**STATEMENT OF**

**COMMISSIONER MICHAEL J. COPPS**

**DISSENTING IN PART AND APPROVING IN PART**

In the Matter of: Various Applications for Assignment of License and
Transfer of Control of Certain Television Licenses to Sinclair Broadcast
Group, Inc. and Glencairn, Ltd.

Over the last several years, Sinclair Broadcasting Company ("Sinclair")
has pursued a strategy of acquiring interests in or management of more
than one station in each market in which it has a television station. In
so doing, it has continually pushed against the parameters of ownership
structures prohibited by the Commission.

With the transactions before the Commission today, Sinclair has crossed
the line into behavior that the majority has found to violate the
Commission's rules. In assessing a fine on Sinclair for this violation,
the majority purports to stop the expansion of Sinclair's forays into
multiple ownership, but in fact it merely points out that lines have
been crossed, while allowing Sinclair to run over these lines and to
continue its multiple ownership strategy.

# Background

The first of Sinclair's forays into multiple television station
ownership came in 1991 when Sinclair acquired a station in Pittsburgh
and sold its existing Pittsburgh station to that station's manager Edwin
Edwards, a Sinclair employee, on extremely favorable terms. Sinclair
operated its new station in Pittsburgh and continued to program its
original station through a Local Marketing Agreement ("LMA").

After that, Sinclair sought to acquire the stations of a company that
wanted to sell its four stations as a group. Two of the four stations,
however, were in markets in which Sinclair already owned television
stations and was thus prohibited from owning additional stations.
Sinclair again enlisted Edwards to acquire the stations Sinclair could
not own. Because Edwards did not have the financial resources to
purchase these stations, the president of Sinclair proposed that his
mother finance the acquisition. Carolyn Smith, the mother of the four
owners of Sinclair, and Edwards established Glencairn, the acquiring
company, 70% of the non-voting stock of which was owned by Smith and 30%
by Edwards. The Glencairn stations, like the Pittsburgh station, were
operated through LMAs by the Sinclair-owned stations in their markets.

In 1997, Sinclair and Glencairn again acquired a station group in
tandem. This transaction involved the acquisition by Sinclair of
stations in Asheville and San Antonio and the acquisition by Glencairn
of an additional station in each of those markets. These new Glencairn
stations, like the others, would be operated through LMAs by the
Sinclair-owned stations in these markets. At the same time, Carolyn
Smith transferred her ownership interest, now 90% of the equity in
Glencairn, to trusts for her grandchildren -- the minor children of the
four brothers who own Sinclair. Applications for Review of these
decisions filed by Pulitzer Broadcasting and Post-Newsweek Stations are
before the Commission today.

Finally, in the transactions before the Commission today, Sinclair and
Glencairn in 1998 filed applications for the stations owned by Sullivan.
As the deal was initially structured, Sinclair would acquire five
stations -- in Buffalo; Madison; Richmond; Winston-Salem and Nashville,
while Glencairn acquired five stations -- in Dayton; Charleston, South
Carolina; Charleston, West Virginia; Oklahoma City and Bluefield, West
Virginia. Unlike the last transaction, these were not separate
acquisitions of stations by Sinclair and Glencairn. Rather, in these
transactions Sinclair would acquire the licenses and assets of five
stations, as well as the non-license assets of the five stations to
which Glencairn would acquire the license. Glencairn would then lease
these stations' assets from Sinclair. All of the Sullivan stations have
been operating through LMAs with Sinclair, and once transferred to
Glencairn these stations will continue to do so. As to these stations,
therefore, Sinclair will own the non-license assets and will control the
programming through LMAs. The licenses themselves will be held by a
company, 90% of which is owned in trust for the minor children of the
owners of Sinclair.

In August 1999, the Commission amended its longstanding television local
ownership rules to permit one licensee to own two television stations in
markets in which eight independent television voices remain after the
consolidation. That decision also rendered LMAs attributable as commonly
owned stations -- with limited grandfathering of existing LMAs -- and
thus prohibited LMAs except where and between those stations that could
be commonly owned pursuant to the revised duopoly rules.

After the Commission's decision in 1999, Sinclair and Glencairn filed an
application to amend the pending application of Glencairn to acquire the
station in Oklahoma City, to make Sinclair not Glencairn the acquirer,
as under the new rules a duopoly would be permissible in Oklahoma City.
Also subsequent to the Commission's 1999 decision, Glencairn filed
applications to sell to Sinclair stations in San Antonio, Milwaukee,
Durham, and Birmingham, as these markets have sufficient voices in each
market to permit duopolies pursuant to our rules. These transactions are
also before the Commission today.

# Discussion

In its August 1999 modification of the television local ownership rules,
the Commission permitted one licensee to own two television stations in
certain markets. In modifying these rules, the Commission fully intended
licensees to avail themselves of the opportunity presented by the rule
change. As the Commission intended, Sinclair has applied to acquire
duopolies in those markets in which such common ownership is
permissible. As the Commission also could have anticipated, Sinclair has
challenged the rules in court, seeking and winning a stay of the
requirement that it terminate its LMAs where such arrangements have been
rendered violative of the rules.

What makes Sinclair's practices disquieting, however, are its maneuvers
to acquire interests in multiple stations in local markets in seeming
contravention -- if not violation -- of Commission rules. While in the
past, Sinclair has entered into arrangements with Glencairn to acquire
and manage multiple stations in local markets that the Mass Media Bureau
has found to fall just short of ownership arrangements, the transactions
presented here raise questions of fact requiring further investigation.

As petitioners point out, a number of facts related to the transfer of
the Sullivan stations to Sinclair and Glencairn call into question
whether Sinclair is the real party in interest behind Glencairn. For
example, Edwards did not know the amount of debt that Glencairn was to
assume to acquire the Sullivan stations. Whether Edwards intended to
deceive the Commission or simply was mistaken in his declaration to the
Commission, that he was ignorant of the most important term of the
transaction may call into question whether he is actively involved in
the corporate management of Glencairn and his purported control of
Glencairn.

Further, there is the question of whether the
Sullivan-Sinclair-Glencairn transaction was structured to allow Sinclair
to pay almost all of the purchase price of the Sullivan stations and
Glencairn to obtain the Sullivan stations it acquired at a small
fraction of their value. The five stations to be acquired by Glencairn
were to be sold for \$8 million. These five stations, according to
estimates based upon comparable sales, should be worth approximately
\$90 million. While the Commission traditionally does not examine the
purchase price in a station sale, it will consider such matters if there
is reason to suspect the parties have attempted a sham transaction in
order to avoid compliance with rules.

If these facts regarding the structure and value of the transaction were
the case, it would call into question whether Glencairn is a truly
independent company or whether Sinclair was making decisions about what
stations Glencairn should acquire and at what price. Furthermore, until
modified after being questioned by FCC staff, the
Sullivan-Sinclair-Glencairn deal was structured so that Sinclair would
be the holder of the promissory note on Glencairn's purchase of the
Sullivan stations, in violation of the Commission's existing policy on
television LMA's.

In addition, Glencairn's proposed sale of all but two of its existing
television stations to Sinclair immediately following adoption of the
new multiple ownership rules raises questions about its control of these
stations prior to those sales. This raises questions of whether these
stations were merely owned by Glencairn but controlled by Sinclair until
such time as Sinclair could own them under our revised multiple
ownership rules. In addition, Glencairn is not to receive cash for the
sale of its stations but rather Sinclair stock, which would further tie
the two companies together financially. These facts call into question
Glencairn's independent decision making ability.

Finally, Glencairn terminated its proposed acquisition of the station in
Oklahoma City when Sinclair was able to acquire it under the new
television duopoly rule. While Glencairn maintains that this was done to
reduce the amount of debt that it was assuming, it is questionable why
an independent company such as Glencairn would walk away from such a
deal without compensation company could take its place.

Though the decision of the majority imposes a forfeiture on Sinclair and
Glencairn, it nonetheless allows all but one of the transactions at
issue to go forward with minor changes. While the majority's finding
that an illegal transfer of control occurred is an important step toward
curtailing Sinclair's -- and any future licensee's -- attempts to
circumvent the Commission's local ownership rules, it does not go far
enough.

The assessment of a fine combined with the approval of the transfers at
issue is incongruous. The finding that an illegal transfer of control
occurred at least raises questions about the control of Glencairn on an
ongoing basis, and about the independence of Glencairn from Sinclair
once Glencairn is controlled by the mother of Sinclair's owners and
owned in trust for their minor children. These questions require
designation for hearing.

With each transaction over the years, Sinclair has stretched the limits
of the Commission's local television ownership rules. In each of several
transactions that have come before it, the Mass Media Bureau has
reviewed the transaction and the Petitions to Deny filed alleging
illegal transfers of control, and has permitted the transaction to go
through. The transactions before the Commission today raise issues that
prompted the majority to find that there has been an illegal transfer of
control and to assess a fine. But the Commission nonetheless has allowed
the transaction to go through without further review. Each transaction
moves the line to which all of our licenses are subject. And this
decision moves it further still.

If anyone wonders how Sinclair will next push against the Commission's
rules, recent press reports may give us a preview. Reportedly,
Sinclair's NBC affiliate in Tallahassee has combined its operations with
the ABC affiliate in that market. Because the ABC affiliate retains
control of its programming, Sinclair asserts in the press that this
relationship is consistent with FCC rules, including the attribution of
Local Marketing Agreements as common ownership. I hope that the
Commission will investigate this relationship for consistency with our
local television ownership rules.

# Conclusion

I therefore dissent from the grants of applications for transfers of the
licenses to various television stations to Glencairn and Sinclair.
Because the relationship between Sinclair and Glencairn and the
ownership and control of Glencairn raise a number of questions of fact
related to these transactions, I believe that we cannot grant these
applications without further review. I therefore dissent from the
majority's decision not to designate these applications for a hearing.

In addition, I dissent from the denial of the Applications for Review
filed by Pulitzer Broadcasting and Post-Newsweek Stations. Given the
finding of illegal transfer of control of Glencairn to Sinclair, and the
outstanding questions of fact regarding independence of Glencairn, I
believe that these transactions should be reviewed and designated for
hearing. In addition, the issues related to Sinclair's control of
Glencairn and the subsequent transfer of legal control of Glencairn to
Carolyn Smith raise questions regarding the transfer of Carolyn Smith's
ownership of Glencairn to trusts for her grandchildren such that these
transfers should similarly be reviewed.

I approve the decision of the majority to the extent that it finds that
an illegal transfer of control occurred vis-à-vis Sinclair's control of
Glencairn. I also approve the assessment of a forfeiture on Sinclair and
Glencairn, as well as the decision of the majority to deny the transfer
of WFBC in Anderson, South Carolina from Glencairn to Sinclair.