Nearly a week after Reuters learned of the details, the FCC on Thursday (12/21) made it official: Sinclair Broadcast Group has been handed a Notice of Apparent Liability for Forfeiture for the apparent failure to make required disclosures in connection with sponsored programming that aired on its stations more than 1,700 times.
The Commission has proposed a fine in the amount of $13,376,200 against Sinclair for the airing of commercials mimicking news stories paid for by the Utah-based Huntsman Cancer Foundation.
These advertisements masquerading as news stories aired during local newscasts on the Sinclair stations, running over a six-month period in 2016.
Additionally, the FCC noted Thursday, Sinclair stations aired 30-minute infomercials.
In both instances, Sinclair failed to notify viewers that this was sponsored content.
As a result, the company seeking to merge with Tribune Media has been handed the largest fine ever proposed for a violation of FCC sponsorship ID rules.
“When a broadcaster fails to disclose the sponsor of paid programming, it may mislead the public into believing the paid broadcast material is the station’s own independently generated news coverage or editorial content, rather than a commercial announcement,” the Commission said. “Sponsorship identification is also important because it promotes fair and equitable competition among sponsors.”
The FCC learned of Sinclair’s activity via an anonymous complaint made to the Commission in April 2016. The paid programming discussed the Huntsman Cancer Institute and were paid for by the associated Huntsman Cancer Foundation.
The FCC’s Enforcement Bureau opened an investigation and found that Sinclair and the Foundation had entered into an agreement under which Sinclair produced and supplied the programming to both Sinclair and non-Sinclair television stations.
This programming, which differs from advertisements supplied to Sinclair stations, promoted the Foundation and the Institute and included 60- to 90-second sponsored stories “made to look like independently generated news coverage and 30-minute paid television programs,” the Commission ruled.
It added, “When broadcast licensees are paid or promised money or other valuable consideration to air specific programming, the Communications Act and FCC rules require them to air an announcement stating the program was paid for and the name of the individual or entity who paid for the program. Further, entities like Sinclair that supply paid programming to other broadcasters must inform them that the programming is sponsored. Today, the Commission finds that Sinclair apparently failed to make these announcements to its viewers or report to non-Sinclair stations that the programming was paid.”
Sinclair has 30 days from Dec. 21, the actual date of the NAL’s release to the company, to respond or pay the proposed fine.
As is the case with all NALs, the Commission will review any written response and additional evidence it receives before determining next steps. A Forfeiture Order imposing a fine or any settlement would require another Commission vote.
The fine could hush, at least momentarily, sharp criticism of the FCC’s actions on the restoration of the UHF Discount and a Notice of Proposed Rulemaking (NPRM) seeking comment on whether the 39% national owner cap for TV broadcasting companies should be modified. Democrats and consolidation opponents have assailed the FCC for taking this action as a sign of favoritism toward Sinclair.