Sinclair, Inc. (SBGI) Earnings Call Transcript & Summary

Okay. Welcome, everyone. Thanks for joining us this afternoon. I'm Bryan Kraft. I cover the media sector for Deutsche Bank, and I'm pleased to welcome Chris Ripley, who's the President and CEO of Sinclair. So Chris, welcome. Thanks for joining us.

Thanks, Bryan. Pleasure to be here.

Why don't we jump right in. Chris, 2020 was a challenging year for everyone. Obviously, looking ahead to 2021, what are the top priorities for you and the management team at Sinclair?

Well, one of our top priorities is undoubtedly the rebrand to Bally Sports. That goes into effect at the end of this month. So we're changing signage. We're -- we've changed the graphics on all of our RSNs. Our new app that replaces Fox Sports Go will come out at the same time. There are literally millions of impressions that were undermonetized in Fox Sports Go, so that will be corrected in the new app. And we're very excited about that. That, of course, will also be the same platform that we launch direct-to-consumer on, which will be another huge growth opportunity for the RSNs. We're also working on a unified ad platform through this year, which will make buying our time a lot easier for advertisers and have a single point of entry for any Sinclair outlet across local, regional and national. So we think that's going to really help remove the friction from the ecosystem in terms of buying our ad time. NEXTGEN TV, of course, is in full swing this year on the transmission side. We should get to over 50% audience coverage -- or sorry, TV household coverage in the U.S. by the end of the year, which means that we can actually start monetization efforts the following year. We have The National Desk, which we launched in January, which is a new national news program that helps fill certain programming holes that we have across many of our stations. We'll look to expand that and capitalize on that programming in terms of growth. And on the digital side, we are looking to capitalize on what has been a watershed year for STIRR and NewsON and our -- and Compulse, which is our digital marketing services, and really take those to the next level in terms of revenue and profitability.

Sounds like you have a lot going on. Why don't we talk about the ad market, and we'll get into some of those other topics over the course of the conversation. So it's just a year ago in the bottom fell out of the market due to COVID. What are you seeing today as far as core advertising recovery in your markets? How close to back to normal levels are we? And perhaps you could give us some color on what you're seeing across the major advertiser categories currently.

Well, there's a lot to be excited about in the core ad market. As we reported, we saw December relatively flattish year-over-year after political ran through the system, which is an incredibly bullish sign. Just mathematically moving into next year, you're going to see massive year-over-year increases in the ad, in core advertising because you're going to be lapping seriously impacted months from COVID. Quarter 1 is looking strong. Even though we're not really at full capacity, there's a bunch of businesses that would normally advertise on our air that are still impaired by virus shutdowns and lower economic activity. All the economic projections for this year are really robust for the recovery when we tend to -- our core ads tend to be levered to general economic activity. And just to cite some specific examples on the services sector, just to give you an idea, like Q3, where you had pretty severe COVID impact to Q4, services were up 27%. Auto, which we've talked a lot about being impacted by factory shutdowns, even though it really -- sales were good. Auto dealers actually performed pretty well overall through COVID, they couldn't get enough inventory. So I think that has rightsized itself. So auto, Q4 to Q3 was up 38%. And it was a sector that was really hurting us being one of our largest, not living up to its full potential. So seeing that lift into Q4, continuing into Q1 bodes well for strong core growth in this year.

And why don't we just -- while we're on advertising, maybe just spend a minute on political. I mean last year was a monster year for Sinclair in political. When you think about the dynamics that drove that strength, what do you think it means for future cycles and, in particular, the midterms coming up in 2022?

Well, it was very gratifying to see a record year of political for 2020. I think it puts to bed any of the questions that came up in 2016, which was a disappointing year. Trump came in. He didn't raise a lot of money. And we had a lot of questions about whether this was the new norm for politics. And we didn't believe it to be as such. We told everyone that it's really just a function of how much money you raised, right? Whatever money you raise, you spend, so that's one thing that I love about politicians is they never return the money they spend, they spend it all. So you can directly predict how well things are going to go by how much money is raised. And so 2020 went back to that normal trend. Obviously, 2018 was normal as well. And the question was what happens when Trump reruns for an election, will he do the same thing he did last time. And he was a conventional candidate in every sense of the word from a political ad spending this time around. And he raised a lot of money, he spent a lot of money, and we had a record year. So going forward, I think this points to a really robust 2022 midterms. We think that's going to be a great year for us and then -- and just a continuation on and into 2024 and beyond.

Okay. And let's talk about sports betting for a moment. You mentioned the rebranding of the RSNs with all the Bally logos. This is an area where you've been obviously very active with the Bally partnership you announced, the rebranding. How large of an advertising category was sports betting for you in 2020 within the broadcasting segment? What do you think the growth trajectory will look like over the next few years from the category?

So it was not a very large category in 2020. And obviously, 2020 was impacted by less sports. But it is on an incredible growth trajectory. Just to give you an idea, it really started in earnest in Q3 when sports came off hiatus. That's when we started to see significant sports money starting to hit our books. And then from Q3 to Q4, it doubled. And arguably, there was less sports to bet on in Q4 than there was in Q3. And we're looking at an almost another doubling from Q4 into Q1. So if this thing doubles every quarter, we'll be in really good shape. But it's really pointing to quite a strong category growth. And a small number becomes a very big number if it doubles that often. So we're really excited. And that's for that on the broadcast side. And of course, it's having a really profound impact on the RSN side on its ad category.

Can you talk about how many markets you're in that have legalized sports betting at this point? And what the outlook is for further legalization in your markets over the next 1 to 2 years?

Well, that's a good question, Bryan. I mean in terms of just our footprint, about half of these states overall either have been legalized or appending. And so -- but that actually sort of, I think, isn't really the main point here. Almost in every state, there's some level of activity around this in anticipation of most of the states going legal. And many players have other properties like Daily Fantasy for instance, which are legal in many more states. So they're able to advertise to precede markets in those areas. So even in states that aren't legal yet, we're seeing activity in those areas. And our legal footprint on the RSN side is already pretty substantial and growing. It's Michigan, Nevada, Tennessee, Indiana, Illinois, Iowa are all places that our RSNs go. And it's quite significant on the broadcast side as well. And even, as I said, even in states that aren't legal yet, you're seeing that preceding activity. And it's our expectation that the vast majority of states will end up legalizing over the course of the next 2 to 3 years.

Okay. And beyond the advertising benefits, can you talk about the other elements of the Bally partnership and how they'll benefit revenue and profit profile of Diamond Sports going forward when you think about all the revenue streams, advertising, licensing fees and any other potential benefits on the affiliate side?

Okay. Well, Bally's was an enterprise-wide deal so it includes all of our assets, all of our outlets. And specifically, there is a naming rights payment, which is actually going to start here next quarter. Now that we have -- once we complete the rebranding of the RSNs, that's a cash naming rights fee that we'll pay to the RSNs. The RSNs also get a percentage of their -- of Bally's annual interactive marketing spend, which is going to be significant as they launch in these markets, which should happen this spring. And the way we've set up this deal, it's really quite symbiotic. Our outlooks are going to be pushing people towards Bally properties and Bally applications to bet, which will then, in turn, be pushing people back to our properties to watch. And all the data says that people who bet watch more, watch more sports, engagement goes up quite significantly. And so it's a virtuous cycle that happens between Bally's and our properties. It gets more people to watch, which means more advertising dollars, which means greater demand for packages that include our content. And on top of that, we're going to be jointly developing additional programming, which is going to go on our air, which will support and be reasons not only for people to tune in but also to engage more on the sports betting platforms. The other thing that we'll work on, which -- sorry, that I was really quite thinking about so I want to mention is a watch-and-play experience. So that's not ready yet, but that is on the drawing board between us and Bally's to create a next-generation watch-and-play experience that is going to revolutionize the way people watch sports today and really make it much more like playing a video game.

Can you elaborate on that any more as to what that experience will be like?

Well, there's some core tenets to it, right? One is that you need to be watching the game. So it will be an interactive experience where you've got overlays, graphical overlays, which are visually exciting. You have any -- you're interacting in it with real time as the game or match is happening. And then there will be rewards in places where you have online sports betting, those rewards will be real money. And then for people who aren't interested in betting or underaged or in states that aren't legal, there will be other types of rewards, like virtual rewards and recognition. And nothing really exists like that today, but I believe it's where the viewing experience is headed. It's what the younger generation is looking for that grew up on video games. They don't necessarily want to lean back and watch a 3-hour game. They'd rather just watch the highlights. And -- but if they had a way to interact and play the game within the game, we think that unlocks all the latent fandom that exists in the younger generations and gives them an experience that -- more of an experience that they're used to having and that they would prefer to have. So -- and that is something that will be separate and apart, a revenue stream that will come in to companies like ourselves that partner with sportsbook to facilitate such an experience.

Okay. And staying on the topic of Diamond for a moment, you obviously have no control over the pace of Pay-TV subscriber declines. But how are you thinking about the outlook for subscriber declines at Diamond, whether it's in the absolute sense or even just relative to the broadcast side of the business or Pay-TV industry trends? What would it take for the Diamond sub trajectory to converge with the overall industry rate of decline so that you're at least kind of back to even with the industry?

Well really, that has to -- that hinges on distributor stability. And I think we're -- we've lapped all of our significant distributor discussions. So I do expect that stability to be there. And the way the RSNs work, they are -- there are guarantees in terms of penetration and pay on percentages. So by and large, once you have your distributors and they're stable, your churn is going to match the underlying trends of that distributor. So that's what I expect going forward, save for actually distributors may be coming back. I don't see -- I think the distributor mix will be stable going forward.

Okay. And you recently mentioned that you plan to launch a direct-to-consumer unauthenticated product in 2022. Can you tell us more about your plans there? What kinds of content do you expect to include? Are you working on securing rights to include live games on the service at some point? And along those lines of recent renewals included direct-to-consumer rights as part of the discussion. So do -- you maybe have some of those rights already. So if you could tell us about that, that would be great.

Sure. So we already have rights in our portfolio today, quite extensive rights to include gains in a direct-to-consumer package. And so the exact details, pricing features, which games, those are all details that we're working out with the leagues as we speak. And so -- but in terms of rights, any new deal that we do going forward, it's absolutely mandatory that the direct-to-consumer rights be included. And when we bought the RSNs, they came with a significant cadre of direct-to-consumer rights that we'll be utilizing.

Okay. Is it the intent then in 2022, when you launch that, to have a lot of the live games included? Or will it start with more kind of studio content and shoulder content around the events? How are you thinking about that programming strategy?

Well, I don't want to preempt actually announcing what the product will be before that happens. And as I said, we are working on the details with the leads just to what exactly the product will look like. But what I can say is that, I can't imagine us launching next year without some amount of live games. And so that is definitely part of the plan.

Okay. Okay. Interesting. And then I guess one thing I'm curious about, and you may not want to talk about at this point, but I want to ask you, how are you thinking about the subscription? Would it be an annual subscription in order to kind of mitigate that seasonal churn? Or would it be more the kind of norm of a monthly subscription? You could obviously charge less effectively per month if you did it on an annual basis, but kind of keep the engagement going. So I'm just curious how you're thinking about that.

Yes. Again, it's another one of those items that's on the drawing board and up for discussion with our partners. But there is a lot of logic to making it either season-based or annual when it comes to sports as opposed to monthly. And so it's something we're open to. The trend in direct-to-consumer land has been more towards monthly or annual. I can tell you, on Tennis Channel, for instance, where we have -- we've had a sort of ancillary direct-to-consumer product for quite some time, TC PLUS. And we mostly sell that yearly now. And so I just -- again, I don't want to preempt what our product announcement will be, but it's certainly something that we would consider.

Sure. Okay. And I wanted to ask you about just the economics around sports teams being granted equity in the RSNs. I think you've done this in a few instances, and just wanted to see if you could give us any sense as to how it fits into the broader deal structure.

Yes. So giving equity to the teams or a profit share has existed for quite some time. So it's not like we -- it's a new thing that we invented. But it is something that we are going to increasingly look to do as we renew these deals. We just did binding term sheets with the Marlins and the Birds and working on the long forms right now. And they both included profit shares or equity distributions. And the reason to do that is it aligns our interest in a greater fashion with the teams. It is -- you can think of it just as a substitute for rights payments. There isn't any more magic to it than that. So instead of giving higher fixed rights payments, you give lower fixed rates payments plus a profit or equity distribution share and then that adds up to the sort of total consideration that the team is looking to get.

I see. That makes sense. Okay. Can we talk about the retrans outlook a bit? It seems like growth -- retrans growth is more muted this year than in past years. While you've got this timing issue with reverse, and those 2 things are leading to your guidance for net retrans to decline mid-single digits this year, can you just walk us through this dynamic for 2021 and explain how you think about net retrans growth longer term for the company?

Yes. So look, the COVID declines that hit us last year, generally indicative of what happens when you have a recession. We even saw this back in '09 that when there's an economic downturn, before anyone was talking about cord cutting, there actually were some declines back in '09 when the economy went down. And so Pay-TV subscription is economically sensitive. Not hugely, but it is. And so we're seeing the full year impact of that into 2021, Though we have noticed, at least sequentially -- unsequential quarters that things have been improving for the Pay-TV operators on their video subs. So that's good to see. And then, of course, we have really sort of bad timing this year with 1/3 of our big 4 subs, having significant increases in reverse retrans hitting at or near year-end 2020. And so the mix were a big amount of expense to make up for on the growth side. And we don't really have significant contracts coming up for renewal this year. We've got one major distributor coming up this summer in DISH. So from a timing perspective, it always -- it made this year a tough year to grow net retrans.

I see. Okay. One thing that some people have asked us and -- which is what's behind the question is, where you've negotiated for the RSNs and broadcast retrans together, have you traded off pricing on the RSN side -- excuse me, traded off broadcast pricing for RSN carriage or pricing. And is that one of the factors maybe that's keeping the net retrans a little bit constrained this year?

So we don't believe there's been any material impact on our broadcast portfolio supporting the RSNs. We do bundle them together and give people incentives to take a broader set of package. But given the history of where we've been and sort of how these negotiations go and if ends at existing contracts, the cone or sort of the variability of outcomes is fairly narrow in these negotiations. And when we look at how that's performed, we don't see any material impact on the broadcast side.

Okay. Okay, great. And can you tell us about your plans for STIRR and NewsON and talk about anything on the engagement side as far as metrics or contributions to add revenue, hinting on the growth outlook? Would just love to hear any more kind of details or color you could share on those.

Yes. STIRR and NewsON have really had breakout years in 2020. The pandemic was helpful for them as it was a lot of AVOD and streaming platforms. They're up to about 1.5 million monthly active users right now and continuing to grow. They are ad-supported, which, again, when you take a look at what Roku is doing in that space, it's been quite tremendous. And what we're doing right now, we have -- there are really a great base right now of usage, good products. And we're looking to gain scale talking through M&A discussions from bolt-ons, some other platforms to gain some scale there and seeing if we can potentially spin them out to recognize the value. Because they're clearly just sort of buried within Sinclair, and it's really not possible for TheStreet to figure out if there's anything of value there, the way they exist today. So we're -- we have a great start in that space. We have, we think, assets that are tremendously valuable, getting them to scale a little bit quicker and then doing something to recognize their value outside of Sinclair, like raising outside capital, spinning them out, those are all things we're looking at.

Interesting, okay. And how about The National Desk? What's the long-term strategy there? Is that going to remain a time block for the stations? Do you plan to do something on the digital side or in pay? Would love to hear more about your plans there.

So The National Desk is off to a great start, great viewer feedback. It's -- it doesn't really have any grander ambitions than being a quality programming for many of our stations as they as they rotate off of some syndicated programming that they used to have. And so it's a way to upgrade. And we have switched down 67 of our stations in a morning block. We are considering other blocks of time for this strategy and specifically for The National Desk. So the expansion will be into further blocks of times. It does exist digitally. It's on STIRR and on our websites. And it will expand over time as it is -- it moves into other day parts.

Okay. I wanted to talk about NEXTGEN TV next. You're in, I believe, 12 markets now. And as more test markets roll out, it seems like we're getting closer to the new broadcast standard becoming more ubiquitous. Can you talk about what this new standard means for the business over the long term and what growth opportunities you see it creating over the next 5 years?

So you're right in noticing that we're hitting a critical mass here. As I think I mentioned earlier in the presentation that we should be getting over 50% of coverage of TV households by the end of this year. And that's really important because there's a chicken and the egg problem whenever you roll out a new technology where one -- there's a transmission side and the receive side. And the receive side won't build until the transmission. So people have confidence that the transmission side is there. And so by reaching over half of the country by the end of this year with an ATSC 3.0 signal or NEXTGEN TV signal, that is a key milestone, in my opinion. And we'll start to unlock monetization opportunities. And then near term, I see NEXTGEN TV as a better way to monetize the over-the-air population. We have, depending on your estimates, 20% up to 25% of the country using over-the-air television today. This provides a better signal, better quality signal, better in-building penetration, higher quality video and audio. And allows for targeted content and advertising. So you've got that population that is getting non-targeted ads today. Generally speaking, targeted ads go at CPMs that are 2 to 3x higher as -- and so that's an opportunity for that population, subscription-based services as well can be provided through NEXTGEN TV to people that before really weren't being given opportunities to subscribe to various services. And then what has really been about for Sinclair more than anything else has been mobility, right. Putting our spectrum to this highest and best use. We, of course, are going to utilize it to enhance our core product of providing video, but data casting, mobility, we think there's going to be huge opportunities in this area in the future, especially as we think through connected cars. And we're having fruitful discussions across the industry with various automakers that want to update their software and their cars once a day, potentially more. And so the question is, how do you update that many cars across entire geographies in an efficient way because these are big files. It's very costly to do that through a one-to-one cellular infrastructure. And so something like ATSC 3.0 is a perfect fit for those types of use cases. And I think things like that will be the more interesting part of the equation as this ecosystem gets built out.

Okay. And any additional color on like when you think this could be a material part of the business and time line for scaling it?

Well, I think it's going to scale in terms of -- I think of it sort of 3 to 5 years for scaling out the ecosystem, finishing the transmission side, scaling up the receive side. TVs are already available in the marketplace, 20 or so TVs were available last year. We expect that consumer electronics players to start making more TVs available now that the transmission side is really getting up in full steam. We received a prototype cellular phone last year. We called it the Mark One, but that required no additional equipment added. It was all encased in your standard cellphone form factor and could receive NEXTGEN TV or ATSC 3.0 signals right into the phone. And so the receive side is what really needs to get going here in order for our spectrum to be put to its highest and best use. And the way I think about value is really actually looking at just what happened in the C-band auction just very recently. That had an average price in that mid-band spectrum of about $1 per megahertz POP. Sinclair has 1.6 billion megahertz POP of spectrum in its portfolio, which it gets no credit for today. So at $1 asset value, that's $1.6 billion of latent asset value that we're trying to unlock. And that's just if you look at it from a wholesale perspective, it would be worth even more if you add value-added services on top, like we're talking about in terms of video, in terms of connected cars and in terms of putting a pipe into mobile phones. So that's the prize for us is realizing that at least the wholesale value of our spectrum because at the end of the day, even if we're not able to put it to its highest and best use, it likely gets auctioned off to the wireless players and redeployed indirectly in the one-to-one 5G context. And that's another way to realize the value, but really just realize the wholesale value, which I think is around $1 billion to $1.5 billion.

Yes. I know it's not your plan, but if you -- let's say you were going to sell spectrum to the wireless industry. In the past, that's been done through auctions organized by the FCC. I've heard that the rules were loosened up earlier this year by the FCC around your ability to actually sell spectrum directly to the wireless industry. And I was just curious if that's your understanding and if you think that you could actually do a direct transaction with wireless carriers or if it would still have to be an FCC-facilitated process.

Yes. Look, there was -- they did change some rules around -- the broadcast Internet was the push last year around that. And certainly, doing creative transactions where we give capacity to the wireless players is something that is absolutely possible. Whether you can transmit an outright sale of a portion, that's more of a legal question. But I think it's certainly providing capacity to the wireless players is absolutely an option. And everything we're doing around NEXTGEN TV, everything that we have done has been about harmonizing it with the mobile phone ecosystem. So for instance, even the upper layers of the standard are now getting harmonized with 5G, it's a complement to 5G. It's much more efficient than 5G broadcast, the version of broadcast that they have within 5G. It's more efficient than that. And it's meant to be a complement to it so that phones can then -- or any mobile device can choose its most efficient way to get the data it needs. And so we definitely think in the future, there will be offload arrangements directly with wireless players as part of the outcome.

Okay. And moving on to capital allocation. How are you and the Board thinking about capital allocation priorities going forward?

Well, it's always a balance. We hit our 5-year target in 1 year in terms of share repurchases last year by 21% at the back of our total shares outstanding. And -- but we'll continue to look at that and balance that with growth opportunities like we talked about before, spending more capital around deployment of NEXTGEN television opportunities we see there, M&A. And so we always look at that and constantly evaluate what will drive the share price higher and where should we deploy our spare cash.

And being 16 percentage points below the ownership cap, are there assets potentially of interest on the broadcast side or in the RSN business? I think that press reports had indicated you're interested in AT&T's RSNs a while back. Has your view on the attractiveness of those assets changed at all, given just the way the industry has evolved over the last year?

Yes. Well, first, on broadcast, there are some assets in the market. We're looking at them. We are strategically whole. I'd like to say on the broadcast side, I mean, we're adding stations that are accretive is nice. It's not going to be a game changer for us one way or the other. So they have to be accretive. And then on the RSN side, my view of the industry is that it will consolidate. It needs to be consolidated together. As we pursue direct -- we transform the RSNs into -- well, we transformed them through direct-to-consumer, through sports betting, gamification, community-based fan, our fandom-based community. That -- all of that for an optimal consumer experience and then also for the best commercial opportunity, you should offer a consolidated offering where the fan can get whatever they want from any league. It doesn't matter sort of whether it's out of market or in the market, and we're having all those discussions because it really makes sense for it all to be available in place. And any team, any market, and that consumer experience, I think, dovetails with the best economic outcome. So all these things coming together, I think, is inevitability, and we intend to be on -- at the fulcrum of that.

Okay. And can you talk about your plans to bring down leverage at Diamond? I think you mentioned swap on your earnings call. So I just would love to hear broadly how you're thinking about deleveraging there.

Well, it's a big priority for us to deleverage and optimize the capital structure at Diamond. So we're in active discussions with our stakeholders, the -- both the secured and the unsecured creditors, and we had an exchange offer that wasn't very well attended last year. And to the extent we do one this year, I think it will be much more well received and pre vetted with the various stakeholders.

Okay. Is there anything in your asset portfolio that you'd consider a potential candidate for divesting?

We're not really looking at stuff in terms of selling. But as I mentioned before, we feel like we have some very underappreciated assets and ones that could be separated and highlighted in terms of value in a more explicit way. I mean our broadcast spectrum, sort of hard to separate that out if there was a way to get that separately valued at $1.5 million, $2.5 billion, I'd probably -- I'd figure out a way to do that. Because I don't think we're getting a dime of credit for it today. But it's hard to do that. What I would -- what we are thinking about and working on are things like Tennis. Like Tennis, for instance, has, I think, incredible opportunities in international and sports betting is second most bet on sport in the world, just -- and it's just sort of going to ride that curve up here in the U.S. And its digital opportunity is also tremendous. And we have all the assets. We have Tennis.com. We have Tennis Magazine. We have Tennis Channel. We have over 95% of all the live Tennis rights in the U.S. And we've just consolidated that position around -- and we've created a fortress around Tennis over the last few years. And so the question for us is, can we do something with Tennis to really highlight that value that we're not getting -- we're certainly getting a multiple of EBITDA on it, there's no doubt about that. But it should be trading at a much, much higher multiple to -- because of its growth opportunities. And so things like that, things like our streaming platforms like STIRR and NewsON, thinking about those, again, not so much a sale, but is there a way where we can continue to maintain a significant economic stake but create and highlight the underappreciated value in the portfolio. The other thing that I would mention that we haven't really talked about today is we're building -- or we have built, now we're rolling out a pretty significant local agency and media business, digital marketing SaaS business. And I call it trade desk for local. And we've got significant clients already like Univision where we're adding new local agencies. And we think it's going to be very disruptive. And it provides best-in-class digital marketing services at a non-arbitraged price to players who desperately need it that are getting arbitraged by the market on a daily basis. So that's another one that we have looked at and say, well, as that scales, maybe we should be exposing that to the marketplace.

Well, it's -- the final question that I was going to wrap up with, I think you largely answered. But is there anything else that you think investors are missing with respect to your stock, your position in the industry or future growth levers that you could potentially pull that you don't think investors are thinking about today?

Right. So yes, I did probably answered chunk a part of your question. But I will say so Tennis, the streaming services, Trade Desk for local, SaaS business, direct -- we're not getting any real credit for what we're going to do on direct-to-consumer and how we're going to gamify sports. And that's in the hopper, we're working on it. That's going to be transformative. And so -- and then I would actually -- and then point just quite simply to our Bally's stake, we own 11 million shares of Bally's at SBG. That right -- at today's price, it was worth over, I think, $700 million. So that's just $700 million of value, free and clear that you'd have to subtract from our market cap before doing our valuation. So it's clear to me that we're not -- the sum of the parts for this company doesn't make a lot of sense. And so we're doing a lot of thinking about how to unlock some of that value.

Okay. All right. Well, that's probably a good stopping point. Chris, I want to thank you for taking the time to join us today and for participating in the conference, and we look forward to hopefully seeing you next year back in Palm Beach, back to the live conference. So thank you very much.

That would be nice, Bryan. I'm looking forward to it as well.

All right. Take care. Have a great rest of the day. Bye, everyone.

Bye-bye.