Sinclair slapped with $48 million FCC fine
Closes book on botched Tribune deal
In one of the biggest fines ever levied against a broadcast company, the FCC fined Maryland-based Sinclair Broadcasting $48 million Wednesday for misrepresenting themselves in their pursuit of Chicago-based Tribune Broadcasting, which was later sold to Nexstar.
The fine and consent decree also closes three investigations into the company, including its conduct over selling stations at below market prices and skirting the ownership laws to maintain control over them; the failure to negotiate restransmission fees with cable and satellite companies in good faith; and violating FCC rules regarding sponsor identification during newscasts and other programs. Sinclair had to amend their sales proposal numerous times, including selling WPIX in New York and WGN-TV in Chicago to Sinclair-connected “shell” companies. For example, Sinclair planned to sell WGN to a used car dealer in Maryland for only $60 million – the value point well below the last major sale of a Chicago commercial station, Fox’s purchase of WPWR-TV for $425 million in 2002.
“Sinclair’s conduct during its attempt to merge with Tribune was completely unacceptable,” said FCC Chairman Ajit Pai. “Today’s penalty, along with the failure of the Sinclair-Tribune transaction, should serve as a cautionary tale to other licensees seeking commission approval of a transaction in the future.”
But when it came to the company’s right-wing commentary on their newscasts, Pai defended their right to air them.
“On the other hand, I disagree with those who, for transparently political reasons, demand that we revoke Sinclair’s licenses.” Pai continued. “While they don’t like what they perceive to be the broadcaster’s viewpoints, the First Amendment still applies around here.”
The oddity of this part of the statement is while he crows about maintaining First Amendment principles, it sure didn’t apply to the Super Bowl “Nipplegate” controversy and NYPD Blue indecency cases in 2004 as the FCC under the last Republican chairman (Kevin Martin) fined numerous CBS-owned and ABC-owned stations WLS-TV in Chicago and KTRK in Houston, respectively. It smacks of hypocrisy at its worst.
The revocation of Sinclair’s licenses were never really in doubt as it is a rare for the FCC to yank licenses. The last FCC revocation took place in 1990 when the agency opted not to renew the license of Spanish-language Telemundo affiliate WSNS-TV in a confusing and complex case involving two local business groups as the station was accused of airing scrambled soft-core porn movies in the early 1980s as part of the ONTV subscription service, which was discontinued on July 1, 1985. The FCC’s move was panned by Latino community leaders and Hispanic members of the Chicago City Council, fearing the new licensee would deprive the community of a vital voice. Telemundo later bought WSNS; NBC would later purchase Telemundo, making WSNS and WMAQ-TV duopoly partners.
The FCC also revoked licenses for WLBT in Jackson, Miss. in 1971 over civil rights violations and Boston’s Channel 5 (the original WHDH) in 1969 and Channel 7 (WNAC) in 1980, giving the city the dubious distinction of the only American TV market whose stations lost their FCC license twice.