectively. The respective financial maintenance covenant is only applicable if 35% or more of the capacity (as a percentage of total commitments) under the respective revolving credit facility, measured as of the last day of each quarter, is utilized under such revolving credit facility as of such date. Since there was no utilization under either of the Revolving Credit Facilities as of September 30, 2020, neither STG nor DSG was subject to the respective financial maintenance covenant under their applicable Bank Credit Agreement. As of September 30, 2020, the STG first lien leverage ratio was below 4.5x and the DSG first lien leverage ratio exceeded 6.25x. We expect that the DSG first lien leverage ratio will remain above 6.25x for at least the next 12 months, which will restrict our ability to fully utilize the DSG Revolving Credit Facility.  We do not currently expect to have more than the 35% of the capacity of the DSG Revolving Credit Facility outstanding as of any quarterly measurement date during the next twelve months, therefore we do not expect DSG will be subject to the financial maintenance covenant. The Bank Credit Agreements contain other restrictions and covenants which the respective entities were in compliance with as of September 30, 2020.

In June 2020, we exchanged $66.5 million aggregate principal amount of the DSG 6.625% Notes due 2027 for $31 million aggregate principal amount of the DSG 12.750% Secured Notes due 2026 and cash payments totaling $10 million, including accrued but unpaid interest.

In May 2020, we purchased $3 million aggregate principal amount of the STG 5.875% Notes in open market transactions for consideration of $2 million. In March 2020 and June 2020, we purchased a total of $15 million aggregate principal amount of the DSG 6.625% Notes in open market transactions for consideration of $10 million.

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In January 2020, we redeemed 200,000 units of Redeemable Subsidiary Preferred Equity for an aggregate redemption price equal to $200 million plus accrued and unpaid dividends, representing 100% of the unreturned capital contribution with respect to the units redeemed, plus accrued and unpaid dividends with respect to the units redeemed up to, but not including, the redemption date, and after giving effect to any applicable rebates. The dividends accrued for the second and third quarters were paid in cash in June 2020 and September 2020, respectively. Dividends accrued during the three months ended March 31, 2020 of $13 million were paid-in-kind and added to the liquidation preference. On June 30, 2020, we redeemed units of the Redeemable Subsidiary Preferred Equity for an aggregate redemption price equal to $13 million plus accrued and unpaid dividends. In August 2020, we redeemed 350,000 units of the Redeemable Subsidiary Preferred Equity for an aggregate redemption price equal to $350 million, representing 100% of the unreturned capital contribution with respect to the units redeemed, plus $4 million in accrued and unpaid dividends, with respect to the units redeemed up to, but not including, the redemption date, for a total redemption amount of $354 million.The balance of the Redeemable Subsidiary Preferred Equity as of September 30, 2020 was $170 million, net of issuance costs.

In January 2020, a minority partner in one of our RSNs exercised its right to sell the entirety of its non-controlling interest to the Company, which the Company purchased for $376 million.

We anticipate that existing cash and cash equivalents, cash flow from our operations, and borrowing capacity under the Bank Credit Agreements and A/R Facility will be sufficient to satisfy our debt service obligations, capital expenditure requirements, and working capital needs for the next twelve months. However, certain factors, including but not limited to, the severity and duration of the COVID-19 pandemic and resulting effect on the economy, our advertisers, Distributors, and their subscribers, could affect our liquidity and our first lien leverage ratio which could affect our ability to access the full borrowing capacity under the Bank Credit Agreements. For our long-term liquidity needs, in addition to the sources described above, we may rely upon the issuance of long-term debt, the issuance of equity or other instruments convertible into or exchangeable for equity, or the sale of non-core assets. However, there can be no assurance that additional financing or capital or buyers of our non-core assets will be available, or that the terms of any transactions will be acceptable or advantageous to us.

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Sources and Uses of Cash

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

	Three Months Ended September 30,						Nine Months Ended September 30,
	2020			2019			2020			2019
Net cash flows from operating activities	$	505		$	271		$	839		$	494
Cash flows used in investing activities:
Acquisition of property and equipment	$	(33	)	$	(34	)	$	(130	)	$	(96	)
Acquisition of businesses, net of cash acquired	—			(9,006		)	(7		)	(9,006		)
Proceeds from the sale of assets	18			—			36			—
Purchases of investments	(37		)	(384		)	(85		)	(431		)
Spectrum repack reimbursements	20			28			72			50
Other, net	5			1			16			6
Net cash flows used in investing activities	$	(27	)	$	(9,395	)	$	(98	)	$	(9,477	)
Cash flows (used in) from financing activities:
Proceeds from notes payable and commercial bank financing	$	74		$	9,452		$	947		$	9,453
Repayments of notes payable, commercial bank financing and finance leases	(17		)	(606		)	(945		)	(715		)
Debt issuance costs	(7		)	(182		)	(7		)	(182		)
Proceeds from the issuance of redeemable subsidiary preferred equity, net	—			985			—			985
Dividends paid on Class A and Class B Common Stock	(14		)	(18		)	(49		)	(55		)
Dividends paid on redeemable subsidiary preferred equity	(7		)	(10		)	(32		)	(10		)
Repurchase of outstanding Class A Common Stock	(82		)	—			(343		)	(125		)
Redemption of redeemable subsidiary preferred equity	(350		)	—			(547		)	—
Distributions to redeemable noncontrolling interests	—			—			(378		)	—
Other, net	(64		)	(26		)	(87		)	(29		)
Net cash flows (used in) from financing activities	$	(467	)	$	9,595		$	(1,441	)	$	9,322

Operating Activities

Net cash flows from operating activities increased during the three and nine months ended September 30, 2020 when compared to the same periods in 2019. The increase is primarily related to a full nine months of RSN results versus a partial period in the prior year, partially offset by a corresponding increase in interest expense on acquisition related debt.

Investing Activities

Net cash flows used in investing activities decreased during the three months ended September 30, 2020 when compared to the same period in 2019. The decrease is primarily related to the acquisition of the RSNs and equity interest in the YES Network during the third quarter of 2019, partially offset by the sale of our Lexington television station (WDKY-TV) during the third quarter of 2020. Net cash flows used in investing activities decreased during the nine months ended September 30, 2020 when compared to the same period in 2019. The decrease is primarily related to the acquisition of the RSNs and equity interest in the YES Network during the third quarter of 2019, partially offset by the sale of WDKY-TV during the third quarter of 2020 and KGBT-TV during the first quarter of 2020 as well as higher spectrum repack reimbursements.

In the fourth quarter of 2020, we anticipate capital expenditures to increase from the third quarter of 2020. As discussed in Note 2. Acquisitions and Dispositions of Assets within our Consolidated Financial Statements, certain of our channels have been reassigned in conjunction with the FCC repacking process. We expect a significant amount of these expenditures will be reimbursed from the fund administered by the FCC.

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Financing Activities

Net cash flows from financing activities decreased during the three and nine months ended September 30, 2020 when compared to the same periods in 2019. The decrease is primarily related to financing inflows during the prior year periods associated with the issuance of debt and Redeemable Subsidiary Preferred Equity for the acquisition of the Acquired RSNs. During the three and nine months ended September 30, 2020, net cash flows used in financing activities primarily related to the redemption of Redeemable Subsidiary Preferred Equity and repurchases of Class A Common Stock, partially offset by the proceeds from loans under the A/R Facility. See Share Repurchase Program under Note 1. Nature of Operations and Summary of Significant Accounting Policies, Note 3. Notes Payable, Finance Leases, and Commercial Bank Financing, and Note 4: Redeemable Noncontrolling Interests within our Consolidated Financial Statements for further discussion.

In August and November 2020, our Board of Directors declared a quarterly dividend of $0.20 per share. Future dividends on our common shares, if any, will be at the discretion of our Board of Directors and will depend on several factors including our results of operations, cash requirements and surplus, financial condition, covenant restrictions, and other factors that the Board of Directors may deem relevant.

CONTRACTUAL CASH OBLIGATIONS

During the nine months ended September 30, 2020, we entered into agreements which increased estimated contractual amounts owed for program rights and content for the remainder of 2020, years 2021-2022, 2023-2024, and 2025 and thereafter by $14 million, $164 million, $171 million, and $88 million, respectively, as of September 30, 2020.

As of September 30, 2020, there were no other material changes to our contractual cash obligations.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Other than discussed below, there were no changes to 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, 2019.

See Recent Accounting Pronouncements under Note 1. Nature of Operations and Summary of Significant Accounting Policies within our Consolidated Financial Statements for a discussion of new accounting guidance. See Broadcast Television Programming under Note 1. Nature of Operations and Summary of Significant Accounting Policies within our Consolidated Financial Statements for a more detailed discussion of the accounting for television program contracts.

The impact of the outbreak of the novel coronavirus (COVID-19) continues to create significant uncertainty and disruption in the global economy and financial markets. It is reasonably possible that these uncertainties continue to impact our estimates related to, but not limited to, revenue recognition, goodwill and intangible assets, sports programming rights, and income taxes. As a result, many of our estimates and assumptions require increased judgment and carry a higher degree of variability and volatility. See Distribution Revenue in Revenue Recognition, Sports Programming Rights, and Impairment of Goodwill and Definite-Lived Intangible Assets under Note 1. Nature of Operations and Summary of Significant Accounting Policies within our Consolidated Financial Statements for a further discussion on how COVID-19 has impacted distribution revenue, sports rights expense, and the value of goodwill and definite-lived intangible assets, respectively. Our estimates may further change in the future as the COVID-19 pandemic continues, new events occur, and additional information emerges, and such changes are recognized or disclosed in our consolidated financial statements.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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, 2019.

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ITEM 4.  CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures and Internal Control over Financial Reporting

Our management, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the design and effectiveness of our disclosure controls and procedures and our internal control over financial reporting as of September 30, 2020.

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.

The term "internal control over financial reporting," as defined in Rules 13a-15d-15(f) under the Exchange Act, means a process designed by, or under the supervision of our Chief Executive and Chief Financial Officer and effected by our Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles (GAAP) and includes those policies and procedures that:

• pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets;

• provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP and that our receipts and expenditures are being made in accordance with authorizations of management or our Board of Directors; and

• provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material adverse effect on our financial statements.

Assessment of Effectiveness of Disclosure Controls and Procedures

Based on the evaluation of our disclosure controls and procedures as of September 30, 2020, our Chief Executive Officer and Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.

Changes in Internal Control over Financial Reporting

There have been no changes in our 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, 2020, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

On August 23, 2019, DSG acquired the Acquired RSNs. See RSN Acquisition under Note 2. Acquisitions and Dispositions of Assets within our Consolidated Financial Statements for more information. We have integrated policies, processes, people, technology, and operations for the acquired company.

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Limitations on the Effectiveness of Controls

Management, including our Chief Executive Officer and Chief Financial Officer, do not expect that our disclosure controls and procedures or our 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 our 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.

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PART II.  OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

We are party to lawsuits and claims 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. 

See Litigation under Note 5. Commitments and Contingencies within our Consolidated Financial Statements for discussion related to certain pending lawsuits.

ITEM 1A. RISK FACTORS

Except as set forth below, as of the date of this report, there have been no material changes to risk factors we previously disclosed in our Annual report on Form 10-K for the year ended December 31, 2019.

The COVID-19 pandemic or the future outbreak or pandemic of any other highly infectious or contagious diseases, could have a material and adverse effect on or cause disruption to our business or financial condition, results of operations and cash flows, the economy, our advertisers, Distributors, and their subscribers.

On March 11, 2020, the World Health Organization declared COVID-19 a pandemic, and on March 13, 2020, the United States declared a national emergency. As a result, the COVID-19 pandemic is negatively affecting almost every industry directly or indirectly. Since that time, efforts to contain the spread of COVID-19 have intensified. Several countries, including the United States, have taken steps to restrict travel, temporarily close businesses and issue quarantine orders, and it remains unclear how long such measures will remain in place regionally.

As a result, the COVID-19 pandemic is negatively affecting almost every industry directly or indirectly. The COVID-19 pandemic has triggered a period of global economic slowdown. The impact of COVID-19 on the remainder of 2020 and beyond will depend significantly on the duration and potential cyclicality of the health crisis and the related public policy actions taken by federal, state, and local governments to limit the length and severity of the global economic slowdown. COVID-19 (or a future pandemic) could have a material and adverse effect on or cause disruption to our business or financial condition, results of operations and cash flows due to, among other factors:

• the suspension, and possible cancellation, of some or all of the MLB, NBA and NHL seasons;

• the requirement of our RSNs to pay professional sports team minimum rights fees, regardless of the number of games played in a season;

• the need to reimburse Distributor affiliation fees related to canceled professional sporting events;

• loss of advertising revenue due to postponement or cancellation of professional sporting events;

• loss of advertising revenue as advertisers may be more reluctant to purchase advertising spots due to reduced consumer spending as a result of shelter in place and stay at home orders;

• lack of liquidity and access to capital resources that may cause one or more Distributors or advertisers to be unable to meet their obligations to us or to otherwise seek modifications of such obligations;

• the significant disruption to the operations of the professional sports leagues and the macroeconomy caused by COVID-19 may result in the recognition of impairment charges on our goodwill and definite-lived intangible assets;

• we may be unable to access debt and equity capital on favorable terms, if at all, or a severe disruption and instability in the global financial markets or deteriorations in credit and financing conditions may affect our access to capital necessary to fund business operations, pursue acquisition and development opportunities, refinance existing debt, and increase our future interest expense;

• the financial impact of COVID-19 could negatively affect our future compliance with financial and other covenants of the Bank Credit Agreements and the indentures governing the STG Notes and the DSG Notes, and the failure to comply with such covenants could result in a default that accelerates the payment of such indebtedness; and

• the interruption to global supply chains caused by COVID-19 could impact our ability to migrate off of various transition services provided by the seller of acquired assets which we rely upon to conduct our business in the local sports segment; and

• the potential negative impact on the health of our executive officers, employees or Board of Directors, particularly if a significant number are impacted, or the impact of government actions or restrictions, including stay-at-home orders, restricting access to our headquarters located in Hunt Valley, Maryland, could result in a deterioration in our ability to ensure business continuity during a disruption.

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The extent to which COVID-19 impacts our operations and those of our sports team partners, Distributors and advertisers will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the scope, severity and duration of the outbreak, the actions taken to contain the outbreak or mitigate its impact, and the direct and indirect economic effects of the outbreak and containment measures, among others.

A prolonged imposition of mandated closures or other social-distancing guidelines may adversely impact the ability of our sports team partners, Distributors and advertisers to generate sufficient revenues, and could force them to default on their obligations to us or result in their bankruptcy or insolvency. The rapid development and fluidity of the pandemic precludes any prediction as to the ultimate adverse impact on us. Nevertheless, COVID-19 presents material uncertainty and risk with respect to our performance, business or financial condition, results from operations and cash flows.

Our media rights agreements with various professional sports teams have varying durations and terms and we may be unable to renew those agreements on acceptable terms or such rights may be lost for other reasons.

Our ability to generate revenues is dependent upon media rights agreements with professional sports teams. As of September 30, 2020, we had a weighted average remaining life of 10 years under our exclusive media rights agreements. Upon expiration, we may seek renewal of these agreements and, if we do, we may be outbid by competing programming networks or others for these agreements or the renewal costs could substantially exceed our costs under the current agreements. Even if we are to renew such agreements, our results of operations could be adversely affected if increases in sports programming rights costs outpace increases in affiliate fee and advertising revenues. In addition, one or more of these sports teams may seek to establish their own programming network or join one of our competitor's networks or regional sports network and, in certain circumstances, we may not have an opportunity to bid for the media rights. Also, there is a risk that certain rights can be distributed via digital rights and the RSNs would not have the same monetization for such rights.

Moreover, the value of these agreements may also be affected by various league decisions and/or league agreements that we may not be able to control, including a decision to alter the number of games played during a season. The governing bodies of the MLB, NBA and NHL have imposed, and may impose in the future, various rules, regulations, guidelines, bulletins, directives, policies and agreements (collectively, “League Rules”), which could have a material negative effect on our business and results of operations. For example, the League Rules define the territories in which we may distribute games of the teams in the applicable league. Changes to the League Rules, or the adoption of new League Rules, could affect our media rights agreements with the various teams and as consequence have a material negative effect on our business and results of operations. For example, the leagues may give digital rights to other Distributors may allocate more games for national feeds or other Distributors and/or incentivize participation in league-controlled sports networks.

The value of these media rights can also be affected, or we could lose such rights entirely, if a team is liquidated, undergoes reorganization in bankruptcy or relocates to an area where it is not possible or commercially feasible for us to continue to distribute programming for such team. Any loss or diminution in the value of rights could impact the extent of the sports coverage offered by us and could materially negatively affect us and our results of operations. In addition, our affiliation agreements with Distributors typically include certain remedies in the event our networks fail to meet a minimum number of professional event telecasts, and, accordingly, any loss of rights could materially negatively affect our business and our results of operations.

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ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The following table summarizes repurchases of our stock in the quarter ended September 30, 2020:

  

Period	Total Number of Shares Purchased (a)	Average Price Per Share		Total Number of Shares Purchased as Part of a Publicly Announced Program	Approximate Dollar Value of Shares That May Yet Be Purchased Under the Program (in millions)
Class A Common Stock: (b)
07/01/20 – 07/31/20	3,505,478	$	18.88	3,505,478	$	462
08/01/20 – 08/31/20	768,526	$	20.72	768,526	$	880
09/01/20 – 09/30/20	—	$	—	—	$	—

(a) All repurchases were made in open-market transactions.

(b) On August 4, 2020, the Board of Directors authorized an additional $500 million share repurchase authorization in addition to the previous repurchase authorization of $1 billion. There is no expiration date and currently, management has no plans to terminate this program. As of September 30, 2020, the remaining authorization under the program was $880 million.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4.  MINE SAFETY DISCLOSURES

None.

ITEM 5.  OTHER INFORMATION

None.

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ITEM 6.  EXHIBITS

Exhibit Number	Description
10.1	Loan and Security Agreement, dated as of September 23, 2020, by and among Diamond Sports Finance SPV, LLC, as borrower, the persons from time to time party thereto as lenders, Fox Sports Net, LLC, as initial servicer, Credit Suisse AG, New York Branch, as administrative agent and Wilmington Trust, National Association, as collateral agent, paying agent and account bank.
10.2	Purchase and Sale Agreement, dated as of September 23, 2020, by and among Fox Sports Net, LLC, certain persons identified therein as originators and Diamond Sports Finance SPV, LLC, as purchaser.
10.3	Performance Guaranty, dated as of September 23, 2020, by Fox Sports Net, LLC in favor of Credit Suisse AG, New York Branch, as administrative agent.
10.4*	Employment Agreement by and between Diamond Sports Group, LLC and Steve Rosenberg, dated July 20, 2020.
31.1**	Certification by Christopher S. Ripley, as Chief Executive Officer of Sinclair Broadcast Group, Inc., pursuant to Rule 13a-14(a) of the Exchange Act (15 U.S.C. § 7241).
31.2**	Certification by Lucy Rutishauser, as Chief Financial Officer of Sinclair Broadcast Group, Inc., pursuant to Rule 13a-14(a) of the Exchange Act (15 U.S.C. § 7241).
32.1**	Certification by Christopher S. Ripley, as Chief Executive Officer of Sinclair Broadcast Group, Inc., pursuant to Rule 13a-14(b) of the Exchange Act and § 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C § 1350).
32.2**	Certification by Lucy Rutishauser, as Chief Financial Officer of Sinclair Broadcast Group, Inc., pursuant to Rule 13a-14(b) of the Exchange Act and § 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C § 1350).
101*	The Company's Consolidated Financial Statements and related Notes for the quarter ended September 30, 2020 from this Quarterly Report on Form 10-Q, formatted in iXBRL (Inline eXtensible Business Reporting Language).*
104	Cover Page Interactive Data File (included in Exhibit 101).

* Filed herewith.

** In accordance with Item 601(b)(32) of Regulation S-K, this Exhibit is not deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section. Such certifications will not be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that the registrant specifically incorporates it by reference.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report on Form 10-Q to be signed on its behalf by the undersigned thereunto duly authorized on the 9th day of November 2020.

SINCLAIR BROADCAST GROUP, INC.
By:	/s/ David R. Bochenek
	David R. Bochenek
	Senior Vice President/Chief Accounting Officer/Corporate Controller
	(Authorized Officer and Chief Accounting Officer)

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EX-10.1

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (this "Agreement") is dated this 6th day of July, 2020, and effective as of the 20th day of July, 2020 (the “Effective Date”), between Sinclair Diamond Sports Group, LLC, a Delaware limited liability company ("Diamond" or “Company”), and Steve Rosenberg ("Employee").

R E C I T A L S

A.    Company, a subsidiary of Sinclair Broadcast Group, Inc. (“SBG”), owns and operates regional sports networks.

B.    Employee has accepted the position as the Company’s President, Local Sports Programming.

C.    The parties hereto desire to set forth all understandings and agreements between them relating to the terms and conditions of Employee’s employment.

NOW, THEREFORE, IN CONSIDERATION OF the mutual covenants herein contained, the parties hereto agree as follows:

1.Duties.

1.1.    Duties Upon Employment.    Upon the terms and subject to the other provisions of this Agreement, effective as of the Effective Date, Employee will become employed by the Company as its President, Local Sports Programming (it being understood that Employee will not formally assume such title until September 1, 2020, or earlier if the individual who currently holds such title retires or is terminated prior to such date). In such capacity, Employee will:

(a)    report to the President of Local News and Marketing or its successor (“PLNM”), such successor as determined by the CEO of SBG (the “SBG CEO”);

(b)    have such authority, responsibilities and perform such duties commensurate with his title as President, Local Sports Programming, including, without limitation, overseeing the non-game programming of SBG’s regional sports networks, its high school sports division, the Stadium channel and such other responsibilities and duties as may from time to time be reasonably established by the PLNM and SBG CEO.

1.2.    Full-Time Employment.    The Employee agrees to devote Employee's full working time, attention, and best efforts exclusively to the business of the Company and its direct and indirect subsidiaries; provided, that Employee shall be permitted to manage his personal affairs and investments so long as such activities do not interfere with his duties to the Company.

1.3.    Location.    During the Employment Term, Employee’s services under this Agreement shall be performed principally in the New York City, New York area or such other

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area as may be mutually agreed. The parties acknowledge and agree that the nature of Employee’s duties hereunder shall, in any event, require reasonable travel from time to time or as reasonably directed by the PLNM and SBG CEO.

1.4Works Made For Hire. Employee agrees and acknowledges that Company (or its designee) is the sole and exclusive owner of the rights to the results, fruit, proceeds and work product in connection with Employee’s employment, this Agreement, or any employment agreement with Company, including, but not limited to, all drawings, plans, original works of authorship, ideas, projects, scripts, artwork, software programs, applications, strategies, lay-outs, story boards, slogans, designs, reports and other documents, whether or not protected or capable of protection under the law of copyrights, trademarks, patents or trade secrets (collectively, “Work Product”). The Work Product shall upon creation become the property of Company, and all evidence thereof shall, without any compensation to Employee, become the property of Company. All of the Work Product constitutes “work made for hire” as such term is defined in Section 101 of the U.S. Copyright Act of 1976 (U.S.C. 17 §101), as amended, such that all copyrights in such Work Product, in any and all media and through all forms of communication or transmission, whether presently known or hereafter developed, are the exclusive property of Company (or its designee). If for any reason any or all of the Work Product does not qualify as "work made for hire," Employee is deemed to have hereby irrevocably, sold, assigned and transferred to Company all right, title and interest in and to the copyright(s) in such Work Product. Recipient agrees that it will require any third party whom Employee retains to assist with or contribute to the Work Product to acknowledge in writing that Company has all rights, title and interest in the Work Product; and in the event it is determined that such third party has rights to the Work Product, said party will transfer such rights to Company without charge. Should Company desire to apply for or secure any copyright, trademark or trade name registration(s) or patent(s) on or related to any part(s) or all of the Work Product, Employee will assist in securing such protection without any further compensation to Employee.

2.Term.

2.1.    Term.    The term of Employee's employment under this Agreement (the "Employment Term") shall begin on the Effective Date and continue until the earlier of (i) the fifth anniversary of the Effective Date and (ii) the date Employee’s employment is terminated in accordance with Section 4 of this Agreement.

2.2.    At Will Employment. Notwithstanding anything else in this Agreement to the contrary, including, without limitation, the provisions of Section 2.1, Section 3, or Section 4 of this Agreement, the employment of Employee is not for a specified period of time, and Company or Employee may terminate the employment of Employee at any time for any reason. There is not as of the Effective Date, nor will there be in the future, unless by a writing signed by all of the parties to this Agreement, any express or implied agreement as to the continued employment of Employee.

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3.    Compensation and Benefits.

3.1.    Compensation.    Employee’s annual base salary shall be Eight Hundred Thousand Dollars ($800,000) (“Base Salary”). During each subsequent year of employment, Employee’s Base Salary shall be determined by the PLNM and SBG CEO, in their absolute and complete discretion. In addition, the Employee will be eligible for certain Incentive Compensation as further described in Section 3.2 of this Agreement.

3.2 Incentive Compensation

(a)    Cash Bonuses. Employee will be eligible for (i) annual cash bonus compensation with a target of Four Hundred Thousand Dollars ($400,000), which may be based on quarterly revenue, cash flow targets, and/or other bonus criteria as further detailed in a separate “Deal Sheet” to be provided to Employee in writing prior to the beginning of the year to which such cash bonus relates, and subject to change each subsequent year by the PLNM and SBG CEO, in their absolute and complete discretion (the “Annual Bonus”); provided, that the PLNM and SBG CEO shall reasonably consult with Employee when determining such “Deal Sheet” performance metrics, and (ii) a discretionary bonus in the form of restricted stock, if any, as determined by the PLNM and SBG CEO, in their sole and absolute discretion (the “Discretionary Bonus”, and together with the Annual Bonus, collectively, the “Bonus”). Any such Bonus shall be determined and payable after the PLNM and SBG CEO has had the opportunity to review any financial, ratings, and/or other information that it determines is necessary, appropriate, or relevant for or to such determination; provided, however, that to ensure compliance with the “short-term deferral” exception under Section 409A of the Internal Revenue Code, any such Bonus shall in no event be paid any later than the fifteenth (15th) day of the third (3rd) calendar month following the later of the end of Employee's Pursuant to Section 4.2(e), Employee shall be entitled to a Pro Rated Bonus (as defined below) for any partial year of employment in accordance with the foregoing. Employee shall be entitled to any Bonuses awarded in accordance with the foregoing so long as Employee is employed through the date of determination of such Bonuses; provided, that, if Employee remains employed through the expiration of the Term, he shall be entitled to a Pro-Rated Bonus (as defined below) for the applicable year. Except for the Bonus payment deadline expressed above, any changes to the Base Salary and/or Bonus may be made in accordance with the terms and conditions of this Agreement without in any manner altering the terms of this Agreement.

(b)    Incentive Bonus. Upon the fifth anniversary of this Agreement if Agreement is still in effect, expires at the end of the Employment Term or if Employee's employment is terminated pursuant to Section 4.1(a)(5) of this Agreement (i.e., by Company without Cause) or pursuant to Section 4.1(a)(6) of this Agreement (i.e., by Employee for Good Reason) within twenty-four months of the fifth anniversary of this Agreement, Employee shall be eligible to receive an incentive bonus compensation (“Incentive Bonus”) in the event the Company’s total linear and digital revenues exceed Five Hundred Ninety Million Dollars ($590,000,000) (the “Goal”) for the immediately preceding twelve months, as calculated as reasonably determined by the Company using its standard methods consistent with the next sentence. If the Company achieves the Goal, Employee shall be entitled to receive from the Company an Incentive Bonus payment equal to five percent (5%) of the amount of the (i) total linear and digital revenues in excess of the Goal minus

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(ii) any costs of programming not related to the live professional sports games (which includes the immediate pre-game and post-game programming). The Incentive Bonus shall not be less than zero and shall not exceed Four Million Dollars ($4,000,000), provided, however, if Employee's employment is terminated pursuant to Section 4.1(a)(5) of this Agreement (i.e., by Company without Cause) or pursuant to Section 4.1(a)(6) of this Agreement (i.e., by Employee for Good Reason) within twenty-four months of the fifth anniversary of this Agreement, Employee shall only be entitled to a portion of the Incentive Bonus prorated for the portion of the five years that the Agreement was in effect. The Incentive Bonus shall be payable to Employee after the fifth anniversary of this Agreement in accordance with the Company’s standard approval (which shall include reasonable time to calculate if Employee is eligible for such Incentive Bonus) and payroll practices.

3.3Vacation.    During each Employment Year, Employee shall be entitled to paid vacation leave in accordance with such policies from time to time in effect and in accordance with the Company’s Employee Handbook, plus one (1) additional week.

3.4.    Health Insurance and Other Benefits.    During the Employment Term, Employee shall be eligible to participate in health insurance programs that may from time to time be provided by SBG for its senior executives, and Employee shall be eligible to participate in other employee benefits plans, including tuition reimbursement, that may from time to time be provided by SBG to its senior executives.

3.5.    Tax Issues.    To the extent taxable to Employee, Employee will be responsible for accounting for and payments of taxes on the benefits provided to Employee, and Employee will keep such records regarding uses of these benefits as the Company reasonably requires and will furnish the Company all such information as may be reasonably requested by it with respect to such benefits.

3.6.    Expenses.    The Company will pay or reimburse Employee from time to time for all expenses incurred by Employee during the Employment Term on behalf of the Company in accordance with the Company’s established expense reimbursement policies, provided, that (a) such expenses must be reasonable business expenses, and (b) Employee supplies to the Company itemized accounts or receipts in accordance with the Company’s procedures and policies with respect to reimbursement of expenses in effect from time to time. To ensure compliance with section 409A of the Internal Revenue Code, (i) the amount of expenses eligible for reimbursement during a calendar year may not affect the expenses eligible for reimbursement in any other calendar year; (ii) the reimbursement of an eligible expense will be made as soon as practicable following the time when Employee has satisfied his entitlement to reimbursement, but no later than the last day of the calendar year following the year in which the expense is incurred; (iii) the right to reimbursement is not subject to liquidation or exchange for another benefit; and (iv) in no event may Employee, directly or indirectly, designate the calendar year of any payment.

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4.Employment Termination.

4.1.    Termination Events.

(a)    The Employment Term will end, and the parties will not have any rights or obligations under this Agreement (except for the rights and obligations under those Sections of this Agreement that are continuing and will survive the end of the Employment Term, as specified in Section 9.10 of this Agreement) on the earliest to occur of the following events (each a "Termination Date"):

(1)    the death of Employee;

(2)    the termination of Employee’s employment as a result of Employee’s Disability (as defined in Section 4.1(b) of this Agreement) of Employee;

(3)    the termination of Employee's employment by Employee without Good Reason (as defined in Section 4.1(d) of this Agreement);

(4)    the termination of Employee's employment by the Company for Cause (as defined in Section 4.1(c) of this Agreement);

(5)    the termination of Employee's employment by the Company without Cause;

(6)    the termination of Employee’s employment by Employee for Good Reason within three (3) months of the inception of the event giving rise to the Good Reason; provided, however, the Employee has first given the Employer written notice of the Good Reason within ten (10) business days of its occurrence and thirty (30) days following such notice to correct it; or

(7)    the termination of Employee’s employment by the Company within twelve (12) months of Change in Control (as defined in Section 8.1 of this Agreement).

(b)    For the purposes of this Agreement, "Disability" means Employee's inability, whether mental or physical, to perform the normal duties of Employee's position for ninety (90) days (which need not be consecutive) during any twelve (12) consecutive month period, and the effective date of such Disability shall be the day next following such ninetieth (90th) day. If the Company and Employee are unable to agree as to whether Employee is disabled, the question will be decided by a physician to be paid by the Company and designated by the Company, subject to the approval of Employee (which approval may not be unreasonably withheld) whose determination will be final and binding on the parties.

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(c)    For the purposes of this Agreement, "Cause" means any of the following: (i) the wrongful appropriation for Employee's own use or benefit of property or money entrusted to Employee by SBG or its direct or indirect subsidiaries, (ii) the conviction or granting of a Probation Before Judgment (or similar such finding or determination if not by a Maryland court) of a crime involving moral turpitude, (iii) Employee's continued willful disregard of Employee's duties and responsibilities hereunder after written notice of such disregard and the reasonable opportunity to correct such disregard, (iv) Employee's continued violation of Company policy after written notice of such violations (such policy may include policies as to drug or alcohol abuse) and the reasonable opportunity to cure such violations, (v) any willful misconduct or gross negligence by Employee which is reasonably likely (in the opinion of SBG’s FCC counsel) to actually jeopardize a Federal Communications Commission license of any broadcast station owned directly or indirectly by the Company, or programmed, directly or indirectly, by the Company; or (vi) the continued insubordination of Employee and/or Employee’s repeated failure to follow the reasonable directives of the PLNM or SBG CEO after written notice of such insubordination or the failure to follow such reasonable directives. Upon a termination for Cause, all of Employee’s duties as described in Section 1 of this Agreement shall terminate.

(d)    For purposes of this Agreement, “Good Reason” means any of the following: (i) the relocation of Employee’s principal place of employment from the New York City, New York metropolitan area, (ii) a material reduction in the duties, authority or responsibilities of Employee or a material change in Employee’s working conditions, (iii) the Employee no longer reporting directly to the PLNM or the SBG CEO without his consent or (iv) any decrease in Base Salary.

(e)    For purposes of this Agreement, the “termination of Employee’s employment” (and like terms used herein) means Employee’s “separation from service” within the meaning of section 409A of the Internal Revenue Code, treating as a separation from service an anticipated permanent reduction in the level of bona fide services to be performed by Employee for the Company to twenty percent (20%) or less of the average level of bona fide services performed by Employee for the Company over the immediately preceding thirty-six (36) month period (or the full period during which Employee performed services for SBG, if that is less than thirty-six (36) months). All members of SBG’s controlled group (as defined for purposes of section 409A of the Internal Revenue Code), shall be treated as a single employer for purposes of determining whether there has occurred a separation from service.

4.2.    Termination Payments.

(a)    If Employee's employment is terminated pursuant to Section 4.1(a)(1) (i.e., upon his death), the Company shall pay to the person or persons designated by Employee pursuant to Section 9.19 (or, if no such written designation has been made, Employee's estate), all of the following:

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1.    within thirty (30) days after the Termination Date, the Base Salary with respect to the then current year that would have been payable to Employee under Section 3.1 of this Agreement up to and including the Termination Date; and

2.    within thirty (30) days after the Termination Date, a payment in respect of unutilized vacation time that has accrued through the Termination Date (determined in accordance with corporate policies established by SBG and consistent with Section 3.4 of this Agreement);

3.    benefits, if any, applicable to Employee in a separate Restricted Stock Award Agreement, upon the terms and conditions set forth therein; and

4.    within thirty (30) days after the Termination Date, reimbursement for any unreimbursed business expenses incurred in accordance with Section 3.6. (items 1, 2 and 4 of this Section 4.2(a) collectively, the “Accrued Benefits”);

(b)    If Employee's employment is terminated pursuant to Section 4.1(a)(2) of this Agreement (i.e., upon his Disability), the Company shall, subject to Section 9.14 of this Agreement (i.e., if Employee is a “specified employee”), pay all of the following:

1.    within thirty (30) days after the Termination Date, the Base Salary with respect to the then current year that would have been payable to Employee under Section 3.1 had the Employment Term ended on the last day of the month in which the Termination Date occurs;

2.    within thirty (30) days after the Termination Date, a payment in respect of unutilized vacation time that has accrued through the Termination Date (determined in accordance with the Company’s established policies and consistent with Section 3.4 of this Agreement);

3.    benefits, if any, applicable to Employee in a separate Restricted Stock Award Agreement, upon the terms and conditions set forth therein; and

4.    within thirty (30) days after the Termination Date, reimbursement for any unreimbursed business expenses incurred in accordance with Section 3.6.

(c)    If Employee's employment is terminated pursuant to Section 4.1(a)(3) of this Agreement (i.e., by Employee without Good Reason), the Company shall, subject to Section9.14 of this Agreement (i.e., if Employee is a “specified employee”), pay to the Employee the Accrued Benefits.

(d)    If Employee's employment is terminated pursuant to Section 4.1(a)(4) of this Agreement (i.e., by Company for Cause), the Company shall pay to Employee within thirty (30) days after the Termination Date, the Accrued Benefits.

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(e)    If Employee's employment is terminated pursuant to Section 4.1(a)(5) of this Agreement (i.e., by Company without Cause) or pursuant to Section 4.1(a)(6) of this Agreement (i.e., by Employee for Good Reason), or pursuant to Section 4.1(a)(7) of this Agreement (i.e., by Company due to Change in Control), the Company shall, subject to Section 9.14 of this Agreement (i.e., if Employee is a “specified employee”), pay Employee all of the following:

1.    the Accrued Benefits;

2.    benefits, if any, applicable to Employee in a separate Restricted Stock Award Agreement, upon the terms and conditions set forth therein;

3.    within thirty (30) days after the Termination Date, the Company shall pay Employee a lump-sum severance in the amount equal to twelve (12) months of Employee’s then current Base Salary; (the “Severance Payment”); provided however, the Company’s obligation to make the Severance Payment shall be conditioned upon Employee’s execution and delivery to Company of a general release by Employee of all claims against Company, its parent and subsidiaries, in form and substance reasonably acceptable to Company and Employee and consistent with the terms hereof; and

4.    within thirty (30) days after the Termination Date, a pro-rated target Annual Bonus with respect to the then current year based on the number of days that Employee was employed in such year up through and including the Termination Date (the “Pro-Rated Bonus”).

5.Confidentiality and Non-Competition.    

5.1.    Confidential Information.

(a)    During Employee’s employment hereunder (and at all times thereafter), Employee shall:

(1)    keep all "Confidential Information" (as defined in Section 5.1(b) of this Agreement) in trust for the use and benefit of (i) SBG and Company and each of their direct and indirect subsidiaries, and (ii) all broadcast stations owned, operated, or programmed directly or indirectly by SBG or its direct or indirect subsidiaries (collectively, the SBG Entities");

(2)    not, except as (i) required by Employee's duties under this Agreement, (ii) authorized by SBG’s General Counsel; or (iii) required by law or any order, rule, or regulation of any court or governmental agency (but only after notice to SBG’s General Counsel of such requirement if legally permissible), at any time during or after the termination of Employee's employment with the Company, directly or indirectly, use, publish, disseminate, distribute, or otherwise disclose any Confidential Information; provided, that Employee shall be permitted to disclose the terms of this Agreement to Employee’s attorneys and other advisors on a need-to-know basis so long as Employee instructs such individuals of the confidential nature of such information; provided, further, that nothing shall prevent Employee from disclosing Confidential Information to

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his attorneys and other advisors on a need-to-know basis in connection with a bona fide dispute between Employee and the Company, SBG and/or any SBG Entity.

(3)    take all reasonable steps necessary, or reasonably requested by any of the SBG Entities, to ensure that all Confidential Information is kept confidential for the use and benefit of the SBG Entities; and

(4)    upon termination of Employee's employment or at any other time any of the SBG Entities in writing so request, promptly deliver to such SBG Entity all materials constituting Confidential Information relating to such SBG Entity (including all copies) that are in Employee's possession or under Employee's control. If requested by any of the SBG Entities to return any Confidential Information, Employee will not make or retain any copy of or extract from such materials.

(b)    For purposes of this Section 5.1, Confidential Information means any proprietary or confidential information of or relating to any of the SBG Entities that is not generally available to the public. Confidential Information includes all information developed by or for any of the SBG Entities (by the Employee or otherwise) concerning marketing used by any of the SBG Entities, suppliers, or customers (including advertisers) with which any of the SBG Entities has dealt prior to the Termination Date, plans for development of new services and expansion into new areas or markets, internal operations, financial information, operations, budgets, and any trade secrets or proprietary information of any type owned by any of the SBG Entities, together with all written, graphic, other materials relating to all or any of the same, and any trade secrets as defined in the Maryland Uniform Trade Secrets Act, as amended from time to time.

5.2.    Non-Competition/Non-Hire/Non-Solicitation.

(a)    Employee shall not, for a period of twelve (12) months after termination of employment for any reason other than a termination by Company without Cause or by Employee for Good Reason, directly or indirectly, participate in any activity involved in the ownership or operation of any professional sports team other than any minor league baseball team, regional sports network, television broadcast station, subscription broadcast service, cable television system operator, cable interconnect, cable television channel or similar enterprise within the United States. As used herein, "participate" means lending one's name to, acting as a consultant or adviser for, being employed by, or acquiring any direct or indirect interest in any business or enterprise, whether as a stockholder, partner, officer, director, employee, consultant, or otherwise.

(b)    While employed by the Company or any of the SBG Entities, and for twelve (12) months thereafter (regardless of the reason why Employee's employment is terminated), Employee will not directly or indirectly:

(1)    hire, attempt to hire, or to assist any other person or entity in hiring or attempting to hire any employee of any of the SBG Entities or any person who was an employee of any of the SBG Entities within the prior twelve (12) month period; or

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(2)    solicit, in competition with any of the SBG Entities, the business of any customer of any of the SBG Entities or any entity whose business any of the SBG Entities solicited during the twelve (12) months period prior to Employee's termination.

(c)    Notwithstanding anything else contained in this Section 5.2, (i) Employee may at any time own, for investment purposes only, up to five percent (5%) of the equity of any publicly-held company whose equity is either listed on a national stock exchange or on the NASDAQ National Market System.

(d)    In the event that (i) Company, SBG or Sinclair Television Group, Inc. places all or substantially all of its assets or regional sports networks up for sale within twelve (12) months after termination of Employee's employment hereunder, or (ii) Employee's employment is terminated in connection with the disposition of all or substantially all of such television broadcast stations (whether by sale of assets, equity, or otherwise), Employee agrees to be bound by, and to execute such additional instruments as may be necessary or desirable to evidence Employee's agreement to be bound by, the terms and conditions of any non-competition provisions contained in the purchase and sale agreement for such stations, without receiving any consideration therefore beyond that expressed in this Agreement. Notwithstanding the foregoing, in no event shall Employee be bound by, or obligated to enter into, any non-competition provisions referred to in this Section 5.2 that extend beyond twelve (12) months from the date of termination of Employee's employment hereunder or whose scope extends the scope of the non-competition provisions set forth in Section 5.2(a) of this Agreement.

(e)    The twelve (12) month time periods referred to in this Section 5.2 of this Agreement shall be tolled on a day-for-day basis for each day during which Employee participates in any activity in violation of Section 5.2 of this Agreement so that Employee shall be restricted from engaging in the conduct referred to in Section 5.2 of this Agreement for a full twelve (12) months.

5.3.    Acknowledgment.    Employee acknowledges and agrees that this Agreement (including, without limitation, the provisions of Sections 5 and 6 of this Agreement) is a condition of Employee being employed by the Company, Employee having access to Confidential Information, being eligible to receive the items referred to in Section 3 of this Agreement, Employee's advancement at the Company, and Employee being eligible to receive other special benefits from the Company; and further, that this Agreement is entered into, and is reasonably necessary, to protect the SBG Entities' investment in Employee's training and development, and to protect the goodwill, trade secrets, business practices, and other business interests of the SBG Entities.

6.Remedies.

6.1.    Injunctive Relief.    The covenants and obligations contained in Section 5 of this Agreement relate to matters which are of a special, unique, and extraordinary character, and a violation of any of the terms of such Section 5 may cause irreparable injury to the SBG Entities, the amount of which will be impossible to estimate or determine and which cannot be adequately compensated. Therefore, SBG Entities will be entitled to seek an injunction, a restraining order,

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or other equitable relief from any court of competent jurisdiction (subject to such terms and conditions that the court determines appropriate) restraining any violation or threatened violation of any of such terms by Employee and such other persons as the court orders. The parties acknowledge and agree that judicial action, rather than arbitration, is appropriate with respect to the enforcement of the provisions of Section 5 of this Agreement. The forum for any litigation hereunder shall be the Circuit Court of Baltimore County or the United States District Court (Northern Division) sitting in Baltimore, Maryland.

6.2.Cumulative Rights and Remedies.     Rights and remedies provided by Section 5 of this Agreement are cumulative and are in addition to any other rights and remedies any of the SBG Entities may have at law or equity.

7.Absence of Restrictions.    Employee warrants and represents that Employee is not a party to or bound by any agreement, contract, or understanding, whether of employment or otherwise, with any third person or entity which would in any way restrict or prohibit Employee from undertaking or performing employment with the Company in accordance with the terms and conditions of this Agreement.

8.    Change in Control

8.1.Definition of Change in Control.

(a)    The “Change in Control Date” shall be the date of the consummation of the transaction constituting a Change in Control, as defined in Section 8.1(b) of this Agreement.

(b)“Change in Control” means and includes each and all of the following occurrences:

                (i)    The stockholders of SBG approve a merger or consolidation of SBG with any other entity, other than a merger or consolidation which would result in the voting securities of SBG outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or its parent company) fifty percent (50%) or more of the total voting power represented by the voting securities of such surviving entity, or its parent company, outstanding immediately after such merger or consolidation, or the stockholders of SBG approve a plan of complete liquidation of SBG or an agreement for the sale or disposition by SBG of all or substantially all of SBG's entities or assets; or

                (ii)    The acquisition in one or a series of transactions by any Person as Beneficial Owner (as defined in Section 8.1(d) of this Agreement), directly or indirectly, of securities of SBG immediately following which such Person beneficially owns securities of SBG representing more than fifty percent (50%) of the total voting power represented by SBG's then outstanding voting securities.

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(c)    Any other provision of this Section 8.1 notwithstanding, the term Change in Control shall not include either of the following events undertaken at the election of SBG:

                (i)    Any transaction, the sole purpose of which is to change the state of incorporation of SBG or Company; or

                (ii)    A transaction, the result of which is to sell all or substantially all of the assets of SBG or Company to another corporation (the "Surviving Corporation"); provided that the Surviving Corporation is owned or controlled, directly or indirectly, by those stockholders of SBG who owned or controlled fifty percent (50%) or more of the voting securities of SBG immediately preceding such transaction; and provided, further, that the Surviving Corporation expressly assumes this Agreement.

(d)    For purposes of this Section 8.1, the term "Beneficial Owner" has the meaning ascribed to such term in Rule 13d-3 of the General Rules and Regulations under the Securities Exchange Act of 1934, as amended (the "Exchange Act").

(e)    For purposes of this Section 8.1, the term "Person" has the meaning ascribed to such term in section 3(a)(9) of the Exchange Act and as used in sections 13(d) and 14(d) thereof, including a group as defined in section 13(d) of the Exchange Act but excluding the Company and any subsidiary and any employee benefit plan sponsored or maintained by the Company or any subsidiary (including any trustee of such plan acting as Trustee).

9.Miscellaneous.

9.1.Attorneys' Fees.    In any action, litigation, or proceeding (collectively, "Action") between the parties arising out of or in relation to this Agreement, the prevailing party in the Action will be awarded, in addition to any damages, injunctions, or other relief, and without regard to whether such Action is prosecuted to final appeal, such party's costs and expenses, including reasonable attorneys' fees.

9.2.Headings.    The descriptive headings of the Sections of this Agreement are inserted for convenience only, and do not constitute a part of this Agreement.

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9.3.Notices.    All notices and other communications hereunder shall be in writing and shall be deemed given upon (a) oral or written confirmation of a receipt of a facsimile transmission, (b) confirmed delivery of a standard overnight courier or when delivered by hand, or (c) the expiration of five (5) business days after the date mailed, postage prepaid, to the parties at the following addresses:

If to Company to:    Diamond Sports Group, LLC

c/o Sinclair Broadcast Group, Inc.

10706 Beaver Dam Road

Cockeysville, Maryland 21030

Attn:    President and CEO

With a copy to:    Diamond Sports Group, LLC

c/o Sinclair Broadcast Group, Inc.

10706 Beaver Dam Road

Cockeysville, Maryland 21030

Attn:    General Counsel

If to Employee to: Employee's address as listed from time to time, in the personnel records of the Company (or any affiliate thereof)

With a copy to:    Grubman Shire Meiselas & Sacks, P.C.

152 West 57^th Street

New York, NY 10019

Attn: Lawrence Shire and Eric Sacks

Email:    lshire@gispc.com and esacks@gispc.com

or to such other address as will be furnished in writing by any party. Any such notice or communication will be deemed to have been given as of the date so mailed.

9.4.Assignment.    The Company may not assign, transfer, or delegate its rights or obligations under this Agreement and any attempt to do so is void; provided, the Company may assign this Agreement to any subsidiary of the Company, any parent of the Company, or the acquirer of all or substantially all of the assets of the Company, and Employee hereby consents and agrees to be bound by any such assignment by the Company. Employee may not assign, transfer, or delegate Employee's rights or obligations under this Agreement and any attempt to do so is void. This Agreement is binding on and inures to the benefit of the parties, their successors and assigns, and the executors, administrators, and other legal representatives of Employee. No other third parties, other than SBG Entities, shall have, or are intended to have, any rights under this Agreement.

9.5.Counterparts. This Agreement may be signed in one or more counterparts, including electronic counterparts, all of which shall be construed together as one instrument.

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9.6.Governing Law.THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF MARYLAND (REGARDLESS OF THE LAWS THAT MIGHT BE APPLICABLE UNDER PRINCIPLES OF CONFLICTS OF LAW) AS TO ALL MATTERS (INCLUDING VALIDITY, CONSTRUCTION, EFFECT, AND PERFORMANCE.)

9.7.Severability.    If the scope of any provision contained in this Agreement is too broad to permit enforcement of such provision to its full extent, then such provision shall be enforced to the maximum extent permitted by law, and Employee hereby consents that such scope may be reformed or modified accordingly and enforced as reformed or modified in any proceeding brought to enforce such provision. Subject to the immediately preceding sentence, whenever possible, each provision of this Agreement will be interpreted in such a manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be prohibited by or invalid under applicable law, such provision, to the extent of such prohibition or invalidity, shall not be deemed to be a part of this Agreement, and shall not invalidate the remainder of such provision or the remaining provisions of this Agreement.

9.8.Entire Agreement.    This Agreement constitutes the entire agreement of Employee and the Company regarding Employee's employment by the Company. This Agreement amends, supersedes, and replaces all prior agreements and understandings, written or verbal, formal or informal, among the parties with respect to the employment of Employee by the Company, including the subject matter of this Agreement. This Agreement may not be amended or modified except by agreement in writing, signed by the party against whom enforcement of any waiver, amendment, modification, or discharge is sought.

9.9.Interpretation.     This Agreement is being entered into among competent and experienced businesspersons (who have had an opportunity to consult with counsel), and any ambiguous language in this Agreement will not necessarily be construed against any particular party as the drafter of such language.

9.10.Continuing Obligations.    The provisions contained in the following Sections of this Agreement will continue and survive the termination of this Agreement: Sections 4.1, 4.2, 5, 6, 8 and 9.

9.11.Taxes.     The Company may withhold from any payments under this Agreement all applicable federal, state, city, or other taxes required by applicable law to be so withheld as determined by the Company in its discretion.

9.12.    Waiver of Jury Trial. The Company and Employee do hereby jointly and severally waive their right to a trial by jury in any action or proceeding to which both are parties arising out of, or in any manner pertaining to, this Agreement. It is understood and agreed that this waiver constitutes a waiver of the right to trial by jury of all claims against all parties to such actions or proceedings. This waiver is knowingly, voluntarily, and willingly made by Employee and the Company, and each represents and warrants to the other that no representations of facts or opinion have been made by any person to induce this waiver or to

14

in any way modify or nullify its effect. Still further, Employee and the Companyeach represents to the other that each has been represented by counsel selected by such party to review or prepare this Agreement or, if not represented, that such party has been advised, and has had the opportunity, to seek the advice of independent legal counsel to review this Agreement prior to signing this Agreement.

9.13.    Exclusion from ERISA and Retirement and Fringe Benefit Computation. Employee and the Company do hereby jointly and severally acknowledge and agree that this Agreement shall not be regarded as an “employee benefit plan” under 29 U.S.C. § 1002(3); provided, however, that if this Agreement is ever regarded as an “employee benefit plan” under 29 U.S.C. § 1002(3), Employee and the Company acknowledge and agree that this Agreement shall be regarded as a plan which is unfunded and is maintained primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees under 29 U.S.C. § 1051(2). Unless specifically provided otherwise pursuant to a separate plan or agreement, this Agreement (except for Section 3.1) shall not be taken into account as “wages,” “salary” or “compensation” in determining eligibility or benefits under (i) any pension, retirement, profit sharing or other qualified or nonqualified plan of deferred compensation, (ii) any employee welfare or fringe benefit plan, including, but not limited to, group life insurance and disability, or (iii) any form of extraordinary pay, including, but not limited to, bonuses, sick pay, and vacation pay.

9.14.    Section 409A Compliance. Employee and the Company intend that the payments and benefits provided under this Agreement shall either be exempt from the application of, or comply with, the requirements of Section 409A of the Code. This Agreement shall be construed in a manner that affects the Employee’s and the Company’s intent to be exempt from or comply with Section 409A. Nevertheless, the tax treatment of the benefits provided under the Plan is not warranted or guaranteed. Neither the Company nor its respective directors, officers, employees or advisers shall be held liable for any taxes, interest, penalties or other monetary amounts owed by the Employee as a result of this Agreement. This Agreement may not be amended in any way that results in a violation of section 409A of the Internal Revenue Code or any regulatory or other guidance issued by the Internal Revenue Service thereunder. In particular, except to the extent permitted by regulatory or other guidance issued by the Internal Revenue Service under section 409A(a)(3) of the Internal Revenue Code, no amendment of this Agreement shall in any way (including a change in form of distribution) result in acceleration of the timing or amount of any payment (or any portion thereof) of “deferred compensation” that is due under this Agreement. An amendment that permits acceleration for any one or more of the reasons that constitute exceptions to the prohibition on acceleration of payments, pursuant to Treas. Regs. § 1.409A-3(j) (as presently written or as hereafter amended, finalized, replaced or supplemented), shall not be deemed to be in violation of this Section 9.14. Notwithstanding any provision of this Agreement to the contrary, if Employee is regarded as a “specified employee” within the meaning of section 409A(a)(2)(B) of the Code and the regulations promulgated thereunder, he may not receive any payment(s) of “deferred compensation” upon any “separation from service” (as defined in Section 4.1(e)), unless such payment(s) are made on or after the date that is six (6) months after the date of such separation from service (or if earlier, the date of death of such specified employee). Instead, any such payments to which such specified employee would otherwise be entitled during the first six (6) months

15

following such separation from service shall be accumulated and paid on the first day of the seventh (7^th) month following the date of separation from service.

9.15.    No Right to Employment.Nothing herein contained is intended to or shall be construed as conferring upon Employee any right to continue in the employ of the Company.

9.16.    Enforcement. The location of any arbitration regarding this Agreement shall be Baltimore County, Maryland. The forum for any litigation involving this Agreement shall be the Circuit Court of Baltimore County or the United States District Court (Northern Division) sitting in Baltimore, Maryland. In the event that either party institutes an action to enforce or interpret any provision of this Agreement, the non-prevailing party shall pay to the prevailing party all costs and expenses (including a reasonable sum for attorneys’ fees and all expert witness fees) incurred by the prevailing party in connection with any such action as determined by the finder of fact in such proceeding.

9.17.Independent Legal Counsel. The undersigned understand and acknowledge that this Agreement was prepared by the Company. The undersigned understand that Employee and the Company may be adverse to each other regarding terms and conditions set forth in this Agreement. The undersigned acknowledge that counsel to the Company has not represented Employee in connection with the preparation of this Agreement nor provided Employee with any legal or other advice in connection with this Agreement and that Employee has been advised and urged to seek independent professional legal, tax, and financial advice in connection with deciding to enter into this Agreement.

9.18.Arbitration and Extension of Time.Except as specifically provided in Section 6 of this Agreement, any dispute or controversy arising out of or relating to this Agreement, as an individual or as part of a class, shall be determined and settled by arbitration in Baltimore County, Maryland in accordance with the Commercial Rules of the American Arbitration Association then in effect, and the Federal Arbitration Act, 9 U.S.C. § 1 etseq., and judgment upon the award rendered by the arbitrator(s) may be entered in any court of competent jurisdiction. The expenses of the arbitration shall be borne by the non-prevailing party to the arbitration, including, but not limited to, the cost of experts, evidence, and legal counsel, as determined by the arbitrator(s) in any such proceeding. Whenever any action is required to be taken under this Agreement within a specified period of time and the taking of such action is materially affected by a matter submitted to arbitration, such period shall automatically be extended by the number of days, plus ten (10) that are taken for the determination of that matter by the arbitrator(s). Notwithstanding the foregoing, the parties agree to use their best reasonable efforts to minimize the costs and frequency of arbitration hereunder.

16

9.19    Payment to Beneficiaries and Beneficiary Designation.

(a)    In the event of Employee’s death at a time when Employee is entitled to receive but has not yet received any cash payments pursuant to this Agreement, any such remaining payments shall be paid to Employee’s beneficiaries.

(b)    Simultaneously with the execution of this Agreement, Employee shall designate one or more beneficiaries to receive the cash payments referred to in Section 9.19(a) of this Agreement. Such beneficiary designation shall be set forth in Exhibit A attached hereto and made a part hereof, and may be modified by Employee at any time, and from time to time, by execution of a new Exhibit A. Each designation of beneficiary will revoke all prior designations by Employee.

(c)    If the primary beneficiaries named by Employee die before Employee, and there are no living contingent beneficiaries named by Employee, then the Company shall direct distribution of the cash payments payable pursuant to this Agreement to the legal representative of the estate of Employee.

9.20     Payments to Minors. If any person to whom any cash payment is due under this Agreement is a minor, or is reasonably found by the Company to be incompetent by reason of physical or mental disability, the Company shall have the right to cause such payments becoming due to such person to be made to another for his benefit, without responsibility of the Company to see to the application of the payment of any such payments, and such payment will constitute a complete discharge of the liabilities of the Company with respect thereto.

9.21     Indemnity. Employee shall be entitled to indemnification by the Company, SBG and/or any other SBG Entity, if applicable, in accordance with the organizational documents of such entities.

THIS CONTRACT CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY BE ENFORCED BY THE PARTIES.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective as of the date first written above.

DIAMOND SPORTS GROUP, LLC

A Delaware limited liability company

Sinclair Broadcast Group, Inc., sole member

By:_________________________________

Name:    Chris Ripley    

Title:    President and Chief Executive Officer

17

EMPLOYEE:

____________________________________

Steve Rosenberg

18

EXHIBIT A

EMPLOYMENT AGREEMENT BETWEEN DIAMOND SPORTS GROUP, LLC AND THE UNDERSIGNED EMPLOYEE

DESIGNATION OF BENEFICIARY

By virtue of my right under the Agreement by and between Diamond Sports Group, LLC and the undersigned employee to designate the beneficiary(ies) of benefits payable under the Agreement, and subject to any future exercise of said right by me, I hereby direct that any and all such benefits shall be paid, in accordance with the terms of the Agreement, to the person(s) named below who are living at the time of my death, and, unless otherwise expressly indicated, in equal shares among them if more than one such person shall be living at the time of my death:

PRIMARY BENEFICIARIES:
	Name	Relationship	Address
	Name	Relationship	Address
	Name	Relationship	Address

In the event that no primary beneficiary shall be living at the time of my death, I hereby direct that any remaining payment(s) shall be made to those person(s) named below who are living at the time of my death, and, unless otherwise expressly indicated, in equal shares among them if more than one such person shall be living at the time of my death:

CONTINGENT BENEFICIARIES:
	Name	Relationship	Address
	Name	Relationship	Address
	Name	Relationship	Address

19

In the further event that none of the persons named above, either as primary or contingent beneficiaries, shall be living at the time of my death, any remaining payment(s) shall be made to my estate pursuant to the Agreement.

NOTE: If so specified in the above designations, "person" includes a trust or corporation.

		Steve Rosenberg
Witness		(Employee Signature)	Date
RECEIPT ACKNOWLEDGED:
By:
	Date

20

EX-31.1

EXHIBIT 31.1

CERTIFICATION

I, Christopher S. Ripley, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Sinclair Broadcast Group, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

A)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

B)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

C)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

D)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

A)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

B)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	November 9, 2020
		/s/ Christopher S. Ripley
		Signature:	Christopher S. Ripley
			Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATION

I, Lucy A. Rutishauser, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Sinclair Broadcast Group, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

A)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

B)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

C)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

D)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

A)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

B)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	November 9, 2020
		/s/ Lucy A. Rutishauser
		Signature:	Lucy A. Rutishauser
			Chief Financial Officer

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report on Form 10-Q of Sinclair Broadcast Group, Inc. (the “Company”) for the period ending September 30, 2020 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Christopher S. Ripley, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

(1)The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Christopher S. Ripley

Christopher S. Ripley

Chief Executive Officer

November 9, 2020

EX-32.2

EXHIBIT 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report on Form 10-Q of Sinclair Broadcast Group, Inc. (the “Company”) for the period ending September 30, 2020 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Lucy A. Rutishauser, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

(1)The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Lucy A. Rutishauser

Lucy A. Rutishauser

Chief Financial Officer

November 9, 2020

XML

Cover Page - shares	9 Months Ended
	Sep. 30, 2020	Nov. 05, 2020
Entity Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2020
Document Transition Report	false
Entity File Number	000-26076
Entity Registrant Name	SINCLAIR BROADCAST GROUP, INC.
Entity Incorporation, State or Country Code	MD
Entity Tax Identification Number	52-1494660
Entity Address, Address Line One	10706 Beaver Dam Road
Entity Address, City or Town	Hunt Valley
Entity Address, State or Province	MD
Entity Address, Postal Zip Code	21030
City Area Code	410
Local Phone Number	568-1500
Title of 12(b) Security	Class A Common Stock, par value $ 0.01 per share
Trading Symbol	SBGI
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Central Index Key	0000912752
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q3
Amendment Flag	false
Class A Common Stock
Entity Information [Line Items]
Entity Common Stock, Shares Outstanding		49,252,898
Class B Common Stock
Entity Information [Line Items]
Entity Common Stock, Shares Outstanding		24,727,682

XML

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands		Sep. 30, 2020	Dec. 31, 2019
Current assets:
Cash and cash equivalents		$ 632,000	$ 1,333,000
Accounts receivable, net of allowance for doubtful accounts of $4 and $8, respectively		1,108,000	1,132,000
Income taxes receivable		248,000	103,000
Prepaid sports rights		335,000	113,000
Prepaid expenses and other current assets		218,000	232,000
Total current assets		2,541,000	2,913,000
Property and equipment, net		814,000	765,000
Operating lease assets		206,000	223,000
Deferred tax assets		259,000	0
Restricted cash		1,000	0
Goodwill		2,092,000	4,716,000
Indefinite-lived intangible assets		163,000	158,000
Definite-lived intangible assets, net		5,747,000	7,977,000
Other assets		660,000	618,000
Total assets	[1]	12,483,000	17,370,000
Current liabilities:
Accounts payable and accrued liabilities		466,000	782,000
Current portion of notes payable, finance leases, and commercial bank financing		72,000	71,000
Current portion of operating lease liabilities		38,000	38,000
Current portion of program contracts payable		111,000	88,000
Other current liabilities		287,000	155,000
Total current liabilities		974,000	1,134,000
Notes payable, finance leases, and commercial bank financing, less current portion		12,391,000	12,367,000
Operating lease liabilities, less current portion		203,000	217,000
Program contracts payable, less current portion		34,000	39,000
Deferred tax liabilities		0	407,000
Other long-term liabilities		364,000	434,000
Total liabilities	[1]	13,966,000	14,598,000
Commitments and contingencies (See Note 5)
Redeemable noncontrolling interests		194,000	1,078,000
Shareholders' equity:
Additional paid-in capital		711,000	1,011,000
Retained (deficit) earnings		(2,438,000)	492,000
Accumulated other comprehensive loss		(11,000)	(2,000)
Total Sinclair Broadcast Group shareholders’ (deficit) equity		(1,737,000)	1,502,000
Noncontrolling interests		60,000	192,000
Total (deficit) equity		(1,677,000)	1,694,000
Total liabilities, redeemable noncontrolling interests, and equity		12,483,000	17,370,000
Class A Common Stock
Shareholders' equity:
Common Stock		1,000	1,000
Class B Common Stock
Shareholders' equity:
Common Stock		0	0
Customer relationships, net
Current assets:
Definite-lived intangible assets, net		4,384,000	5,979,000
Other definite-lived intangible assets, net
Current assets:
Definite-lived intangible assets, net		1,363,000	1,998,000
Consolidated VIEs
Current assets:
Cash and cash equivalents		37,000	39,000
Accounts receivable, net of allowance for doubtful accounts of $4 and $8, respectively		89,000	39,000
Prepaid sports rights		10,000	10,000
Prepaid expenses and other current assets		7,000	6,000
Total current assets		143,000	94,000
Property and equipment, net		17,000	15,000
Operating lease assets		6,000	8,000
Definite-lived intangible assets, net		55,000	93,000
Total assets		237,000	228,000
Current liabilities:
Other current liabilities		35,000	19,000
Notes payable, finance leases, and commercial bank financing, less current portion		11,000	15,000
Operating lease liabilities, less current portion		5,000	6,000
Program contracts payable, less current portion		4,000	7,000
Other long-term liabilities		14,000	1,000
Total liabilities		$ 69,000	$ 48,000

[1] Our consolidated total assets as of September 30, 2020 and December 31, 2019 include total assets of variable interest entities (VIEs) of $237 million and $228 million, respectively, which can only be used to settle the obligations of the VIEs. Our consolidated total liabilities as of September 30, 2020 and December 31, 2019 include total liabilities of VIEs of $53 million and $27 million, respectively, for which the creditors of the VIEs have no recourse to us. See Note 8. Variable Interest Entities.

XML

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions	Sep. 30, 2020	Dec. 31, 2019
Accounts receivable, allowance for doubtful accounts	$ 4	$ 8
Class A Common Stock
Common Stock, par value (USD per share)	$ 0.01	$ 0.01
Common Stock, shares authorized (shares)	500,000,000	500,000,000
Common Stock, shares issued (shares)	49,170,850	66,830,110
Common Stock, shares outstanding (shares)	49,170,850	66,830,110
Class B Common Stock
Common Stock, par value (USD per share)	$ 0.01	$ 0.01
Common Stock, shares authorized (shares)	140,000,000	140,000,000
Common Stock, shares issued (shares)	24,727,682	24,727,682
Common Stock, shares outstanding (shares)	24,727,682	24,727,682
Consolidated VIEs
Non-recourse liabilities	$ 53	$ 27

XML

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
REVENUES:
Revenues	$ 1,539	$ 1,125	$ 4,431	$ 2,618
OPERATING EXPENSES:
Media programming and production expenses	1,077	560	2,288	1,215
Media selling, general and administrative expenses	212	185	608	510
Amortization of program contract costs	19	22	63	68
Non-media expenses	18	42	69	120
Depreciation of property and equipment	25	24	75	69
Corporate general and administrative expenses	30	237	111	317
Amortization of definite-lived intangible and other assets	149	96	449	183
Impairment of goodwill and definite-lived intangible assets	4,264	0	4,264	0
Gain on asset dispositions and other, net of impairment	(39)	(35)	(99)	(57)
Total operating expenses	5,755	1,131	7,828	2,425
Operating (loss) income	(4,216)	(6)	(3,397)	193
OTHER INCOME (EXPENSE):
Interest expense including amortization of debt discount and deferred financing costs	(157)	(129)	(502)	(237)
Gain on extinguishment of debt	0	0	5	0
Loss from equity method investments	(10)	(12)	(23)	(38)
Other income, net	169	3	169	12
Total other income (expense), net	2	(138)	(351)	(263)
Loss before income taxes	(4,214)	(144)	(3,748)	(70)
INCOME TAX BENEFIT	847	95	805	88
NET (LOSS) INCOME	(3,367)	(49)	(2,943)	18
Net income attributable to the redeemable noncontrolling interests	(19)	(11)	(51)	(11)
Net loss (income) attributable to the noncontrolling interests	130	0	113	(3)
NET (LOSS) INCOME ATTRIBUTABLE TO SINCLAIR BROADCAST GROUP	$ (3,256)	$ (60)	$ (2,881)	$ 4
EARNINGS PER COMMON SHARE ATTRIBUTABLE TO SINCLAIR BROADCAST GROUP:
Basic earnings per share (USD per share)	$ (43.53)	$ (0.65)	$ (35.17)	$ 0.05
Diluted earnings per share (USD per share)	$ (43.53)	$ (0.65)	$ (35.17)	$ 0.05
Basic weighted average common shares outstanding (shares)	74,810	92,086	81,922	92,050
Diluted weighted average common and common equivalent shares outstanding (shares)	74,810	92,086	81,922	93,271
Media revenues
REVENUES:
Revenues	$ 1,519	$ 1,070	$ 4,353	$ 2,465
Non-media revenues
REVENUES:
Revenues	$ 20	$ 55	$ 78	$ 153

XML

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Statement of Comprehensive Income [Abstract]
Net (loss) income	$ (3,367)	$ (49)	$ (2,943)	$ 18
Share of other comprehensive loss of equity method investments	0	0	(9)	0
Comprehensive (loss) income	(3,367)	(49)	(2,952)	18
Comprehensive income attributable to the redeemable noncontrolling interests	(19)	(11)	(51)	(11)
Comprehensive loss (income) attributable to the noncontrolling interests	130	0	113	(3)
Comprehensive (loss) income attributable to Sinclair Broadcast Group	$ (3,256)	$ (60)	$ (2,890)	$ 4

XML

CONSOLIDATED STATEMENTS OF EQUITY AND REDEEMABLE NONCONTROLLING INTERESTS - USD ($) $ in Millions	Total	Additional Paid-In Capital	Retained Earnings	Accumulated Other Comprehensive Loss	Noncontrolling Interests	Class A Common Stock	Class A Common Stock Common Stock	Class B Common Stock	Class B Common Stock Common Stock
BALANCE at Dec. 31, 2018	$ 0
Increase (Decrease) in Temporary Equity
Issuance of redeemable subsidiary preferred equity, net of issuance costs	985
Noncontrolling interest issued or acquired	380
Distributions to redeemable noncontrolling interests	(14)
Net income (loss)	11
BALANCE at Sep. 30, 2019	1,362
BALANCE (shares) at Dec. 31, 2018							68,897,723		25,670,684
BALANCE at Dec. 31, 2018	1,600	$ 1,121	$ 518	$ (1)	$ (39)		$ 1		$ 0
Increase (Decrease) in Stockholders' Equity
Dividends declared and paid on Class A and Class B Common Stock	(55)		(55)
Class B Common Stock converted into Class A Common Stock (shares)							643,002		(643,002)
Class B Common Stock converted into Class A Common Stock	0
Repurchases of Class A Common Stock (shares)							(3,993,194)
Repurchases of Class A Common Stock	(125)	(125)
Class A Common Stock issued pursuant to employee benefit plans (shares)							1,515,606
Class A Common Stock issued pursuant to employee benefit plans	32	32
Noncontrolling interest issued or acquired	231				231
Distributions to noncontrolling interests, net	(15)				(15)
Net (loss) income	7		4		3
BALANCE (shares) at Sep. 30, 2019							67,063,137		25,027,682
BALANCE at Sep. 30, 2019	1,675	1,028	467	(1)	180		$ 1		$ 0
BALANCE at Jun. 30, 2019	0
Increase (Decrease) in Temporary Equity
Issuance of redeemable subsidiary preferred equity, net of issuance costs	985
Noncontrolling interest issued or acquired	380
Distributions to redeemable noncontrolling interests	(14)
Net income (loss)	11
BALANCE at Sep. 30, 2019	1,362
BALANCE (shares) at Jun. 30, 2019							67,032,088		25,027,682
BALANCE at Jun. 30, 2019	1,529	1,024	545	(1)	(40)		$ 1		$ 0
Increase (Decrease) in Stockholders' Equity
Dividends declared and paid on Class A and Class B Common Stock	(18)		(18)
Class A Common Stock issued pursuant to employee benefit plans (shares)							31,049
Class A Common Stock issued pursuant to employee benefit plans	4	4
Noncontrolling interest issued or acquired	231				231
Distributions to noncontrolling interests, net	(11)				(11)
Net (loss) income	(60)		(60)
BALANCE (shares) at Sep. 30, 2019							67,063,137		25,027,682
BALANCE at Sep. 30, 2019	1,675	1,028	467	(1)	180		$ 1		$ 0
BALANCE at Dec. 31, 2019	1,078
Increase (Decrease) in Temporary Equity
Noncontrolling interest issued or acquired	22
Distributions to noncontrolling interests, net	(32)
Distributions to redeemable noncontrolling interests	(378)
Redemption of redeemable noncontrolling interests	(547)
Net income (loss)	51
BALANCE at Sep. 30, 2020	194
BALANCE (shares) at Dec. 31, 2019						66,830,110	66,830,110	24,727,682	24,727,682
BALANCE at Dec. 31, 2019	1,694	1,011	492	(2)	192		$ 1		$ 0
Increase (Decrease) in Stockholders' Equity
Dividends declared and paid on Class A and Class B Common Stock	(49)		(49)
Repurchases of Class A Common Stock (shares)							(19,418,934)
Repurchases of Class A Common Stock	(343)	(343)
Class A Common Stock issued pursuant to employee benefit plans (shares)							1,759,674
Class A Common Stock issued pursuant to employee benefit plans	43	43
Noncontrolling interest issued or acquired	0
Distributions to noncontrolling interests, net	(19)				(19)
Distributions to redeemable noncontrolling interests	0
Redemption of redeemable noncontrolling interests	0
Other comprehensive loss	(9)			(9)
Net (loss) income	(2,994)		(2,881)		(113)
BALANCE (shares) at Sep. 30, 2020						49,170,850	49,170,850	24,727,682	24,727,682
BALANCE at Sep. 30, 2020	(1,677)	711	(2,438)	(11)	60		$ 1		$ 0
BALANCE at Jun. 30, 2020	510
Increase (Decrease) in Temporary Equity
Noncontrolling interest issued or acquired	22
Distributions to noncontrolling interests, net	(7)
Redemption of redeemable noncontrolling interests	(350)
Net income (loss)	19
BALANCE at Sep. 30, 2020	194
BALANCE (shares) at Jun. 30, 2020							53,342,336		24,727,682
BALANCE at Jun. 30, 2020	1,811	787	832	(11)	202		$ 1		$ 0
Increase (Decrease) in Stockholders' Equity
Dividends declared and paid on Class A and Class B Common Stock	(14)		(14)
Repurchases of Class A Common Stock (shares)							(4,274,004)
Repurchases of Class A Common Stock	(82)	(82)
Class A Common Stock issued pursuant to employee benefit plans (shares)							102,518
Class A Common Stock issued pursuant to employee benefit plans	6	6
Noncontrolling interest issued or acquired	0
Distributions to noncontrolling interests, net	(12)				(12)
Redemption of redeemable noncontrolling interests	0
Net (loss) income	(3,386)		(3,256)		(130)
BALANCE (shares) at Sep. 30, 2020						49,170,850	49,170,850	24,727,682	24,727,682
BALANCE at Sep. 30, 2020	$ (1,677)	$ 711	$ (2,438)	$ (11)	$ 60		$ 1		$ 0

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CONSOLIDATED STATEMENTS OF EQUITY AND REDEEMABLE NONCONTROLLING INTERESTS (Parenthetical) - $ / shares	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Class A Common Stock
Dividends declared per share (USD per share)	$ 0.20	$ 0.20	$ 0.60	$ 0.60
Dividends paid per share (USD per share)	0.2	0.2	0.6	0.6
Class B Common Stock
Dividends declared per share (USD per share)	0.2	0.2	0.6	0.6
Dividends paid per share (USD per share)	$ 0.2	$ 0.2	$ 0.6	$ 0.6

XML

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income	$ (2,943)	$ 18
Adjustments to reconcile net (loss) income to net cash flows from operating activities:
Impairment of goodwill and definite-lived intangible assets	4,264	0
Depreciation of property and equipment	75	69
Amortization of definite-lived intangible and other assets	449	183
Amortization of program contract costs	63	68
Amortization of sports programming rights	1,028	193
Stock-based compensation	39	26
Deferred tax benefit	(660)	(51)
Gain on asset dispositions and other, net of impairment	(101)	(50)
Loss from equity method investments	23	38
Distributions from investments	26	4
Sports programming rights payments	(1,124)	(118)
Gain on extinguishment of debt	(5)	0
Measurement adjustment gain on variable payment obligations	(168)	0
Change in assets and liabilities, net of acquisitions:
Decrease in accounts receivable	24	63
Decrease (increase) in prepaid expenses and other current assets	4	(56)
(Decrease) increase in accounts payable and accrued and other current liabilities	(106)	210
Net change in net income taxes payable/receivable	(145)	(73)
Decrease in program contracts payable	(70)	(72)
Increase in other long-term liabilities	120	3
Other, net	46	39
Net cash flows from operating activities	839	494
CASH FLOWS USED IN INVESTING ACTIVITIES:
Acquisition of property and equipment	(130)	(96)
Acquisition of business, net of cash acquired	(7)	(9,006)
Spectrum repack reimbursements	72	50
Proceeds from the sale of assets	36	0
Purchases of investments	(85)	(431)
Other, net	16	6
Net cash flows used in investing activities	(98)	(9,477)
CASH FLOWS (USED IN) FROM FINANCING ACTIVITIES:
Proceeds from notes payable and commercial bank financing	947	9,453
Repayments of notes payable, commercial bank financing, and finance leases	(945)	(715)
Proceeds from the issuance of redeemable subsidiary preferred equity, net	0	985
Repurchase of outstanding Class A Common Stock	(343)	(125)
Dividends paid on Class A and Class B Common Stock	(49)	(55)
Dividends paid on redeemable subsidiary preferred equity	(32)	(10)
Redemption of redeemable subsidiary preferred equity	(547)	0
Debt issuance costs	(7)	(182)
Distributions to noncontrolling interests, net	(19)	(30)
Distributions to redeemable noncontrolling interests	(378)	0
Other, net	(68)	1
Net cash flows (used in) from financing activities	(1,441)	9,322
NET (DECREASE) INCREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH	(700)	339
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, beginning of period	1,333	1,060
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, end of period	$ 633	$ 1,399

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NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

9 Months Ended

Sep. 30, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Nature of Operations

Sinclair Broadcast Group, Inc. (the Company) is a diversified television media company with national reach and a strong focus on providing high-quality content on our local television stations, regional sports networks, 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, college and professional sports, and other original programming produced by us. Additionally, we own digital media products that are complementary to our extensive portfolio of television station related digital properties. Outside of our media related businesses, we operate technical services companies focused on supply and maintenance of broadcast transmission systems as well as research and development for the advancement of broadcast technology, and we manage other non-media related investments.

As of September 30, 2020, we had two reportable segments for accounting purposes, broadcast and local sports. The broadcast segment consists primarily of our 190 broadcast television stations in 88 markets, which we own, provide programming and operating services pursuant to agreements commonly referred to as local marketing agreements (LMAs), or provide sales services and other non-programming operating services pursuant to other outsourcing agreements (such as joint sales agreements (JSAs) and shared services agreements (SSAs)). These stations broadcast 627 channels as of September 30, 2020. For the purpose of this report, these 190 stations and 627 channels are referred to as "our" stations and channels. The local sports segment consists primarily of 21 regional sports network brands (the Acquired RSNs), the Marquee Sports Network (Marquee) joint venture, and a 20% equity interest in the Yankee Entertainment and Sports Network, LLC (YES Network). We refer to the Acquired RSNs and Marquee as "the RSNs." The RSNs and YES Network own the exclusive rights to air, among other sporting events, the games of professional sports teams.

Principles of Consolidation

The consolidated financial statements include our accounts and those of our wholly-owned and majority-owned subsidiaries, including the operating results of the RSNs acquired on August 23, 2019, as discussed in Note 2. Acquisitions and Dispositions of Assets, 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. Noncontrolling interests which may be redeemed by the holder, and the redemption is outside of our control, are presented as redeemable noncontrolling interests. 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 8. 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, 2020 and 2019 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 income, consolidated statements of equity and redeemable noncontrolling interests, and consolidated statements of cash flows for these periods as adjusted for the adoption of recent accounting pronouncements discussed below.

As permitted under the applicable rules and regulations of the Securities and Exchange Commission (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, 2019 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.

Equity 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. Investments accounted for utilizing the measurement alternative were $26 million, net of $7 million of cumulative impairments, as of September 30, 2020 and $28 million, net of $7 million of cumulative impairments, as of December 31, 2019. There were no adjustments to the carrying amount of investments accounted for utilizing the measurement alternative for the three and nine months ended September 30, 2020 and the three months ended September 30, 2019. We recorded a $2 million impairment related to one investment for the nine months ended September 30, 2019, which is included in other income, net in our consolidated statements of operations.

YES Network Investment. On August 29, 2019, an indirect subsidiary of Diamond Sports Group, LLC (DSG), an indirect wholly-owned subsidiary of the Company, acquired a 20% equity interest in YES Network for cash consideration of $346 million as part of a consortium led by Yankee Global Enterprises. We account for our investment in the YES Network as an equity method investment, which is recorded within other assets in our consolidated balance sheets, and in which our proportionate share of the net income generated by the investment is included within loss from equity method investments in our consolidated statements of operations. During the three and nine months ended September 30, 2020, we recorded a loss of $3 million and income of $3 million, respectively, related to our investment. During both the three and nine months ended September 30, 2019, we recorded income of $1 million related to our investment. There were no impairment charges resulting from our interim impairment assessment of our investment in the YES Network for the quarter ended September 30, 2020.

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, revenues, and expenses in the consolidated financial statements and in the disclosures of contingent assets and liabilities. Actual results could differ from those estimates.

The impact of the outbreak of the novel coronavirus (COVID-19) continues to create significant uncertainty and disruption in the global economy and financial markets. It is reasonably possible that these uncertainties could further materially impact our estimates related to, but not limited to, revenue recognition, goodwill and intangible assets, program contract costs, sports programming rights, and income taxes. As a result, many of our estimates and assumptions require increased judgment and carry a higher degree of variability and volatility. Our estimates may change as new events occur and additional information emerges, and such changes are recognized or disclosed in our consolidated financial statements.

Recent Accounting Pronouncements

In June 2016, the FASB issued amended guidance on the accounting for credit losses on financial instruments. Among other provisions, this guidance introduces a new impairment model for most financial assets and certain other instruments. For trade and other receivables, held-to-maturity debt securities, loans and other instruments, entities will be required to use a forward-looking “expected loss” model that will replace the current “incurred loss” model that will generally result in the earlier recognition of allowances for losses. We adopted this guidance during the first quarter of 2020. The impact of the adoption did not have a material impact on our consolidated financial statements.

In August 2018, the FASB issued guidance which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software, with the capitalized implementation costs of a hosting arrangement that is a service contract expensed over the term of the hosting arrangement. We adopted this guidance during the first quarter of 2020. The impact of the adoption did not have a material impact on our consolidated financial statements.

In October 2018, the FASB issued guidance for determining whether a decision-making fee is a variable interest. The amendments require organizations to consider indirect interests held through related parties under common control on a proportional basis rather than as the equivalent of a direct interest in its entirety, as currently required in generally accepted accounting principles (GAAP). We adopted this guidance during the first quarter of 2020. The impact of the adoption did not have a material impact on our consolidated financial statements.

In March 2019, the FASB issued guidance which requires that an entity test a film or license agreement within the scope of Subtopic 920-350 for impairment at the film group level, when the film or license agreement is predominantly monetized with other films and/or license agreements. We adopted this guidance during the first quarter of 2020. The impact of the adoption did not have a material impact on our consolidated financial statements. See Broadcast Television Programming below for further information on our accounting for television program contracts.

In December 2019, the FASB issued guidance which is intended to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. ASU 2019-12 will be effective for interim and annual periods beginning after December 15, 2020. Early adoption is permitted. We early adopted this guidance during the third quarter of 2020. The impact of the adoption did not have a material impact on our consolidated financial statements.

In March 2020, the FASB issued guidance providing optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by the discontinuation of the London Interbank Offered Rate (LIBOR) or by another reference rate expected to be discontinued. The guidance was effective for all entities immediately upon issuance of the update and may be applied prospectively to applicable transactions existing as of or entered into from the date of adoption through December 31, 2022. We are currently evaluating the impact of this guidance, if elected, but do not expect a material impact on our consolidated financial statements.

Broadcast Television Programming

We have agreements with rights holders for the rights to television programming over contract periods, which generally run from one to seven years. Contract payments are made in installments over periods 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 contract costs are amortized on a straight-line basis except for contracts greater than three years which are amortized utilizing an accelerated method. Program contract 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.

Fair value is determined utilizing a discounted cash flow model based on management’s expectation of future advertising revenues, net of sales commissions, to be generated by the program material. We assess our program contract costs on a quarterly basis to ensure the costs are recorded at the lower of unamortized cost or fair value.

Sports Programming Rights

We have multi-year program rights agreements that provide the Company with the right to produce and telecast professional live sports games within a specified territory in exchange for a rights fee. A prepaid asset is recorded for rights acquired related to future games upon payment of the contracted fee. The assets recorded for the acquired rights are classified as current or non-current based on the period when the games are expected to be aired. Liabilities are recorded for any program rights obligations that have been incurred but not yet paid at period end. We amortize these programing rights as an expense over each season based upon contractually stated rates. Amortization is accelerated in the event that the stated contractual rates over the term of the rights agreement results in an expense recognition pattern that is inconsistent with the projected growth of revenue over the contractual term.

On March 12, 2020, the National Basketball Association (NBA), the National Hockey League (NHL) and Major League Baseball (MLB) suspended or delayed the start of their seasons as a result of the COVID-19 pandemic. On that date, the Company suspended the recognition of amortization expense associated with prepaid program rights agreements with teams within these leagues. Amortization expense resumed for the NBA, NHL, and MLB over the modified seasons when the games commenced during the third quarter of 2020.

Certain rights agreements with professional teams contain provisions which require the rebate of rights fees paid by the Company if a contractually minimum number of live games are not delivered. Rights fees paid in advance of expense recognition, inclusive of any contractual rebates due to the Company, are included within prepaid sports rights in our consolidated balance sheets.

Non-cash Investing and Financing Activities

Non-cash transactions related to finance lease obligations were $6 million during the nine months ended September 30, 2020. Leased assets obtained in exchange for new operating lease liabilities were $10 million during both the nine months ended September 30, 2020 and 2019. Non-cash transactions related to sports rights were $22 million during the nine months ended September 30, 2020.

Revenue Recognition

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

For the three months ended September 30, 2020	Broadcast		Local sports		Other		Eliminations			Total
Distribution revenue	$	356	$	597	$	50	$	—		$	1,003
Advertising revenue	344		124		31		1			500
Other media, non-media, and intercompany revenues	34		6		24		(28		)	36
Total revenues	$	734	$	727	$	105	$	(27	)	$	1,539
For the three months ended September 30, 2019	Broadcast		Local sports		Other		Eliminations			Total
Distribution revenue	$	340	$	306	$	33	$	—		$	679
Advertising revenue	302		43		32		(1		)	376
Other media, non-media, and intercompany revenue	19		3		64		(16		)	70
Total revenues	$	661	$	352	$	129	$	(17	)	$	1,125
For the nine months ended September 30, 2020	Broadcast		Local sports		Other		Eliminations			Total
Distribution revenue	$	1,059	$	1,959	$	150	$	—		$	3,168
Advertising revenue	861		182		92		—			1,135
Other media, non-media, and intercompany revenues	106		14		96		(88		)	128
Total revenues	$	2,026	$	2,155	$	338	$	(88	)	$	4,431
For the nine months ended September 30, 2019	Broadcast		Local sports		Other		Eliminations			Total
Distribution revenue	$	995	$	306	$	97	$	—		$	1,398
Advertising revenue	904		43		78		(1		)	1,024
Other media, non-media, and intercompany revenues	40		3		179		(26		)	196
Total revenues	$	1,939	$	352	$	354	$	(27	)	$	2,618

Distribution Revenue. We generate distribution revenue through fees received from multi-channel video programming distributors (MVPDs) and virtual MVPDs (vMVPDs, and together with MVPDs, "Distributors") for the right to distribute our stations, RSNs, 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.

Certain of our distribution arrangements contain provisions that require the Company to deliver a minimum number of live professional sports games or tournaments during a defined period which usually corresponds with a calendar year. If the minimum threshold is not met, we may be obligated to refund a portion of the distribution fees received if shortfalls are not cured within a specified period of time. Our ability to meet these requirements is primarily driven by the delivery of games by the professional sports leagues. The Company has not historically paid any material rebates under these contractual provisions as it is unusual for there to be an event which is significant enough to preclude the Company from meeting or exceeding these thresholds. The COVID-19 pandemic has resulted in significant disruptions to the normal operations of the professional sports leagues resulting in delays and uncertainty with respect to regularly scheduled games. Decisions made by the leagues during the second quarter of 2020 regarding the timing and format of the revised 2020 seasons have resulted, in some cases, in our inability to meet these minimum requirements and the need to reduce revenue based upon estimated rebates due to our distribution customers. These estimated rebates will be recognized over the measurement period of the rebate which is the year ended December 31, 2020. For the three and nine months ended September 30, 2020, we reduced revenue by, and accrued corresponding rebates to Distributors of $128 million and $252 million, respectively. See Subsequent Events within Note 1. Nature of Operations and Summary of Significant Accounting Policies.

Advertising Revenue. We generate advertising revenue primarily from the sale of advertising spots/impressions within our broadcast television, RSN, 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. Deferred revenue was $75 million and $54 million as of September 30, 2020 and December 31, 2019, respectively. Deferred revenue recognized during the nine months ended September 30, 2020 and 2019, included in the deferred revenue balance as of December 31, 2019 and 2018, was $45 million and $65 million, respectively.

For the three months ended September 30, 2020, three customers accounted for 17%, 15%, and 12%, respectively, of our total revenues. For the nine months ended September 30, 2020, three customers accounted for 19%, 17%, and 12%, respectively, of our total revenues. For the three months ended September 30, 2019, three customers accounted for 17%, 14%, and 11%, respectively, of our total revenues. For the nine months ended September 30, 2019, two customers accounted for 14% and 12%, respectively, of our total revenues. As of September 30, 2020, three customers accounted for 18%, 16%, and 13%, respectively, of our accounts receivable, net. For purposes of this disclosure, a single customer may include multiple entities under common control.

Impairment of Goodwill and Definite-Lived Intangible Assets

Our RSNs included in the local sports segment have been negatively impacted by the recent loss of two Distributors. In addition, our existing Distributors are experiencing elevated levels of subscriber erosion which we believe is influenced, in part, by shifting consumer behaviors resulting from media fragmentation, the current economic environment, the COVID 19 pandemic and related uncertainties. Most of these factors are also expected to have a negative impact on future projected revenue and margins of our RSNs. As a result of these factors, we performed an impairment test of the RSN reporting units' goodwill and long-lived asset groups during the quarter ending September 30, 2020.

The long-lived asset impairment test requires a comparison of undiscounted cash flows expected to be generated over the useful life of an asset group to the carrying value of the asset group. Assets are grouped at the lowest level for which identifiable cash flows are largely independent of the cash flows of other groups of assets and liabilities. We have concluded that each of our RSNs individually qualify as an asset group and therefore the test was performed at each RSN level accordingly. We estimated the projected undiscounted cash flows over the remaining useful life of each asset group. The more significant inputs used in determining our estimate of the projected cash flows included future revenue growth and projected margins. We identified 10 RSNs which had carrying values in excess of the future undiscounted cash flows; and therefore, for these RSNs an impairment loss was measured as the amount by which the carrying value of each asset group exceeded the fair value of each asset group. The calculated impairment was then allocated to the long-lived assets within the asset group, which primarily consists of definite lived intangible assets, based upon relative fair value.

The fair value of the asset groups, reporting units and definite lived intangible assets were determined based upon a discounted cash flow analysis which uses the present value of projected cash flows. The projected cash flows were based upon our estimates of future revenues and margins, among other inputs. The discount rates used in the valuation were based on a weighted-average cost of capital determined from relevant market comparisons and taking into consideration the risk specifically associated with our asset groups and underlying assets. Terminal values were determined based upon the final year of projected cash flows which reflected our estimate of stable perpetual growth. The more sensitive inputs used in the discounted cash flow analysis include projected revenue and margins, as well as the discount rates used to calculate the present value of future cash flows. Projected revenue was based on the consideration of historical experience of the business, market data surrounding subscriber projections and advertising growth, our ability to retain existing customers and our ability to obtain new customers. Our revenue projections could be negatively impacted by the further loss of key Distributors, inability to obtain new or retain existing Distributors on terms similar to those expiring, greater than expected consumer migration away from traditional linear Distributors, or our inability to successfully develop alternative revenue streams, among other factors. Our future margins may also be affected by our inability to renew sports rights agreements on terms favorable to us.

During the three months ended September 30, 2020, we recorded a non-cash impairment charge on customer relationships of $1,218 million and other definite-lived intangible assets of $431 million, included within impairment of goodwill and definite-lived intangible assets in our consolidated statements of operations. As of September 30, 2020, the remaining balance of the customer relationship intangible asset was $3,756 million and the aggregate remaining balance of the other definite-lived intangible assets was $673 million. After the recognition of these impairments, there were no asset groups which have a heightened risk of further impairment because the projected undiscounted cash flows of the individual asset groups were substantially greater than their carrying values. However, significant deterioration in the factors described above could result in future material impairments.

The remaining customer relationships and other definite-lived intangible assets will both be amortized over a remaining weighted average useful life of 11 years on a straight-line basis.

We tested the RSN reporting units' goodwill for impairment on an interim basis by comparing the fair value of each of the RSN reporting units to their revised carrying value after adjustments were made related to the impairments of the asset groups, as described above. To the extent that the carrying value of the respective reporting units exceeded the fair value, a goodwill impairment charge was recorded. The fair value of the reporting units was determined based upon a discounted cash flow analysis, as described above.

For the quarter ended September 30, 2020, the carrying value exceeded the fair value of all reporting units. We recorded a non-cash goodwill impairment charge of $2,615 million, included within impairment of goodwill and definite-lived intangible assets in our consolidated statements of operations. As of September 30, 2020, there was no remaining goodwill within our local sports segment.

Based upon these events, we performed a qualitative impairment assessment related to our broadcast reporting unit, concluding it was not more likely than not that an impairment existed.

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, 2020 and 2019 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 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 limitations on interest expense deductibility, and certain state net operating loss (NOL) carryforwards and other state attributes. During three and nine months ended September 30, 2020, we increased our valuation allowance by $215 million and $219 million, respectively. The increase in valuation allowance was primarily due to the change in judgment in the realizability of certain deferred tax assets relating to the reduction in forecasts of future taxable income. See further discussion under Impairment of Goodwill and Definite-Lived Intangible Assets under Note 1. Nature of Operations and Summary of Significant Accounting Policies within our Consolidated Financial Statements.

Our effective income tax rate for the three and nine months ended September 30, 2020 approximated the statutory rate. During the three and nine months ended September 30,2020, we recorded a $68 million and an $83 million, respectively, discrete benefit as a result of the CARES Act allowing for the estimated 2020 federal net operating loss to be carried back to pre-2018 years when the federal tax rate was 35%.

Our effective income tax rate for the three months ended September 30, 2019 was greater than the statutory rate primarily due to a $34 million benefit related to a change in the treatment of the gain from the sale of certain broadcast spectrum in connection with the Broadcast Incentive Auction and a $16 million benefit related to a release of valuation allowance on certain state net operating losses. Our effective income tax rate for the nine months ended September 30, 2019 was greater than the statutory rate primarily due to a $34 million benefit related to a change in the treatment of the gain from the sale of certain broadcast spectrum in connection with the Broadcast Incentive Auction, $18 million federal tax credits related to investments in sustainability initiatives, and a $16 million benefit related to a release of valuation allowance on certain state net operating losses.

We believe it is reasonably possible that our liability for unrecognized tax benefits related to continuing operations could be reduced by up to $6 million in the next twelve months, as a result of 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. In August 2020, we received an approval from the Joint Committee on Taxation of a settlement agreement with the Internal Revenue Service with respect to the audit of our 2013-2015 federal income tax returns. There was no material impact on our financial statements as a result of this settlement.

Share Repurchase Program

On August 4, 2020, the Board of Directors authorized an additional $500 million share repurchase authorization in addition to the previous repurchase authorization of $1 billion. There is no expiration date and currently, management has no plans to terminate this program. During the three and nine months ended September 30, 2020, we repurchased approximately 4 million shares for $82 million and 19 million shares for $343 million, respectively. As of September 30, 2020, the total remaining purchase authorization was $880 million.

Subsequent Events    

In November 2020, our Board of Directors declared a quarterly dividend of $0.20 per share, payable on December 15, 2020 to holders of record at the close of business on December 1, 2020.

The Company is closely monitoring the impact of the COVID-19 pandemic on all aspects of its business, including how it has already impacted, and will impact, its advertisers, Distributors, and agreements with professional sports leagues. While the NBA, NHL, and MLB were able to complete modified season schedules during 2020, there can be no assurance that the MLB, NBA, or NHL will complete full or abbreviated seasons in the future. As of November 9, 2020, both the NBA and NHL have announced that their 2020-2021 seasons are currently on hold with delayed starts likely to be announced later this year. Any reduction in the number of games played by the leagues may have an adverse impact on our operations and cash flows. The Company is currently unable to predict the full extent that the COVID-19 pandemic will have on its financial condition, results of operations, and cash flows in future periods due to numerous uncertainties.

Reclassifications

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

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ACQUISITIONS AND DISPOSITIONS OF ASSETS

9 Months Ended

Sep. 30, 2020

Business Combinations [Abstract]

ACQUISITIONS AND DISPOSITIONS OF ASSETS

ACQUISITIONS AND DISPOSITIONS OF ASSETS:

Acquisitions

RSN Acquisition. In May 2019, DSG entered into a definitive agreement to acquire controlling interests in 21 Regional Sports Network brands and Fox College Sports (collectively, the Acquired RSNs), from The Walt Disney Company (Disney) for $9.6 billion plus certain adjustments. On August 23, 2019 we completed the acquisition for an aggregate preliminary purchase price, including cash acquired, and subject to an adjustment based upon finalization of working capital, net debt, and other adjustments, of $9,817 million, accounted for as a business combination under the acquisition method of accounting. The acquisition provides an expansion to our premium sports programming including the exclusive regional distribution rights to 42 professional teams consisting of 14 MLB teams, 16 NBA teams, and 12 NHL teams. The Acquired RSNs are reported within our local sports segment. See Note 7. Segment Data.

The transaction was funded through a combination of debt financing raised by DSG and Sinclair Television Group, Inc. (STG), and redeemable subsidiary preferred equity.

The following table summarizes the fair value of acquired assets, assumed liabilities, and noncontrolling interests of the Acquired RSNs (in millions):

Cash and cash equivalents	$	824
Accounts receivable, net	606
Prepaid expenses and other current assets	175
Property and equipment, net	25
Customer relationships, net	5,439
Other definite-lived intangible assets, net	1,286
Other assets	52
Accounts payable and accrued liabilities	(181		)
Other long-term liabilities	(396		)
Goodwill	2,615
Fair value of identifiable net assets acquired	$	10,445
Redeemable noncontrolling interests	(380		)
Noncontrolling interests	(248		)
Gross purchase price	$	9,817
Purchase price, net of cash acquired	$	8,993

The final purchase price allocation presented above is based upon management's estimates of the fair value of the acquired assets, assumed liabilities, and noncontrolling interest using valuation techniques including income and cost approaches. The fair value estimates are based on, but not limited to, projected revenue, projected margins, and discount rates used to present value future cash flows. The adjustments made to the initial allocation were based on more detailed information obtained about the specific assets acquired and liabilities assumed and did not result in material changes to the amortization expense recorded in previous quarters.

The definite-lived intangible assets of $6,725 million are primarily comprised of customer relationships, which represent existing advertiser relationships and contractual relationships with Distributors of $5,439 million, the fair value of contracts with sports teams of $1,271 million, and tradenames/trademarks of $15 million. The intangible assets will be amortized over a weighted average useful life of 2 years for tradenames/trademarks, 13 years for customer relationships, and 12 years for contracts with sports teams on a straight-line basis. The fair value of the sports team contracts will be amortized over the respective contract term. Acquired property and equipment will be depreciated on a straight-line basis over the respective estimated remaining useful lives. Goodwill is calculated as the excess of the consideration transferred over the fair value of the identifiable net assets acquired and represents the future economic benefits expected to arise from other intangible assets acquired that do not qualify for separate recognition, as well as expected future synergies. We estimate that $2.4 billion of goodwill, which represents our interest in the Acquired RSNs, will be deductible for tax purposes. Refer to Impairment of Goodwill and Definite-Lived Intangible Assets within Note 1. Nature of Operations and Summary of Significant Accounting Policies for discussion of the impairment of the acquired goodwill and definite-lived intangible assets during the third quarter of 2020.

In connection with the acquisition, we recognized $0.4 million and $4 million for the three and nine months ended September 30, 2020, respectively, and $85 million and $94 million for the three and nine months ended September 30, 2019, respectively, of transaction costs that we expensed as incurred and classified as corporate general and administrative expenses in our consolidated statements of operations. Revenue and operating loss, excluding the effects of intercompany expenses, of the Acquired RSNs included in our consolidated statements of operations were $673 million and $4,435 million, respectively, for the three months ended September 30, 2020. Revenue and operating loss, excluding the effects of intercompany expenses, of the Acquired RSNs included in our consolidated statements of operations were $2,076 million and $3,830 million, respectively, for the nine months ended September 30, 2020. Revenue and operating income, excluding the effects of intercompany expenses and the transaction costs above, of the Acquired RSNs included in our consolidated statements of operations were $352 million and $46 million, respectively, for both the three and nine months ended September 30, 2019.

Pro Forma Information. The table below sets forth unaudited pro forma results of operations, assuming that the RSN Acquisition, along with transactions necessary to finance the acquisition, occurred at the beginning of the period presented (in millions, except per share data):

	Three Months Ended   September 30, 2019			Nine Months Ended   September 30, 2019
Total revenue	$	1,632		$	5,067
Net income	$	9		$	434
Net (loss) income attributable to Sinclair Broadcast Group	$	(41	)	$	274
Basic earnings per share attributable to Sinclair Broadcast Group	$	(0.44	)	$	2.98
Diluted earnings per share attributable to Sinclair Broadcast Group	$	(0.44	)	$	2.94

This pro forma financial information is based on historical results of operations, adjusted for the allocation of the purchase price and other acquisition accounting adjustments, and is not indicative of what our results would have been had we operated the Acquired RSNs for the period presented because the pro forma results do not reflect expected synergies. The pro forma adjustments reflect depreciation expense and amortization of intangible assets related to the fair value of the assets acquired and any adjustments to interest expense to reflect the debt financing of the transactions, if applicable. Depreciation and amortization expense are higher than amounts recorded in the historical financial statements of the acquirees due to the fair value adjustments recorded in purchase accounting.

Other Acquisitions.  During the nine months ended September 30, 2020, we completed the acquisition of the license asset and certain non-license assets of a radio station for $7 million, reported within our broadcast segment. The acquisition was completed using cash on hand. In June 2020, we entered into an agreement to acquire the license assets and certain non-license assets of two television stations for $9 million. The transaction closed during the fourth quarter of 2020, was completed using cash on hand, and will be reported within our broadcast segment.

Dispositions

Broadcast Sales. In January 2020, we agreed to sell the license and non-license assets of WDKY-TV in Lexington, KY and certain non-license assets associated with KGBT-TV in Harlingen, TX for an aggregate purchase price of $36 million. The KGBT-TV transaction closed during the first quarter of 2020 and we recorded a gain of $8 million which is included within gain on asset dispositions and other, net of impairment in our consolidated statements of operations. The WDKY-TV transaction closed during the third quarter of 2020 and we recorded a gain of $21 million which is included within gain on asset dispositions and other, net of impairment in our consolidated statements of operations.

Broadcast Incentive Auction. Congress authorized the Federal Communications Commission (FCC) to conduct so-called "incentive auctions" to auction and re-purpose broadcast television spectrum for mobile broadband use. Pursuant to the auction, television broadcasters submitted bids to receive compensation for relinquishing all or a portion of their rights in the television spectrum of their full-service and Class A stations. Low power stations were not eligible to participate in the auction and are not protected and therefore may be displaced or forced to go off the air as a result of the post-auction repacking process.

In the repacking process associated with the auction, the FCC has reassigned some stations to new post-auction channels. We do not expect reassignment to new channels to have a material impact on our coverage. We have received notification from the FCC that 100 of our stations have been assigned to new channels. Legislation has provided the FCC with a $3 billion fund to reimburse reasonable costs incurred by stations that are reassigned to new channels in the repack. We expect that the reimbursements from the fund will cover the majority of our expenses related to the repack. We recorded gains related to reimbursements for spectrum repack costs incurred of $20 million and $72 million for the three and nine months ended September 30, 2020, respectively, and $28 million and $50 million for the three and nine months ended September 30, 2019, respectively, which are included within gain on asset dispositions and other, net of impairment in our consolidated statements of operations. Capital expenditures related to the spectrum repack were $13 million and $54 million for the three and nine months ended September 30, 2020, respectively, and $16 million and $41 million for the three and nine months ended September 30, 2019, respectively.

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NOTES PAYABLE, FINANCE LEASES, AND COMMERCIAL BANK FINANCING

9 Months Ended

Sep. 30, 2020

Debt Disclosure [Abstract]

NOTES PAYABLE, FINANCE LEASES, AND COMMERCIAL BANK FINANCING

NOTES PAYABLE, FINANCE LEASES, AND COMMERCIAL BANK FINANCING:

Bank Credit Agreements

Each of STG’s and DSG’s bank credit agreements (the Bank Credit Agreements) provide a $650 million five-year revolving credit facility, whereby STG’s revolving credit facility (the STG Revolving Credit Facility) is priced at LIBOR plus 2.00% and DSG’s revolving credit facility (the DSG Revolving Credit Facility and, together with the STG Revolving Credit Facility, the Revolving Credit Facilities) is priced at LIBOR plus 3.00%, subject to decrease if the specified first lien leverage ratio (as defined in the respective Bank Credit Agreements) is less than or equal to certain levels.  On March 17, 2020, we drew $648 million and $225 million under the STG Revolving Credit Facility and the DSG Revolving Credit Facility, respectively, as a precautionary measure given the COVID-19 pandemic.  During the quarter ended June 30, 2020, the Company fully repaid the amounts outstanding under each of the Revolving Credit Facilities.

The Bank Credit Agreements each include a financial maintenance covenant, the first lien leverage ratio (as defined in the respective Bank Credit Agreements), which requires such applicable ratio not to exceed 4.5x and 6.25x, measured as of the end of each fiscal quarter, for STG and DSG, respectively. The respective financial maintenance covenant is only applicable if 35% or more of the capacity (as a percentage of total commitments) under the respective revolving credit facility, measured as of the last day of each quarter, is utilized under such revolving credit facility as of such date. Since there was no utilization under either of the Revolving Credit Facilities as of September 30, 2020, neither STG nor DSG was subject to the respective financial maintenance covenant under their applicable Bank Credit Agreement. As of September 30, 2020, the STG first lien leverage ratio was below 4.5x and the DSG first lien leverage ratio exceeded 6.25x. We expect that the DSG first lien leverage ratio will remain above 6.25x for at least the next 12 months, which will restrict our ability to utilize the full DSG Revolving Credit Facility.  We do not currently expect to have more than 35% of the capacity of the DSG Revolving Credit Facility outstanding as of any quarterly measurement date during the next twelve months, therefore we do not expect DSG will be subject to the financial maintenance covenant.  The Bank Credit Agreements contain other restrictions and covenants which the respective entities were in compliance with as of September 30, 2020.

STG Notes

On May 21, 2020, we purchased $2.5 million aggregate principal amount of STG's 5.875% Notes due 2026 (the STG 5.875% Notes) in open market transactions for consideration of $2.3 million. The STG 5.875% Notes acquired in May 2020 were canceled immediately following their acquisition. We recognized a gain on extinguishment of the STG 5.875% Notes of $0.2 million for the nine months ended September 30, 2020. As of September 30, 2020, the balance of the STG 5.875% Notes, net of deferred financing costs, was $344 million.

DSG Notes

In March 2020 and June 2020, we purchased a total of $15 million aggregate principal amount of DSG's 6.625% Notes due 2027 (the DSG 6.625% Notes) in open market transactions for consideration of $10 million. The DSG 6.625% Notes acquired in March 2020 and June 2020 were canceled immediately following their acquisition. We recognized a gain on extinguishment of the DSG 6.625% Notes of $5 million for the nine months ended September 30, 2020.

On June 10, 2020, we exchanged $66.5 million aggregate principal amount of the DSG 6.625% Notes for cash payments of $10 million, including accrued but unpaid interest, and $31 million aggregate principal amount of newly issued senior secured notes, which bear interest at a rate of 12.750% per annum and mature on December 1, 2026 (the DSG 12.750% Secured Notes and, together with the DSG 6.625% Notes and DSG's 5.375% Senior Secured Notes due 2026, the DSG Notes). As of September 30, 2020, the balance of the DSG 6.625% Notes, net of deferred financing costs, was $1,709 million and the balance of the DSG 12.750% Secured Notes was $55 million, inclusive of a $24 million premium.

Prior to August 15, 2022, we may redeem the DSG 12.750% Secured Notes, 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 applicable DSG 12.750% Secured Notes plus accrued and unpaid interest, if any, to the date of redemption, plus a ‘‘make-whole’’ premium (assuming for purposes of the calculation of such “make-whole” premium that interest were to accrue on the DSG 12.750% Secured Notes at a rate for such “make-whole” period equal to 5.375% per annum). Beginning on August 15, 2022, we may redeem the DSG 12.750% Secured Notes, in whole or in part, at any time or from time to time at certain redemption prices, plus accrued and unpaid interest, if any, to the date of redemption. In addition, on or prior to August 15, 2022, we may redeem up to 40% of the DSG 12.750% Secured Notes using the proceeds of certain equity offerings. If the notes are redeemed during the twelve-month period beginning August 15, 2022, 2023, and 2024 and thereafter, then the redemption prices for the DSG 12.750% Secured Notes are 102.688%, 101.344%, and 100%, respectively.

DSG’s obligations under the DSG 12.750% Secured Notes are jointly and severally guaranteed by Diamond Sports Intermediate Holdings LLC (DSIH), DSG’s direct parent, and certain wholly-owned subsidiaries of DSIH. The DSG 12.750% Secured Notes are not guaranteed by the Company, STG, or any of STG’s subsidiaries.

Accounts receivable securitization facility

On September 23, 2020 (the Closing Date), the Company's and DSG's indirect wholly-owned subsidiary, Diamond Sports Finance SPV, LLC (DSPV), entered into a $250 million accounts receivable securitization facility (the A/R Facility) which matures on September 23, 2023, in order to enable DSG to raise incremental funding for the ongoing business needs of DSG and its subsidiaries.

The A/R Facility was entered into pursuant to a Loan and Security Agreement (the Loan Agreement), dated September 23, 2020, among DSPV, as borrower, the persons from time to time party thereto, as lenders (the Lenders), and Fox Sports Net, LLC (FSN), a wholly-owned direct subsidiary of DSG, as initial servicer, Credit Suisse AG, New York Branch, as administrative agent and Wilmington Trust, National Association, as collateral agent, paying agent and account bank. The Lenders will provide certain loans, which loans will be secured by certain accounts receivable (Pool Receivables) purchased by DSPV pursuant to a Purchase and Sale Agreement (the Purchase Agreement, and together with the Loan Agreement, the A/R Agreements), dated September 23, 2020, among FSN, certain indirect wholly owned subsidiaries of DSG identified therein as originators (the Originators) and DSPV as purchaser, pursuant to which the Originators will sell certain accounts receivable to DSPV and FSN will continue to service such accounts receivable.

The maximum funding availability under the A/R Facility is $250 million, subject to borrowing base and certain other restrictions. The amount of actual availability under the A/R Facility is subject to change based on the level of eligible receivables sold by the Originators to DSPV and certain reserves. Eligibility of the receivables is determined by a variety of factors, including, but not limited to, credit ratings of the Originators’ customers, customer concentration levels, and certain characteristics of the accounts receivable being transferred. In addition, subsequent to November 1, 2020, the total commitment under the A/R Facility will be the lesser of $250 million and the sum of the lowest aggregate loan balance since November 1, 2020 plus $50 million.

Borrowings under the A/R Facility generally bear interest at a rate per annum equal to LIBOR, which is subject to an interest rate floor of 0% per annum, plus 4.97% or, if the aggregate outstanding principal amount of loans is less than $125 million on or after November 1, 2020, 5.47%. We are required to pay a commitment fee on unutilized commitments under the A/R Facility.

We may voluntarily prepay outstanding loans or terminate commitments under the A/R Facility at any time without premium or penalty, other than customary breakage costs with respect to LIBOR rate loans, except (1) any voluntary prepayment (x) from the proceeds of a voluntary repurchase in accordance with the Purchase Agreement by any Originator of any Pool Receivables on or prior to the date that is 18 months after the Closing Date or (y) from the proceeds of a new accounts receivable financing entered into by DSPV or an affiliate thereof and requiring the purchase of Pool Receivables from DSPV after the date that is 18 months after the Closing Date but on or prior to the date that is 36 months after the Closing Date or (2) certain terminations of commitments on or prior to the date that is 18 months after the Closing Date, shall in each case be subject to a prepayment premium of 1.00% of the principal amount of the loans prepaid or commitments terminated, as the case may be.

DSPV, FSN, and the Originators provide customary representations and covenants under the A/R Agreements. Receivables in the A/R Facility are subject to certain eligibility criteria, concentration limits and reserves. The Loan Agreement provides for certain events of default upon the occurrence of which the administrative agent may declare the facility’s termination date to have occurred and declare the outstanding loan and all other obligations of DSPV to be due and payable. The Purchase Agreement provides for certain early amortization events upon the occurrence of which DSPV may terminate the sale and contribution of accounts receivable and related assets thereunder, including an early amortization event which would occur upon Consolidated EBITDA (as defined in the DSG Bank Credit Agreement as in effect at such time) of DSIH and its restricted subsidiaries under the DSG Bank Credit Agreement, less Consolidated Interest Expense (as defined in the DSG Bank Credit Agreement as in effect at such time) of DSIH and its restricted subsidiaries under the DSG Bank Credit Agreement, being less than zero as of the last day of any fiscal quarter (measured on a trailing four fiscal quarter basis).

As of September 30, 2020, the balance of the loans under the A/R Facility was $74 million and the balance of the receivables held by DSPV as part of the A/R Facility was $124 million, included in accounts receivable, net in our consolidated balance sheets. On October 22, 2020, the A/R Facility provided additional funding of $122 million, bringing the outstanding balance of the loans under the A/R Facility to $196 million.

The performance by the Originators of their respective obligations under the A/R Facility is guaranteed by FSN pursuant to a performance guaranty by FSN in favor of Credit Suisse AG, New York Branch, as administrative agent under the Loan Agreement.

Notes payable and 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 $2 million as of both September 30, 2020 and December 31, 2019. 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, 2020 and December 31, 2019, respectively.

Debt of variable interest entities and guarantees of third-party debt

STG jointly, severally, unconditionally, and irrevocably guaranteed $51 million and $57 million of debt of certain third parties as of September 30, 2020 and December 31, 2019, respectively, of which $17 million and $20 million, net of deferred financing costs, related to consolidated VIEs that are included in our consolidated balance sheets as of September 30, 2020 and December 31, 2019, respectively. These guarantees primarily relate to the debt of Cunningham Broadcasting Corporation (Cunningham) as discussed under Cunningham Broadcasting Corporation within Note 9. Related Person Transactions. We have determined that, as of September 30, 2020, it is not probable that we would have to perform under any of these guarantees.

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REDEEMABLE NONCONTROLLING INTERESTS

9 Months Ended

Sep. 30, 2020

Temporary Equity Disclosure [Abstract]

REDEEMABLE NONCONTROLLING INTERESTS

REDEEMABLE NONCONTROLLING INTERESTS:

We account for redeemable noncontrolling interests in accordance with ASC 480, Distinguishing Liabilities from Equity, and classify them as mezzanine equity in our consolidated balance sheets because their possible redemption is outside of the control of the Company. Our redeemable non-controlling interests consist of the following:

Redeemable Subsidiary Preferred Equity. On August 23, 2019, Diamond Sports Holdings LLC (DSH), an indirect parent of DSG and indirect wholly-owned subsidiary of the Company, issued preferred equity (the Redeemable Subsidiary Preferred Equity).

On January 21, 2020, we redeemed 200,000 units of the Redeemable Subsidiary Preferred Equity for an aggregate redemption price equal to $200 million plus accrued and unpaid dividends, representing 100% of the unreturned capital contribution with respect to the units redeemed, plus accrued and unpaid dividends with respect to the units redeemed up to, but not including, the redemption date, and after giving effect to any applicable rebates.

In August 2020, we redeemed 350,000 units of the Redeemable Subsidiary Preferred Equity for an aggregate redemption price equal to $350 million, representing 100% of the unreturned capital contribution with respect to the units redeemed, plus $4 million in accrued and unpaid dividends, with respect to the units redeemed up to, but not including, the redemption date, for a total redemption amount of $354 million.

Dividends accrued during the three and nine months ended September 30, 2020 were $7 million and $32 million, respectively, and during both the three and nine months ended September 30, 2019 were $10 million and are reflected in net income attributable to the redeemable noncontrolling interests in our consolidated statements of operations. The dividends paid in cash accrue at a rate equal to 1-month LIBOR (with a 0.75% floor) plus 7.5%, which is 0.5% lower than the rate payable if the dividends were paid-in-kind during the quarter. The dividends accrued for the third quarter were paid in cash in September 2020. Dividends accrued during the three months ended March 31, 2020 of $13 million were paid-in-kind and added to the liquidation preference. In June 2020, we redeemed units of the Redeemable Subsidiary Preferred Equity for an aggregate redemption price equal to $13 million.

The balance of the Redeemable Subsidiary Preferred Equity as of September 30, 2020 was $170 million, net of issuance costs.

Subsidiary Equity Put Right. A noncontrolling equity holder of one of our subsidiaries had the right to sell their interest to the Company at a fair market sale value of $376 million, plus any undistributed income, which was exercised and settled in January 2020.

A noncontrolling equity holder of one of our subsidiaries has the right to sell their interest to the Company at any time during the 30-day period following September 30, 2025. The initial value of this redeemable noncontrolling interest was recorded at $22 million.

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COMMITMENTS AND CONTINGENCIES

9 Months Ended

Sep. 30, 2020

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES:

Sports Programming Rights

We are contractually obligated to make payments to purchase sports programming rights. The following table presents our annual non-cancellable commitments relating to our local sports segment's sports programming rights agreements as of September 30, 2020. These commitments assume that sports teams fully deliver the contractually committed games, and do not reflect the impact of rebates expected to be paid by the teams.

(in millions)
2020 (remainder)	$	515
2021	1,820
2022	1,575
2023	1,525
2024	1,457
2025 and thereafter	8,281
Total	$	15,173

Other Liabilities

In connection with the RSN Acquisition, we assumed certain fixed payment obligations which are payable through 2027. We recorded these obligations in purchase accounting at estimated fair value. As of September 30, 2020, $57 million was recorded within other current liabilities and $100 million was recorded within other long-term liabilities in our consolidated balance sheets. Interest expense of $2 million and $6 million was recorded for the three and nine months ended September 30, 2020, respectively and $0.5 million was recorded for both the three and nine months ended September 30, 2019.

In connection with the RSN Acquisition, we assumed certain variable payment obligations which are payable through 2030. These contractual obligations are based upon the excess cash flow of certain RSNs. We recorded these obligations in purchase accounting at estimated fair value. As of September 30, 2020, $20 million was recorded within other current liabilities and $44 million was recorded within other long-term liabilities in our consolidated balance sheets. These obligations are measured as the amount of cash that would be paid under the terms of the contracts if they were to settle at each reporting date. Total measurement adjustment gains of $168 million for both the three and nine months ended September 30, 2020 were recorded within other income, net in our consolidated statements of operations. The measurement adjustment gains were a result of a decrease in the projected excess cash flows of the related RSNs, as further discussed in Impairment of Goodwill and Definite-Lived Intangible Assets under Note 1. Nature of Operations and Summary of Significant Accounting Policies . For further information, see Note 10. Fair Value Measurements.

Litigation

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 the Company's financial statements. 

FCC Litigation Matters

On December 21, 2017, the FCC issued a Notice of Apparent Liability for Forfeiture (NAL) proposing a $13 million fine for alleged violations of the FCC's sponsorship identification rules by the Company and certain of its subsidiaries. We filed a response disputing the Commission's findings and the proposed fine.

On July 19, 2018, the FCC released a Hearing Designation Order (HDO) to commence a hearing before an Administrative Law Judge (ALJ) with respect to the Company’s proposed acquisition of Tribune. The HDO asked the ALJ to determine (i) whether Sinclair was the real party in interest to the sale of WGN-TV, KDAF(TV), and KIAH(TV), (ii) if so, whether the Company engaged in misrepresentation and/or lack of candor in its applications with the FCC and (iii) whether consummation of the overall transaction would be in the public interest and compliance with the FCC’s ownership rules. The Company maintains that the overall transaction and the proposed divestitures complied with the FCC’s rules, and strongly rejects any allegation of misrepresentation or lack of candor. The Merger Agreement was terminated by Tribune on August 9, 2018, on which date the Company subsequently filed a letter with the FCC to withdraw the merger applications and have them dismissed with prejudice and filed with the ALJ a Notice of Withdrawal of Applications and Motion to Terminate Hearing (Motion). On August 10, 2018, the FCC's Enforcement Bureau filed a responsive pleading with the ALJ stating that it did not oppose dismissal of the merger applications and concurrent termination of the hearing proceeding. The ALJ granted the Motion and terminated the hearing on March 5, 2019. As part of a discussion initiated by the Company to respond to allegations raised in the HDO, the FCC’s Media Bureau sent the Company a letter of inquiry.

On May 22, 2020, the FCC released an Order and Consent Decree pursuant to which the Company agreed to pay $48 million to resolve the FCC’s investigation of the allegations raised in the HDO, the matters covered by the NAL, 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 4-year compliance plan. 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. For the nine months ended September 30, 2020, we recorded an expense of $2.5 million for the above legal matters, which is reflected within selling, general, and administrative expenses in our consolidated statements of operations.

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 station WNUV(TV). The Company filed an opposition to the petition on October 1, 2020, and the petition remains pending.

On September 2, 2020, the FCC adopted a Memorandum Opinion and Order and Notice of Apparent Liability for Forfeiture (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 Commission to dismiss the proceeding or, alternatively, to reduce the proposed forfeiture to $25,000 per station. The Company is not a party to that proceeding and cannot predict whether or how the proceeding will affect the Company’s financial statements. However, we accrued an expense for the above legal matters during the three months ended September 30, 2020, as we consolidate these stations as VIEs.

Other Litigation Matters

On November 6, 2018, the Company agreed to enter into a proposed consent decree with the Department of Justice (DOJ). This consent decree resolves the Department of Justice’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 Sinclair 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 Department of Justice 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 has 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. Defendants in this action filed a motion to dismiss the consolidated action, but that motion was denied. The Company believes the lawsuits are without merit and intends to vigorously defend itself against all such claims.

On August 9, 2018, Edward Komito, a putative Company shareholder, filed a class action complaint in the United States District Court for the District of Maryland (the "District of Maryland") against the Company, Christopher Ripley and Lucy Rutishauser, which action is now captioned In re Sinclair Broadcast Group, Inc. Securities Litigation, case No. 1:18-CV-02445-CCB (the "Securities Action"). On March 1, 2019, lead counsel in the Securities Action filed an amended complaint, adding David Smith and Steven Marks as defendants, and alleging that defendants violated the federal securities laws by issuing false or misleading disclosures concerning (a) the Merger prior to the termination thereof; and (b) the DOJ investigation concerning the alleged exchange of pacing information. The Securities Action seeks declaratory relief, money damages in an amount to be determined at trial, and attorney’s fees and costs. On May 3, 2019, Defendants filed a motion to dismiss the amended complaint, which motion was opposed by lead plaintiff. On February 4, 2020, the Court issued a decision granting the motion to dismiss in part and denying the motion to dismiss in part. On February 18, 2020, plaintiffs filed a motion for reconsideration or, in the alternative, to certify dismissal as final and appealable. Defendants filed an opposition to this motion. On July 20, 2020, the Court issued a decision denying plaintiffs’ motion and dismissing the remaining claims (which the Court previously had not dismissed in its February 4, 2020 decision) based on lack of standing. The plaintiffs did not appeal this decision, and the Securities Action therefore has concluded.

In addition, beginning in late July 2018, Sinclair received letters from two putative Company shareholders requesting that the Board of Directors of the Company investigate whether any of the Company’s officers and directors committed nonexculpated breaches of fiduciary duties in connection with, or gross mismanagement with respect to: (i) seeking regulatory approval of the Tribune Merger and (ii) the HDO, and the allegations contained therein. A committee consisting of independent members of the board of directors has been formed to respond to these demands (the "Special Litigation Committee"). The members of the Special Litigation Committee are Martin R. Leader, Larry E. McCanna, and the Honorable Benson Everett Legg, with Martin Leader as its designated Chair.

On November 29, 2018, putative Company shareholder Fire and Police Retiree Health Care Fund, San Antonio filed a shareholder derivative complaint in the District of Maryland against the members of the Company’s Board of Directors, Mr. Ripley, and the Company (as a nominal defendant), which action is captioned Fire and Police Retiree Health Care Fund, San Antonio v. Smith, et al., Case No. 1:18-cv-03670-RDB (the "San Antonio Action"). On December 26, 2018, putative Company shareholder Teamsters Local 677 Health Services & Insurance Plan filed a shareholder derivative complaint in the Circuit Court of Maryland for Baltimore County (the "Circuit Court") against the members of the Company’s Board of Directors, Mr. Ripley, and the Company (as a nominal defendant), which action is captioned Teamsters Local 677 Health Services & Insurance Plan v. Friedman, et al., Case No. 03-C-18-12119 (the "Teamsters Action"). A defendant in the Teamsters Action removed the Teamsters action to the District of Maryland, and the plaintiff in that case has moved to remand the case back to the Circuit Court. That motion is fully briefed and awaiting decision. On December 21, 2018, putative Company shareholder Norfolk County Retirement System filed a shareholder derivative complaint in the District of Maryland against the members of the Company’s Board of Directors, Mr. Ripley, and the Company (as a nominal defendant), which action is captioned Norfolk County Retirement System v. Smith, et al., Case No. 1:18-cv-03952-RDB (the "Norfolk Action," and together with the San Antonio Action and the Teamsters Action, the "Derivative Actions"). The plaintiffs in each of the Derivative Actions allege breaches of fiduciary duties by the defendants in connection with (i) seeking regulatory approval of the Tribune Merger and (ii) the HDO, and the allegations contained therein. The plaintiffs in the Derivative Actions seek declaratory relief, money damages to be awarded to the Company in an amount to be determined at trial, corporate governance reforms, equitable or injunctive relief, and attorney’s fees and costs. Additionally, the plaintiffs in the Teamsters and Norfolk Actions allege that the defendants were unjustly enriched, in the form of their compensation as directors and/or officers of the Company, in light of the alleged breaches of fiduciary duty, and seek restitution to be awarded to the Company. These allegations are the subject matter of the review being conducted by the Special Litigation Committee, as noted above. On April 30, 2019, the Special Litigation Committee moved to dismiss and, in the alternative, to stay the San Antonio and Norfolk Actions, which motion was opposed by the plaintiffs. The Company and the remaining individual defendants joined in this motion. On October 23, 2019, the court granted the plaintiff’s motion in the Teamsters Action to remand that action back to the Circuit Court. On December 9, 2019, the court denied defendants’ motions to dismiss and, in the alternative, to stay the San Antonio and Norfolk Actions without prejudice, subject to potential renewal following limited discovery.

On July 20, 2020, the parties to the Derivative Actions executed a Stipulation and Agreement of Settlement, Compromise and Release (the “Settlement Stipulation”) reflecting the terms of the settlement of the Derivative Actions (the “Settlement”), which Settlement is subject to final approval by the District Court of Maryland. In connection with the Settlement, (a) the Company’s Board of Directors has agreed to implement a series of corporate governance measures (as described in Exhibit A to the Settlement Stipulation); (b) defendants’ insurers will pay $20.5 million into a settlement fund, which, after a deduction for an award of fees and expenses to plaintiffs’ counsel in an amount to be determined by the Court, will be paid to the Company; (c) the Board of Directors will designate an aggregate amount of $5 million of the settlement fund to be used, over a period of five years, for the implementation and operation of the corporate governance measures and certain compliance programs in connection with an FCC consent decree that was previously announced on May 6, 2020; and (d) the Company’s Executive Chairman David D. Smith will forgo, cancel, or return a grant of SARs of 638,298 shares of Sinclair Class A common stock that was awarded to him in February 2020. In exchange for the consideration described above, and subject to final court approval, the Derivative Actions will be dismissed and defendants will be released of any claims relating to the Tribune Merger or the HDO (provided that the release will not include the Securities Action). On July 23, 2020, and pursuant to the Settlement, the Teamsters Action was voluntarily dismissed. Also on July 23, 2020, the plaintiffs in the Norfolk Action and the San Antonio Action filed the settlement papers with the District of Maryland and moved for preliminary approval of the Settlement as fair, reasonable, and adequate, and providing for notice to shareholders of the Settlement. On August 6, 2020, the court entered an order preliminarily approving the settlement and providing for notice of a final settlement hearing to be held on October 27, 2020. On October 27, 2020, the court held the final settlement hearing and indicated that the court would review the submissions and issue a written decision. Defendants have not admitted any liability or wrongdoing in connection with the Settlement and have entered into the Settlement to avoid the costs, risks, distraction, and uncertainties of continued litigation.

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EARNINGS PER SHARE

9 Months Ended

Sep. 30, 2020

Earnings Per Share [Abstract]

EARNINGS PER SHARE

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):

	Three Months Ended   September 30,						Nine Months Ended   September 30,
	2020			2019			2020			2019
Income (Numerator)
Net (loss) income	$	(3,367	)	$	(49	)	$	(2,943	)	$	18
Net income attributable to the redeemable noncontrolling interests	(19		)	(11		)	(51		)	(11		)
Net loss (income) attributable to the noncontrolling interests	130			—			113			(3		)
Numerator for basic and diluted earnings per common share available to common shareholders	$	(3,256	)	$	(60	)	$	(2,881	)	$	4
Shares (Denominator)
Basic weighted-average common shares outstanding	74,810			92,086			81,922			92,050
Dilutive effect of stock-settled appreciation rights and outstanding stock options	—			—			—			1,221
Diluted weighted-average common and common equivalent shares outstanding	74,810			92,086			81,922			93,271

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:

	Three Months Ended   September 30,		Nine Months Ended   September 30,
	2020	2019	2020	2019
Weighted-average stock-settled appreciation rights and outstanding stock options excluded	3,456	1,349	3,406	317

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SEGMENT DATA

9 Months Ended

Sep. 30, 2020

Segment Reporting [Abstract]

SEGMENT DATA

SEGMENT DATA:We measure segment performance based on operating income (loss). We have two reportable segments: broadcast and local sports. Our broadcast segment, previously referred to as our local news and marketing services segment, provides free over-the-air programming to television viewing audiences and includes stations in 88 markets located throughout the continental United States. Our local sports segment, previously referred to as our sports segment, provides viewers with live professional sports content and includes 23 regional sports network brands. Other and corporate are not reportable segments but are included for reconciliation purposes. Other primarily consists of original networks and content, including Tennis, non-broadcast digital and internet solutions, technical services, and other non-media investments. Corporate costs primarily include our costs to operate as a public company and to operate our corporate headquarters location. All of our businesses are located within the United States.

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

As of September 30, 2020	Broadcast		Local sports		Other & Corporate		Eliminations			Consolidated
Assets	$	4,673	$	6,211	$	1,641	$	(42	)	$	12,483

For the three months ended September 30, 2020	Broadcast			Local sports			Other & Corporate			Eliminations				Consolidated
Revenue	$	734		$	727		$	105		$	(27	)	(b)	$	1,539
Depreciation of property and equipment and amortization of definite-lived intangibles and other assets	60			109			6			(1		)		174
Amortization of sports programming rights (a)	—			632			—			—				632
Amortization of program contract costs	19			—			—			—				19
Corporate general and administrative expenses	25			3			2			—				30
(Gain) loss on asset dispositions and other, net of impairment	(41		)	—			2			—				(39		)
Impairment of goodwill and definite-lived intangible assets	—			4,264			—			—				4,264
Operating income (loss)	221			(4,450		)	10			3				(4,216		)
Interest expense including amortization of debt discount and deferred financing costs	2			111			48			(4		)		157
Loss from equity method investments	—			(2		)	(8		)	—				(10		)

For the three months ended September 30, 2019	Broadcast			Local sports			Other & Corporate			Eliminations				Consolidated
Revenue	$	661		$	352		$	129		$	(17	)	(b)	$	1,125
Depreciation of property and equipment and amortization of definite-lived intangibles and other assets	61			54			6			(1		)		120
Amortization of sports programming rights (a)	—			193			—			—				193
Amortization of program contract costs	22			—			—			—				22
Corporate general and administrative expenses	23			92			123			(1		)		237
Gain on asset dispositions and other, net of impairment	(29		)	—			(6		)	—				(35		)
Operating income (loss)	154			(56		)	(102		)	(2		)		(6		)
Interest expense including amortization of debt discount and deferred financing costs	1			73			58			(3		)		129
Income (loss) from equity method investments	—			1			(13		)	—				(12		)

For the nine months ended September 30, 2020	Broadcast			Local sports			Other & Corporate			Eliminations				Consolidated
Revenue	$	2,026		$	2,155		$	338		$	(88	)	(b)	$	4,431
Depreciation of property and equipment and amortization of definite-lived intangibles and other assets	178			328			19			(1		)		524
Amortization of sports programming rights (a)	—			1,028			—			—				1,028
Amortization of program contract costs	63			—			—			—				63
Corporate general and administrative expenses	95			7			9			—				111
(Gain) loss on asset dispositions and other, net of impairment	(101		)	—			2			—				(99		)
Impairment of goodwill and definite-lived intangible assets	—			4,264			—			—				4,264
Operating income (loss)	455			(3,885		)	38			(5		)		(3,397		)
Interest expense including amortization of debt discount and deferred financing costs	4			351			156			(9		)		502
Income (loss) from equity method investments	—			6			(29		)	—				(23		)

For the nine months ended September 30, 2019	Broadcast			Local sports			Other & Corporate			Eliminations				Consolidated
Revenue	$	1,939		$	352		$	354		$	(27	)	(b)	$	2,618
Depreciation of property and equipment and amortization of definite-lived intangibles and other assets	183			54			16			(1		)		252
Amortization of sports programming rights (a)	—			193			—			—				193
Amortization of program contract costs	68			—			—			—				68
Corporate general and administrative expenses	82			92			144			(1		)		317
Gain on asset dispositions and other, net of impairment	(51		)	—			(6		)	—				(57		)
Operating income (loss)	384			(56		)	(128		)	(7		)		193
Interest expense including amortization of debt discount and deferred financing costs	4			73			170			(10		)		237
Income (loss) from equity method investments	—			1			(39		)	—				(38		)

(a) The amortization of sports programming rights is included within media programming and production expenses on our consolidated statements of operations. Due to the outbreak of COVID-19 and postponement of professional sports leagues, we did not record amortization of our sports contracts during the month of March 2020 and three months ended June 30, 2020. Amortization expense resumed when the games commenced during the three months ended September 30, 2020.

(b)

Includes $26 million and $75 million for the three and nine months ended September 30, 2020, respectively, and $9 million for both the three and nine months ended September 30, 2019 of revenue for services provided by broadcast to local sports and other, which are eliminated in consolidation.

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VARIABLE INTEREST ENTITIES

9 Months Ended

Sep. 30, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

VARIABLE INTEREST ENTITIES

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.

We are party to a joint venture associated with Marquee. Marquee is party to a long term telecast rights agreement which provides the rights to air certain live game telecasts and other content, which we guarantee. In connection with the RSN Acquisition, we became party to a joint venture associated with one other regional sports network. We participate significantly in the economics and have the power to direct the activities which significantly impact the economic performance of these regional sports networks, including sales and certain operational services. We consolidate these regional sports networks because they are variable interest entities and we are the primary beneficiary.

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):

	As of September 30, 2020		As of December 31, 2019
ASSETS
Current assets:
Cash and cash equivalents	$	37	$	39
Accounts receivable, net	89		39
Prepaid sports rights	10		10
Other current assets	7		6
Total current assets	143		94
Property and equipment, net	17		15
Operating lease assets	6		8
Goodwill and indefinite-lived intangible assets	15		15
Definite-lived intangible assets, net	55		93
Other assets	1		3
Total assets	$	237	$	228
LIABILITIES
Current liabilities:
Other current liabilities	$	35	$	19
Notes payable, finance leases and commercial bank financing, less current portion	11		15
Operating lease liabilities, less current portion	5		6
Program contracts payable, less current portion	4		7
Other long-term liabilities	14		1
Total liabilities	$	69	$	48

The amounts above represent the consolidated 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 $130 million and $127 million as of September 30, 2020 and December 31, 2019, respectively, 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, 2020, 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 debt 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 $78 million and $71 million as of September 30, 2020 and December 31, 2019, respectively. 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 from equity method investments and other income, net, respectively, in our consolidated statements of operations. We recorded losses of $7 million and $29 million for the three and nine months ended September 30, 2020, respectively, and losses of $13 million and $38 million for the three and nine months ended September 30, 2019, respectively.

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RELATED PERSON TRANSACTIONS

9 Months Ended

Sep. 30, 2020

Related Party Transactions [Abstract]

RELATED PERSON TRANSACTIONS

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 $1 million for both the three months ended September 30, 2020 and 2019 and $4 million for both the nine months ended September 30, 2020 and 2019. 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 less than $1 million for both the three and nine months ended September 30, 2020. For all leases, we incurred expenses of $1 million for the three months ended September 30, 2019 and $2 million for the nine months ended September 30, 2019.

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; and KRNV-DT/KENV-DT Reno, Nevada/Salt Lake City, Utah (collectively, the Cunningham Stations). Certain of our stations provide services to the Cunningham Stations pursuant to LMAs or JSAs and SSAs. See Note 8. Variable Interest Entities, for further discussion of the scope of services provided under these types of arrangements. As of September 30, 2020, we have jointly and severally, unconditionally, and irrevocably guaranteed $42 million of Cunningham's debt, of which $8 million, net of $0.4 million deferred financing costs, relates to the Cunningham VIEs that we consolidate.

The voting stock of Cunningham is owned by an unrelated party. All of the non-voting stock 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, 2023 and there are two additional 5-year renewal terms 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) $5 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 $53 million and $51 million as of September 30, 2020 and December 31, 2019, respectively. The remaining aggregate purchase price of these stations, net of prepayments, as of both September 30, 2020 and December 31, 2019, was approximately $54 million. Additionally, we provide services to WDBB-TV pursuant to an LMA, which expires April 22, 2025, and have a purchase option to acquire for $0.2 million. We paid Cunningham, under these agreements, $2 million for both the three months ended September 30, 2020 and 2019 and $6 million for both the nine months ended September 30, 2020 and 2019.

The agreements with KBVU-TV/KCVU-TV, KRNV-DT/KENV-DT, WBSF-TV, WEMT-TV, WGTU-TV/WGTQ-TV, WPFO-TV, and WYDO-TV expire between December 2020 and August 2025 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 revenues of the stations are reported in our consolidated statements of operations. Our consolidated revenues include $39 million and $38 million for the three months ended September 30, 2020 and 2019, respectively, and $111 million for both the nine months ended September 30, 2020 and 2019, 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 June 2022. Under the agreement, Cunningham paid us an initial fee of $1 million and pays us $0.2 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 $1 million that expires in October 2021.

Atlantic Automotive Corporation

We sell advertising time to Atlantic Automotive Corporation (Atlantic Automotive), a holding company that owns automobile dealerships and an automobile leasing company. David D. Smith, our Executive Chairman, has a controlling interest in, and is a member of the Board of Directors of, Atlantic Automotive. We received payments for advertising totaling less than $0.1 million for both the three and nine months ended September 30, 2020 and $0.2 million for both the three and nine months ended September 30, 2019.

Leased property by real estate ventures

Certain of our real estate ventures have entered into leases with entities owned by members of the Smith Family. Total rent received under these leases was $0.3 million for both the three months ended September 30, 2020 and 2019 and $0.7 million for both the nine months ended September 30, 2020 and 2019.

Equity method investees

YES Network. In August 2019, YES Network, an equity method investee, entered into a management services agreement with the Company, in which the Company provides certain services for an initial term that expires on August 29, 2025. The agreement will automatically renew for two 2-year renewal terms, with a final expiration on August 29, 2029. Pursuant to the terms of the agreement, the YES Network paid us a management services fee of $1 million and $4 million for the three and nine months ended September 30, 2020, respectively, and $0.4 million for both the three and nine months ended September 30, 2019.

In conjunction with the acquisition of the RSNs on August 23, 2019, as discussed in Note 2. Acquisitions and Dispositions of Assets, we assumed a minority interest in certain mobile production companies, which we account for as equity method investments. We made payments for production services to these entities totaling $7 million and $16 million for the three and nine months ended September 30, 2020, respectively, and $4 million for both the three and nine months ended September 30, 2019.

Sports Programming Rights

The Company paid $15 million and $221 million, net of rebates, for the three and nine months ended September 30, 2020, respectively, and $38 million for both the three and nine months ended September 30, 2019, under sports programming rights agreements covering the broadcast of regular season games, to six professional teams who have non-controlling equity interests in certain of our RSNs. These agreements expire on various dates during the fiscal years ended 2025 through 2032.

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FAIR VALUE MEASUREMENTS

9 Months Ended

Sep. 30, 2020

Fair Value Disclosures [Abstract]

FAIR VALUE MEASUREMENTS

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 carrying value and fair value of our financial assets and liabilities for the periods presented (in millions):

	As of September 30, 2020				As of December 31, 2019
	Carrying Value		Fair Value		Carrying Value		Fair Value
Level 1:
STG:
Money market funds	$	239	$	239	$	354	$	354
Deferred compensation assets	37		37		36		36
Deferred compensation liabilities	32		32		33		33
DSG:
Money market funds	47		47		559		559
Level 2 (a):
STG:
5.875% Senior Unsecured Notes due 2026	348		342		350		368
5.625% Senior Unsecured Notes due 2024	550		547		550		566
5.500% Senior Unsecured Notes due 2030	500		464		500		511
5.125% Senior Unsecured Notes due 2027	400		373		400		411
Term Loan B	1,319		1,282		1,329		1,326
Term Loan B-2	1,287		1,252		1,297		1,300
DSG:
12.750% Senior Secured Notes due 2026 (b)	31		25		—		—
6.625% Senior Unsecured Notes due 2027 (b)	1,744		908		1,825		1,775
5.375% Senior Secured Notes due 2026	3,050		2,158		3,050		3,085
Term Loan	3,267		2,597		3,292		3,284
Accounts receivable securitization facility (c)	74		74		—		—
Debt of variable interest entities	18		18		21		21
Debt of non-media subsidiaries	18		18		18		18
Level 3
DSG:
Variable payment obligations (d)	64		64		239		239

(a) Amounts are carried in our consolidated balance sheets net of debt discount, premium, and deferred financing cost, which are excluded in the above table, of $182 million and $231 million as of September 30, 2020 and December 31, 2019, respectively.

(b) On June 10, 2020, we exchanged $66.5 million aggregate principal amount of the DSG 6.625% Notes for cash payments of $10 million, including accrued but unpaid interest, and $31 million aggregate principal amount of the newly issued DSG 12.750% Secured Notes. See Note 3. Notes Payable, Finance Leases, and Commercial Bank Financing for further information.

(c) We entered into the A/R Facility on September 23, 2020. As of September 30, 2020, the balance of the loans under the A/R Facility was $74 million. See Note 3. Notes Payable, Finance Leases, and Commercial Bank Financing for further information.

(d) The Company records its variable payment obligations at fair value on a recurring basis. These liabilities are further described in Other Liabilities within Note 5. Commitments and Contingencies. Significant unobservable inputs used in the fair value measurement are projected future operating income before depreciation and amortization; and weighted average discount rate of 10%. Significant increases (decreases) in projected future operating income would generally result in a significantly higher (lower) fair value measurement. Significant increases (decreases) in discount rates, would result in a significantly (lower) higher fair value measurement.

The following table summarizes the changes in financial liabilities 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, 2020 (in millions):

	Variable Payment Obligations
Fair value at June 30, 2020	$	235
Payments	(6		)
Measurement adjustments	(165		)
Fair value at September 30, 2020	$	64
	Variable Payment Obligations
Fair value at December 31, 2019	$	239
Payments	(16		)
Measurement adjustments	(159		)
Fair value at September 30, 2020	$	64

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CONDENSED CONSOLIDATING FINANCIAL STATEMENTS

9 Months Ended

Sep. 30, 2020

Condensed Financial Information Disclosure [Abstract]

CONDENSED CONSOLIDATING FINANCIAL STATEMENTS

CONDENSED CONSOLIDATING FINANCIAL STATEMENTS:

Sinclair Television Group, Inc. (STG), a wholly-owned subsidiary and the television operating subsidiary of Sinclair Broadcast Group, Inc. (SBG), is the primary obligor under the STG Bank Credit Agreement, 5.625% Notes, 5.875% Notes, 5.125% Notes, and 5.500% Notes (collectively, the Notes are referred to as the "STG Notes"), and, until they were redeemed, STG's 5.375% Notes and 6.125% Notes. STG’s 5.625% Notes were publicly registered on a Registration Statement on Form S-3ASR (No. 333-203483), effective April 17, 2015, and, until they were redeemed, STG’s 6.125% Notes were publicly registered on a Registration Statement on Form S-4 (No. 333-187724), effective April 16, 2013. Our Class A Common Stock and Class B Common Stock as of September 30, 2020, were obligations or securities of SBG and not obligations or securities of STG. SBG is a guarantor under the STG Bank Credit Agreement, 5.625% Notes, 5.875% Notes, 5.125% Notes, 5.500% Notes and, until they were redeemed, STG's 5.375% Notes and 6.125% Notes. As of September 30, 2020, our consolidated total debt, net of deferred financing costs and debt discounts, of $12,463 million included $4,415 million related to STG and its subsidiaries of which SBG guaranteed $4,375 million.

SBG, KDSM, LLC, a wholly-owned subsidiary of SBG, and STG’s wholly-owned subsidiaries (guarantor subsidiaries) have fully and unconditionally guaranteed, subject to certain customary automatic release provisions, all of STG’s obligations. Those guarantees are joint and several. There are certain contractual restrictions on the ability of SBG, STG, or KDSM, LLC to obtain funds from their subsidiaries in the form of dividends or loans.

The following condensed consolidating financial statements present the consolidated balance sheets, consolidated statements of operations and comprehensive income, and consolidated statements of cash flows of SBG, STG, KDSM, LLC and the guarantor subsidiaries, the direct and indirect non-guarantor subsidiaries of SBG and the eliminations necessary to arrive at our information on a consolidated basis.

These statements are presented in accordance with the disclosure requirements under SEC Regulation S-X, Rule 3-10.

CONDENSED CONSOLIDATING BALANCE SHEET

AS OF SEPTEMBER 30, 2020

(in millions) (unaudited)

	Sinclair Broadcast Group, Inc.			Sinclair Television Group, Inc.		Guarantor Subsidiaries and KDSM, LLC		Non- Guarantor Subsidiaries			Eliminations			Sinclair Consolidated
Cash and cash equivalents	$	—		$	262	$	4	$	366		$	—		$	632
Accounts receivable, net	—			—		510		598			—			1,108
Other current assets	9			55		403		416			(82		)	801
Total current assets	9			317		917		1,380			(82		)	2,541
Property and equipment, net	1			32		704		104			(27		)	814
Investment in equity of consolidated subsidiaries	331			3,516		—		—			(3,847		)	—
Restricted cash	—			—		—		1			—			1
Goodwill	—			—		2,082		10			—			2,092
Indefinite-lived intangible assets	—			—		149		14			—			163
Definite-lived intangible assets, net	—			—		1,299		4,491			(43		)	5,747
Other long-term assets	84			1,768		282		1,225			(2,234		)	1,125
Total assets	$	425		$	5,633	$	5,433	$	7,225		$	(6,233	)	$	12,483
Accounts payable and accrued liabilities	$	15		$	61	$	262	$	210		$	(82	)	$	466
Current portion of long-term debt	—			27		5		41			(1		)	72
Other current liabilities	1			1		192		242			—			436
Total current liabilities	16			89		459		493			(83		)	974
Long-term debt	700			4,331		35		8,363			(1,038		)	12,391
Investment in deficit of consolidated subsidiaries	1,434			—		—		—			(1,434		)	—
Other long-term liabilities	12			121		1,427		457			(1,416		)	601
Total liabilities	2,162			4,541		1,921		9,313			(3,971		)	13,966
Redeemable noncontrolling interests	—			—		—		194			—			194
Total Sinclair Broadcast Group (deficit) equity	(1,737		)	1,092		3,512		(2,338		)	(2,266		)	(1,737		)
Noncontrolling interests in consolidated subsidiaries	—			—		—		56			4			60
Total liabilities, redeemable noncontrolling interests, and equity	$	425		$	5,633	$	5,433	$	7,225		$	(6,233	)	$	12,483

CONDENSED CONSOLIDATING BALANCE SHEET

AS OF DECEMBER 31, 2019

(in millions)

	Sinclair Broadcast Group, Inc.		Sinclair Television Group, Inc.		Guarantor Subsidiaries and KDSM, LLC		Non- Guarantor Subsidiaries		Eliminations			Sinclair Consolidated
Cash and cash equivalents	$	—	$	357	$	3	$	973	$	—		$	1,333
Accounts receivable, net	—		—		561		571		—			1,132
Other current assets	5		41		264		188		(50		)	448
Total current assets	5		398		828		1,732		(50		)	2,913
Property and equipment, net	1		31		659		96		(22		)	765
Investment in consolidated subsidiaries	2,270		3,558		—		—		(5,828		)	—
Goodwill	—		—		2,091		2,625		—			4,716
Indefinite-lived intangible assets	—		—		144		14		—			158
Definite-lived intangible assets, net	—		—		1,426		6,598		(47		)	7,977
Other long-term assets	82		1,611		279		618		(1,749		)	841
Total assets	$	2,358	$	5,598	$	5,427	$	11,683	$	(7,696	)	$	17,370
Accounts payable and accrued liabilities	$	142	$	109	$	286	$	296	$	(51	)	$	782
Current portion of long-term debt	—		27		4		41		(1		)	71
Other current liabilities	—		1		133		147		—			281
Total current liabilities	142		137		423		484		(52		)	1,134
Long-term debt	700		4,348		32		8,317		(1,030		)	12,367
Other long-term liabilities	13		53		1,418		547		(934		)	1,097
Total liabilities	855		4,538		1,873		9,348		(2,016		)	14,598
Redeemable noncontrolling interests	—		—		—		1,078		—			1,078
Total Sinclair Broadcast Group equity	1,503		1,060		3,554		1,069		(5,684		)	1,502
Noncontrolling interests in consolidated subsidiaries	—		—		—		188		4			192
Total liabilities, redeemable noncontrolling interests, and equity	$	2,358	$	5,598	$	5,427	$	11,683	$	(7,696	)	$	17,370

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2020

(in millions) (unaudited)

	Sinclair Broadcast Group, Inc.			Sinclair Television Group, Inc.			Guarantor Subsidiaries and KDSM, LLC			Non- Guarantor Subsidiaries			Eliminations			Sinclair Consolidated
Net revenue	$	—		$	25		$	774		$	786		$	(46	)	$	1,539
Media programming and production expenses	—			—			322			772			(17		)	1,077
Selling, general and administrative expenses	2			27			160			77			(24		)	242
Impairment of goodwill and definite-lived intangible assets	—			—			—			4,264			—			4,264
Depreciation, amortization and other operating expenses	1			1			40			133			(3		)	172
Total operating expenses	3			28			522			5,246			(44		)	5,755
Operating (loss) income	(3		)	(3		)	252			(4,460		)	(2		)	(4,216		)
Equity in (loss) earnings of consolidated subsidiaries	(3,252		)	302			—			—			2,950			—
Interest expense	(3		)	(45		)	(1		)	(114		)	6			(157		)
Other income (expense)	1			5			(11		)	168			(4		)	159
Total other (expense) income	(3,254		)	262			(12		)	54			2,952			2
Income tax benefit	1			55			64			727			—			847
Net (loss) income	(3,256		)	314			304			(3,679		)	2,950			(3,367		)
Net income attributable to the redeemable noncontrolling interests	—			—			—			(19		)	—			(19		)
Net loss attributable to the noncontrolling interests	—			—			—			130			—			130
Net (loss) income attributable to Sinclair Broadcast Group	$	(3,256	)	$	314		$	304		$	(3,568	)	$	2,950		$	(3,256	)
Comprehensive (loss) income	$	(3,256	)	$	314		$	304		$	(3,679	)	$	2,950		$	(3,367	)

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2019

(in millions) (unaudited)

	Sinclair Broadcast Group, Inc.			Sinclair Television Group, Inc.			Guarantor Subsidiaries and KDSM, LLC			Non- Guarantor Subsidiaries			Eliminations			Sinclair Consolidated
Net revenue	$	—		$	9		$	702		$	445		$	(31	)	$	1,125
Media programming and production expenses	—			—			312			262			(14		)	560
Selling, general and administrative expenses	122			24			162			124			(10		)	422
Depreciation, amortization and other operating expenses	—			(6		)	55			104			(4		)	149
Total operating expenses	122			18			529			490			(28		)	1,131
Operating (loss) income	(122		)	(9		)	173			(45		)	(3		)	(6		)
Equity in earnings of consolidated subsidiaries	35			202			—			—			(237		)	—
Interest expense	(1		)	(55		)	(1		)	(76		)	4			(129		)
Other income (expense)	1			(2		)	(12		)	6			(2		)	(9		)
Total other income (expense)	35			145			(13		)	(70		)	(235		)	(138		)
Income tax benefit	27			4			43			21			—			95
Net (loss) income	(60		)	140			203			(94		)	(238		)	(49		)
Net income attributable to the redeemable noncontrolling interests	—			—			—			(11		)	—			(11		)
Net (loss) income attributable to Sinclair Broadcast Group	$	(60	)	$	140		$	203		$	(105	)	$	(238	)	$	(60	)
Comprehensive (loss) income	$	(60	)	$	140		$	203		$	(94	)	$	(238	)	$	(49	)

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2020

(in millions) (unaudited)

	Sinclair Broadcast Group, Inc.			Sinclair Television Group, Inc.			Guarantor Subsidiaries and KDSM, LLC			Non- Guarantor Subsidiaries			Eliminations			Sinclair Consolidated
Net revenue	$	—		$	74		$	2,140		$	2,350		$	(133	)	$	4,431
Media programming and production expenses	—			—			962			1,371			(45		)	2,288
Selling, general and administrative expenses	8			97			479			207			(72		)	719
Impairment of goodwill and definite-lived intangible assets	—			—			—			4,264			—			4,264
Depreciation, amortization and other operating expenses	1			6			143			416			(9		)	557
Total operating expenses	9			103			1,584			6,258			(126		)	7,828
Operating (loss) income	(9		)	(29		)	556			(3,908		)	(7		)	(3,397		)
Equity in (loss) earnings of consolidated subsidiaries	(2,866		)	542			—			—			2,324			—
Interest expense	(10		)	(147		)	(3		)	(361		)	19			(502		)
Other income (expense)	—			11			(30		)	180			(10		)	151
Total other (expense) income	(2,876		)	406			(33		)	(181		)	2,333			(351		)
Income tax benefit	4			75			24			702			—			805
Net (loss) income	(2,881		)	452			547			(3,387		)	2,326			(2,943		)
Net income attributable to the redeemable noncontrolling interests	—			—			—			(51		)	—			(51		)
Net loss attributable to the noncontrolling interests	—			—			—			113			—			113
Net (loss) income attributable to Sinclair Broadcast Group	$	(2,881	)	$	452		$	547		$	(3,325	)	$	2,326		$	(2,881	)
Comprehensive (loss) income	$	(2,881	)	$	452		$	547		$	(3,396	)	$	2,326		$	(2,952	)

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2019

(in millions) (unaudited)

	Sinclair Broadcast Group, Inc.			Sinclair Television Group, Inc.			Guarantor Subsidiaries and KDSM, LLC			Non- Guarantor Subsidiaries			Eliminations			Sinclair Consolidated
Net revenue	$	—		$	9		$	2,064		$	616		$	(71	)	$	2,618
Media programming and production expenses	—			—			931			325			(41		)	1,215
Selling, general and administrative expenses	143			82			481			133			(12		)	827
Depreciation, amortization and other operating expenses	—			(3		)	203			193			(10		)	383
Total operating expenses	143			79			1,615			651			(63		)	2,425
Operating (loss) income	(143		)	(70		)	449			(35		)	(8		)	193
Equity in earnings of consolidated subsidiaries	116			410			—			—			(526		)	—
Interest expense	(2		)	(160		)	(2		)	(85		)	12			(237		)
Other income (expense)	2			3			(35		)	5			(1		)	(26		)
Total other income (expense)	116			253			(37		)	(80		)	(515		)	(263		)
Income tax benefit	31			33			3			21			—			88
Net income (loss)	4			216			415			(94		)	(523		)	18
Net income attributable to the redeemable noncontrolling interests	—			—			—			(11		)	—			(11		)
Net income attributable to the noncontrolling interests	—			—			—			(3		)	—			(3		)
Net income (loss) attributable to Sinclair Broadcast Group	$	4		$	216		$	415		$	(108	)	$	(523	)	$	4
Comprehensive income (loss)	$	4		$	216		$	415		$	(94	)	$	(523	)	$	18

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2020

(in millions) (unaudited)

	Sinclair Broadcast Group, Inc.			Sinclair Television Group, Inc.			Guarantor Subsidiaries and KDSM, LLC			Non- Guarantor Subsidiaries			Eliminations			Sinclair Consolidated
NET CASH FLOWS (USED IN) FROM OPERATING ACTIVITIES	$	(115	)	$	(39	)	$	481		$	510		$	2		$	839
NET CASH FLOWS USED IN INVESTING ACTIVITIES
Acquisition of property and equipment	—			(7		)	(110		)	(19		)	6			(130		)
Acquisition of businesses, net of cash acquired	—			—			(7		)	—			—			(7		)
Spectrum repack reimbursements	—			—			72			—			—			72
Proceeds from the sale of assets	—			—			36			—			—			36
Purchases of investments	(2		)	(30		)	(33		)	(20		)	—			(85		)
Other, net	1			—			(2		)	17			—			16
Net cash flows used in investing activities	(1		)	(37		)	(44		)	(22		)	6			(98		)
NET CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES
Proceeds from notes payable and commercial bank financing	—			648			—			299			—			947
Repayments of notes payable, commercial bank financing and finance leases	—			(670		)	(3		)	(272		)	—			(945		)
Repurchase of outstanding Class A Common Stock	(343		)	—			—			—			—			(343		)
Dividends paid on Class A and Class B Common Stock	(49		)	—			—			—			—			(49		)
Dividends paid on redeemable subsidiary preferred equity	—			—			—			(32		)	—			(32		)
Redemption of redeemable subsidiary preferred equity	—			—			—			(547		)	—			(547		)
Debt issuance costs	—			—			—			(7		)	—			(7		)
Distributions to noncontrolling interests, net	—			—			—			(19		)	—			(19		)
Distributions to redeemable noncontrolling interests	—			—			—			(378		)	—			(378		)
Increase (decrease) in intercompany payables	507			3			(433		)	(69		)	(8		)	—
Other, net	1			—			—			(69		)	—			(68		)
Net cash flows from (used in) financing activities	116			(19		)	(436		)	(1,094		)	(8		)	(1,441		)
NET (DECREASE) INCREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH	—			(95		)	1			(606		)	—			(700		)
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, beginning of period	—			357			3			973			—			1,333
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, end of period	$	—		$	262		$	4		$	367		$	—		$	633

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2019

(in millions) (unaudited)

	Sinclair Broadcast Group, Inc.			Sinclair Television Group, Inc.			Guarantor Subsidiaries and KDSM, LLC			Non- Guarantor Subsidiaries			Eliminations			Sinclair Consolidated
NET CASH FLOWS (USED IN) FROM OPERATING ACTIVITIES	$	(4	)	$	(188	)	$	538		$	157		$	(9	)	$	494
NET CASH FLOWS USED IN INVESTING ACTIVITIES
Acquisition of property and equipment	—			(2		)	(99		)	(4		)	9			(96		)
Acquisition of businesses, net of cash acquired	—			—			—			(9,006		)	—			(9,006		)
Spectrum repack reimbursements	—			—			50			—			—			50
Purchases of investments	(2		)	(36		)	(42		)	(351		)	—			(431		)
Other, net	—			2			—			4			—			6
Net cash flows used in investing activities	(2		)	(36		)	(91		)	(9,357		)	9			(9,477		)
NET CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES
Proceeds from notes payable and commercial bank financing	—			1,294			—			8,159			—			9,453
Repayments of notes payable, commercial bank financing and finance leases	—			(706		)	(3		)	(26		)	20			(715		)
Proceeds from the issuance of redeemable subsidiary preferred equity, net	—			—			—			985			—			985
Repurchase of outstanding Class A Common Stock	(125		)	—			—			—			—			(125		)
Dividends paid on Class A and Class B Common Stock	(55		)	—			—			—			—			(55		)
Dividends paid on redeemable subsidiary preferred equity	—			—			—			(10		)	—			(10		)
Debt issuance costs	—			(15		)	—			(167		)	—			(182		)
Distributions to noncontrolling interests	—			—			—			(30		)	—			(30		)
Increase (decrease) in intercompany payables	186			(1,074		)	(454		)	1,362			(20		)	—
Other, net	—			1			—			—			—			1
Net cash flows from (used in) financing activities	6			(500		)	(457		)	10,273			—			9,322
NET (DECREASE) INCREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH	—			(724		)	(10		)	1,073			—			339
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, beginning of period	—			962			19			79			—			1,060
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, end of period	$	—		$	238		$	9		$	1,152		$	—		$	1,399

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NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

9 Months Ended

Sep. 30, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Nature of Operations

Nature of Operations

Sinclair Broadcast Group, Inc. (the Company) is a diversified television media company with national reach and a strong focus on providing high-quality content on our local television stations, regional sports networks, 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, college and professional sports, and other original programming produced by us. Additionally, we own digital media products that are complementary to our extensive portfolio of television station related digital properties. Outside of our media related businesses, we operate technical services companies focused on supply and maintenance of broadcast transmission systems as well as research and development for the advancement of broadcast technology, and we manage other non-media related investments.

Principles of Consolidation and Interim Financial Statements

Principles of Consolidation

The consolidated financial statements include our accounts and those of our wholly-owned and majority-owned subsidiaries, including the operating results of the RSNs acquired on August 23, 2019, as discussed in Note 2. Acquisitions and Dispositions of Assets, 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. Noncontrolling interests which may be redeemed by the holder, and the redemption is outside of our control, are presented as redeemable noncontrolling interests. 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 8. 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, 2020 and 2019 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 income, consolidated statements of equity and redeemable noncontrolling interests, and consolidated statements of cash flows for these periods as adjusted for the adoption of recent accounting pronouncements discussed below.

As permitted under the applicable rules and regulations of the Securities and Exchange Commission (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, 2019 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.

Equity Investments

Equity 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.

Equity Method Investments

We account for our investment in the YES Network as an equity method investment, which is recorded within other assets in our consolidated balance sheets, and in which our proportionate share of the net income generated by the investment is included within loss from equity method investments in our consolidated statements of operations.

Use of Estimates

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, revenues, and expenses in the consolidated financial statements and in the disclosures of contingent assets and liabilities. Actual results could differ from those estimates.

The impact of the outbreak of the novel coronavirus (COVID-19) continues to create significant uncertainty and disruption in the global economy and financial markets. It is reasonably possible that these uncertainties could further materially impact our estimates related to, but not limited to, revenue recognition, goodwill and intangible assets, program contract costs, sports programming rights, and income taxes. As a result, many of our estimates and assumptions require increased judgment and carry a higher degree of variability and volatility. Our estimates may change as new events occur and additional information emerges, and such changes are recognized or disclosed in our consolidated financial statements.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

In June 2016, the FASB issued amended guidance on the accounting for credit losses on financial instruments. Among other provisions, this guidance introduces a new impairment model for most financial assets and certain other instruments. For trade and other receivables, held-to-maturity debt securities, loans and other instruments, entities will be required to use a forward-looking “expected loss” model that will replace the current “incurred loss” model that will generally result in the earlier recognition of allowances for losses. We adopted this guidance during the first quarter of 2020. The impact of the adoption did not have a material impact on our consolidated financial statements.

In August 2018, the FASB issued guidance which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software, with the capitalized implementation costs of a hosting arrangement that is a service contract expensed over the term of the hosting arrangement. We adopted this guidance during the first quarter of 2020. The impact of the adoption did not have a material impact on our consolidated financial statements.

In October 2018, the FASB issued guidance for determining whether a decision-making fee is a variable interest. The amendments require organizations to consider indirect interests held through related parties under common control on a proportional basis rather than as the equivalent of a direct interest in its entirety, as currently required in generally accepted accounting principles (GAAP). We adopted this guidance during the first quarter of 2020. The impact of the adoption did not have a material impact on our consolidated financial statements.

In March 2019, the FASB issued guidance which requires that an entity test a film or license agreement within the scope of Subtopic 920-350 for impairment at the film group level, when the film or license agreement is predominantly monetized with other films and/or license agreements. We adopted this guidance during the first quarter of 2020. The impact of the adoption did not have a material impact on our consolidated financial statements. See Broadcast Television Programming below for further information on our accounting for television program contracts.

In December 2019, the FASB issued guidance which is intended to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. ASU 2019-12 will be effective for interim and annual periods beginning after December 15, 2020. Early adoption is permitted. We early adopted this guidance during the third quarter of 2020. The impact of the adoption did not have a material impact on our consolidated financial statements.

In March 2020, the FASB issued guidance providing optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by the discontinuation of the London Interbank Offered Rate (LIBOR) or by another reference rate expected to be discontinued. The guidance was effective for all entities immediately upon issuance of the update and may be applied prospectively to applicable transactions existing as of or entered into from the date of adoption through December 31, 2022. We are currently evaluating the impact of this guidance, if elected, but do not expect a material impact on our consolidated financial statements.

Broadcast Television Programming

Broadcast Television Programming

We have agreements with rights holders for the rights to television programming over contract periods, which generally run from one to seven years. Contract payments are made in installments over periods 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 contract costs are amortized on a straight-line basis except for contracts greater than three years which are amortized utilizing an accelerated method. Program contract 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.

Fair value is determined utilizing a discounted cash flow model based on management’s expectation of future advertising revenues, net of sales commissions, to be generated by the program material. We assess our program contract costs on a quarterly basis to ensure the costs are recorded at the lower of unamortized cost or fair value

Sports Programming Rights

Sports Programming Rights

We have multi-year program rights agreements that provide the Company with the right to produce and telecast professional live sports games within a specified territory in exchange for a rights fee. A prepaid asset is recorded for rights acquired related to future games upon payment of the contracted fee. The assets recorded for the acquired rights are classified as current or non-current based on the period when the games are expected to be aired. Liabilities are recorded for any program rights obligations that have been incurred but not yet paid at period end. We amortize these programing rights as an expense over each season based upon contractually stated rates. Amortization is accelerated in the event that the stated contractual rates over the term of the rights agreement results in an expense recognition pattern that is inconsistent with the projected growth of revenue over the contractual term.

Certain rights agreements with professional teams contain provisions which require the rebate of rights fees paid by the Company if a contractually minimum number of live games are not delivered. Rights fees paid in advance of expense recognition, inclusive of any contractual rebates due to the Company, are included within prepaid sports rights in our consolidated balance sheets.

Revenue Recognition

Distribution Revenue. We generate distribution revenue through fees received from multi-channel video programming distributors (MVPDs) and virtual MVPDs (vMVPDs, and together with MVPDs, "Distributors") for the right to distribute our stations, RSNs, 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.

Certain of our distribution arrangements contain provisions that require the Company to deliver a minimum number of live professional sports games or tournaments during a defined period which usually corresponds with a calendar year. If the minimum threshold is not met, we may be obligated to refund a portion of the distribution fees received if shortfalls are not cured within a specified period of time. Our ability to meet these requirements is primarily driven by the delivery of games by the professional sports leagues. The Company has not historically paid any material rebates under these contractual provisions as it is unusual for there to be an event which is significant enough to preclude the Company from meeting or exceeding these thresholds. The COVID-19 pandemic has resulted in significant disruptions to the normal operations of the professional sports leagues resulting in delays and uncertainty with respect to regularly scheduled games. Decisions made by the leagues during the second quarter of 2020 regarding the timing and format of the revised 2020 seasons have resulted, in some cases, in our inability to meet these minimum requirements and the need to reduce revenue based upon estimated rebates due to our distribution customers. These estimated rebates will be recognized over the measurement period of the rebate which is the year ended December 31, 2020. For the three and nine months ended September 30, 2020, we reduced revenue by, and accrued corresponding rebates to Distributors of $128 million and $252 million, respectively. See Subsequent Events within Note 1. Nature of Operations and Summary of Significant Accounting Policies.

Advertising Revenue. We generate advertising revenue primarily from the sale of advertising spots/impressions within our broadcast television, RSN, 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.

Impairment of Goodwill and Definite-Lived Intangible Assets

The long-lived asset impairment test requires a comparison of undiscounted cash flows expected to be generated over the useful life of an asset group to the carrying value of the asset group. Assets are grouped at the lowest level for which identifiable cash flows are largely independent of the cash flows of other groups of assets and liabilities. We have concluded that each of our RSNs individually qualify as an asset group and therefore the test was performed at each RSN level accordingly. We estimated the projected undiscounted cash flows over the remaining useful life of each asset group. The more significant inputs used in determining our estimate of the projected cash flows included future revenue growth and projected margins. We identified 10 RSNs which had carrying values in excess of the future undiscounted cash flows; and therefore, for these RSNs an impairment loss was measured as the amount by which the carrying value of each asset group exceeded the fair value of each asset group. The calculated impairment was then allocated to the long-lived assets within the asset group, which primarily consists of definite lived intangible assets, based upon relative fair value.

The fair value of the asset groups, reporting units and definite lived intangible assets were determined based upon a discounted cash flow analysis which uses the present value of projected cash flows. The projected cash flows were based upon our estimates of future revenues and margins, among other inputs. The discount rates used in the valuation were based on a weighted-average cost of capital determined from relevant market comparisons and taking into consideration the risk specifically associated with our asset groups and underlying assets. Terminal values were determined based upon the final year of projected cash flows which reflected our estimate of stable perpetual growth. The more sensitive inputs used in the discounted cash flow analysis include projected revenue and margins, as well as the discount rates used to calculate the present value of future cash flows. Projected revenue was based on the consideration of historical experience of the business, market data surrounding subscriber projections and advertising growth, our ability to retain existing customers and our ability to obtain new customers. Our revenue projections could be negatively impacted by the further loss of key Distributors, inability to obtain new or retain existing Distributors on terms similar to those expiring, greater than expected consumer migration away from traditional linear Distributors, or our inability to successfully develop alternative revenue streams, among other factors. Our future margins may also be affected by our inability to renew sports rights agreements on terms favorable to us.

Income Taxes

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, 2020 and 2019 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 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 limitations on interest expense deductibility, and certain state net operating loss (NOL) carryforwards and other state attributes.

Reclassifications

Reclassifications

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

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.

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NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

9 Months Ended

Sep. 30, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Disaggregation of Revenue

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

For the three months ended September 30, 2020	Broadcast		Local sports		Other		Eliminations			Total
Distribution revenue	$	356	$	597	$	50	$	—		$	1,003
Advertising revenue	344		124		31		1			500
Other media, non-media, and intercompany revenues	34		6		24		(28		)	36
Total revenues	$	734	$	727	$	105	$	(27	)	$	1,539
For the three months ended September 30, 2019	Broadcast		Local sports		Other		Eliminations			Total
Distribution revenue	$	340	$	306	$	33	$	—		$	679
Advertising revenue	302		43		32		(1		)	376
Other media, non-media, and intercompany revenue	19		3		64		(16		)	70
Total revenues	$	661	$	352	$	129	$	(17	)	$	1,125
For the nine months ended September 30, 2020	Broadcast		Local sports		Other		Eliminations			Total
Distribution revenue	$	1,059	$	1,959	$	150	$	—		$	3,168
Advertising revenue	861		182		92		—			1,135
Other media, non-media, and intercompany revenues	106		14		96		(88		)	128
Total revenues	$	2,026	$	2,155	$	338	$	(88	)	$	4,431
For the nine months ended September 30, 2019	Broadcast		Local sports		Other		Eliminations			Total
Distribution revenue	$	995	$	306	$	97	$	—		$	1,398
Advertising revenue	904		43		78		(1		)	1,024
Other media, non-media, and intercompany revenues	40		3		179		(26		)	196
Total revenues	$	1,939	$	352	$	354	$	(27	)	$	2,618

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ACQUISITIONS AND DISPOSITIONS OF ASSETS (Tables)

9 Months Ended

Sep. 30, 2020

Business Combinations [Abstract]

Schedule of Allocated Fair Value of Acquired Assets and Liabilities Assumed

The following table summarizes the fair value of acquired assets, assumed liabilities, and noncontrolling interests of the Acquired RSNs (in millions):

Cash and cash equivalents	$	824
Accounts receivable, net	606
Prepaid expenses and other current assets	175
Property and equipment, net	25
Customer relationships, net	5,439
Other definite-lived intangible assets, net	1,286
Other assets	52
Accounts payable and accrued liabilities	(181		)
Other long-term liabilities	(396		)
Goodwill	2,615
Fair value of identifiable net assets acquired	$	10,445
Redeemable noncontrolling interests	(380		)
Noncontrolling interests	(248		)
Gross purchase price	$	9,817
Purchase price, net of cash acquired	$	8,993

Business Acquisition, Pro Forma Information

The table below sets forth unaudited pro forma results of operations, assuming that the RSN Acquisition, along with transactions necessary to finance the acquisition, occurred at the beginning of the period presented (in millions, except per share data):

	Three Months Ended   September 30, 2019			Nine Months Ended   September 30, 2019
Total revenue	$	1,632		$	5,067
Net income	$	9		$	434
Net (loss) income attributable to Sinclair Broadcast Group	$	(41	)	$	274
Basic earnings per share attributable to Sinclair Broadcast Group	$	(0.44	)	$	2.98
Diluted earnings per share attributable to Sinclair Broadcast Group	$	(0.44	)	$	2.94

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COMMITMENTS AND CONTINGENCIES (Tables)

9 Months Ended

Sep. 30, 2020

Commitments and Contingencies Disclosure [Abstract]

Schedule of Non-Cancellable Commitments Relating to Sports Rights Agreement

The following table presents our annual non-cancellable commitments relating to our local sports segment's sports programming rights agreements as of September 30, 2020. These commitments assume that sports teams fully deliver the contractually committed games, and do not reflect the impact of rebates expected to be paid by the teams.

(in millions)
2020 (remainder)	$	515
2021	1,820
2022	1,575
2023	1,525
2024	1,457
2025 and thereafter	8,281
Total	$	15,173

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EARNINGS PER SHARE (Tables)

9 Months Ended

Sep. 30, 2020

Earnings Per Share [Abstract]

Schedule of Reconciliation of Income (Numerator) and Shares (Denominator) Used in Computation of Diluted 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):

	Three Months Ended   September 30,						Nine Months Ended   September 30,
	2020			2019			2020			2019
Income (Numerator)
Net (loss) income	$	(3,367	)	$	(49	)	$	(2,943	)	$	18
Net income attributable to the redeemable noncontrolling interests	(19		)	(11		)	(51		)	(11		)
Net loss (income) attributable to the noncontrolling interests	130			—			113			(3		)
Numerator for basic and diluted earnings per common share available to common shareholders	$	(3,256	)	$	(60	)	$	(2,881	)	$	4
Shares (Denominator)
Basic weighted-average common shares outstanding	74,810			92,086			81,922			92,050
Dilutive effect of stock-settled appreciation rights and outstanding stock options	—			—			—			1,221
Diluted weighted-average common and common equivalent shares outstanding	74,810			92,086			81,922			93,271

Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share

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:

	Three Months Ended   September 30,		Nine Months Ended   September 30,
	2020	2019	2020	2019
Weighted-average stock-settled appreciation rights and outstanding stock options excluded	3,456	1,349	3,406	317

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SEGMENT DATA (Tables)

9 Months Ended

Sep. 30, 2020

Segment Reporting [Abstract]

Schedule of segment financial information

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

As of September 30, 2020	Broadcast		Local sports		Other & Corporate		Eliminations			Consolidated
Assets	$	4,673	$	6,211	$	1,641	$	(42	)	$	12,483

For the three months ended September 30, 2020	Broadcast			Local sports			Other & Corporate			Eliminations				Consolidated
Revenue	$	734		$	727		$	105		$	(27	)	(b)	$	1,539
Depreciation of property and equipment and amortization of definite-lived intangibles and other assets	60			109			6			(1		)		174
Amortization of sports programming rights (a)	—			632			—			—				632
Amortization of program contract costs	19			—			—			—				19
Corporate general and administrative expenses	25			3			2			—				30
(Gain) loss on asset dispositions and other, net of impairment	(41		)	—			2			—				(39		)
Impairment of goodwill and definite-lived intangible assets	—			4,264			—			—				4,264
Operating income (loss)	221			(4,450		)	10			3				(4,216		)
Interest expense including amortization of debt discount and deferred financing costs	2			111			48			(4		)		157
Loss from equity method investments	—			(2		)	(8		)	—				(10		)

For the three months ended September 30, 2019	Broadcast			Local sports			Other & Corporate			Eliminations				Consolidated
Revenue	$	661		$	352		$	129		$	(17	)	(b)	$	1,125
Depreciation of property and equipment and amortization of definite-lived intangibles and other assets	61			54			6			(1		)		120
Amortization of sports programming rights (a)	—			193			—			—				193
Amortization of program contract costs	22			—			—			—				22
Corporate general and administrative expenses	23			92			123			(1		)		237
Gain on asset dispositions and other, net of impairment	(29		)	—			(6		)	—				(35		)
Operating income (loss)	154			(56		)	(102		)	(2		)		(6		)
Interest expense including amortization of debt discount and deferred financing costs	1			73			58			(3		)		129
Income (loss) from equity method investments	—			1			(13		)	—				(12		)

For the nine months ended September 30, 2020	Broadcast			Local sports			Other & Corporate			Eliminations				Consolidated
Revenue	$	2,026		$	2,155		$	338		$	(88	)	(b)	$	4,431
Depreciation of property and equipment and amortization of definite-lived intangibles and other assets	178			328			19			(1		)		524
Amortization of sports programming rights (a)	—			1,028			—			—				1,028
Amortization of program contract costs	63			—			—			—				63
Corporate general and administrative expenses	95			7			9			—				111
(Gain) loss on asset dispositions and other, net of impairment	(101		)	—			2			—				(99		)
Impairment of goodwill and definite-lived intangible assets	—			4,264			—			—				4,264
Operating income (loss)	455			(3,885		)	38			(5		)		(3,397		)
Interest expense including amortization of debt discount and deferred financing costs	4			351			156			(9		)		502
Income (loss) from equity method investments	—			6			(29		)	—				(23		)

For the nine months ended September 30, 2019	Broadcast			Local sports			Other & Corporate			Eliminations				Consolidated
Revenue	$	1,939		$	352		$	354		$	(27	)	(b)	$	2,618
Depreciation of property and equipment and amortization of definite-lived intangibles and other assets	183			54			16			(1		)		252
Amortization of sports programming rights (a)	—			193			—			—				193
Amortization of program contract costs	68			—			—			—				68
Corporate general and administrative expenses	82			92			144			(1		)		317
Gain on asset dispositions and other, net of impairment	(51		)	—			(6		)	—				(57		)
Operating income (loss)	384			(56		)	(128		)	(7		)		193
Interest expense including amortization of debt discount and deferred financing costs	4			73			170			(10		)		237
Income (loss) from equity method investments	—			1			(39		)	—				(38		)

(a) The amortization of sports programming rights is included within media programming and production expenses on our consolidated statements of operations. Due to the outbreak of COVID-19 and postponement of professional sports leagues, we did not record amortization of our sports contracts during the month of March 2020 and three months ended June 30, 2020. Amortization expense resumed when the games commenced during the three months ended September 30, 2020.

(b)

Includes $26 million and $75 million for the three and nine months ended September 30, 2020, respectively, and $9 million for both the three and nine months ended September 30, 2019 of revenue for services provided by broadcast to local sports and other, which are eliminated in consolidation.

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VARIABLE INTEREST ENTITIES (Tables)

9 Months Ended

Sep. 30, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedule of Variable Interest Entities

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):

	As of September 30, 2020		As of December 31, 2019
ASSETS
Current assets:
Cash and cash equivalents	$	37	$	39
Accounts receivable, net	89		39
Prepaid sports rights	10		10
Other current assets	7		6
Total current assets	143		94
Property and equipment, net	17		15
Operating lease assets	6		8
Goodwill and indefinite-lived intangible assets	15		15
Definite-lived intangible assets, net	55		93
Other assets	1		3
Total assets	$	237	$	228
LIABILITIES
Current liabilities:
Other current liabilities	$	35	$	19
Notes payable, finance leases and commercial bank financing, less current portion	11		15
Operating lease liabilities, less current portion	5		6
Program contracts payable, less current portion	4		7
Other long-term liabilities	14		1
Total liabilities	$	69	$	48

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FAIR VALUE MEASUREMENTS (Tables)

9 Months Ended

Sep. 30, 2020

Fair Value Disclosures [Abstract]

Schedule of carrying value and fair value of notes and debentures

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

	As of September 30, 2020				As of December 31, 2019
	Carrying Value		Fair Value		Carrying Value		Fair Value
Level 1:
STG:
Money market funds	$	239	$	239	$	354	$	354
Deferred compensation assets	37		37		36		36
Deferred compensation liabilities	32		32		33		33
DSG:
Money market funds	47		47		559		559
Level 2 (a):
STG:
5.875% Senior Unsecured Notes due 2026	348		342		350		368
5.625% Senior Unsecured Notes due 2024	550		547		550		566
5.500% Senior Unsecured Notes due 2030	500		464		500		511
5.125% Senior Unsecured Notes due 2027	400		373		400		411
Term Loan B	1,319		1,282		1,329		1,326
Term Loan B-2	1,287		1,252		1,297		1,300
DSG:
12.750% Senior Secured Notes due 2026 (b)	31		25		—		—
6.625% Senior Unsecured Notes due 2027 (b)	1,744		908		1,825		1,775
5.375% Senior Secured Notes due 2026	3,050		2,158		3,050		3,085
Term Loan	3,267		2,597		3,292		3,284
Accounts receivable securitization facility (c)	74		74		—		—
Debt of variable interest entities	18		18		21		21
Debt of non-media subsidiaries	18		18		18		18
Level 3
DSG:
Variable payment obligations (d)	64		64		239		239

(a) Amounts are carried in our consolidated balance sheets net of debt discount, premium, and deferred financing cost, which are excluded in the above table, of $182 million and $231 million as of September 30, 2020 and December 31, 2019, respectively.

(b) On June 10, 2020, we exchanged $66.5 million aggregate principal amount of the DSG 6.625% Notes for cash payments of $10 million, including accrued but unpaid interest, and $31 million aggregate principal amount of the newly issued DSG 12.750% Secured Notes. See Note 3. Notes Payable, Finance Leases, and Commercial Bank Financing for further information.

(c) We entered into the A/R Facility on September 23, 2020. As of September 30, 2020, the balance of the loans under the A/R Facility was $74 million. See Note 3. Notes Payable, Finance Leases, and Commercial Bank Financing for further information.

(d)

The Company records its variable payment obligations at fair value on a recurring basis. These liabilities are further described in Other Liabilities within Note 5. Commitments and Contingencies. Significant unobservable inputs used in the fair value measurement are projected future operating income before depreciation and amortization; and weighted average discount rate of 10%. Significant increases (decreases) in projected future operating income would generally result in a significantly higher (lower) fair value measurement. Significant increases (decreases) in discount rates, would result in a significantly (lower) higher fair value measurement.

Schedule of changes in Level 3 financial liabilities measured on recurring basis

The following table summarizes the changes in financial liabilities 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, 2020 (in millions):

	Variable Payment Obligations
Fair value at June 30, 2020	$	235
Payments	(6		)
Measurement adjustments	(165		)
Fair value at September 30, 2020	$	64
	Variable Payment Obligations
Fair value at December 31, 2019	$	239
Payments	(16		)
Measurement adjustments	(159		)
Fair value at September 30, 2020	$	64

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CONDENSED CONSOLIDATING FINANCIAL STATEMENTS (Tables)

9 Months Ended

Sep. 30, 2020

Condensed Financial Information Disclosure [Abstract]

Schedule of condensed consolidating balance sheet

CONDENSED CONSOLIDATING BALANCE SHEET

AS OF SEPTEMBER 30, 2020

(in millions) (unaudited)

	Sinclair Broadcast Group, Inc.			Sinclair Television Group, Inc.		Guarantor Subsidiaries and KDSM, LLC		Non- Guarantor Subsidiaries			Eliminations			Sinclair Consolidated
Cash and cash equivalents	$	—		$	262	$	4	$	366		$	—		$	632
Accounts receivable, net	—			—		510		598			—			1,108
Other current assets	9			55		403		416			(82		)	801
Total current assets	9			317		917		1,380			(82		)	2,541
Property and equipment, net	1			32		704		104			(27		)	814
Investment in equity of consolidated subsidiaries	331			3,516		—		—			(3,847		)	—
Restricted cash	—			—		—		1			—			1
Goodwill	—			—		2,082		10			—			2,092
Indefinite-lived intangible assets	—			—		149		14			—			163
Definite-lived intangible assets, net	—			—		1,299		4,491			(43		)	5,747
Other long-term assets	84			1,768		282		1,225			(2,234		)	1,125
Total assets	$	425		$	5,633	$	5,433	$	7,225		$	(6,233	)	$	12,483
Accounts payable and accrued liabilities	$	15		$	61	$	262	$	210		$	(82	)	$	466
Current portion of long-term debt	—			27		5		41			(1		)	72
Other current liabilities	1			1		192		242			—			436
Total current liabilities	16			89		459		493			(83		)	974
Long-term debt	700			4,331		35		8,363			(1,038		)	12,391
Investment in deficit of consolidated subsidiaries	1,434			—		—		—			(1,434		)	—
Other long-term liabilities	12			121		1,427		457			(1,416		)	601
Total liabilities	2,162			4,541		1,921		9,313			(3,971		)	13,966
Redeemable noncontrolling interests	—			—		—		194			—			194
Total Sinclair Broadcast Group (deficit) equity	(1,737		)	1,092		3,512		(2,338		)	(2,266		)	(1,737		)
Noncontrolling interests in consolidated subsidiaries	—			—		—		56			4			60
Total liabilities, redeemable noncontrolling interests, and equity	$	425		$	5,633	$	5,433	$	7,225		$	(6,233	)	$	12,483

CONDENSED CONSOLIDATING BALANCE SHEET

AS OF DECEMBER 31, 2019

(in millions)

	Sinclair Broadcast Group, Inc.		Sinclair Television Group, Inc.		Guarantor Subsidiaries and KDSM, LLC		Non- Guarantor Subsidiaries		Eliminations			Sinclair Consolidated
Cash and cash equivalents	$	—	$	357	$	3	$	973	$	—		$	1,333
Accounts receivable, net	—		—		561		571		—			1,132
Other current assets	5		41		264		188		(50		)	448
Total current assets	5		398		828		1,732		(50		)	2,913
Property and equipment, net	1		31		659		96		(22		)	765
Investment in consolidated subsidiaries	2,270		3,558		—		—		(5,828		)	—
Goodwill	—		—		2,091		2,625		—			4,716
Indefinite-lived intangible assets	—		—		144		14		—			158
Definite-lived intangible assets, net	—		—		1,426		6,598		(47		)	7,977
Other long-term assets	82		1,611		279		618		(1,749		)	841
Total assets	$	2,358	$	5,598	$	5,427	$	11,683	$	(7,696	)	$	17,370
Accounts payable and accrued liabilities	$	142	$	109	$	286	$	296	$	(51	)	$	782
Current portion of long-term debt	—		27		4		41		(1		)	71
Other current liabilities	—		1		133		147		—			281
Total current liabilities	142		137		423		484		(52		)	1,134
Long-term debt	700		4,348		32		8,317		(1,030		)	12,367
Other long-term liabilities	13		53		1,418		547		(934		)	1,097
Total liabilities	855		4,538		1,873		9,348		(2,016		)	14,598
Redeemable noncontrolling interests	—		—		—		1,078		—			1,078
Total Sinclair Broadcast Group equity	1,503		1,060		3,554		1,069		(5,684		)	1,502
Noncontrolling interests in consolidated subsidiaries	—		—		—		188		4			192
Total liabilities, redeemable noncontrolling interests, and equity	$	2,358	$	5,598	$	5,427	$	11,683	$	(7,696	)	$	17,370

Schedule of condensed consolidating statement of operations and comprehensive income

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2020

(in millions) (unaudited)

	Sinclair Broadcast Group, Inc.			Sinclair Television Group, Inc.			Guarantor Subsidiaries and KDSM, LLC			Non- Guarantor Subsidiaries			Eliminations			Sinclair Consolidated
Net revenue	$	—		$	25		$	774		$	786		$	(46	)	$	1,539
Media programming and production expenses	—			—			322			772			(17		)	1,077
Selling, general and administrative expenses	2			27			160			77			(24		)	242
Impairment of goodwill and definite-lived intangible assets	—			—			—			4,264			—			4,264
Depreciation, amortization and other operating expenses	1			1			40			133			(3		)	172
Total operating expenses	3			28			522			5,246			(44		)	5,755
Operating (loss) income	(3		)	(3		)	252			(4,460		)	(2		)	(4,216		)
Equity in (loss) earnings of consolidated subsidiaries	(3,252		)	302			—			—			2,950			—
Interest expense	(3		)	(45		)	(1		)	(114		)	6			(157		)
Other income (expense)	1			5			(11		)	168			(4		)	159
Total other (expense) income	(3,254		)	262			(12		)	54			2,952			2
Income tax benefit	1			55			64			727			—			847
Net (loss) income	(3,256		)	314			304			(3,679		)	2,950			(3,367		)
Net income attributable to the redeemable noncontrolling interests	—			—			—			(19		)	—			(19		)
Net loss attributable to the noncontrolling interests	—			—			—			130			—			130
Net (loss) income attributable to Sinclair Broadcast Group	$	(3,256	)	$	314		$	304		$	(3,568	)	$	2,950		$	(3,256	)
Comprehensive (loss) income	$	(3,256	)	$	314		$	304		$	(3,679	)	$	2,950		$	(3,367	)

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2019

(in millions) (unaudited)

	Sinclair Broadcast Group, Inc.			Sinclair Television Group, Inc.			Guarantor Subsidiaries and KDSM, LLC			Non- Guarantor Subsidiaries			Eliminations			Sinclair Consolidated
Net revenue	$	—		$	9		$	702		$	445		$	(31	)	$	1,125
Media programming and production expenses	—			—			312			262			(14		)	560
Selling, general and administrative expenses	122			24			162			124			(10		)	422
Depreciation, amortization and other operating expenses	—			(6		)	55			104			(4		)	149
Total operating expenses	122			18			529			490			(28		)	1,131
Operating (loss) income	(122		)	(9		)	173			(45		)	(3		)	(6		)
Equity in earnings of consolidated subsidiaries	35			202			—			—			(237		)	—
Interest expense	(1		)	(55		)	(1		)	(76		)	4			(129		)
Other income (expense)	1			(2		)	(12		)	6			(2		)	(9		)
Total other income (expense)	35			145			(13		)	(70		)	(235		)	(138		)
Income tax benefit	27			4			43			21			—			95
Net (loss) income	(60		)	140			203			(94		)	(238		)	(49		)
Net income attributable to the redeemable noncontrolling interests	—			—			—			(11		)	—			(11		)
Net (loss) income attributable to Sinclair Broadcast Group	$	(60	)	$	140		$	203		$	(105	)	$	(238	)	$	(60	)
Comprehensive (loss) income	$	(60	)	$	140		$	203		$	(94	)	$	(238	)	$	(49	)

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2020

(in millions) (unaudited)

	Sinclair Broadcast Group, Inc.			Sinclair Television Group, Inc.			Guarantor Subsidiaries and KDSM, LLC			Non- Guarantor Subsidiaries			Eliminations			Sinclair Consolidated
Net revenue	$	—		$	74		$	2,140		$	2,350		$	(133	)	$	4,431
Media programming and production expenses	—			—			962			1,371			(45		)	2,288
Selling, general and administrative expenses	8			97			479			207			(72		)	719
Impairment of goodwill and definite-lived intangible assets	—			—			—			4,264			—			4,264
Depreciation, amortization and other operating expenses	1			6			143			416			(9		)	557
Total operating expenses	9			103			1,584			6,258			(126		)	7,828
Operating (loss) income	(9		)	(29		)	556			(3,908		)	(7		)	(3,397		)
Equity in (loss) earnings of consolidated subsidiaries	(2,866		)	542			—			—			2,324			—
Interest expense	(10		)	(147		)	(3		)	(361		)	19			(502		)
Other income (expense)	—			11			(30		)	180			(10		)	151
Total other (expense) income	(2,876		)	406			(33		)	(181		)	2,333			(351		)
Income tax benefit	4			75			24			702			—			805
Net (loss) income	(2,881		)	452			547			(3,387		)	2,326			(2,943		)
Net income attributable to the redeemable noncontrolling interests	—			—			—			(51		)	—			(51		)
Net loss attributable to the noncontrolling interests	—			—			—			113			—			113
Net (loss) income attributable to Sinclair Broadcast Group	$	(2,881	)	$	452		$	547		$	(3,325	)	$	2,326		$	(2,881	)
Comprehensive (loss) income	$	(2,881	)	$	452		$	547		$	(3,396	)	$	2,326		$	(2,952	)

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2019

(in millions) (unaudited)

	Sinclair Broadcast Group, Inc.			Sinclair Television Group, Inc.			Guarantor Subsidiaries and KDSM, LLC			Non- Guarantor Subsidiaries			Eliminations			Sinclair Consolidated
Net revenue	$	—		$	9		$	2,064		$	616		$	(71	)	$	2,618
Media programming and production expenses	—			—			931			325			(41		)	1,215
Selling, general and administrative expenses	143			82			481			133			(12		)	827
Depreciation, amortization and other operating expenses	—			(3		)	203			193			(10		)	383
Total operating expenses	143			79			1,615			651			(63		)	2,425
Operating (loss) income	(143		)	(70		)	449			(35		)	(8		)	193
Equity in earnings of consolidated subsidiaries	116			410			—			—			(526		)	—
Interest expense	(2		)	(160		)	(2		)	(85		)	12			(237		)
Other income (expense)	2			3			(35		)	5			(1		)	(26		)
Total other income (expense)	116			253			(37		)	(80		)	(515		)	(263		)
Income tax benefit	31			33			3			21			—			88
Net income (loss)	4			216			415			(94		)	(523		)	18
Net income attributable to the redeemable noncontrolling interests	—			—			—			(11		)	—			(11		)
Net income attributable to the noncontrolling interests	—			—			—			(3		)	—			(3		)
Net income (loss) attributable to Sinclair Broadcast Group	$	4		$	216		$	415		$	(108	)	$	(523	)	$	4
Comprehensive income (loss)	$	4		$	216		$	415		$	(94	)	$	(523	)	$	18

Schedule of condensed consolidating statement of cash flows

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2020

(in millions) (unaudited)

	Sinclair Broadcast Group, Inc.			Sinclair Television Group, Inc.			Guarantor Subsidiaries and KDSM, LLC			Non- Guarantor Subsidiaries			Eliminations			Sinclair Consolidated
NET CASH FLOWS (USED IN) FROM OPERATING ACTIVITIES	$	(115	)	$	(39	)	$	481		$	510		$	2		$	839
NET CASH FLOWS USED IN INVESTING ACTIVITIES
Acquisition of property and equipment	—			(7		)	(110		)	(19		)	6			(130		)
Acquisition of businesses, net of cash acquired	—			—			(7		)	—			—			(7		)
Spectrum repack reimbursements	—			—			72			—			—			72
Proceeds from the sale of assets	—			—			36			—			—			36
Purchases of investments	(2		)	(30		)	(33		)	(20		)	—			(85		)
Other, net	1			—			(2		)	17			—			16
Net cash flows used in investing activities	(1		)	(37		)	(44		)	(22		)	6			(98		)
NET CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES
Proceeds from notes payable and commercial bank financing	—			648			—			299			—			947
Repayments of notes payable, commercial bank financing and finance leases	—			(670		)	(3		)	(272		)	—			(945		)
Repurchase of outstanding Class A Common Stock	(343		)	—			—			—			—			(343		)
Dividends paid on Class A and Class B Common Stock	(49		)	—			—			—			—			(49		)
Dividends paid on redeemable subsidiary preferred equity	—			—			—			(32		)	—			(32		)
Redemption of redeemable subsidiary preferred equity	—			—			—			(547		)	—			(547		)
Debt issuance costs	—			—			—			(7		)	—			(7		)
Distributions to noncontrolling interests, net	—			—			—			(19		)	—			(19		)
Distributions to redeemable noncontrolling interests	—			—			—			(378		)	—			(378		)
Increase (decrease) in intercompany payables	507			3			(433		)	(69		)	(8		)	—
Other, net	1			—			—			(69		)	—			(68		)
Net cash flows from (used in) financing activities	116			(19		)	(436		)	(1,094		)	(8		)	(1,441		)
NET (DECREASE) INCREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH	—			(95		)	1			(606		)	—			(700		)
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, beginning of period	—			357			3			973			—			1,333
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, end of period	$	—		$	262		$	4		$	367		$	—		$	633

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2019

(in millions) (unaudited)

	Sinclair Broadcast Group, Inc.			Sinclair Television Group, Inc.			Guarantor Subsidiaries and KDSM, LLC			Non- Guarantor Subsidiaries			Eliminations			Sinclair Consolidated
NET CASH FLOWS (USED IN) FROM OPERATING ACTIVITIES	$	(4	)	$	(188	)	$	538		$	157		$	(9	)	$	494
NET CASH FLOWS USED IN INVESTING ACTIVITIES
Acquisition of property and equipment	—			(2		)	(99		)	(4		)	9			(96		)
Acquisition of businesses, net of cash acquired	—			—			—			(9,006		)	—			(9,006		)
Spectrum repack reimbursements	—			—			50			—			—			50
Purchases of investments	(2		)	(36		)	(42		)	(351		)	—			(431		)
Other, net	—			2			—			4			—			6
Net cash flows used in investing activities	(2		)	(36		)	(91		)	(9,357		)	9			(9,477		)
NET CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES
Proceeds from notes payable and commercial bank financing	—			1,294			—			8,159			—			9,453
Repayments of notes payable, commercial bank financing and finance leases	—			(706		)	(3		)	(26		)	20			(715		)
Proceeds from the issuance of redeemable subsidiary preferred equity, net	—			—			—			985			—			985
Repurchase of outstanding Class A Common Stock	(125		)	—			—			—			—			(125		)
Dividends paid on Class A and Class B Common Stock	(55		)	—			—			—			—			(55		)
Dividends paid on redeemable subsidiary preferred equity	—			—			—			(10		)	—			(10		)
Debt issuance costs	—			(15		)	—			(167		)	—			(182		)
Distributions to noncontrolling interests	—			—			—			(30		)	—			(30		)
Increase (decrease) in intercompany payables	186			(1,074		)	(454		)	1,362			(20		)	—
Other, net	—			1			—			—			—			1
Net cash flows from (used in) financing activities	6			(500		)	(457		)	10,273			—			9,322
NET (DECREASE) INCREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH	—			(724		)	(10		)	1,073			—			339
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, beginning of period	—			962			19			79			—			1,060
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, end of period	$	—		$	238		$	9		$	1,152		$	—		$	1,399

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NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Nature of Operations (Details)	9 Months Ended
	Sep. 30, 2020 channel segment station regional_sport_network market	Aug. 29, 2019
Schedule of Equity Method Investments [Line Items]
Number of reportable segments | segment	2
Number of television stations owned | station	190
Number of markets | market	88
Number of channels | channel	627
YES Network
Schedule of Equity Method Investments [Line Items]
Equity interest percentage		20.00%
Local sports
Schedule of Equity Method Investments [Line Items]
Number of regional sports networks acquired | regional_sport_network	21
Local sports | YES Network
Schedule of Equity Method Investments [Line Items]
Equity interest percentage	20.00%

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NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Equity Investments (Details) - USD ($)		3 Months Ended		9 Months Ended
	Aug. 29, 2019	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2019
Schedule of Equity Method Investments [Line Items]
Equity investments, net of cumulative impairment		$ 26,000,000		$ 26,000,000		$ 28,000,000
Cumulative impairment		7,000,000		7,000,000		$ 7,000,000
Impairment recorded		0	$ 0	0	$ 2,000,000
Income (loss) from equity method investments		(10,000,000)	(12,000,000)	(23,000,000)	(38,000,000)
YES Network
Schedule of Equity Method Investments [Line Items]
Equity interest percentage	20.00%
Cash consideration	$ 346,000,000
Income (loss) from equity method investments		$ (3,000,000)	$ 1,000,000	$ 3,000,000	$ 1,000,000

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NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Broadcast Television Programming (Details) - Television programming contract rights	9 Months Ended
	Sep. 30, 2020
Minimum
Finite-Lived Intangible Assets [Line Items]
Television programming contract period	1 year
Maximum
Finite-Lived Intangible Assets [Line Items]
Television programming contract period	7 years
Contract period utilizing accelerated amortization method	3 years

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NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Non-cash Investing and Financing Activities (Details) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Non-cash transactions related to finance lease obligations	$ 6
Leased assets obtained in exchange for new operating lease liabilities	10	$ 10
Non-cash transactions related to sports rights	$ 22

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NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Revenue Recognition, Disaggregation of Revenue (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Disaggregation of Revenue [Line Items]
Total revenues	$ 1,539	$ 1,125	$ 4,431	$ 2,618
Distribution revenue
Disaggregation of Revenue [Line Items]
Total revenues	1,003	679	3,168	1,398
Advertising revenue
Disaggregation of Revenue [Line Items]
Total revenues	500	376	1,135	1,024
Other media, non-media, and intercompany revenues
Disaggregation of Revenue [Line Items]
Total revenues	36	70	128	196
Operating segments | Broadcast
Disaggregation of Revenue [Line Items]
Total revenues	734	661	2,026	1,939
Operating segments | Local sports
Disaggregation of Revenue [Line Items]
Total revenues	727	352	2,155	352
Operating segments | Other
Disaggregation of Revenue [Line Items]
Total revenues	105	129	338	354
Operating segments | Distribution revenue | Broadcast
Disaggregation of Revenue [Line Items]
Total revenues	356	340	1,059	995
Operating segments | Distribution revenue | Local sports
Disaggregation of Revenue [Line Items]
Total revenues	597	306	1,959	306
Operating segments | Distribution revenue | Other
Disaggregation of Revenue [Line Items]
Total revenues	50	33	150	97
Operating segments | Advertising revenue | Broadcast
Disaggregation of Revenue [Line Items]
Total revenues	344	302	861	904
Operating segments | Advertising revenue | Local sports
Disaggregation of Revenue [Line Items]
Total revenues	124	43	182	43
Operating segments | Advertising revenue | Other
Disaggregation of Revenue [Line Items]
Total revenues	31	32	92	78
Operating segments | Other media, non-media, and intercompany revenues | Broadcast
Disaggregation of Revenue [Line Items]
Total revenues	34	19	106	40
Operating segments | Other media, non-media, and intercompany revenues | Local sports
Disaggregation of Revenue [Line Items]
Total revenues	6	3	14	3
Operating segments | Other media, non-media, and intercompany revenues | Other
Disaggregation of Revenue [Line Items]
Total revenues	24	64	96	179
Eliminations
Disaggregation of Revenue [Line Items]
Total revenues	(27)	(17)	(88)	(27)
Eliminations | Distribution revenue
Disaggregation of Revenue [Line Items]
Total revenues	0	0	0	0
Eliminations | Advertising revenue
Disaggregation of Revenue [Line Items]
Total revenues	1	(1)	0	(1)
Eliminations | Other media, non-media, and intercompany revenues
Disaggregation of Revenue [Line Items]
Total revenues	$ (28)	$ (16)	$ (88)	$ (26)

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NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Revenue Recognition, Narrative (Details) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2020 USD ($) customer	Sep. 30, 2019 USD ($) customer	Sep. 30, 2020 USD ($) customer	Sep. 30, 2019 USD ($) customer	Dec. 31, 2019 USD ($)
Disaggregation of Revenue [Line Items]
Remit payment period			120 days
Revenues	$ 1,539	$ 1,125	$ 4,431	$ 2,618
Deferred revenue	$ 75		75		$ 54
Deferred revenue, revenue recognized			$ 45	$ 65
Customer Concentration Risk | Revenue Benchmark
Disaggregation of Revenue [Line Items]
Number of customers | customer	3	3	3	2
Customer Concentration Risk | Revenue Benchmark | Customer One
Disaggregation of Revenue [Line Items]
Percentage of concentration	17.00%	17.00%	19.00%	14.00%
Customer Concentration Risk | Revenue Benchmark | Customer Two
Disaggregation of Revenue [Line Items]
Percentage of concentration	15.00%	14.00%	17.00%	12.00%
Customer Concentration Risk | Revenue Benchmark | Customer Three
Disaggregation of Revenue [Line Items]
Percentage of concentration	12.00%	11.00%	12.00%
Customer Concentration Risk | Accounts Receivable
Disaggregation of Revenue [Line Items]
Number of customers | customer			3
Customer Concentration Risk | Accounts Receivable | Customer One
Disaggregation of Revenue [Line Items]
Percentage of concentration			18.00%
Customer Concentration Risk | Accounts Receivable | Customer Two
Disaggregation of Revenue [Line Items]
Percentage of concentration			16.00%
Customer Concentration Risk | Accounts Receivable | Customer Three
Disaggregation of Revenue [Line Items]
Percentage of concentration			13.00%
Distribution Revenue Rebate
Disaggregation of Revenue [Line Items]
Revenues	$ (128)		$ (252)

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NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Impairment (Details)		3 Months Ended		9 Months Ended
	Aug. 23, 2019 USD ($)	Sep. 30, 2020 USD ($) station	Sep. 30, 2019 USD ($)	Sep. 30, 2020 USD ($)	Sep. 30, 2019 USD ($)	Dec. 31, 2019 USD ($)
Finite-Lived Intangible Assets [Line Items]
Definite-lived intangible assets, net		$ 5,747,000,000		$ 5,747,000,000		$ 7,977,000,000
Impairment of goodwill and definite-lived intangible assets		4,264,000,000	$ 0	4,264,000,000	$ 0
Goodwill		2,092,000,000		2,092,000,000		4,716,000,000
Customer relationships, net
Finite-Lived Intangible Assets [Line Items]
Definite-lived intangible assets, net		4,384,000,000		4,384,000,000		5,979,000,000
Other definite-lived intangible assets, net
Finite-Lived Intangible Assets [Line Items]
Definite-lived intangible assets, net		$ 1,363,000,000		1,363,000,000		$ 1,998,000,000
RSNs
Finite-Lived Intangible Assets [Line Items]
Number of impaired RSNs | station		10
Impairment of goodwill and definite-lived intangible assets		$ 2,615,000,000
Goodwill	$ 2,615,000,000	0		0
RSNs | Customer relationships, net
Finite-Lived Intangible Assets [Line Items]
Non-cash impairment charge on intangible assets		1,218,000,000
Definite-lived intangible assets, net		$ 3,756,000,000		3,756,000,000
Amortization period, weighted average useful life	13 years	11 years
RSNs | Other definite-lived intangible assets, net
Finite-Lived Intangible Assets [Line Items]
Non-cash impairment charge on intangible assets		$ 431,000,000
Definite-lived intangible assets, net		$ 673,000,000		$ 673,000,000
Amortization period, weighted average useful life		11 years
RSNs | Favorable/Unfavorable Contracts With Sports Teams
Finite-Lived Intangible Assets [Line Items]
Amortization period, weighted average useful life	12 years
RSNs | Tradenames/Trademarks
Finite-Lived Intangible Assets [Line Items]
Amortization period, weighted average useful life	2 years

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NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Income Taxes (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Increase in valuation allowance	$ 215		$ 219
Discrete benefit, CARES Act	$ 68		83
Tax benefit from sale of spectrum		$ 34		$ 34
State benefit related to change in apportionment estimates		$ 16		16
Federal tax credits related to investments in sustainability initiatives				$ 18
Unrecognized tax benefits reduced (up to)			$ 6

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NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Share Repurchase Program (Details) - USD ($) shares in Millions	3 Months Ended	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2020	Aug. 04, 2020	Aug. 09, 2018
Class of Stock [Line Items]
Stock repurchase program, additional authorized repurchase amount			$ 500,000,000	$ 1,000,000,000
Stock repurchase program, remaining authorized repurchase amount	$ 880,000,000	$ 880,000,000
Class A Common Stock
Class of Stock [Line Items]
Treasury stock, shares acquired (in shares)	4	19
Treasury stock, value acquired	$ 82,000,000	$ 343,000,000

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NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Subsequent Events (Details)	Nov. 04, 2020 $ / shares
Subsequent Event
Subsequent Event [Line Items]
Dividends declared per share (USD per share)	$ 0.20

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ACQUISITIONS AND DISPOSITIONS OF ASSETS - Narrative (Details) $ in Millions		1 Months Ended		3 Months Ended			9 Months Ended
	Aug. 23, 2019 USD ($) national_basketball_association_team national_hockey_league_team major_league_baseball_team professional_team	Jun. 30, 2020 USD ($) station	May 31, 2019 USD ($) brand	Sep. 30, 2020 USD ($)	Mar. 31, 2020 USD ($)	Sep. 30, 2019 USD ($)	Sep. 30, 2020 USD ($) station	Sep. 30, 2019 USD ($)	Jan. 31, 2020 USD ($)
Business Acquisition [Line Items]
Gain on sale of assets				$ 39.0		$ 35.0	$ 99.0	$ 57.0
Number of stations assigned new channels | station							100
Broadcast incentive auction, total legislation funds to reimburse stations							$ 3,000.0
Broadcast incentive auction, gain recognized on sale				20.0		28.0	72.0	50.0
Broadcast incentive auction, total capital expenditure				13.0		16.0	54.0	41.0
RSNs
Business Acquisition [Line Items]
Number of brands | brand			21
Purchase price, unadjusted initial consideration expected to be transferred			$ 9,600.0
Purchase price	$ 9,817.0
Number of professional teams | professional_team	42
Definite-lived intangible assets acquired	$ 6,725.0
Goodwill estimated to be deductible for tax purposes	2,400.0
Acquisition related costs				0.4		85.0	4.0	94.0
Net revenue from acquiree				673.0		352.0	2,076.0	352.0
Operating income (loss) from acquiree				$ (4,435.0)		$ 46.0	(3,830.0)	$ 46.0
RSNs | Customer relationships, net
Business Acquisition [Line Items]
Definite-lived intangible assets acquired	$ 5,439.0
Amortization period, weighted average useful life	13 years			11 years
RSNs | Favorable/Unfavorable Contracts With Sports Teams
Business Acquisition [Line Items]
Definite-lived intangible assets acquired	$ 1,271.0
Amortization period, weighted average useful life	12 years
RSNs | Tradenames/Trademarks
Business Acquisition [Line Items]
Definite-lived intangible assets acquired	$ 15.0
Amortization period, weighted average useful life	2 years
Radio station assets
Business Acquisition [Line Items]
Purchase price							$ 7.0
Television station assets
Business Acquisition [Line Items]
Purchase price, unadjusted initial consideration expected to be transferred		$ 9.0
Number of television stations | station		2
Major League Baseball | RSNs
Business Acquisition [Line Items]
Number of professional teams | major_league_baseball_team	14
National Basketball Association | RSNs
Business Acquisition [Line Items]
Number of professional teams | national_basketball_association_team	16
National Hockey League | RSNs
Business Acquisition [Line Items]
Number of professional teams | national_hockey_league_team	12
KGBT Non-License Assets and WDKY License and Non-License Assets | Disposal Group, Disposed of by Sale, Not Discontinued Operations
Business Acquisition [Line Items]
Aggregate purchase price									$ 36.0
KGBT Non-License Assets | Disposal Group, Disposed of by Sale, Not Discontinued Operations
Business Acquisition [Line Items]
Gain on sale of assets					$ 8.0
WDKY License and Non-License Assets | Disposal Group, Disposed of by Sale, Not Discontinued Operations
Business Acquisition [Line Items]
Gain on sale of assets				$ 21.0

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ACQUISITIONS AND DISPOSITIONS OF ASSETS - Fair Value of Acquired Assets and Liabilities (Details) - USD ($)		9 Months Ended
	Aug. 23, 2019	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2019
Allocated fair value of acquired assets and assumed liabilities
Goodwill		$ 2,092,000,000		$ 4,716,000,000
Purchase price, net of cash acquired		7,000,000	$ 9,006,000,000
RSNs
Allocated fair value of acquired assets and assumed liabilities
Cash and cash equivalents	$ 824,000,000
Accounts receivable, net	606,000,000
Prepaid expenses and other current assets	175,000,000
Property and equipment, net	25,000,000
Other assets	52,000,000
Accounts payable and accrued liabilities	(181,000,000)
Other long-term liabilities	(396,000,000)
Goodwill	2,615,000,000	$ 0
Fair value of identifiable net assets acquired	10,445,000,000
Redeemable noncontrolling interests	(380,000,000)
Noncontrolling interests	(248,000,000)
Gross purchase price	9,817,000,000
Purchase price, net of cash acquired	8,993,000,000
Customer relationships, net | RSNs
Allocated fair value of acquired assets and assumed liabilities
Intangible assets	5,439,000,000
Other definite-lived intangible assets, net | RSNs
Allocated fair value of acquired assets and assumed liabilities
Intangible assets	$ 1,286,000,000

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ACQUISITIONS AND DISPOSITIONS OF ASSETS - Pro Forma Information (Details) - RSNs - USD ($) $ / shares in Units, $ in Millions	3 Months Ended	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2019
Business Acquisition [Line Items]
Total revenue	$ 1,632	$ 5,067
Net income	9	434
Net (loss) income attributable to Sinclair Broadcast Group	$ (41)	$ 274
Basic earnings per share attributable to Sinclair Broadcast Group (USD per share)	$ (0.44)	$ 2.98
Diluted earnings per share attributable to Sinclair Broadcast Group (USD per share)	$ (0.44)	$ 2.94

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NOTES PAYABLE, FINANCE LEASES, AND COMMERCIAL BANK FINANCING - Bank Credit Agreements (Details)		9 Months Ended
	Mar. 17, 2020 USD ($)	Sep. 30, 2020 USD ($)
Debt Instrument [Line Items]
Borrowings under revolving credit facility exceed total commitments (as a percent)		35.00%
STG Revolving Credit Facility
Debt Instrument [Line Items]
Maximum borrowing capacity		$ 650,000,000
Debt term		5 years
Drew down from credit facility	$ 648,000,000
First lien leverage ratio		4.5
Borrowings outstanding		$ 0
DSG Revolving Credit Facility
Debt Instrument [Line Items]
Maximum borrowing capacity		$ 650,000,000
Debt term		5 years
Drew down from credit facility	$ 225,000,000
First lien leverage ratio		6.25
Borrowings outstanding		$ 0
LIBOR | STG Revolving Credit Facility
Debt Instrument [Line Items]
Basis spread on variable rate		2.00%
LIBOR | DSG Revolving Credit Facility
Debt Instrument [Line Items]
Basis spread on variable rate		3.00%

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NOTES PAYABLE, FINANCE LEASES, AND COMMERCIAL BANK FINANCING - STG Notes (Details) - USD ($) $ in Millions		3 Months Ended		9 Months Ended
	May 21, 2020	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Debt Instrument [Line Items]
Gain on extinguishment of debt		$ 0.0	$ 0.0	$ 5.0	$ 0.0
Senior Notes | 5.875% Senior Unsecured Notes due 2026
Debt Instrument [Line Items]
Redeemed amount	$ 2.5
Interest rate (as a percent)		5.875%		5.875%
Consideration	$ 2.3
Gain on extinguishment of debt		$ 0.2
Notes balance, net of deferred financing costs		$ 344.0		$ 344.0

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NOTES PAYABLE, FINANCE LEASES, AND COMMERCIAL BANK FINANCING - DSG Notes (Details) - USD ($)		3 Months Ended		4 Months Ended	9 Months Ended
	Jun. 10, 2020	Sep. 30, 2020	Sep. 30, 2019	Jun. 30, 2020	Sep. 30, 2020	Sep. 30, 2019
Debt Instrument [Line Items]
Gain on extinguishment of debt		$ 0	$ 0		$ 5,000,000	$ 0
Senior Notes | DSG 6.625% Notes
Debt Instrument [Line Items]
Redeemed amount	$ 66,500,000			$ 15,000,000
Interest rate (as a percent)		6.625%			6.625%
Consideration				$ 10,000,000
Gain on extinguishment of debt					$ 5,000,000
Cash payments	10,000,000
Notes balance, net of deferred financing costs		$ 1,709,000,000			$ 1,709,000,000
Senior Notes | DSG 12.750% Senior Secured Notes
Debt Instrument [Line Items]
Interest rate (as a percent)		12.75%			12.75%
Aggregate principal amount	31,000,000
Notes balance, net of deferred financing costs		$ 55,000,000			$ 55,000,000
Debt premium	$ 24,000,000
Redemption percentage					100.00%
Senior Notes | 5.375% Senior Secured Notes due 2026
Debt Instrument [Line Items]
Interest rate (as a percent)		5.375%			5.375%
Redemption period one | Senior Notes | DSG 12.750% Senior Secured Notes
Debt Instrument [Line Items]
Redemption percentage					102.688%
Redemption period two | Senior Notes | DSG 12.750% Senior Secured Notes
Debt Instrument [Line Items]
Redemption percentage					101.344%
Redemption percentage of principal amount					40.00%
Redemption period three | Senior Notes | DSG 12.750% Senior Secured Notes
Debt Instrument [Line Items]
Redemption percentage					100.00%

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NOTES PAYABLE, FINANCE LEASES, AND COMMERCIAL BANK FINANCING - Accounts Receivable Securitization Facility (Details) - USD ($)	Oct. 22, 2020	Sep. 30, 2020	Sep. 23, 2020	Dec. 31, 2019
Line of Credit Facility [Line Items]
Accounts receivable, net		$ 1,108,000,000		$ 1,132,000,000
Line of Credit Facility | A/R Facility
Line of Credit Facility [Line Items]
Maximum borrowing capacity			$ 250,000,000
Maximum borrowing capacity, addition			50,000,000
Aggregate outstanding principal amount of loans (less than)			$ 125,000,000
Prepayment premium (as a percent)			1.00%
Borrowings outstanding		74,000,000
Line of Credit Facility | A/R Facility | Floor
Line of Credit Facility [Line Items]
Interest rate (as a percent)			0.00%
Line of Credit Facility | A/R Facility | LIBOR
Line of Credit Facility [Line Items]
Interest rate before November 1, 2020 (as a percent)			4.97%
Interest rate after November 1, 2020 (as a percent)			5.47%
Line of Credit Facility | A/R Facility | DSPV
Line of Credit Facility [Line Items]
Accounts receivable, net		$ 124,000,000
Line of Credit Facility | A/R Facility | Subsequent Event
Line of Credit Facility [Line Items]
Borrowings outstanding	$ 196,000,000
Additional funding from credit facility	$ 122,000,000

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NOTES PAYABLE, FINANCE LEASES, AND COMMERCIAL BANK FINANCING - Notes Payable and Finance Leases to Affiliates, and Debt of VIEs and Guarantees of Third-Party Debt (Details) - USD ($) $ in Millions	Sep. 30, 2020	Dec. 31, 2019
Debt Instrument [Line Items]
Current portion of notes payable, finance leases, and commercial bank financing	$ 72	$ 71
Notes payable, finance leases, and commercial bank financing, less current portion	12,391	12,367
Consolidated total debt	12,463
Affiliated Entity
Debt Instrument [Line Items]
Current portion of notes payable, finance leases, and commercial bank financing	2	2
Notes payable, finance leases, and commercial bank financing, less current portion	7	9
Guarantee Obligations
Debt Instrument [Line Items]
Unconditional and irrevocably guaranteed debt	51	57
Consolidated VIEs
Debt Instrument [Line Items]
Notes payable, finance leases, and commercial bank financing, less current portion	11	15
Consolidated total debt	$ 17	$ 20

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REDEEMABLE NONCONTROLLING INTERESTS (Details) - USD ($) $ in Millions		1 Months Ended	3 Months Ended			9 Months Ended
	Jan. 21, 2020	Aug. 31, 2020	Sep. 30, 2020	Mar. 31, 2020	Sep. 30, 2019	Sep. 30, 2020	Aug. 23, 2019
Temporary Equity [Line Items]
Aggregate redemption price	$ 200	$ 350	$ 13			$ 13
Redemption price, percent	100.00%	100.00%
Accrued and unpaid dividends		$ 4
Total redemption amount		$ 354
Dividends accrued during the period			7	$ 13	$ 10	32
Redeemable subsidiary preferred equity			170			$ 170
Non-controlling equity holder right to sell period (in days)						30 days
Redeemable noncontrolling interest			$ 22			$ 22
30-Day Period Following January 2, 2020
Temporary Equity [Line Items]
Non-controlling equity holder right to sell, fair market sale value							$ 376
Redeemable Preferred Stock
Temporary Equity [Line Items]
Redeemed units (in shares)	200,000	350,000
Floor
Temporary Equity [Line Items]
Cash interest rate			0.75%			0.75%
LIBOR
Temporary Equity [Line Items]
Cash interest rate			7.50%			7.50%
Percent higher than the rate payable if dividends were paid in cash			0.50%			0.50%

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COMMITMENTS AND CONTINGENCIES (Schedule of Non-Cancellable Commitments Relating to Sports Rights Agreement) (Details) - Sports Programming Rights $ in Millions	Sep. 30, 2020 USD ($)
Other Commitments [Line Items]
2020 (remainder)	$ 515
2021	1,820
2022	1,575
2023	1,525
2024	1,457
2025 and thereafter	8,281
Total	$ 15,173

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COMMITMENTS AND CONTINGENCIES (Narrative) (Details)								3 Months Ended		9 Months Ended
	Nov. 09, 2020 lawsuit	Oct. 15, 2020 USD ($)	Sep. 02, 2020 USD ($)	Aug. 19, 2020 USD ($)	Jul. 20, 2020 USD ($) shares	May 22, 2020 USD ($) petition	Dec. 21, 2017 USD ($)	Sep. 30, 2020 USD ($)	Sep. 30, 2019 USD ($)	Sep. 30, 2020 USD ($)	Sep. 30, 2019 USD ($)	Oct. 03, 2018 lawsuit
COMMITMENTS AND CONTINGENCIES
Interest expense including amortization of debt discount and deferred financing costs								$ (157,000,000)	$ (129,000,000)	$ (502,000,000)	$ (237,000,000)
Various Cases Alleging Violation of Sherman Antitrust Act
COMMITMENTS AND CONTINGENCIES
Loss contingency, number of other broadcasters | lawsuit												13
Breach of Merger Agreement
COMMITMENTS AND CONTINGENCIES
Agreement to pay to resolve FCC investigation						$ 48,000,000
Payments for resolve FCC investigation				$ 48,000,000
Compliance plan term						4 years
Number of petitions filed | petition						2
Legal expense										2,500,000
Settlement Stipulation
COMMITMENTS AND CONTINGENCIES
Agreement to pay to resolve FCC investigation					$ 20,500,000
Compliance plan term					5 years
Aggregate amount of settlement fund to be used					$ 5,000,000
Share based compensation to be forfeited, canceled, or returned (shares) | shares					638,298
Unfavorable Regulatory Action
COMMITMENTS AND CONTINGENCIES
Proposed fine			$ 9,000,000				$ 13,000,000
Proposed fine per station			$ 500,000
Fixed Payment Obligations | RSNs
COMMITMENTS AND CONTINGENCIES
Other current liabilities								57,000,000		57,000,000
Other long-term liabilities								100,000,000		100,000,000
Interest expense including amortization of debt discount and deferred financing costs								(2,000,000)	$ (500,000)	(6,000,000)	$ (500,000)
Variable Payment Obligations | RSNs
COMMITMENTS AND CONTINGENCIES
Other current liabilities								20,000,000		20,000,000
Other long-term liabilities								44,000,000		44,000,000
Other income, net | Variable Payment Obligations | RSNs
COMMITMENTS AND CONTINGENCIES
Total measurement adjustment gains								$ 168,000,000		$ (168,000,000)
Subsequent Event | Various Cases Alleging Violation of Sherman Antitrust Act
COMMITMENTS AND CONTINGENCIES
Loss contingency, new claims filed, number (lawsuit) | lawsuit	22
Subsequent Event | Unfavorable Regulatory Action
COMMITMENTS AND CONTINGENCIES
Proposed fine per station		$ 25,000

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EARNINGS PER SHARE - Schedule of Earnings per Share (Details) - USD ($) shares in Thousands, $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Income (Numerator)
Net (loss) income	$ (3,367)	$ (49)	$ (2,943)	$ 18
Net income attributable to the redeemable noncontrolling interests	(19)	(11)	(51)	(11)
Net loss (income) attributable to the noncontrolling interests	130	0	113	(3)
Numerator for basic and diluted earnings per common share available to common shareholders	$ (3,256)	$ (60)	$ (2,881)	$ 4
Shares (Denominator)
Basic weighted average common shares outstanding (shares)	74,810	92,086	81,922	92,050
Dilutive effect of stock-settled appreciation rights and outstanding stock options (shares)	0	0	0	1,221
Diluted weighted average common and common equivalent shares outstanding (shares)	74,810	92,086	81,922	93,271

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EARNINGS PER SHARE - Summary of Antidilutive Securities (Details) - shares shares in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Earnings Per Share [Abstract]
Weighted-average stock-settled appreciation rights and outstanding stock options excluded (in shares)	3,456	1,349	3,406	317

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SEGMENT DATA - Narrative (Details)	9 Months Ended
	Sep. 30, 2020 segment regional_sport_network market
Segment data
Number of reportable segments | segment	2
Number of markets	88
Operating segments | Broadcast
Segment data
Number of markets	88
Operating segments | Local Sports
Segment data
Number of regional sports networks | regional_sport_network	23

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SEGMENT DATA - Segment Financial Information (Details) - USD ($) $ in Millions		3 Months Ended		9 Months Ended
		Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2019
Segment data
Assets	[1]	$ 12,483		$ 12,483		$ 17,370
Total revenues		1,539	$ 1,125	4,431	$ 2,618
Depreciation of property and equipment and amortization of definite-lived intangibles and other assets		174	120	524	252
Amortization of sports programming rights		632	193	1,028	193
Amortization of program contract costs		19	22	63	68
Corporate general and administrative overhead expenses		30	237	111	317
(Gain) loss on asset dispositions and other, net of impairment		(39)	(35)	(99)	(57)
Impairment of goodwill and definite-lived intangible assets		4,264	0	4,264	0
Operating (loss) income		(4,216)	(6)	(3,397)	193
Interest expense and amortization of debt discount and deferred financing costs		157	129	502	237
Loss from equity method investments		(10)	(12)	(23)	(38)
Intersegment revenues		26	9	75	9
Operating segments | Broadcast
Segment data
Assets		4,673		4,673
Total revenues		734	661	2,026	1,939
Depreciation of property and equipment and amortization of definite-lived intangibles and other assets		60	61	178	183
Amortization of sports programming rights		0	0	0	0
Amortization of program contract costs		19	22	63	68
Corporate general and administrative overhead expenses		25	23	95	82
(Gain) loss on asset dispositions and other, net of impairment		(41)	(29)	(101)	(51)
Impairment of goodwill and definite-lived intangible assets		0		0
Operating (loss) income		221	154	455	384
Interest expense and amortization of debt discount and deferred financing costs		2	1	4	4
Loss from equity method investments		0	0	0	0
Operating segments | Local sports
Segment data
Assets		6,211		6,211
Total revenues		727	352	2,155	352
Depreciation of property and equipment and amortization of definite-lived intangibles and other assets		109	54	328	54
Amortization of sports programming rights		632	193	1,028	193
Amortization of program contract costs		0	0	0	0
Corporate general and administrative overhead expenses		3	92	7	92
(Gain) loss on asset dispositions and other, net of impairment		0	0	0	0
Impairment of goodwill and definite-lived intangible assets		4,264		4,264
Operating (loss) income		(4,450)	(56)	(3,885)	(56)
Interest expense and amortization of debt discount and deferred financing costs		111	73	351	73
Loss from equity method investments		(2)	1	6	1
Operating segments | Other & Corporate
Segment data
Assets		1,641		1,641
Total revenues		105	129	338	354
Depreciation of property and equipment and amortization of definite-lived intangibles and other assets		6	6	19	16
Amortization of sports programming rights		0	0	0	0
Amortization of program contract costs		0	0	0	0
Corporate general and administrative overhead expenses		2	123	9	144
(Gain) loss on asset dispositions and other, net of impairment		2	(6)	2	(6)
Impairment of goodwill and definite-lived intangible assets		0		0
Operating (loss) income		10	(102)	38	(128)
Interest expense and amortization of debt discount and deferred financing costs		48	58	156	170
Loss from equity method investments		(8)	(13)	(29)	(39)
Eliminations
Segment data
Assets		(42)		(42)
Total revenues		(27)	(17)	(88)	(27)
Depreciation of property and equipment and amortization of definite-lived intangibles and other assets		(1)	(1)	(1)	(1)
Amortization of sports programming rights		0	0	0	0
Amortization of program contract costs		0	0	0	0
Corporate general and administrative overhead expenses		0	(1)	0	(1)
(Gain) loss on asset dispositions and other, net of impairment		0	0	0	0
Impairment of goodwill and definite-lived intangible assets		0		0
Operating (loss) income		3	(2)	(5)	(7)
Interest expense and amortization of debt discount and deferred financing costs		(4)	(3)	(9)	(10)
Loss from equity method investments		$ 0	$ 0	$ 0	$ 0

[1] Our consolidated total assets as of September 30, 2020 and December 31, 2019 include total assets of variable interest entities (VIEs) of $237 million and $228 million, respectively, which can only be used to settle the obligations of the VIEs. Our consolidated total liabilities as of September 30, 2020 and December 31, 2019 include total liabilities of VIEs of $53 million and $27 million, respectively, for which the creditors of the VIEs have no recourse to us. See Note 8. Variable Interest Entities.

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VARIABLE INTEREST ENTITIES - Narrative (Details) - USD ($) $ in Millions		3 Months Ended		9 Months Ended
		Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2019
Variable Interest Entity [Line Items]
Carrying amount	[1]	$ 12,483		$ 12,483		$ 17,370
Eliminations
Variable Interest Entity [Line Items]
Carrying amount		(6,233)		(6,233)		(7,696)
VIEs which are not primary beneficiary
Variable Interest Entity [Line Items]
Carrying amount		78		78		71
Loss from equity method investments		7	$ 13	$ 29	$ 38
Consolidated VIEs
Variable Interest Entity [Line Items]
Variable interest entities outsourcing agreement initial term				5 years
Carrying amount		237		$ 237		228
Consolidated VIEs | Eliminations
Variable Interest Entity [Line Items]
Liabilities associated with the certain outsourcing agreements and purchase options		$ 130		$ 130		$ 127

[1] Our consolidated total assets as of September 30, 2020 and December 31, 2019 include total assets of variable interest entities (VIEs) of $237 million and $228 million, respectively, which can only be used to settle the obligations of the VIEs. Our consolidated total liabilities as of September 30, 2020 and December 31, 2019 include total liabilities of VIEs of $53 million and $27 million, respectively, for which the creditors of the VIEs have no recourse to us. See Note 8. Variable Interest Entities.

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VARIABLE INTEREST ENTITIES - Schedule of Variable Interest Entities Assets and Liabilities (Details) - USD ($) $ in Millions		Sep. 30, 2020	Dec. 31, 2019
Current assets:
Cash and cash equivalents		$ 632	$ 1,333
Accounts receivable, net		1,108	1,132
Prepaid sports rights		335	113
Other current assets		218	232
Total current assets		2,541	2,913
Property and equipment, net		814	765
Operating lease assets		206	223
Other definite-lived intangible assets, net		5,747	7,977
Total assets	[1]	12,483	17,370
Current liabilities:
Other current liabilities		287	155
Notes payable, finance leases, and commercial bank financing, less current portion		12,391	12,367
Operating lease liabilities, less current portion		203	217
Program contracts payable, less current portion		34	39
Other long-term liabilities		364	434
Total liabilities	[1]	13,966	14,598
Consolidated VIEs
Current assets:
Cash and cash equivalents		37	39
Accounts receivable, net		89	39
Prepaid sports rights		10	10
Other current assets		7	6
Total current assets		143	94
Property and equipment, net		17	15
Operating lease assets		6	8
Goodwill and indefinite-lived intangible assets		15	15
Other definite-lived intangible assets, net		55	93
Other assets		1	3
Total assets		237	228
Current liabilities:
Other current liabilities		35	19
Notes payable, finance leases, and commercial bank financing, less current portion		11	15
Operating lease liabilities, less current portion		5	6
Program contracts payable, less current portion		4	7
Other long-term liabilities		14	1
Total liabilities		$ 69	$ 48

[1] Our consolidated total assets as of September 30, 2020 and December 31, 2019 include total assets of variable interest entities (VIEs) of $237 million and $228 million, respectively, which can only be used to settle the obligations of the VIEs. Our consolidated total liabilities as of September 30, 2020 and December 31, 2019 include total liabilities of VIEs of $53 million and $27 million, respectively, for which the creditors of the VIEs have no recourse to us. See Note 8. Variable Interest Entities.

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RELATED PERSON TRANSACTIONS - Transactions with our Controlling Shareholders (Details) - Entities owned by the controlling shareholders - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Lease Services
Related Party Transaction [Line Items]
Lease payments made to entities	$ 1	$ 1	$ 4	$ 4
Charter Aircraft | Maximum
Related Party Transaction [Line Items]
Aircraft expenses (less than)	$ 1	$ 1	$ 1	$ 2

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RELATED PERSON TRANSACTIONS - Cunningham Broadcasting Corporation (Details) $ in Millions	1 Months Ended		3 Months Ended		9 Months Ended
	Aug. 31, 2016 USD ($)	Apr. 30, 2016 USD ($)	Sep. 30, 2020 USD ($)	Sep. 30, 2019 USD ($)	Sep. 30, 2020 USD ($) renewal	Sep. 30, 2019 USD ($)	Dec. 31, 2019 USD ($)
Related Party Transaction [Line Items]
Consolidated total debt			$ 12,463.0		$ 12,463.0
Total revenues			$ 1,539.0	$ 1,125.0	$ 4,431.0	$ 2,618.0
Affiliated Entity | Cunningham
Related Party Transaction [Line Items]
Right to acquire capital stock			100.00%		100.00%
Total payments made under the LMA excluded from liabilities			$ 53.0		$ 53.0		$ 51.0
Remaining purchase price			54.0		54.0		54.0
Purchase options, broadcast stations			$ 0.2		$ 0.2
Proceeds from sale of master control equipment		$ 1.0
Annual revenue from master control services		$ 0.2
Annual revenue for share service	$ 1.0
Affiliated Entity | Cunningham | LMA
Related Party Transaction [Line Items]
Number of additional renewal terms | renewal					2
Agreement renewal period					5 years
Percentage of net broadcast revenue used to determine annual LMA fees required to be paid			3.00%		3.00%
Amount used to determine annual LMA fees required to be paid			$ 5.0		$ 5.0
Annual increase in aggregate purchase price			6.00%		6.00%
Lease payments made to entities			$ 2.0	2.0	$ 6.0	6.0
Cunningham license related assets | Cunningham
Related Party Transaction [Line Items]
Agreement renewal period					8 years
Total revenues			39.0	$ 38.0	$ 111.0	$ 111.0
Guarantee Obligations
Related Party Transaction [Line Items]
Unconditional and irrevocably guaranteed debt			51.0		51.0		57.0
Guarantee Obligations | Affiliated Entity | Cunningham
Related Party Transaction [Line Items]
Unconditional and irrevocably guaranteed debt			42.0		42.0
Consolidated VIEs
Related Party Transaction [Line Items]
Consolidated total debt			17.0		17.0		$ 20.0
Consolidated VIEs | Affiliated Entity | Cunningham
Related Party Transaction [Line Items]
Consolidated total debt			8.0		8.0
Deferred financing costs			$ 0.4		$ 0.4

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RELATED PERSON TRANSACTIONS - Atlantic Automotive Corporation (Details) - Atlantic Automotive Corporation - Advertising time - Affiliated Entity - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Related Party Transaction [Line Items]
Amount received (less than)		$ 0.2	$ 0.1	$ 0.2
Maximum
Related Party Transaction [Line Items]
Amount received (less than)	$ 0.1

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RELATED PERSON TRANSACTIONS - Leased Property by Real Estate Ventures (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Entities owned by the controlling shareholders | Lease Services
Related Party Transaction [Line Items]
Amount received	$ 0.3	$ 0.3	$ 0.7	$ 0.7

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RELATED PERSON TRANSACTIONS - Equity Method Investees (Details) $ in Millions	1 Months Ended	3 Months Ended		9 Months Ended
	Aug. 31, 2019 renewal	Sep. 30, 2020 USD ($)	Sep. 30, 2019 USD ($)	Sep. 30, 2020 USD ($)	Sep. 30, 2019 USD ($)
YES Network
Related Party Transaction [Line Items]
Number of renewal terms | renewal	2
Renewal period	2 years
Management service fee		$ 1.0	$ 0.4	$ 4.0	$ 0.4
Mobile Trucks
Related Party Transaction [Line Items]
Amount paid		$ 7.0	$ 4.0	$ 16.0	$ 4.0

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RELATED PERSON TRANSACTIONS - Sports Programming Rights (Details) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2020 USD ($)	Sep. 30, 2019 USD ($)	Sep. 30, 2020 USD ($)	Sep. 30, 2019 USD ($)	Aug. 23, 2019 professional_team
Related Party Transaction [Line Items]
Sports programming rights payments			$ 1,124	$ 118
Sports Teams Affiliates | RSNs
Related Party Transaction [Line Items]
Sports programming rights payments	$ 15	$ 38	$ 221
Number of sports rights agreements assumed | professional_team					6

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FAIR VALUE MEASUREMENTS (Details) - USD ($)			4 Months Ended
	Jun. 10, 2020	May 21, 2020	Jun. 30, 2020	Sep. 30, 2020	Dec. 31, 2019
FAIR VALUE MEASUREMENTS:
Debt discount and deferred financing costs				$ 182,000,000	$ 231,000,000
Level 1 | Carrying Value
FAIR VALUE MEASUREMENTS:
Deferred compensation assets				37,000,000	36,000,000
Deferred compensation liabilities				32,000,000	33,000,000
Level 1 | Fair Value
FAIR VALUE MEASUREMENTS:
Deferred compensation assets				37,000,000	36,000,000
Deferred compensation liabilities				32,000,000	33,000,000
Level 2 | Carrying Value | Debt of variable interest entities
FAIR VALUE MEASUREMENTS:
Debt fair value disclosure				18,000,000	21,000,000
Level 2 | Carrying Value | Debt of non-media subsidiaries
FAIR VALUE MEASUREMENTS:
Debt fair value disclosure				18,000,000	18,000,000
Level 2 | Fair Value | Debt of variable interest entities
FAIR VALUE MEASUREMENTS:
Debt fair value disclosure				18,000,000	21,000,000
Level 2 | Fair Value | Debt of non-media subsidiaries
FAIR VALUE MEASUREMENTS:
Debt fair value disclosure				$ 18,000,000	18,000,000
Senior Notes | 5.875% Senior Unsecured Notes due 2026
FAIR VALUE MEASUREMENTS:
Redeemed amount		$ 2,500,000
Interest rate (as a percent)				5.875%
Senior Notes | 5.625% Senior Unsecured Notes due 2024
FAIR VALUE MEASUREMENTS:
Interest rate (as a percent)				5.625%
Senior Notes | 5.500% Senior Unsecured Notes due 2030
FAIR VALUE MEASUREMENTS:
Interest rate (as a percent)				5.50%
Senior Notes | 5.125% Senior Unsecured Notes due 2027
FAIR VALUE MEASUREMENTS:
Interest rate (as a percent)				5.125%
Senior Notes | 12.750% Senior Secured Notes due 2026
FAIR VALUE MEASUREMENTS:
Interest rate (as a percent)				12.75%
Aggregate principal amount	$ 31,000,000
Senior Notes | 6.625% Senior Unsecured Notes due 2027
FAIR VALUE MEASUREMENTS:
Redeemed amount	66,500,000		$ 15,000,000
Interest rate (as a percent)				6.625%
Cash payments	$ 10,000,000
Senior Notes | 5.375% Senior Secured Notes due 2026
FAIR VALUE MEASUREMENTS:
Interest rate (as a percent)				5.375%
Senior Notes | Level 2 | Carrying Value | 5.875% Senior Unsecured Notes due 2026
FAIR VALUE MEASUREMENTS:
Debt fair value disclosure				$ 348,000,000	350,000,000
Senior Notes | Level 2 | Carrying Value | 5.625% Senior Unsecured Notes due 2024
FAIR VALUE MEASUREMENTS:
Debt fair value disclosure				550,000,000	550,000,000
Senior Notes | Level 2 | Carrying Value | 5.500% Senior Unsecured Notes due 2030
FAIR VALUE MEASUREMENTS:
Debt fair value disclosure				500,000,000	500,000,000
Senior Notes | Level 2 | Carrying Value | 5.125% Senior Unsecured Notes due 2027
FAIR VALUE MEASUREMENTS:
Debt fair value disclosure				400,000,000	400,000,000
Senior Notes | Level 2 | Carrying Value | 12.750% Senior Secured Notes due 2026
FAIR VALUE MEASUREMENTS:
Debt fair value disclosure				31,000,000	0
Senior Notes | Level 2 | Carrying Value | 6.625% Senior Unsecured Notes due 2027
FAIR VALUE MEASUREMENTS:
Debt fair value disclosure				1,744,000,000	1,825,000,000
Senior Notes | Level 2 | Carrying Value | 5.375% Senior Secured Notes due 2026
FAIR VALUE MEASUREMENTS:
Debt fair value disclosure				3,050,000,000	3,050,000,000
Senior Notes | Level 2 | Fair Value | 5.875% Senior Unsecured Notes due 2026
FAIR VALUE MEASUREMENTS:
Debt fair value disclosure				342,000,000	368,000,000
Senior Notes | Level 2 | Fair Value | 5.625% Senior Unsecured Notes due 2024
FAIR VALUE MEASUREMENTS:
Debt fair value disclosure				547,000,000	566,000,000
Senior Notes | Level 2 | Fair Value | 5.500% Senior Unsecured Notes due 2030
FAIR VALUE MEASUREMENTS:
Debt fair value disclosure				464,000,000	511,000,000
Senior Notes | Level 2 | Fair Value | 5.125% Senior Unsecured Notes due 2027
FAIR VALUE MEASUREMENTS:
Debt fair value disclosure				373,000,000	411,000,000
Senior Notes | Level 2 | Fair Value | 12.750% Senior Secured Notes due 2026
FAIR VALUE MEASUREMENTS:
Debt fair value disclosure				25,000,000	0
Senior Notes | Level 2 | Fair Value | 6.625% Senior Unsecured Notes due 2027
FAIR VALUE MEASUREMENTS:
Debt fair value disclosure				908,000,000	1,775,000,000
Senior Notes | Level 2 | Fair Value | 5.375% Senior Secured Notes due 2026
FAIR VALUE MEASUREMENTS:
Debt fair value disclosure				2,158,000,000	3,085,000,000
Term Loan | Level 2 | Carrying Value | Term Loan B
FAIR VALUE MEASUREMENTS:
Debt fair value disclosure				1,319,000,000	1,329,000,000
Term Loan | Level 2 | Carrying Value | Term Loan B-2
FAIR VALUE MEASUREMENTS:
Debt fair value disclosure				1,287,000,000	1,297,000,000
Term Loan | Level 2 | Carrying Value | Term Loan
FAIR VALUE MEASUREMENTS:
Debt fair value disclosure				3,267,000,000	3,292,000,000
Term Loan | Level 2 | Fair Value | Term Loan B
FAIR VALUE MEASUREMENTS:
Debt fair value disclosure				1,282,000,000	1,326,000,000
Term Loan | Level 2 | Fair Value | Term Loan B-2
FAIR VALUE MEASUREMENTS:
Debt fair value disclosure				1,252,000,000	1,300,000,000
Term Loan | Level 2 | Fair Value | Term Loan
FAIR VALUE MEASUREMENTS:
Debt fair value disclosure				2,597,000,000	3,284,000,000
Line of Credit Facility | A/R Facility
FAIR VALUE MEASUREMENTS:
Borrowings outstanding				74,000,000
Line of Credit Facility | Level 2 | Carrying Value | A/R Facility
FAIR VALUE MEASUREMENTS:
Debt fair value disclosure				74,000,000	0
Line of Credit Facility | Level 2 | Fair Value | A/R Facility
FAIR VALUE MEASUREMENTS:
Debt fair value disclosure				$ 74,000,000	0
Variable Payment Obligations | Level 3 | Discount rate
FAIR VALUE MEASUREMENTS:
Weighted average discount rate (as a percent)				0.10
Variable Payment Obligations | Level 3 | Carrying Value
FAIR VALUE MEASUREMENTS:
Variable payment obligations				$ 64,000,000	239,000,000
Variable Payment Obligations | Level 3 | Fair Value
FAIR VALUE MEASUREMENTS:
Variable payment obligations				64,000,000	239,000,000
STG Money Market Funds | Level 1 | Carrying Value
FAIR VALUE MEASUREMENTS:
Money market funds				239,000,000	354,000,000
STG Money Market Funds | Level 1 | Fair Value
FAIR VALUE MEASUREMENTS:
Money market funds				239,000,000	354,000,000
DSG Money Market Funds | Level 1 | Carrying Value
FAIR VALUE MEASUREMENTS:
Money market funds				47,000,000	559,000,000
DSG Money Market Funds | Level 1 | Fair Value
FAIR VALUE MEASUREMENTS:
Money market funds				$ 47,000,000	$ 559,000,000

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FAIR VALUE MEASUREMENTS - Schedule of Level 3 Activity (Details) - Variable Payment Obligations - Fair Value, Recurring - Level 3 - USD ($) $ in Millions	3 Months Ended	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2020
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Fair value, beginning balance	$ 235	$ 239
Payments	(6)	(16)
Measurement adjustments	(165)	(159)
Fair value, ending balance	$ 64	$ 64

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CONDENSED CONSOLIDATING FINANCIAL STATEMENTS - Narrative (Details) $ in Millions	Sep. 30, 2020 USD ($)
Debt Instrument [Line Items]
Consolidated total debt	$ 12,463
Subsidiary Issuer
Debt Instrument [Line Items]
Consolidated total debt	4,415
Amount of debt guaranteed by parent	$ 4,375
5.375% Senior Unsecured Notes due 2021 | Sinclair Television Group, Inc. | Senior Notes
Debt Instrument [Line Items]
Interest rate (as a percent)	5.375%
5.375% Senior Unsecured Notes due 2021 | Guarantor Subsidiaries and KDSM, LLC | Senior Notes
Debt Instrument [Line Items]
Interest rate (as a percent)	5.375%
5.625% Senior Unsecured Notes Due 2021 | Sinclair Television Group, Inc. | Senior Notes
Debt Instrument [Line Items]
Interest rate (as a percent)	5.625%
6.125% Senior Unsecured Notes due 2022 | Sinclair Television Group, Inc. | Senior Notes
Debt Instrument [Line Items]
Interest rate (as a percent)	6.125%
6.125% Senior Unsecured Notes due 2022 | Guarantor Subsidiaries and KDSM, LLC | Senior Notes
Debt Instrument [Line Items]
Interest rate (as a percent)	6.125%
5.875% Senior Unsecured Notes due 2026 | Sinclair Television Group, Inc. | Senior Notes
Debt Instrument [Line Items]
Interest rate (as a percent)	5.875%
5.875% Senior Unsecured Notes due 2026 | Guarantor Subsidiaries and KDSM, LLC | Senior Notes
Debt Instrument [Line Items]
Interest rate (as a percent)	5.875%
5.125% Senior Unsecured Notes due 2027 | Sinclair Television Group, Inc. | Senior Notes
Debt Instrument [Line Items]
Interest rate (as a percent)	5.125%
5.125% Senior Unsecured Notes due 2027 | Guarantor Subsidiaries and KDSM, LLC | Senior Notes
Debt Instrument [Line Items]
Interest rate (as a percent)	5.125%
5.500% Senior Unsecured Notes due 2030 | Senior Notes
Debt Instrument [Line Items]
Interest rate (as a percent)	5.50%
5.500% Senior Unsecured Notes due 2030 | Sinclair Television Group, Inc. | Senior Notes
Debt Instrument [Line Items]
Interest rate (as a percent)	5.50%
5.500% Senior Unsecured Notes due 2030 | Guarantor Subsidiaries and KDSM, LLC | Senior Notes
Debt Instrument [Line Items]
Interest rate (as a percent)	5.50%
5.625% Senior Unsecured Notes due 2024 | Sinclair Television Group, Inc. | Senior Notes
Debt Instrument [Line Items]
Interest rate (as a percent)	5.625%
5.625% Senior Unsecured Notes due 2024 | Guarantor Subsidiaries and KDSM, LLC | Senior Notes
Debt Instrument [Line Items]
Interest rate (as a percent)	5.625%

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CONDENSED CONSOLIDATING FINANCIAL STATEMENTS - Balance Sheet (Details) - USD ($) $ in Thousands		Sep. 30, 2020	Dec. 31, 2019
CONDENSED CONSOLIDATING BALANCE SHEET
Cash and cash equivalents		$ 632,000	$ 1,333,000
Accounts receivable, net		1,108,000	1,132,000
Other current assets		801,000	448,000
Total current assets		2,541,000	2,913,000
Property and equipment, net		814,000	765,000
Investment in consolidated subsidiaries		0	0
Restricted cash		1,000	0
Goodwill		2,092,000	4,716,000
Indefinite-lived intangible assets		163,000	158,000
Definite-lived intangible assets, net		5,747,000	7,977,000
Other long-term assets		1,125,000	841,000
Total assets	[1]	12,483,000	17,370,000
Accounts payable and accrued liabilities		466,000	782,000
Current portion of long-term debt		72,000	71,000
Other current liabilities		436,000	281,000
Total current liabilities		974,000	1,134,000
Long-term debt		12,391,000	12,367,000
Investment in deficit of consolidated subsidiaries		0
Other long-term liabilities		601,000	1,097,000
Total liabilities	[1]	13,966,000	14,598,000
Redeemable noncontrolling interests		194,000	1,078,000
Total Sinclair Broadcast Group equity (deficit)		(1,737,000)	1,502,000
Noncontrolling interests in consolidated subsidiaries		60,000	192,000
Total liabilities, redeemable noncontrolling interests, and equity		12,483,000	17,370,000
Reportable legal entities | Sinclair Broadcast Group, Inc.
CONDENSED CONSOLIDATING BALANCE SHEET
Cash and cash equivalents		0	0
Accounts receivable, net		0	0
Other current assets		9,000	5,000
Total current assets		9,000	5,000
Property and equipment, net		1,000	1,000
Investment in consolidated subsidiaries		331,000	2,270,000
Restricted cash		0
Goodwill		0	0
Indefinite-lived intangible assets		0	0
Definite-lived intangible assets, net		0	0
Other long-term assets		84,000	82,000
Total assets		425,000	2,358,000
Accounts payable and accrued liabilities		15,000	142,000
Current portion of long-term debt		0	0
Other current liabilities		1,000	0
Total current liabilities		16,000	142,000
Long-term debt		700,000	700,000
Investment in deficit of consolidated subsidiaries		1,434,000
Other long-term liabilities		12,000	13,000
Total liabilities		2,162,000	855,000
Redeemable noncontrolling interests		0	0
Total Sinclair Broadcast Group equity (deficit)		(1,737,000)	1,503,000
Noncontrolling interests in consolidated subsidiaries		0	0
Total liabilities, redeemable noncontrolling interests, and equity		425,000	2,358,000
Reportable legal entities | Sinclair Television Group, Inc.
CONDENSED CONSOLIDATING BALANCE SHEET
Cash and cash equivalents		262,000	357,000
Accounts receivable, net		0	0
Other current assets		55,000	41,000
Total current assets		317,000	398,000
Property and equipment, net		32,000	31,000
Investment in consolidated subsidiaries		3,516,000	3,558,000
Restricted cash		0
Goodwill		0	0
Indefinite-lived intangible assets		0	0
Definite-lived intangible assets, net		0	0
Other long-term assets		1,768,000	1,611,000
Total assets		5,633,000	5,598,000
Accounts payable and accrued liabilities		61,000	109,000
Current portion of long-term debt		27,000	27,000
Other current liabilities		1,000	1,000
Total current liabilities		89,000	137,000
Long-term debt		4,331,000	4,348,000
Investment in deficit of consolidated subsidiaries		0
Other long-term liabilities		121,000	53,000
Total liabilities		4,541,000	4,538,000
Redeemable noncontrolling interests		0	0
Total Sinclair Broadcast Group equity (deficit)		1,092,000	1,060,000
Noncontrolling interests in consolidated subsidiaries		0	0
Total liabilities, redeemable noncontrolling interests, and equity		5,633,000	5,598,000
Reportable legal entities | Guarantor Subsidiaries and KDSM, LLC
CONDENSED CONSOLIDATING BALANCE SHEET
Cash and cash equivalents		4,000	3,000
Accounts receivable, net		510,000	561,000
Other current assets		403,000	264,000
Total current assets		917,000	828,000
Property and equipment, net		704,000	659,000
Investment in consolidated subsidiaries		0	0
Restricted cash		0
Goodwill		2,082,000	2,091,000
Indefinite-lived intangible assets		149,000	144,000
Definite-lived intangible assets, net		1,299,000	1,426,000
Other long-term assets		282,000	279,000
Total assets		5,433,000	5,427,000
Accounts payable and accrued liabilities		262,000	286,000
Current portion of long-term debt		5,000	4,000
Other current liabilities		192,000	133,000
Total current liabilities		459,000	423,000
Long-term debt		35,000	32,000
Investment in deficit of consolidated subsidiaries		0
Other long-term liabilities		1,427,000	1,418,000
Total liabilities		1,921,000	1,873,000
Redeemable noncontrolling interests		0	0
Total Sinclair Broadcast Group equity (deficit)		3,512,000	3,554,000
Noncontrolling interests in consolidated subsidiaries		0	0
Total liabilities, redeemable noncontrolling interests, and equity		5,433,000	5,427,000
Reportable legal entities | Non- Guarantor Subsidiaries
CONDENSED CONSOLIDATING BALANCE SHEET
Cash and cash equivalents		366,000	973,000
Accounts receivable, net		598,000	571,000
Other current assets		416,000	188,000
Total current assets		1,380,000	1,732,000
Property and equipment, net		104,000	96,000
Investment in consolidated subsidiaries		0	0
Restricted cash		1,000
Goodwill		10,000	2,625,000
Indefinite-lived intangible assets		14,000	14,000
Definite-lived intangible assets, net		4,491,000	6,598,000
Other long-term assets		1,225,000	618,000
Total assets		7,225,000	11,683,000
Accounts payable and accrued liabilities		210,000	296,000
Current portion of long-term debt		41,000	41,000
Other current liabilities		242,000	147,000
Total current liabilities		493,000	484,000
Long-term debt		8,363,000	8,317,000
Investment in deficit of consolidated subsidiaries		0
Other long-term liabilities		457,000	547,000
Total liabilities		9,313,000	9,348,000
Redeemable noncontrolling interests		194,000	1,078,000
Total Sinclair Broadcast Group equity (deficit)		(2,338,000)	1,069,000
Noncontrolling interests in consolidated subsidiaries		56,000	188,000
Total liabilities, redeemable noncontrolling interests, and equity		7,225,000	11,683,000
Eliminations
CONDENSED CONSOLIDATING BALANCE SHEET
Cash and cash equivalents		0	0
Accounts receivable, net		0	0
Other current assets		(82,000)	(50,000)
Total current assets		(82,000)	(50,000)
Property and equipment, net		(27,000)	(22,000)
Investment in consolidated subsidiaries		(3,847,000)	(5,828,000)
Restricted cash		0
Goodwill		0	0
Indefinite-lived intangible assets		0	0
Definite-lived intangible assets, net		(43,000)	(47,000)
Other long-term assets		(2,234,000)	(1,749,000)
Total assets		(6,233,000)	(7,696,000)
Accounts payable and accrued liabilities		(82,000)	(51,000)
Current portion of long-term debt		(1,000)	(1,000)
Other current liabilities		0	0
Total current liabilities		(83,000)	(52,000)
Long-term debt		(1,038,000)	(1,030,000)
Investment in deficit of consolidated subsidiaries		(1,434,000)
Other long-term liabilities		(1,416,000)	(934,000)
Total liabilities		(3,971,000)	(2,016,000)
Redeemable noncontrolling interests		0	0
Total Sinclair Broadcast Group equity (deficit)		(2,266,000)	(5,684,000)
Noncontrolling interests in consolidated subsidiaries		4,000	4,000
Total liabilities, redeemable noncontrolling interests, and equity		$ (6,233,000)	$ (7,696,000)

[1] Our consolidated total assets as of September 30, 2020 and December 31, 2019 include total assets of variable interest entities (VIEs) of $237 million and $228 million, respectively, which can only be used to settle the obligations of the VIEs. Our consolidated total liabilities as of September 30, 2020 and December 31, 2019 include total liabilities of VIEs of $53 million and $27 million, respectively, for which the creditors of the VIEs have no recourse to us. See Note 8. Variable Interest Entities.

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CONDENSED CONSOLIDATING FINANCIAL STATEMENTS - Statement of Operations and Comprehensive Income (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME
Total revenues	$ 1,539	$ 1,125	$ 4,431	$ 2,618
Media program and production expenses	1,077	560	2,288	1,215
Selling, general and administrative	242	422	719	827
Impairment of goodwill and definite-lived intangible assets	4,264	0	4,264	0
Depreciation, amortization and other operating expenses	172	149	557	383
Total operating expenses	5,755	1,131	7,828	2,425
Operating (loss) income	(4,216)	(6)	(3,397)	193
Equity in earnings of consolidated subsidiaries	0	0	0	0
Interest expense	(157)	(129)	(502)	(237)
Other income (expense)	159	(9)	151	(26)
Total other income (expense), net	2	(138)	(351)	(263)
Income tax benefit (provision)	847	95	805	88
NET (LOSS) INCOME	(3,367)	(49)	(2,943)	18
Net income attributable to the redeemable noncontrolling interests	(19)	(11)	(51)	(11)
Net loss (income) attributable to the noncontrolling interests	130	0	113	(3)
NET (LOSS) INCOME ATTRIBUTABLE TO SINCLAIR BROADCAST GROUP	(3,256)	(60)	(2,881)	4
Comprehensive (loss) income	(3,367)	(49)	(2,952)	18
Reportable legal entities | Sinclair Broadcast Group, Inc.
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME
Total revenues	0	0	0	0
Media program and production expenses	0	0	0	0
Selling, general and administrative	2	122	8	143
Impairment of goodwill and definite-lived intangible assets	0		0
Depreciation, amortization and other operating expenses	1	0	1	0
Total operating expenses	3	122	9	143
Operating (loss) income	(3)	(122)	(9)	(143)
Equity in earnings of consolidated subsidiaries	(3,252)	35	(2,866)	116
Interest expense	(3)	(1)	(10)	(2)
Other income (expense)	1	1	0	2
Total other income (expense), net	(3,254)	35	(2,876)	116
Income tax benefit (provision)	1	27	4	31
NET (LOSS) INCOME	(3,256)	(60)	(2,881)	4
Net income attributable to the redeemable noncontrolling interests	0	0	0	0
Net loss (income) attributable to the noncontrolling interests	0		0	0
NET (LOSS) INCOME ATTRIBUTABLE TO SINCLAIR BROADCAST GROUP	(3,256)	(60)	(2,881)	4
Comprehensive (loss) income	(3,256)	(60)	(2,881)	4
Reportable legal entities | Sinclair Television Group, Inc.
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME
Total revenues	25	9	74	9
Media program and production expenses	0	0	0	0
Selling, general and administrative	27	24	97	82
Impairment of goodwill and definite-lived intangible assets	0		0
Depreciation, amortization and other operating expenses	1	(6)	6	(3)
Total operating expenses	28	18	103	79
Operating (loss) income	(3)	(9)	(29)	(70)
Equity in earnings of consolidated subsidiaries	302	202	542	410
Interest expense	(45)	(55)	(147)	(160)
Other income (expense)	5	(2)	11	3
Total other income (expense), net	262	145	406	253
Income tax benefit (provision)	55	4	75	33
NET (LOSS) INCOME	314	140	452	216
Net income attributable to the redeemable noncontrolling interests	0	0	0	0
Net loss (income) attributable to the noncontrolling interests	0		0	0
NET (LOSS) INCOME ATTRIBUTABLE TO SINCLAIR BROADCAST GROUP	314	140	452	216
Comprehensive (loss) income	314	140	452	216
Reportable legal entities | Guarantor Subsidiaries and KDSM, LLC
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME
Total revenues	774	702	2,140	2,064
Media program and production expenses	322	312	962	931
Selling, general and administrative	160	162	479	481
Impairment of goodwill and definite-lived intangible assets	0		0
Depreciation, amortization and other operating expenses	40	55	143	203
Total operating expenses	522	529	1,584	1,615
Operating (loss) income	252	173	556	449
Equity in earnings of consolidated subsidiaries	0	0	0	0
Interest expense	(1)	(1)	(3)	(2)
Other income (expense)	(11)	(12)	(30)	(35)
Total other income (expense), net	(12)	(13)	(33)	(37)
Income tax benefit (provision)	64	43	24	3
NET (LOSS) INCOME	304	203	547	415
Net income attributable to the redeemable noncontrolling interests	0	0	0	0
Net loss (income) attributable to the noncontrolling interests	0		0	0
NET (LOSS) INCOME ATTRIBUTABLE TO SINCLAIR BROADCAST GROUP	304	203	547	415
Comprehensive (loss) income	304	203	547	415
Reportable legal entities | Non- Guarantor Subsidiaries
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME
Total revenues	786	445	2,350	616
Media program and production expenses	772	262	1,371	325
Selling, general and administrative	77	124	207	133
Impairment of goodwill and definite-lived intangible assets	4,264		4,264
Depreciation, amortization and other operating expenses	133	104	416	193
Total operating expenses	5,246	490	6,258	651
Operating (loss) income	(4,460)	(45)	(3,908)	(35)
Equity in earnings of consolidated subsidiaries	0	0	0	0
Interest expense	(114)	(76)	(361)	(85)
Other income (expense)	168	6	180	5
Total other income (expense), net	54	(70)	(181)	(80)
Income tax benefit (provision)	727	21	702	21
NET (LOSS) INCOME	(3,679)	(94)	(3,387)	(94)
Net income attributable to the redeemable noncontrolling interests	(19)	(11)	(51)	(11)
Net loss (income) attributable to the noncontrolling interests	130		113	(3)
NET (LOSS) INCOME ATTRIBUTABLE TO SINCLAIR BROADCAST GROUP	(3,568)	(105)	(3,325)	(108)
Comprehensive (loss) income	(3,679)	(94)	(3,396)	(94)
Eliminations
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME
Total revenues	(46)	(31)	(133)	(71)
Media program and production expenses	(17)	(14)	(45)	(41)
Selling, general and administrative	(24)	(10)	(72)	(12)
Impairment of goodwill and definite-lived intangible assets	0		0
Depreciation, amortization and other operating expenses	(3)	(4)	(9)	(10)
Total operating expenses	(44)	(28)	(126)	(63)
Operating (loss) income	(2)	(3)	(7)	(8)
Equity in earnings of consolidated subsidiaries	2,950	(237)	2,324	(526)
Interest expense	6	4	19	12
Other income (expense)	(4)	(2)	(10)	(1)
Total other income (expense), net	2,952	(235)	2,333	(515)
Income tax benefit (provision)	0	0	0	0
NET (LOSS) INCOME	2,950	(238)	2,326	(523)
Net income attributable to the redeemable noncontrolling interests	0	0	0	0
Net loss (income) attributable to the noncontrolling interests	0		0	0
NET (LOSS) INCOME ATTRIBUTABLE TO SINCLAIR BROADCAST GROUP	2,950	(238)	2,326	(523)
Comprehensive (loss) income	$ 2,950	$ (238)	$ 2,326	$ (523)

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CONDENSED CONSOLIDATING FINANCIAL STATEMENTS - Statement of Cash Flows (Details) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME
NET CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES	$ 839	$ 494
CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES:
Acquisition of property and equipment	(130)	(96)
Acquisition of business, net of cash acquired	(7)	(9,006)
Spectrum repack reimbursements	72	50
Proceeds from the sale of assets	36	0
Purchases of investments	(85)	(431)
Other, net	16	6
Net cash flows used in investing activities	(98)	(9,477)
CASH FLOWS (USED IN) FROM FINANCING ACTIVITIES:
Proceeds from notes payable and commercial bank financing	947	9,453
Repayments of notes payable, commercial bank financing, and finance leases	(945)	(715)
Proceeds from the issuance of redeemable subsidiary preferred equity, net	0	985
Repurchase of outstanding Class A Common Stock	(343)	(125)
Dividends paid on Class A and Class B Common Stock	(49)	(55)
Dividends paid on redeemable subsidiary preferred equity	(32)	(10)
Redemption of redeemable subsidiary preferred equity	(547)	0
Debt issuance costs	(7)	(182)
Distributions to noncontrolling interests, net	(19)	(30)
Distributions to redeemable noncontrolling interests	(378)	0
Increase (decrease) in intercompany payables	0	0
Other, net	(68)	1
Net cash flows (used in) from financing activities	(1,441)	9,322
NET (DECREASE) INCREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH	(700)	339
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, beginning of period	1,333	1,060
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, end of period	633	1,399
Reportable legal entities | Sinclair Broadcast Group, Inc.
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME
NET CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES	(115)	(4)
CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES:
Acquisition of property and equipment	0	0
Acquisition of business, net of cash acquired	0	0
Spectrum repack reimbursements	0	0
Proceeds from the sale of assets	0
Purchases of investments	(2)	(2)
Other, net	1	0
Net cash flows used in investing activities	(1)	(2)
CASH FLOWS (USED IN) FROM FINANCING ACTIVITIES:
Proceeds from notes payable and commercial bank financing	0	0
Repayments of notes payable, commercial bank financing, and finance leases	0	0
Proceeds from the issuance of redeemable subsidiary preferred equity, net		0
Repurchase of outstanding Class A Common Stock	(343)	(125)
Dividends paid on Class A and Class B Common Stock	(49)	(55)
Dividends paid on redeemable subsidiary preferred equity	0	0
Redemption of redeemable subsidiary preferred equity	0
Debt issuance costs	0	0
Distributions to noncontrolling interests, net	0	0
Distributions to redeemable noncontrolling interests	0
Increase (decrease) in intercompany payables	507	186
Other, net	1	0
Net cash flows (used in) from financing activities	116	6
NET (DECREASE) INCREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH	0	0
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, beginning of period	0	0
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, end of period	0	0
Reportable legal entities | Sinclair Television Group, Inc.
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME
NET CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES	(39)	(188)
CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES:
Acquisition of property and equipment	(7)	(2)
Acquisition of business, net of cash acquired	0	0
Spectrum repack reimbursements	0	0
Proceeds from the sale of assets	0
Purchases of investments	(30)	(36)
Other, net	0	2
Net cash flows used in investing activities	(37)	(36)
CASH FLOWS (USED IN) FROM FINANCING ACTIVITIES:
Proceeds from notes payable and commercial bank financing	648	1,294
Repayments of notes payable, commercial bank financing, and finance leases	(670)	(706)
Proceeds from the issuance of redeemable subsidiary preferred equity, net		0
Repurchase of outstanding Class A Common Stock	0	0
Dividends paid on Class A and Class B Common Stock	0	0
Dividends paid on redeemable subsidiary preferred equity	0	0
Redemption of redeemable subsidiary preferred equity	0
Debt issuance costs	0	(15)
Distributions to noncontrolling interests, net	0	0
Distributions to redeemable noncontrolling interests	0
Increase (decrease) in intercompany payables	3	(1,074)
Other, net	0	1
Net cash flows (used in) from financing activities	(19)	(500)
NET (DECREASE) INCREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH	(95)	(724)
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, beginning of period	357	962
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, end of period	262	238
Reportable legal entities | Guarantor Subsidiaries and KDSM, LLC
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME
NET CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES	481	538
CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES:
Acquisition of property and equipment	(110)	(99)
Acquisition of business, net of cash acquired	(7)	0
Spectrum repack reimbursements	72	50
Proceeds from the sale of assets	36
Purchases of investments	(33)	(42)
Other, net	(2)	0
Net cash flows used in investing activities	(44)	(91)
CASH FLOWS (USED IN) FROM FINANCING ACTIVITIES:
Proceeds from notes payable and commercial bank financing	0	0
Repayments of notes payable, commercial bank financing, and finance leases	(3)	(3)
Proceeds from the issuance of redeemable subsidiary preferred equity, net		0
Repurchase of outstanding Class A Common Stock	0	0
Dividends paid on Class A and Class B Common Stock	0	0
Dividends paid on redeemable subsidiary preferred equity	0	0
Redemption of redeemable subsidiary preferred equity	0
Debt issuance costs	0	0
Distributions to noncontrolling interests, net	0	0
Distributions to redeemable noncontrolling interests	0
Increase (decrease) in intercompany payables	(433)	(454)
Other, net	0	0
Net cash flows (used in) from financing activities	(436)	(457)
NET (DECREASE) INCREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH	1	(10)
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, beginning of period	3	19
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, end of period	4	9
Reportable legal entities | Non- Guarantor Subsidiaries
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME
NET CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES	510	157
CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES:
Acquisition of property and equipment	(19)	(4)
Acquisition of business, net of cash acquired	0	(9,006)
Spectrum repack reimbursements	0	0
Proceeds from the sale of assets	0
Purchases of investments	(20)	(351)
Other, net	17	4
Net cash flows used in investing activities	(22)	(9,357)
CASH FLOWS (USED IN) FROM FINANCING ACTIVITIES:
Proceeds from notes payable and commercial bank financing	299	8,159
Repayments of notes payable, commercial bank financing, and finance leases	(272)	(26)
Proceeds from the issuance of redeemable subsidiary preferred equity, net		985
Repurchase of outstanding Class A Common Stock	0	0
Dividends paid on Class A and Class B Common Stock	0	0
Dividends paid on redeemable subsidiary preferred equity	(32)	(10)
Redemption of redeemable subsidiary preferred equity	(547)
Debt issuance costs	(7)	(167)
Distributions to noncontrolling interests, net	(19)	(30)
Distributions to redeemable noncontrolling interests	(378)
Increase (decrease) in intercompany payables	(69)	1,362
Other, net	(69)	0
Net cash flows (used in) from financing activities	(1,094)	10,273
NET (DECREASE) INCREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH	(606)	1,073
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, beginning of period	973	79
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, end of period	367	1,152
Eliminations
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME
NET CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES	2	(9)
CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES:
Acquisition of property and equipment	6	9
Acquisition of business, net of cash acquired	0	0
Spectrum repack reimbursements	0	0
Proceeds from the sale of assets	0
Purchases of investments	0	0
Other, net	0	0
Net cash flows used in investing activities	6	9
CASH FLOWS (USED IN) FROM FINANCING ACTIVITIES:
Proceeds from notes payable and commercial bank financing	0	0
Repayments of notes payable, commercial bank financing, and finance leases	0	20
Proceeds from the issuance of redeemable subsidiary preferred equity, net		0
Repurchase of outstanding Class A Common Stock	0	0
Dividends paid on Class A and Class B Common Stock	0	0
Dividends paid on redeemable subsidiary preferred equity	0	0
Redemption of redeemable subsidiary preferred equity	0
Debt issuance costs	0	0
Distributions to noncontrolling interests, net	0	0
Distributions to redeemable noncontrolling interests	0
Increase (decrease) in intercompany payables	(8)	(20)
Other, net	0	0
Net cash flows (used in) from financing activities	(8)	0
NET (DECREASE) INCREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH	0	0
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, beginning of period	0	0
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, end of period	$ 0	$ 0