Weighed down by Diamond Sports Group, Sinclair missed estimates in the fourth quarter.
The broadcast giant’s total revenues dropped 35% from the same period last year to $960 million. Its stock was down 6% on Wednesday.
Removing Diamond, which owns the 19 Bally’s regional sports networks, from the calculations, Sinclair’s revenue increased by 18% year-over-year due to strong spending on political advertising prior to the November elections.
In March, Sinclair deconsolidated Diamond, separating the company from its financial accounting despite still owning it. Diamond removed Sinclair as an operator of its sports networks in December.
Diamond missed a $140 million interest payment and owes around $2 billion in media rights, namely to MLB, the NBA, and NHL, this season. The company — which is widely believed to be headed toward bankruptcy — is currently in a 30-day grace period in which it can negotiate with leagues and creditors.
MLB commissioner Rob Manfred said last week that if the company is unable to pay, the league would take control of the local rights of the 14 teams under contract with Diamond and produce games through its MLB Network.
Manfred added that the affected MLB teams would take a revenue hit in the short term, but he would seek to negotiate the right to stream games locally as part of any new deal for local broadcasts.