Sinclair shares fall with film flap

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ASSOCIATED PRESS

Shares fell more than 8 percent yesterday for Sinclair Broadcast Group Inc., the media company based in suburban Baltimore that has said it will air this week a critical documentary about presidential candidate Sen. John Kerry's anti-war activities during the Vietnam era.

Sinclair shares fell 55 cents at $6.49 a share on Nasdaq Stock Market yesterday. On Friday, Legg Mason investment firm issued a report saying the documentary could harm broadcast-deregulation efforts.

The Hunt Valley, Md., company has asked its 62 television stations to pre-empt regular programming to air "Stolen Honor: Wounds That Never Heal." Many of the stations are in swing states that could decide the outcome of the election.

The Legg Mason report said the decision "would likely turn Sinclair into another poster child for critics of the industry to target, and we believe there is some risk that the negative fallout could spread beyond Sinclair to other broadcasters by fueling the general backlash against regulatory relaxation and media concentration."

The company, the largest non-network owner of stations in the country, amassed its stations as federal regulations were relaxed on station ownership. At the same time, it became a generous political donor, primarily to Republican causes.

Yesterday, JP Morgan also initiated coverage of the company, giving Sinclair an "underweight" rating.

Meanwhile, a Vietnam veteran shown in the documentary filed a libel lawsuit against the movie's producer yesterday, saying the film falsely calls the veteran a fraud and a liar. Kenneth J. Campbell, now a professor at the University of Delaware, also threatened legal action against the Sinclair Broadcast Group.

Mr. Campbell says in the suit that the documentary combines footage of him appearing at a 1971 war protest with narration that says many of the supposed veterans who took part in the event were later "discovered as frauds" who "never set foot on the battlefield, or left the comfort of the States, or even served in uniform."

The suit said viewers would be left with the perception that Mr. Campbell had lied about his military service.

The Democratic National Committee has filed a complaint with the Federal Election Commission, saying the airing of the film should be considered an illegal in-kind contribution to the Bush campaign. Mr. Kerry's presidential campaign has asked that each station carrying the program provide similar air time to Kerry supporters.

Sinclair has said the program is news and has invited Mr. Kerry, Massachusetts Democrat, to appear.

FCC Chairman Michael Powell said Thursday the federal agency would not block Sinclair from airing the program, noting that the commission has never taken such action and that no rules allow it to prevent the broadcast.