US TV and comms regulator, the Federal Communications Commission, has proposed a $13 million fine against Sinclair Broadcast Group for apparently failing to make required disclosures in connection with programming sponsored by a third party.
The programming was broadcast more than 1,700 times, either as stories resembling independently generated news coverage that aired during the local news, or as longer-form stories aired as 30-minute television programmes, according to the FCC. This is the largest fine that the Commission has ever proposed for a violation of its sponsorship identification rules.
The FCC’s sponsorship identification rules help ensure that consumers know who is trying to persuade them through paid programming. When a broadcaster fails to disclose the sponsor of paid programming, it may mislead the public into believing the paid broadcast material is the station’s own independently generated news coverage or editorial content, rather than a commercial announcement. Sponsorship identification is also important because it promotes fair and equitable competition among sponsors.
In April 2016, the Commission received an anonymous complaint alleging that Sinclair, which has a Conservative political bent, had aired paid programming about the Huntsman Cancer Institute during news programmes, but failed to disclose that the Huntsman Cancer Foundation paid for the stories to air. The FCC’s Enforcement Bureau opened an investigation and found that Sinclair and the Foundation had entered into an agreement under which Sinclair produced and supplied programming to both Sinclair and non-Sinclair television stations. This programming promoted the Foundation and the Institute and included 60- to 90-second sponsored stories made to look like independently generated news coverage and 30-minute paid television programmes.
When broadcast licencees are paid or promised money or other valuable consideration to air specific programming, the Communications Act and FCC rules require them to air an announcement stating the programme was paid for and the name of the individual or entity who paid for the programme. Further, entities like Sinclair that supply paid programming to other broadcasters must inform them that the programming is sponsored. The FCC found that Sinclair apparently failed to make these announcements to its viewers or report to non-Sinclair stations that the programming was paid.
Sinclair will have 30 days to respond to this notice or to pay the proposed fine.
The fine comes amid a slew of opposition that has emerged to the proposed $3.9 billion Sinclair-Tribune Media deal. Opponents of the proposed merger include those on the political right and the political left, including DISH Network, the American Cable Association, Competitive Carriers Association, advocacy group Common Cause, plus conservative news channels One America News Network, Newsmax and Glenn Beck's The Blaze. Also opposed is the Computer and Communications Industry Association, which represents Google, Amazon and other tech companies, and T-Mobile USA, which is concerned the deal could delay the transfer of broadcast airwaves spectrum for wireless use. Many of these joined the Coalition to Save Local Media, which came together to unite the opposition.
Dismissing the opposition's concerns, Sinclair recently said in a media statement that the "proposed merger will advance the public interest by helping shore up an industry buffeted by well-known economic challenges". It also said it would be investing "deeply" in local news, sports and entertainment programming.
Sinclair, which owns 173 local television stations in the US, announced plans in May to acquire Tribune's 42 TV stations in 33 markets as well as cable network WGN America and digital multicast network Antenna TV, extending its reach to 72% of American households. Many have filed petitions with the FCC, saying that further consolidation in the broadcast market would narrow viewing choices for millions of Americans, and give the conservative-leaning Sinclair too much influence over local news content.