Investor Relations

BALTIMORE –
Sinclair Broadcast Group, Inc. (“Sinclair” or the “Company”) (Nasdaq: SBGI) today announced the early participation and consent results for its indirect subsidiaries, Diamond Sports Group, LLC (“Diamond Sports Group”) and Diamond Sports Finance Company (the “Co-Issuer,” and together with Diamond Sports Group, the “Issuers”), previously announced private offer to exchange (the “Exchange Offer”) any and all of the Issuers’ outstanding 5.375% Senior Secured Second Lien Notes due 2026 (CUSIP / ISIN 25277LAF3 / US25277LAF31; U2527JAD7 / USU2527JAD73; 25277L AG1 / US25277LAG14) (the “Exchange Second Lien Secured Notes”) for any and all of the Issuers’ outstanding 5.375% Senior Secured Notes due 2026 (CUSIP / ISIN 25277LAA4 / US25277LAA44; U2527JAA3 / USU2527JAA35) (the “Existing Secured Notes”) on the terms and subject to the conditions set forth in the Confidential Offering Memorandum, Offer to Exchange and Consent Solicitation Statement, dated as of February 14, 2022 (as amended, supplemented or modified, the “Offer Documents”).

The Issuers have been advised that as of 5:00 p.m., New York City time, on February 28, 2022 (the “Early Tender Time”), approximately $3,036 million aggregate principal amount, representing approximately 99.5%, of outstanding Existing Secured Notes not owned by the Issuers or any of their affiliates, had been validly tendered (and not validly withdrawn) pursuant to the Exchange Offer and the corresponding consents were delivered (and not validly revoked) pursuant to the Consent Solicitation (as defined below). Thus, as of the Early Tender Time, the Requisite Notes Consents (as defined below) have been delivered. Assuming all of the other conditions applicable to the Exchange Offer have been deemed satisfied or waived by the Issuers, which we expect to occur today, the Issuers and the trustee under the Secured Notes Indenture will enter into a supplemental indenture to the Secured Notes Indenture reflecting the Proposed Existing Secured Notes Amendment to the Secured Notes Indenture (the “Secured Notes Supplemental Indenture”).

As previously disclosed, in conjunction with the Exchange Offer, the Issuers have also solicited consents from Eligible Holders (as defined below) of the Existing Secured Notes (the “Consent Solicitation”) to amend (the “Proposed Existing Secured Notes Amendment”) the indenture governing the Existing Secured Notes (the “Secured Notes Indenture”). The Proposed Secured Notes Amendments would, among other things, (a) eliminate most of the restrictive covenants and certain of the events of default contained in the Secured Notes Indenture, (b) expressly permit us to consummate certain financing transactions, including (i) Diamond Sports Group’s incurrence of a new $635 million term loan on a first-priority lien basis, (ii) the Issuers’ incurrence of the Exchange Second Lien Secured Notes that are issued and delivered in exchange for the Existing Secured Notes tendered in the Exchange Offer and (iii) Diamond Sports Group’s incurrence of new second-priority lien term loan and revolving credit facilities in exchange for its existing term loans and existing revolving credit facility, (c) provide for the subordination of the lien priority of the liens securing the obligations under the Existing Secured Notes that remain outstanding following completion of the Exchange Offer and Consent Solicitation to the liens securing the new $635 million first-priority lien term loan, the new second-priority lien term loan and revolving credit facilities and the Exchange Second Lien Secured Notes (including refinancings of all such first priority and second priority indebtedness), as well as future second lien secured indebtedness, pursuant to the terms of a new first/second/third lien intercreditor agreement, and (d) provide for collateral sharing on a pari passu third lien basis with the existing term loans and existing revolving credit facility commitments which have not been exchanged for new second-priority lien term loan and revolving credit facilities as described above, as well as with future secured indebtedness incurred on a third-lien basis, pursuant to the terms of a new third lien pari passu intercreditor agreement that will replace the existing first lien intercreditor agreement in effect with respect to the Existing Secured Notes. The Issuers must receive consents from holders of two-thirds (66 2/3%) in aggregate principal amount of outstanding Existing Secured Notes not owned by the Issuers or any of their affiliates to adopt the Proposed Secured Notes Amendments (the “Requisite Notes Consents”).

Withdrawal rights for the Exchange Offer expired at 5:00 p.m., New York City time, on February 28, 2022, and, accordingly, Existing Secured Notes validly tendered in the Exchange Offer may no longer be withdrawn and Consents delivered in the Consent Solicitation may not be revoked except as required by law.

The Secured Notes Supplemental Indenture will be effective immediately upon execution thereof, but the provisions thereof will not be operative until all of the Secured Notes that have been tendered prior to the Early Tender Time have been accepted for exchange in accordance with the terms of the Offer Documents. The Issuers expect settlement of the Existing Secured Notes validly tendered (and not validly withdrawn) by the Early Tender Time to occur today, March 1, 2022. Eligible Holders of the Existing Secured Notes who validly tendered (and did not validly withdraw) their Existing Secured Notes prior to the Early Tender Time will be entitled to receive the total consideration listed below, as described in the Offering Documents.

		Consideration per $1,000 Principal Amount of 5.375% Secured Notes Tendered
CUSIP/ISIN		Total Consideration
25277LAA4 / US25277LAA44; U2527JAA3 / USU2527JAA35		$1,000 in aggregate principal amount of Exchange Second Lien Secured Notes

Upon settlement of the Existing Secured Notes validly tendered (and not validly withdrawn) by the Early Tender Time, the Issuers expect to issue approximately $3,036 million aggregate principal amount of Exchange Second Lien Secured Notes in exchange for the validly tendered and not properly withdrawn Existing Secured Notes.

Eligible Holders who have not yet tendered or have validly withdrawn their Existing Secured Notes have until 11:59 P.M., New York City time, on March 14, 2022, unless extended by the Issuers (such time and date, as it may be extended, the “Expiration Time”) to tender their Existing Secured Notes pursuant to the Exchange Offer. Eligible Holders of the Existing Secured Notes who validly tender (and do not validly withdraw) their Existing Secured Notes after the Early Tender Time but at or prior to the Expiration Time will be entitled to receive only the exchange consideration listed below, as described in the Offering Documents.

		Consideration per $1,000 Principal Amount of 5.375% Secured Notes Tendered
CUSIP/ISIN		Exchange Consideration
25277LAA4 / US25277LAA44; U2527JAA3 / USU2527JAA35		$990 in aggregate principal amount of Exchange Second Lien Secured Notes

Holders who validly tender their Existing Secured Notes will be deemed to consent to the Proposed Existing Secured Notes Amendment, and holders may not deliver Consents to the Proposed Existing Secured Notes Amendment without validly tendering their Existing Secured Notes in the Exchange Offer.

No accrued and unpaid interest will be paid on the Existing Secured Notes in connection with the Exchange Offer. Holders of Existing Secured Notes that are accepted for exchange will be deemed to have waived the right to receive any payment from the Issuers for interest accrued from the date of the last interest payment date for their Existing Secured Notes. However, the first interest payment for the Exchange Second Lien Secured Notes issued in the exchange will include interest from the most recent interest payment date for such corresponding tendered Existing Secured Note on the principal amount of such Exchange Second Lien Secured Notes. Consequently, if an Eligible Holder tendered Existing Secured Notes before the Early Tender Time, the Eligible Holder will receive the same amount of accrued interest that the Eligible Holder would have received had the Eligible Holder not exchanged Existing Secured Notes in the Exchange Offer. However, if an Eligible Holder tenders Existing Secured Notes after the Early Tender Time and they are accepted for exchange, interest will accrue only on the aggregate principal amount of Exchange Second Lien Secured Notes received by the Eligible Holder, which means the Eligible Holder will receive a lower aggregate interest payment on the Eligible Holder’s Exchange Second Lien Secured Notes than the aggregate amount of interest the Eligible Holder would have received on the Eligible Holder’s applicable Existing Secured Notes had the Eligible Holder not tendered them for exchange.

The Exchange Offer is being made, and the Exchange Second Lien Secured Notes are being offered and issued, only to holders of Existing Secured Notes who are reasonably believed to be (i) “qualified institutional buyers” as defined in Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), (ii) not U.S. persons (as defined in Regulation S under the Securities Act) or purchasing for the account or benefit of U.S. persons, other than a distributor, and are purchasing the New Secured Notes in an offshore transaction in accordance with Regulation S; or (iii) persons who are institutional “accredited investors” as such term is defined in Rule 501(a) of the Securities Act. The holders of Existing Secured Notes who are eligible to participate in the Exchange Offer pursuant to the foregoing conditions are referred to as “Eligible Holders.” Only Eligible Holders are authorized to receive or review the Offering Documents or to participate in the Exchange Offer and Consent Solicitation.

The Offer Documents will be distributed only to holders of Existing Secured Notes that complete and return a letter of eligibility confirming that they are Eligible Holders. Copies of the eligibility letter are available to holders through the information and exchange agent for the Exchange Offer, Ipreo LLC at (888) 593-9546 (U.S. toll-free) or (212) 849-3880 or [email protected].

The Exchange Offer and Consent Solicitation is made only by, and pursuant to the terms of, the Offer Documents, and the information in this news release is qualified by reference thereto.

The Existing Secured Notes and the Exchange Second Lien Secured Notes have not been and will not be registered under the Securities Act or any state securities laws and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements. Accordingly, the Exchange Second Lien Secured Notes are being offered for exchange only to persons reasonably believed to be (i) “qualified institutional buyers” (as defined in Rule 144A under the Securities Act, (ii) not U.S. persons (as defined in Regulation S under the Securities Act) or purchasing for the account or benefit of U.S. persons, other than a distributor, and are purchasing Exchange Second Lien Secured Notes in an offshore transaction in accordance with Regulation S, or (iii) persons who are institutional “accredited investors” as such term is defined in Rule 501(a) of the Securities Act.

This press release is for informational purposes only and is neither an offer to sell nor a solicitation of an offer to exchange or purchase the Exchange Second Lien Secured Notes or any other securities. In addition, this press release is neither an offer to purchase nor a solicitation of an offer to sell any Existing Secured Notes. The Exchange Offer and the Consent Solicitation were only made pursuant to the Offering Documents and were only made to Eligible Holders. The Exchange Offer was not made to holders of Existing Secured Notes in any jurisdiction in which the making or acceptance thereof would not be in compliance with the securities, blue sky or other laws of such jurisdiction. The Exchange Second Lien Secured Notes were not approved or disapproved by any regulatory authority, nor has any such authority passed upon the accuracy or adequacy of the Offering Documents.

Forward-Looking Statements:

The matters discussed in this news release include forward-looking statements regarding, among other things, future events and actions. When used in this news release, 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 and consumer adoption 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 the Company; the ongoing assessment of the October cybersecurity event, material legal, financial and reputational risks resulting from a breach of the Company’s information systems, and operational disruptions due to the cybersecurity event; the impact of Federal Communications Commission and other regulatory proceedings against the Company; 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 Securities and Exchange Commission. There can be no assurances that the assumptions and other factors referred to in this release will occur. The Company undertakes no obligation to publicly release the result of any revisions to these forward-looking statements except as required by law.

View source version on businesswire.com: https://www.businesswire.com/news/home/20220301005714/en/

Investor Contacts:

Steve Zenker, VP, Investor Relations

Billie-Jo McIntire, Director, Investor Relations

(410) 568-1500

Media Contact:

[email protected]