Sunday, October 21, 2018

Sunday Long Read: The Company Line

This week's Sunday Long Read comes to us from The New Yorker's Sheelah Kolhatkar on Sinclair, arguably the biggest media threat to the US today. I've talked multiple times before about Sinclair Broadcast Group, the right-wing conglomerate that owns nearly two hundred local broadcast stations and forces pro-Trump, pro-GOP, pro-corporate propaganda on its local news broadcasts. The man behind Sinclair is David D. Smith, who makes no effort to hide the fact that he is there to spread the message of the Trump GOP for his 20 million daily viewers in dozens of TV markets around the country, whether they like it or not.

Sinclair has largely evaded the kind of public scrutiny given to its more famous competitor, Fox News, and David Smith sometimes expresses frustration that his business doesn’t command as much respect as Rupert Murdoch’s company, 21st Century Fox, which owns the channel. Fox News is the highest-rated cable property, with 2.5 million viewers during prime time. But twenty million or so U.S. households don’t have cable or streaming television, and therefore rely on local stations such as Sinclair’s. A Republican operative who has worked with Smith told me, “He has a shtick that he does not deviate from: ‘People watch broadcast television, and there’s a shitload of people in this country who do not have cable.’ And he’s right. Local TV is still where a significant cross-section of the population gets their news, and a lot of what’s going on in cable television is just totally irrelevant. It’s not a sexy business, but he’s laughing all the way to the bank.”

Sinclair was founded by Smith’s father, Julian Sinclair Smith, who worked in aerospace engineering before applying to the F.C.C., in 1965, for a license to operate a television station in Baltimore. In 1971, Julian Smith launched Channel 45, also known as WBFF. The airwaves are considered a publicly owned resource, and broadcasters must agree to devote a portion of their programming to serving the public interest. Julian’s four sons—Fredrick, Duncan, Robert, and David—grew up watching the family’s channel, known as “the BFF,” for Baltimore’s Family Features, which showed old movies and children’s shows. The Smith family ate dinner with the TV on, so that they could keep an eye out for technical problems. Julian encouraged his sons to help at the WBFF offices by hauling out garbage.

David was the most entrepreneurial of the boys. In the nineteen-seventies, when he was in his twenties, he became a partner in a company called CinĂ© Processors, which produced copies of pornographic films, including “Deep Throat.” (Smith’s colleague in the enterprise told the Los Angeles Times that CinĂ© Processors later went out of business after a police raid.) David also founded, and then sold, a company that made television transmitters. In the nineteen-eighties, as Julian’s health declined, the Smith sons began to take a more active role in running Sinclair. In 1991, the Baltimore Sun portrayed the brothers as role models in the business community. “Listen as they gather in the stately Roland Park home of the parents to talk about themselves and the station, the sons joking and wisecracking and chiding one another as if they are at some sort of bawdy class reunion, adding to each other’s thoughts, and ultimately deferring almost solemnly to the father,” the reporter wrote.

Sinclair had recently introduced its first hour-long newscast, after David pointed out that Baltimore was one of the only top television markets without a 10 p.m. national news program. Soon, under David’s direction, Sinclair began buying new stations. “I didn’t want to be a digit head; I wanted to be an entrepreneur,” David told Forbes in 1996. “My father was too much of a visionary to care about profits. What I wanted was purely to make money.”

At the time, F.C.C. rules prohibited a company from owning two stations in the same market, but Smith found a work-around. Sinclair bought a television station in Pittsburgh, WPGH, even though Sinclair already owned its main rival, WPTT. The first Iraq War had just started, and the stock market was dropping, but Smith paid a high price—fifty-five million dollars—for the station. “Everybody thought it was the end of the world,” Smith said. “I didn’t. I believed that certain things were going to happen in the television industry, the most important being consolidation.”

To comply with the F.C.C., Sinclair would have to divest one of the two stations to an independent owner. Instead, Smith sold WPTT to its manager, a Sinclair employee named Edwin Edwards, Sr., and then signed an agreement that gave Sinclair day-to-day control over the station
. A few years later, Sinclair replicated this strategy in Baltimore, divesting one station to a company called Glencairn, which was jointly controlled by Edwards and Smith’s mother. These “duopolies” gave the company leverage in purchasing syndicated television shows like “Friends” and “Cheers.” The fact that Edwards is African-American meant that Sinclair qualified for tax benefits for companies selling to minority owners. Although Sinclair told the F.C.C. that the divested stations were independent, filings with the Securities and Exchange Commission indicated that they were Sinclair assets.

By 1998, Forbes reported, Sinclair had made twelve of these so-called sidecar purchases, with eight more pending. All were made through Glencairn, Smith family members, or Sinclair executives, allowing the company to circumvent another F.C.C. regulation: an ownership cap dictating that no corporation can control more than thirty-five per cent of the national market, a figure that has since been raised to thirty-nine per cent. When reached for comment, Sinclair said that the company “used these legally permissible operating efficiencies to continue to survive in a very competitive business landscape,” and added that the sidecar deals were “similar in all material respects to arrangements in which many other broadcasters frequently engage.”

None of this would have been possible without the willful blindness of the F.C.C. Andrew Schwartzman, who has been involved in litigation against Sinclair, told me that Sinclair “pushed the envelope and the rules aggressively, time after time after time,” and that the company had “an unparalleled track record of getting away with stuff.”
Emboldened by the sidecar strategy, Sinclair made a flurry of new purchases. In 1998, it announced plans to buy Sullivan Broadcast Holdings, which owned thirteen stations in places like Oklahoma City, Nashville, and Dayton. Around the same time, the F.C.C., under pressure from lobbyists, modified the duopoly rule to be more lenient. Sinclair responded by buying all but two of the Glencairn stations, for a fraction of their market value.

Public-interest groups and media organizations complained to the F.C.C., arguing that Glencairn was a front for Sinclair, and that the situation had allowed the company to build a near-monopoly in many markets. In 2001, an F.C.C. investigation found that Sinclair had exercised de-facto control over Glencairn, but the commission fined the two companies a mere forty thousand dollars each. The pattern continued, with Sinclair buying back divested stations when regulations loosened. Glencairn changed its name to Cunningham Broadcasting, and promised that it would be under new management—which, it turned out, meant Sinclair’s former president Robert Simmons. Shortly afterward, Sinclair filed applications to acquire five stations licensed to Cunningham, at what critics said was a tenth of their true market value.

And on and on.  Sinclair was the man behind the "Stolen Honor" movie in 2004 that was essentially a two-hour campaign commercial attacking John Kerry.  It ran on all of Sinclair's Ohio stations, cost Kerry the state, and the election.

Smith is right up there with Steve Bannon and his ilk as the most consistently powerful and dangerous media mogul in America.  It's safe to say Trump would not be president without his broadcast stations in Michigan (8 stations), Ohio (9 stations), Pennsylvania (9 stations), and Wisconsin (5 stations) and his pro-Trump propaganda there which basically amounted to tens of millions in free advertising in 2016.

How much damage has he done in 2018?

We'll know soon, I suspect.

No comments:

Related Posts with Thumbnails