Sinclair flap proves exception to the rule

Introduction

A Center for Public Integrity examination of contributions by broadcasters and their chief lobbying organization, the National Association of Broadcasters, reveals that when it comes to politics, the industry does not play favorites: since 1998, records show, broadcasters have donated $13,528,000 to Democratic candidates and party organizations and $13,391,000 to Republicans.

A glaring exception to this evenhanded approach can be found at Sinclair Broadcasting Group, which recently endured a firestorm of negative publicity for ordering its 62 television stations to air a documentary—just days before the election—critical of Democratic presidential nominee John Kerry.

A little more than 95 percent of Sinclair’s $334,000 in contributions have gone to Republicans—a lopsided record of giving unmatched by any other major television broadcaster, the Center found. News Corp., for example, whose Fox cable-news operation is often criticized for its perceived right wing bias, has actually given 64 percent of its contributions to Democrats since 1998 and 36 percent to Republicans. (Contributions by longtime Democratic fundraiser Haim Saban, who owned half of Fox Family Worldwide, are excluded from that ratio; when included, News Corp. contributions skew in favor of Democrats by 81 percent to 19 percent.) And Clear Channel Communications Inc., whose board of directors includes the businessman who bought the Texas Rangers baseball team from President George W. Bush, only favors Republicans by about 63 percent to 37 percent.

Reporters, editors and news executives insist that their employers’ campaign contributions have no bearing on how the news is reported. But recent events involving Sinclair and other large broadcasters, such as Viacom Inc., coupled with an escalating lobbying effort to remove government controls, raise questions about whether the broadcast industry’s corporate goals may be affecting news coverage.

Breakdown of Political Contributions by Top 10 Broadcasters

Bad business

The controversy involving Sinclair was kindled when management ordered the company’s television stations, several of which are in so-called swing states, to pre-empt regular primetime programming for an unflattering documentary about Kerry’s Vietnam service, Stolen Honor: Wounds That Never Heal.

But if Sinclair’s goal was to help itself by helping President Bush, whose administration has consistently supported deregulation of major media corporations, the move clearly backfired. By ordering the airing of an overtly political broadcast so close to the election, the company managed to cast a negative light on the media ownership issue in general, and a harsh spotlight on itself in particular.

“This is an abuse of the public trust,” FCC Commissioner Michael Copps said of the Sinclair flap in a prepared statement. “And it is proof positive of media consolidation run amok when one owner can use the public airwaves to blanket the country with its political ideology—whether liberal or conservative.”

It wasn’t the first time Sinclair became the subject of a newscast, as opposed to the producer of one. Six months earlier, for example, the company earned an unwelcome spotlight for instructing its ABC affiliates to pre-empt a “Nightline” program devoted entirely to the reading of a list of American soldiers who had died in the Iraq war. In explaining its decision, Sinclair claimed that “Despite the denials by a spokeswoman for the show, ABC appears to be motivated by a political agenda designed to undermine the efforts of the United States in Iraq.” Two months earlier, Sinclair had dispatched news crews to Iraq to cover the “good news” that it believed the rest of the media had missed.

Sinclair was founded by Julian Sinclair Smith in 1971 with a single Baltimore television station that is now the company flagship. Led by Smith’s son, David, Sinclair grew into the nation’s largest owner of television stations—a collection of mostly small-market broadcasters that reach nearly 25 percent of all households.

The company has made no secret of its conservative leanings. In 2002, it created its “News Central” production to centrally manage news operations for all of its stations. Daily broadcasts include commentaries by Mark Hyman, the company’s vice president for corporate relations, whose minute-long segments have often included questionable claims. In one segment, for instance, Hyman said that Kerry enlisted in the Navy to avoid being drafted into the Army.

Overall, however, Sinclair has shown its partisan colors with impunity—at least until now.

When news surfaced of the company’s plans to air Stolen Honor, advertisers threatened to boycott, Wall Street analysts criticized the company and the stock dropped to a 52-week low. Shareholders threatened lawsuits over the broadcast of the anti-Kerry documentary, prompting Sinclair to issue a statement saying it would not air the film in its entirety, but rather broadcast segments from it as part of a news program.

But as bad as it was for Sinclair, the controversy is worse for the broadcast industry as a whole by raising concerns about one company controlling too large a portion of the airwaves.

“Sinclair has replaced Clear Channel as the new poster child for the ills of media consolidation,” Jeffrey Chester, executive director of the Center for Digital Democracy in Washington, told the Center for Public Integrity.

Top priority

Lobbying expenditures by the broadcast industry have gone from $20 million* in 1998 to at least $37 million* in 2003. It was during that last year of record lobbying that the FCC proposed significant relaxation of the ownership rules, which would have allowed corporations to own more media outlets than ever before and reach a greater percentage of the national audience.

Media deregulation is a top priority for broadcasters. And FCC Chairman Michael Powell, who was appointed by Bush, shares their views.

That was made clear during Powell’s first public appearance as chairman-designate. At a meeting of the Association of Local Television Stations on January 22, 2001, the commissioner agreed with fellow Republican FCC Commissioner Harold Furchtgott-Roth that the agency had in effect become a needless third federal antitrust regulator, given its restrictions over media ownership.

Gradually, the impending deregulation found its way into the national discourse. By June 2003, the FCC had received more than 700,000 public comments about the issue, with 99 percent opposed to any further deregulation. They constituted the largest public response in the agency’s history.

“There’s a gut reaction,” said Chester, noting that these complaints came despite the fact that “you’ve never gotten a single report from any of the major news broadcasts or newspapers about what the owners are lobbying about.” Despite not being well-informed by major news organizations about the agendas of their parent companies, “the public,” he said, “understands that things are out of whack.”

Nevertheless, on June 2, 2003, Powell led the other Republican commissioners in voting to increase the national broadcast television audience cap to 45 percent (up from 35 percent) and eliminate the so-called duopoly rule (a prohibition against owning two TV stations in the same market) and the media cross-ownership rules.

Perhaps convinced by the public outcry, though, the Senate commerce committee quickly called on the FCC to defend the new rules and, at the same time, crafted a bill that would override the attempt to set the national audience cap at 45 percent. Ultimately, the White House stepped in and the 45 percent cap was reduced to 39 percent. Some of the nation’s largest broadcasters, including Fox and Viacom, are all bumping against or exceeding that limit.

Since then, a federal appeals court sent the new rules, other than the audience cap, back to the FCC for re-justification, forcing the agency to re-submit the proposed changes with new supporting research. Eventually, the agency will do just that, and the ultimate decision as to whether the rules will be loosened further will rest with the federal government.

Battle not over

It is disturbing to many to think of media companies as politically active. But it would be naïve not to. Big broadcasters are required to consider both the public interest and the interest of their shareholders, but too often the shareholders’ interest wins at the expense of the public’s.

“The standards and practices are determined within the corporate environment,” said Danny Schechter, executive editor of Mediachannel.org, a Web site that tracks media issues.

Schechter was at one time news director and principal newscaster at WBCN-FM in Boston. He said that news staffers would take “ascertainment” trips into the community to determine issues of importance, then run documentaries on them. Over a number of years, however, WBCN went from being owned by a small company with a few radio stations to one of 183 owned by Viacom, and that same period saw significant decline in the quality of news production.

“The bottom line is much more important than the public interest,” he told the Center. “Yes, government policy has favored [deregulation], but corporations have run with it beyond what they’ve envisioned.”

All good journalists follow the money. And in the media consolidation debate, the money has been flying out of the bank for lobbying.

Major broadcasters sharply increased the amount of money they spent lobbying during 2003, the peak of the consolidation debate. In addition to the impact on national audience caps, the decisions also affected so-called cross-ownership—how many different kinds of media outlets, such as newspapers and television stations—a company may own in one market.

Belo Corp., owner of television stations and newspapers, had consistently spent $200,000 a year from 1998 through 2002. In 2003, however, the company ramped that up to $300,000.* Clear Channel Communications Inc., the largest radio station owner in the country, went from an average yearly lobbying total of $76,000 for 1998-2002 to more than $1.8 million* in 2003. Both the National Association of Broadcasters and the Washington Post Co., which also owns television stations, saw significant increases.

The most obvious sign of this shift comes not from hard-core Republicans like David Smith and his three brothers, who control Sinclair, but from the 81-year-old self-described “liberal Democrat” who controls Viacom Inc., owner of CBS, and one of the largest media conglomerates in the world.

Sumner Redstone tacitly endorsed George Bush for re-election in late September, at a meeting of CEOs in Hong Kong. The election of a Republican administration, Redstone told his audience, “is a better deal” in Viacom’s view, “because the Republican administration has stood for many things we believe in, deregulation and so on.”

Newsweek reported that Redstone’s remarks were viewed by many as a breach of an understood code of silence regarding political endorsements that most media conglomerates respect. Several other executives from the top broadcasters were asked to comment, and most repudiated any notion of political favor, while a public interest lobbyist pointed to the remarks as evidence of “what we have known all along”—a comfortable relationship between the industry and its government regulators.

When asked to comment on Redstone’s endorsement of Bush, a News Corp. spokesman told Newsweek, “We run these businesses not to promote an ideology or political agenda, but to make them successful.”

Note to readers: This story has been reposted. Since the report was originally released, the Center for Public Integrity has changed the way it calculates lobbying expenditures to reflect a more stringent methodology for determining the total amounts. The change was made to correct the potential overstatement of totals. Figures or relevant text that have been changed are indicated with asterisks. (2/28/2006)