Fox’s Unfamiliar but Powerful Television Rival: Sinclair
The timing could not be more fortuitous for Sinclair Broadcast Group: a Republican president is in the White House, his regulators have just eased rules on owning television stations and the dominant name in conservative media is reeling from a sexual harassment scandal.
But as Sinclair tries to expand by buying even more local television stations, it has locked horns with that other broadcast giant known for its political bent, 21st Century Fox.
Sinclair, which has little name recognition but beams local television stations into a quarter of American homes, covers plenty of standard local news, including fires, shootings and traffic. But it has also used its 173 television stations to advance a mostly right-leaning agenda since the presidency of George W. Bush.
Fox, the media conglomerate controlled by Rupert Murdoch and his sons, has long dominated conservative political discussion with its Fox News cable channel. But Fox News is in disarray after several scandals. In the last weeks alone, Fox News lost its biggest star, Bill O’Reilly, and one of its most senior executives, Bill Shine.
With Fox News on the ropes, Sinclair, already the largest owner of local television stations, is looking to expand. Until last week it appeared to be closing in on acquiring Tribune Media, the second-largest owner of such stations. If completed, the deal would expand Sinclair’s footprint from mostly smaller markets to some of the country’s largest cities, including Chicago and New York.
Then Fox stepped in. Working with the private equity firm Blackstone, Fox is considering its own offer for Tribune, a move intended to thwart Sinclair’s expansion plans and prevent it from amassing too many local Fox affiliates, according to people familiar with the matter who were not authorized to speak publicly. Bids for Tribune are due Thursday.
Sinclair is eager to broaden its reach. Last month, the company hired Boris Epshteyn, a former spokesman for President Trump, as its chief political analyst and on-air commentator. And the company has been emboldened by the Trump administration’s easing of rules that had stymied its expansion.
“Sinclair was growing and building before there was this Fox controversy,” said Armstrong Williams, owner of Howard Stirk Holdings, the largest minority-owned station group, which has two affiliates that have joint-operating agreements with Sinclair. “It was leveraging itself and looking for acquisitions.”
Representatives for Sinclair and Fox declined to comment for this article.
Founded in 1971 by Julian Sinclair Smith, an electrical engineer who understood the growing importance of broadcast television, Sinclair has expanded from one station serving Baltimore to 173 stations and 81 markets across the country.
Much of that growth has come under the helm of Mr. Smith’s son David, Sinclair’s longtime chairman. Under the younger Mr. Smith, one of four brothers who together control the broadcaster’s voting stock, Sinclair has spent more than $7 billion since the mid-1990s on acquisitions, according to data from Standard & Poor’s Global Market Intelligence.
“We’re forever expanding — like the universe,” Mr. Smith told The Baltimore Sun in 1995.
It also operates stations owned by affiliates, some of which are majority owned by the Smith family, pushing up against Federal Communications Commission boundaries on station ownership in individual markets.
In 2009, burdened by nearly $1.3 billion of debt and the recession, Sinclair warned that it might be forced to file for bankruptcy protection. But today the company has a market value of nearly $3.4 billion and has expanded into original content and sports, even acquiring the Tennis Channel.
Along the way, Mr. Smith and his brothers have become active in politics. Some of their giving has been to Democrats, mostly for state and local races in Maryland. But a vast majority of their money has been funneled to Republican causes, including the Republican National Committee and a Mitt Romney fund-raising committee in 2012, according to Federal Election Commission disclosures.
In the last election cycle, the brothers donated tens of thousands of dollars to Republican causes, including at least $6,000 from Frederick Smith to a “super PAC” supporting Mr. Trump and $20,000 from David Smith to the National Republican Congressional Committee.
Despite Sinclair’s expansion in the last two decades, the nature of its holdings — a vast array of stations spread across markets and network affiliations — has meant that the company has never achieved the name recognition, or clout, of national broadcasters.
Still, critics say Sinclair’s programming makes its political bent abundantly clear.
While much of the station’s local news broadcasts are filled with local news, Sinclair also provides commentary and syndicated reports from its Washington bureau that have generally taken stances critical of Democrats and laudatory of Republicans.
Mark Hyman, a onetime Sinclair executive, has a twice-weekly segment on dozens of the group’s stations, promising to take viewers “behind the headlines.” What they find there are reliably conservative arguments on hotly contested political issues like voter identification laws, the Export-Import Bank and overhauling the Internal Revenue Service.
In the days after the Sept. 11, 2001, terrorist attacks, Sinclair instructed anchors to read statements supporting Mr. Bush and his administration’s efforts to fight terrorism, The Baltimore Sun and others reported at the time.
Before the 2004 presidential election, Sinclair drew sharp criticism, including from Senator John McCain, Republican of Arizona, for its refusal to broadcast an episode of “Nightline” devoted to reciting the names of every member of the military killed in action in Iraq. The company, which sent Mr. Hyman and one of its reporters to Iraq earlier in the year to find positive stories that were not being told, said the broadcast amounted to an antiwar statement, The New York Times wrote at the time.
Then, just days before the election, Sinclair aired parts of a documentary critical of the anti-Vietnam War activities of John Kerry, the Democratic nominee. The company had originally planned to air the documentary in full, The Times reported, but pressure from advertisers and shareholders led it to run only excerpts during a program on the election.
More recently, Jared Kushner, Mr. Trump’s son-in-law and now a senior adviser in the White House, said at a meeting with business executives that the Trump campaign had reached an agreement with Sinclair to give more access to Mr. Trump and the campaign under the condition that the interviews be broadcast without commentary on the company’s affiliates, according to two people who had attended the meeting but were not authorized to discuss it. Taped in Sinclair’s Washington bureau, the interviews with Mr. Trump were broadcast across several swing states.
Sinclair has disputed reports that it engaged in any unusual arrangements with the Trump campaign, saying in a statement that it offered no deals on tone or subject matter and that it also approached Hillary Rodham Clinton’s campaign.
Still, questions about the ties between Sinclair and Mr. Trump have continued since Election Day.
In February, at one of his first news conferences as president, Mr. Trump granted the first of two questions to Scott Thuman, a reporter for Sinclair’s Washington ABC affiliate, WJLA, a rare distinction for a local broadcast affiliate.
When Mr. Epshteyn, one of Mr. Trump’s most visible on-air defenders during the campaign, was looking for a place to land last month after leaving a brief stint in the White House, he signed a deal with Sinclair.
“They have cobbled together this sort of old media infrastructure but have been so aggressive in their concentration and consolidation that it actually gives them a huge reach,” said Craig Aaron, president of Free Press, a consumer advocacy group. “And there is no question they are using this huge reach, especially in a lot of battleground states, to really push news with a Republican slant.”
Acquiring Tribune could further extend Sinclair’s influence, a potential expansion only recently made possible by the Trump administration.
Last month, after lobbying from media companies, the F.C.C. reinstated what is known as the “UHF discount.” While broadcasters are not permitted to cover more than 39 percent of American households, the discount lets companies exclude stations operating on ultrahigh frequencies from their calculations of station ownership. That move gives Sinclair plenty of breathing room to buy more stations.
Pursuing Tribune makes sense for Sinclair beyond politics. Becoming even bigger would allow Sinclair to push for higher fees from cable operators that retransmit its channels, while helping it fight similar fee demands from content providers, including Fox.
In particular, buying Tribune would make Sinclair the biggest owner of Fox affiliates by far, giving it more leverage over the Murdochs.
But Tim Graham, the director of media analysis at the Media Research Center, a conservative watchdog group, rejected the idea that Fox was under any imminent threat, from Sinclair or other competitors.
“You can talk a big game about Fox News on the ropes, but it’s still Muhammad Ali,” Mr. Graham said. “It’s still the champion, and everyone else is much smaller.”