Sinclair Responds to Senator Kerry

Sinclair Responds to Senator Kerry

BALTIMORE, Jan. 11 /PRNewswire-FirstCall/ -- Sinclair Broadcast Group, Inc. (NASDAQ:SBGI) , the "Company" or "Sinclair," today released a copy of a letter sent on January 8, 2010 to Senator John Kerry from David Smith, President and Chief Executive Officer of Sinclair. In his letter, Mr. Smith addresses the Mediacom retransmission dispute and the need to allow the free market to work without government intervention.

About Sinclair:

Sinclair Broadcast Group, Inc., one of the largest and most diversified television broadcasting companies, owns and operates, programs or provides sales services to 58 television stations in 35 markets. Sinclair's television group reaches approximately 22% of U.S. television households and is affiliated with all major networks. Sinclair owns equity interests in various non-broadcast related companies. The Company regularly uses its website as a key source of Company information and can be accessed at www.sbgi.net.

   Below is the full text of Mr. Smith's letter to Senator Kerry:      January 9, 2010    The Honorable John F. Kerry   United States Senate   218 Russell Senate Office Building   Washington, D.C. 20510    Dear Senator Kerry:    I am writing in response to your letter of December 30, 2009.  I am    also writing to address the position of Mediacom as set forth in the    letter you received on January 7th from their CEO.    Although we share your concern for the public interest and are    pleased to have reached agreement with Mediacom, I trust you can see    through Mediacom's blustery rhetoric to understand that their true    interest lies not in serving the public interest, but rather in    maximizing their profits by receiving government intervention to    avoid paying fair, market-driven consideration for the right to    retransmit broadcast television programming.    Mediacom's argument essentially boils down to a self-serving claim    that because local broadcast stations are free over-the-air this    should give a private, for profit company like Mediacom a special    right to use this programming without paying an appropriate fee to    do so.  Were this the case, video bootleggers could simply record    popular broadcast programming over-the-air onto DVDs and sell    boxed sets of the entire season at prices far below the selling    price of those who actually pay to acquire the valuable rights to    sell such programming.  Similarly, XM Satellite Radio would have no    need to produce its own programming since in the world envisioned by    Mediacom, XM could just rebroadcast popular programming that it    picks up for free over-the-air from broadcast radio stations.    These examples point out the absurdity of Mediacom's position and    aptly illustrate that although broadcasting is free to the public,    this provides no special right for a private business to use such    programming in a for profit enterprise.  In fact, taking away this    special right was precisely the intent of the law Congress passed in    1992 establishing the retransmission consent regime.    Mediacom uses programming from broadcast stations as one of its most    important assets in attracting and retaining subscribers.  That this    is the case is clear from the public interest in the recent    negotiations between Sinclair and Mediacom.  Nonetheless, Mediacom    pays broadcasters much less than they currently pay for many program    streams which are far less important to their customers.  This    disparity seems fundamentally unfair to us.    The promise of the 1992 retransmission consent legislation - that    broadcasters would receive fair compensation - has yet to be fully    realized, but we believe the free market is finally beginning to    move in that direction.  The recent success of FOX in receiving    compensation from Time Warner Cable for its highly rated stations,    coupled with the decision by Cablevision to remove The Food Network    and HGTV from its line-up rather than pay exorbitant price    increases for these low rated programming services reflect a    movement toward a resetting of program acquisition fees consistent    with consumer demand.  Such a redistribution of fees, delayed as it    has been by prior Federal law (which allowed cable companies to    retransmit broadcast stations without obtaining permission or paying    compensation) and the monopoly position of cable providers during    most of the 1990s, has been a long-time coming and will require    more time to occur fully.  Allowing this to happen, however, through    powerful free market forces unfettered by government interference,    will truly meet the public interest by ensuring that cable companies    properly allocate the public's money to pay for the most popular and    demanded programming.    Although Sinclair is pleased to have reached agreement with Mediacom,    a company which clings to the past practice of underpaying for its    most important revenue generating assets and which has had other    issues acquiring the right to broadcast programming popular with its    customers, such as the NFL Network and the Big 10 Network, I do not    agree that the failure to have reached agreement would have meant    Sinclair neglected the interests of the public that rely on our    stations.  Nor do I agree with Mediacom's claim that had agreement    not been reached, that Mediacom's customers would have been denied    access to programming.* These stations are available to the public    completely for free over-the-air, as well as from numerous    competitors of Mediacom that have reached agreement with Sinclair    without seeking government intervention.    I understand from press accounts that following the announcement of    the Time Warner Cable/FOX negotiations you indicated an interest in    speaking with those parties in order to better understand the    situation.  Sinclair would be pleased to also be part of such    discussions with you and your staff, in order to provide you with    our insights on the retransmission consent process.    Thank you for your interest in this matter.                                             Sincerely yours,                                             David D. Smith                                            President and CEO    

* Mediacom's continued efforts to paint Sinclair as the bad actor in all of this does nothing more than point out the disingenuous and partisan nature of their claims. Characterizing a failure to reach agreement as Sinclair denying programming to Mediacom subscribers is no more accurate than describing the situation as a denial by Mediacom. In the same way Sinclair takes the position that Mediacom cannot carry a station unless Mediacom pays a price acceptable to Sinclair, Mediacom is taking the position that Mediacom will not carry a station unless Sinclair receives a price that is acceptable to Mediacom.

First Call Analyst: Lucy Rutishauser
FCMN Contact:

Source: Sinclair Broadcast Group, Inc.

CONTACT: Barry Faber, EVP & General Counsel of Sinclair Broadcast Group,
Inc., +1-410-568-1500

Web Site: http://www.sbgi.net/

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Profile: International Entertainment