facebook linkedin twitter

FCC Slaps Sinclair Broadcast Group With Record $48 Million Fine

May 7, 2020 by Dan McCue

WASHINGTON – Sinclair Broadcast Group agreed on Wednesday to pay a record $48 million fine to the Federal Communications Commission to resolve allegations it failed to disclose the sponsor of paid content and misled the agency during its failed merger with Tribune Media.

The conservative-leaning broadcaster ran afoul of the commission with its plan for station divestitures tied to the proposed $3.9 billion acquisition of Tribune Media, a deal that would have extended Sinclair’s reach to more than 70% of U.S. TV homes.

The divestitures were needed to bring the company into compliance with the agency’s station ownership limits. Under the rules currently in place, Sinclair needed to sell at least one station in nine markets to stay below station-ownership limits.

But the plan included selling two of Tribune’s biggest stations — WPIX-TV New York and WGN Chicago — for below-market prices to entities with ties to Sinclair and the Smith family that controls the Baltimore-based broadcaster.

The agency also found that Sinclair aired paid programming 1,700 times without disclosing the identity of the sponsor.

A third investigation involved charges that Sinclair had failed to conduct good faith negotiations for retransmission consent agreements.

The commission proposed a $13.4 million fine for the alleged conduct related to unidentified sponsors in December 2017, finding Sinclair violated sponsorship identification rules that require paid programming be identified as such to provide a clear distinction for viewers between commercials and news coverage or editorial content.

The FCC said Sinclair created 60- and 90-second spots that promoted the Huntsman Cancer Institute in Utah and aired them on its local newscasts, or as free-standing half-hour programs.

But the company did not identify the spots as sponsored content paid for by the Huntsman Cancer Foundation. Other non-Sinclair stations supplied with the programs and segments also were not informed about the sponsorship, the FCC said in a statement.

At the time, Sinclair denied any wrongdoing and said it would contest the fine.

“Any absence of sponsorship identification in these public service segments was unintended and a result of simple human error,” Sinclair said in a statement.

Jessica Rosenworcel, a Democratic member of the FCC board, who long opposed the Sinclair-Tribune Media deal, objected to the $13.4 million fine, arguing not only was it far too small, but that it was an illustration of the Republican-led board extending “unreasonable and suspicious favor to a company with a clear record of difficulty complying with the law.”

Earlier, in an appearance before the House Communications Subcommittee, Rosenworcel said she was concerned the agency was determined to approve Sinclair’s acquisition of Tribune Media. 

“I’m also concerned that if you look at the series of media policy decisions that has been made by this commission, they all seem to serve Sinclair broadcasting’s business plan — from reinstating the UHF discount, to changing the 39% rule that was enacted by Congress, to possibly foisting on all of our households a new broadcast standard for which they own many, many patents,” she said in 2018, adding, “I think it has reached a point where all of our media policy decisions seem to be custom-built for this one company, and I think it is something that merits investigation.”

Sinclair unveiled its plan to divest itself of the Chicago and New York stations in an FCC filing in March 2018, saying WGN would be sold for $60 million and WPIX for $15 million.

The transaction immediately drew scrutiny, as the prospective buyers were a Maryland executive whose car dealership is controlled by Sinclair Executive Chairman David Smith, and a company controlled by Smith’s mother’s estate, respectively.

Critics examining March 1 FCC filings by the Maryland-based company pointed out that Sinclair was attempting to skirt the rules by continuing to operate each station and retaining buy-back options.

In a statement Wednesday, FCC Chairman Ajit Pai called Sinclair’s conduct “completely unacceptable” and said the record $48 million fine, “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.”

However, in the same statement, Pai said he disagrees with those, “who, for transparently political reasons, demand that we revoke Sinclair’s licenses. 

“While they don’t like what they perceive to be the broadcaster’s viewpoints, the First Amendment still applies around here,” he said.

Sinclair’s CEO, Chris Ripley, said in a statement on Wednesday that the company was pleased with the resolution announced today by the FCC.

“We thank the FCC staff for their diligence in reaching this resolution,” Ripley said. “Sinclair is committed to continue to interact constructively with all of its regulators to ensure full compliance with applicable laws, rules and regulations.”

Media

October 11, 2021
by Dan McCue
Americans’ Trust in Media Continues to Slide

WASHINGTON – Americans’ trust in the news media continues to plummet, dropping four percentage points from last year’s already low... Read More

WASHINGTON – Americans’ trust in the news media continues to plummet, dropping four percentage points from last year’s already low 36%, a new Gallup poll has found. The poll, which was released last week also found the media continues to be a decidedly politically polarizing issue... Read More

September 22, 2021
by Dan McCue
Bill Aimed at Saving Local Journalism Included in Reconciliation Package

WASHINGTON -- A key piece of a bipartisan proposal to sustain local journalism has passed through the House Ways and... Read More

WASHINGTON -- A key piece of a bipartisan proposal to sustain local journalism has passed through the House Ways and Means Committee and is now part of the $3.5 trillion budget reconciliation package currently awaiting a vote in the full chamber. When it was proposed by... Read More

September 22, 2021
by Tom Ramstack
Trump Accuses His Niece and NY Times of Conspiracy for Revealing His Tax Returns

Former President Donald Trump accuses his niece and The New York Times of deceit and conspiracy to obtain his tax... Read More

Former President Donald Trump accuses his niece and The New York Times of deceit and conspiracy to obtain his tax returns in a lawsuit he filed Tuesday. The lawsuit asks for $100 million in compensation after the former president says he was victimized by an “insidious... Read More

September 16, 2021
by Dan McCue
Lone Sentence in Popular Series Could Cost Netflix a Cool $5 Million

LOS ANGELES, Calif. - A single line in Netflix sensation “The Queen’s Gambit,” which is expected to rake in the... Read More

LOS ANGELES, Calif. - A single line in Netflix sensation “The Queen’s Gambit,” which is expected to rake in the statues at this weekend’s 73rd Primetime Emmy Awards, could wind up costing the streaming giant a cool $5 million thanks to a defamation lawsuit filed Thursday... Read More

September 4, 2021
by Dan McCue
Broadcasters Say Media Ownership Rules Are Detrimental to Competition, Diversity

WASHINGTON -- Regulations governing the ownership of broadcast radio and television stations harms broadcasters’ ability to compete in the marketplace,... Read More

WASHINGTON -- Regulations governing the ownership of broadcast radio and television stations harms broadcasters’ ability to compete in the marketplace, stymies service to local communities and fails to promote diversity in ownership, the National Association of Broadcasters said in a lengthy filing delivered to the Federal... Read More

September 1, 2021
by Dan McCue
Nielsen Has National Ratings Accreditation Yanked by Media Rating Council

Nielsen, which for decades has been providing television ratings for everything from presidential debates and political conventions to nightly newscasts,... Read More

Nielsen, which for decades has been providing television ratings for everything from presidential debates and political conventions to nightly newscasts, was reeling Wednesday after a key industry organization pulled its support of the company’s services. The Media Rating Council is a United States-based nonprofit organization that... Read More

News From The Well
scroll top