Sinclair Broadcast Group (SBG) appears to be feeling the bite of cord-cutting. Sinclair is one of the largest TV station owners in the United States, owning or operating 185 affiliates of ABC, CBS, The CW, Fox, and NBC in 86 markets around the country. But a new report from CNBC indicates that Sinclair is potentially looking to offload a large portion of those stations, and is continuing to explore its options for the Tennis Channel as well, as it tries to streamline its business in an era where top cable channel distributors are losing viewers every day.

Key Details:

• Sinclair has hired an investment bank to determine the value of assets possibly available for sale.
• The company has been looking to add investment partners or consider other options for Tennis Channel since February.
• A recent settlement with Diamond Sports Group is another financial drag on Sinclair, in addition to accelerated cord-cutting.

CNBC indicates that Sinclair has chosen the investment bank Moelis to evaluate the assets it wants to potentially sell. Those assets include more than 60 of its TV stations, in big media markets such as Pittsburgh, Portland, Oregon, and Austin, Texas, among others. If Sinclair sold all of these stations, its footprint would decrease by more than 30%.

Speaking to Wall Street analysts during Sinclair’s earnings conference call this week, CEO Chris Ripley confirmed the company is open to selling parts of its business, though he declined to get into specifics.

“As we’ve always stated, we have no sacred cows,” Ripley said. “We want to unlock the sum of the parts valuation that we think we’re grossly undervalued for. And to the extent that asset sales makes sense in order to unlock that value and help us de-lever, then that’s something that we’d be open to as well.”

CNBC reports that Sinclair is still evaluating its options for the Tennis Channel, as well. Back in February, reports emerged that Sinclair was looking for a partner to purchase an equity stake in the channel, but that if it failed to do so it may potentially consider selling the channel outright. In the United States, viewers can find the Tennis Channel on DIRECTV STREAM, Fubo, Sling TV and YouTube TV.

Why is Sinclair Looking to Offload Local Stations?

To see why Sinclair is trying to sell so many of its local TV stations, one need look no further than the decline in pay-TV subscribers in recent years. In 2023 alone, top cable and satellite companies lost 7 million subscribers combined, and station owners like Sinclair make most of their money through retransmission fees from these companies based on a per-subscriber rate. The fewer customers that are watching these channels, the less Sinclair gets paid for them.

There are also other factors that could be at play. Earlier this year, Sinclair agreed to settle a lawsuit filed by its subsidiary Diamond Sports Group, which claimed that SBG improperly diverted funds away from Diamond before the regional sports broadcasting vertical went into bankruptcy. The settlement saw Sinclair agree to pay Diamond $495 million, which is no small chunk of change even for a big company like Sinclair.

All in all, Sinclair has lost more than 70% of its market value since 2019. The company is trying to streamline operations now by selling off a big chunk of its TV stations in order to remain a healthy business, but the acceleration of cord-cutting means that more drastic measures will likely be needed by Sinclair in the future.