Sinclair Amends Kerry Film Plans

(CBS/AP)  Threatened with a shareholder revolt, Sinclair Broadcast said it will not air in its entirety a documentary critical of John Kerry's anti-war activities, but will instead incorporate parts of the 42-minute film into a news special.

Parts of the film "Stolen Honor: Wounds That Never Heal" will be shown during a program examining the use of documentaries to influence elections, Sinclair said Tuesday. The company said media reports that the entire film was to be shown were "inaccurate."

The announcement came hours after shareholders challenged Sinclair's plans to air the film, saying the controversial broadcast may hurt their investment. The decision had also prompted several advertisers to ask Sinclair not to run their commercials in or around the program.

Shares of Sinclair Broadcast Group Inc., the owner of 62 television stations that reach a quarter of U.S. households, rebounded sharply after the announcement, up more than 17 percent on the NASDAQ stock exchange in early trading Wednesday. The shares had dropped more than 16 percent since plans for the show were first announced earlier this month.

"A POW Story: Politics, Pressure and the Media," will examine the "role of the media in filtering the information contained in these documentaries, allegations of media bias by media organizations that ignore or filter legitimate news and the attempts by candidates and other organizations to influence media coverage," the company said in a statement.

It will air Friday on 40 of the company's stations, including many in key swing states for the Nov. 2 presidential election. A company spokesman had previously said the company planned to air some or all of the film.

"We have not ceded, and will not in the future cede, control of our news reporting to any outside organization or political group," said Joe DeFeo, Sinclair's vice president of news.

Sinclair fired its Washington bureau chief, Jon Lieberman, on Monday after he publicly criticized the company's plans.

In an interview with the Baltimore Sun, Leiberman, 29, called the planned Sinclair program "biased political propaganda, with clear intentions to sway the election."

The Democratic National Committee filed a complaint with the Federal Election Commission, arguing that the broadcast should be considered an illegal in-kind contribution to President Bush's campaign.

Sinclair said executives met recently with senior Kerry campaign officials but the campaign has declined to participate in the program.

Meanwhile, a lawyer said he planned to sue on behalf of shareholders, alleging insider trading by top executives as well as damage from the decision to air the film. Media Matters, a media advocacy group, announced it was underwriting the costs of a shareholder action demanding equal time for opposing views.

The company did not directly address the insider trading accusation, but CEO David Smith said executives "have endured personal attacks of the vilest nature."

Eighteen senators, all Democrats, wrote last week to the Federal Communications Commission to ask it to investigate Sinclair's plans. The agency declined to intervene.

New York Comptroller Alan Hevesi, also a Democrat, sent a letter expressing concern to Sinclair on behalf of the state's pension fund, which owns shares in the broadcasting company.

Sinclair stock has dropped to less than $7 a share, from a high of more than $15 a share in January.

Two groups offered programs Tuesday to Sinclair to air in response to its news special. California philanthropist Deborah Rappaport and her husband offered to pay for an hour of airtime for the documentary "Going Upriver," a positive portrayal of Kerry's service in Vietnam.

Mother Jones Magazine offered Sinclair a half-hour video of four prominent Republicans — including John Dean and Pete Peterson — condemning the Bush administration.