BROOKE GLADSTONE: By the time you hear this, 40 local television stations -- many of them in swing states --will have aired a politically incendiary primetime program about election season documentaries. Sinclair Broadcasting Group, the media conglomerate that owns the stations, described it as a news special. But others, including Sinclair's Washington Bureau Chief John Lieberman, called it, quote, "blatant political propaganda, specifically of the anti-Kerry sort." I'm sorry -- make that former Washington Bureau Chief. For those words, Lieberman was fired on Monday. Lieberman was referring to "Stolen Honor: Wounds that Never Heal," a short film that attacks Kerry's anti-war activism after he served in Vietnam. Sinclair originally ordered its stations to air that program, triggering a massive boycott campaign of Sinclair's advertisers and a precipitous dive in the value of Sinclair's stock. But on Tuesday, the company seemed to backtrack. It announced that actually, only a few short segments from the film would be included in a report about the impact of political documentaries. Sinclair's stock shot back up. But not before several groups of shareholders threatened to sue the company for airing Stolen Honor without an opposing view, and that was followed by more lawsuits, or threats of lawsuits, for insider trading, libel and copyright infringement. Blair Levin is a managing director at Legg Mason - a financial services company. He says the anti-Sinclair activists on the internet were triumphant -- at first.

BLAIR LEVIN: A first kind of reaction was "Great. We won." But now there was kind of a second wave of reaction saying "Hey, wait a minute. They're actually just pretending that it's a real news show, but in fact it's the same scurrilous smear of Senator Kerry just before the election." So one critical question that I would have for investors is: to what extent does this community feel, after seeing the actual event on Friday, that they should either declare victory or they should say "Hey, wait a minute. Anyone associated with this company, we should be boycotting."

BROOKE GLADSTONE: The Columbia Journalism Review this week bestowed its first annual Ben Bagdikian Media Monopoly Award to Sinclair. The editorial said that the award goes to the person or company who, quote, "has done the most to curb the dangerously-rising power of media companies in America." Sinclair seems to fit the bill better than any opponent of media consolidation that CJR could come up with.

BLAIR LEVIN: Yeah. Sinclair's business plan in some ways depends on the FCC granting certain kinds of relief for certain media ownership limits. They want to be able to buy more stations in the markets where they're currently operating. It's our view that, by doing what they did, they've created a situation in which they're essentially a poster child for what the opponents of media concentration regard as the dangers of media concentration. That's going to make relief more difficult to achieve if John Kerry is elected, but the interesting thing is that under a Bush administration, it makes it much more politically difficult, precisely because it will now look like a Sinclair pay-back.

BROOKE GLADSTONE: So you would suggest, then, that it was a bad business maneuver either way, for Sinclair.

BLAIR LEVIN: Well, certainly if you look at it in the kind of sometimes narrow way in which I look at it, like: Was this more likely to make the regulatory situation better for them or less likely? Clearly it makes it less likely. Clearly it's a bad business decision, in that regard. And, and I would note, I don't think the company has ever defended their decision on the basis that it was a good business decision, which is actually kind of interesting.

BROOKE GLADSTONE: Yeah, that seems to bring us to the crux of the matter. Is it possible that we shouldn't be trying to understand Sinclair in the way we have traditionally understood media conglomerates or, or for that matter corporations in general. NYU journalism professor Jay Rosen has argued that Sinclair isn't so much a commercial broadcaster with a political agenda as a political broadcaster with an expanding commercial base.

BLAIR LEVIN: Well, certainly they have been much more up front about their politics. Traditionally media companies have been pretty middle of the road, and one of the reasons why the media ownership issue is so important to some folks is that this is the medium by which we are supposed to have civic discourse. And if this is a medium which is taken over by one side or the other, how will we ever get a fair and diverse debate?

BROOKE GLADSTONE: Let's turn for a moment to Stolen Honor, the documentary/partisan film/news that Sinclair said was simply telling the facts. Now anyone can download a copy of the script or even, for a few dollars, the documentary itself, in which POWs contend that Americans did not commit atrocities in Vietnam. Of course last year's Pulitzer Prize-winning series in the Toledo Blade documents the testimony of several Vietnam vets that in fact they did participate in the murder of many, many civilians. Now, this has implications far beyond this election, I think.

BLAIR LEVIN: Oh, absolutely. One of the very interesting things I think about this election is the way that the fragmentation of the media has led to people going to the media to have their own views confirmed, and there's an awful lot of kind of mis-information out there. Now, I think it's dangerous when we don't have folks who are doing the kind of fact-checking that traditionally the middle of the road media has done, so as to give people some kind of sense of what actually is factually true and what is not, in fact, true.

BROOKE GLADSTONE: We don't know the end of the story yet. The show has aired. Sinclair recovered a lot of its stock losses. The boycotts may or may not continue. The lawsuits may or may not be filed. But does the very fact that Sinclair tried something different and tried something that was scary to a lot of people -- does that mean that the entire industry has approached a sort of Rubicon?

BLAIR LEVIN: Well, I certainly think this will become something of a watershed moment. If nothing else happens, and the advertiser boycotts go away, and the lawsuits go away, and the FCC does nothing, both on the fairness question but also on the ownership question, I would not be surprised to see other broadcasters use the broadcasting platform for partisan political purposes very directly and overtly in future elections. But I think that there's going to be a continuing question about the impact of this on media ownership issues, and I think it may cause some effort to have a renewal of the more traditional fairness doctrines or equal opportunity kinds of requirements that in the past have been clearer. I wouldn't be surprised to see legislation that would deal with the kind of questions raised by what Sinclair did.

BROOKE GLADSTONE: Well, thank you very much.

BLAIR LEVIN: Thank you.

BROOKE GLADSTONE: Blair Levin is a managing director of Legg Mason and served as chief of staff to former FCC Chairman Reed Hundt. Coming up, newspaper endorsements -- so much pain -- so little impact. And campaign politics with a mouse.

BOB GARFIELD: This is On the Media, from NPR.