Shares for the TV station group are down about 6.6% this morning after it missed Q4 earnings estimates, bringing its year-to-date stock performance to -27.2%. But execs urged analysts not to fret about its prospects — including if broadcasters fail to persuade the U.S. Supreme Court that Aereo infringes on their copyrights. For example, networks probably wouldn’t follow through on threats to restrict their prime time shows to pay TV if justices say that the streaming service can pick up local broadcasters’ over-the-air signals without paying a license fee. “The truth of the matter is that the amount of support that we provide as affiliates to the network programming is significant, especially with the amount of local programming that we supply, news production, and syndicated product that we purchase,” Sinclair CEO David Smith says. The variation in network ratings in different markets “demonstrates the importance of local branding to the networks and to their viewing.” Nor is the station group chief fearful that cable and satellite companies might replicate Aereo’s antenna-based technology to avoid paying retransmission consent fees to broadcasters. With all of the laws and regulations that govern pay TV providers’ relationship with TV stations, ”you’re talking years and years before that would get settled.” Smith also shrugged off the latest copyright infringement suit against Aereo in Utah, saying that “any litigation we’ve got going in Salt Lake City could be diluted by what the Supreme Court does.” The high court will hear arguments on April 22.
On other matters, Sinclair says that it expects more revenues from its CBS stations later this year when the network offers eight Thursday night NFL games. The company also is upbeat about the ad market, projecting that same station revenues in 2014 will rise as much as 3.2% not including the impact of Sinclair’s acquisitions or the $122.5M it expects to see from political ads (up from $11.8M last year). Still, some investors are concerned about the additional expenses the company is inuring from its recent round of acquisition deals. Excluding one-time expenses, Q4 earnings came in at 29 cents a share, below the Street’s 33 cent forecast. Revenues, at $427.7M, were +29.8% and beat expectations for $413M.