Sinclair, Inc. Q1 FY2025 Earnings Call

Good day, everyone and welcome to the Sinclair, Inc. First Quarter 2025 Earnings Conference Call. At this time, all participants have been placed on a listen-only mode. It is now my pleasure to turn the floor over to your host, Chris King, Vice President of Investor Relations at Sinclair Inc. Sir, the floor is yours.

Thank you. Good afternoon, everyone, and thank you for joining Sinclair's first quarter 2025 earnings conference call. Joining me on the call today are Chris Ripley, our President and CEO; Lucy Rutishauser, our Executive Vice President and Chief Financial Officer; and Rob Weisbord, our COO and President of Local Media. Before we begin, I want to remind everyone that slides for today's earnings call are available on our website sbgi.net, on the Events and Presentations page of the Investor Relations portion of the site. A webcast replay will remain available on our website until our next quarterly earnings release. Certain matters discussed on this call may include forward-looking statements regarding, among other things, future operating results. Such statements are subject to a number of risks and uncertainties. Actual results in the future could differ from those described in the forward-looking statements as a result of various important factors. Such factors have been set forth in the company's most recent reports as filed with the SEC and included in our first quarter earnings release. The company undertakes no obligation to update these forward-looking statements. Included on the call will be a discussion of non-GAAP financial measures, specifically adjusted EBITDA. These measures are not formulated in accordance with GAAP and are not meant to replace GAAP measurements and may differ from other companies' uses or formulations. Further discussions and reconciliations of the company's non-GAAP financial measures to comparable GAAP financial measures can be found on our website. Let me now turn the call over to Chris Ripley.

Good afternoon, everyone, and thank you for joining us. Beginning on Slide 3, we're off to a solid start to the year despite the macroeconomic uncertainty all around us. Our total media revenue was in line with our expectations. Once again, we reported what we believe will be among the strongest core advertising performances among our broadcast peers in the first quarter. Total advertising revenues were within our guidance range, excluding the impact in the quarter from an acquisition by Compulse. Distribution revenues increased by $15 million year-over-year, and while subscriber churn moderated slightly, the improvements have not yet caught up with our guidance, which led to distribution revenues coming in $2 million below our guidance. Media expenses were better than expected, driving adjusted EBITDA comfortably above the high end of our guidance range. Turning to Slide 4. Our Ventures portfolio continues to transform away from our minority investment holdings as we look to position the portfolio for more majority-owned assets over time. Ventures benefited from $10 million of cash distributions and invested $38 million in the quarter, including approximately $30 million for an acquisition by Compulse. Ventures cash balance was $354 million at quarter end. After completing our comprehensive refinancing of STG in February, we continue to carefully examine potential uses of Ventures cash, which may include potential share repurchases or other shareholder-friendly activity. On Slide 5, I wanted to highlight a key announcement we made last week regarding the hire of Jeff Blackburn as Chairman and CEO of Tennis Channel. Jeff comes to us after a storied 20-plus-year career at Amazon, where he was the prime architect of the company's expansion into streaming and sports while also developing and building Prime Video, Prime Studios, Amazon Music, Amazon's advertising and marketplace divisions. He will lead Tennis Channel's strategy to expand its digital and streaming footprint and deepen audience engagement in order to position Tennis Channel for its next phase of transformative growth and long-term value creation. As the latest example of such growth just this morning, we announced the formation of a new business unit to operate a groundbreaking partnership with the ATP, WTA, and participating U.S. tournaments to create a unified opportunity to purchase a single comprehensive sponsorship package that covers the entire country. This morning, Verizon was announced as the first sponsor sale with category exclusivity in the 5G wireless space. We are excited to have attracted a media executive of Jeff's stature, and we view the Tennis Enterprise sponsorship announcement as an example of the growth and long-term value creation that we're committed to delivering in the quarters and years to come. With that said, let me now turn it over to Rob to continue the discussion about our Broadcast business.

Thanks, Chris, and good afternoon, everyone. Turning to Slide 6. As Chris mentioned earlier, we expect our core advertising results to once again be a leader in the industry despite the uncertainty and volatility that is impacting major categories across the nation. This would continue recent trends, which have seen us beating our publicly traded broadcasting peers in year-over-year core growth rates in four of the past six quarters through the end of 2024. During the first quarter, core advertising revenues were within our guidance range of down low single-digits year-over-year. Having said that, the macroeconomic and tariff-related uncertainty is creating hesitation by certain top categories. On a positive note, we are now less than eight months away from another political season kicking off. On Slide 7, as an early preview of what we expect in 2026, we currently have 23 Senate races and 25 gubernatorial races in our footprint. We believe that at least six of these Senate races will be highly competitive and more than half the gubernatorial races will have competitive primaries. In addition, more than 30 house races have already been targeted by the National Republican and Democratic parties as potential flips. We expect intense battles across the country as the House, Senate, and gubernatorial elections are all close to being evenly split between the two parties. Therefore, we expect taking control will be a driver of midterm election dollars. Touching on our distribution revenues on Slide 8. Our net retransmission revenues grew by mid-single digits year-over-year in the quarter, and we continue to expect a two-year mid-single-digit CAGR through the end of this year. Notably, Charter, our largest MVPD, reduced video subscriber discounts in the first quarter by 55% year-over-year, highlighting the success in reducing churn including what we have called the great rebundling. The package is streaming platforms with legacy linear packages. We believe Charter's success in reducing churn illustrates how creative solutions, including this type of bundling of the streaming platforms with legacy linear packages can reduce or reverse this driver turn materially over time. From a renewal perspective, during the quarter, we extended our YouTube TV distribution agreement. As a reminder, we do not have any outstanding traditional linear distribution or Big 4 network affiliation agreements up for renewal before late 2026. I also want to point out that our Portland Trail Blazers coverage in this NBA regular season doubled its average audience size on our stations in the Pacific Northwest versus the prior season's coverage on a regional sports network. Once again highlighting the importance of sports and the benefits of the wide distribution of broadcast TV. The latest addition to our AMP Media sports podcast lineup, BFFR, starring Women's Soccer Star, Sydney Leroux and Ali Riley, two of the key members of Angel City Football Club, launched last week. The weekly podcast will focus on the authentic behind-the-scenes discussions that have helped the growth in social media identities into some of the largest women's sports media landscapes. We will also launch a women's basketball podcast shortly featuring WNBA Stars, Canvas Blocker and Aliyah Boston. These launches reflect our continued commitment to elevating women's sports and amplifying the voice of its top athletes. Stay tuned for additional announcements regarding the ongoing expansion of our social media and podcast platforms. I also wanted to briefly mention our very successful upfront presentation last week in New York, where we showcased our news and sports brands that demonstrated our advertisers can activate and amplify their brands as our partners. I wanted to thank all our podcast partners, including Coach Urban Meyer, Mark Ingram II, Rob Stone, Martina Navratilova, Sydney Leroux, Matt Leinart, Jerry Ferrara for being at our upfront and helping us demonstrate what a powerful partner we can be for our advertisers. We look forward to sharing updates with you in the coming quarters. Now let me turn it back over to Chris to provide a couple of industry updates.

Thanks, Rob. Turning to Slide 9. We, along with the NAB and the entire industry, are hopeful that many of the woefully outdated FCC regulations that have hampered growth in the broadcast industry over the recent decades will be revisited, if not eliminated, in the coming months, and we remain hopeful that most of the outdated ownership rules impacting the sector will be modified to allow sensible M&A and portfolio rationalization. In addition, the industry will be lobbying for other issues impacting the sector, particularly the rules that prohibit broadcasters from negotiating directly with virtual MVPDs as well as the rules that will allow the industry to rapidly sunset ATSC 1.0 networks, which will help accelerate the broad adoption of next-gen broadcast products and services. As an example of what may come, last week FCC Commissioner Simonton and his Chief of Staff authored an Op-Ed suggesting that the FCC should take action to cap network programming fees at 30% of retransmission fees. The piece highlights this proposal as a way to protect local broadcasters and local journalism from big tech and big media. The implementation of such a proposal would allow for the strengthening of local broadcasters and local news throughout the country. We look forward to continuing to work with Chairman Car and the rest of the FCC on the very welcomed and long overdue deregulatory approach to the broadcast industry to help level the playing field. Lastly, I wanted to extend my deep appreciation and best wishes to Lucy, who announced her upcoming retirement several weeks ago. While Lucy is staying on through the transition of the new CFO, her over 26 years at Sinclair will be coming to an end within the next several months. Lucy has more than eight years of experience in the CFO chair and her reputation and expertise have benefited Sinclair greatly over the years. Lucy recently led our almost $4 billion comprehensive refinancing and has helped guide the company through tremendous growth of our portfolio of stations, diversification of our assets, many capital markets transactions, and many other initiatives, as well as the great recession of pandemic and other challenges. Her numerous awards and recognitions from across the industry are a testimony to her leadership, dedication, and knowledge of both Sinclair and the wider broadcast industry. Even though we expect her to remain with us in a senior advisory role, there is no question that we will greatly miss her guidance, strategic and fiscal contributions, mentorship, and work ethic. On behalf of the company, thank you for everything, Lucy. Now perhaps for the final time, let me turn it over to Lucy for a discussion of our financial results in more detail.

Thank you, Chris, for the very kind words, and good afternoon, everyone. I'm pleased to say that I depart with Sinclair in a financially strong and healthy position and poised to grow in what should be a transformative next few years with deregulation and next-gen broadcast. Turning to Slide 10. Following our recent refinancing, we have significantly extended the debt maturity profile of the company with the current weighted average maturity of more than six years. As of March 31st, our first-lien net leverage was 1.8x with total first-lien net leverage at 4.2x and total net leverage at 5.8x as defined in our new STG credit agreement. Our balance sheet is now not only the industry's longest in terms of maturity profile but, more importantly, positions us well to participate in what we hope will be a period of renewed M&A activity within the sector. In addition to the comprehensive refinancing, we also repurchased approximately $66 million in face value of STG's 2027 notes for $62 million in early April. On Slide 11, we highlight our first-quarter segment results. Despite the negative economic headlines and general levels of uncertainty throughout the economy, we delivered in-line media revenues in our Local Media segment, with core advertising down 4.5% year-over-year, and distribution revenues were slightly below expectations, although they grew year-over-year. Our political revenue outperformance in the quarter was largely driven by a Wisconsin Supreme Court race that garnered national attention in what could be an early indicator of what's to come in next year's midterm elections. Adjusted EBITDA beat the high end of our guidance range by approximately $9 million for local media, driven by favorable SG&A and promotional expenses on a continued cost savings focus. Tennis Channel had another strong quarter with revenues and adjusted EBITDA, both in line with our guidance ranges as total revenues grew by 9% from year-ago levels. Slide 12 reviews our consolidated media revenue, which was within our guidance range as in-line core and higher political advertising were offset by slightly lower-than-expected distribution revenues. Media revenues fell by approximately $22 million year-over-year, driven by lower political advertising revenues in this nonelection year and the absence of material diamond sports management fees which were offset by higher distribution revenue of $15 million year-over-year on the recent renewals. Turning to Slide 13. Our consolidated adjusted EBITDA exceeded our guidance range primarily on a continued focus on managing expenses, which were lower than forecast due to several SG&A line items. As compared to last year, adjusted EBITDA declined by $27 million, driven by lower core political and management fee revenues and slightly higher media expenses on network programming fees, production costs, and annual compensation increases. On Slide 14, we introduced our second-quarter 2025 guidance. Please note that our guidance includes the recent acquisition by Compulse, which is included in other in our segment reporting. We expect second-quarter media revenues to be lower year-over-year on a consolidated basis due primarily to significantly lower political revenues in a non-election year, the absence of material diamond management fees, as well as some continued softness in core advertising categories. We anticipate Local Media core advertising revenue to be lower by approximately 2% at the midpoint of our guidance range, while distribution revenues are expected to be 1% higher year-over-year as we begin to cycle through some of the larger distribution renewals from a year ago. Our consolidated adjusted EBITDA is expected to be within a range of $91 million to $107 million. Turning to Slide 15. We present our full-year guidance. However, we have removed the media expense line item. We believe the current macroeconomic and tariff-related uncertainty is causing our advertisers in several key categories to have significantly reduced visibility and is, therefore, driving a wide range of potential outcomes in the second half of the year. In fact, several of those advertisers have pulled their own financial guidance. With the reduced visibility on core revenues in the back half of the year, it's difficult to provide a range for the media expenses given the direct costs associated with those revenues such as commissions, bonuses, etc. However, you do have Q1 actuals and Q2 guidance to inform your full-year media expense estimates based on your advertising revenue assumptions in the back half of the year. We will note that consistent with our beat on media expenses in the first quarter, we would expect those expense trends for acquisition to continue under an assumption of consistent revenue expectations for the remainder of the year. And the full-year guidance provided, net interest expense includes the non-recurring $68 million in fees and expenses related to the refinancing that were expensed in the first quarter. Notably, for the year, we are now forecasting much lower cash tax payments of $121 million at the midpoint of our guidance, which is $95 million lower than our guidance provided last quarter. Driving the reduction is a revised estimate of the taxes on the Diamond exit gain, which declined from an estimated $170 million to $83 million. The $87 million estimated reduction is largely due to having more current information regarding the utilization of certain tax attributes. Of the $83 million Diamond exit gain taxes, Local Media is estimated to fund $58 million and ventures to fund $25 million. I will now turn it back to Chris for some closing remarks before we open the call to Q&A.

Thanks, Lucy. Turning to Slide 16 to wrap up the quarter with our key takeaways. Sinclair delivered solid financial results in a challenging environment. Adjusted EBITDA exceeded the high end of our range guidance. Core advertising trends continue to be among the best in the industry, despite the macroeconomic uncertainties and lack of visibility. Subscriber churn continues to moderate. Regulatory optimism remains buoyant with expectations for loosened M&A restrictions and next-gen spectrum relief among other potentially favorable changes that could lead to a strengthening of local journalism. The balance sheet is strong with the comprehensive refinancing completed during the first quarter, our weighted average maturity of more than six years out, our nearest meaningful maturity not until December of 2029, and $66 million of debt repurchased at a discount. Finally, liquidity got a further boost from a significantly lower cash tax payment estimate for the full year related to the Diamond Chapter 11 emergence. In summary, we could not be more optimistic about the future for the industry and Sinclair's continued position as an industry leader. Thank you very much for joining us today and your interest in Sinclair. Rob, Lucy, and I will now take your questions.

Certainly. Everyone at this time, we will be conducting a question-and-answer session. Your first question is coming from Dan Kurnos from Benchmark. Your line is live.

Great. Thanks. Good afternoon. Chris, let me just echo sentiments, Lucy. We go back a long, long way. A certain one-handed catch at Brewer Stadium, while holding a beverage, I might add, will never be forgotten. So I do certainly wish you nothing but the best. I just wanted to start with that.

I appreciate that. Thank you, Dan.

Chris, the Compulse aspect has certainly attracted significant attention. There is considerable discussion about whether the FCC has the authority to impose limits on retransmission rates, specifically reverse rates. Could you elaborate on that and share your perspective on the likelihood of such an action? It’s clear that if they allowed you to negotiate directly with virtual providers, it would have a substantial impact on the overall trajectory.

Sure. So the FCC does have the ability to regulate the relationship between networks and affiliates, that is a part of their charter. So obviously, capping a major expense like that could be very helpful in terms of leveling the playing field with us in big tech and big media. And it could also open up bigger opportunities for us in terms of filling in dayparts that maybe the networks don't want to service anymore, which would also dovetail with the FCC's objectives. So overall, I think what our key takeaway is from that Op-Ed is that we are seeing this groundswell of deregulatory support for the broadcast industry that we believe is well overdue. And the right answer for the industry, I think, will end up being a combination of things, some of which will be loosening up ownership rules, sunsetting ATSC 1.0, but other ideas that are coming to the surface here. And we're just thrilled that the FCC is stepping in to help level the playing field.

Got it. Super helpful. And then kind of the other obvious question given sort of the uncertainties out there, you pulled your media expense line item. We got the 2Q guide. Maybe just tell us what you're seeing out there, conversations with advertisers and how do you guys feel about how core might shape up for the year, understanding you have some really easy comps in the back half of the year?

Yes. As the year progresses, we still expect our core to grow year-over-year. However, I want to note that our visibility has significantly decreased compared to six to eight weeks ago. We have observed major companies in important advertising sectors, such as Ford, withdraw their financial forecasts for the year due to uncertainty regarding the overall economic situation and tariff policies. These companies are worried about supply chains as well as consumer confidence and demand. Therefore, while we anticipate growth year-over-year, we remain cautiously optimistic given the limited visibility as time has passed.

Got it. Super helpful. Thank you. And thank you, Lucy. Best of luck.

Thank you, Dan.

Thank you. Your next question is coming from Aaron Watts from Deutsche Bank. Your line is live.

Hey, everyone. Thanks for having me on. Lucy, I want to thank you for everything over the many years, including putting up with all my questions and all our conferences you took time to participate in. At those and on these calls, but I am glad that you'll still be with the company in your new role. So best of luck with that.

Appreciate it. Thank you.

Of course. A follow-up on core advertising and maybe the auto category specifically, how did that trend in the first quarter? And how is it looking in 2Q? Are you seeing any bump kind of beat the tariff ad, get a car before the price increases? And do you see this bump if it is happening as sustainable at all?

Up to date, we haven't seen that bump. We were just notified though that Nissan will be going on with an aggressive ad campaign. What's interesting is the trends are moving away from outright buys to leases. And so the leases are tending to trend up. So we're bullish on the financial segment wrapped around the automotive and again, they're going to have to clear out the '25 in the back half of the year to make room for the '26. But again, with some of the visibility is not there, how much of the foreign manufacturers, OEMs, how much is going to come into the country still remains not visible to us. So I think we're competitive on the domestic side and the foreign side is still to be seen.

Okay. And in terms of what you see from some of your bigger markets versus maybe more of your smaller markets, national versus local. Are you seeing a widespread kind of difference in advertiser sentiment based on that? I mean we've been hearing that national is a bit weaker than local. Are you seeing that play out?

Both are running parallel with each other. And again, I think we approach the business in a unique way. Our monitors on partner possibilities and we just ran a draft with our audio talent from Green Bay, activating a couple of our major advertisers. So as we look at it, we don't really look at trying to do just straight ads but this turn the spot to the dots world. It really is across platform and the activation and amplifying of our partners, which we're seeing in our upfront. So we have long-term partnerships that have been strong and stay with us because of that activation. So we're not really seeing much difference between local and national as far as our pace and it has to do just with how we both service the local clients and the national clients.

Okay. That's helpful. Thanks. Lucy, maybe I could aim one your way. You noted the $66 million of bond repurchases in April. Can you just remind us the capital allocation priorities for the television group specifically? Should we expect continued debt paydown going forward in particular, as we roll into next year when the political dollars Chris highlighted start to roll in?

Yes. So as we've been saying for a couple of quarters now, Aaron, and especially with the refinancing, our focus is on deleveraging the local media group and this is one indication buying the debt in at a discount where we can start to drive that deleveraging down.

Okay, perfect. Thank you for the time, and Lucy, best of luck.

Thank you.

Thanks, Aaron.

Thank you. Your next question is coming from Steven Cahall from Wells Fargo. Your line is live.

Thank you. Chris, I was wondering if you could talk a little more about the specifics of how you see deregulation unfolding. I think when the Republicans have a majority of Commissioners, then maybe they'll move to notice of proposed rulemaking. So I was wondering if you think that's the next step where then the industry will begin to have substantive conversations? And whether you participate as a buyer or a seller, do you like that process needs to clear any court challenges that it could face before you'd be willing to sort of sign and do on the transact? Just trying to get an understanding of like how fast this can happen or if there's a number of steps in the process that we'll need to wait for before you'd be comfortable transacting if we do get pretty significant deregulation like we expect?

Certainly. The confirmation of the third Republican Commissioner, Olivia Trusty, is progressing well, and we expect her to be in place by Memorial Day. Following that, I anticipate that rule-making will begin. Commissioner Carr has indicated that the in-market ownership rules are outdated, which reflects a growing sentiment in the industry. Once the third Republican Commissioner is appointed, I believe actions will be taken promptly. Meanwhile, the current rules, such as the UHF discount and ownership regulations involving two Big 4 stations with waivers, still provide significant flexibility for M&A activities. Therefore, from our perspective, we plan to engage in more activity soon. We recently announced the sale of five markets and a station swap, and there will be additional developments in the weeks ahead. We will also begin filing for some JSA buy-ins, which should positively impact our finances with minimal cash outlay. Station swaps are likely to occur as we await changes to the rules, and many broadcasters are considering large-scale mergers without necessarily waiting for regulatory adjustments.

Got it. Thank you. And then just on advertising, should we assume with the change to the expense guide in the back half of the year that your visibility is also a little lower as you look out later in Q2, obviously, April and May, but maybe you can just speak to where the visibility starts to decline more forward in Q2? Or is it kind of as a before we had all volatility? Thank you.

So I'll let others share their thoughts. In terms of our visibility, we are really looking about four to six weeks ahead. The data we currently have for Q3 and Q4 doesn't provide much insight at this time. Additionally, around 20% of our total expenses are variable based on revenue, which explains why it wasn't appropriate to provide guidance at this moment.

What I'll add is the visibility is four to six weeks. But as we go into the middle of the third quarter and fourth quarter with the return of college football, NFL, we're coming off of record championship games Super Bowl, sports on broadcasts have seen record highs, and the advertisers have noticed that. So even with the economic times, uncertainty is what we know is certain is that there is a demand for top-tier sports, and we're set up perfectly in the third and fourth quarter to capitalize on the top-tier sports that will be returning to the networks.

Thank you.

Thank you. Your next question is coming from Benjamin Soff from Deutsche Bank. Your line is live.

Good afternoon. Thanks for the question. I was curious if you could talk a little bit more about the Compulse deal. Any additional color on that asset and how it's impacting numbers? And then for Lucy, another really strong quarter on the expense side. Can you talk about where you were able to capture those savings? And how much runway is left to continue taking costs out of the business? Thank you.

Yes. So why don't I do that part first, and then Chris will talk about the acquisition. So I appreciate the compliment on the expense side. This is an enterprise-wide focus where all of our department heads are engaged in looking for ways to work smarter, be more efficient and really question the spending. And so I'd like to take credit for it, but I really have to give credit to the entire organization on that. And so really, in the first quarter, that is coming across a multitude of departments — I wish I could just point to one of them as being the main driver, but it really is coming across on an NOI basis. Now what I would say is, are there more expenses that if we needed to, that we could take out of the business. Again, if we needed to, the answer is yes. But right now, there is not a need to go down to the bare minimum, and so we continue to spend where we see growth in the business and be smarter about the places where it's not growing or we really don't need to put investment behind it.

In terms of the acquisition, Compulse, as I stated in prior earnings results is matured to the point where it really is a best-in-class platform. It's delivering double-digit growth for us every quarter year-over-year. It's got healthy margins, and we really are looking to scale it in a big way. So this acquisition on a pro forma basis ends up being a very attractive multiple for us because of the synergies, and it significantly increases the amount of revenue that we're putting on the Compulse platform. So it's a very accretive move in an area that is consolidating. And this will increase the financial size and significance of Compulse for the ventures portfolio going forward.

I'll add that it follows our commitment to being a multimedia company, not a singular broadcast company. and we recognize where fewer habits are shifting, and we will shift with those habits. We've made a commitment to our sellers to our digital content folks that we would support them, and the demand showcases why we will support that growth for Compulse because it's justified by its group and by where your habits are.

Thank you. Your next question is coming from David Hamburger from Morgan Stanley. Your line is live.

Thank you very much. And again, I would like to echo the sentiment. We see you've always been very helpful answering questions and otherwise and wish you the best in your new endeavor.

Thank you.

Of course. Last quarter, you had disclosed that you had renewed your retrans agreements representing 80% of the traditional Big 4. You had one negotiation that was active at the time. I assume based on the disclosures now, I wanted to confirm, one, that you've renegotiated that agreement seeing that you now mentioned you have nothing until the end of 2026. As well, you had mentioned on the earnings call that the guidance you gave for the first quarter reflected accruals based on the current state of negotiations with that counterparty. I'm just curious, how did that end up shake out based on what you were accruing the results? And did that at all impact the distribution revenues in the first quarter?

The short answer to that is no, it did not impact the Q1 results. We ended up — there is an agreement in principle with that MVPD, and we ended up right at where we were accruing at.

Okay. And just generally speaking about the slower-than-expected improvement in churn, I mean, you did highlight, and we've all seen kind of the charter numbers. It does appear still to be somewhat mixed. When you look across the pay TV universe, what are you expecting now as you looked at the second-quarter guidance, can you provide any additional thoughts or color on kind of your expectations for subscriber churn? And I think in the past, you've actually disclosed that it's been pretty consistently in mid-single digits. Is that still the case?

Yes. So Dave, that is still the case. Our forecast does assume mid-single digit percent. And to your point, we were a little bit more optimistic in how quickly the sub churn would moderate. But again, it's just slightly off. And I do want to remind you that on a year-over-year basis, putting aside the forecast on a year-over-year basis, we grew distribution revenues significantly.

I also would like to add, David, that we — everything that we've seen so far and the growth in gross retrans and our renewals on the reverse side, we are reiterating our two-year CAGR from '23 to '25 of mid-single digits.

Thank you so much.

Thank you. That concludes our Q&A session. I will now hand the conference back to Chris Ripley, President and CEO, for closing remarks. Please go ahead.

Thank you all for joining our call today and supporting Sinclair. To the extent you have any questions or comments, please reach out to us.

Thank you. Everyone, this concludes today's event. You may disconnect at this time and have a wonderful day. Thank you for your participation.