Sinclair Broadcast agrees to global settlement in litigation with DSG

Sinclair announced that it has agreed, subject to definitive documentation and final court approval, to a global settlement and release of all claims associated with the litigation filed by Diamond Sports Group, or DSG, and DSG’s wholly-owned subsidiary, Diamond Sports Net, in July 2023, which settlement includes an amendment to the Management Services Agreement between Sinclair Television Group, or STG, and DSG. The settlement terms include, among other things, DSG’s withdrawal of its $1.5B litigation against Sinclair and all other defendants, along with the full and final satisfaction and release of all claims in that litigation against all defendants, including Sinclair and its subsidiaries, in exchange for Sinclair’s cash payment to DSG of $495M, which is estimated to result in a net cost to Sinclair of approximately $250M-$325M after considering corresponding tax benefits, additional Management Services Agreement payments to STG, and other assets and value to be received by Sinclair in connection with the settlement. The $495M cash payment will be funded by cash on hand at Sinclair Ventures, Sinclair Television Group, and/or a loan backed by Sinclair Ventures. Under the terms of the settlement, Sinclair will provide transition services to DSG to allow DSG to become a self-standing entity going forward. The settlement is subject to definitive documentation. A motion for approval of the settlement is expected to be filed with the Court next week. The Company has entered into the settlement, without admitting any fault or wrongdoing. If the settlement does not receive final Court approval, Sinclair remains committed to vigorously defending against the claims asserted in the litigation.