Sinclair Burning Some Bridges

Oct 25, 2004  •  Post A Comment

The Sinclair Broadcast Group may have solved some of its short-term problems last week by pulling back on plans to air an anti-John Kerry documentary uncut, but its decision to air the politically controversial program in any form appears to have soured some advertisers, raising the danger of lingering issues.

At least 50 advertisers, including Verizon Communications, Burger King and Ford Motor Co., planned to pull their commercials last Friday night, when the station group was to air “A POW Story: Politics, Pressure and the Media,” a program critical of the Massachusetts senator and Democratic presidential candidate’s anti-Vietnam War activities in the early 1970s.

“Some of our clients are getting out of the way,” Kathy Crawford, president of local broadcast for MindShare USA, said last week, declining to be specific. “If the consumer complains to the client, the client has no choice but to respond.”

In a statement, Burger King said it would not allow its ads to run on Sinclair stations on Friday night since “it does not endorse any candidate or political party.” A Ford spokeswoman confirmed that the car company wouldn’t advertise on Sinclair stations Friday night. A Verizon spokesman declined to comment.

But the story doesn’t end there. A number of major national advertisers, including a technology company and a telecommunications company, are considering longer-term reductions in their local advertising on Sinclair’s 62 stations, according to media buying executives.

“We have a business relationship with them, and they have sucked us into their political agenda,” said one angry media agency executive who buys for a number of high-profile technology companies. “If I can help it; I’m not going to buy them.”

Sinclair stations consists of 20 Fox affiliates, 19 WB affiliates, six UPN, eight ABC, four NBC, three CBS and two independent stations.

Annoyed advertising executives are considering these longer-term decisions because of Sinclair’s increasing trend toward mixing its political preferences with its news products. In late April Sinclair, which is based in Hunt Valley, Md., refused to air an episode of ABC’s “Nightline” because anchor Ted Koppel planned to read the names of the U.S. soldiers who died in Iraq.

“If they continue to do things like this, then that brings them into a different light,” Ms. Crawford said.

Still, Ms. Crawford didn’t believe the situation would evolve into a long-term problem.

Boycott lists such as those found on anti-Sinclair Web sites can be an irritant for national advertisers. One site, boycottsbg .com, listed some 105 advertisers. Its creator, Nick Davis, a self-described concerned citizen and business executive from Kansas City, Mo., said he has a database of some 1,100 Sinclair advertisers that he still is considering targeting.

Sinclair also received adverse publicity last week when it fired its Washington bureau chief, Jon Lieberman, for publicly criticizing the company’s actions.

After the furor arose early last week, Sinclair backed off plans to air intact a documentary critical of Sen. Kerry. The company also dropped plans to air the documentary on all its stations instead announcing plans to run a portion of it on about 40 of its stations at 8 p.m. (ET) last Friday.

Sinclair still was editing the program last Thursday. Carl Gottlieb, managing editor of Sinclair’s News Central, described it as “a pretty balanced show” on “an important issue.” Mr. Gottlieb said the hour would open by posing free-speech questions and include segments from “Stolen Honor” and the pro-Kerry “Going Up River” documentary.

Separately, Sen. Kerry’s campaign on Thursday announced it would not participate in a Sinclair program slated to run after the “POW” show. Campaign spokesman Chad Clanton said that despite Sinclair’s modifications, “The Kerry campaign is in no way cooperating with this discredited partisan effort that Sinclair is poorly disguising as `news.’ … Sinclair’s latest spin on this premeditated political attack is just a panicked attempt to appear fair and reasonable.”

In Wall Street’s view, Sinclair’s future was dimming before the controversy surrounding its planned airing of the documentary surfaced. The latest dust-up may have made a bad situation worse, Wall Street analysts said.

Though it has 62 television stations, Sinclair has been considered a laggard among the major station groups, failing to improve broadcast cash flow margins despite cost-cutting initiatives and missing out on political advertising spending that has buoyed other station groups.

JPMorgan securities analyst Barton Crockett noted that while Sinclair owns more stations than any other group, it has only six stations ranked either No. 1 or No. 2 in evening news. “Ad buyers will tend to consolidate spending around market leaders,” he wrote in a research note.

Michele Greppi, Doug Halonen and Jay Sherman contributed to this report.