FCC Hits Sinclair Stations With Maximum Fines, Totaling $8.7M, For Retrans Negotiation Violations

The Federal Communications Commission has upheld imposing the maximum per-violation fine of $512,228 on 17 of 18 Sinclair Broadcast TV stations identified as having violated the FCC’s good-faith requirement in retransmission consent negotiations.

The fines are based on an FCC’s Forfeiture Order from September 2020 — the first ever issued for failure to negotiate retrans agreements in good faith.

The penalties resulted from a June 2019 complaint by AT&T and its DirecTV DBS service, charging that the Sinclair stations had intentionally and unreasonably delayed retrans negotiations, in part by failing to respond to AT&T’s proposals.

In its complaint, AT&T said that all of the stations involved were "managed and controlled by Sinclair Broadcast Group through some type of shared services agreement."

In December 2019, the FCC found that all 18 Sinclair stations had “willfully and repeatedly” violated its good-faith negotiation standards.

In September 2020, it rejected an appeal by the eight station groups involved: Deerfield Media, GoCom Media, Howard Stirk Holdings, HSH, Mercury Broadcasting, MPS Media, KMTR Television, Second Generation of Iowa and Waitt Broadcasting.

The FCC also rejected a subsequent response from the stations arguing that they should be fined no more than $25,000 per station.

However, the agency did reduce the forfeiture penalty for one station, Mercury, to $30,000, citing the station’s “demonstrable inability to pay” the maximum fine.

The 18 stations’ fines total more $8.74 million.

This is not Sinclair’s first run-in with the FCC — or its first scrutiny for negotiations behavior.

In May 2020, Sinclair agreed to pay a record $48 million civil penalty and abide by a “strict compliance plan” to close three open FCC investigations.

The penalty was the largest ever imposed on a broadcaster in the agency’s 86-year history, and twice the previous record fine for a broadcaster — $24 million paid by Univision in 2007 — according to the FCC.

That consent decree closed an investigation into Sinclair’s disclosure of information during its failed attempt to acquire Tribune Media for $3.9-billion in 2018. The deal would have given Sinclair, already the country’s largest owner of local TV stations, reach into seven in 10 American households, to create a new national conservative platform.

At least at that time, it also closed investigations underway into whether Sinclair had met its obligations to negotiate retransmission consent agreements in good faith, the FCC said.  

In addition, the decree closed an investigation of Sinclair’s failure to make required disclosures for paid programming.

“The programming in question 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 programs without identifying the true sponsor of the content (the Huntsman Cancer Foundation),” the FCC wrote.

The agency added that it had already voted, in December 2017, to propose that Sinclair receive the largest fine ever for a sponsorship identification rules violation: $13 million.

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