S&P: Sinclair outlook negative

Standard & Poor's said it revised its outlook on Sinclair Broadcast Group, Inc. to negative from stable. All ratings on the company, including the BB- corporate credit rating, and its subsidiary, Sinclair Television Group Inc., were affirmed.

The agency said the outlook change reflects its concern that, because of the weakening advertising market and Sinclair's previous prioritization of financial resources for nonstrategic investments, share repurchases and dividends, the company will not reach S&P's target leverage ratio of 5.5 times for a stable outlook. As of Sept. 30, the lease-adjusted debt-to-EBITDA ratio was 5.8 times.

The BB- rating reflects Sinclair's financial risk from high debt leverage, its portfolio of generally lower-ranked stations, its growing portfolio of real estate and other non-TV assets and TV advertising's mature revenue growth prospects, S&P said.

Sinclair's large TV audience reach, TV broadcasting's typically good margins and the company's discretionary cash flow potential partially offset these factors, in the agency's view.

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