Sinclair Goes Digital and Multiplies
Sinclair Broadcast Group Inc., the company that has repeatedly tried to force its conservative political agenda into the homes of millions of television viewers, is now forging a deal with the nation's largest cable company that would allow Sinclair to increase – by over 500 percent – the number of stations on which it can broadcast its "news" content.
Undaunted by a recent federal decision to limit TV broadcasters' access to cable distribution, Sinclair is now putting in place a series of deals that would increase manifold the conservative media company's reach.
Last week, Sinclair President and CEO David Smith outlined the company's plans to open the cable pipeline to as many as five additional Sinclair channels for each of the 62 stations currently under the broadcaster's control. The move – as TV broadcasting continues its transition to a digital format – has the potential to grow Sinclair's considerable holdings to 372 stations.
During an investors call last Thursday, Smith spoke of one deal he's hammering out with Comcast Corp., the nation's largest cable television company. Though Smith spoke in generalities, it's clear that he hopes to win Comcast's agreement to carry Sinclair's full digital offering in the local markets where the conservative broadcaster and the cable provider have a presence.
Smith's move comes on the heels of a series of setbacks for the Maryland-based broadcaster. On the very day of Smith's investor call, the Federal Communications Commission (FCC) ruled that cable operators would not be obligated to carry the additional digital programming streams that local broadcasters will be able to offer. At the moment, cable companies are mandated to carry only one signal per local station. Broadcasters, including Sinclair, wanted the FCC to force cable operators to allow "multicasting," which means six digital stations can be compressed over a slice of public airwaves that formerly carried a single analog signal.
In lay terms, this process hands a local broadcaster the opportunity to program six times as much content. It's a potential boon to the commercial broadcast industry, but only if it can convince cable carriers – the means by which 85 percent of American households receive their television – to include the extra local stations.
Having thus far failed to do so via official channels at the FCC and in Congress, Sinclair is taking a new tack – striking deals directly with the cable carriers. And the Sinclair-Comcast deal is just the tip of the iceberg. "In the event that we do get a deal done with Comcast, my sense is that it will kind of lay the groundwork for every other cable company within our industry where we broadcast," Smith told investors last Thursday.
Cozying Up To Cable
"Last week's FCC ruling confirmed that cable is now king," Jeff Chester, executive director of the Center for Digital Democracy, says. "If you don't have digital distribution, you're out of business and Sinclair knows this."
Chester says that the future of television is in "T-Commerce," providing consumer-interactive content that allows viewers to pick what programs they want and when they want them on a pay-as-you-go basis. It was this content-on-demand model that provided much of the buzz coming out of the Las Vegas Consumer Electronics Show last month.
The cable industry has spent nearly $95 billion since 1996 to lay new two-way pipelines to consumers – with systems that allow audiences to select and pay (say $0.30 to $1) for each show they wish to watch. Now more than 91 percent of cable-ready homes in the U.S. have access to interactive television services that make content-on-demand possible – with more than a third of U.S. cable customers now subscribing to digital cable.
"Broadcasters without access to cable's return path are out of business," Chester notes.
And now Sinclair is scrambling to cut deals with cable providers to ensure that their digital future brings Sinclair into more American households.
A Bad Actor Multiplies
If successful, it's no stretch to imagine the type of programming that Sinclair would favor for its new digital regime. And, if past is prologue, it's a picture not many progressives would want to see. Sinclair owns television stations in 39 different markets reaching approximately 24 percent of U.S. television households in 24 states.
Almost every Sinclair station is obligated to broadcast content produced by the company's Maryland-based news operation, the aptly named "News Central," which spins out a view of the world that bears a remarkable resemblance the Bush administration's view.
Sinclair says this model allows the company "to build its local news franchise and local market share by introducing local news programming in markets that otherwise could not support news." Economical perhaps, but what lurks beneath their single-newscast model are Sinclair's overt attempts to influence the nation's political agenda.
Upset by the negative tone to the Iraq coverage of the mainstream news outlets, Smith sent Sinclair's own team to Baghdad to present a rosier view of the occupation. Sinclair also requires most of its stations to air a news segment called "The Point," during which company vice president Mark Hyman routinely launches broadsides against the "loony left."
Last October, just weeks before Americans went to the polls, Sinclair told all of its 62 stations to air an aggressively anti-Kerry documentary as a last-ditch effort to influence the outcome of the election. This order ignited a firestorm of public protest, including successful attempts to urge advertisers to pull their spots from the station group and to convince fund managers to excise Sinclair from their portfolios. The rapid mobilization led to a plunge in Sinclair's stock price before the company decided to air a modified version of the documentary.
Lately, Sinclair's Smith has rushed to the defense of longtime friend and ally Armstrong Williams, the conservative media commentator outed recently for receiving more than $240,000 from the White House to shill for Bush's education policy. In early 2004 Williams conducted an interview with Depatment of Education chief Roderick Paige to do just that – a piece of propaganda that was broadcast via "NewsCentral" into as many as 20 million homes. For Smith, such Bush administration cheerleading is just business as usual.
Sinclair seems to think it's immune to the controversy and public outrage that's placed the broadcaster at the center of so much media attention during the past twelve months. In fact, the company has not responded to repeated requests to be interviewed for this story. Commenting in recent press reports, Sinclair executives have even hinted that the negative coverage has been good for their business in solidifying a base of support from Americans and corporations who appreciate Sinclair's proselytizing on behalf of the Bush administration.
Questions linger as to how Sinclair – a company that was granted free access to our public airwaves – thinks that it can repeatedly get away with such crass political maneuvering. As Sinclair moves into the digital arena, though, one thing remains clear. The number of Sinclair stations and size of Sinclair's audience may multiply beyond efforts to rein them in.