Judging by his resume, Edwin L. Edwards Sr. should be one of the most praised African American businessmen in the nation. A TV talk-show host in Pittsburgh, he is also chief executive of a company that is listed as principal owner of seven television stations across the country, a business that has few minority entrepreneurs.
But these days some of his most likely admirers have turned into his biggest enemies.
The National Association of Black Owned Broadcasters opposes Edwards so bitterly that he walked out of the group two years ago and started a competing organization. Jesse Jackson's Rainbow/PUSH Coalition, a civil rights group, is campaigning to deny him four more stations he's got his eye on.
And several big media companies, including The Washington Post Co., have joined in, filing objections with the Federal Communications Commission to question his plans.
His opponents allege that Edwards, 47, is not a broadcast mogul, but a mere front man, a "sham" who is helping a Baltimore company controlled by a wealthy white family expand its empire. With Edwards's help, they say, Sinclair Broadcast Group is violating the cardinal rule of ownership diversity in the TV industry: One company can own only one station in a city.
"All of the evidence that has been disclosed so far indicates that [Edwards's company] is controlled by Sinclair," said Jim Winston, executive director of NABOB, the black broadcasters group.
To which Edwards replies, "That's an outright lie. . . . They're trying to throw roadblocks to upset a legitimate business relationship. I'm from the streets of Cleveland. I came up the hard way. And I'm not going to back down now."
Sinclair also denies wrongdoing and notes that the FCC has approved its past business relationship with Edwards. An FCC spokesman yesterday declined to comment directly on Sinclair and Edwards, citing a pending decision on whether to allow the purchase of the four stations.
Currently, just 2.9 percent of commercial radio stations and 2.6 percent of TV stations are owned by blacks, Hispanics or Asian Americans or Native Americans, according to the Commerce Department. Democratic Party leaders, most recently Vice President Gore, have bemoaned those numbers for years, but in 1995 Republicans in Congress largely scrapped a federal program that gave financial incentives to companies that sell stations to minorities.
Edwards says he's an example of bootstrap capitalism. But opponents say the Edwards-Sinclair alliance and others like it limit the number of affordable stations for sale, indirectly preventing "legitimate" minority entrepreneurs from breaking into the business.
Edwards never used the federal incentive program. Instead, his relationship with Sinclair has been his stepping stone. Edwards spent 16 years as a Sinclair employee, and has been in the broadcasting business for decades as an engineer, a manager and a radio deejay in Cleveland and the District. Nowadays he speaks glowingly of the Smith brothers, four of whom manage and control Sinclair.
Edwards's company, Glencairn Ltd., uses the same Washington attorney as Sinclair, and their station purchases are financed through the same bank, using the same loan officer. When Edwards had a falling out with Winston's group in 1997, he decided to form his own trade organization, the Black Broadcasters Alliance, an effort Sinclair supported.
Edwards has helped Sinclair, too, at a time when major media companies are in a race to acquire more TV stations. Glencairn holds TV station licenses in seven cities, including Milwaukee, Pittsburgh and Baltimore. Glencairn also is seeking FCC approval to acquire four more stations in a deal that involves Sinclair.
Glencairn and Edwards, however, don't operate any of these stations. Sinclair does.
Sinclair runs Edwards's seven stations under an arrangement known as a local marketing agreement, or LMA. In an LMA, a station owner (in this case, Glencairn) essentially leases the right to program and sell advertising on its station to another party (in this case, Sinclair), which pays the owner a fee and hires most of the station's employees.
In addition to Edwards's stations, Sinclair operates another 14 stations this way, making it the most aggressive user of LMAs in the country. Nationally, about 100 TV stations are run under LMAs, according to the FCC.
Although the FCC has never formally adopted an LMA regulation, it has approved LMAs in the radio and TV business for the past decade. Bob Ratcliffe of the FCC's mass media bureau declined to address the Glencairn-Sinclair LMAs directly, but said the commission has chosen to allow LMAs because "we want to let broadcasters have relationships that . . . serve people in their communities." He said the commission allows those relationships as long as they are "consistent with our fundamental [ownership and control] principles."
Sinclair and Edwards say they're providing that community service. "We think that being able to program [a second] station allows us to do things that support the public interest," such as helping "fledging networks UPN and WB find local audiences," said Patrick Talamantes, Sinclair's treasurer. "Clearly, this improves diversity and choice."
But Rainbow/PUSH and others say Sinclair is simply using Edwards to get around an FCC rule that limits a company to owning only one station in a market. All of the Edwards-Sinclair LMA stations are in cities where Sinclair already owns a station, meaning Sinclair runs two stations in these markets, and three in one city, Birmingham. By essentially renting -- but not owning -- Edwards's stations, Sinclair says that it is in compliance with the FCC's one-to-a-market regulation.
But Edwards's opponents, which also include Pulitzer Broadcasting and Kelley International Licensing, charge that Sinclair actually does own Edwards's stations. Kelley, based in Oklahoma City, recently told the FCC that Edwards's company "appears to be determined to immortalize itself as the poster child for sham ownership structures."
The facts of the ownership, as provided by Edwards and his critics:
Glencairn is almost entirely owned by members of Sinclair's controlling family, the Smiths. Edwards owns just 3 percent of Glencairn's equity. The rest is held by Carolyn C. Smith, mother of the four Smith brothers who run Sinclair, and by trusts established for the benefit of Carolyn Smith's grandchildren. Edwards's 3 percent stake is vested with 100 percent of the company's voting rights.
Sinclair holds options to buy out Edwards's interest in the Glencairn stations when, or if, the FCC ever allows a company to own more than one station in a market.
Glencairn would assume debt but wouldn't pay any cash for the four stations it is currently seeking to acquire from a company called Sullivan Broadcasting. Sinclair would put up the entire $1 billion purchase price. Glencairn would become the principal owner of the stations by assuming debt valued at $40.5 million.
Both Edwards and Talamantes say the fact that Edwards only owns 3 percent of Glencairn's equity is irrelevant because that stake controls 100 percent of voting rights. "I control the stock and I control the company," says Edwards.
In documents filed with the FCC, Rainbow/PUSH questions just how aware Edwards is about events involving his own company.
The organization points out that Glencairn and Edwards gave conflicting accounts of the company's financial involvement in the Sullivan deal several months after signing a purchase agreement. Rainbow/PUSH said Glencairn and Edwards told the FCC that the company was assuming $80 million in debt -- then changed the figure twice in three months. It last told the agency $40.5 million.
Edwards blames the confusion on "miscommunication" among the company's bankers, accountants and executives. He calls it "an honest mistake."
The FCC is now paying close attention. Last month, the agency asked Edwards and Glencairn to explain their proposed arrangement with Sinclair.
Among other things, the FCC raised "concern" about Glencairn's contradictory statements about the amount of debt in the deal. It also zeroed in on a clause in Glencairn's LMA agreement with Sinclair that gives Sinclair the right to turn over operation of the stations to whomever it chooses.
In response this week, Glencairn said it would strike that clause. But Edwards and Sinclair's Talamantes both offer the same general argument for why this deal should get the agency's approval: The structure of their LMA agreements, they say, hasn't changed since Glencairn and Sinclair struck their first agreement in 1992; if the FCC has objections, why has the agency's staff blessed seven similar Sinclair-Glencairn LMAs?
"I want to make one thing perfectly clear," says Edwards. "I will not be intimidated." Shrugging off his critics, he adds, "I'm just a guy who's been chasing his dream for the past 30 years. I guess the bigger you get, the more people want to take shots at you."
CAPTION: EDWIN L. EDWARDS SR.