HOLMES REPORT: Sinclair put its value in danger over Kerry movie by forgetting its accountability to shareholders

By the time my last article about Sinclair Broadcast Group appeared, the company had already reversed itself, backing off its plans to air an anti-Kerry documentary in the days before the election and replacing it with - by most accounts - a reasonably balanced look at the way various political films have influenced the election process.

By the time my last article about Sinclair Broadcast Group appeared, the company had already reversed itself, backing off its plans to air an anti-Kerry documentary in the days before the election and replacing it with - by most accounts - a reasonably balanced look at the way various political films have influenced the election process.

Sinclair would probably argue with my description of its action, seeing as a press release denied that the company - which owns 62 stations across the country - had ever intended to air Stolen Honor. "Contrary to numerous inaccurate political and press accounts," it said, "Sinclair stations will not be airing the documentary Stolen Honor in its entirety. At no time did Sinclair ever publicly announce that it intended to do so."

It's true there was no press release, but Stolen Honor somehow showed up in TV listings around the country. And Sinclair spokesman Mark Hyman certainly seemed to believe it was going to air when he told reporters, "This is a powerful story. The networks are acting like Holocaust deniers and pretending [the POWs quoted in Stolen Honor] don't exist. It would be irresponsible to ignore them." (A quote that wins this year's prize for hyperbole and insensitivity.)

Similarly, Sinclair's Washington bureau chief, Jon Leiberman, seemed equally certain of his employer's plans when he spoke out against the order that stations air the documentary - even though his candor would cost him his job.

But Sinclair's ducking and weaving notwithstanding, the decision not to air Stolen Honor drew howls of outrage from the right, including The Wall Street Journal, which in an editorial emerged rather surprisingly as an advocate for the right of management to destroy millions of dollars of shareholder value without any accountability.

Sinclair lost about 16% of its value between the first story about Stolen Honor and the announcement that it wouldn't air it (two weeks during which a more diligent management might have said something to dispel a supposedly erroneous and damaging story), giving rise to shareholder lawsuits the Journal found wholly inappropriate.

"One of the most important protections that a free press has is independent corporate ownership," thundered the Journal's editorial writer, apparently forgetting that corporate ownership means being answerable to those owners, many of whom were not prepared in this case to allow politically motivated managers to use their money for propaganda purposes.

The fact is that media companies are just that: companies. And like other companies, they are answerable to their shareholders - and other stakeholders. And that's just as it should be.

  • Paul Holmes has spent the past 17 years writing about the PR business for publications including PRWeek, Inside PR, and Reputation Management. He is currently president of The Holmes Group and editor of www.holmesreport.com.

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