Unpaid VNRs Remain ‘Valuable Consideration,’ Must be Disclosed, FCC Says
TV stations airing video news releases (VNRs) still must disclose to viewers that they're sponsored content, or risk FCC fines, the Enforcement Bureau said in two notices of apparent liability released Thursday afternoon. They came in response to complaints from 2006 by groups seeking better corporate disclosure in media, including Free Press, and caught one of the licensees and both the complainants off guard. News Corp.’s Fox Television Stations and Access.1 Communications each face $4,000 fines. Although the penalties are small, the decisions highlight the fact that the commission wants broadcasters to make sponsorship disclosures even when stations aren’t paid to run VNRs.
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Both companies that were fined told the agency they didn’t have to provide disclosure because they weren’t paid for airing the VNRs. Fox’s KMSP-TV Minneapolis in 2006 aired a news report on new car designs that included what amounts to a news release in video form from General Motors. “We're reviewing [it] and will respond at the appropriate time,” a Fox spokeswoman said. Access.1’s WMGM-TV Wildwood, N.J., showed a VNR during a health segment about the Zicam cold remedy. General Manager Ron Smith was “very surprised” by the NAL, since the station’s license was just renewed by the commission, he said. Smith hadn’t yet seen the NAL.
Sponsorship ID was required to alert viewers that General Motors provided the material to KMSP, and Matrixx Initiatives, maker of Zicam, gave the video to WMGM, said notices signed by Enforcement Bureau Chief Michele Ellison. “Commission precedent makes clear that VNR material constitutes ‘valuable consideration’ within the meaning of section 317” of the Communications Act, she wrote. “The Commission also has warned that it will take enforcement action against broadcast stations that do not comply."
The complaints from Free Press and the Center for Media and Democracy came as they tried to highlight to the FCC what they called the problem of VNRs being aired without disclosure. A commission inquiry into dozens of those news releases had held up many stations’ license renewals (CD Oct 16 p2/06).
The last NALs on VNRs came in 2007. Comcast then faced a $20,000 fine for airing VNRs on cable news channel CN8, since defunct, which the company also hadn’t been paid for, but didn’t disclose. An FCC spokesman declined to comment on Thursday.
It’s both surprising and pleasing that the FCC “is looking into these matters,” since VNRs “are continuing to mislead viewers,” said CMD Executive Director Lisa Graves. “The practice hasn’t gone away.” She cited anecdotal viewer reports to the group, which hasn’t recently studied the issue. Since the complaints were made, “it’s been radio silence ever since from the FCC, so this is welcome,” said Free Press Policy Counsel Corie Wright. “People deserve to know when programming that resembles bona fide news coverage is really a commercial. We encourage the FCC to continue to crack down on fake news.”