[opendtv] News: Sinclair Fallout Could Linger

Sinclair Fallout Could Linger
Experts say flap over film may spur new regulations on ownership of 
stations; Firm could see 'turbulence'; Broadcast licenses safe; new 
ones likely to come under added scrutiny

By Andrea K. Walker
Baltimore Sun

Its controversial program about political documentaries is behind it, 
but the political ramifications for Sinclair Broadcast Group Inc. 
likely aren't over.

Sinclair, one of the largest independent owners of television 
stations, found itself the latest media company in controversy's 
glare when its plans to air an anti-John Kerry documentary drew 
fierce opposition from Democrats in Washington, advertisers and, in 
turn, shareholders.

Shares of the Hunt Valley company fell nearly 17 percent, then mostly 
recovered after it announced it would not air all of the documentary 
critical of Kerry's actions some 30 years ago after he returned from 
combat in Vietnam.

Historically, the Federal Communications Commission has revoked or 
denied renewal of broadcast licenses for negligence, but not for 
arguments over political speech that are protected by the First 
Amendment -- making it unlikely Sinclair would lose any of its 
licenses. But Sinclair could be affected in other ways. Media 
analysts said the flap could lead regulators to re-examine rules that 
govern how many stations a company can own in one market and that 
deal with the political content of newscasts.

And depending on the outcome of next week's election, and its effect 
on the control of the FCC, which regulates the public airwaves, 
Sinclair might not get the rubber stamp that television outlets 
routinely receive when renewing broadcast licenses.

"I wouldn't bet on anybody losing their license unless the FCC 
receives a sudden spine transplant, but Sinclair could unquestionably 
see some turbulence," said Andrew Jay Schwartzman, president and 
chief executive officer of the Media Access Project, a public 
interest group.

The issue flared Oct. 9 after the Los Angeles Times reported that 
Sinclair instructed its stations to pre-empt regular programming to 
air a news program based on Stolen Honor: Wounds that Never Heal. The 
documentary included allegations from former prisoners of war that 
Kerry's anti-war testimony before Congress in 1971 caused further 
torture to soldiers held captive in Vietnam.

A plummeting stock, threats of lawsuits by shareholders and a 
backlash from its advertisers prompted Sinclair to switch gears and 
air a show Friday on political documentaries in general. Sinclair 
also shrunk the number of stations to air the show to 40 from 60. The 
company's stock closed up 4 cents to $7.17 on Friday.

Although the company declined to comment last week, it released a 
statement Friday evening that it was "gratified" by an opinion piece 
in The New York Times and a Wall Street Journal editorial in support 
of airing the documentary.

Reed Hundt, who led the FCC from 1993 to 1997 under President Bill 
Clinton, said that Sinclair has jeopardized a longstanding 
relationship the federal government had with broadcasters that they 
would gain free access to the public airwaves -- worth billions of 
dollars if sold -- in exchange for fair and responsible coverage.

"Since it's one universal medium, they've been given very special 
privileges to sustain that universality," Hundt said. "If 
broadcasters start to behave to the degree the way Sinclair is 
uniquely behaving, the whole industry will find that they'll be on 
the short end of the political stick."

Political targets

Media companies have been political targets before. President Richard 
M. Nixon pursued the licenses of television stations that he 
perceived as foes, including those owned by the Washington Post Co. 
In 1973, Republicans challenged the licenses of two Florida stations 
owned by the company. But the Republican chairman of the FCC at the 
time, Dean Burch, did not keep the stations from getting their 
licenses renewed.

"Nixon would obsessively monitor media coverage of his 
administration," said Philip Napoli, an associate professor at 
Fordham University in New York and director of the Donald McGannon 
Communications Research Center. "If he didn't like the way they were 
covering them, he directed the FCC to put a lot of pressure on them."

Last year, Cumulus Media Inc. drew criticism for ordering its radio 
stations not to play songs by the Dixie Chicks after the lead singer 
of the popular country music group said during a concert in London 
that she was ashamed that President Bush was from her home state of 
Texas.

Sen. John McCain, an Arizona Republican, said in a Senate hearing 
that Cumulus was threatening to erode the First Amendment by 
censoring political views the company didn't agree with and said it 
exemplified the problem of media power consolidated in a few hands.

Until 1987, broadcasters were regulated by a "fairness doctrine." It 
required television stations to make the best attempt to include 
contrasting views on issues of public importance. But the FCC and 
courts repealed the doctrine, arguing that it interfered with free 
speech rights. Some journalists also argued the stricture was a 
burden and discouraged them from covering controversial issues.

Some experts contend that the elimination of the doctrine enabled the 
rise of partisan news programs, including the creation of 
conservatively voiced Fox News.

In denouncing Sinclair, the Kerry camp said that the company had an 
obligation to allow Kerry to give his view under an FCC rule that 
requires a broadcaster lending its facilities to support one 
candidate to provide "quasi-equal opportunities" for backers of the 
opposing cause. Sinclair invited Kerry to participate in the special, 
but he declined.

Revoking licenses rare

Any viewer theoretically can challenge Sinclair's licenses, which 
come up for renewal every eight years at various times, state by 
state.

The FCC has revoked licenses several times for reasons other than 
content complaints. In 1988, RKO agreed to sell KHJ-TV Channel 9 in 
Los Angeles and 13 other television and radio stations to Walt Disney 
Co. in a $324 million settlement after the FCC revoked RKO's licenses 
for filing false financial statements, dishonesty with advertisers 
and improper campaign contributions.

In 1989, radio station owner Henry Serafin lost WBUZ, a Fredonia, 
N.Y., AM radio station, after local residents complained that he 
discriminated in hiring and ran contests without awarding prizes.

"I think it would be a very difficult case to make that Sinclair's 
airing of the program is so egregious and unfair that it should 
warrant loss of a license to run a television station," said John G. 
Johnson Jr., a partner in the media practice of Paul, Hastings, 
Janofsky & Walker LLP in Washington.

Ultimately, Sinclair also has shareholders, advertisers and viewers 
to answer to -- parties whose grievances last week triggered a quick 
response.

"In public relations, there are many people you have to answer to," 
said Roger Caplan, owner of the Caplan Group, an Ellicott City 
advertising and marketing firm. "They underestimated that their 
stockholders and advertisers would not be pleased and their 
viewership would not be upset."
 
 
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