Sinclair changes plan for broadcast

Md.-based network to air special on documentaries and their political impact

October 20, 2004|By Andrea K. Walker | Andrea K. Walker,SUN STAFF

As criticism mounted over its plans to air an anti-John Kerry documentary as news shortly before the presidential election, Sinclair Broadcast Group Inc. retreated slightly yesterday, saying that it will air a broader newscast about the political impact of documentaries and cut by one-third the number of its stations that will show it.

The Hunt Valley-based company has begun to feel financial impact from the controversy over whether Sinclair, whose executives have donated heavily to Republican causes, was breaching equal-time regulations and using its network of 62 television stations to influence the outcome of the election.

Sinclair shares dropped 23 cents yesterday, or 3.5 percent, to close at $6.26 - the stock's lowest price in more than three years. More than 1.1 million shares traded each of the past two days, nearly triple the normal activity, as investors reacted nervously to threats from Democratic leaders on Capitol Hill to interfere with license renewals for Sinclair stations.

Sinclair's stock has fallen 16.5 percent since Oct. 8, the day before the Los Angeles Times reported that the company had instructed its stations to pre-empt regular programming to air Stolen Honor: Wounds that Never Heal. The documentary was created by Carlton Sherwood, a prize-winning journalist with ties to the Bush administration. It included allegations by former prisoners of war that Kerry's anti-war testimony before Congress in 1971 caused further torture to American soldiers held captive in Vietnam.

New York State Comptroller Alan G. Hevesi, the sole trustee of the $115 billion New York State Common Retirement Fund, wrote a letter to the company yesterday questioning whether the publicity was hurting the fund, which holds 256,600 shares of Sinclair stock.

Hevesi is "very concerned about what this has been doing to the stock," said John Chartier, a spokesman. "The shares have dropped substantially in the last couple of days. The comptroller has some serious questions that he has asked [Sinclair Chief Executive Officer David Smith]."

Sinclair said in a statement yesterday that the special will air on 40 of its stations, rather than the 60 originally scheduled. In Baltimore, it will air at 8 p.m. Friday on WBFF, Sinclair's flagship station.

Sinclair has maintained that coverage about its broadcast was premature because the show was still taking shape. Yesterday evening, the company said it will air an hour-long news special entitled, A POW Story: Politics, Pressure and the Media, that will broadly examine the use of documentaries and other media to influence voting in the 2004 election.

While the show will include questions raised by former POWs in Stolen Honor, the company said, it remained unclear last night whether Sinclair will air parts of the documentary. Sinclair said it will use concerns discussed in the documentary to examine the broader issue of media bias and how candidates and other organizations influence news coverage.

Critics have contended Sinclair is using the public airwaves to espouse its political beliefs. The Smith family, which owns controlling interest in the company, has donated heavily to the Republican Party. Sinclair owns or controls 62 television stations in 39 markets, reaching nearly one-quarter of the nation's population.

"The experience of preparing to air this news special has been trying for many of those involved," David Smith said in the statement the company released. "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.

"We cannot in a free America yield to the misguided attempts by a small but vocal minority to influence behavior and trample on the First Amendment rights of those with whom they might not agree. I have been encouraged, however, by the thousands of e-mails and other messages I, and others, received supporting Sinclair's efforts to hold firm to its ideals in the face of a firestorm of controversy which, ironically, was actually based on misinformation."

One group of investors pulled back on threats to sue the broadcast company after details of the program were released yesterday. Washington-based Media Matters for America, a media advocacy group, had agreed to underwrite court action by a group of shareholders represented by Glickenhaus & Co. Glickenhaus, a Wall Street firm with 6,100 shares of Sinclair stock, wanted Sinclair to give equal time to an opposing view of its documentary. "We will hold off on the legal action until after we see the programming," Media Matters spokeswoman Naomi Seligman said.

On behalf of other shareholders, Victoria Shaev, a Sinclair shareholder living in New York, filed a lawsuit against the company in Baltimore City Circuit Court. The suit alleged that the company placed political and personal interests before the best interest of the stockholders.

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