Backlash hits Sinclair on disputed 'news event'
TV report called unfair to Kerry
By Bruce V. Bigelow
UNION-TRIBUNE STAFF WRITER
October 20, 2004
The nation's largest chain of TV stations is feeling a political and financial backlash over its controversial plan to broadcast a "special news event" highly critical of Democratic presidential nominee Sen. John Kerry.
The Sinclair Broadcast Group said yesterday it will pre-empt regular programming at 40 of its 62 stations Friday to broadcast a special report titled "A POW Story: Politics, Pressure and the Media."
The program will draw heavily from the documentary "Stolen Honor: Wounds That Never Heal" that includes accusations that Kerry's anti-war efforts 30 years ago worsened the torture of U.S. prisoners in Vietnam and prolonged the war.
The announcement seemed to mark a change in course for the Maryland-based media group, which has been fending off a mounting uproar over reports that it intended to air "Stolen Honor" in its entirety. Instead, Sinclair says its program will "focus in part on the use of documentaries and other media to influence voting."
Democratic Party leaders have denounced the program as a partisan attack and a deliberate attempt to bruise Kerry in the final days before the election.
But the battering spread to Sinclair, and advertisers withdrew commercials, consumer groups mounted boycotts and the price of Sinclair shares fell by more than 15 percent to a 52-week low of $6.26.
Yesterday, San Diego shareholder litigator William S. Lerach announced he was taking the first step in a shareholder lawsuit against Sinclair.
Lerach said that three members of the Smith family that controls Sinclair sold their shares for more than $18.5 million when the stock was near its 52-week high of $15.50.
He contends they could tell then that Sinclair's business was faltering and were taking advantage of their insider knowledge. Since then, the price of Sinclair shares have fallen by more than 50 percent.
"At a time when the company is experiencing troubles," Lerach said, "the board and officers should be focused on creating shareholder value – not pressing a controversial personal political agenda at shareholders' expense."
Lerach, who was a key fund-raiser for former President Clinton, denied that the lawsuit was politically motivated.
"We are equal-opportunity suers," he said.
New York Comptroller Alan Hevesi, a Democrat, raised similar concerns in a letter sent yesterday to Sinclair on behalf of the state's pension fund, which owns shares in the broadcasting company.
Sinclair did not directly address those allegations yesterday.
But in a statement, Chairman and CEO David D. Smith said, "The company and many of its executives have endured personal attacks of the vilest nature, as well as calls on our advertisers and our viewers to boycott our stations and on our shareholders to sell their stock."
He added, "We have received threats of retribution from a member of Sen. John Kerry's campaign and have seen attempts by leading members of Congress to influence the Federal Communications Commission to stop Sinclair from broadcasting this news special."
A call to Chad Clanton, a Kerry campaign spokesman, was not immediately returned.
Sinclair is the nation's largest independent owner of television stations, and it has been unabashed in its support for President Bush.
Large contributions
Many Sinclair board members and senior executives have contributed hundreds of thousands of dollars, mostly to Republican candidates and causes over five years.
In April, Sinclair prohibited its ABC affiliates from broadcasting an edition of "Nightline" in which host Ted Koppel read aloud the names of U.S. military personnel killed in Iraq. Sinclair accused ABC News of promoting an anti-war agenda, which the network denied.
Mark Hyman, Sinclair's vice president for corporate relations who also delivers conservative commentaries for newscasts, took a crew to Iraq this year to report on what he called the untold positive news of the war.
As controversies go, however, none has compared with the uproar over the program about Kerry.
The company said 40 of its 62 TV stations will broadcast "A POW Story" during prime time Friday. The company, which pioneered media "duopolies" in which it owns two TV stations in the same market, will not duplicate the broadcast by secondary stations it owns in some cities.
Sinclair has only one TV station in California, a CBS affiliate in Sacramento.
Sinclair said the program would "examine the role of the media in filtering the information contained in these documentaries, allegations of media bias by media organizations that ignore or filter legitimate news and the attempts by candidates and other organizations to influence media coverage."
It is expected to include excerpts from the documentary "Stolen Honor: Wounds That Never Heal" in which former POWs claim that Kerry's 1971 Senate testimony against the war prolonged their captivity.
The Kerry campaign has called the documentary a politically motivated attack that is unfair and inaccurate.
Not in entirety
Initial news reports indicated that Sinclair planned to broadcast the documentary in its entirety. Sinclair denied that yesterday, saying that "at no time did Sinclair ever publicly announce that it intended to do so."
Sinclair fired its Washington bureau chief, Jon Leiberman, this week after he publicly protested directives to help develop a news special around the "Stolen Honor" documentary in four days.
In an interview last night with MSNBC, Leiberman called the planned special program "political propaganda" without journalistic objectivity and that it was intended to undermine Kerry's election.
"The news department has been around for 2½ years and has never run a news special about anything," Leiberman said. The company said the newsman violated policy by discussing its business.
As the political uproar has intensified, Wall Street analysts voiced worries that Sinclair was alienating advertisers, government regulators and investors.
Lehman Bros. William Meyers, for example, wrote that Sinclair's planned broadcast "has no upside and only multi-dimensional downside" for the company.
At least some of those concerns proved well-grounded.
Advertisers in Minneapolis; Portland, Maine; Madison, Wis.; and Springfield, Ill., have pulled their commercials from Sinclair stations, The New York Times reported Monday.
At least two groups were organizing boycotts of the company, and a report issued by Legg Mason last week cited the controversy and rhetorically asked: "Is this good for investors in terms of increasing the odds for favorable deregulation? We think not." |
