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Sinclair Broadcast expects to see record political advertising sales this year after earnings miss

Sinclair Broadcast Group expects this presidential election year to deliver the highest political advertising sales in the company’s history.

The Hunt Valley-based broadcaster discussed political revenue expectations Wednesday as it announced fourth-quarter financial results that fell short of Wall Street’s expectations. Sinclair shares tumbled 15% to $23.36 each by the closing bell.

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“We are intently focused on continuing recent successes in growing our share of political advertising dollars for our stations and now sports networks, unique among our broadcast peers,” said Chris Ripley, Sinclair’s president and CEO, during a call with analysts.

Already, the year is off to a strong financial start with political spending running “well ahead” of the same period in 2016, the last presidential election year, Ripley said.

A key focus for Sinclair this year will be capturing some of “what is believed to be unprecedented political advertising spending,” Ripley said. “We expect 2020 to be our highest political revenue on record.”

Its previous high for political spending in a year was $266 million.

The broadcaster began a shift toward becoming a more diversified media company last year when it bought 21 regional sports networks and Fox College Sports from Disney for $10.6 billion. The deal made the TV station owner the nation’s largest provider of local sports programming.

Political advertising revenue can supercharge Sinclair’s results. On Wednesday, Sinclair reported a fourth-quarter profit of $44 million, or 47 cents per share, compared with income of $206 million, or 2.10 per share, in the fourth quarter of 2018, an election year. Political revenues of $23 million in the October-to-December period compared with $150 million in the fourth quarter of 2018, an election year.

Total revenues jumped 82% to $1.6 billion, with the addition of the sports networks.

Sinclair’s results missed the expectations of Wall Street analysts, who projected fourth-quarter earnings of $1.03 per share and revenue of $1.62 billion.

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