WNUV-TV owner a lightning rod for criticism; Some label Edwards front man for Sinclair

THE BALTIMORE SUN

In an industry dominated by people with white skin, Edwin L. Edwards Sr. is an anomaly. The 47-year-old Pittsburgh businessman heads a company that owns seven television stations nationwide, including Baltimore's WNUV-TV.

This has made Edwards one of the few blacks who has broken into broadcasting's ownership ranks. It has also made him a lightning rod.

Edwards has been the subject of regulatory scrutiny and intense public criticism, much of which has come from the Rev. Jesse L. Jackson's Rainbow/PUSH Coalition and other pro-diversity groups that would normally be expected to applaud blacks who have reached the executive suite.

Andrew Jay Schwartzman, president of the Media Access Project, a Washington public-interest law firm that focuses on communications issues, called Edwards a "sham."

Schwartzman, Rainbow/PUSH and others say Edwards is little more than a front man enabling Baltimore-based Sinclair Broadcast Group Inc. to bend federal station-ownership rules. Regulators are taking a close look at the management structure that binds Edwards and Sinclair. While other broadcasters around the country have similar arrangements, critics say it is Edwards who best typifies what is wrong with the system.

Edwards dismissed the charges as "mudslinging."

"I'm a very successful black man. You would think they [diversity advocates] would be behind us," Edwards said in the stentorian, bell-clear voice of the television talk-show host he still is.

To get a sense of why Edwards has received brickbats from some unlikely sources, a little broadcast-industry history is in order. For all the immense change that the TV business has undergone -- the rise and triumph of cable, the advent of satellite television, the endless merger-and-partnership barn dance that has redefined who owns what -- one rule has remained more or less sacrosanct: Thou shalt not own two or more TV stations serving the same geographic area.

This commandment is known in regulatory argot as "the duopoly rule." It is intended to ensure that no one person or company hogs channels and dictates the televised news and entertainment options of a community.

One way broadcasters have managed to tweak the duopoly rule is with arrangements called local marketing agreements, or LMAs. These agreements, which have won approval by the FCC, allow a broadcaster who already owns one TV station in a given city to buy the programming rights to a second station. The broadcaster does not own the second station -- that would violate the duopoly rule. However, the broadcaster does control programming of the second station.

Opponents of LMAs say such deals give one company control of two TV stations in the market, squelching diversity and defying the spirit if not the strict letter of the duopoly rule.

Sinclair using LMA

Sinclair has become virtually synonymous with the LMA, using it as a key part of its drive to become one of the largest and most influential station owners and programmers in the country. Edwards, a former news announcer and manager for Sinclair, is a favorite partner in these arrangements; his company, Glencairn Ltd., is listed as the owner of seven stations nationwide that are programmed by Sinclair under LMA deals.

In Baltimore, for example, Sinclair owns Fox station WBFF-TV while Glencairn owns the WB Network's WNUV-TV. Through its LMA with Glencairn, Sinclair controls programming for both stations.

An eighth LMA station, in Pittsburgh, is owned by Edwards in a separate, non-Glencairn entity and programmed by Sinclair.

Edwards defended the legitimacy of LMAs and said his critics are hypocritically singling him out. "On one hand, they're saying, 'Do something about [boosting] minority ownership,' and on the other hand they're saying, 'Block this guy and his deal with Sinclair.' "

Media Access Project's Schwartzman said it is Sinclair, a white-run company, that is being disingenuous about race.

"The function of enhancing minority ownership is to increase diversity of views and perspectives," Schwartzman said. "Here, Eddie Edwards sells or leases essentially 100 percent of programming time and control to Sinclair. There's no diversity; David Smith [Sinclair's chairman, president and CEO] is now essentially programming two stations in an area. Eddie programs zero."

Close relationship

As proof of what they see as Edwards' too-tight relationship with Sinclair, Schwartzman and others point out that Carolyn Smith (David Smith's mother) and her grandchildren directly or indirectly own 97 percent of Glencairn and that she and Glencairn have the same lender and loan officer. In addition, Schwartzman said, Sinclair has contractual arrangements to take over Glencairn's stations altogether if the FCC ever allows full ownership of more than one station in the same market.

Eyebrows and suspicions were raised recently when Edwards originally told regulators that the amount of debt carried by a group of stations involved in a complex deal involving Glencairn and Sinclair was more than $80 million; the true amount was closer to $40 million. Critics said the discrepancy, which was corrected, was proof of Edwards' detachment from his stations' operations.

Edwards said his critics have misunderstood and misrepresented his relationship with Sinclair. He freely admitted that he thinks highly of Sinclair and the Smiths, but bristled at the implication that he is their toady.

He spoke reverentially of Carolyn Smith, saying, "That lady is like my mother," but he insisted that she is separate from the company her sons control and that, in any case, her stake in Glencairn consists of nonvoting shares.

Meaningful role

Edwards said he does have a meaningful role in the programming of his stations. "I have the power to pre-empt anything at any time that I wish," he said. When asked for examples of such pre-emption, he said no such situations have yet arisen. However, he said he recently persuaded Sinclair to adjust its programming schedule to run a gospel-music awards show.

Edwards controls stock

He declined to comment on specific aspects of his contracts with Sinclair, saying only that "There are some options they can exercise, but only with my approval. I control the stock."

As to the $40 million debt gaffe, Edwards called the resultant criticism "absolutely laughable."

"Come on, we're human, we're busy. I'm looking at million-dollar deals all the time. It was a mistake. It didn't hurt anybody," he said.

David B. Amy, Sinclair's chief financial officer, said the relationship between Sinclair and Edwards began in 1991, when the then-puny Sinclair was looking for a way to rescue a failing independent station it owned in Pittsburgh.

Sinclair's station was getting pummeled by the local Fox affiliate, Amy said, so Sinclair decided to do something drastic: buy out the Fox station at a premium.

Company was vulnerable

The deal strengthened Sinclair's hand in Pittsburgh, but it also put the company in a vulnerable financial position. The company decided to sell its independent station, but it didn't want to sell to just anyone.

"The last thing we're going to do after [the Fox station purchase] is turn around and sell a competitive station to a significant player and undermine our investment. We needed to sell it to someone that wasn't just going to come in and compete and beat the hell out of us," Amy said.

That someone turned out to be Eddie Edwards. This was not an LMA; Edwards' station had its own home-shopping programs at first. Amy said that as cable companies threatened to drop Edwards' station, Edwards and Sinclair reached an arrangement where Sinclair would pay Edwards to carry programming. The cable companies were mollified, and the Sinclair-Edwards LMA bond was forged.

'Tough battles'

Amy said the relationship between Edwards and Sinclair was no mere facade. "We have a great relationship, no question about it, but we've had some tough battles," Amy said. "We don't go to Eddie and say, 'No matter what you think, we're doing this.' "

The FCC declined to comment on Sinclair and Edwards, but the commission has proposed that broadcasters who own one station and program another in the same area be declared owners of both stations.

In light of the duopoly rule, this redefinition would presumably force Sinclair and other broadcasters to give up their LMA programming rights. A final decision on the matter is expected by the end of the year.

For his part, Edwards said he is trying to look beyond present controversies. He said he plans to buy some radio stations and set up his own TV production company. If moving ahead in the broadcast business means taking the occasional burst of flak, so be it.

"Eddie Edwards has been in broadcasting all of his life," he said of himself. "He can stand on his own two feet. That might arouse jealousy."

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