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Federal regulators fine KUTV's owner $13.3 million for deceiving Utah viewers

Paid TV advertising was not properly identified on dozens of Sinclair Broadcasting-owned stations, says Federal Communications Commission.

(Steve Ruark | AP Photo) In this Tuesday, Oct. 12, 2004, file photo, Sinclair Broadcast Group, Inc.'s headquarters stands in Hunt Valley, Md. Sinclair Broadcast Group, one of the nation's largest local TV station operators, announced Monday, May 8, 2017, that it will pay about $3.9 billion for Tribune Media, adding more than 40 stations including KTLA in Los Angeles, WPIX in New York and WGN in Chicago.

  | Dec. 16, 2017, 7:48 p.m.
| Updated: Dec. 19, 2017, 4:33 a.m.

Sinclair Broadcasting, which owns three TV stations in Utah and is trying to buy the parent company of a fourth, has been fined $13.3 million by federal regulators for failing to properly disclose that news stories about the Huntsman Cancer Institute in Salt Lake City were actually paid advertising.

According to Reuters and Bloomberg, the proposed Federal Communications Commission fine covers approximately 1,700 ad spots that aired on dozens of Sinclair stations in 2016.

The segments in question were part of an advertising arrangement with the Huntsman Cancer Foundation, which raises money for the Huntsman Cancer Institute. There is no suggestion of wrongdoing on the part of the foundation or HCI, which purchased ad time from Sinclair and was unaware that the segments were used improperly. Huntsman Cancer Foundation president and COO Susan Sheehan said the arrangement was not renewed when the problem came to light.

In Utah, Sinclair owns KUTV-Channel 2, KJZZ-Channel 14 and KMYU-Channel 12. Sinclair is in the midst of a multibillion dollar buyout attempt of Tribune Broadcasting, whose stations include KSTU-Channel 13 in Salt Lake City.

Under current Federal Communications Commission regulations, Sinclair would be prohibited from owning both KUTV and KSTU. Those rules, however, are currently under review.

The incidents leading to the FCC fines are being seized upon by opponents of the Sinclair-Tribune deal as a reason it should be rejected by federal regulators.

The story broke in August 2016, and FCC fines have been anticipated since then. They’re still not official; the FCC has not announced them, and neither it nor Sinclair has made any public comment.

In the wake of the incident, former KUTV news director Jennifer Dahl — who had been promoted to Sinclair’s Western Regional news director — issued a memo instructing the stations that they would have to air an apology over a five-week period. She subsequently lost her job at Sinclair.

Editor’s note: Paul Huntsman, a son of Jon Huntsman Sr., is the owner and publisher of The Salt Lake Tribune. And The Tribune is a content partner with KUTV.