Sinclair Tries Duop Back Door

Ken Ferree's words may come back to haunt him. At least, that's the hope of Sinclair Broadcasting. Wondering aloud at a trade group conference last fall, the FCC Media Bureau chief questioned whether the commission has authority to block station deals given the weird legal limbo of ownership limits.

"We would be hard-pressed. ... to say, No, you can't do this," Ferree told the National Association of Black Owned Broadcasters in September.

Enter Sinclair. The station group some consider the renegade of broadcasting is making a second stab a buying five stations it operates under local marketing agreements, even though the FCC rejected the same deal two summers ago. And it is seizing on Ferree's off-the-cuff comments to argue that the FCC can no longer stand in the way.

Sinclair is the country's largest TV-station group in terms of total stations owned and its ability to raise the hackles of media-consolidation critics is second only to radio conglomerate Clear Channel. (FCC Commissioner Michael Copps once complained the company repeatedly "stretched the limits" of agency rules and should be investigated.)

"The applications are ripe for grant," Sinclair's Washington attorney Kathryn Schmeltzer told the FCC in a filing.

At issue are Sinclair's bids to finally buy WGRT-TV Dayton, Ohio; WVAH-TV Charleston, W.Va.; WTAT-TV Charleston, S.C.; WTTE(TV), Columbus, Ohio; and WNUV(TV) Baltimore. In each market, Sinclair already owns another TV station, and none of the deals comply with the FCC's 1999 rule limiting TV duopolies to markets where eight separately owned stations would remain.

That doesn't matter, Sinclair argues, because the 1999 rule was ordered rewritten by federal appeals judges in Washington. The result of that rewrite, a more lenient four-voice limit, has been stayed by Philadelphia's federal appeals court. The conflicting court decisions have, in effect, left the TV business with virtually no ownership limits at all, Sinclair says.

But Sinclair's critics say the company's legal analysis is shaky.

"Even Ken Ferree would agree that his utterances, no matter how profound, are not precedent," said Andrew Schwartzman, president of Media Access Project.

Sinclair is smart to push for closing the station deal while the status of the ownership rules are unclear. Only two of the five purchases could go through if the new four-voice test is upheld after the Philadelphia court hears oral argument in challenges to the FCC new rules next month. Even worse, the LMAs in Dayton, Charleston, W.Va., and Columbus would have to be disbanded because the changes would make those partnerships attributable to Sinclair's ownership tally.

Sinclair's bid to acquire the stations is the latest convoluted chapter in its half-decade effort to acquire stations once run by LMA business partner Edwin L. Edwards.

The stations are currently owned by Cunningham Broadcasting, a company 7.2% owned by Carolyn Smith, mother of Sinclair Chief Executive David Smith. Prior to 2002, Cunningham was named Glencairn Ltd. Edwards stepped down from the helm of Glencairn in '02.

For a second time, Jesse Jackson's Rainbow/PUSH Coalition has petitioned the FCC to strip some of Sinclair's TV licenses, arguing Glencairn/Cunningham is a front company for Sinclair.