Cunningham Broadcasting

Cunningham Broadcasting Corporation is an owner of broadcast television stations in the United States. The company currently owns six stations – four affiliated with Fox (one of which also carries MyNetworkTV on a digital subchannel), one affiliated with MyNetworkTV and one affiliated with The CW.

Cunningham has very close ties to the Sinclair Broadcast Group. All but one of the Cunningham stations are operated by Sinclair under local marketing agreements (the exception is WYZZ-TV, which is operated by Nexstar Broadcasting Group). In addition, over 90 percent of Cunningham's stock is controlled by trusts in the name of Sinclair founder Julian Smith's children. Based on these arrangements, Cunningham appears to be a shell corporation that Sinclair uses to circumvent Federal Communications Commission regulations on television station ownership.[1]

History

Cunningham was formed in 1994 as Glencairn, Ltd. It was headed by Edwin Edwards, a former Sinclair executive who had been general manager of one of Sinclair's original stations, WPTT-TV (channel 22, now WPNT) in Pittsburgh, Pennsylvania. Sinclair sold WPTT to Edwards after Sinclair bought rival WPGH-TV (channel 53), but continued to operate the station under a local marketing agreement before buying the station back outright in 2000.

The initial capital was supplied by Carolyn Smith, wife of Sinclair founder Julian Smith and mother of current Sinclair CEO David Smith. Carolyn Smith also controlled 70% of Glencairn's stock. However, Glencairn held itself out as a minority-owned broadcaster (Edwards is African American), gaining instant favor with the Federal Communications Commission.

Glencairn's initial purchase set the stage for its future dealings. In late 1993 or early 1994, Sinclair Broadcast Group merged with Abry Communications, which owned WNUV (channel 54) in Baltimore. WNUV had been the principal rival to Sinclair's flagship station, WBFF (channel 45). Sinclair could not keep both stations because FCC rules at the time did not allow common ownership of two television stations in a single market. Accordingly, Glencairn bought WNUV from Sinclair, and the latter took over WNUV's operations under an LMA. However, due to the Smiths' controlling interest in Glencairn, Sinclair effectively had a duopoly in Baltimore – and had all but emasculated its principal rival.

Glencairn eventually bought ten more stations, and Sinclair controlled all their operations via local marketing agreements. Due to Glencairn's financial structure (the Smiths eventually bought 97% of Glencairn's stock), Sinclair effectively had duopolies in all 11 markets in violation of the FCC media ownership rules at the time. Among the more notable purchases:

The 1999–2001 dispute

In 1999, the FCC finally relaxed its ownership rules and allowed one company to own two stations in the same market starting in 2001. Ironically, this development brought the Sinclair-Glencairn arrangement to light for the first time. At the time, Glencairn was getting ready to buy Sullivan-owned KOKH-TV (channel 25) in Oklahoma City, Oklahoma, where Sinclair already owned KOCB (channel 34). When the FCC relaxed its rules, Sinclair simply replaced Glencairn as the buyer for KOKH. Glencairn then announced plans to sell five of its stations to Sinclair outright.[2]

This move led Jesse Jackson and others to file challenges to the proposed transactions. In the course of subsequent hearings, it emerged that Edwards did not know how much debt Glencairn would assume when the deals were finalized. This led FCC Commissioner Michael Copps to question the deal's integrity, as well as Glencairn's decision-making process. It later emerged that Glencairn was to be paid for the proposed purchases with Sinclair stock, and that the Smiths controlled almost all of Glencairn's stock. Eventually, the FCC placed a $40,000 fine against Sinclair for illegally controlling Glencairn. However, it took no further action, leading Copps to blast the decision as a backhanded endorsement of Sinclair's tactics.[3] [4]

Glencairn becomes Cunningham

In 2001, Glencairn attempted to merge with Sinclair outright. However, the FCC rejected the deal because six of Glencairn's stations – WNUV, WVAH, WTTE, WBSC, WRGT-TV (channel 45) in Dayton, Ohio and WTAT-TV (channel 24) in Charleston, South Carolina – were located in markets where Sinclair could not legally have duopolies. The reasons stated:

Sinclair, however, was able to buy five of Glencairn's stations, and Glencairn subsequently changed its name to Cunningham Broadcasting. However, nearly all of Cunningham's stock is owned by trusts in the name of the children of the Smith brothers, so Sinclair still effectively owns Cunningham.[5] This situation led Sinclair Media Watch, a grassroots organization based in Asheville, to file informal objections when WLOS and WBSC's licenses came up for renewal in 2004. However, the FCC has taken no further action against Sinclair or Cunningham.[6]

See also

References

  1. ↑ SinclairWatch.org Archived July 20, 2006 at the Wayback Machine
  2. ↑ PUSH pushing FCC over Sinclair/Glencairn.(Rainbow/Push Coalition; Sinclair Broadcast; local marketing agreements), Broadcasting & Cable, July 13, 1998.
  3. ↑ Glencairn's dicey LMAs, Broadcasting & Cable, March 29, 1999.
  4. ↑ FCC fines Sinclair for Glencairn control, Broadcast & Cable, December 10, 2001.
  5. ↑ "Family's TV Clout in Bush's Corner, Howard Kurtz and Frank Ahrens, Washington Post, October 12, 2004, Page A1". Washingtonpost.com. 2004-10-12. Retrieved 2014-01-04.
  6. ↑ "Sinclair Media Watch challenge to WLOS and WBSC licenses" (PDF). Retrieved 2014-01-04.
This article is issued from Wikipedia - version of the Sunday, January 17, 2016. The text is available under the Creative Commons Attribution/Share Alike but additional terms may apply for the media files.