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Sinclair's hasty 
retreat on Kerry special

Backs down after threat of insider trading suit

By Marisa Hoheb

    When two weeks ago Sinclair Broadcasting Group ordered its stations to air an anti-John Kerry documentary, political pressure began to build almost immediately against the station group.
   And as Friday's air date got closer, the heat only accelerated, with critics of media consolidation and consumer interest groups decrying what a member of the Kerry campaign called Sinclair’s “partisan agenda.” They were joined by advertisers and shareholders.
   Now the nation’s largest television group has retreated, saying yesterday it will air only portions of “Stolen Honor: Wounds That Never Heal” on Friday night rather than show the documentary in its entirety as originally planned.
   The announcement appears to come in direct response to a threat by a group of Sinclair shareholders to sue two executives and a board member for alleged insider trading in Sinclair stock as part of a larger action challenging the management of the publicly held company.  
   In a statement yesterday Sinclair CEO David Smith 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.”
   Sinclair said it will use excerpts from “Stolen Honor” and other political documentaries to “examine the role of the media in filtering the information contained in these documentaries, allegations of media bias by media organizations that ignore or filter legitimate news and the attempts by candidates and other organizations to influence media coverage.”
   The broadcaster did not indicate how much of the 42-minute documentary, which criticizes Kerry’s anti-Vietnam War activities, would be included in the hour-long news program, now entitled “A P.O.W. Story: Politics, Pressure and the Media.”
   But Sinclair did insist that contrary to earlier reports, it had never made public its intention to air the entire film.
   Sinclair also said “A P.O.W. Story” will only appear on 40 of the 62 stations it owns or operates, many of them located in swing states including Ohio, Florida and Pennsylvania. The broadcaster originally planned to air the documentary on most or all of its stations. Sinclair is one of the largest media contributors to the Bush reelection campaign and the Republican Party.
   Yesterday a group of shareholders sent a fax to Smith, requesting that he launch an independent investigation into possible insider trading on the part of three members of the Smith family, which owns Sinclair. The shareholders accuse two executives and a board member of selling Sinclair shares directly ahead of a downturn in the stock.
   The shareholders, represented by San Diego attorney William Lerach, are expected to file a  lawsuit in the coming weeks. Shares in Sinclair have dropped more than 15 percent since it announced it would run the documentary.
   Also yesterday, New York State Comptroller Alan Hevesi sent a letter to the company stating that Sinclair’s decision to air “Stolen Honor” would diminish the value of the New York State pension fund’s investment in Sinclair.
   And Burger King announced it would pull all commercials from Sinclair stations on the day of the broadcast, saying it intends to remain neutral during the election.
   The Kerry campaign has already filed a complaint with the Federal Communications Commission demanding equal air time. Meanwhile, the producers of “Going Upriver,” a documentary examining Kerry’s wartime experiences in a more positive light, have teamed up with a philanthropist in an attempt to buy an hour of primetime on Sinclair stations.
   Sinclair said it won’t allow excerpts of “Going Upriver” to air in primetime but will consider other time slots.


Oct. 20, 2004 © 2004 Media Life


-  Marisa Hoheb is a staff writer for Media Life.


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