Infamous broadcaster Sinclair mulls bankruptcy

Locally, Sinclair Broadcast Group is known for operating The CW Twin Cities, but the television company is best known for its controversial actions leading up to the 2004 election. In April of that year, Sinclair issued a statement that its ABC affiliates wouldn’t be airing an episode of Nightline that honored U.S. soldiers killed in Iraq, characterizing the broadcast as an anti-war statement. In October 2004, the company broadcast Stolen Honor, an anti-John Kerry documentary impugning the then-presidential candidate’s Vietnam war service and post-war peace activism.

But it’s not politics that is hurting the company: it’s the economy. Sinclair indicated in Securities and Exchange Commission filings Friday that it’s considering filing for bankruptcy protection.

Based in Hunt Valley, Maryland, Sinclair has courted controversy for years. In 2003, I called out the company for attempting to pass off stories produced at its home office as local news.  The next year, I reported on how the company’s Washington bureau chief, Jon Leiberman, was canned for calling the airing of the anti-Kerry flick “biased political propaganda, with clear intentions to sway this election” (in a pot-kettle-black moment, management accused him of letting his “political leanings get in the way”). In 2005, I reported that the company used its news operations, at times, to promote the business interests of its owners.

But what may send the company — the country’s biggest owner of local TV stations — into Chapter 11 bankruptcy is far less sinister: the downturn in ad spending by the automotive industry. According to the Baltimore Business Journal, the company had $1.3 billion in debt at the end of the first quarter, and car advertising — which makes up a quarter of Sinclair’s ad revenue — dipped to 14 percent over the same period. The company also says political ads were virtually nonexistent in 2009.

Sinclair’s shares dropped 21 percent yesterday following Friday’s SEC filing.