Big broadcaster Sinclair in dire straits
Another big broadcaster may be on the verge of bankruptcy.
Baltimore-based Sinclair Broadcast Group Inc., which is controlled by David Smith and his family and operates 58 television stations, said if it can't restructure its heavy debt load it will have to file for bankruptcy. The company, which has about $1.3 billion in debt, is trying to negotiate terms on notes of $500 million that are coming due in the next 18 months.
If Sinclair files for bankruptcy it will be bad news for Hollywood, which counts on the broadcaster to spend heavily on programming for its stations. With 58 stations to program, Sinclair is one of the biggest buyers of reruns, movies, talk shows and game shows.
Sinclair is the latest broadcaster to be feeling the pinch of a poor economy and a changing media landscape. In a filing with the Securities and Exchange Commission, the company said auto advertising used to represent 25% of its ad revenue and now accounts for only about half that.
Other broadcasters who have filed for bankruptcy this year include Young Broadcasting Inc. and ION Media. Tribune Co., which owns the Los Angeles Times and a major group of TV stations, has been operating in bankruptcy since late last year.
Also darkening Sinclair's prospects is Cunningham Broadcasting Corp., a small broadcaster operated by Sinclair that is actually owned by trusts established by David Smith's mother Carolyn. Cunningham, Sinclair said, is at risk of defaulting on its loans at the end of the month. If Cunningham has to file for bankruptcy, that would mean the loss of $77 million in revenue it kicks back to Sinclair annually.
Sinclair has gained notoriety in the industry for both its hard-nosed business tactics and its political stances. Smith is a colorful and known for his sharp elbows. He, along with his brothers inherited two stations from his father and built it into one of the biggest operators in the country.
Smith made national headlines in 2004 when his stations that were affiliated with the ABC network refused to air a "Nightline" broadcast featuring then-anchor Ted Koppel reading the names of those who had died in Iraq. Later that year, Sinclair aired a controversial documentary challenging Sen. John Kerry's war record.
-- Joe Flint