OCT 15 - 31, 2004

VOL. 2 ISSUE 20

OCTOBER 14, 2004 –  Imagine, if you actually stand up to a bully, the bully is not so tough to knock out.

At long last the Democrats, and others, have taken a stand against a right-wing media entity that uses the public airwaves essentially as a tool for the Bush campaign.  They've let FOX get away with, let Limbaugh and Hannity and, and, and... get away with it - for over a decade now.

But Sinclair Broadcast received the first biff from the suddenly courageous Democratic Party.  And the result?  Serious problems for the entire company.

Not only are there possible FEC and FCC problems, but Sinclair is getting clobbered from where it really hurts:  its stockholders.

See, the trouble with a publicly-owned company trying to pull such a scam is that, well, half of the public is for the other guy.  And so if you cross a line, they cross you.

In this case, the Smith brothers - the four brothers who started the station, as CBS reports, from a UHF station their father gave them, and who currently sit on the company's board - thought they could get away with using the station as their own personal political tool.

Problem was, they went public, and so are now just board members there to serve the stock holders.  Stockholders such as... the State of New York, who, according to CBS, owns about $2 mil worth of the company. 

As CBS reports, "New York Comptroller Alan Hevesi sent a letter to Sinclair on behalf of the state's pension fund... In his letter to Sinclair, Hevesi, a Democrat, said the $115 billion New York State Common Retirement Fund holds 256,600 shares of Sinclair Broadcast Group Inc. and questioned the impact of showing "Stolen Honor" on the value of the shares. Among the questions raised in the letter, a copy of which was provided to The Associated Press: the cost of foregoing an hour of commercial time to show the documentary; how many advertisers have pulled their spots from Sinclair stations and how much that has cost the company; and the impact on ratings."

In other words, you are responsible for a business, not owners of a personal toy you can mess with as you see fit.

The plan objected to called for all Sinclair stations to broadcast without commercials during prime time and anti-Kerry documentary.  The force of lost revenue from not being able to air ads during prime time alone is a breach of stewardship to the stockholders.  And the absurdity of that move shows just how delusionally out of touch the Smith-led company leadership is.

And it's not just the State of New York that is pissed, Wall Street investors are fuming, and a San Diego attorney is warning that they are directly violating the law.

From CBS:  "San Diego attorney William S. Lerach also planned a teleconference Tuesday afternoon to "discuss insider self-dealing by officers of Sinclair Broadcasting."

And New York investment firm Glickenhaus & Co. is raising hell as well on behalf of its clients.

"General partner Jim Glickenhaus said Sinclair's CEO and directors have a financial obligation to shareholders.  "We are not partisan. We are investors," Glickenhaus said. "Sinclair's decision has caused harm to the value of our investment in Sinclair. We believe Sinclair must give equal time to an opposing point of view. Otherwise the company is placing its future and the value of our investment in jeopardy, by putting the renewal of its FCC licenses at risk, alienating local advertisers, and opening itself up to libel suits against the company."

Sinclair's troubles are fueled by a stock price that has plummeted of late.  Additional problems stem from the fact that the board seems to be, save for a few members, one big conflict-of-interest disaster, in violation of NASDAQ-required standards.

The Smiths appear to have thought they could simply do what FOX and Limbaugh have done.  But at last someone has stood up to the scam.

Sorry, Sinclair.  You thought you could get away with being another right-wing bully.  But this isn't the Soviet Union, and, in this case, good Americans are standing up for the democracy they love so much (as well as, for certain, another American favorite right:  the right to make money.)