One of the more unusual, experiences I have had in my time on Seeking Alpha was in one of my Sinclair Broadcast Group (SBGI) articles when I and a few of my readers started quibbling over the precise legal terms within certificates of indenture and the precise listing requirements for SEC bond tables. What made such an esoteric debate worth having was that it was key to understanding just how bad a hole Sinclair was in with its sweeping, almost “bet the company” RSN purchase.
While doing so, however, I also realized that Sinclair management may be about to concede it made a bad purchase with the RSNs - and may have found a way to limit the worst of the damage.
Six months on, there's no longer any “may” about it - management has successfully managed to (partially) extract itself from its disastrous acquisition and shifted some considerable portion of the losses from Sinclair to the bondholders of Diamond Sports, Sinclair’s bankruptcy remote RSN subsidiary. Since this reduction in losses of roughly $1 billion is a very substantial portion of the company’s book value, I took another look at its financials and came away far more impressed than my previous visits to the opaque world of SEC filings.
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