Sinclair Broadcast Group

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A media company. According to the company's webpage [1], Sinclair's television group includes "19 FOX, 17 MyTV, 10 ABC, 9 CW, 2 CBS and 1 NBC affiliates and reaches approximately 22% of all U.S. television households".

Most recently, this company gained notoriety by ordering its 62 local stations to broadcast an anti-Kerry film, produced by Carlton Sherwood, a few days before the November 2, 2004 general election. Those 62 stations included affiliates of all six major commercial broadcast networks in Florida, Ohio, Wisconsin, Nevada and Pennsylvania. The broadcast was scheduled to preempt normal prime-time programming on those outlets. Sinclair vice president Mark Hyman said on a CNN interview that John Kerry and the Democrats were like "holocaust deniers" and that if the Sinclair stunt was an "in-kind donation to George Bush" then "every suicide bomb that goes off in Iraq is an in-kind donation to John Kerry."

Sinclair eventually aired a program in a format which showed parts of the Sherwood movie and effectively disguised it as a "news" program.

In April, Sinclair communications corporate counsel decided to pull a special Nightline broadcast devoted to reading the names of those fallen in combat from their 8 ABC affiliates.

MediaChannel.org reported on April 29, 2004

Of the top twenty TV and Radio companies to make political contributions in 2004, Sinclair Broadcasting Group, is among the most conservative, giving 98 percent of its $65,434 in political contributions to GOP candidates.

Contents

The Sinclair stunt

As a result of a widespread organizational effort involving the dKos community, other progressive bloggers such as Joshua Marshall and atrios and other organizations, Sinclair's attempted stunt to force its stations to broadcast a partisan hit piece against Kerry collapsed, and a more "balanced" piece was shown in its place [2]. However, "Stolen Honor" did air on some PAX network affiliates on the weekend of October 30, 31 apparently sponsored by NewsMax Media (in which the notorious right-wing financier Richard Scaife has a 7% stake). Moreover EchoStar Communications which operates the DISH satellite network said "Stolen Honor" would be made available to its customers for a fee according to Susan Arnold, vice president of programming DISH Network [3]. It should be noted however that DISH also aired Michael Moore's movie Fahrenheit 9/11 (see [4]).

According to the Washington Post, (October 11, 2004, Sinclair Stations to Air Anti-Kerry Documentary, Paul Farhi) and other news sources , the film entitled "Stolen Honor" "focuses on Kerry's antiwar testimony to Congress in 1971 and its effect on American POWs in Vietnam." The film was produced independently of Sinclair, and includes interviews with former POWs who say their Vietnamese captors used Kerry's comments to undercut prisoner morale.

In contrast, in the weeks immediately before the scheduled airing, Sinclair suggested on its website that the content of the program to be aired was as yet undetermined:

The program has not been videotaped and the exact format of this unscripted event has not been finalized. Characterizations regarding the content are premature and are based on ill-informed sources.

This statement directly contradicted information from published news reports - such as the Washington Post story - that "Stolen Honor" documentary was released in early September, and published TV schedules with specific airtimes for the "Stolen Honor" broadcast. On October 19, in an effort to stem the slide of its stockprice, Sinclair tried to give the appearance of backing down on the show's contents.

On Friday October 22 Sinclair did broadcast a program which included portions of "Stolen Honor" as well as clips of other films such as Going Upriver. The program called A POW Story: Politics, Pressure and the Media was aired on 40 of Sinclair's outlets. Their chosen format was an effective way for Sinclair to broadcast parts of "Stolen Honor" and disguise it as news. Nevertheless, there is widespread opinion in right-wing blogs such as free republic that the program was poorly produced and failed as a last-minute effort to boost Bush in swing states. This DKos post also has comments on the program from a liberal perspective. A summary is available here.

When Sinclair's intentions were made public in October, Sinclair went on the offensive to quell criticism that it was violating election laws by airing the film. On October 12, 2004 Mark Hyman was interviewed by CNN's Bill Hemmer. In that interview, the following exchange occurred [5]

HEMMER: Democrats say this is illegal. Clearly, you do not. Why not?
HYMAN: Well, a couple of issues. First of all, we haven't even looked at a 90-minute program. But if John Kerry wants to spend 45 minutes or an hour with us, maybe we have a 90-minute program. Again, no formal format has been decided upon.
However, the accusations coming from Terry McAuliffe and others, is it because they are some elements of this that may reflect poorly on John Kerry? That it's somehow an in-kind contribution of George Bush?
If you use that logic and reasoning, that means every car bomb in Iraq would be an in-kind contribution to John Kerry. Weak job performance ratings that came out last month would have been an in- kind contribution to John Kerry. And that's just nonsense.
This is news. I can't change the fact that these people decided to come forward today. The networks had this opportunity over a month ago to speak with these people. They chose to suppress them. They chose to ignore them. They are acting like Holocaust deniers, pretending these men don't exist.

Mark Hyman's public comments comparing Democrats to Holocaust deniers has been widely condemned. For example, Abraham H. Foxman, National Director of the Anti-Defamation League condemned these comments in a public letter submitted to the Washington Post [6] in which he urged Mr. Hyman to retract his comments.

Sinclair's track record of illegally influencing elections was one reason the reaction to the originally scheduled "Stolen Honor" broadcast was so intense. As Jason Leopold points out [7], Sinclair has a history of trying to influence elections by providing disguised campaign contributions to Republican candidates.

The structure of the company

Information for Fiscal Year ending December 31, 2003

  • Auditors: Ernst and Young LLP
  • Annual Sales $738.7 Million in Sales,as listed on Form 10-K
  • Number of Employees 3,266, as listed on Form 10-K
  • Sales per Employee $226,178
  • Listed on NASDAQ
  • Ticker: SBGI

One glaring characteristic of SBG's financials is the extremely high level of its debt. Here is a comparison of the Debt/Equity (D/E) ratios of Sinclair and three of its competitors (see Yahoo finance)

  • Sinclair D/E = 7.048
  • Gannet D/E = .471
  • Hearst-Argyle Television, Inc D/E = 0.513
  • Belo Corp D/E = 0.78

According to Mergent Online, the company had 71 shareholders as of February 13 2004. Again comparisons to industry competitors shows a highly concentrated company

  • Gannet: 12,800 (as of 12/28/2003)
  • Hearst-Argyle television: 672 (as of 03/01/2004)
  • Belo Number: 23,662 (as of 02/10/2004)

Corporate officers

The four sons of founder Julian Sinclair Smith are said to control about 95% of the company.

David D. Smith founded Comark Communications, Inc. in 1978, a manufacturer of high power transmitters for UHF television stations. He has served as President and Chief Executive Officer since 1988 and as Chairman of the Board of Sinclair Broadcast Group, Inc. since September 1990. David Smith is currently a member of the Board of Directors of Sinclair Ventures, Inc., Acrodyne Communications, Inc., G1440, Inc., Summa Holdings, Ltd., KDSM, Inc., and Safe Waterways in Maryland.

On Tuesday August 13, 1996, David Smith was arrested in his hometown of Baltimore and charged with a misdemeanor sex offense. It was reported that Smith was caught being fellated by a prostitute while driving a company owned car on the Jones Falls Expressway. (August 15, 1996, Baltimore Sun,Peter Hermann; August 17, 1996, Pittsburgh Post-Gazette.)

The company later issued a statement saying: "The allegations against Mr. Smith are of a personal nature. Sinclair is confident this matter will conclude in a fair and equitable resolution. The company will continue to operate under the direction of its current management." (Aug 19, 1996, Broadcasting & Cable Elizabeth A Rathbun. See also [http://atrios.blogspot.com/2004_04_25_atrios_archive.html#108335351404593578 Atrios])

According to this report by Eric Boehlert at Salon.com:

Smith as part of his plea agreement, ordered his newsroom employees to produce a series of reports on a local drug counseling program, which counted toward Smith's court-ordered community service.

Frederick G. Smith has acted as Vice President of Sinclair since 1990 and Director since 1986. Before becoming an officer at Sinclair, Mr. Smith describes himself as being an oral and maxillofacial surgeon (i.e. a dentist) engaged in private practice. He is currently a member of the board of directors of Sinclair Ventures, Inc., the Freven Foundation, Safe Waterways in Maryland, and Gerstell Academy.

Frederick Smith also owns Todd Village, a Maryland trailer park that is currently under litigation for discriminating against African-Americans (According to this report at WBAL TV; see also October 14, 2004, The Baltimore Sun, Group alleges discrimination at mobile home park, Sheridan Lyons).

Officers

  • David D. Smith - Chief Executive Officer, President, Chairman of the Board
  • David B. Amy - Executive Vice President, Chief Financial Officer
  • Darren Shipiro - Vice President, Sales
  • Nat S. Ostroff - Vice President, Technical
  • Donald H. Thompson - Vice President, Human Resources
  • J. Duncan Smith - Vice President, Secretary
  • Thomas I. Waters III - Vice President, Purchasing
  • Barry Faber - Head of Legal Department
  • Joe DeFeo - Vice President
  • M. William Butler - Vice President
  • Delbert R. Parks III - Vice President, Engineering
  • Gregg Siegel - Vice President, Sales
  • Mark E. Hyman - Vice President, Corporate Communications
  • Lucy A. Rutishauser - Vice President, Finance and Treasurer
  • David R. Bochenek - Chief Accounting Officer
  • Jeffrey W. Sleete - Vice President, Marketing
  • Frederick G. Smith - Vice President

Board of Directors [8]

  • David D. Smith, Chairman of the Board, President and Chief Executive Officer
  • Frederick G. Smith, Vice President
  • J. Duncan Smith, Vice President and Secretary
  • Robert E. Smith, Director
  • Daniel C. Keith, President and Founder of the Cavanaugh Group, Inc.
  • Martin R. Leader, Director
  • Lawrence E. McCanna, Managing Partner, Gross, Mendelsohn & Associates, P.A.
  • Basil A. Thomas, Of Counsel, Thomas & Libowitz, P.A.


Background information DKos Diary: "The Sinclair Broadcasting Group, Explored" by Hunter

Company history and marketing focus

The company originated in 1971 as a UHF station in Baltimore, Maryland. Many stations are owned outright by the company, but many others are affiliated through local marketing agreements, or LMAs. The stations are affiliates of various television networks: ABC, CBS, NBC, Fox, UPN, and the WB. Two of the stations are independents.

SBG has experimented with using a centralized news organization called "NewsCentral" that provides pre-packaged news segments for distribution to several of the group's stations. These segments are integrated into programming during local news broadcasts. Mark Hyman, a high-ranking executive at SBG, also creates editorial segments called "the Point" that are broadcast on all of the group's stations.

On April 9, 1999 shares of the company fell nearly 18% after Fox said it would cut the amoung of commercial time available to affiliates. Sinclair said this move would hurt its cash flow. New York Times, April 9, 1999.

In July of 1999, the company sold 43 of its radio stations to Entercom Communications in a push to expand into digital television and the internet. New York Times, July 28, 1999.

Media markets

State Market Call sign Network Channel Phone
Alabama Birmingham WTTO WB 21 / 28 Digital (205) 943-2168
WABM UPN 68 / 36 (205) 943-2168
WDBB (L) WB 17 / 18 (205) 943-2168
California Stockton/Sacramento KOVR CBS 13 / 25 (916) 374-1313
Florida Pensacola WEAR ABC 3 / 17 (251) 433-333
WFGX (L) 35 / 25 (850) 456-3333
Tallahassee WTWC NBC 40 / 2 (850) 893-4140
WTXL (O) ABC 27 / 22
Tampa WTTA (L) WB 38 / 57 (813) 886-9882
Illinois Peoria WYZZ Fox 43 / 28 (309) 688-3131
Champaign WICS NBC 20 / 42 (217) 753-5620
WICD NBC 15 / 41 (217) 351-8500
Iowa Cedar Rapids KGAN CBS 2 / 51 (319) 395-9060
Des Moines KDSM Fox 17 / 16 (515) 256-1700
Kentucky Lexington WDKY Fox 56 / 4 (859) 268-2665
Paducah KBSI Fox 23 / 22 (573) 334-1223
WDKA (L) WB 49 / 50 (573) 334-1223
Maryland Baltimore WBFF Fox 45 / 46 (410) 467 4545
WNUV (L) WB 54 / 40 (410) 467-8854
Massachusetts Springfield WGGB ABC 40 / 55 (413) 733-4040
Maine Portland WGME CBS 13 / 38 (207) 797-1313
Michigan Flint WSMH Fox 66 / 16 (810) 785-8866
Minnesota Minneapolis KMWB WB 23 / 22 (651) 646-2300
Missouri Kansas City KSMO WB 62 / 47 (913) 576-7762
St. Louis KDNL ABC 30 / 31 (314) 436-3030
New York Buffalo WUTV Fox 29 / 14 (716) 773-7531
WNYO WB 49 / 34
Rochester WUHF Fox 31 / 28 (585) 232-3700
Syracuse WSYT Fox 68 / 19 (315) 472-6800
WNYS (L) WB 43 / 44 (315) 472-6800
Nevada Las Vegas KVWB WB 21 / 22 (702) 873-0033
KFBT 33 / 29 (702) 873-0033
North Carolina Asheville WBSC (L) WB 40 / 14
WLOS ABC 13 / 56 (828) 684-1340
Greensboro WXLV ABC 45 / 29 (336) 274-4848
WUPN UPN 48 / 33 (336) 274-4848
Raleigh-Durham WLFL WB 22 / 57 (919) 872-9535
WRDC UPN 28 / 27 (919) 878-6198
Ohio Cincinnati WSTR WB 64 / 33 (513) 641-4400
Columbus WTTE (L) Fox 28 / 36 (614) 481-6666
WSYX ABC 6 / 13 (614) 481-6666
Dayton WKEF ABC 22 / 51 (937) 263.4500
WRGT (L) Fox 45 / 30 (937) 263.4500
Oklahoma Oklahoma City KOCB WB 34 / 33 (405) 843-2525
KOKH Fox 25 / 24 (405) 843-2525
Pennsylvania Pittsburgh WPGH Fox 53 / 43 (412) 931-5300
WCWB WB 22 / 42 (412) 931-5300
South Carolina Charleston WMMP UPN 36 / 35 (843) 744-2424
WTAT (L) Fox 24 / 40 (843) 744-2424
Tennessee Nashville WZTV Fox 17 / 15 (615) 244-1717
WUXP UPN 30 / 21 (310) 369-3066
WNAB (O) WB 58 / 23
Tri-Cities WEMT Fox 39 / 38 (423) 283-3900
Texas San Antonio KABB Fox 29 / 30 (210) 366-1129
KRRT WB 35 / 32 (210) 366-1129
West Virginia Charleston WCHS ABC 8 / 41 (304) 346-5358
WVAH (L) Fox 11 / 19 (304) 757-0011
Wisconsin Madison WMSN Fox 47 / 11 (608) 833-0047
Milwaukee WCGV UPN 24 / 25 (414) 442-7050
WVTV WB 18 / 61 (414) 442-7050
Virginia Norfolk WTVZ WB 33 / 38 (757) 622-3333
Richmond WRLH Fox 35 / 26 (804) 345-3693
  • Table is from Wikipedia [9].


Why did Sinclair try to do this? It wanted favors from Bush

Sinclair executives, most notably Bush apologist Mark Hyman, tried to portray the film as news (see for instance the CNN interview with Bill Hemmer). Mark Hyman and others on the political right-wing also tried to label accusations from the left that the program is an illegal campaign contribution to the Bush Cheney campaign, as an attempt to stifle "free speech".

Readers unfamiliar with the film can read a transcript here or are linked to a downloadable version here. On a DKos post, fredfish notes [10] : Right at the start, Carlton Sherwood presents himself at the center of the storytelling and makes it a personal op-ed piece. The first thing the viewer notices: in the first 33 seconds when he is narrating directly into the camera (0:18 to 0:51 seconds on the timecode), he only blinks twice. His eyes are like coins - he's is transfixed and preparing for assault.

For an interpretation of Sinclair's motives which is consonant with its past performance as a propaganda vehicle, one needs to examine Sinclair's corporate strategy in choosing markets, in selecting programming and structuring its finances. USA Today writes (11 October 04):

With its heavy concentration of Fox and WB affiliates, ranking in the middle of the pack in mostly midsize markets, Sinclair is barely profitable and laden with debt. It had a net profit of $14 million on revenue of $739 million in 2003.

As noted above its Debt-to-Equity ratio is astronomical, measuring in at over 7, nearly 10 times that of any of its competitors. USA Today further notes

Sinclair hopes to change that by solidifying its hold on local markets by controlling, for example, two stations in more cities and sharing operating and news-gathering costs. But it needs the federal government to relax several media ownership restrictions.
Sinclair wants officials to permit a company to own two or more stations in more communities than allowed now. It also wants the FCC to ease a restriction that bars a company from owning TV stations reaching more than 35% of all homes, and to lift the rule that keeps companies from owning newspapers and TV stations in most markets.
That's where the parties part ways. FCC Chairman Michael Powell, a Republican (and son of Colin Powell, and formerly GE-NBC's lawyer!), has made media deregulation a priority, although many of the FCC's rule changes are tangled in court. Kerry says he'll clamp down on changes that promote consolidation.

The most recent 10-K filing of Sinclair with the Securities and Exchange Commission provides a compelling contrast between Sinclair's public corporate strategy and its role as a political propaganda machine. For instance:

We are seeking to provide cost effective local news programming through the News Central format described below. We also continuously review the performance of our existing news operations to make sure that they are economically viable.

One such challenge occurred on Sunday, October 17 when Sinclair's Washington bureau chief Jon Leiberman declared in comments published in the Baltimore Sun that the proposed program is "blatant political propaganda". Leiberman was fired late monday for violating company policy by speaking to the media without prior approval. Leiberman, said he was fired by Joseph DeFeo, Sinclair's vice president for news, and "escorted out of the building." (Los Angeles Times, October 19, 2004, Sinclair Fires Journalist After Critical Comments; The broadcaster's Washington bureau chief had called an upcoming anti-Kerry program "blatant political propaganda." Elizabeth Jensen)

Boycott Sinclair reports that Sinclair is seeking FCC approval for five more stations. Also see The Deal for details.

Were other organizations behind this? StoptheNRA.com which is associated to the Brady campaign, recently sent out an email to its members suggesting that the NRA was behind the Stolen Honor "documentary". We have been told by a source inside the NRA (whom we cannot identify to protect him and his family) that the NRA is a significant funder of Stolen Honor. See this DKos post.

Sinclair broadcast revenue

On October 4, Sinclair management announced that it was revising downward its net broadcast revenue estimate for the quarter ended September 30, 2004. Sinclair blamed hurricanes for the revised revenue forecast; this was before the public outcry on the airing of "Stolen Honor"-"POW Story".

Initial guidance was for third quarter net broadcast revenues to be up 4% to 5% from third quarter 2003 net broadcast revenues of $161.3 million. However, due to weakness primarily in auto advertising spending and cancellations resulting from the recent hurricanes which impacted eight of the Company's television stations in the Southeast, the Company is revising its net broadcast revenue guidance to be approximately $163.7 million in the third quarter.

Sinclair Broadcast Group released its third quarter 2004 earnings results at 7:30 a.m. ET on Thursday, November 4, 2004 [11]. In this report, net broadcast revenues for this period were $164.2 million, an increase of 1.8% from third quarter 2003 net broadcast revenues. This was far less than the optimistic 4% to 5% anticipated increase.

David Smith mentions the Sinclair stunt controversy, framing it in the language of the first ammendment:

"We thank our many advertisers, investors and viewers who stood with Sinclair during the past several weeks and who did not rush to pre-judge our news special, 'A POW Story,'"
"Sinclair and its news operations can only be characterized as the poster child for a free and independent press. It is unfortunate that our news special became the means by which certain political groups tried to stifle the First Amendment rights of others."

Sinclair stock price fluctuations

The business press reported widely on the financial repercussions of Sinclair's programming strategy. For example:

Sinclair ... is running a significant financial and political risk by telling its stations to pre-empt regular programming and carry the film. Already, Sinclair's decision has alienated some advertisers; enraged consumer and media watchdog groups, who are vowing to challenge its station licenses when they come up for renewal; and given pause to some analysts and investors considering the company's financial outlook. (New York Times, Risks Seen for TV Chain Showing Film About Kerry, October 18, 2004.) NYTimes link (registration required).

On the popular Motley Fools website, analyst Bill Mann writes

Sinclair Broadcasting Group (Nasdaq: SBGI) stock has been pummeled as its controversial plan to air a documentary that looks into Senator John Kerry's Vietnam-era activities has sparked questions of appropriateness and stoked anger among those who see as a blatant political ploy.
.. it does not strain credulity that such a program at such a time could be extremely damaging to Kerry's campaign. What it harmed first, though, was Sinclair. Its stock has been decimated, its advertisers threatened with boycotts, its management vilified.
Sinclair has decided that its end strategy will be to run a news story on the use of documentaries and media to influence elections on approximately 40 of its stations. If the economic impact of this decision for Sinclair turns out to be deep and permanent, then the public has exercised its right to choose and to apply pressure. But also know this: those who wish to see Stolen Honor will most certainly do so, regardless of what Sinclair does. The First Amendment is a powerful, beautiful thing.

(These are excerpts from the linked article [12] which appeared on October 20, 2004 and for which a free registration may be required).

On October 18, SBGI stock closed at 6.49, the lowest in nearly three years. The stock had fallen over 15% since the beginning of the Sinclair stunt controversy in early October. The fall occurred despite the high concentration of the company as noted above (see graph at Yahoo). The stock slide continued on October 19.

In an effort to halt the freefall of its stock and stem litigation based on fraud and mismanagement, on the afternoon of October 19, Sinclair senior management issued what appeared to be conciliatory statements on the airing of the show.

As of midafternoon on October 20, the fall of Sinclair stock appeared to have been halted and even recovered somewhat from previous losses. There were spurts of buying at what was rumored to be higher than market prices. (See Yahoo message boards for unfiltered and unverified commentary and speculation).

By the end of the week, Sinclair management appeared to be succesfully battling the downward pressure on the stock with a combination of heavy buying and public statements on the content of its revised program.

Legal status of Sinclair's actions

The FCC did nothing to prevent Sinclair's broadcast. Eighteen Democratic senators had written FCC chairman Michael Powell asking him to investigate whether the Sinclair broadcast of the film should be allowed under FCC rules. FCC chairman Powell was quoted as saying "Don't look to us to block the airing of a program". [13].

On October 12, Joseph Sandler, General Counsel of the DNC ,filed a complaint to the Federal Election Commission arguing that Sinclair is "about to make an unlawful corporate funded electionering communication and corporate in-kind contributions" to the Bush-Cheney campaign and the RNC, in violation of the FEC's regulations.

According to an Editorial in the Boston Globe (October 15, 2004)

Broadcasting "Stolen Honor" this close to the election would have violated the Fairness Doctrine, an FCC rule that mandated stations, as holders of scarce broadcasting licences, provide balanced coverage of political issues. The FCC abolished the rule in 1987 as the spread of cable television opened up broadcasting to a multitude of voices.

The editorial continued:

After the Fairness Doctrine was abandoned, the FCC retained a rule mandating that people get an opportunity to respond to personal attacks broadcast by a station. A federal court overturned this on procedural grounds in 2000.
A Sinclair spokesman, in a taped message, says the company wants Kerry to appear as part of the program - which it calls news. That could be an invitation to an in-station pillorying. Kerry should be able to set the time and determine the content of his own response.
Sinclair uses public airwaves at nominal cost for the FCC license. This cut-rate privilege ought to be accompanied by a commitment to public responsibility. Without an equal time allotment, the only acceptable approach by Sinclair is a decision not to broadcast "Stolen Honor" before the election. Afterwards the FCC should restore the personal attack rule and examine its abolition of the Fairness Doctrine to make sure the airwaves are not used for propaganda disguised as news.

On October 15, Marc E. Elias, General Counsel of the Kerry-Edwards campaign, sent to a letter to Sinclair CEO David D. Smith (see above for Mr. Smith's background) in which he made the following points

  • Sinclair's airing of the program constitutes an illegal corporate-funded "electioneering communication."
  • Under the FCC's decision in Nicholas Zapple, 23 F.C.C.2d 707 (1970), a broadcasting station that permits supporters of a candidate to use its facilities to advance that candidate's campaign must provide supporters of the opposing candidate "quasi-equal opportunities." Despite the repeal of the Fairness Doctrine, the FCC has made clear that stations' Zapple obligations continue in effect.


  • The program does not meet any of the requirements for the exemptions from the equal opportunities requirement. It is not regularly scheduled on Sinclair's stations and will not be shown when news programming is regularly aired. The content of the program will not be controlled by Sinclair or an independent journalistic organization. The program instead is intended to be an attack on Senator Kerry and thus is not the result of decisions made on the basis of newsworthiness rather than to advance or retard a particular candidate. Thus, the program cannot qualify as either a bona fide news program or news interview.
  • It also cannot be viewed as an exempt documentary: That exemption explicitly applies only if the appearance of the candidate is 'incidental to the presentation of the subject or subjects covered by the news documentary.'"
  • Section 315(a) of the Communications Act was intended to prevent the licensee of a broadcasting station using the public airwaves to use that facility to promote one candidate for public office over another. The FCC in Zapple recognized that Congress's intent could be frustrated by stations that aired programs featuring supporters of one candidate instead of the candidate himself or herself. See RTNDA, 184 F.3d at 884 n.10. If Sinclair does air this program in which supporters of President Bush attack Senator Kerry, it must provide a similar opportunity for Senator Kerry's supporters. Please consider this a request that each Sinclair station that airs the documentary provide supporters of the Kerry-Edwards campaign with a similar amount of time on that station before the election at a time where an audience of similar size can be expected to be viewing the station. Please contact me or have a representative of each station do so in order to schedule an appearance by supporters of Senator Kerry.


New legal fronts

For the legal battles against Sinclair see the Media Matters website.

It was widely reported on October 18 [14] that a Vietnam veteran has filed a libel suit against the film producer Carlton Sherwood. The veteran, Kenneth J. Campbell, says he was falsely branded a fraud and a liar by the film. According to the article

Kenneth J. Campbell, now a professor at the University of Delaware, said in the suit that "Stolen Honor: Wounds That Never Heal" combines footage of him appearing at a 1971 war protest with narration that claims that many of the supposed veterans who took part in the event were later "discovered as frauds" who "never set foot on the battlefield, or left the comfort of the States, or even served in uniform."

Several new legal fronts resulted from shareholder challenges. Media Matters [15] announced on October 19 that it will underwrite the costs of a shareholder action, demanding that Sinclair Broadcast Group, Inc., provide equal time to those "with views opposed to the allegations" in the Sinclair "Stolen Honor" broadcast. Glickenhaus & Co., representing clients with stocks in Sinclair, demanded in a letter sent to the company's board of directors, that they immediately "provide those with views opposed to the allegations in the film an equal opportunity to respond."

If an answer to Glickenhaus' demand is not received by close of business today, Tuesday October 19, additional remedies, including an injunction in a court of law prior to the first scheduled airing of Stolen Honor October 21, may be sought.

On yet a new legal front [16], William S. Lerach held a news conference on October 19 to discuss insider self-dealing by officers of Sinclair Broadcasting. He demanded that Sinclair executives disgorge millions of dollars in unjustified profits taken out of the firm when stock prices were high during the past 12 months.

New York Comptroller Alan Hevesi sent a letter (pdf file) to Sinclair on behalf of the state's pension fund, which owns 256,600 shares in the broadcasting company. In this letter he requests that Sinclair management explain how the "Stolen Honor" broadcast is in the interest of the pension fund for which he is sole trustee. He asks about

  • The cost of foregoing one hour of paid commercial time.
  • The loss in advertising resulting from reported boycotts.
  • The potential cost of alienating large numbers of viewers.
  • The impact of the controversy on Wall Street's assessment of Sinclair.
  • The plans for improving the company's performance (which he notes has been disappointment at best).
  • The fact that Sinclair seems more concerned about partisan poltical agenda than shareholder stock value.
  • The cost of possible litigation on the company.

Forms of activism against Sinclair

Quoting a reader cited by Joshua Marshall in his blog, [17]

I've worked in the media business for 30 years and I guarantee you that sales is what these local TV stations are all about. They don't care about license renewal or overwhelming public outrage. They care about sales only, so only local advertisers can affect their decisions.

The effort against Sinclair may serve as a model for rapid-response organization in similar campaigns in the future.

As indicated on a recent Dkos posting on Sylvan Learning Corporation [18], advertisers do respond to this kind of pressure. An effective letter will be short, polite, state the facts of the matter and what you the writer will do, namely stop buying their products. Mention the phrase negative sales impact. For example:

I understand you are an advertiser on WXYZ in U City. Are you aware that Sinclair Broadcast Group is requiring WXYZ to preempt its regular programming just days before the November 2 election to air a film that attacks presidential candidate Senator John F. Kerry? The film, "Stolen Honor: Wounds That Never Heal," features former POWs accusing Kerry -- a decorated Navy veteran turned war protester -- of worsening their ordeal by prolonging the war.
I bring this controversy to your attention, because it is public knowledge your company advertises on WXYZ and this abuse of the public airwaves will negatively impact your company's sales. As a matter of principle, I for one will choose to purchase products from your competitors, unless you withdraw your advertising from WXYZ.

The organization Boycott Sinclair directed its efforts at advertisers. As noted on their main webpage:

We are boycotting the advertisers because it is the most effective way of persuading this media conglomerate, whose four founders control 90% of the voting stock.

Marketplace activism

In addition to contacting advertisers, you might try to contact the Wall Street analysts who issue research reports on Sinclair's stock. However, for the reasons mentioned above, this may have little effect.

Moreover, given the very small number of shareholders in Sinclair, complicity of managers of funds holding Sinclair stock with Sinclair management, at the expense of those funds' shareholders, is a likely possibility. One should expect therefore vague and non-committal replies. Several DKos posters (Lestatdelc and Bigdmomofthree) independently contacted Gabelli Asset Management, obtaining a form letter response which said:

It is the policy of Gabelli Asset Management to be neither for nor against management, but for the best interests of shareholders. To this effect, we published a "Magna Carta of Shareholder Rights" in 1988 to articulate our firm's approach towards management, which can be found at [19].

Joshua Marshall quotes a Lehman Brothers Equity Research analyst report dated October 15th, 2004:

"In our opinion, Sinclair's decision to pre-empt programming to air 'Stolen Honor' is potentially damaging -- both financially and politically. In a best case scenario, we believe that this decision could result in lost ad revenues. In a worst case scenario, we believe the decision may lead to higher political risk. As mgmt has increased the co's political risk, we are reducing our 12-month price target to $9 (from $10)".

In light of such opinions and the fact that the Smith brothers control over 95% of the company, Sinclair seems to be less of a public corporation than a propaganda vehicle that they are willing to run into the ground, at the expense of creditors and outside shareholders, in support of right-wing causes.

Top Institutional Investors

A more complete list of institutional investors in Sinclair, including contact info, is at Media Matters

List of Sinclair advertisers by state

A comprehensive list is located here.

Contact information

Sinclair Broadcast Group, Inc.
10706 Beaver Dam Road
Hunt Valley, MARYLAND 21030


(410) 568-1500
(410) 568-1533


Advertiser Responses

Sinclair advertisers responded to letters sent by the public threatening boycott or ending business with them. There were a number of possible advertiser responses, ranging from immediate pullout to full support of Sinclair.

It was reported that some businesses that pulled or threatened to pull advertising from Sinclair outlets were subjected to intense pressure from Sinclair ranging from the threat of legal action to an orchestrated intimidation campaign to force them to recant. As an example, Hannaford's supermarkets reversed their pullout decision as a result of these efforts. Advertising dollars spent on Sinclair media outlets became analogous to protection money paid by businesses to organized crime.

The clearinghouse page for the boycott effort is Boycott Sinclair.

The list of advertiser responses has been removed, although they are readily available in previous versions of this article.

GPL disclaimer

A small portion of this article is originally from Wikipedia.

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