Sinclair (SBGI) risk factors, FY2024 10-K

RISKS RELATING TO OUR OPERATIONS

1. 01If the rate of decline in the number of subscribers to Distributor services increases or these subscribers shift to other services or bundles that do not include our stations or programming networks, there may be a material adverse effect on our revenues
2. 02We may not be able to renegotiate distribution agreements at terms comparable to or more favorable than our current agreements and networks with which we are affiliated currently, or in the future, may require us to share revenue from distribution agreements with them
3. 03Distributors lobby to change the regulations under which retransmission consent is negotiated before both Congress and the FCC in order to increase their bargaining leverage with television stations
4. 04As further described under Item 1. Business – Federal Regulation of Television Broadcasting, the FCC also has a Further Notice of Proposed Rulemaking pending which seeks additional comment on whether it has authority to, and should, eliminate or modify its network non-duplication and syndicated exclusivity rules
5. 05Our acquisitions and investments could pose various risks and increase our financial leverage
6. 06We face intense, wide-ranging competition for viewers and advertisers
7. 07Our ability to adapt to competition from other broadcasters, other content providers and changes in consumer behavior and technology may adversely affect our business
8. 08We depend on the appeal of our programming, which may be unpredictable, and increased programming costs or the loss of key entertainment and sports programming previously exclusively available to Distributor subscribers may have a material negative effect on our business and on our results of operations
9. 09Theft of our intellectual property, including on digital platforms, may have a material negative effect on us and our results of operations, and we may become subject to infringement or other claims relating to our content or technology
10. 10We have experienced a cyber security breach in the past and may be vulnerable to future security breaches, data privacy, and other information technology failures that could have a material adverse effect on our financial performance and operating results and disrupt our operations
11. 11Data privacy, data protection, and information security may require significant resources and present certain risks, including risks related to compliance with domestic and international privacy and data protection laws
12. 12We rely upon cloud computing services to operate certain significant aspects of our business and any disruption could have an adverse effect on our financial condition and results of operations
13. 13The loss of key personnel, including talent, could disrupt the management or operations of our business and could have an adverse effect on our financial condition and results of operations
14. 14We could be adversely affected by labor disputes, other union activity and related legislation
15. 15Unrelated third parties may bring claims against us based on the nature and content of information posted on our linear programming, social platforms, and websites maintained by us
16. 16Our advertising revenue can vary substantially from period to period based on many factors beyond our control. This volatility affects our operating results and may reduce our ability to repay debt or reduce the market value of our securities
17. 17There can be no assurance that our advertising revenue will not be volatile in the future or that such volatility will not have an adverse impact on our business, financial condition, or results of operations
18. 18Federal regulation of the broadcasting industry limits our operating flexibility, which may affect our ability to generate revenue or reduce our costs
19. 19Television station ownership
20. 20would be forced to sell these assets, restructure our agreements or find another use for them. If this happens, the market for such assets may not be as good as when we purchased them and, therefore, we cannot be certain of a favorable return on our original investments
21. 21Failure of owner / licensee to exercise control
22. 22We have invested and will continue to invest in new technology initiatives which may not result in usable technology or intellectual property
23. 23We have limited experience in operating or investing in non-broadcast related businesses
24. 24Our operations and business have in the past been, and could in the future be, materially adversely impacted by a pandemic or other health emergency
25. 25Our response to corporate social responsibility considerations, and compliance with laws and regulations related thereto may adversely impact our business
26. 26The effects of the economic environment could require us to record an asset impairment of goodwill, indefinite-lived and definite-lived intangible assets or our investments
27. 27We are subject to risks related to our use of Artificial Intelligence (AI), a new and emerging technology, which is in the early stages of commercial use

RISKS RELATING TO OUR CONCENTRATED VOTING STOCK OWNERSHIP

1. 28The Smiths exercise control over most matters submitted to a stockholder vote and may have interests that differ from other security holders. They may, therefore, take actions that are not in the interests of other security holders

RISKS RELATING TO OUR DEBT

1. 29We have a high level of debt, totaling $4,129 million at December 31, 2024, compared to the book value of shareholders’ equity of $516 million on the same date
2. 30We may not be able to generate sufficient cash to service all of our debt and may be forced to take other actions to satisfy our obligations under our debt, which may not be successful
3. 31Despite our current level of debt, we and our subsidiaries may still be able to incur substantially more debt. This could further exacerbate the risks to our financial condition described herein
4. 32Our variable rate debt subjects us to interest rate risk, which could cause our debt service obligations to increase significantly
5. 33Our use of derivative financial instruments to reduce interest rate risk may result in added volatility in our financial results and cash flows, including increased interest expense
6. 34Commitments we have made to our lenders and noteholders limit our ability to take actions that could increase the value of our securities and business or may require us to take actions that decrease the value of our securities and business
7. 35Certain of our debt agreements will contain cross-default provisions with other debt, which means that a default under certain of our debt instruments may cause a default under such other debt
8. 36Financial and economic conditions, including inflation, may have an adverse impact on our industry, business, and results of operations or financial condition