Sinclair's Shame

By Don Hazen, AlterNet. Posted October 18, 2004.

In the world of right-wing corporate media, Sinclair Broadcasting has long been overshadowed by Rupert Murdoch's News Corp. and its cable mouthpiece Fox News.

But not any more.

Sinclair Broadcasting Group (SBGI) created an uproar last week when it announced its plans to force its affiliate stations to preempt regularly scheduled programming and air an anti-Kerry documentary, titled "Stolen Honor: Wounds That Never Heal," just days before the election. It was a blatantly partisan move on the part of a company that owns 62 stations, many of which are in the critical swing states of Ohio, Florida, Iowa and Wisconsin. For example, in the highly contested state of Ohio, there are Sinclair stations in Cincinnati, Dayton and Columbus.

Sinclair became an instant cause celebre, as diverse groups, individuals and activists instantly banded together to protest its decision. Within days, a vital and energetic grassroots movement was born.

A number of fast-acting blogs and web sites, including Daily Kos and Democratic Underground, quickly compiled lists of contact information to allow outraged citizens to take action. Others immediately constructed a web site, Boycottsbg.com, with a database of Sinclair advertisers so individuals could contact these companies and directly threaten to boycott their businesses if they did not pull their ads from Sinclair.

According to the media advocacy group Media Matters, an estimated 100,000 calls have been made to advertisers. And it's already taking effect – companies are pulling their ads in various parts of the country, including Maine and Wisconsin. According to the Portland Press Herald in Maine, Sinclair television station WGME's plan to air the anti-Kerry documentary prompted three Maine companies – Hannaford supermarkets, the Lee Auto Malls, and the law offices of Joe Bornstein – to pull their advertising from the Portland TV station.

Hitting Sinclair Where It Hurts

The rapidly growing, aggressive advertising boycott effort has already had a measurable financial impact on Sinclair, whose stock dropped 10 percent over the past week, closing on Friday at an all-time low of $7.04 – a $60 million loss in value.

The boycott is just one among Sinclair's increasing list of woes. A financial analyst from Lehman Brothers has warned that showing the film is "potentially damaging, both financially and politically." William M. Meyers wrote in his analysis for the company: "In a best case scenario, we believe that this decision could result in lost ad revenues. In a worst case scenario ... the decision may lead to higher political risk. As management has increased the company's political risk, we are reducing our 12-month price target to $9 (from $10)."

Meanwhile legal experts such as Stanford professor Lawrence Lessig predict that Sinclair shareholders will surely file lawsuits against the company's management. According to David S. Bennahum, Senior Fellow at Media Matters:

[A]s a publically traded company, Sinclair Broadcasting Group directors have a responsibility to ensure that Sinclair takes actions consistent with enhancing shareholder value. Sinclair's decision to air "Stolen Honor: Wounds That Never Heal" places partisan political interests ahead of shareholder value by jeopardizing the renewal of FCC licenses, stimulating grassroots advertiser boycotts and triggering potential investigations into the company's misuse of its licenses to use the public airwaves.

Media Matters is urging anyone who may be a shareholder in one of 20 mutual funds and six pension funds that invest in the company to request that their fund manager immediately divest their funds from Sinclair.

What Liberal Media?

The reason for the widespread anger is summed up by the blogger at Grass Roots Nation:

Don Hazen is the Executive Editor of AlterNet.

Liked this story? Get top stories in your inbox each week from Media and Technology! Sign up now »