Glencairn ruling dueOwnership dispute pits Edwards-Sinclair against Jackson, FCC 11/18/2001 07:00:00 PM Eastern
Pittsburgh minority broadcaster Eddie Edwards has been called a "sham" and a "scapegoat." Now the FCC is about to decide whether he should also be called a TV-station owner.
Edwards has been the focus of a bitter dispute that has pitted Glencairn, the nine-station TV group he heads, and business partner Sinclair Broadcasting against the nation's best-known civil-rights leader, Rev. Jesse Jackson.
Jackson's Rainbow/PUSH Coalition charges that Sinclair used Edwards as a front to illegally circumvent government restrictions that had barred companies from owning two TV stations in a single market, a charge Sinclair strongly disputes.
Thanks to the ugly row, the FCC has been hauled into court to answer Sinclair's charges that the agency has held hostage the approval of 14 unrelated station acquisitions as punishment for the company's unwillingness to strike a deal with Jackson.
In the latest round, the FCC told federal judges in Washington last week that it will rule on Sinclair's applications in the next 30 days and asked them to reject Sinclair's request for a court-ordered expedited ruling.
The matter has been pending at the FCC since early in the tenure of former FCC Chairman William Kennard, who, according to Sinclair's court filing, called Edwards a "sham" owner.
Edwards and Sinclair counter that a better description might be "scapegoat," because Edwards has been maligned.
According to Sinclair, Kennard and other FCC officials improperly promised the mergers would be approved if Sinclair agreed to help other minorities obtain stations. Kennard had no comment.
Calling charges of bad faith "preposterous," the FCC said the current lineup—which includes three commissioners in office less than six months and a different chairman—cannot be blamed for any alleged actions by Kennard.
FCC officials won't disclose recommendations made by the Mass Media Bureau staff. But industry sources note that Sinclair, the country's eighth-largest station group in terms of audience reach, likes to test the limits of the government's ownership rules. Most recently, it unveiled a joint venture with Tallahassee ABC affiliate WTXL-TV. Sinclair owns local NBC affiliate WTWC-TV. Under the deal, Sinclair will run all but WTXL's programming functions, an arrangement some local competitors complain violates the spirit if not the letter of new rules permitting dual TV ownership only when eight or more separately owned stations remain in a market.
Sinclair argues the deal complies with FCC rules, which state that only programming control would give a company ownership of the station. In the ventures with Glencairn, Sinclair operates all aspects of station operation, including programming.
Regarding the dispute over Glencairn, Rainbow/PUSH argues the pending purchases should be rejected unless Sinclair is forced to unwind its relationship with Glencairn. They say Edwards is a front for Sinclair because he owns only 3% of Glencairn's common stock, while relatives of Sinclair shareholders own 97%. Sinclair counters that Edwards truly controls Glencairn because he owns all of the voting stock.
Regardless of how the fight with Rainbow/PUSH turns out, Sinclair could still be forced to divest some local marketing agreements with Glencairn and other stations. Unless the court strikes down the FCC's new duopoly restrictions as Sinclair has asked in a separate case, the Baltimore-based station group will have to sever ties to four partnerships in Ohio, South Carolina and West Virginia. Oral arguments in that case are scheduled Jan. 14, and a decision is expected several months later.
Jesse Jackson isn't without his critics in the media industry, either. Some have accused him of "extorting" media firms by threatening to hold up mergers unless they spin off stations to minority buyers or contribute to minority scholarship funds.