Sinclair Broadcast Group is getting a bad rep on Wall Street due to a history of poor performance and what analysts view as a disastrous business decision to air an anti-Kerry propaganda film on all of its 62 TV stations this week. A boycott of Sinclair’s advertisers is snowballing, and other unforseen troubles of the company’s own making are bringing wave after wave of unwanted bad publicity.
The stock value of the corporate giant is in free fall. According to some accounts, the company has lost 11% of its value since the company announced its decision to air the controverisal film. A major story on the front page of The New York Times business section on Monday morning detailed stock analysts’ concerns about the unwise politization of the media company, and predicted the very political and economic backlash the company is now experiencing.
Sinclair stock has dropped every day since the company ordered is stations to air the anti-Kerry hit piece — 8% on Monday alone. Knight Ridder Newspapers reported that when the stock market closed on Monday, “The stock has fallen 53 percent this year. It dropped 7 cents, or 1 percent, on Friday to close at $7.04. It traded at a 52-week low Monday of $6.49. Before Sinclair’s plans to show the documentary more than a week ago was first reported, the stock was at $7.50.”
It appears that its only going to get worse for the shrinking media giant.
MoveOn.org is emailing members urging them to question mutual funds and pension funds that are heavily invested in Sinclair.
The Baltimore Sun reported that the DC Bureau chief for Sinclair Broadcasting, Jon Lieberman publicly denounced the film as “political propaganda” and told his bosses he would not participate in presenting it as news. Lieberman’s statement epitomizes the view of most of those who are outraged by Sinclair’s dictatorial decision, “it’s not about right or left,” he said, “it’s about what’s right or wrong in news coverage this close to an election.” He was later fired by Joseph DeFeo, Sinclair’s vice president for news, and “escorted out of the building,” according to CBS News. Now, of course, Leiberman is a hero to journalists everywhere for speaking up for journalistic integrity, and will undoubtedly be featured by every media major and minor media outlet in the U.S. this week.
News outlets nationwide were already running the story about how Kenneth J. Campbell, a University of Delaware professor and a decorated veteran of the war in Vietnam has filed a libel suit against Carton Sherwood, the producer of the film at the center of the controversy. Campbell claims that the film shows him at a 1971 war protest with a voice-over that claims many of those who took part in the event were later “discovered as frauds” who “never set foot on the battlefield, or left the comfort of the States, or even served in uniform.” Campbell says he will add Sinclair to the libel suit if it airs the film this week.
Meanwhile, the boycott continues to gather momentum, and media reports continue to surface examples of businesses that have withdrawn their advertising. For example, HER Real Living, a real-estate company with 30 offices in Central Ohio, has pulled its ads from Sinclair’s local Fox and ABC affiliates.
The North Carolina law firm of Henson and Feurst also says that is has withdrawn its advertising according to a letter posted on The Daily Kos. Attorney Thomas W. Henson wrote, “We spend each day fighting for these rights for our clients against companies and industries that abuse their power, and do not approve of a company which chooses to violate its use of the public airwaves in a manner inconsistent with our constitutional liberties.”
The Sinclair story may very well shape up to be the most spectacular corporate meltdown in recent American history.