With our television platform in place, we turned our efforts to repositioning for future growth, both operationally and technologically. It was during this time that we, as the industry visionary, launched the country’s first digital multicast sub-channel using syndicated programming, pioneered the industry’s first cable retransmission consent agreement, and led the industry movement for mobility and portability of the broadcast television signal. The decade also gave witness to the transition from analog to digital television, as well as two of the country’s worst events in the decade: the 9/11 terrorist attacks and the Great Recession.
As a result of the 9/11 terrorist attacks, the national economy, as well as the advertising market, went into a recession, seeing the greatest declines in advertising spending in over 50 years.
With an improving economy, our free cash flow grew, leading to a stronger balance sheet. That same year, our Board of Directors approved our first-ever common stock dividend. What began as a $0.10 annual per share dividend rate grew as high as $0.80 before being suspended during the Great Recession.
During the year, we were approached by American prisoners of the Vietnam War asking for their voice to be heard through a documentary, “Stolen Honor.” While we did not air the program, we did dedicate a public interest show discussing both sides of the topics raised in the documentary.
In March 2005, we once again led the industry in innovative business arrangements by executing on the country’s first per subscriber fee cable retransmission consent agreement. This model became the industry standard by which television broadcasters could get paid by MVPDs (multi-channel video programming distributors) such as cable, satellite and telecommunications companies. Our efforts created not only a new source of revenue for us and the industry, but helped to revitalize the over-the-air broadcast industry. Under retransmission consent, distributors pay for the right to carry our valuable programming aired on our stations and funded by us.
Changes in the country’s networks altered the make-up of our affiliation mix. The WB Network and the UPN Network combined to become the CW Network. A sixth network, MyNetworkTV, was launched by FOX. Subsequently, we became the largest FOX and MyNetworkTV affiliate group, the second largest ABC affiliate group and the third largest CW affiliate group in the country. Also during the year, we launched our first digital sub-channel on WBFF-TV in Baltimore. The new channel, known then as Good TV, was the first syndicated digital sub-channel in the country.
Our vision for utilizing and creating value from our digital TV investments continued, as we furthered our advocacy efforts around the development of technology that allowed for the portability and mobility of the television signal. Once again, we teamed with consumer electronics manufacturers to test transmission standards to allow broadcasters’ digital signals to be transmitted to and received by portable and mobile devices such as smart phones, laptops, tablets, televisions in cars and other handheld devices. As the industry thought-leader for an advanced, mobile and flexible transmission standard in the U.S, we along with eight other broadcasters and networks, founded the Open Mobile Video Coalition (OMVC), whose purpose it was to promote and evaluate mobile TV technical applications.
Just as the decade began with a recession, so too did it end in one. The country found itself in the midst of the Great Recession, the worst economic environment the country had experienced since the Great Depression. With high unemployment, financial institutions failing, and homes being foreclosed, the advertising market suffered its greatest losses ever. A few major American automotive manufacturers, which historically had been the largest customers of broadcasters and newspapers, went bankrupt, contributing to the failure of many long-standing daily newspapers in the country.
June 12, 2009, marked one of the television broadcast industry’s most historic events – the U.S. government officially turned off the analog television signal forever, thereby ushering in the age of digital television. Sinclair, always considered an industry leader for our technical expertise and vision, would continue to play a major leading role in the years to come for the development of mobile television and other broadcast spectrum uses.
It was around this same time that consumer viewing habits began changing dramatically as over-the-top technologies, mobile apps, and social networks were introduced. It was clear that we would need to be in these spaces and so our digital interactive (“DI”) platform was born. The DI
foundation is based on a three-screen approach (fixed TV set, websites and portable applications) to drive local news, to interface with our audience, and to provide for an out-of-home means for advertisers and content providers to reach consumers.