Sanctions against Sinclair? Sounds justified

It’s either coincidence, karma or a higher power when things come together in ways previously thought impossible.

This weekend, Jewish people around the world read the Torah portion Shofetim (שֹׁפְטִים, or “Judges,” comprising Deuteronomy 16:18–21:9).

The best-known line in it is the third, “Justice, justice shall you pursue” (צֶ֥דֶק צֶ֖דֶק תִּרְדֹּ֑ף, Deut. 16:20).

Shofetim also happens to be the Torah portion from my bar mitzvah and it’s interesting that it’s coming up this week because an article in Axios yesterday said,

Sinclair Broadcasting’s failed effort to buy Tribune Media may soon become more than just a costly embarrassment. It could result in the company ultimately losing its broadcast licenses.”

Isn’t that what I suggested should happen, weeks ago, back on July 27?

And two days earlier, how

“It looks like one of the seven deadly sins – greediness – may have killed the (merger) deal!”?

Yesterday, Axios wrote,

“The conservative broadcaster has been accused of lying to the FCC, and of acting in bad faith with Tribune.”

There’s not much a huge corporation can do to anger the Federal Communications Commission these days – if it follows the rules, which get eased all the time – but lying is its one big crime.

Back on Jan. 27, I wrote the FCC was going to allow the deal but

“force Sinclair to sell off a bunch of stations because it’ll be (way, way, way) too big.”

And that was the crux of the problem: ownership limits and which stations would be sold off. Oh, and would the companies buying really be associated with Sinclair and let Sinclair control the stations?

Ajit Pai fcc wikipedia
Ajit Pai (Wikipedia)

In mid-July, FCC Chairman Ajit Pai said in a statement:

“Based on a thorough review of the record, I have serious concerns about the Sinclair-Tribune transaction. … The evidence we’ve received suggests that certain station divestitures that have been proposed to the FCC would allow Sinclair to control those stations in practice, even if not in name, in violation of the law. … When the FCC confronts disputed issues like these, the Communications Act does not allow it to approve a transaction. Instead, the law requires the FCC to designate the transaction for a hearing in order to get to the bottom of those disputed issues.”

That was a huge surprise and the turning point in the drawn-out deal.

On July 24, the newspaper in Sinclair’s hometown, The Baltimore Sun, wrote what finally did the deal in:

“FCC Chairman Ajit Pai, an appointee of President Donald J. Trump who has been viewed as friendly to Sinclair and such a merger, raised ‘serious concerns’ Monday about whether the deal would serve the public interest.”

Ah, the public interest! It’s always nice to hear about that, since we’re talking about use of the public airwaves.

I quoted TVNewsCheck’s Harry A. Jessell on the seriousness of what Sinclair had actually been doing pretty quietly doing for years:

“Its mishandling of its merger application has badly stained its permanent FCC record in a way that could greatly complicate its future regulatory dealings. … And a liar is what the FCC has accused Sinclair of being by obfuscating the fact it would continue to control three major market stations that it told the FCC it would spin off to other broadcasters to comply with ownership limits.

sinclair before tribune
Sinclair’s reach. Large enough?

“You see, the FCC acts on the honor system. It presumes that you are obeying all the rules and expects you to confess any infractions. It’s the principal way the FCC polices those it regulates. That’s why lying – the ever-polite FCC calls it “misrepresentation” or “lack of candor” – is taken seriously and is the FCC equivalent of a capital crime. … As the lawyers pointed out to me this week, once indicted for misrepresentation as Sinclair has now been, it sticks because it goes to the broadcaster’s basic character qualifications to be a licensee. It cannot buy or sell a station or even renew a license until it resolves the character question. Sinclair’s best move now is to walk away from the merger and promise, no, swear on a stack of Bibles, that it will never, ever mislead the FCC again.

“Sinclair has no one but itself to blame for this fiasco. It pushed too hard to keep as many of the Tribune stations as it could and somewhere along the line lost sight of the larger goal – get the transfer through the FCC and get to closing. … (David Smith) kept going back to the FCC (and the Justice Department) demanding more and more. Ironically, he will likely end up with nothing, except maybe a new set of regulatory hassles.”

feature Tribune gavel Sinclair

Tribune called off the deal and sued Sinclair for $1 billion.

— UPDATE: Sinclair counter-suing Tribune, accusing its onetime takeover target of a “deliberate effort to exploit and capitalize on an unfavorable and unexpected reaction from the FCC to capture a windfall.” —

Of course, Sinclair denied everything and said in a statement,

“We have been completely transparent about every aspect of the proposed transaction.”

fcc commissioners 2018One thing Sinclair failed to do after telling the FCC it was withdrawing the deal was asking the administrative law judge, who FCC commissioners unanimously recommended look into Sinclair’s representations during the Tribune negotiations, to end his planned hearing. The FCC’s Enforcement Bureau said it had no problem if the hearing was terminated.

But Broadcasting & Cable reported “The FCC docket was still open” as of Monday and got confirmation from an FCC spokesperson,

“Although Sinclair’s pleading states that the applications ‘have been withdrawn’ and are to be dismissed with prejudice, it fails to specifically seek such relief from the Chief Administrative Law Judge.”

B&C added,

“That’s because the licenses are now before him, rather than the FCC staffers who had been vetting them before the hearing designation.”

tv airwavesThis is a world of bigger and bigger broadcasting companies – in part because of competition from cable, satellite and the internet – but as I’ve said about a million times, the broadcasters have special responsibilities since they use the public airways. And they need a tougher FCC to keep them, and the newer companies, in line.

On the other hand, Axios quoted Dennis Wharton, executive vice president of communications for the National Association of Broadcasters as saying,

“Scale matters when we are competing against massive pay TV conglomerates, Facebook, Apple and Netflix. If you want a healthy broadcast business that keeps the Super Bowl on free TV, that encourages local investigative journalism and allows stations to go 24-7 live with California wildfire coverage, broadcasters can’t be the only media barred from getting bigger.”

The FCC is still determining whether to raise the limits on TV station ownership above 39 percent. Most experts told Axios they

“believe that cap will be lifted above 50 percent, but they don’t know what the exact limit will be, or when it will be passed and implemented.”

RKO General 1962Anyway, the FCC has taken away broadcast licenses before. I wrote about the RKO General situation all over the country, and also allegations of impropriety in the granting of a Boston television license.

According to experts Axios spoke to, Sinclair’s first batch of licenses comes up for renewal in June 2020. (Look for more activist challenges then.)

They also

“describe Sinclair as a ‘hard headed’ company that rarely engages with D.C. and which recently lost its top lobbyist.”

That description should come as no surprise to any regular reader of this blog.

So for now, there’s no deal, but a lawsuit, between Sinclair and Tribune.

Sinclair’s alleged misrepresentations to the FCC

“can be reviewed by an administrative law judge during a license renewal hearing, were the FCC to recommend such a hearing (which may be likely, given FCC’s concerns and Sinclair’s many outside critics),”

according to Axios.

The judge could revoke Sinclair’s licenses outright, which would teach the industry and its investors a big, important lesson. But a telecom lawyer Axios spoke to said,

“A more likely scenario … is that the FCC would reach a settlement whereby Sinclair is required to divest stations.”

My opinion: Crush them or cut them down to size, but at least do something.

One last note is that Sinclair is going to have trouble finding another merger partner due to its potential license renewal issues, but also because Tribune’s lawsuit accused the company of being “belligerent.” It’s what happens when you’re too big.Tribune Broadcasting Company

Now to the Tribune side, where there is less justice.

Reuters reported the company is going to pay big

“bonuses to executives who worked for more than 15 months on its failed merger.”

You’d think they’d be in line for bonuses after a successful merger!

How big are these bonuses? Reuters reported the company said,

“16 percent of target annual bonuses, which had been conditioned on completion of the Sinclair merger.” (I underlined. –Lenny)

money dollars centsAre you hearing this, shareholders?

This is what it adds up to. Three top executives – chief financial officer Chandler Bigelow, president of broadcast media Larry Wert, and general counsel and chief strategy officer Edward Lazarus – will be getting

“between $102,000 and $160,000. Other executives will get bonuses based on a similar percentage of their targeted annual bonuses.”

Why?

“In recognition of the substantial efforts and time that each of them devoted to the company’s anticipated merger with Sinclair and their contributions to maintain and grow the company’s business,”

according to the company.

That’s if the company was actually spending money to “maintain and grow” the business which is doubtful because companies in the process of being bought are cheap, not replacing employees or equipment so the financial sheets look better.

And what about all the employees who were encouraged to work under harder conditions and so much uncertainty for so long?

That’s the world, these days, kids.

Reuters also mentioned,

“Last week, Tribune Media Chief Executive Officer Peter Kern told investors it (was) ‘open to all opportunities’ in terms of industry consolidation or remaining independent. He noted on an investor call there was ‘tons of activity out there.’

“Kern said he would continue to run the company until Tribune reached a ‘permanent state.’”

Keep in mind, last Monday, Tribune announced it

“reached a comprehensive agreement with Fox Broadcasting Company to renew the existing Fox affiliations of eight Tribune Media television stations, including KCPQ-TV (Seattle), KDVR-TV (Denver), WJW-TV (Cleveland), KTVI-TV (St. Louis), WDAF-TV (Kansas City), KSTU-TV (Salt Lake City), WITI-TV (Milwaukee), WGHP-TV (Greensboro, NC). Terms of the agreement were not disclosed.”

disney abc logo

But knowing Fox is selling most of its assets to Disney/ABC and looking for more stations to buy, especially those in NFL football team markets, I’d consider Tribune a seller rather than a buyer.

TVNewsCheck’s Jessell agrees, pointing out,

“Recall that just prior to the announcement of the Sinclair deal, Fox tried to swoop in and buy Tribune out from underneath Sinclair. It coveted some of Tribune’s stations and it feared Sinclair becoming too big an affiliate group for it to push around.”

Fox TV stations

I’d also consider telling the FCC not to let Fox buy any of those eight stations, except Seattle, because it owned them at one point and sold them when it made sense for the company. In other words, it showed no commitment to the communities or their people. Companies shouldn’t be allowed to sell unneeded stations and then buy them back when they feel they’ll make more money.

standard media

Besides Fox, which could face ownership limits, Jessell pointed to Soo Kim’s new Standard Media, which was going to buy nine Tribune stations in seven cities, and Nexstar as potential buyers.

Jessell also mentions there are a lot more stations on the market now than two years ago.

cox media group

Cox is looking for someone to buy its 14 stations, Gray is buying Raycom and has to spin off nine stations, and Cordillera will be leaving the industry once it sells its 11 stations.

So complicated!

But some more from Jessell on Sinclair:

“Not in the entire history of broadcasting, with the possible of RKO, has a major company so thoroughly managed to trap itself in such a regulatory and legal morass. …

“If Executive Chairman David Smith did not control the board, he would be thrown out for directing this debacle and hobbling the company at a critical time for it and the industry. It will be interesting to see who is made the scapegoat. …

“Sinclair can continue to churn out cash, but, from a strategic standpoint in broadcasting, is indefinitely sidelined. Until it resolves the alleged character issues at the FCC, it cannot buy a broadcast license. It can’t even renew one.

“Sinclair’s challenge today is to start digging out — and it’s going to be costly. First it must settle with Tribune. And then it has to return to the good graces of the FCC.” …

Also, “The Sinclair independent shareholders (could) file a lawsuit against Smith and his team for gross mismanagement.” …

And, “Indeed, Sinclair did everything wrong, allowing arrogance and self-righteousness to overcome its good sense at every turn.”

I think a lot of justice is what’s needed here, and soon.

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Paying for news, one candidate’s free airtime and asking for your comments

I hope you’ve had a terrific Tuesday!

I have a few thoughts (just a few) I figured I’d get out today.

paywall ny timesThis morning, Axios reported several news websites “launched new paywalls within the past year.”

Sorry! (But not this one.)

It named BloombergVanity Fair, WiredBusiness Insider and The Atlantic, and added, “Legacy institutions like The New York TimesThe Wall Street JournalThe Washington Post and The Boston Globe have all tightened their paywalls over the past few years.”

We all know somebody has to pay the people who gather and publish the news in any media format. That’s a given, and anyone who has been in the business knows most employees are not paid nearly what they’re worth.paywall Science Direct That’s a shame and forcing good people out of the business, especially at a time we need the Fourth Estate to be as tough as ever — especially when reporting on news happening in American government and the world.

paywall ny times 2The people researching, making contacts and conducting interviews on the front lines need to make a living.

So what’s the best solution?

I really don’t know.

If you read what I post, you see I often use multiple sites for information and different viewpoints, but I don’t pay those sites. Instead, I credit them link to them, and hope they benefit when I — and then you — click for more information.paywall academic

But if these trusted sites use paywalls, there’s no way any of us would pay multiple sites. How many of us could afford to? Big newsrooms, even if they say they can’t, but you and I won’t have the information we need to be responsible citizens.

Newspapers (on paper) make money through both subscriptions and advertising. So do most cable networks and your cable/satellite company.

paywall south china morning postUnfortunately, today, it looks like news on the web is going the same way.

TV news websites aren’t the best. Maybe some major group could invest in the rights to some top publications and names, to drive our traffic to their own sites so we could be made more aware of important events. It’s too bad many of the companies that owned broadcast and newspaper/magazine assets split up.

no paywall logo
This graphic and all above are clip art

The first company that can do so and really publicize specific detailed content on a daily basis (not just that “we’re free and the newspaper isn’t” or “here are the top stories on our site at this hour”) during newscasts could get new readers who’d share the site with non-readers.

Just a thought.

A similar story from Axios about newspapers is not necessarily new but making news because Warren Buffett said it:

“No one except the Wall Street Journal, The New York Times and now probably the Washington Post has come up with a digital product that really in any significant way will replace the revenue that is being lost as print newspapers lose both circulation and advertising … It is very difficult to see — with a lack of success in terms of important dollars rising from digital — it’s difficult to see how the print product survives over time.

newspaperAccording to Axios, “Local media executives have been saying for months that their biggest competition for subscriptions and eyeballs is large national newspapers.”Warren Buffett 2015

That’s bad for Buffett, who was speaking at Berkshire Hathaway’s annual meeting, and his company owns more than 30 newspapers.

That’s especially bad for the rest of us because too much of what we see on local news deals with murders, crashes and fires. They’re often visual. But it’s the local papers that often investigate and dig, outside of ratings periods. If they go down, who will take their place?

There are also two updates on Facebook, which has been under fire since Cambridge Analytica “harvested personal data on millions of Facebook users, without their knowledge, for marketing and political purposes.”

Last week, the London-based political research firm announced it’s “closing all of its operations with plans to file for bankruptcy in the U.S.,” according to The Huffington Post.

Going further, Adweek says, “Its parent company, SCL Elections, will file for insolvency in the United Kingdom while ceasing all operations in both countries.”

Cambridge Analytica site
https://cambridgeanalytica.org/

The Post quoted from a statement on the firm’s website that it

has been the subject of “numerous unfounded accusations” and “vilified for activities that are not only legal, but also widely accepted as a standard component of online advertising in both the political and commercial arenas.”

I’m not so sure, and to hell with the letter of the law! How about ethics? I know many other people feel the same way.

person on computer typing facebookThat’s because The Wall Street Journal, citing a person familiar with the situation, reported “The decision to close up shop followed rising legal fees and a loss of clients over the investigation into their work and use of Facebook data.”

So there!

And The Huffington Post also reported,

“The firm also suspended its CEO, Alexander Nix, in March after he was recorded bragging about Cambridge Analytica and its parent company, Strategic Communication Laboratories, influencing more than 200 elections around the world with unethical practices.

“Those methods included bribery, entrapment and the use of sex workers and inaccurate information. Nix had said that he was lying when he said that.

“Cambridge Analytica did not immediately respond to a request for comment.”

Good riddance!

Cambridge Analytica had been hired by both Donald Trump and Ted Cruz’s Republican primary campaigns during the 2016 presidential race.

donald trump ted cruz

As for Facebook, a spokesperson told Recode in a statement,

“This doesn’t change our commitment and determination to understand exactly what happened and make sure it doesn’t happen again. We are continuing with our investigation in cooperation with the relevant authorities.”

featured fb zuckerberg cambridgeThe Cambridge revelations led to Facebook CEO Mark Zuckerberg appearing before Congress to discuss his company’s data practices, and chief technology officer Mike Schroepfer doing the same in the British Parliament.

Meanwhile, take a look at this list:

Abortion… Budget… Civil rights… Crime… Economy… Education… Energy… Environment… Foreign Policy… Government reform… Guns… Health… Immigration… Infrastructure… Military… Poverty… Social Security… Taxes… Terrorism… Values…

facebook adsThey’re what Axios reports Facebook has defined as “issue ads” that’ll require authorization and labeling on its platform in the U.S.

facebook ads thumbs upAdvertising isn’t just to sell products to make money, but also selling ideas that can win activists money for lobbying and more advertising — and votes.

Eventually, an appeals process will be established and inevitable discrepancies about what’s considered an “issue ad” will be taken up there. That means the list may evolve over time.

facebook coca-cola ad

The reason is issue ads are often more difficult to regulate than regular election ads, which simply advocate for one candidate over another.

Of course, political ads on TV and the radio are heavily regulated since they’re on the public airwaves. That’s especially true for federal offices. This one is not.

That brings me to an article I tweeted earlier today.

Politico reported since the beginning of the year, Fox News has invited central Florida congressman and gubernatorial primary candidate Ron DeSantis on the air “roughly 100 times” while his opponent in the race – Florida Agriculture Commissioner Adam Putnam – has not been invited even once. That airtime has been compared to $7.1 million in “national publicity value.”

So much for fair and balanced, and anything close to equal time!

ron desantis adam putnam
Ron DeSantis and Adam Putnam

Remember, this is a Republican primary and what Politico called, “a seemingly endless series of appearances on a news network favored by conservatives.”

Not just conservatives, but supporters of President Trump, who endorsed DeSantis.

And, “Since announcing his bid in January, DeSantis has been given frequent access to Fox’s best real estate — including Fox & Friends, Laura Ingraham, and the Hannity show.”

DeSantis on Fox
Only Ron DeSantis. No Adam Putnam. Not fair. Not equal.

Here is one more comparison.

Putnam is still the GOP frontrunner and has raised more than $20 million.

DeSantis has raised only $7.8 million between his campaign and political committee, but Fox News is probably why “roughly 40 percent of DeSantis’ contributions have come from non-Florida donors,” even though only Floridians will vote in their state’s gubernatorial primary.

Also,

“Of the nearly $4 million spent by Putnam and his political committee on TV ads, hundreds-of-thousands of dollars have been for time on Fox News programs” but “When those ads started to circulate, some of Fox News’ most prominent hosts gave DeSantis cover and tried to tie the ads to Putnam.”

That’s similar to how Sinclair Broadcast Group aired “a commercial from a liberal consumer watchdog that’s critical of the broadcaster’s actions” as it tries to merge with Tribune Media, but CNN reported, “the company is running its own message right before and after the ad. So viewers are seeing a 15-second defense of Sinclair, then 30 seconds of criticism, then another 15-second defense.”

SBG FloridaBTW, Sinclair owns or operates Florida stations in West Palm Beach, Pensacola (with Mobile, AL), Tallahassee (with Thomasville, GA) and Gainesville. See map.

SIDEBAR: This isn’t what I planed to write about but Sinclair’s wanna-be merger victim, Tribune, only owns WSFL-39 in Florida. It has been known as “SFL-TV, South Florida’s CW” in recent years, covering the Miami-Fort Lauderdale area. Friday, I reported the station will be spun off and not take part in the Sinclair-Tribune merger, even if it happens. Plus, I showed you the lists of Sinclair and Tribune stations submitted to the FCC document that said so. I stand by everything I wrote and showed.

tribune divest

Notice all the TBDs in the Buyer column. They include WSFL. I explained all the other TBD stations are Fox affiliates, and the ones in NFL football cities will probably be sold to the network itself, which is going to be a lot leaner and stressing live events — especially NFL football — which it will be adding on Thursday nights. That’s if Fox ever comes to an agreement with Sinclair.

WSFL is a CW affiliate without a news department and I dwelled on whether Fox would buy it and dump its Sunbeam-owned powerhouse affiliate WSVN. Again, it’s all here.

All of those stations have to be sold because otherwise, the proposed merged company would own more stations than the FCC allows. I also explained in detail what I consider sinister motives with Cunningham and other Sinclair buyers, on Friday.

The deal was supposed to happen in the second quarter of this year (by June). I just did an internet search and found nothing new from any reliable sources, but I did find something new on the FCC’s website. Yesterday, it published a letter from FCC Chairman Ajit Pai’s response to Sen. Dick Durbin (D-IL) regarding Sinclair Broadcast’s proposal to acquire Tribune Media. Sen. Durbin and others have been especially concerned about Tribune’s WGN-TV9 in Chicago. The letter was written a few weeks ago but again, just published yesterday.

Pai to Durbin
https://transition.fcc.gov/Daily_Releases/Daily_Business/2018/db0507/DOC-350587A1.pdf

So I believe nothing has changed, despite seeing a website that appears to be WSFL’s. It’s called SFLTV.com. However, it looks like a generic Florida TV blog, does not look professional, does not have a detailed copyright, news I don’t believe from May 1 and today, and some strange graphics (below). I’m just warning you.

Click here for the real WSFL website. It looks like other Tribune sites, and these are current and former logos.

BACK TO THE STORYPolitico also reported, “A Fox News spokeswoman did not return a request seeking comment on why DeSantis is a regular guest or why Putnam has not been on the network this year.”

feature group
Another similarity: Ron DeSantis almost in Sinclair Broadcast Group style!

I’m reporting Politico put DeSantis’ name in the first line of its story, while Putnam’s didn’t appear until the tenth paragraph!

And no Democrats’ names appear at all!

Also not mentioned: Two-term Gov. Rick Scott (R-FL) will be leaving Tallahassee behind to take on U.S. Sen. Bill Nelson (D-FL).

rick scott bill nelson
Gov. Rick Scott and Sen. Bill Nelson

By the way, speaking of equal time, the Federal Communications Commission’s Equal-Time Rule specifies that U.S. radio and television broadcast stations must provide an equivalent opportunity to any opposing political candidates who request it, in news or advertising. It was created in §18 of the Radio Act of 1927 because the FCC was concerned broadcasters could easily manipulate the outcome of elections by presenting just one point of view, and excluding other candidates. (Like Fox News is doing? What lets them do it, in a moment.) The rule was later superseded by the Communications Act of 1934.

Then, the FCC writes, “In 1972, new rules regarding cable television became effective. … Cable television operators who originated programming were subject to equal time, sponsorship identification and other provisions similar to rules applicable to broadcasters.”

Now,

“Once a cable system allows a legally qualified candidate for public office to use its facilities, it must afford ‘equal opportunities’ to all other candidates for that office to use its facilities. The cable system may not censor the content of a candidate’s material in any way, and may not discriminate between candidates in practices, regulations, facilities or services rendered while making time available to such candidates. Candidate appearances which are exempt from the ‘equal opportunities’ rules include appearances on a bona fide newscast, bona fide news interview, bona fide news documentary, or during on-the-spot coverage of a bona fide news event.”

Bona fide newscast? Bona fide news interview? I just report. You can decide.

If I remember correctly, back in the day, Oprah’s talk show was considered news under this policy; not any others.

That’s different from the Fairness Doctrine (1947-1987) “that required the holders of broadcast licenses both to present controversial issues of public importance (not candidates) and to do so in a manner that was—in the FCC’s view—honest, equitable, and balanced.”

One very last thing and it’s the last thing you see on posts: the comments. Did you know I’m constantly updating articles in that section?

It’s not easy to find on the regular generic CohenConnect.com homepage you turn to when you want to see the latest articles (if you don’t subscribe with your email address or WordPress account). WordPress makes you go below the sharing and liking, and below all the categories and tags for the post you just read, and you’ll find a place for comments at the very end, just before the previous article begins.

generic site

After an article, WordPress makes you go below the sharing and liking, below the related posts (which it chooses, along with the categories beneath them), below all the categories and tags for the post you just read, below a link to the article before (and after, unless it’s the latest), and that’s where you’ll find any comments.

article page

So keep checking the bottom of an article out if you were really interested, even weeks after publishing, and you know what to do in some rare case you don’t think I’m right!

Besides, who do you trust more, WordPress or Facebook?

Also, please, don’t miss out. If you like what you read here, subscribe to CohenConnect.com with either your email address or WordPress account, and get a notice whenever I publish.