Sinclair Broadcast Group

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Sinclair Broadcast Group, Inc.
Type	Public (NASDAQ:SBGI)
Founded	1974
Headquarters	Hunt Valley, Maryland, USA
Key people	David D. Smith, Chairman & CEO David B. Amy, CFO
Industry	Telecommunications
Products	Television
Revenue	$614.4 Million USD (2005)
Net income	$182.3 Million USD (2005)
Website	www.sbgi.net

The Sinclair Broadcast Group (SBG) NASDAQ: SBGI is the operator of the largest number of local television stations in the United States with a total of 59 stations across the country in 38 primarily small and medium markets, many of which are located in the South and the Midwest. Broadcasts by SBG stations can be received by 24 percent of American households. The company is based in Hunt Valley, Maryland.

Contents 1 History 2 Background 3 Relationship to Glencairn/Cunningham 4 Nightline controversy 5 Kerry film controversy 6 Retransmission disputes 6.1 Mediacom 6.2 Time Warner Cable 6.3 Comcast 7 Notes 8 Stations operated by SBG 8.1 Former Sinclair Owned and Operated Stations 9 See also 10 References 11 External links 11.1 Sinclair 11.2 Anti-Sinclair activism 11.3 News/comment

[edit] History

The company, founded by Julian Sinclair Smith, originated in 1971 as the Commercial Radio Institute with the launch of UHF station (and still current Sinclair flagship) WBFF (Channel 45) in Baltimore, Maryland. He founded stations in Pittsburgh, Pennsylvania and Columbus, Ohio in the late 1970s and early 1980s.

Smith's son David D. Smith began taking a more active role in the 1980s. In 1985, the Commercial Radio Institute changed its name to Sinclair Broadcast Group. In 1990, David Smith and his three brothers bought their parents' remaining stock and went on a buying spree that eventually made it one of the largest station owners in the country.

Though Sinclair became a public company in 1995 and is currently traded on NASDAQ under the symbol SBGI, the Smith family still retains a majority financial interest, and all four Smith brothers serve as executives or directors.

[edit] Background

Network	# Stations
Fox	19
MyNetworkTV (MNTV)	17
ABC	11
CW	8
CBS	2
NBC	2

Many stations are owned outright by the company, but many others are affiliated through local marketing agreements, or LMAs. Sinclair pioneered the LMA concept in 1991.

The stations are affiliates of various television networks: ABC, CBS, NBC and Fox. In January 2006, UPN and the WB shut down and their corporate parents launched a new network, The CW, utilizing former assets and shows from UPN and WB. At that time it was announced that on May 2006 Sinclair's 8 WB stations (WVTV, KMWB, WNAB, WTTO/WDBB, KOCB, WLFL and WNUV) and independent KFBT will become affiliates of the newly-formed network. In February 2006 My Network TV, a new spin-off of Fox's parent News Corporation, was formed to pickup stations that were losing either UPN or The WB. That announcement resulted in Sinclair signing a deal the following March, bringing 10 ex WB affiliates (WTTA, WCWB, WSTR, WBSC, KRRT, WTVZ, WNYO, KVWB, WDKA and WNYS), 6 ex-UPN affiliates (WUXP, WCGV, WUPN, WMMP, WABM and WRDC) and one independent (WFGX) to the new upstart come September 2006. Fox's deal with Sinclair was also strengthened by renewing its 19 stations to a six-year deal. The deal also includes flagship WBFF/Baltimore, despite Fox having a O&O, My Network TV affiliate WUTB, in the same market.

On December 22, 2006, WTWC renewed its affiliation agreement with NBC, keeping the station affiliated with the network through the end of 2016. [1]

SBG had experimented with using a centralized news organization called News Central that provided prepackaged news segments for distribution to several of the group's stations. These segments were integrated into programming during local news broadcasts. Mark Hyman, a high-ranking executive at SBG, also creates conservative editorial segments called "The Point" that are broadcast on some of the group's 61 stations. In addition, most of the stations that aired "News Central" emulated the prepackaged news studio appearance for local stories. This model was ultimately unsuccessful, and on March 31, 2006, News Central ended its national news broadcasts (although The Point commentaries lasted until November 30, 2006). Most stations running the News Central format ended up cancelling their news coverage altogether, although some stations that did this have subsequently contracted with competing TV stations to produce their newscasts. SBG still produces a one-minute national news briefing for its stations, entitled Washington Newsroom.

[edit] Relationship to Glencairn/Cunningham

Between 1994 and 1997, nine stations owned by Glencairn Ltd. entered LMAs with Sinclair-owned stations in the same cities. Glencairn was owned by Edwin Edwards, a former Sinclair executive, who also personally owned WPTT-TV in Pittsburgh. It held itself out as a minority-owned broadcaster.

However, Carolyn Smith, wife of Sinclair founder Julian Smith and mother of current Sinclair CEO David Smith, supplied Glencairn's initial capital and controlled 70% of Glencairn's stock. In December 2001, after complaints from Jesse Jackson and several other media companies, the FCC fined Sinclair $40,000 for illegally controlling Glencairn. Sinclair tried to merge outright with Glencairn in 2001 and purchase Edwards' Pittsburgh station, now WPMY. However, the FCC only allowed four of the stations to come directly under the Sinclair banner. Glencairn kept the other six stations and changed its name to Cunningham Broadcasting. Nearly all of Cunningham's stock (90%) is owned by trusts in the name of four members of the Smith family, and all six Cunningham stations have LMAs with Sinclair stations. Based on these arrangements, Glencairn/Cunningham has served merely as a shell corporation with the sole purpose of evading FCC ownership rules.

In three markets, Cunningham owns the fourth-highest rated station while Sinclair owns one of the three highest-rated stations. The FCC's duopoly rules do not allow common ownership of two of the four highest-rated stations in a single market. In Cunningham's three other markets, there are too few stations or unique station owners to permit a Sinclair duopoly. The FCC requires a market to have eight unique station owners once a duopoly is formed.

[edit] Nightline controversy

In 2004, Sinclair attracted controversy when it decided that eight ABC stations it owned would not be allowed to broadcast an April 30 airing of a Nightline tribute to the 721 soldiers killed in the 2003 invasion and occupation of Iraq.

The group issued a statement that said in part, "The action appears to be motivated by a political agenda designed to undermine the efforts of the United States in Iraq." ABC responded, saying that the program was meant to be an expression of respect which seeks to honor those who have laid down their lives for this country."

For differing reasons, the decision to not air the episode attracted criticism both from supporters and opponents of the Iraq war. Affected stations were in the following markets:

• Columbus, Ohio
• St. Louis, Missouri
• Charleston, West Virginia
• Mobile, Alabama/Pensacola, Florida (In this market, the program was aired by a local Clear Channel TV station.
• Springfield, Massachusetts
• Asheville, North Carolina
• Greensboro, North Carolina

WTXL in Tallahassee, Florida, formerly owned by Media Venture Management but, at that time, operated by Sinclair under a local marketing agreement, decided to air the program. In some of the affected areas, such as Mobile/Pensacola, other broadcasters stepped into the breach to air the broadcast.

[edit] Kerry film controversy

In October 2004, it was reported that Sinclair would order all 62 of its affiliate stations to preempt prime time programming to air Stolen Honor: Wounds That Never Heal, a documentary critical of U.S. presidential candidate John Kerry's anti-Vietnam War activism, just two weeks before the November 2 election. [2] The film was produced by Carlton Sherwood, a former associate of Tom Ridge, and accuses John Kerry of prolonging the Vietnam War because of his anti-war activism. The organization Swift Boat Veterans for Truth, an anti-Kerry organization whose name become well known in the 2004 election year, was cross-promoting the film as part of a $1.4 million advertising campaign. [3]

In response, the Democratic National Committee filed a legal motion with the Federal Election Commission stating that it is inappropriate for the media organization to air "partisan propaganda" in the last 10 days of an election campaign. [4]

Sinclair fired its Washington bureau chief Jon Lieberman, stating he revealed company business when he publicly discussed the documentary in an interview published October 18th in the Baltimore Sun.

Sinclair later aired an edited version of the documentary.

SBGI stock took a dive during and leading up to this time period as stockholders who threatened lawsuits and portions of the general public became enraged. As of towards the end of 2006, the stock has yet to fully recover.

[edit] Retransmission disputes

[edit] Mediacom

Cable TV company Mediacom filed an antitrust lawsuit against Sinclair on October 2006, claiming that Sinclair insisted on blanket carriage of 22 SBGI stations at all Mediacom cable companies where SBGI operates a TV station regardless of market differences. The District Court for the Southern District of Iowa denied Mediacom's injunction motion on October 24; Mediacom appealed to the United States Court of Appeals for the Eighth Circuit, but they dropped the appeal on December 13. ^[1]

Sinclair's retransmission agreement with Mediacom was originally set to expire on December 1, 2006, but Sinclair later extended the deadline to January 5, 2007. Despite the extension, the two sides remained at an impasse over how much money Mediacom should pay Sinclair for carriage of its stations. On January 4, the FCC's Media Bureau denied Mediacom's complaint stating that Sinclair failed to negotiate with Mediacom in good faith. After failing to respond to Mediacom's offer to take the dispute to binding arbitration before the deadline, Sinclair pulled all 22 stations from Mediacom's lineups shortly after midnight on January 6. ^[2] Despite a plea from Iowa's Congressional delegation urging the two sides to submit to binding arbitration, Sinclair rejected the plea on January 11. ^[3] The two sides discussed the dispute in front of Iowa lawmakers on January 23. ^[4] On January 30, 2007, Senators Daniel Inouye, Chairman of the US Senate Committee on Commerce, Science and Transportation and Ranking Member Ted Stevens signed a letter addressed to Kevin Martin, the chairman of the Federal Communications Commission, directing him to resolve the issue.^[5] The impasse ended on February 2 when Mediacom announced that it had reached a retransmission agreement with Sinclair for undisclosed terms. All 22 stations were restored to Mediacom systems shortly after the agreement was announced.^[6]

Many satellite providers in the impacted areas looked to capitalize on the Mediacom/SBGI conflict and ran vigorous campaigns to try to recruit disenfranchised Mediacom subscribers. Sinclair's stations in Iowa, KDSM-TV in Des Moines and KGAN in Cedar Rapids, offered $150 rebates (payable as $10 monthly credits) while other markets offered $100 rebates for switching to DirecTV. ^[7] Mediacom and the American Cable Association criticized this campaign as a type of bounty payment. ^[8]

[edit] Time Warner Cable

Sinclair was also involved with retransmission negotiations with Time Warner Cable, but the two sides reached an agreement on January 19^[9].

[edit] Comcast

Broadcasting & Cable reported on January 5, 2007 that Sinclair may pull 30 stations from Comcast systems after its retransmission agreement was slated to expire on February 5 ^[10]. Comcast was granted an extension so the retransmission rights were extended to March 1 ^[11]. The deadline passed at 2 a.m. early Thursday morning, March 1.[5] The two sides were still talking so the deadline was extended to March 10.[6] Comcast has stated that they will not pay cash for retransmission rights, but is willing to barter such as giving free commercials for SBGI stations on Comcast cable channels.[7] On March 9, Comcast and Sinclair jointly announced a four-year deal for retransmission rights which expire on March 1, 2011.[8]

[edit] Notes

[edit] Stations operated by SBG

State Market Call sign Network Channel Alabama Birmingham WTTO The CW 21 / 28 Digital WABM MNTV 68 / 36 WDBB (L) The CW 17 / 18 Florida Pensacola/Mobile WEAR-TV ABC 3 / 17 WFGX (L) MNTV 35 / 25 Tallahassee WTWC NBC 40 / 2 Tampa WTTA (L) MNTV 38 / 57 Illinois Champaign-Springfield WICD ABC 15 / 41 WICS ABC 20 / 42 Peoria WYZZ 1 Fox 43 / 28 Iowa Cedar Rapids KGAN CBS 2 / 51 Des Moines KDSM Fox 17 / 6 Kentucky Lexington WDKY Fox 56 / 4 Paducah KBSI Fox 23 / 22 WDKA (L) MNTV 49 / 50 Maryland Baltimore WBFF Fox 45 / 46 WNUV (C) The CW 54 / 40 Massachusetts Springfield WGGB ABC 40 / 55 Maine Portland WGME CBS 13 / 38 Michigan Flint WSMH Fox 66 / 16 Minnesota Minneapolis WUCW The CW 23 / 22 Missouri St. Louis KDNL ABC 30 / 31 New York Buffalo WUTV Fox 29 / 14 WNYO MNTV 49 / 34 Rochester WUHF 2 Fox 31 / 7 Syracuse WSYT Fox 68 / 19 WNYS (L) MNTV 43 / 44 Nevada Las Vegas KVMY MNTV 21 / 22 KVCW The CW 33 / 29

State Market Call sign Network Channel North Carolina Asheville WMYA (C) MNTV 40 / 14 WLOS ABC 13 / 56 Greensboro WXLV ABC 45 / 29 WMYV MNTV 48 / 33 Raleigh-Durham WLFL The CW 22 / 57 WRDC MNTV 28 / 27 Ohio Cincinnati WSTR MNTV 64 / 33 Columbus WTTE (C) Fox 28 / 36 WSYX ABC 6 / 13 Dayton WKEF ABC 22 / 51 WRGT (C) Fox 45 / 30 Oklahoma Oklahoma City KOCB The CW 34 / 33 KOKH Fox 25 / 24 Pennsylvania Pittsburgh WPGH Fox 53 / 43 WPMY MNTV 22 / 42 WPXI 3 NBC 11 / 48 South Carolina Charleston WMMP MNTV 36 / 35 WTAT (C) Fox 24 / 40 Tennessee Nashville WZTV Fox 17 / 15 WUXP MNTV 30 / 21 WNAB (O) The CW 58 / 23 Texas San Antonio KABB Fox 29 / 30 KMYS MNTV 35 / 32 Virginia Norfolk WTVZ MNTV 33 / 38 Richmond WRLH Fox 35 / 26 West Virginia Charleston WCHS ABC 8 / 41 WVAH (C) Fox 11 / 19 Wisconsin Madison WMSN Fox 47 / 11 Milwaukee WCGV MNTV 24 / 25 WVTV The CW 18 / 61

(L) - Local marketing agreement
(O) - Outsourcing agreement
(C) - Owned by Cunningham Broadcasting and operated by Sinclair via a local marketing agreement, but effectively owned by Sinclair due to Cunningham's financial structure
1: Owned by Sinclair, but managed by Nexstar Broadcasting Group-owned CBS affiliate WMBD-TV
2: Owned by Sinclair, but managed by Nexstar Broadcasting Group-owned CBS affiliate WROC-TV
3: WPXI is 10% owned by Sinclair, 90% by Cox Enterprises.

[edit] Former Sinclair Owned and Operated Stations

Current DMA#	Market/City of License	Station	Years Owned	Current Affiliation/Owner
20.	Sacramento, California	KOVR 13	1996-2005	CBS owned-and-operated (O&O)
25.	Indianapolis/Bloomington, Indiana	WTTV 4	1996-2002	CW affiliate owned by Tribune Company
	Kokomo, Indiana	WTTK 29	1996-2002	CW affiliate owned by Tribune Company (satellite of WTTV)
31.	Kansas City, Missouri/Kansas City, Kansas	KSMO-TV 62	1994-2005	My Network TV affiliate owned by Meredith Corporation
90.	North Pole/Plattsburgh, New York/ Burlington, Vermont	WPTZ 5	1997-1998	NBC affiliate owned by Hearst-Argyle Television
	Hartford, Vermont/Hanover, New Hampshire	WNNE 31	1997-1998	NBC affiliate owned by Hearst-Argyle Television (semi-satellite of WPTZ)
92.	Greeneville/Tri-Cities, Tennessee	WEMT 39	2000-2006	Fox affiliate owned by Esteem Broadcasting
108.	Tallahassee, Florida	WTXL-TV 27	2001-20061	ABC affiliate owned by Calkins Media

¹Operated by WTWC-TV under a shared services agreement (license was held by a third party)

[edit] See also

• Lists of corporate assets

[edit] References

• Paul Schmelzer (October 20, 2004). The Eternal Twilight of the Sinclair Mind. AlterNet.
• Lisa de Moraes (April 30, 2004). Stations to Boycott Nightline's List of the Fallen. Page C07, Washington Post.
• Al Tompkins (April 30, 2004). ABC Breaks Through Nightline Blackout (Poynter Online)
• Paul Schmelzer (April 23, 2003). The Death of Local News. AlterNet.
• Katie Benner (October 11, 2004). Anti-Kerry film sparks DNC response. CNN
• Wil S. Hylton (December 2005). Not Necessarily the News. GQ.

[edit] External links

[edit] Sinclair

• Sinclair Broadcast Group, Inc. official site
• NewsCentral
• SBG - station list
• CJR Who Owns What: Sinclair Broadcast Group

[edit] Anti-Sinclair activism

• Sinclair Watch
• Stop Sinclair.org petition
• The "Counter"Point Blog
• Iowans for Better Local Television

[edit] News/comment

• "Not Necessarily the News" By Wil S. Hyton GQ December 2005.
• David Smith denies political agenda, Oct 2004
• Sinclair Broadcast: The Puppetmasters, AlterNet, February 17, 2005.
• "Sinclair's Disgrace" by Eric Boehlert, Salon, Oct. 14, 2004
• Disinfopedia - Sinclair Broadcast Group
• dKosopedia - Sinclair Broadcast Group
• Ketupa.net - Sinclair Broadcast Group