Scripps decries Smith brothers' tie to WNUV sale

October 14, 1993|By David Zurawik | David Zurawik,Television Critic

The owner of WMAR-TV (Channel 2) is asking the federal government to step in and stop the sale of WNUV-TV (Channel 54) to a Pittsburgh broadcasting executive.

Scripps Howard Broadcasting alleges that the four Smith brothers, who own WBFF (Channel 45), are using Eddie Edwards Sr., an African-American who owns WPTT in Pittsburgh, and their mother, Mrs. Carolyn Smith, in a plan to take control of WNUV.

The arrangement, according to Scripps Howard, would give the Smith family control of Baltimore's only two independent TV stations in violation of the Federal Communication Commission's "duopoly" rule, which prohibits anyone from owning more than one TV station in a market.

"What they're really doing is suppressing an African-American from competing as an owner in the Baltimore market right now," the 42-year-old Mr. Edwards said yesterday in response to the Scripps Howard allegations.

"It's not fair, and the African-American community of Baltimore will not tolerate it," Mr. Edwards said, adding that he would hold a press conference in Baltimore today to dispute the charges.

Scripps Howard's attorney, Kenneth C. Howard Jr., who drafted and filed the documents, declined comment.

The Smith brothers, owners of the Sinclair Broadcast Group Inc. -- which has TV stations in Milwaukee, Columbus, Pittsburgh and Birmingham, as well as WBFF -- also declined to comment.

In August, Mr. Edwards signed an agreement to buy WNUV from ABRY Communications LP. The price tag for WNUV and an option on an independent station in Milwaukee was $100 million, according to ABRY.

Scripps, on behalf of WMAR, is challenging the sale of WNUV on several points. What they add up to is the allegation that if the FCC awards the license for WNUV to Mr. Edwards, the Smiths would, in fact, be running the station.

Its petition claims that Mrs. Carolyn C. Smith, not Mr. Edwards, would have the controlling interest in WNUV under the proposed ownership structure.

And documents filed by Mr. Edwards with the FCC appear to support that.

Those documents say that Mr. Edwards would have the titles of president, treasurer and director in the company that would ultimately hold WNUV's license, Glencairn, Ltd.

Mrs. Smith, meanwhile, would have the titles of vice president, secretary and director. But while Mr. Edwards would have only three voting shares and 30 percent of the votes, Mrs. Smith would have seven voting shares and 70 percent of the corporation's votes.

"What's wrong with that?" Mr. Edwards asked.

"I am the president, and she is simply a stockholder who has 70 percent. . . . The Smith family has nothing to do with Glencairn, Ltd., except Mrs. Smith being a stockholder."

Scripps Howard's position as stated in its petition is: "Indeed, the evidence strongly suggests that the WBFF Principals [the Smith brothers] are attempting to use their mother, Carolyn Smith, as a means to evade the local multiple ownerships limits."

Scripps Howard also alleges the history of "a close intertwining of business relationships between Carolyn Smith and her sons." One such arrangement, Scripps Howard says, involves Mrs. Smith in 1991 pledging her interests in WBFF as collateral in a $95 million line of credit for Sinclair with Chase Manhattan Bank and others.

Scripps Howard also says the Smith brothers -- David D., J. Duncan, Robert E. and Frederick G. Smith -- would exercise undue control over WNUV through a proposed local management agreement, known in the industry as an LMA.

An LMA allows the owner of a TV station to lease blocks of time on his station to another party, which then programs and sells ads during that time.

Through an LMA, Mr. Edwards is currently allowing the Smiths to program and sell advertising on his Pittsburgh station.

He is asking the FCC to approve such an arrangement at WNUV, which would allow the Smiths to control 20 hours a day of programming and advertising sales on WNUV.

"The FCC has no problem with it," Mr. Edwards says.

Mr. Edwards decried the allegations and said another reason for the Scripps Howard filing is a long-standing feud between WMAR and the Smith brothers.

That feud involves the Smith brothers' challenge to WMAR's license. The Smith brothers say Channel 2's license should be taken from Scripps Howard and given to them because they are local owners and would better serve the community. The challenge was filed two years ago and is scheduled for an FCC hearing next month.

"Scripps Howard and Channel 2 have a problem with the Smiths. And that is the only reason they are coming after me, to get to them, because I have had business ties with them in the past and possibly may have some more in the future even in the Baltimore market.

"Scripps Howard should be ashamed of themselves for interfering with the progress of African-Americans as we move forward to gaining ownership in the broadcasting medium," said Mr. Edwards, who would have the largest African American-owned TV group in the country if the FCC OKs his purchase of the Baltimore and Milwaukee stations.

Mr. Edwards bought WPTT from the Smiths in 1991. That transaction was also challenged, but the FCC ultimately ruled in Mr. Edward's favor.

Scripps' filing with the FCC, called a petition to deny, is part of a process that allows objections to be raised before a broadcast license is transferred through the sale of a TV or radio station.

A formal response to the Scripps Howard petition is expected to be filed by Mr. Edwards' attorneys within a week. The FCC will have at least another 30 days after that to make its decision.

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