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FCC Fines Sinclair Broadcast Group $13.4 Million for Running Sponsored Content as News

The FCC is slapping Sinclair Broadcast Group with a $13.4 million fine for running news stories on a cancer foundation but failing to disclose that the foundation was paying for them to air.

The FCC said that the programming 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.” The agency said that it was the largest fine ever imposed for a violation of its sponsorship identification rules.

The fine is also expected to give critics of Sinclair’s proposed merger with Tribune Media fodder for the argument that the transaction is not in the public interest. The FCC is currently reviewing the transaction.

Sinclair said in a statement that it would challenge the FCC’s sanction.

“Sinclair proudly supports the Cancer Foundation and its educational mission. Any absence of sponsorship identification in these public service segments was unintended and a result of simple human error.

“After working to reach a reasonable settlement, we are disappointed by this [fine], which we believe is unreasonable, given the circumstances of our case and the absence of any viewer harm. We disagree with the FCC’s action and intend to contest this unwarranted fine.”

The cancer center was founded by Jon Huntsman Sr., the businessman who has long been active in Republican politics and whose son, Jon Huntsman Jr., is the current U.S. ambassador to Russia.

Commissioners Mignon Clyburn and Jessica Rosenworcel , the two Democrats on the FCC, dissented from the decision because they believe the fine should be greater.

Clyburn called it “meager.”

“On first read, one might easily conclude that today’s enforcement action by the Republican-led FCC represents a strong stand against a company with a history of skirting FCC rules,” she said. “But take a closer look: contrary to what the FCC majority would have you believe, the nearly $13.4 million fine levied against Sinclair Broadcast Group represents a mere slap on the wrist.”

She added, “Simply put, the ‘punishment does not fit the crime’ against a company that grossed more than $2.7 billion in revenue last year.”

The FCC said that it acted on an anonymous complaint that Sinclair had aired paid programming about the Huntsman Cancer Center during its news programs, but did not tell viewers that Huntsman paid for the stories to air. The FCC’s enforcement bureau found that Sinclair and the foundation entered into an agreement “under which Sinclair produced and supplied programming to both Sinclair and non-Sinclair television stations.”

“This programming 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 FCC said.

Clyburn noted in her statement that Sinclair has been fined repeatedly over the years, including a $9.5 million settlement in 2016 for failing to negotiate in good faith for retransmission consent negotiations, and sanctions for violating other regulations, including children’s television rules.

Rosenworcel said, “In light of this substantial history of failure to comply with our policies and the sheer number of violations before the agency now, the immediate notice should seek the highest fines permissible under our rules.  But instead of doing so, we offer unreasonable and suspicious favor to a company with a clear record of difficulty complying with the law.”

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