8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

Form 8-K

CURRENT REPORT PURSUANT TO SECTION 13 OR 15 (D)

OF THE SECURITIES EXCHANGE ACT OF 1934

October 7, 2021

Date of Report (Date of earliest event reported)

SINCLAIR BROADCAST GROUP, INC.

(Exact name of registrant as specified in its charter)

Maryland	000-26076	52-1494660
(State of organization)	(Commission File Number)	(I.R.S. Employer Identification Number)

10706 Beaver Dam Road

Hunt Valley, MD  21030

(Address of principal executive offices and zip code)

(410) 568-1500

(Registrant's telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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 is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2). 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. ☐

Item 7.01 Regulation FD Disclosure.

As previously disclosed, Diamond Sports Group LLC (“DSG”), a wholly-owned subsidiary of Sinclair Broadcast Group, Inc. (“Sinclair”), is a party to the Credit Agreement dated August 23, 2019 (the “Diamond Credit Agreement”) among Diamond Sports Intermediate Holdings LLC (“Holdings”), DSG, JPMorgan Chase Bank, N.A., as administrative agent, and the issuing banks and lenders party thereto (collectively, the “Lenders”), the indentures for the 5.375% Senior Secured Notes due 2026 and the 6.625% Senior Notes due 2027 each dated as of August 2, 2019 and for the 12.750% Senior Secured Notes due 2026 dated as of June 10, 2020 (collectively, the “Diamond Indentures”), entered into among DSG, Diamond Sports Finance Company, as co-issuer, Holdings, the other parties thereto as guarantors, and U.S. Bank National Association, as trustee.

Sinclair entered into non-disclosure agreements with certain Lenders and certain holders of secured and unsecured notes issued under the Diamond Indentures for the purpose of engaging in discussions with such Lenders and noteholders and their respective advisors concerning potential interest in funding new DSG indebtedness and exchanging and/or repurchasing existing DSG indebtedness (the “Transaction Discussions”). However, the Transaction Discussions are dependent, in part, on the outcome of Sinclair and DSG’s ongoing discussions with certain interested parties, including commercial partners, on the evolution of DSG’s business and those parties’ support for and potential involvement with a proposed direct-to-consumer platform (the “Other Interested Party Discussions”). As a result, while DSG has made significant progress in its discussions with such Lenders and noteholders and their respective advisors, the Transaction Discussions have not resulted in a definitive agreement at this time and pursuant to the non-disclosure agreements referenced above, DSG has agreed to publicly disclose certain confidential information relating to the Transaction Discussions. Though the Transaction Discussions and Other Interested Party Discussions are ongoing, there can be no assurance that DSG will be able to complete any such transactions under discussion, which would be subject to market and other customary conditions.

The foregoing descriptions of the Transaction Discussions and proposals are not complete and are qualified in their entirety by reference to the draft term sheets provided by DSG to the debtholders, which are furnished herewith as Exhibits 99.1 and 99.2, respectively.

Cautionary Note Regarding Forward-Looking Statements

The matters discussed in the information furnished herewith include forward-looking statements regarding, among other things, future events and actions. When used in the supplemental financial discussion, the words “outlook,” “intends to,” “believes,” “anticipates,” “expects,” “achieves,” “estimates,” and similar expressions are intended to identify forward-looking statements. Such statements are subject to a number of risks and uncertainties. Actual results in the future could differ materially and adversely from those described in the forward-looking statements as a result of various important factors, including and in addition to the assumptions set forth therein, but not limited to: the potential impacts of the novel coronavirus (“COVID-19”) pandemic on our business operations, financial results and financial position and on the world economy, including the significant disruption to the operations of the professional sports leagues, the need to provide rebates to our distributors related to canceled professional sporting events, and loss of advertising revenue due to postponement or cancellation of professional sporting events, and reduced consumer spending as a result of shelter in place and stay at home orders; our ability to generate cash to service our substantial indebtedness; successful execution of outsourcing agreements; the successful execution of retransmission consent agreements; the successful execution of network affiliation and distributor agreements; the successful execution of media rights agreements with professional sports teams; the impact of over-the-top and other emerging technologies and their potential impact on cord-cutting; the impact of distributors offering “skinny” programming bundles that may not include all programming of our networks; pricing and demand fluctuations in local and national advertising; the successful implementation of our sports direct to consumer platform; volatility in programming costs; the market acceptance of new programming; our ability to identify and consummate acquisitions and investments, to manage increased leverage resulting from acquisitions and investments, and to achieve anticipated returns on those investments once consummated; the impact of pending and future litigation claims against Sinclair; the impact of Federal Communications Commission and other regulatory proceedings against Sinclair, uncertainties associated with potential changes in the regulatory environment affecting our business and growth strategy, and any risk factors set forth in Sinclair’s recent reports on Form 10-Q and/or Form 10-K, as filed with the SEC. There can be no assurances that the assumptions and other factors referred to in the information furnished herewith will occur. The information is speculative and subjective in nature and was based upon expectations, beliefs, opinions, and assumptions, which are inherently uncertain and include factors that are beyond the control of Sinclair and DSG and may not prove to be accurate; does not necessarily reflect current expectations, beliefs, opinions, or assumptions that the management of Sinclair and DSG may have about the prospects for its businesses, changes in general business or economic conditions, or any other transaction or event that has occurred or that may occur or that was not anticipated at the time such information was prepared; may not reflect current results or future performance, which may be significantly more favorable or less favorable than projected by such information; and is not, and should not be regarded as, a representation that any of the

expectations contained in, or forming a part of, the forecasts will be achieved. Sinclair undertakes no obligation to publicly release the results of any revisions to these forward-looking statements except as required by law.

The information set forth in and incorporated into this Item 7.01 of this Current Report on Form 8-K, including Exhibits 99.1 and 99.2, is being furnished under Item 7.01 and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to liability of that section nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language in such filing, except as shall be expressly set forth by specific reference in such filing. The filing of this Item 7.01 of this Current Report on Form 8-K shall not be deemed an admission as to the materiality of any information herein that is required to be disclosed solely by reason of Regulation FD.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

Exhibit No.	Description
99.1	Diamond Sports Group Proposal to Secured Creditors dated September 27, 2021.
99.2	Diamond Sports Group Proposal to Unsecured Noteholders dated September 28, 2021.
104	Cover Page Interactive Data File (embedded within the Inline XBRL document).

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

SINCLAIR BROADCAST GROUP, INC.

By: /s/ David R. Bochenek

Name:    David R. Bochenek

Title:    Senior Vice President / Chief Accounting Officer

Dated: October 7, 2021

EX-99.1

Diamond Sports Group Proposal to Secured Creditors Dated September 27, 2021 First Priority Superpriority Debt [Second Priority Superpriority Debt1] Amount  $600mm New Money ► Will be used for general corporate purposes including funding the operating needs of DSG and other capital expenditures  Up to $6,340mm Security  Lien Priority: Senior to existing 1L debt; security package will include all pledgable assets that are already pledged and with additional perfection steps as may be agreed taking into account legal, contractual and practical limitations  Lien Priority: Senior to existing 1L debt; junior to First-Priority Debt1 currently Guarantors  All current and future domestic material subsidiaries (with carveouts consistent with existing first lien debt, other than with more restrictive release of lien and guarantee provisions)  Same as First-Priority Debt Rate  L + 700, 0.75% LIBOR floor (or fixed-price equivalent)  Status Quo: Fees / OID  OID: 99.0 to participating lenders  3% backstop fee to backstopping lenders  N/A Amortization  1.0% per annum  1.0% per annum (Term Loan only) Tenor  March 2026 Maturity  August 2026 Maturity; coterminous with existing notes / term loan Call Protection  NC3 / 107 / par  Call schedule unchanged from existing notes / term loan Maintenance Covenant  Minimum liquidity: $25mm (to be defined as book cash plus availability under DSG’s revolver)  Same as First-Priority Debt Negative Covenants  [Basket for exchange of Unsecured or Secured debt into additional Second-Priority Debt equal to 85% of 1L Debt less Second-Priority Debt issued to participating 1L1, provided exchange at minimum [35]% discount to par and completed within 6 months of closing]  Unlimited basket for exchange of Unsecured Notes into additional junior lien debt (behind outstanding 1L debt), provided total cash interest expense of junior lien exchanged debt cannot exceed total cash interest expense of unsecured debt so exchanged  Revisions to include significant reductions to basket capacity contained in existing 1L debt to be mutually agreed, provided accommodations to be agreed will be made to allow for the company to operate and grow its business  Unrestricted subsidiary concept to be limited to specific business needs of company to be specifically agreed (and with sacred right voting protections against amending); investments in non-guarantor subs to be restricted (and debt incurrences by such subs to be further restricted); Subject to carveouts to operate business, etc.  Preferred equity and unsecured notes are considered restricted debt payments (“RDP”); Existing contractual debt payments and cash interest paid on preferred equity (based on existing agreement) shall not count at RDP ► Unsecured notes repurchases cannot be made for more than [•] cents of par ► Preferred equity repurchases/distributions can only be made if total net leverage < [5.0]x Other  New money First Priority Superpriority Debt will be offered to all existing 1L holders pro rata  Required minimum participation of >50% of 1L Loans2 and >67% of 1L Notes  Subject to satisfactory completion of due diligence  Reimbursement of certain fees and expenses of Ad Hoc Group and Ad Hoc Group professionals; Evercore fees subject to a cap of $[•], payable at the closing of a transaction  Company to use commercially reasonable efforts to have First Priority Superpriority Debt [and Second Priority Superpriority Debt1] rated within 30 days of closing by Moody’s and  S&P (but no specific ratings will be required)  Inclusion of Chewy protection in form and substance acceptable to Ad Hoc Group  Inclusion of lien and payment subordination protection as a sacred right, only able to be amended by affected lender vote  Eliminate ability for Company to make non-cash open market purchases  Existing DSG revolving credit facility will become pari with the Second-Priority Debt (regardless of participation in the New Money) 1. Structure under review – could remain 2nd priority or may eliminate roll-up depending on participation thresholds 2. Requires vote of >50% of total credit facility debt (1L Term Loan and RCF) ► Term Loan: L + 325bps ► Notes: 5.375% FRE 408 For Settlement Discussion Only 1

EX-99.2

Diamond Sports Group Proposal to Unsecured Noteholders dated September 28, 2021 1 New Money Financing • $[600]mm of 1L notes at Diamond Sports Group, LLC • 3.5% backstop fee to be paid in cash • Cash proceeds from new money financing will be held in escrow, to be released upon commercial launch of DTC. New money and Tranche 1 to have a lien in escrowed cash, pending release. The “Commercial Launch” to be defined as the date that content is broadcast through the application and any revenue from the application is received. Special mandatory redemption to be at par. Exchange • Tranche 1: Roll-up of unsecured notes into up to $[100]mm of 1L notes on same terms as new money at par (to the extent DSG receives New Money Financing of less than $[600]mm 1L notes; otherwise Tranche 1 roll-up does not apply) ‒ Limited to lenders who provide new money financing ‒ Document tightening as compared with existing 1L notes, on terms to be agreed • Tranche 2: Roll-up of unsecured notes into 1L notes on substantially the same terms as existing secured notes at a [10]% discount ‒ Limited to holders who provide new money financing ‒ Same credit support and substantially consistent with the covenants as existing 1L notes • Tranche 3: Roll-up of unsecured notes into 1L notes on substantially the same terms as existing secured notes at a [30]% discount ‒ Same credit support and substantially consistent with the covenants as existing 1L notes Interest Rate • New money and Tranche 1: [9.000]% • Tranche 2: 7.625% • Tranche 3: 6.625% Maturity • New money and Tranche 1: October 2027 (6 years) with springing maturity to October 2025 (4 years) if 5.375% secured notes are not refinanced • Tranche 2 and 3: November 2026 (5 years); date of maturity must be at least 91 days outside of August 24, 2026 term loan maturity Call Protection • New money and Tranche 1: Callable at T+50 for life based on all payments to October 2027 maturity ‒ In connection with a refinancing of at least 90% of Diamond’s outstanding secured debt, the Company can redeem the new money at T+50 for three years, 106, 103, par thereafter • Call premium to be due and payable upon acceleration including automatic acceleration in bankruptcy DTC Matters • TBD FRE 408 For Settlement Discussion Only

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Cover Page Cover Page	Oct. 07, 2021
Cover [Abstract]
Document Type	8-K
Document Period End Date	Oct. 07, 2021
Entity Registrant Name	SINCLAIR BROADCAST GROUP, INC.
Entity Incorporation, State or Country Code	MD
Entity File Number	000-26076
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
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Entity Emerging Growth Company	false
Title of 12(b) Security	Class A Common Stock, par value $ 0.01 per share
Trading Symbol	SBGI
Security Exchange Name	NASDAQ
Amendment Flag	false
Entity Central Index Key	0000912752