May 25 (Bloomberg) -- U.S. Federal Communications Commission Chairman Kevin Martin ordered a probe of dozens of television stations after a report found they aired advertisements as if they were news reports, people familiar with the inquiry said.

The April study by the non-profit Center for Media and Democracy found at least 77 stations, including seven each owned by Sinclair Broadcast Group Inc. and Tribune Co., ignored an FCC warning to disclose sponsors. The maximum fine for each violation is $32,500, rising to a maximum of $325,000 whenever violations occur for 10 days or more, said FCC spokesman Clyde Ensslin.

``If the investigation leads to significant fines, the FCC could cause stations to put disclosures in place that make clearer the corporate role in local news,'' said analyst Blair Levin of Stifel Nicolaus & Co. in Washington. ``It depends how hard Martin wants to push it.''

The Washington-based FCC warned TV stations in April 2005 they may be fined for airing news stories provided by the government and companies without disclosing who made them. The agency had received complaints about the use of videos provided by the Bush administration about topics including military success in Iraq.

Since then, 69 stations have aired so-called video news releases and eight showed satellite media tours, which involve a scripted interview with an author or expert promoting a product such as a book, the Madison, Wisconsin-based research group found.

Fox, CBS, ABC

Ensslin today declined to comment about the investigation. The FCC's enforcement unit asked the Center for Media and Democracy last week for its report and some research materials, center senior researcher Diane Farsetta said.

FCC Commissioner Jonathan Adelstein, a Democrat, requested an investigation following publication of the April study. Martin is a Republican.

Stations in 30 states aired the video ads, the study found. News Corp.'s Fox News and CBS Corp. each own six of the stations that aired the ads without disclosure. Twenty-three are affiliates of Walt Disney Co.'s ABC network.

Hunt Valley, Maryland-based Sinclair, which owns 60 local stations, and New York-based Fox, which owns 35, said it is their policy to disclose the sources of any corporate promotions.

``It's clearly stated, and our news directors know this,'' Sinclair Chief Financial Officer David Amy said in an interview.

Fox is ``taking the appropriate steps to reiterate this policy to our entire stations group,'' spokeswoman Erica Keane said.

Tribune spokesman Gary Weitman and CBS spokeswoman Shannon Jacobs had no immediate comment.

Disclosures Stripped

``Our affiliates are independently owned and operated,'' ABC spokeswoman Susan Sewell said. ``We don't control their news policies.'' Burbank, California-based Disney has 226 ABC affiliates in the U.S.

TV stations are using promotions as news reports because they are strapped for resources at the same time that they are being asked to air more programs to keep up with cable-TV news networks, Farsetta said.

``Stations managers have said they are turning to provided media because they can't afford to do all the news on their own,'' she said.

In one example cited by the study, a Fox-owned station in St. Louis and a Sinclair station in Milwaukee aired a Halloween promotion funded by Mclean, Virginia-based candy-maker Mars Inc. as news.

The October 2005 segment on how to plan a safe Halloween mentioned Mars's Snickers, M&Ms and Starburst brands by name and showed images of them, according to the Center's Web site. The tape included a proper disclosure of Mars's sponsorship, which was removed by the stations before the broadcast.

Corporate Sponsors

General Manager Spencer Koch at Fox station KTVI in St. Louis referred questions to Fox spokeswoman Keane. WVTV-18 General Manager David Ford in Milwaukee didn't immediately respond to a request for comment.

Alice Nathanson, a spokeswoman for Mars unit Masterfood USA, didn't immediately respond to a request for comment.

Other companies that sponsored the promotions included were Detroit-based General Motors Corp., the world's largest automaker; Santa Clara, California-based Intel Corp., the biggest maker of semiconductors; and New York-based drugmaker Pfizer Inc., the non-profit group said.

As with the Mars tape, the companies' disclosures were stripped before airing, the report said.

General Motors spokesman Mike Meyerand, Pfizer spokeswoman Alison Lehanski and Intel spokesman Chuck Mulloy all said their companies provide full disclosure in video footage they release.

``We in no way attempt to hide that we are providing the video,'' Mulloy said. ``In fact, we bend over backward to make this disclosure.''

Shares of Disney rose 1 cent to $30.15 in New York Stock Exchange composite trading. Also in NYSE trading, Tribune shares gained 22 cents to $27.90, News Corp. shares added 11 cents to $18.75, and CBS climbed 90 cents to $26.30. Shares of Sinclair rose 3 cents to $8.44 in Nasdaq Stock Market composite trading.

To contact the reporter on this story: Neil Roland in Washington at nroland@bloomberg.net.

Last Updated: May 25, 2006 16:26 EDT