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INCOME TAXES
 12 Months Ended
Dec. 31, 2025
Operating Loss Carryforwards [Line Items]  
INCOME TAXES
10. INCOME TAXES:
 
The (benefit) provision for income taxes consisted of the following for the years ended December 31, 2025, 2024, and 2023 (in millions):
 202520242023
Current provision (benefit) for income taxes:   
Federal$48 $(10)$5 
State19 4 (5)
 67 (6)— 
Deferred (benefit) provision for income taxes:   
Federal(84)86 (342)
State(37)(4)(16)
 (121)82 (358)
(Benefit) provision for income taxes$(54)$76 $(358)

A reconciliation of the provision for income taxes to the amount computed by applying the 21% statutory U.S. federal income tax rate to income before taxes for the year ended December 31, 2025, after the prospective adoption of ASU 2023-09, is as follows (in millions, except percentages):
 20252025
Tax Expense/(Benefit)Estimated Tax Rate
U.S. federal statutory tax rate$(32)21.0 %
State income taxes, net of federal tax benefit (a) (b)(22)14.5 %
Tax credits (federal R&D credit)(4)2.7 %
Nontaxable or nondeductible items:
Executive compensation6 (3.7)%
Other— (0.3)%
Changes in unrecognized tax benefits2 (1.2)%
Other adjustments:
Pending tax refunds interest income(6)3.8 %
Effect of consolidated VIEs3 (1.8)%
Other(1)0.6 %
Effective income tax rate$(54)35.6 %
(a)The 2025 state jurisdiction that contributes to the majority (greater than 50%) of the tax effect in this category is Maryland.
(b)Includes a $23 million decrease in valuation allowance primarily as a result of a change in recent years from cumulative loss to cumulative earnings in certain state jurisdictions.
A reconciliation of the provision for income taxes to the amount computed by applying the 21% statutory U.S. federal income tax rate to income before taxes for years ended December 31, 2024 and 2023, prior to the prospective adoption of ASU 2023-09, is as follows:
 20242023
U.S. federal statutory tax rate21.0 %21.0 %
Adjustments:
State income taxes, net of federal tax benefit (a)5.1 %4.6 %
Valuation allowance (b)(4.9)%30.6 %
Pending tax refunds interest income (c)(3.4)%— %
Federal tax credits(1.5)%0.6 %
Other2.8 %(0.5)%
Effective income tax rate19.1 %56.3 %
(a)Included in state income taxes are deferred income tax effects related to certain acquisitions, intercompany mergers, tax elections, law changes and/or impact of changes in apportionment.
(b)Our 2024 income tax provision includes a $19 million decrease in valuation allowance primarily as a result of a change in recent years from cumulative loss to cumulative earnings in certain state jurisdictions, and a remeasurement of state net deferred tax assets due to state apportionment updates. Our 2023 income tax provision includes a $212 million decrease related to the release of valuation allowance associated with the federal interest expense carryforwards under the IRC Section 163(j).
(c)Our 2024 income tax provision includes a $14 million accrual of interest income attributable to prior years’ pending income tax refund claims, including an immaterial $7.5 million correcting adjustment related to the accrual of interest income attributable to prior years’ pending income tax refund claims.

Temporary differences between the financial reporting carrying amounts and the tax bases of assets and liabilities give rise to deferred taxes. Total deferred tax assets and deferred tax liabilities as of December 31, 2025 and 2024 were as follows (in millions):
 20252024
Deferred Tax Assets:  
Net operating losses:  
Federal$10 $86 
State119 149 
Investment in Bally's securities54 62 
IRC Section 163(j) interest expense carryforward38 139 
Operating lease liabilities32 38 
Capitalized research and development expenses10 52 
Tax Credits1 91 
Other59 42 
 323 659 
Valuation allowance for deferred tax assets(74)(101)
Total deferred tax assets$249 $558 
Deferred Tax Liabilities:  
Goodwill and intangible assets$(344)$(360)
Property & equipment, net(86)(93)
Operating lease assets(26)(32)
Investment in Diamond— (405)
Other(6)(3)
Total deferred tax liabilities(462)(893)
Net deferred tax liabilities$(213)$(335)
At December 31, 2025, the Company had approximately $46 million and $2,418 million of gross federal and state net operating losses, respectively. Except for those without an expiration date, these losses will expire during various years from 2026 to 2045, and some of them are subject to annual limitations under the IRC Section 382 and similar state provisions. As discussed in Income Taxes under Note 1. Nature of Operations and Summary of Significant Accounting Policies, we establish a valuation allowance in accordance with the guidance related to accounting for income taxes. As of December 31, 2025, a valuation allowance has been provided for deferred tax assets related to certain of our available state net operating loss carryforwards based on past operating results, expected timing of the reversals of existing temporary basis differences, alternative tax strategies, current and cumulative losses, and projected future taxable income. Although realization is not assured for the remaining deferred tax assets, we believe it is more likely than not that they will be realized in the future. During the year ended December 31, 2025, we decreased our valuation allowance by $27 million to $74 million. The decrease is primarily a result of a change in recent years from cumulative loss to cumulative earnings in certain state jurisdictions. During the year ended December 31, 2024, we decreased our valuation allowance by $19 million to $101 million. The decrease is primarily a result of a change in recent years from cumulative loss to cumulative earnings in certain state jurisdictions and a remeasurement of state net deferred tax assets due to state apportionment updates.
 
The following table summarizes the activity related to our accrued unrecognized tax benefits for the years ended December 31, 2025, 2024, and 2023 (in millions):
 202520242023
Balance at January 1,$15 $14 $17 
Additions related to current year tax positions— 1 1 
Reductions related to settlements with taxing authorities— — (2)
Reductions related to expiration of the applicable statute of limitations— — (2)
Balance at December 31,$15 $15 $14 

We are subject to U.S. federal income tax as well as income tax of multiple state jurisdictions. Our 2014 through 2020 federal tax returns are currently under audit, and several of our subsidiaries are currently under state examinations for various years. We do not anticipate that resolution of these matters will result in a material change to our consolidated financial statements. In addition, we do not believe that our liability for unrecognized tax benefits would be materially impacted, in the next twelve months, as a result of expected statute of limitations expirations and resolution of examination issues and settlements with tax authorities.

The net cash income taxes paid by the Company for the year ended December 31, 2025 were as follows (in millions):

 2025
Federal$31 
State & local:
California6 
Other8 
Foreign— 
Income taxes, net of amounts refunded$45 

The net cash income taxes paid by the Company during the years ended December 31, 2024 and 2023 were $3 million and $4 million, respectively.
Sinclair Broadcast Group, LLC  
Operating Loss Carryforwards [Line Items]  
INCOME TAXES
9. INCOME TAXES:

The (benefit) provision for income taxes consisted of the following for the years ended December 31, 2025, 2024, and 2023 (in millions):
 202520242023
Current provision (benefit) for income taxes:   
Federal$37 $(35)$5 
State19 4 (5)
 56 (31)— 
Deferred (benefit) provision for income taxes:
Federal(85)95 (331)
State(34)(4)(28)
 (119)91 (359)
(Benefit) provision for income taxes$(63)$60 $(359)
A reconciliation of the provision for income taxes to the amount computed by applying the 21% statutory U.S. federal income tax rate to income before taxes for the year ended December 31, 2025, after the prospective adoption of ASU 2023-09, is as follows (in millions, except percentages):
20252025
 Tax Expense/(Benefit)Estimated Tax Rate
U.S. federal statutory tax rate$(46)21.0 %
State income taxes, net of federal tax benefit (a) (b)(19)8.6 %
Tax credits (federal R&D credit)(4)1.8 %
Nontaxable or nondeductible items:
Executive compensation6 (2.6)%
Other— (0.1)%
Changes in unrecognized tax benefits2 (0.8)%
Other adjustments:
Pending tax refunds interest income(6)2.7 %
Effective of consolidated VIEs3 (1.3)%
Other1 (0.4)%
Effective income tax rate$(63)28.9 %
(a)The 2025 state jurisdiction that contributes to the majority (greater than 50%) of the tax effect in this category is Maryland.
(b)Includes a $22 million decrease in valuation allowance primarily as a result of a change in recent years from cumulative loss to cumulative earnings in certain state jurisdictions.

A reconciliation of the provision for income taxes to the amount computed by applying the 21% statutory U.S. federal income tax rate to income before taxes for years ended December 31, 2024 and 2023, prior to the prospective adoption of ASU 2023-09, is as follows:
 20242023
U.S. federal statutory tax rate21.0 %21.0 %
Adjustments:
State income taxes, net of federal tax benefit (a)6.0 %4.7 %
Valuation allowance (b)(5.8)%33.5 %
Pending tax refunds interest income (c)(4.6)%— %
Non-deductible items1.9 %(0.6)%
Federal tax credits(1.9)%0.6 %
Adjustment to prior year taxes1.7 %— %
Other2.0 %0.2 %
Effective income tax rate20.3 %59.4 %
(a)Included in state income taxes are deferred income tax effects related to certain acquisitions, intercompany mergers, tax elections, law changes and/or impact of changes in apportionment.
(b)SBG’s 2024 income tax provision includes a $17 million decrease in valuation allowance primarily result of a change in recent years from cumulative loss to cumulative earnings in certain state jurisdictions, and a remeasurement of state net deferred tax assets due to state apportionment updates. SBG’s 2023 income tax provision includes a $212 million decrease related to the release of valuation allowance associated with the federal interest expense carryforwards under the IRC Section 163(j).
(c)SBG’s 2024 income tax provision includes a $14 million accrual of interest income attributable to prior years’ pending income tax refund claims, including an immaterial $7.5 million correcting adjustment related to the accrual of interest income attributable to prior years’ pending income tax refund claims.
Temporary differences between the financial reporting carrying amounts and the tax bases of assets and liabilities give rise to deferred taxes. Total deferred tax assets and deferred tax liabilities as of December 31, 2025 and 2024 were as follows (in millions):
 20252024
Deferred Tax Assets:
Net operating losses:
Federal$— $75 
State120 149 
IRC Section 163(j) interest expense carryforward52 139 
Operating lease liabilities30 36 
Tax Credits— 90 
Capitalized research and development expenses7 44 
Other41 45 
250 578 
Valuation allowance for deferred tax assets(74)(96)
Total deferred tax assets$176 $482 
Deferred Tax Liabilities:
Goodwill and intangible assets$(320)$(331)
Property & equipment, net(80)(87)
Investment in Diamond— (405)
Operating lease assets(26)(32)
Other(5)— 
Total deferred tax liabilities(431)(855)
Net deferred tax liabilities$(255)$(373)

At December 31, 2025, SBG had approximately $2,408 million of state net operating losses. Except for those without an expiration date, these losses will expire during various years from 2026 to 2045, and some of them are subject to annual limitations under state provisions. As discussed in Income Taxes under Note 1. Nature of Operations and Summary of Significant Accounting Policies, SBG establishes a valuation allowance in accordance with the guidance related to accounting for income taxes. As of December 31, 2025, a valuation allowance has been provided for deferred tax assets related to certain temporary basis differences and a substantial portion of SBG’s available state net operating loss carryforwards based on past operating results, expected timing of the reversals of existing temporary basis differences, alternative tax strategies, current and cumulative losses, and projected future taxable income. Although realization is not assured for the remaining deferred tax assets, SBG believes it is more likely than not that they will be realized in the future. During the year ended December 31, 2025, SBG decreased its valuation allowance by $22 million to $74 million. The decrease was primarily a result of a change in recent years from cumulative loss to cumulative earnings in certain state jurisdictions. During the year ended December 31, 2024, SBG decreased its valuation allowance by $17 million to $96 million. The decrease was primarily a result of a change in recent years from cumulative loss to cumulative earnings in certain state jurisdictions, and a remeasurement of state net deferred tax assets due to state apportionment updates.
The following table summarizes the activity related to SBG’s accrued unrecognized tax benefits for the years ended December 31, 2025, 2024, and 2023 (in millions):
 202520242023
Balance at January 1,$13 $12 $17 
Additions related to current year tax positions1 1 1 
Reductions related to positions transferred to Ventures— — (2)
Reductions related to settlements with taxing authorities— — (2)
Reductions related to expiration of the applicable statute of limitations— — (2)
Balance at December 31,$14 $13 $12 

SBG is a subsidiary of Sinclair and is subject to U.S. federal income tax as part of the consolidated return. SBG is also subject to income tax of multiple state jurisdictions. SBG’s 2014 through 2020 federal tax returns are currently under audit, and several of SBG’s subsidiaries are currently under state examinations for various years. SBG does not anticipate that resolution of these matters will result in a material change to SBG’s financial statements. In addition, SBG does not believe that SBG’s liability for unrecognized tax benefits would be materially impacted, in the next twelve months, as a result of expected statute of limitations expirations and resolution of examination issues and settlements with tax authorities.

The net cash income taxes paid by the Company for the year ended December 31, 2025 were as follows (in millions):

 2025
Federal$31 
State & local:
California6 
Other8 
Foreign— 
Income taxes, net of amounts refunded$45 

The net cash income taxes paid by the Company during the years ended December 31, 2024 and 2023 were $3 million and $4 million, respectively.