Sinclair Broadcast Group said that the cyber attack the company faced last year resulted in $63 million in lost advertising revenue in the fourth quarter, plus other costs of $11 million.
Some of the losses might be covered by insurance, but Sinclair said it estimates that the incident will have resulted in an unrecoverable net loss of about $24 million.
The ransomware cyber attack disrupted the computers at Sinclair and its stations,, making it hard for its stations to produce newscasts and feed its programming to distributors including Hulu.
Station engineers were able to find work arounds until the company was able to restore most of its systems.
For the quarter, Sinclair reported a loss of $89 million,, or $1.18 a share, compared to net income of $467 million, or $6.32 a year ago.
Revenue fell 2% to $1.476 billion from $1.512 billion a year ago. The decline was caused partly by the cyber attack and also by the absence of political advertising. Excluding the cyber attack revenue would have been up for the quarter, the company said.
Advertising revenue was down 31% to $383 million. Core advertising revenue, excluding political spending, was up 4% to $364 million.
Distribution revenue was $1.048 billion, up from $917 million a year ago.
Sinclair also said it raised its dividend by 25%.
“We exceeded our adjusted free cash flow and adjusted EBITDA expectations for the quarter, after adjusting for the impact of the cyber incident we experienced in October,” said CEO Chris Ripley. “We continue to be encouraged by the rebound in the advertising market in 2021 and expect a robust advertising market in 2022, driven by significant political ad placements, continued strong demand from the service and sports betting categories, and a slow recovery in the auto and other supply-constrained sectors.”
Ripley said that already this year, Sinclair has renewed its local digital rights with the NBA & NHL, paving the way for its new direct to consumer product, debuted two new original programs on our regional sports networks, and secured live tennis rights for the Women’s Tennis Association tour in Germany, Austria, Switzerland, and the Netherlands.
“Coupled with the continued roll-out of NextGen broadcasting and the emergence of gamification elements across our platforms, we remain steadfast in our mission of connecting people with content everywhere,” Ripley said. ” ■
