WASHINGTON -- On Thursday, the Sinclair Broadcast Group responded to a report Free Press released this week.
In Cease to Resist: How the FCC's Failure to Enforce Its Rules Created a New Wave of Media Consolidation, Free Press showed how Sinclair and other broadcasters are using shell companies to exploit loopholes in the Federal Communications Commission’s media ownership rules. Sinclair has led the current wave of local TV station consolidation — which one industry insider described as “the biggest wave … in the history of television.”
Free Press Research Director S. Derek Turner made the following statement:
“Contrary to its claims, Sinclair is not helping independent, struggling stations stay on the air. Instead, it's using its shell companies to buy these stations and drive independent owners out of business. Its own CEO, David Smith, made it clear in a recent statement that pushing these small operators out of business is the point of the company's aggressive acquisition strategy.
“Sinclair's argument that the FCC has done nothing to stop these practices just serves to highlight the farce we identified in our report. But Sinclair's shell games are fooling no one but the FCC.
" Indeed, in its criticism of our report, Sinclair declined to respond to our findings that the Securities and Exchange Commission considers Sinclair and its shell companies as one and the same. The SEC does this because it's the plain truth. Sinclair controls every aspect of its shell companies' operations and keeps all of the profits.
“Sinclair also claims that it's adding jobs, but the company has a long track record of laying off workers and cutting the number of staff at its stations. Our research found that the average number of employees at Sinclair-owned stations has declined by nearly 20 percent since 2001.
“The bottom line is that fake owners shouldn't be given broadcast licenses. Sinclair can’t explain away the fact that it's violating the spirit of the FCC rules and exploiting loopholes to do it. It’s time for the FCC to stop this wave of consolidation before the damage is irreversible.”