Wednesday, October 20, 2004

Broadcaster Plans to Show Only Parts of Film

The New York Times
October 20, 2004

Broadcaster Plans to Show Only Parts of Film

The Sinclair Broadcast Group, facing increasing pressure from shareholders and advertisers over its plans to broadcast a documentary critical of John Kerry's antiwar activities more than 30 years ago, said yesterday it would not show the film in its entirety.

Instead the company announced it would use excerpts from the film, "Stolen Honor: Wounds that Never Heal,'' as part of an hourlong news program examining how this and other politically charged documentaries seek to influence voters and how the news media reported on their content. It was unclear how much of the 42-minute film Sinclair plans to use in its program, "A P.O.W. Story: Politics, Pressure and the Media.''

Sinclair, the nation's largest television station group, also said the special would appear Friday night on 40 of the 62 stations it owns or operates, many of them in swing states including Ohio, Florida and Pennsylvania. Originally, Sinclair planned to broadcast the program on most if not all of the stations over several nights this week, depending on the city, according to spokesmen for three of the broadcast networks who will be affected by the pre-emptions.

In a news release yesterday, Sinclair said that contrary to numerous reports, it had never announced it would show the film in full. The company declined further comment.

Last week, a company spokesman, Mark Hyman, who also serves as a conservative commentator on newscasts on Sinclair stations, defended the company's intention to use the film. "Clearly John Kerry has made his Vietnam service the foundation of his presidential run,'' Mr. Hyman told The New York Times. "This is an issue that is certainly topical.''

But since Sinclair's decision to use the documentary became public, the company has been caught in a hornet's nest of protest involving shareholders, advertisers and consumer interest groups vowing to contest the company's license renewals with the Federal Communications Commission. The company, already suffering from a sluggish advertising climate, has had its stock price fall by almost 17 percent and its market capitalization drop by $140 million in the last week and a half.

The protest grew yesterday. The Burger King Company announced that it would pull all its commercials from Sinclair stations all day on the date the program is broadcast. "Burger King wants to maintain neutrality during this election," said Eric Anderson, a spokesman.

The Kerry campaign had already filed a complaint with the F.C.C. asking for equal time. Chad Clanton, a spokesman for Mr. Kerry, said: "Sinclair Broadcasting has been all over the map on this issue. One thing that is certain is that they have a partisan agenda."

A group of shareholders, represented by the prominent lawyer William S. Lerach, announced it would file suit against Sinclair's management, charging it with damaging the company financially by pursuing the partisan political interests of its owners and with insider trading.

Alan G. Hevesi, the New York state comptroller and the sole trustee of the New York State Common Retirement Fund, which owns more than 250,000 shares of Sinclair stock, wrote a letter to David D. Smith, Sinclair's chief executive, detailing his concerns about what he called "recent actions that have brought a great deal of publicity to our company." Mr. Hevesi also demanded that Mr. Smith explain why critics who have accused the company of pursuing "partisan political views" rather than "protecting shareholder value" are wrong.

Sinclair executives have been among the largest media contributors to President Bush and the Republican Party. And the company has made a number of polarizing news judgments in the past. In April, its eight ABC affiliates pre-empted the "Nightline'' program in which the names of American soldiers killed in Iraq were read aloud. Sinclair declared the program "unpatriotic'' and harmful to the war effort.

Mr. Lerach, who has represented the shareholders of Enron and R. J. Reynolds in successful shareholder lawsuits, said in a telephone news conference that he had been approached by "three or four" big shareholders in Sinclair. He would name only the Service Employees International Union, which represents New York hospital workers and which he described as a "large debt holder" in Sinclair.

Mr. Lerach accused three members of the Smith family, which has owned and run Sinclair since its inception, of selling much or nearly all of their shares in the company late last year and early this year when they had reason to know the stock price was about to plummet.

He said he was not saying these actions were tied to the controversy over the film, but he discovered the irregularities because clients asked him to look into how the shareholders were suffering because of the political agenda of the management.

"It shows again the peril of engulfing a publicly held company in a controversy," Mr. Lerach said.

The company did not return phone calls yesterday seeking comment. But in a statement, Mr. Smith, the chief executive, said: "The experience of preparing to air this news special has been trying for many of those involved. The company and many of its executives have endured personal attacks of the vilest nature, as well as calls on our advertisers and our viewers to boycott our stations and on our shareholders to sell their stock. In addition, and more shockingly, we have received threats of retribution from a member of Senator John Kerry's campaign and have seen attempts by leading members of Congress to influence the Federal Communications Commission to stop Sinclair from broadcasting this news special."

He added, "We cannot in a free America yield to the misguided attempts by a small but vocal minority to influence behavior and trample on the First Amendment rights of those with whom they might not agree.''

Stuart Elliott contributed reporting for this article.

NOTE: What Mr. Smith fails to state is that the so-called documentary is not a documentary, and is not news. It is plain and simple an anti-Kerry smear campaign, which violates Sinclair's use of the public airwaves.