Under mounting political, legal and financial pressure, Sinclair Broadcast Group Inc. yesterday backed away from its plan to carry a film attacking John F. Kerry's Vietnam War record, saying it would air only portions of the movie in an hour-long special scheduled for Friday.
"The experience of preparing to air this news special has been trying for many of those involved," Sinclair chief executive David D. Smith said in a statement. "The company and many of its executives have endured personal attacks of the vilest nature, as well as calls on our advertisers and our viewers to boycott our stations and on our shareholders to sell their stock."
Chad Clanton, a spokesman for the Kerry campaign, which had demanded equal time to respond to the planned airing of the 42-minute film "Stolen Honor," said Sinclair "has been all over the map on this issue. One thing that's certain is that they have a partisan agenda."
Andrew Jay Schwartzman, president of the nonprofit Media Access Project, called the Sinclair move "a surprising cave-in" and said the 62-station television company "clearly felt a lot of pressure and this is an attempt to find a face-saving way out."
Democrats have complained to three federal agencies about the Sinclair special, noting that Smith and his three brothers, who run the Baltimore area company, have contributed heavily to President Bush and the Republican Party.
Sinclair said it will produce "A POW Story: Politics, Pressure and the Media," hosted by Jeff Barnd, an anchor at Sinclair's WBFF in Baltimore, using footage from "Stolen Honor" and other political documentaries while examining allegations of media bias. The company now says that it never intended to air "Stolen Honor" in its entirety, although Sinclair commentator and vice president Mark Hyman had told The Washington Post that the movie would air unless the Massachusetts senator agreed to an interview, in which case only portions might run.
"I am not personally aware that he ever said that, but if he said it, that was not company policy at the time," Sinclair lawyer Barry Faber said. He said Sinclair's position on the film has been "evolving" and that journalists and critics have made a "leap to judgment."
"There has been a misunderstanding of what our intention was," Faber said, "in part because it wasn't clear to us what our intention was."
The film features 17 former prisoners of war criticizing Kerry's 1971 allegations of U.S. atrocities in Vietnam. Asked whether the political uproar prompted Sinclair to change its plans, Faber said: "We did not and do not make programming decisions because of political pressure." Sinclair also generated headlines after firing its Washington bureau chief, Jon Leiberman, on Monday, for criticizing plans to air the movie.
Sinclair's stock has dropped more than 15 percent since the controversy erupted 10 days ago. Alan G. Hevesi, the Democratic comptroller of New York whose state pension fund holds 257,000 shares of Sinclair, questioned in a letter to the company yesterday whether airing the movie would further depress the shares.
The Sinclair announcement came hours after Deborah Rappaport, a major Democratic donor with her husband, Andy, a Silicon Valley venture capitalist, said they had offered to buy one hour on Sinclair stations. This would finance a 42-minute version of a pro-Kerry documentary, "Going Upriver: The Long War of John Kerry," by George Butler. Rappaport said she was "deeply, deeply outraged" by Sinclair's action and was offering $1 million more than the company's usual ad rate in response.
Adding to the pressure on Sinclair, a group of institutional investors alleged yesterday that Smith's three brothers, who serve on the company board, sold millions of dollars in Sinclair shares late last year just before the stock began its decline. Prominent shareholder lawyer William S. Lerach said the family would face a lawsuit unless the company is repaid.
Lerach, who has led investor lawsuits against Enron Corp., Time Warner Inc. and other corporations, is a noted Democratic fundraiser. But he said his involvement is not political, spurred instead by institutional investors who have watched Sinclair's stock slide from a high of $15 per share in late December to its close of $6.26 yesterday.
Lerach noted that Frederick, Robert and Duncan Smith sold about 1.4 million shares of stock for almost $19 million as the stock was peaking at the turn of the year. The attorney, whose clients include a New York pension fund for health care workers, said the plan to air "Stolen Honor" has further hurt the company by driving down the stock price. He said Sinclair executives "should be focusing on creating shareholder value -- not pressing a controversial personal political agenda at shareholders' expense."
Also yesterday, James E. Beardsley Jr., attorney for a Vietnam War veteran who is seen in a war protest in "Stolen Honor," said he would sue Sinclair if it airs the movie. The veteran, Kenneth J. Campbell, now a University of Delaware professor, sued filmmaker Carlton Sherwood for libel this week. The movie "made him look like a liar, a fraud and a fabricator" by suggesting he made baseless charges about a Vietnam massacre, Beardsley said.
Sherwood called the suit "an obvious public relations stunt," noting in a statement that Campbell is not named in the film. After a Philadelphia theater canceled plans to show "Stolen Honor," Sherwood accused Kerry supporters of trying to "silence and censor the voices of veteran POWs."