BALTIMORE, Jan 11, 2010 /PRNewswire via COMTEX/ -- Sinclair Broadcast Group, Inc. /quotes/comstock/15*!sbgi/quotes/nls/sbgi (SBGI 4.95, +0.11, +2.27%) , the "Company" or "Sinclair," today released a copy of a letter sent on January 8, 2010 to Senator John Kerry from David Smith, President and Chief Executive Officer of Sinclair. In his letter, Mr. Smith addresses the Mediacom retransmission dispute and the need to allow the free market to work without government intervention.
About Sinclair:
Sinclair Broadcast Group, Inc., one of the largest and most diversified television broadcasting companies, owns and operates, programs or provides sales services to 58 television stations in 35 markets. Sinclair's television group reaches approximately 22% of U.S. television households and is affiliated with all major networks. Sinclair owns equity interests in various non-broadcast related companies. The Company regularly uses its website as a key source of Company information and can be accessed at www.sbgi.net.
Below is the full text of Mr. Smith's letter to Senator Kerry:
January 9, 2010
The Honorable John F. Kerry
United States Senate
218 Russell Senate Office Building
Washington, D.C. 20510
Dear Senator Kerry:
I am writing in response to your letter of December 30, 2009. I am
also writing to address the position of Mediacom as set forth in the
letter you received on January 7th from their CEO.
Although we share your concern for the public interest and are
pleased to have reached agreement with Mediacom, I trust you can see
through Mediacom's blustery rhetoric to understand that their true
interest lies not in serving the public interest, but rather in
maximizing their profits by receiving government intervention to
avoid paying fair, market-driven consideration for the right to
retransmit broadcast television programming.
Mediacom's argument essentially boils down to a self-serving claim
that because local broadcast stations are free over-the-air this
should give a private, for profit company like Mediacom a special
right to use this programming without paying an appropriate fee to
do so. Were this the case, video bootleggers could simply record
popular broadcast programming over-the-air onto DVDs and sell
boxed sets of the entire season at prices far below the selling
price of those who actually pay to acquire the valuable rights to
sell such programming. Similarly, XM Satellite Radio would have no
need to produce its own programming since in the world envisioned by
Mediacom, XM could just rebroadcast popular programming that it
picks up for free over-the-air from broadcast radio stations.
These examples point out the absurdity of Mediacom's position and
aptly illustrate that although broadcasting is free to the public,
this provides no special right for a private business to use such
programming in a for profit enterprise. In fact, taking away this
special right was precisely the intent of the law Congress passed in
1992 establishing the retransmission consent regime.
Mediacom uses programming from broadcast stations as one of its most
important assets in attracting and retaining subscribers. That this
is the case is clear from the public interest in the recent
negotiations between Sinclair and Mediacom. Nonetheless, Mediacom
pays broadcasters much less than they currently pay for many program
streams which are far less important to their customers. This
disparity seems fundamentally unfair to us.
The promise of the 1992 retransmission consent legislation - that
broadcasters would receive fair compensation - has yet to be fully
realized, but we believe the free market is finally beginning to
move in that direction. The recent success of FOX in receiving
compensation from Time Warner Cable for its highly rated stations,
coupled with the decision by Cablevision to remove The Food Network
and HGTV from its line-up rather than pay exorbitant price
increases for these low rated programming services reflect a
movement toward a resetting of program acquisition fees consistent
with consumer demand. Such a redistribution of fees, delayed as it
has been by prior Federal law (which allowed cable companies to
retransmit broadcast stations without obtaining permission or paying
compensation) and the monopoly position of cable providers during
most of the 1990s, has been a long-time coming and will require
more time to occur fully. Allowing this to happen, however, through
powerful free market forces unfettered by government interference,
will truly meet the public interest by ensuring that cable companies
properly allocate the public's money to pay for the most popular and
demanded programming.
Although Sinclair is pleased to have reached agreement with Mediacom,
a company which clings to the past practice of underpaying for its
most important revenue generating assets and which has had other
issues acquiring the right to broadcast programming popular with its
customers, such as the NFL Network and the Big 10 Network, I do not
agree that the failure to have reached agreement would have meant
Sinclair neglected the interests of the public that rely on our
stations. Nor do I agree with Mediacom's claim that had agreement
not been reached, that Mediacom's customers would have been denied
access to programming.* These stations are available to the public
completely for free over-the-air, as well as from numerous
competitors of Mediacom that have reached agreement with Sinclair
without seeking government intervention.
I understand from press accounts that following the announcement of
the Time Warner Cable/FOX negotiations you indicated an interest in
speaking with those parties in order to better understand the
situation. Sinclair would be pleased to also be part of such
discussions with you and your staff, in order to provide you with
our insights on the retransmission consent process.
Thank you for your interest in this matter.
Sincerely yours,
David D. Smith
President and CEO
* Mediacom's continued efforts to paint Sinclair as the bad actor in all of this does nothing more than point out the disingenuous and partisan nature of their claims. Characterizing a failure to reach agreement as Sinclair denying programming to Mediacom subscribers is no more accurate than describing the situation as a denial by Mediacom. In the same way Sinclair takes the position that Mediacom cannot carry a station unless Mediacom pays a price acceptable to Sinclair, Mediacom is taking the position that Mediacom will not carry a station unless Sinclair receives a price that is acceptable to Mediacom.
SOURCE Sinclair Broadcast Group, Inc.
