History
In 1971, UHF pioneer Julian Sinclair Smith went on the air in Baltimore, Maryland with our flagship station, WBFF-TV. WBFF-TV became the first UHF station in Baltimore and one of the very first in the country. Today UHF broadcasters are an important presence in virtually every market in the country. With UHF broadcasting changing the shape of the television landscape, Julian Sinclair Smith's four sons envisioned a powerful new distribution network created by acquiring existing UHF stations. From that vision, they developed a long term plan to launch the Company as a major consolidator in the industry. And so, in 1986, Sinclair Broadcast Group, Inc. (SBG) was founded. In 1990, the four Smith brothers purchased the remaining interests in SBG from their parents and set out to make their vision a reality. Sinclair's first acquisition was made in 1991 when it acquired WPGH-TV in Pittsburgh, Pennsylvania. In the same year, the Company introduced the first Local Marketing Agreement (LMA), a visionary new strategy that would build value for the Company and the local community by enabling SBG to program a second station in a market where it already owned a station, pursuant to FCC rules. Today, SBG operates the most LMAs of any broadcaster, bringing high quality programming from networks and introducing the possibility of additional news programming for the local marketplaces. In 1994, SBG acquired four stations plus options on additional properties, thereby doubling the size of the Company. In June 1995, rapidly growing SBG went public, realizing approximately $111.5 million to fund future acquisitions. That same year, SBG added five more stations in four markets. Within 10 years after being formed, Sinclair became the nation's largest commercial television broadcasting company not owned by a network when it acquired River City Broadcasting. The acquisition of River City also launched SBG into the radio industry. SBG now owned 28 television stations in 21 markets and 23 radio stations in 7 markets. The economies of scale enabled SBG to improve margins and maximize programming power. In 1997, SBG signed a landmark affiliation agreement with The WB Network, calling for cash compensation to SBG over the length of a 10-year contract. The agreement marked the first time that The WB offered network compensation of any magnitude to its affiliates. In the same year, the Federal Communications Commission (FCC) accelerated the shift of the television industry from analog to digital television broadcasting (DTV) by granting the first digital licenses to broadcasters. SBG proposed multi-channel television as an alternative to high definition television (HDTV). In 1998, SBG again doubled in size with such acquisitions as Heritage, Sullivan Broadcasting and Max Media and emerged as one of the largest broadcasting companies in the United States and one of the top 10 radio broadcasters. With the television platform in place, SBG turned its efforts to repositioning the Company for future growth, both operationally and technologically. In 1999 SBG launched its Ventures Business, acquiring an 89% equity interest in G1440, an e-business solutions and applications provider. Also in 1999 SBG acquired a 32% equity interest in Acrodyne Communications, Inc., a leading manufacturer of transmitters and other television broadcast equipment. SBG also divested of its 51 station radio group to strengthen its balance sheet and to focus on its television platform and the roll-out of digital television. The radio group sale was valued at an approximate 19x of broadcast cash flow. In September 1999, SBG became the first broadcaster to announce that the national advertising market was becoming fragmented due to increased competition from other forms of media and that broadcasters needed to focus their efforts on advertising revenues generated in the local markets. Hence, SBG's local strategy was born. In 2002, focusing on how to grow local market share, SBG launched News Central, a local news strategy operating in conjunction with a centralized national news operation. This revolutionary news model allowed SBG to build its local news franchise by introducing local news programming in markets that otherwise could not support the news. News Central eventually evolved into another economically efficient news offering known as a News Share, in which an SBG lower-rated news station partners with the number 1 or 2 rated news station in the marketplace. By 2005, SBG completed the build-out of its digital television platform, and quickly realized that there were many opportunities to monetize these assets. Understanding that the digital platform, as well as the Company’s regular programming, provided multi-channel video programming distributors (MVPDs), such as cable, satellite and telecommunications companies, with valuable programming, SBG became one of the first broadcasters in the country to request compensation from the MVPDs for their right to carry programming aired on SBG’s stations. This compensation, known as retransmission consent agreement fees, provided a new revenue stream for broadcasters and helped to revitalize the broadcast industry. In 2006, changes in the country’s networks altered the make-up of SBG’s affiliation mix. That year, the WB Network and the UPN Network combined to become the CW Network. A sixth network, MyNetworkTV, was launched. Subsequently, SBG became the largest FOX and MyNetworkTV affiliate groups, the second largest ABC affiliate group and the third largest CW affiliate group in the country.
However, SBG’s vision for utilizing and creating value from its digital investment did not stop there. For years, SBG advocated the development of technology that allowed for the portability and mobility of the television signal. In 2006 and 2007, SBG once again teamed with consumer electronic manufacturers to test transmission standards to allow broadcasters’ digital signals to be transmitted to portable and mobile devices such as cell phones, laptops, televisions in cars and other handheld devices, thereby creating another potential new revenue stream for broadcasters. In 2007, SBG, along with 8 other broadcasters and networks, founded the Open Mobile Video Coalition whose purpose it is to promote and evaluate mobile TV business applications.
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That year, SBG conducted a series of tests in Philadelphia and Baltimore and discovered that the FCC adopted 8VSB digital standard could not be received in environments where complex multi-path existed. With tests results in hand, SBG led a broadcasters' petition to the FCC to enable broadcasters the choice of the 8VSB or COFDM standard, a more robust and flexible standard used elsewhere around the world. Due to our efforts and years of testing, the FCC, the broadcast industry and the consumer electronics manufacturers agreed that improvements in digital television technology must occur and promised to correct the shortcomings.
That same year, SBG launched its first digital sub-channel on WBFF-TV in Baltimore. The new channel, known as Good TV, was the first syndicated programming digital sub-channel in the country.