By Andrew Franklin, President UTR LLC
Today thousands of gun rights advocates have gathered in Albany to protest Andrew Cuomo’s aggressive move to restrict the rights of gun owners and purchasers. At the same time, Leo Hindery, a major fundraiser for Governor Cuomo and a national leader in the Democratic Party, is pushing a merger that will create the nation’s largest pro-gun media network. Hindery’s conflicting business and political interests are creating more risk for the future of media networks like the Sportsman Channel and the Outdoor Channel. Hindery’s conflicting loyalties will inevitably alienate and impact the sponsors, viewers and shareholders who have invested in those businesses.
Leo Hindery is the leader of Intermedia Partners, which owns magazines including Guns & Ammo, Rifle Shooter and other publications for firearm enthusiasts. Hindery’s portfolio also includes the Sportsman Channel, which features programs such as “NRA News Cam and Company” and Ted Nugent’s “Wanted Ted or Alive.” The channel also live streamed Wayne LaPierre’s response to President Obama’s State of the Union Address.
Surprisingly, given his position as the #1 gun media tycoon in the country, Hindery is also a national leader in the Democratic Party. According to public records, over the past several years, Hindery has given over $2.2 million to Democratic candidates at the federal level. Hindery’s political affiliations as a leader and significant fundraiser for the Democratic Party create a serious conflict that could threaten the future for investors and sponsors of outdoor sportsman programming. Governor Cuomo, the architect of perhaps the most aggressive gun control legislation in the nation, has received $78,000 from Leo Hindery for his campaigns.
Understanding the political activity and relationships that Leo Hindery maintains, it’s easy to understand how it will be difficult, if not impossible, for him to manage and grow the most high profile and influential outdoor, hunting and fishing network in the nation. On one hand, sponsors and advertisers will have a difficult time reconciling the fact that network ownership supports politicians and policies that are severely harming their business. Alienating sponsors and audience members will harm the revenue potential and growth prospects of the company.
At the same time, Hindery will continue to be a lightning rod for aggrieved gun control activists who will target the media network as a proxy. Should Hindery succumb to political pressure from his close friends in the Obama White House and throughout the Democratic Party, we could see a shift in programming, which would further alienate loyal viewers. Worse still, other high-profile media executives that support the current administration could choose to drop distribution thereby limiting sportsmen’s opportunity to view this content.
As an example of the risk that politics poses to the long term future of outdoor lifestyle media, this week the New Jersey State Assembly passed a bill forbidding the state pension fund from investing in gun companies. This pension fund is the single largest institutional investor in the Outdoor Channel. If Hindery’s company merges with Outdoor, there is the very real risk that the fund could divest its interest in Outdoor Channel, bringing significant harm to the company, its sponsors and viewers.
Investors and stakeholders in the future of outdoor sports and lifestyle entertainment should be alarmed at the internal conflict between the long term interests of companies like the Outdoor Channel and the deep political relationships of Leo Hindery. The merger of Hindery’s company with the Outdoor Channel will continue to create controversy and distraction that will hurt the long term performance of the network, involve the Democratic Party more directly in the direction of gun-enthusiast media, and overall damage the interests of sportsmen, and the sponsors and investors who care about the future of entertainment for outdoor enthusiasts.
In an interview in the National Journal’s Technology Daily in 2001, Leo Hindery explained why he switched parties from Republican to Democrat. “It was when social issues became more important that I became a Democrat,” Hindery said. “The prompt for me was diversity, pro-choice, gun control … where the Republican Party has chosen “a different path.” The success of sportsmen media requires a leader who is committed to the lifestyle and values of the sponsor and the audience.
Andrew Franklin is President of UTR LLC, an independent investment firm representing small high-net-worth investors. UTR owns about 550,000 Outdoor Channel shares, or more than 2 percent of the company’s common stock.