Copyright, Logopedia 2012

by Anna Hider

Overview

Sinclair Broadcast Group, Inc. (SBGI) was founded in 1986 when Julian Sinclair Smith’s sons took his small broadcasting station in Baltimore, Maryland and made plans to expand it into a major force in the industry. Since then, the company has been buying assets, and has grown to own 74 stations in 45 markets, mostly small- to medium-sized cities in the South and Midwest. They reach about 26.3% of households in America. Their stations include various affiliates such as Fox (19 stations), ABC (11 stations), MyTV Network (18 stations plus 2 subchannels), The CW (12 stations plus 4 subchannels), CBS (9 stations), NBC (1 stations), and more. They are also credited with pioneering the local marketing agreement concept in 1991. A local marketing agreement is an arrangement that allows one company to operate a radio or TV station that is owned by another licensee. The company trades on the Nasdaq as “SBGI”. They employ around 3,130 people.

Executives

David D. Smith; Copyright, Baltimore Business Journal 2011

David D. Smith: Chairman, President and Chief Executive Officer

Steven M. Marks: Chief Operating Officer and Vice President

David B. Amy: Chief Financial Officer and Executive Vice President

J. Duncan Smith: Secretary, Director and Vice President

Lucy A. Rutishauser: Treasurer, Vice President, and Head of Investor Relations

David R. Bochenek: Chief Accounting Officer and Vice President

Barry M. Faber: Executive Vice President and General Counsel

Controversy

Sinclair came under fire by the FCC for illegally controlling Glencairn Ltd. Glencairn had entered into a local marketing agreement with Sinclair, and Carolyn Smith, the wife of Sinclair founder Julian Smith and the mother of the current CEO David Smith, owned 70 percent of Glencairn’s stock. The FCC fined SBGI $40,000. SBGI tried to buy Glencairn, and the FCC only allowed four of then 10 stations to be directly owned by Sinclair. Glencairn changed its named to Cunningham Broadcasting, and entered another LMA with Sinclair. 90% of Cunningham’s stock is owned by trusts in the name of members of the Smith family. In 2009, SBGI almost filed for chapter 11 bankruptcy, as they had a $1.33 billion dollar debt and they feared Cunningham Broadcasting would not be able to repay a $33.5 million dollar loan.

Sinclair has also faced a lot of political controversy, as in 2004 when several SBGI stations chose not to air a Nightline episode paying tribute to the war in Iraq, saying that they suspected the program’s motive was to undermine the war.¹ This drew criticism from both supporters and opponents of the war. Another incident occurred before the 2004 elections, when it was reported that Sinclair would have all of its stations air a documentary about presidential candidate John Kerry that was funded by an anti-Kerry organization.² They fired their Washington bureau chief, but showed an edited version of the documentary. SBGI suffered from a negative image for years afterwards. Similarly, in November 2010, several SBGI stations aired a controversial anti-Obama infomercial.³

Ring of Honor

SBGI also owns the Ring of Honor Wrestling company, which they bought in May of 2011. Sinclair produces an hour-long weekly program for Ring of Honor, which they air on Sinclair stations, mainly  during primetime on the weekend on The CW and MyNetworkTV affiliated stations. They hope to sell the program into non-Sinclair stations to syndicate.

Ring of Honor Return 2011

News

April 5, 2012: Sinclair released a statement saying that it would announce its first quarter earnings at 7:30 am on May 2, 2012. A 9:30 am conference call to discuss the results will follow.

Copyright, theliberaloc.com 2012

• April 2, 2012: Sinclair Broadcast Group closed on the acquisition of Freedom Communications assets for $385 million. SBGI had been operating the stations, with locations in West Palm Beach, FL; Grand Rapids/ Kalamazoo/ Battle Creek and Lansing, MI; Albany, NY; Chattanooga, TN; Medford/Klamath Falls, OR and Beaumont/ Port Arthur/ Orange TX since December of 2011 while FCC approval was pending.
• March 15, 2012: Sinclair participated in the Television Broadcasting Symposium of Gabelli & Company, Inc.’s 4th annual Movie Exhibition Conference with six other broadcasting companies. The symposium featured presentations and panel discussions with  leading advertisers, broadcasting companies, publishers, advertising companies, equipment providers, etc. and was a research meeting for institutional investors. Gabelli & Company is an institutional research and brokerage firm.
• February 8, 2012: SBGI released its fourth quarter report for 2011. The company reported a 4.9% decrease in revenue from continuing operations from last year’s third quarter report, and a 1.2% decrease for the year, as compared to last year. However, the company saw an increase in ad sales for the automotive industry (the largest advertising category) at the end of the quarter, and expect the increase to continue. SBGI also expects an increase in political advertising in 2012, an election year.

• January 3, 2012: SBGI closes its acquisition of Four Points Media, which operated stations in Salt Lake City, UT; Austin, TX; West Palm Beach, FL and Providence, RI. Sinclair had been running the stations since October, 2011 while awaiting FCC approval. The deal was worth $200 million.