A Proposed Fine of $13.4M for Undisclosed Sponsored Content Serves as a Warning to Other Broadcast Stations
As we closed the books on 2017, the FCC announced that it plans to fine Sinclair Broadcast Group Inc. a record $13.4M, for having not adequately disclosed sponsored content in its programming. The fine was calculated by the FCC based on over 1,700 instances – across 64 of Sinclair stations – where the FCC found Sinclair to be in violation of Section 317(a)(1) of the Communications Act, which requires identification of anyone who has paid for broadcast programming. That adds up to roughly $7,700 per violation. Guess someone was on the FCC’s naughty list.
While many might be inclined to gloss over this decision as a one-off that is only notable for the size of the fine, it can also be viewed as a clear signal that the FCC is getting tough on sponsorship identification generally and possibly elevating it higher in the Commission’s list of enforcement priorities.
With this Notice of Apparent Liability (NAL), the Commission has forcefully underscored the continued importance of the statutory requirement that all broadcast stations are transparent about who are attempting to persuade their listeners or viewers. This longstanding requirement applies to all broadcasts of any length where any compensation, in cash or in kind, has been provided to a station in exchange for a broadcast. While the amount in question is higher than prior cases, that alone shows that the FCC is taking this issue seriously.
The FCC began to look into the matter of potential undisclosed, paid content on Sinclair stations in April 2016 when it received an anonymous complaint which alleged that the cancer foundation Huntsman Cancer Institute (HC) was paying for favorable news coverage and programming on Sinclair and other stations. The content that got Sinclair in trouble was varied in length. Some ran as short news of approximately one minute in length, but Sinclair also broadcast as many as 71 full-length programs. Sinclair did not include a clear identification of any of them as being sponsored, even though Sinclair had an arrangement whereby it would receive compensation for these broadcasts. The problem is that programming that appeared to be chosen by the station on its own was not. Continue Reading