SBGI - Relationship To Glencairn/Cunningham

Relationship To Glencairn/Cunningham

Between 1994 and 1997, nine stations owned by Glencairn Ltd. entered LMAs with Sinclair-owned stations in the same cities. Glencairn was owned by Edwin Edwards, a former Sinclair executive, who also personally owned WPTT in Pittsburgh. It held itself out as a minority-owned broadcaster.

However, Carolyn Smith, wife of Sinclair founder Julian Smith and mother of current Sinclair CEO David Smith, supplied Glencairn's initial capital and controlled 70 percent of Glencairn's stock. In December 2001, after complaints from Jesse Jackson and several other media companies, the Federal Communications Commission (FCC) fined Sinclair $40,000 for illegally controlling Glencairn. Sinclair tried to merge outright with Glencairn in 2001 and purchase Edwards' Pittsburgh station. However, the FCC only allowed four of the stations to come directly under the Sinclair banner. Glencairn kept the other six stations and changed its name to Cunningham Broadcasting. Nearly all of Cunningham's stock (90 percent) is owned by trusts in the name of four members of the Smith family, and all six Cunningham stations have LMAs with Sinclair stations. Based on these arrangements, Glencairn/Cunningham has served merely as a shell corporation with the sole purpose of evading FCC ownership rules.

In three markets, Cunningham owns the fourth-highest rated station while Sinclair owns one of the three highest-rated stations. The FCC's duopoly rules do not allow common ownership of two of the four highest-rated stations in a single market. In Cunningham's three other markets, there are too few stations or unique station owners to permit a Sinclair duopoly. The FCC requires a market to have eight unique station owners once a duopoly is formed.