Sinclair Broadcast Group, LLC

1. NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Nature of Operations

Sinclair Broadcast Group, LLC (“SBG”), a Maryland limited liability company and a wholly owned subsidiary of Sinclair, Inc. (“Sinclair”), is a diversified media company with national reach and a strong focus on providing high-quality content on SBG’s local television stations and digital platforms. The content, distributed through SBG’s broadcast platform and third-party platforms, consists of programming provided by third-party networks and syndicators, local news and other original programming produced by SBG and SBG owned networks.

For the quarter ended March 31, 2026, SBG hadone reportable segment: local media. The local media segment consists primarily of SBG’s 177 broadcast television stations in 79 markets, which SBG owns, provides programming and operating services pursuant to agreements commonly referred to as local marketing agreements (“LMA”), or provides sales services and other non-programming operating services pursuant to other outsourcing agreements (such as joint sales agreements (“JSA”) and shared services agreements (“SSA”)). These stations broadcast 646 channels as of March 31, 2026. For the purpose of this report, these 177 stations and 646 channels are referred to as “SBG” stations and channels.

Principles of Consolidation

The consolidated financial statements include SBG’s accounts and those of SBG’s wholly-owned and majority-owned subsidiaries and VIEs for which SBG is the primary beneficiary. Noncontrolling interests represent a minority owner’s proportionate share of the equity in certain of SBG’s consolidated entities. All intercompany transactions and account balances have been eliminated in consolidation.

SBG consolidates VIEs when SBG is the primary beneficiary. SBG is the primary beneficiary of a VIE when SBG has the power to direct the activities of the VIE that most significantly impact the economic performance of the VIE and has the obligation to absorb losses or the right to receive returns that would be significant to the VIE. See Note 6. Variable Interest Entities for more information on SBG’s VIEs.

Investments in entities over which SBG has significant influence but not control are accounted for using the equity method of accounting. Income from equity method investments represents SBG’s proportionate share of net income generated by equity method investees.

Interim Financial Statements

SBG’s consolidated financial statements for the three months ended March 31, 2026 and 2025 are unaudited. In the opinion of management, such financial statements have been presented on the same basis as the audited consolidated financial statements and include all adjustments, consisting only of normal recurring adjustments necessary for a fair statement of the consolidated balance sheets, consolidated statements of operations, consolidated statements of comprehensive (loss) income, consolidated statements of member’s deficit and noncontrolling interests, and consolidated statements of cash flows for these periods as adjusted for the adoption of recent accounting pronouncements.

As permitted under the applicable rules and regulations of the Securities and Exchange Commission (the “SEC”), SBG’s consolidated financial statements do not include all disclosures normally included with audited consolidated financial statements and, accordingly, should be read together with the audited consolidated financial statements and notes thereto in Sinclair’s Annual Report on Form 10-K for the year ended December 31, 2025 filed with the SEC. SBG’s consolidated statements of operations presented in the accompanying consolidated financial statements are not necessarily representative of operations for an entire year.

Use of Estimates

The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses in the consolidated financial statements and in the disclosures of contingent assets and liabilities. Actual results could differ from those estimates.

Changes in Accounting Estimates

During the three months ended March 31, 2026, SBG reassessed the useful lives of certain FCC licenses previously classified as indefinite-lived intangible assets. Based on this reassessment, management determined that these licenses have finite useful lives and, accordingly, SBG reclassified $122 million of FCC licenses from indefinite-lived to definite-lived intangible assets which will be amortized over a 15-year life. We assessed our FCC licenses for impairment prior to completion of this change, concluding there were no impairment indicators.

Recent Accounting Pronouncements

In November 2024, the FASB issued guidance requiring disclosure of disaggregated information about certain income statement expense line items. The guidance is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. SBG is currently evaluating the impact of this guidance.

In December 2025, the FASB issued guidance providing clarifications and organizational improvements to interim financial reporting guidance under Accounting Standard Codification 270. The guidance is effective for interim reporting periods beginning after December 15, 2027. Early adoption is permitted. SBG is currently evaluating the impact of this guidance.

Broadcast Television Programming

SBG has agreements with programming syndicators for the rights to television programming over contract periods, which generally run fromone tothree years. Contract payments are made in installments over terms that are generally equal to or shorter than the contract period. Pursuant to accounting guidance for the broadcasting industry, an asset and a liability for the rights acquired and obligations incurred under a license agreement are reported on the balance sheet when the cost of each program is known or reasonably determinable, the program material has been accepted by the licensee in accordance with the conditions of the license agreement, and the program is available for its first showing or telecast. The portion of program contracts which becomes payable within one year is reflected as a current liability in the accompanying consolidated balance sheets.

The rights to this programming are reflected in the accompanying consolidated balance sheets at the lower of unamortized cost or fair value. Program costs are amortized on a straight-line basis except for contracts greater than three years which are amortized utilizing an accelerated method. Program costs estimated by management to be amortized in the succeeding year are classified as current assets. Payments of program contract liabilities are typically made on a scheduled basis and are not affected by amortization or fair value adjustments.

SBG assessesthe program costs on a quarterly basis to ensure the costs are recorded at the lower of unamortized cost or fair value.

Supplemental Information - Statements of Cash Flows

Leased assets obtained in exchange for new operating lease liabilities were $8 million and $3 million for the three months ended March 31, 2026 and 2025, respectively. Non-cash investing activities included property and equipment purchases of $3 million and $5 million for the three months ended March 31, 2026 and 2025, respectively.

SBG received equity shares in investments valued at $4 million and $8 million for the three months ended March 31, 2026 and 2025, respectively, in exchange for an obligation to deliver a similar value of advertising spots.

During the three months ended March 31, 2026, SBG completed the acquisition and sale of certain television stations that included non-cash consideration as further described in Acquisitions and Station Disposals below.

Included in distributions to member, net within cash flows used in financing activities in SBG’s consolidated statements of cash flows, were dividends to Sinclair to fund its portion of the dividends to Sinclair shareholders and parent company expenses of $29 million and $30 million for the three months ended March 31, 2026 and 2025, respectively.

Revenue Recognition

The following table presents SBG’s revenue disaggregated by type for the local media segment (in millions):

Distribution Revenue. SBG generates distribution revenue through fees received from multi-channel video programming distributors (“MVPD”) and virtual MVPDs (“vMVPD,” and together with MVPDs, “Distributors”) for the right to distribute SBG’s stations and other properties. Distribution arrangements are generally governed by multi-year contracts and the underlying fees are based upon a contractual monthly rate per subscriber. These arrangements represent licenses of intellectual property; revenue is recognized as the signal or network programming is provided to SBG’s customers (as usage occurs) which corresponds with the satisfaction of SBG’s performance obligation. Revenue is calculated based upon the contractual rate multiplied by an estimated number of subscribers. SBG’s customers will remit payments based upon actual subscribers a short time after the conclusion of a month, which generally does not exceed 120 days. Historical adjustments to subscriber estimates have not been material.

Core Advertising Revenue. SBG generates core advertising revenue primarily from the sale of non-political advertising spots/impressions within broadcast television and digital platforms.

Political Advertising Revenue. SBG generates political advertising revenue primarily from the sale of political advertising spots/impressions within broadcast television and digital platforms.

In accordance with ASC 606, SBG does not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) distribution arrangements which are accounted for as a sales/usage-based royalty.

Deferred Revenue. SBG records deferred revenue when cash payments are received or due in advance of performance, including amounts which are refundable. SBG classifies deferred revenue as either current in other current liabilities or long-term in other long-term liabilities in SBG’s consolidated balance sheets based on the timing of when SBG expects to satisfy performance obligations. Deferred revenue was $147 million and $145 million as of March 31, 2026 and December 31, 2025, respectively, of which $83 million and $88 million, respectively, was reflected in other long-term liabilities in SBG’s consolidated balance sheets. Deferred revenue recognized for the three months ended March 31, 2026 and 2025, included in the deferred revenue balance as of December 31, 2025 and 2024, was $17 million and $19 million, respectively.

For the three months ended March 31, 2026, two customers accounted for 11% and 11%, respectively, of SBG’s total revenue. For the three months ended March 31, 2025, two customers accounted for 11% and 10%, respectively, of SBG’s total revenue. As of March 31, 2026, three customers accounted for 13%,10%, and 10%, respectively, of SBG’s accounts receivable, net. As of December 31, 2025, two customers accounted for 13% and 12%, respectively, of SBG’s accounts receivable, net. For purposes of this disclosure, a single customer may include multiple entities under common control.

Acquisitions and Station Disposals

In February 2026, SBG acquired the non-license assets of KMYT and KOKI in Tulsa, OK, along with a purchase option to acquire the four television stations that were previously sold in 2025 (as described below). The total consideration for the transaction was $52 million and included SBG transferring the non-license assets of KLEW in Spokane, WA and KEPR, KIMA, KUNW, KORX, and KVVK in Yakima, WA valued at $12 million, the forgiveness of certain outstanding promissory notes and working capital balances in the amount of $21 million, and cash payments (including cash payments related to certain holdbacks) of $19 million. The acquired assets and liabilities were recorded at fair value as of the closing date of the transaction. Based upon SBG’s preliminary purchase price allocation, SBG recorded $21 million of definite-lived intangible assets, $10 million of property and equipment, $19 million of other assets, and $2 million of goodwill.

During the three months ended March 31, 2025, SBG entered into an asset purchase agreement with a counterparty to sell SBG’s owned stations within Milwaukee, WI (WVTV), Springfield, IL (WICS/WICD), Ottumwa, IA (KTVO), and Quincy, IL (KHQA) for approximately $30 million and accrued the estimated loss we expected to recognize upon closing of the sale of approximately $17 million, which is included within loss on asset dispositions and other, net within SBG’s consolidated statements of operations and SBG’s local media segment within Note 5. Segment Data for the three months ended March 31, 2025 and was recorded to reflect the underlying assets at the lower of carrying value and fair value.

Income Taxes

SBG’s income tax provision for all periods consists of federal and state income taxes. The tax provision for the three months ended March 31, 2026 and 2025 is based on the estimated effective tax rate applicable for the full year after taking into account discrete tax items and the effects of the noncontrolling interests. SBG provides a valuation allowance for deferred tax assets if it is determined that it is more likely than not that some or all of the deferred tax assets will not be realized. In evaluating SBG’s ability to realize net deferred tax assets, SBG considers all available evidence, both positive and negative, including past operating results, tax planning strategies, current and cumulative losses, and forecasts of future taxable income. In considering these sources of taxable income, SBG must make certain judgments that are based on the plans and estimates used to manage SBG’s underlying businesses on a long-term basis. A valuation allowance has been provided for deferred tax assets related to a certain amount of SBG’s available state net operating loss carryforwards based on past operating results, expected timing of the reversals of existing temporary basis differences, alternative tax strategies and projected future taxable income.

SBG’s effective income tax rate for the three months ended March 31, 2026 was greater than the statutory rate primarily due to a 2026 release of a valuation allowance on certain state net operating losses resulting from a change in the filing methodology that impacted the realizability of the associated deferred tax assets. SBG’s effective income tax rate for the three months ended March 31, 2025 approximated the statutory rate.

SBG does not believe that the liability for unrecognized tax benefits would be materially impacted, in the next twelve months, as a result of the expected statute of limitations expirations, the application of limits under available state administrative practice exceptions, and the resolution of examination issues and settlements with federal and certain state tax authorities.

Reclassifications

Certain reclassifications have been made to prior years’ consolidated financial statements to conform to the current year’s presentation.

2. OTHER ASSETS:

Other assets as of March 31, 2026 and December 31, 2025 consisted of the following (in millions):

Investments

SBG’s investments, excluding equity method investments, are accounted for at fair value or, in situations where fair value is not readily determinable, SBG has the option to value investments at cost plus observable changes in value, less impairment. Additionally, certain investments were measured at net asset value (“NAV”).

Investments measured at NAV were $14 million and $13 million as of March 31, 2026 and December 31, 2025, respectively.

Investments accounted for utilizing the measurement alternative were $20 million and $17 million as of March 31, 2026 and December 31, 2025, respectively. There wereno adjustments to the carrying amount of investments accounted for utilizing the measurement alternative for either of the three months ended March 31, 2026 and 2025.

3. NOTES PAYABLE, FINANCE LEASES, AND COMMERCIAL BANK FINANCING:

Credit Agreement and Notes

Sinclair Television Group, Inc. (“STG”), a wholly-owned subsidiary of SBG, is party to two bank credit agreements, the new credit agreement dated February 12, 2025 (the “New Credit Agreement”) and an existing credit agreement that was amended as of February 12, 2025 (the “Amended Credit Agreement).

The New Credit Agreement includes a financial maintenance covenant, the first-out first lien leverage ratio (as defined in the New Credit Agreement), which requires such ratio not to exceed 3.5 x, measured as of the end of each fiscal quarter, which is only applicable if 35% or more of the capacity (as a percentage of total commitments) under the $575 million first-out first lien revolving commitments (the “First-Out Revolving Credit Facility”), measured as of the last day of each fiscal quarter, is utilized as of such date. Since there wasno utilization under the First-Out Revolving Credit Facility as of March 31, 2026, STG was not subject to the financial maintenance covenant under the New Credit Agreement. As of March 31, 2026, the STG first-out first lien leverage ratio was below 3.5 x. The New Credit Agreement contains other restrictions and covenants with which STG was in compliance as of March 31, 2026.

During the first quarter of 2025, STG completed a series of financing transactions and for thethree months ended March 31, 2025, recognized a gain on extinguishment of the 4.125% Senior Secured Notes due 2030 and 5.125% Senior Notes due 2027 of$5 million and$3 million, respectively, and a loss on extinguishment of the Term Loan B-2 of$6 million.

Finance Leases to Affiliates

The current portion of notes payable, finance leases, and commercial bank financing in SBG’s consolidated balance sheets includes finance leases to affiliates of $3 million as of both March 31, 2026 and December 31, 2025. Notes payable, finance leases, and commercial bank financing, less current portion, in SBG’s consolidated balance sheets includes finance leases to affiliates of $6 million as of both March 31, 2026 and December 31, 2025. See Note 7. Related Person Transactions.

Debt of Variable Interest Entities and Guarantees of Third-Party Obligations

SBG jointly, severally, unconditionally, and irrevocably guaranteed $2 million of debt of certain third parties as of December 31, 2025, all of which related to consolidated VIEs and was included in our consolidated balance sheets. SBG guarantees certain obligations of the Marquee Sports Network (“Marquee”) subject to a maximum aggregate amount of $331 million for the years 2026 through 2029. As of both March 31, 2026 and December 31, 2025, SBG’s estimated obligation was $15 million. Of this estimated obligation, SBG paid $5 million during the three months ended March 31, 2026 and $10 million during the year ended December 31, 2025. See Note 4. Commitments and Contingencies for further discussion.

Accounts Receivable Securitization Facility

On November 6, 2025, STG and one of its subsidiaries entered into athree-year, up to $375 million revolving accounts receivable securitization facility (the “AR Facility”) with Wells Fargo Bank, N.A., as administrative agent, which matures on November 6, 2028, in order to enable STG to raise incremental, low-cost capital. Amounts outstanding under the A/R Facility bear interest at SOFR plus 1.25%. The amount of actual availability under the A/R Facility is subject to change based on the level of eligible receivables sold by certain subsidiaries of STG identified therein (the “Originators”) to STG. Eligibility of the receivables is determined by a variety of factors, including, but not limited to, credit ratings of the Originators’ customers, customer concentration levels, and certain characteristics of the accounts receivable being transferred. The total amount outstanding under the A/R Facility was $375 million as of both March 31, 2026 and December 31, 2025. Interest expense related to the A/R Facility was $5 million for the three months ended March 31, 2026.

Interest Rate Collar

During the three months ended March 31, 2026, SBG entered intotwo interest collar agreements in order to manage a portion of SBG’s exposure to variable interest rates. The first agreement has a notional amount of $100 million, an effective date of March 3, 2026, a termination date of August 31, 2027, an interest rate ceiling of 3.75%, and an interest rate floor of 2.67%. The second agreement has a notional amount of $100 million, an effective date of March 30, 2026, a termination date of March 30, 2027, an interest rate ceiling of 4.25%, and an interest rate floor of 3.65%. The activity associated with these agreements was immaterial for the three months ended March 31, 2026.

4. COMMITMENTS AND CONTINGENCIES:

Litigation, Claims, and Regulatory Matters

SBG is a party to lawsuits, claims, and regulatory matters from time to time in the ordinary course of business. Actions currently pending are in various stages and no material judgments or decisions have been rendered by hearing boards or courts in connection with such actions. Except as noted below, SBG does not believe the outcome of these matters, individually or in the aggregate, will have a material effect on SBG’s financial statements.

FCC Matters

On May 22, 2020, the Federal Communications Commission (“FCC”) released an Order and Consent Decree pursuant to which the Company agreed to pay $48 million to resolve the matters covered by a Notice of Apparent Liability for Forfeiture (“NAL”) issued in December 2017 proposing a $13 million fine for alleged violations of the FCC’s sponsorship identification rules by the Company and certain of its subsidiaries, the FCC’s investigation of the allegations raised in the Hearing Designation Order issued in connection with the Company’s proposed acquisition of Tribune, and a retransmission related matter. The Company submitted the $48 million payment on August 19, 2020. As part of the consent decree, the Company also agreed to implement afour-year compliance plan, which terminated on May 29, 2024. Two petitions were filed on June 8, 2020 seeking reconsideration of the consent decree. The Company filed an opposition to the petitions on June 18, 2020, and the petitions remain pending.

On September 1, 2020, one of the individuals who filed a petition for reconsideration of the consent decree filed a petition to deny the license renewal application of WBFF(TV), Baltimore, MD, and the license renewal applications of two other Baltimore, MD stations: WUTB(TV), which the Company subsequently acquired from Deerfield Media in November 2025, and Cunningham Broadcasting Corporation (“Cunningham”) station WNUV(TV), with which the Company has an LMA. On January 18, 2024, a motion was filed to request substitution of the petitioner, who is deceased. On June 27, 2025, the FCC (i) denied the motion for substitution; (ii) dismissed the petition to deny; and (iii) granted the license renewal applications of WBFF(TV), WUTB(TV), and WNUV(TV). An application for review of the FCC’s decision was filed on July 28, 2025 on behalf of the individual who unsuccessfully sought to be substituted for the petitioner in the proceeding. The Company timely filed an opposition to the application for review and the matter remains pending. On April 14, 2025, the same attorney who filed the petition against the renewal applications filed a similar petition to deny, on behalf of a different client, against assignment applications filed by the Company seeking FCC consent to sell certain stations to a third party. On July 1, 2025, the FCC dismissed that petition to deny and granted the applications. An application for review of the decision to grant the assignment applications was filed on behalf of the petitioner on July 30, 2025. The Company timely filed an opposition to the application for review and the matter remains pending.

On September 2, 2020, the FCC adopted a Memorandum Opinion and Order and NAL against the licensees of several stations with whom the Company has LMAs, JSAs, and/or SSAs in response to a complaint regarding those stations’ retransmission consent negotiations. The NAL proposed a $0.5 million penalty for each station, totaling $9 million. The licensees filed a response to the NAL on October 15, 2020, asking the FCC to dismiss the proceeding or, alternatively, to reduce the proposed forfeiture to $25,000 per station. On July 28, 2021, the FCC issued a forfeiture order in which the $0.5 million penalty was upheld for all but one station. A Petition for Reconsideration of the forfeiture order was filed on August 7, 2021. On March 14, 2022, the FCC released a Memorandum Opinion and Order and Order on Reconsideration, which reaffirmed the forfeiture order, dismissed (and in the alternative, denied) the Petition for Reconsideration, and stated that because the fines were not paid within the period stated in the July 2021 forfeiture order the FCC may refer the case to the U.S. Department of Justice (“DOJ”) for enforcement of the forfeiture pursuant to Section 504 of the Communications Act. Our understanding is that this matter remains pending. The Company is not a party to this forfeiture order.

On September 21, 2022, the FCC released an NAL against the licensees of a number of stations, including 83 SBG stations and several stations with whom SBG has LMAs, JSAs, and/or SSAs (or with whom SBG had LMAs, JSAs, and/or SSAs and has since acquired), for violation of the FCC’s limitations on commercial matter in children’s television programming related to KidsClick network programming distributed by the Company in 2018. The NAL proposed a fine of $2.7 million against SBG, and fines ranging from $20,000 to $26,000 per station for the other licensees, including the LMA, JSA, and/or SSA stations, for a total of $3.4 million. On October 21, 2022, the Company filed a written response seeking reduction of the proposed fine amount. On September 6, 2024, the FCC issued a forfeiture order imposing the fine as proposed in the NAL. The Company and all other affected licensees filed a joint petition for reconsideration of the forfeiture order on October 7, 2024. On June 27, 2025, the FCC adopted an Order and Consent Decree pursuant to which the Company agreed to make a voluntary contribution of $500,000 to resolve, without any admission of liability, the forfeiture order (with respect to SBG stations), a closed captioning investigation of SBG station WUHF in Rochester, NY, and matters relating to certain of SBG’s pending station renewal applications. As part of the consent decree, the Company also agreed to implement a two-year compliance plan relating to the FCC’s limits on commercial matter in children’s programming and closed captioning rules, and the FCC agreed to grant the license renewal applications of all SBG stations involved in the matters resolved by the consent decree. The consent decree states the forfeiture order will be resolved by separate action with respect to the non-SBG licensees named in the forfeiture order, and to SBG’s knowledge all but one of such non-SBG licensees have entered into non-monetary consent decrees with the FCC and agreed to similar compliance plans with respect to the FCC’s limits on commercial matter in children’s programming. The Company made the $500,000 voluntary contribution on July 9, 2025.

Other Matters

On November 6, 2018, the Company agreed to enter into a proposed consent decree with the DOJ. This consent decree resolves the DOJ’s investigation into the sharing of pacing information among certain stations in some local markets. The DOJ filed the consent decree and related documents in the U.S. District Court for the District of Columbia on November 13, 2018. The U.S. District Court for the District of Columbia entered the consent decree on May 22, 2019. The consent decree is not an admission of any wrongdoing by the Company and does not subject the Company to any monetary damages or penalties. The Company believes that even if the pacing information was shared as alleged, it would not have impacted any pricing of advertisements or the competitive nature of the market. The consent decree requires the Company to adopt certain antitrust compliance measures, including the appointment of an Antitrust Compliance Officer, consistent with what the DOJ has required in previous consent decrees in other industries. The consent decree also requires the Company’s stations not to exchange pacing and certain other information with other stations in their local markets, which the Company’s management had already instructed them not to do.

The Company is aware oftwenty-two putative class action lawsuits that were filed against the Company following published reports of the DOJ investigation into the exchange of pacing data within the industry. On October 3, 2018, these lawsuits were consolidated in the Northern District of Illinois. The consolidated action alleges that the Company andthirteen other broadcasters conspired to fix prices for commercials to be aired on broadcast television stations throughout the United States and engaged in unlawful information sharing, in violation of the Sherman Antitrust Act. The consolidated action seeks damages, attorneys’ fees, costs and interest, as well as injunctions against adopting practices or plans that would restrain competition in the ways the plaintiffs have alleged. The Court denied the defendants’ motion to dismiss on November 6, 2020. Discovery commenced shortly after that and is continuing. On December 8, 2023, the Court granted final approval of the settlements the plaintiffs had reached with four of the original defendants (CBS, Fox, Cox Media, and ShareBuilders), who agreed to pay a total of $48 million to settle the plaintiffs’ claims against them. The plaintiffs are continuing to pursue their claims against the Company and the other non-settling defendants, and fact discovery closes on June 1, 2026. On December 6, 2024, the plaintiffs filed a motion seeking sanctions against the Company in connection with the loss of certain cell phone data. On November 18, 2025, the Court issued a Memorandum Opinion and Order on the plaintiffs’ motion seeking sanctions, declining as premature the plaintiffs’ request to present evidence of Sinclair’s spoliation at summary judgment and trial, and imposing monetary sanctions on Sinclair for the costs of the plaintiffs’ investigation between April 30, 2024 and the filing of the motion seeking sanctions. On February 20, 2025, Special Master Richard Levie issued Report and Recommendation No. 3 addressing the plaintiffs’ challenges to certain of non-settling defendants’ privilege log entries (“Levie R&R No. 3”), which recommended that the Court compel disclosure of certain documents Sinclair and the other non-settling defendants withheld from discovery based on assertions of privilege. On October 20, 2025, the Court issued an order adopting Levie R&R No. 3 and denying the objections to Levie R&R No. 3 made by Sinclair and the other non-settling defendants, compelling the production of 6,313 documents Sinclair withheld as privileged. On April 8, 2026, the Company filed a Motion for Reconsideration regarding 519 of these documents. Special Master Wayne R. Andersen has addressed the plaintiffs’ remaining challenges to certain of Sinclair’s and other non-settling defendants’ privilege log entries. On September 29, 2025, Special Master Andersen issued Report and Recommendation No. 3 (“Andersen R&R No. 3”); on October 23, 2025, Special Master Andersen issued Report and Recommendation No. 6 (“Andersen R&R No. 6”); on November 17, 2025, Special Master Andersen issued Report and Recommendation No. 8 (“Andersen R&R No. 8”); on November 18, 2025, Special Master Andersen issued Report and Recommendation No. 9 (“Andersen R&R No. 9”); and on December 16, 2025, Special Master Andersen issued Report and Recommendation No. 13 (“Andersen R&R No. 13”). In each report and recommendation, Special Master Andersen recommended granting in part and denying in part the plaintiffs’ challenges. No party appealed Andersen R&R No. 3, which compelled the production of two documents Sinclair withheld as privileged. The plaintiffs objected to Andersen R&R No. 6, Andersen R&R No. 8, Andersen R&R No. 9, and Andersen R&R No. 13. On January 22, 2026, the Court issued an order rejecting plaintiffs’ objections to and adopting Andersen R&R No. 6, Andersen R&R No. 8, and Andersen R&R No. 9. Andersen R&R No. 6 compelled the production of 252 documents, Andersen R&R No. 8 compelled the production of 79 documents, and Andersen R&R No. 9 compelled the production of 10 documents. On February 23, 2026, the Court issued an order rejecting plaintiffs’ objections to and adopting Andersen R&R No. 13. Andersen R&R No. 13 compelled the production of 11 documents. Andersen R&R Nos. 3, 6, 8, 9, and 13 collectively upheld the Company’s privilege claims over 1,639 documents. On January 23, 2026, the Court issued a new scheduling order, setting a trial date of November 1, 2027. The Company continues to believe the lawsuits are without merit and intends to vigorously defend itself against all such claims.

SBG has provided a guarantee that requires SBG to provide funding to Marquee under certain circumstances. On July 19, 2024, Marquee sent SBG a funding notice seeking $29 million under the Marquee guarantee by August 1, 2024 purportedly to make payments under certain agreements to affiliates of the Chicago Cubs, an affiliate of which is also a co-owner of Marquee. Based on the information provided to SBG by Marquee, Marquee has sufficient cash to make such payments without funding under the Marquee guarantee. For this and other reasons, SBG does not believe it is contractually required to provide funding under the Marquee guarantee at this time and has so informed Marquee. On August 2, 2024, Marquee sent SBG another letter claiming that SBG’s failure to timely pay the amounts subject to Marquee’s funding notice constitutes a breach of the Marquee guarantee and requesting payment of such amounts no later than August 17, 2024 at which time Marquee has stated it will pursue any and all available remedies pursuant to the Marquee guarantee. As of January 1, 2025, SBG determined SBG had no further obligations under the guarantee agreement. Marquee disputed this position, and on June 9, 2025, SBG entered into a binding term sheet to settle the matter. As part of the settlement, the parties agreed that the guarantee would be in effect through 2029; however, the maximum obligation under the guarantee agreement was reduced. As a result of the execution of this binding term sheet, SBG has concluded that SBG’s obligation to pay under a portion of the guarantee is probable and the loss related thereto could be reasonably estimated, thus recorded an estimated obligation related to this arrangement during the year ended December 31, 2025. See Note 3. Notes Payable, Finance Leases, and Commercial Bank Financing for further information. Because loss contingencies are inherently unpredictable and unfavorable developments can occur, the assessment requires judgment about future events. Moreover, there is no assurance that contingencies will be satisfied and the ultimate loss may differ materially from the estimated obligation SBG has recorded.

5. SEGMENT DATA:

SBG measures segment performance based on operating income (loss). For the quarter ended March 31, 2026, SBG hadone reportable segment: local media. The local media segment includes SBG’s television stations, original networks, and content and provides these through free over-the-air programming to television viewing audiences for stations in markets located throughout the continental United States, as well as distributes the content of these stations to MVPDs for distribution to their customers in exchange for contractual fees. See Revenue Recognition under Note 1. Nature of Operations and Summary of Significant Accounting Policiesfor further detail. Corporate is not a reportable segment but is included for reconciliation purposes. Corporate costs primarily include SBG’s costs to operate as the parent company of its subsidiaries. All of SBG’s businesses are located within the United States.

Segment financial information is included in the following tables for the periods presented (in millions):

(a)Other segment items relate primarily to non-media expenses.

6. VARIABLE INTEREST ENTITIES:

Certain of SBG’s stations provide services to other station owners within the same respective market through agreements, such as LMAs, where SBG provides programming, sales, operational, and administrative services, and JSAs and SSAs, where SBG provides non-programming, sales, operational, and administrative services. In certain cases, SBG has also entered into purchase agreements or options to purchase the license related assets of the licensee. SBG typically owns the majority of the non-license assets of the stations, and in some cases where the licensee acquired the license assets concurrent with SBG’s acquisition of the non-license assets of the station, SBG has provided guarantees to the bank for the licensee’s acquisition financing. The terms of the agreements vary but generally have initial terms of over five years with several optional renewal terms. Based on the terms of the agreements and the significance of SBG’s investment in the stations, SBG is the primary beneficiary when, subject to the ultimate control of the licensees, SBG has the power to direct the activities which significantly impact the economic performance of the VIE through the services SBG provides and SBG absorbs losses and returns that would be considered significant to the VIEs. The fees paid between SBG and the licensees pursuant to these arrangements are eliminated in consolidation.

The carrying amounts and classification of the assets and liabilities of the VIEs mentioned above, which have been included in SBG’s consolidated balance sheets as of the dates presented, were as follows (in millions):

The amounts above represent the combined assets and liabilities of the VIEs described above, for which SBG is the primary beneficiary. Total liabilities associated with certain outsourcing agreements and purchase options with certain VIEs, which are excluded from the above, were $115 million and $116 million as of March 31, 2026 and December 31, 2025, respectively, as these amounts are eliminated in consolidation. The assets of each of these consolidated VIEs can only be used to settle the obligations of the VIE. As of March 31, 2026, all of the liabilities are non-recourse to SBG except for the debt of certain VIEs. See Debt of Variable Interest Entities and Guarantees of Third-Party Obligations under Note 3. Notes Payable, Finance Leases, and Commercial Bank Financing for further discussion. The risk and reward characteristics of the VIEs are similar.

7. RELATED PERSON TRANSACTIONS:

Transactions With SBG’s Indirect Controlling Shareholders

David, Frederick, J. Duncan, and Robert Smith (collectively, the “Sinclair controlling shareholders”) are brothers and hold substantially all of the Sinclair Class B Common Stock and some of the Sinclair Class A Common Stock and are on the Board of Managers of SBG. SBG engaged in the following transactions with them and/or entities in which they have substantial interests:

Leases. Certain assets used by SBG and SBG’s operating subsidiaries are leased from entities owned by the Sinclair controlling shareholders. Lease payments made to these entities were $2 million for both the three months ended March 31, 2026 and 2025. For further information, see Note 3. Notes Payable, Finance Leases, and Commercial Bank Financing.

Charter Aircraft. SBG leases aircraft owned by certain Sinclair controlling shareholders. For all leases, SBG incurred expenses of $0.2 million for the three months ended March 31, 2025.

The Baltimore Sun. David Smith is the majority shareholder of The Baltimore Sun. STG has entered into agreements with The Baltimore Sun to provide independent contractor services, sales representation, news resource sharing, and content sharing. In relation to these agreements, SBG recorded revenue of $0.2 million for the three months ended March 31, 2026.

Atlantic Automotive Corporation. SBG sells advertising time to Atlantic Automotive Corporation ("Atlantic Automotive"), a holding company that owns automobile dealerships and an automobile leasing company. David Smith has a controlling interest in, and is a member of the board of directors of, Atlantic Automotive. SBG received payments for advertising totaling less than $0.1 million for both the three months ended March 31, 2026 and 2025.

Cunningham Broadcasting Corporation

As of March 1, 2026, Cunningham owns a portfolio of television stations, including: WNUV-TV Baltimore, Maryland; WRGT-TV Dayton, Ohio; WVAH-TV Charleston, West Virginia; WMYA-TV Anderson, South Carolina; WTTE-TV Columbus, Ohio; WDBB-TV Birmingham, Alabama; WBSF-TV Flint, Michigan; KRNV-DT/KENV-DT Reno, Nevada/Salt Lake City, Utah; and KTXD-TV in Dallas, Texas (collectively, the “Cunningham Stations”). Certain of SBG’s stations provide services to certain Cunningham Stations pursuant to LMAs or JSAs and SSAs. See Note 6. Variable Interest Entities, for further discussion of the scope of services provided under these types of arrangements. The agreements with KRNV-DT/KENV-DT, WBSF-TV and WDBB-TV expire between November 2029 and April 2030 and certain stations have renewal provisions for successive eight-year periods. On March 1, 2026, SBG exercised purchase options for WGTU-TV/WGTQ-TV Traverse City/Cadillac, Michigan; WEMT-TV Tri-Cities, Tennessee; WYDO-TV Greenville, North Carolina; KBVU-TV/KCVU-TV Eureka/Chico-Redding, California; and WPFO-TV Portland, Maine (collectively, the “Purchased Stations”) and these stations are now owned and operated by SBG.

The services provided to WNUV-TV, WMYA-TV, WTTE-TV, WRGT-TV and WVAH-TV are governed by a master agreement which has a current term that expires on July 1, 2028 and there isone additional five-year renewal term remaining with final expiration on July 1, 2033. SBG also executed purchase agreements to acquire the license related assets of these stations from Cunningham, which grant SBG the right to acquire, and grant Cunningham the right to require SBG to acquire, subject to applicable FCC rules and regulations,100% of the capital stock or the assets of these individual subsidiaries of Cunningham. Pursuant to the terms of this agreement SBG is obligated to pay Cunningham an annual fee for the television stations equal to the greater of (i)3% of each station’s annual net broadcast revenue or (ii) $6 million. The aggregate purchase price of these television stations increases by 6% annually. A portion of the fee is required to be applied to the purchase price to the extent of the 6% increase. The cumulative prepayments made under these purchase agreements were $74 million and $73 million as of March 31, 2026 and December 31, 2025, respectively. The remaining aggregate purchase price of these stations, net of prepayments, as of both March 31, 2026 and December 31, 2025, was approximately $54 million. Additionally, SBG provides services to WDBB-TV pursuant to an LMA, which expires April 22, 2030, and has a purchase option to acquire for $0.2 million. Under these agreements, SBG paid Cunningham $3 million for both the three months ended March 31, 2026 and 2025.

As SBG consolidates the licensees as VIEs, the amounts SBG earns or pays under the arrangements are eliminated in consolidation and the gross revenue of the stations are reported in SBG’s consolidated statements of operations. SBG’s consolidated revenue includes $4 million and $34 million for the three months ended March 31, 2026 and 2025, respectively, related to the Cunningham Stations, and, prior to March 1, 2026, the Purchased Stations.

SBG has an agreement with Cunningham to provide master control equipment and provide master control services to a station in Johnstown, PA with which Cunningham has an LMA, that is operating on a month-to-month term until either party provides notice of termination. Under the agreement, Cunningham paid SBG an initial fee of $1 million and pays SBG $0.3 million annually for master control services plus the cost to maintain and repair the equipment. In addition, SBG has an agreement with Cunningham to provide a news share service with the Johnstown, PA station for an annual fee of $0.6 million, which increases by 2% on each anniversary and expires in November 2028.

SBG has multi-cast agreements with Cunningham Stations in the Anderson, South Carolina; Baltimore, Maryland; Charleston, West Virginia; and Dallas, Texas markets and, prior to March 1, 2026, with stations in the Eureka/Chico-Redding, California; Tri-Cities, Tennessee; Portland, Maine; and Greenville, North Carolina markets. In exchange for carriage of these networks in their markets, SBG paid $0.3 million for both the three months ended March 31, 2026 and 2025 under these agreements.

All of the non-voting stock of the Cunningham Stations is owned by trusts for the benefit of the children of the Sinclair controlling shareholders. SBG consolidates certain subsidiaries of Cunningham with which SBG has variable interests through various arrangements related to the Cunningham Stations.

WG Communications Group

The wife of Robert Weisbord, SBG’s Chief Operating Officer and President of Local Media, has an ownership interest in WG Communications Group (“WGC”). SBG received revenue from advertisers represented by WGC of less than $0.1 million and $0.1 million for the three months ended March 31, 2026 and 2025, respectively, and made payments to WGC of less than $0.1 million for the three months ended March 31, 2025.

Sinclair, Inc.

Sinclair is the sole member of SBG.

SBG recorded revenue of $3 million for the three months ended March 31, 2026 and $3 million for the three months ended March 31, 2025 related to sales services provided by SBG to Sinclair, and certain of its direct and indirect subsidiaries.

SBG recorded expenses of $8 million for the three months ended March 31, 2026 and $4 million for the three months ended March 31, 2025 related to digital advertising services provided by Sinclair, and certain of its direct and indirect subsidiaries, to SBG.

SBG made net cash distributions of $45 million to Sinclair, and certain of its direct and indirect subsidiaries, for the three months ended March 31, 2026. SBG made net cash distributions of $46 million to Sinclair, and certain of its direct and indirect subsidiaries, for the three months ended March 31, 2025.

As of March 31, 2026 SBG had a payable to Sinclair, and certain of its direct and indirect subsidiaries, of $1 million, included within other current liabilities in SBG’s consolidated balance sheets. As of December 31, 2025, SBG had a receivable from Sinclair, and certain of its direct and indirect subsidiaries, of $1 million, included within prepaid expenses and other current assets in SBG’s consolidated balance sheets.

Employees

Jason Smith, an employee of SBG, is the son of Frederick Smith, who is a Vice President of SBG and a member of SBG’s Board of Managers. Jason Smith received total compensation of $0.8 million and $0.3 million for the three months ended March 31, 2026 and 2025, respectively, consisting of salary and bonus, and was granted 144,300 and 159,607 shares of restricted stock, vesting overtwo years, for the three months ended March 31, 2026 and 2025, respectively.

Ethan White, an employee of SBG, is the son-in-law of J. Duncan Smith, who is a Vice President of SBG and a member of SBG’s Board of Managers. Ethan White received total compensation of $0.1 million for both the three months ended March 31, 2026 and 2025, consisting of salary and bonus, and was granted 5,162 and 3,244 shares of restricted stock, vesting overtwo years, for the three months ended March 31, 2026 and 2025, respectively.

Ryan McCoy, an employee of SBG, is the son-in-law of J. Duncan Smith. Ryan McCoy received total compensation of less than $0.1 million for both the three months ended March 31, 2026 and 2025, consisting of salary.

Amberly Thompson, an employee of SBG, is the daughter of Donald Thompson, who is an Executive Vice President and Chief Human Resources Officer of SBG. Amberly Thompson received total compensation of less than $0.1 million for both the three months ended March 31, 2026 and 2025, consisting of salary, and was granted 285 shares of restricted stock, vesting overtwo years, for the three months ended March 31, 2025.

Frederick Smith is the brother of David Smith, Executive Chairman of SBG and a member of SBG’s Board of Managers; Robert Smith, a member of SBG’s Board of Managers; and J. Duncan Smith. Frederick Smith received total compensation of $0.2 million for both the three months ended March 31, 2026 and 2025, consisting of salary and bonus.

J. Duncan Smith is the brother of David Smith, Frederick Smith, and Robert Smith. J. Duncan Smith received total compensation of $0.2 million for both the three months ended March 31, 2026 and 2025, consisting of salary and bonus.

8. FAIR VALUE MEASUREMENTS:

Accounting guidance provides for valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow), and the cost approach (cost to replace the service capacity of an asset or replacement cost). A fair value hierarchy using three broad levels prioritizes the inputs to valuation techniques used to measure fair value. The following is a brief description of those three levels:

•Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.

•Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.

•Level 3: Unobservable inputs that reflect the reporting entity’s own assumptions.

The following table sets forth the face value and fair value of SBG’s financial assets and liabilities for the periods presented (in millions):

N/A - Not applicable

(a)Amounts are carried in SBG’s consolidated balance sheets net of debt discount and deferred financing cost, which are excluded in the above table, of $53 million and $55 million as of March 31, 2026 and December 31, 2025, respectively.