Boycott Lessons

22 October 2004


Sinclair Chops Anti-Kerry Film to Placate Shareholders, Advertisers

Economic sanctions against a nation-state have a dubious record at best, but against market participants they can be devastating. Captain Charles Cunningham Boycott gave his name to a practice that isolated him from the entire local economy of County Mayo in the 1880s. Sinclair Broadcasting might wind up lending its name to the practice of having advertisers pull ad buys from controversial political broadcasting. Sinclair’s shareholders didn’t like its plan to air an anti-Kerry film right before the election either, shaving 16% off the value of the company’s stock after the announcement that the film would air. It’s back up now that management has decided to show only a little of the film.

The celluloid in question, "Stolen Honor: Wounds That Never Heal," apparently suggests that Senator Kerry’s testimony before congress after his tour of duty in Vietnam damaged American morale and undermined the war effort. Perhaps it did. Then again, the US military won every engagement on the battlefield during that war, and the Nixon White House still found a way to lose Vietnam to the Reds.

In any case, Sinclair Broadcasting is a media holding company, and it had ordered its 62 TV stations to air this film right before the election. This is the same Sinclair that refused to show the “Nightline” broadcast when the names of the American troops who died in Iraq were read aloud. It is also the same Sinclair whose executives have donated heavily to the Bush-Cheney campaign. Naturally, the Democrats complained to the Federal Election Commission, and Sinclair’s own Washington bureau chief Jon Leiberman spoke out against it (Mr. Leiberman is now unemployed, but one suspects not for long).

What got Sinclair’s attention, though, was when advertisers, who didn’t want any controversy associated with their products and services, began to pull out of their ad buys. US Cellular, Regis Corp. (a hair salon operator), and Nationwide Insurance all asked to keep their ads away from the program. And as noted, the shareholders began selling as soon as the decision reached the public’s ears.

Sinclair has since decided not to broadcast the whole thing, and only 40 of its 62 stations are going to carry it. As a result, the stock price rose Wednesday by 14%, to around $7.13 a share. There remains the issue of some allegations of insider trading at Sinclair, but that is another story.

© Copyright 2004 by The Kensington Review, J. Myhre, Editor. No part of this publication may be reproduced without written consent.

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