Sinclair Broadcast Group said the cyberattack the company faced last year resulted in a $63 million loss in advertising revenue in the fourth quarter, plus $11 million in other costs.
Some of the losses could be covered by insurance, but Sinclair said he estimates the incident will have resulted in an irrecoverable net loss of around $24 million.
The ransomware cyberattack disrupted the computers of Sinclair and its stations, making it difficult for its stations to produce newscasts and transmit its programming to distributors, including Hulu.
Station engineers were able to find workarounds until the company was able to restore most of its systems.
For the quarter, Sinclair reported a loss of $89 million, or $1.18 per 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 partly caused by the cyberattack and also by the lack of political advertising. Without the cyberattacks, revenue would have increased for the quarter, the company said.
Advertising revenue fell 31% to $383 million. Core advertising revenue, excluding political spending, increased 4% to $364 million.
Distribution revenue was $1.048 billion, up from $917 million a year ago.
Sinclair also said it increased 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,” CEO Chris Ripley said. “We continue to be encouraged by the rebound in the advertising market in 2021 and anticipate 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 automotive and other sectors where supply is limited.
Ripley said that already this year, Sinclair has renewed its local digital rights with the NBA and NHL, paving the way for its new direct-to-consumer product, launched two new original programs on our regional sports networks and secured the tennis rights in live for the Women’s Tour of the Tennis Association in Germany, Austria, Switzerland and the Netherlands.
“Coupled with the continued rollout of NextGen Broadcast and the emergence of gamification elements on our platforms, we remain true to our mission to connect people with content everywhere,” said Ripley. ” ■