What a difference a dog market makes. In the past 12 months, not a single
member of BROADCASTING & CABLE's Top 25 Media Groups disappeared.
Blame it on the bears, because a bear market can freeze the deal market.
Most giant deals are paid for in stock, not cash, and when the bulls are
running, stock prices hover close to private-market values, so buyers are happy
to issue shares at high prices for a takeover. But the market slump immediately
devalues the currency, without trimming the sellers' expectations. Buyers
hesitate at issuing millions more shares and diluting existing shareholders too
much. The result is stasis among the big companies.
The following list includes only those companies with significant U.S.
broadcasting, cable or satellite TV holdings, either production or distribution.
That excludes such companies as Germany's Bertlesmann because its U.S. interests
are primarily in music. On the other hand, it includes big U.S. media companies
like Bloomberg and McGraw-Hill, whose TV holdings are relatively small. The
companies are ranked by 2000 media revenues, which include TV, radio, film,
music, print and Internet properties.
Dulles, Va./New York
(NYSE: AOL; TWX)
Fiscal year ended:
Dec. 31, 2000
Rank last year:
1
Stephen M. Case, chairman; Gerald Levin, CEO
Revenues:
$36.2 billion
Operating cash flow:
$8.4 billion
Operating income:
-$228 million
52-week high:
$62.70
52-week low:
$31.50
Forget buying AT&T Broadband. AOL's challenge is to make its takeover of Time Warner work. For all the talk of synergy, there was precious little overlap between the two companies. Chairman Steve Case and CEO Jerry Levin have to squeeze efficiencies out, and selling
Entertainment Weekly
subscriptions via AOL online isn't enough to impress. Skepticism is growing over their promised $40 billion in 2001 revenues and $11 billion in cash flow.
Burbank, Calif.
(NYSE: DIS)
Fiscal year ended:
Sept. 30, 2000
Rank last year:
2
Michael Eisner, chairman and CEO
Revenues:
$25.4 billion
Operating cash flow:
$6.4 billion
Operating income:
$3.2 billion
52-week high:
$41.93
52-week low:
$25.67
Who Wants to Be a Millionaire?
was Disney's big TV phenomenon in fiscal year 2000. Some analysts believe that the quiz show accounted for close to 25% of ABC-TV's prime time during the year. Since then, the show has slipped in the key demographics, but it still continues to make a significant contribution to ABC's prime time revenues. Meanwhile, just last month, the company made its largest media acquisition since buying ABC five years ago: It agreed to purchase Fox Family Worldwide for $5.3 billion.
Paris; Montreal
Fiscal year ended:
June 30, 2001
Rank last year:
3
Jean-Marie Messier, chairman/CEO; Edgar Bronfman Jr., vice chairman
Revenues:
$24.3 billion
Operating cash flow:
$3.3 billion
Operating income:
$417 million
52-week high:
$80.94
52-week low:
$50.50
Vivendi Universal is targeting a 10% annual increase in media and communications revenues from 2000 to 2001. Hit movies
Gladiator
and
Erin Brockovich
helped, as did the company's USA Network, which averaged a 3.5 rating for its original movies in 2000. Other cable happenings included Home Shopping Network sales' growing 16% in the fourth quarter.
New York
(NYSE: VIA)
Fiscal year ended:
Dec. 31, 2000
Rank last year:
4
Sumner Redstone, chairman/CEO; Mel Karmazin, president/COO
Revenues:
$20 billion
Operating cash flow:
$3.5 billion
Operating income:
$1.3 billion
52-week high:
$69.93
52-week low:
$37.90
2000 was a really big year for Viacom. It bought CBS and agreed to buy BET, the black cable network. The BET acquisition closed earlier this year. The company also took its publicly traded radio/outdoor subsidiary, Infinity Broadcasting, in-house. Infinity continued to aggressively buy radio stations, including a bunch from Clear Channel in a $1.4 billion deal. CBS-TV won the network household prime time ratings race and is these days succeeding at efforts to attract younger viewers to the network, but it has a way to go.
Sydney, Australia
(NYSE: NWS)
Fiscal year ended:
June 30, 2001
Rank last year:
6
Rupert Murdoch, chairman/CEO
Revenues:
$13.8 billion
Operating cash flow:
$2.1 billion
Operating income:
$1.7 billion
52-week high:
$48.81
52-week low:
$24.55
So strapped for cash that Chairman Rupert Murdoch committed the unheard-of act of selling a fully distributed cable network, Fox Family Channel. That's because he's marshaling resources to take over DirecTV. If he gets it, other networks worry that News Corp. will use the 11 million-subscriber base to favor its channels at the expense of theirs.
Englewood, Colo.
(NYSE: T; LMG.A; LMG.B)
Fiscal year ended:
Dec. 31, 2000
Rank last year:
7
C. Michael Armstrong, chairman; Daniel E. Somers, president/CEO, AT&T Broadband; John Malone, chairman, Liberty Media
Revenues:
$9.6 billion
Operating cash flow:
$2.4 billion
Operating income:
-$1.8 billion
52-week high:
$32.93
52-week low:
$16.50
AT&T Broadband isn't likely to be around for next year's list. Comcast is gunning for the company, and AT&T Chairman Mike Armstrong is trying to dig up some other buyers or perhaps backers to help him go it alone.
Whoever runs it has to figure out how to raise the cable unit's woeful cash-flow margins.
Tokyo
(NYSE: SNE)
Fiscal year ended:
March 31, 2001
Rank last year:
5
Nobuyuki Idei, chairman and CEO
Revenues:
$9 billion
Operating cash flow:
Unavailable
Operating income:
Unavailable
52-week high:
$116.30
52-week low:
$46.25
One of the big changes at Sony was the sale of its 50% stake in the Game Show Network to Liberty Digital for $275 million in cash and stock. Sony had 34 television programs on-air in 2000, including
Family Law
,
The King of Queens
and
Strong Medicine
.
Philadelphia
(Nasdaq: CMCSK; CMCSA)
Fiscal year ended:
Dec. 31, 2000
Rank last year:
8
Ralph Roberts, chairman; Brian Roberts, president
Revenues:
$8.2 billion
Operating cash flow:
$2.5 billion
Operating income:
-$161 million
52-week high:
$45.31
52-week low:
$33.38
If Comcast succeeds in its fight for AT&T Broadband, Comcast will have to succeed in improving that telco's terrible cash flow. If not, the company is in pretty good shape, with debt low and both shopping channel QVC and its cable systems showing strong growth lately.
New York
(NYSE: GE)
Fiscal year ended:
Dec. 31, 2000
Rank last year:
11
Jack Welch, chairman/CEO, GE; Bob Wright, president/CEO, NBC
Revenues:
$6.8 billion
Operating cash flow:
Unavailable
Operating income:
$1.9 billion
52-week high:
$60.50
52-week low:
$36.42
NBC rode the economic and advertising boom of the 1990s to record revenues and profits. Last year, the NBC Television Network had higher revenue-$4.8 billion-and bigger profits-$770 million-than any other broadcast network. This spring, the network once again led the pack in upfront prime time ad sales with $2 billion. However, like other media companies, its Internet strategy foundered. In addition, Jack Welch is retiring, and, whenever CEOs change, other things do, too.
Arlington, Va.
(NYSE: GCI)
Fiscal year ended:
Dec. 26, 2000
Rank last year:
12
John J. Curley, chairman; Douglas H. McCorkindale, president/CEO
Revenues:
$6.2 billion
Operating cash flow:
$2.2 billion
Operating income:
$1.8 billion
52-week high:
$70.02
52-week low:
$48.37
Gannett made $4.8 billion in acquisitions in 2000, mostly on the publishing side of its business, which accounts for more than 85% of the corporation's revenue base. The company did acquire one TV station last year-WJXX(TV) Jacksonville, Fla.-which gives it a duopoly in that market, the 53rd. Gannett is now the eighth-ranked TV-group owner, with 22 stations covering approximately 17.5% of the U.S. The company also sold its cable division last year for $2.7 billion.
San Antonio
(NYSE: CCU)
Fiscal year ended:
Dec. 31, 2000
Rank last year:
13
L. Lowry Mays, chairman
Revenues:
$5.3 billion
Operating cash flow:
$1.7 billion
Operating income:
$304 million
52-week high:
$85.81
52-week low:
$43.87
2000 was a big acquisition year for Clear Channel, capped by the $19.4 billion purchase of group radio operator AM/FM Inc. Clear Channel also acquired SFX Entertainment (since renamed Clear Channel Entertainment) last year for $4.4 billion. Radio accounted for $2.4 billion of 2000 revenues, and outdoor accounted for $1.7 billion.
Atlanta
(privately held)
Fiscal year ended:
Dec. 31, 2000
Rank last year:
10
James C. Kennedy, chairman
Revenues:
$5.5 billion
Operating cash flow:
Unavailable
Operating income:
Unavailable
Cox has taken a breather from its periodic acquisition binges. Aside from the stumbling AT&T, it is the only other MSO investing heavily in marketing cable telephone services. Other major operators don't see the returns. Will Cox's multibillion investment prove the likes of Comcast and Cablevision wrong?
El Segundo, Calif.
(NYSE: GMH)
Fiscal year ended:
Dec. 31, 2000
Rank last year:
16
Eddie Hartenstein, chairman/CEO
Revenues:
$5.2 billion
Operating cash flow:
-$24 million
Operating income:
-$289 million
52-week high:
$38
52-week low:
$17.50
Whoever winds up buying DirecTV is going to have to deal with the same problems parent companies Hughes Electronics and General Motors are trying to escape. Marketing costs are surging, churn is running up uncomfortably, and satellite costs are looming. After five years of slumber, cable operators' deployment of digital cable is pinching DirecTV.
Chicago
(NYSE: TRB)
Fiscal year ended:
Dec. 31, 2000
Rank last year:
9
John W. Madigan, chairman, president/CEO
Revenues:
$4.9 billion
Operating cash flow:
$1.4 billion
Operating income:
$1.0 billion
52-week high:
$46.50
52-week low:
$34.37
Tribune acquired two TV stations in 2000, WNOL(TV) New Orleans and WATL-TV Atlanta for $107 million. About 30%, or $1.5 billion, of Tribune's 2000 revenue was derived from its broadcasting and entertainment segment. The 13% growth in those revenues was attributed in part to the acquisition of the two TV stations and also in the improved performance of The WB Network, in which Tribune has a 25% stake.
USA Networks
(NASDAQ: USAI)
Fiscal year ended:
Dec. 31, 2000
Rank last year:
18
Barry Diller, chairman/CEO
Revenues:
$4.7 billion
Operating cash flow:
$796 million
Operating income:
$151 million
52-week high:
$28.44
52-week low:
$16.18
Despite his recent marriage, Chairman Barry Diller always seems to be the bridesmaid and never the bride. Diller abandoned his broadcast-TV ambitions, selling his stations so Univision could start a new network. He has refocused his efforts on-gasp-buying more Internet companies. Brags about having the only profitable Internet group, one fueled by fee-generating sites like Ticketmaster, instead of sites dependent on evaporating online advertising.
New York
(NYSE: MHP)
Fiscal year ended:
Dec. 31, 2000
Rank last year:
14
Harold W. "Terry" McGraw III, chairman, president/CEO
Revenues:
$4.3 billion
Operating cash flow:
$1.2 billion
Operating income:
$820.2 million
52-week high:
$70.87
52-week low:
$52
Revenue at McGraw-Hill rose 7.2% to $4.3 billion, an all-time high for the company. The company's four TV stations (KMGH-TV Denver, KGTV(TV) San Diego, KERO-TV Bakersfield, Calif., and WRTV(TV) Indianapolis, all ABC affiliates) showed a 10.6% growth in revenues in 2000 to $127.8 million. Those 2000 numbers, however, were buoyed by the Super Bowl and the political season. They'll be challenged to do the same this year.
Woodbury, N.Y.
(ASE: CVC)
Fiscal year ended:
Dec. 31, 2000
Rank last year:
15
James Dolan, CEO
Revenues:
$4.1 billion
Operating cash flow:
$942 million
Operating income:
$33 million
52-week high:
$91.50
52-week low:
$46.25
After lagging other operators in digital cable, Cablevision is preparing to take a huge plunge, putting expensive digital converters into 50% of its 2.8 million cable homes by 2003, whether they order new products or not. The Dolan family is convinced that, once the box is in the home, it can sell enough new VOD and interactive services to cover the $350-per-home bet.
New York
(privately held)
Fiscal year ended:
Dec. 31, 2000
Rank last year:
17
Frank A. Bennack Jr., president/CEO
Revenues:
$4.1 billion (estimate)
Operating cash flow:
Unavailable
Operating income:
Unavailable
Hearst-Argyle television stations (27 in all, covering 17.5% of U.S. households) contributed roughly $747 million to Hearst's bottom line, a gain of 13.5% over 1999. The remaining $3.4 billion was made up of revenues from the group's publishing units as well as cable-television networks. Cable-network ownership includes 50% of Lifetime, 20% of ESPN and 37.5% of A&E Television Networks.
St. Louis
(NYSE: CHTR)
Fiscal year ended:
Dec. 31, 2000
Rank last year:
20
Paul Allen, chairman, CEO; Jerry Kent, president
Revenues:
$3.6 billion
Operating cash flow:
$1.7 billion
Operating income:
-$971 million
52-week high:
$24.48
52-week low:
$14
One of the few bright spots in Microsoft co-founder Paul Allen's corpse-laden investment portfolio. Fortunately, it's also his largest one. Charter declined to participate in the AT&T Broadband auction, with President Jerry Kent figuring that he had enough work-and debt-from two dozen or so system acquisitions in the past two years.
New York
(NYSE: NYT)
Fiscal year ended:
Dec. 26, 2000
Rank last year:
19
Arthur Sulzberger Jr., chairman; Russell T. Lewis, president/CEO
Revenues:
$3.48 billion
Operating cash flow:
$673 million
Operating income:
$635 million
52-week high:
$47.98
52-week low:
$32.62
More than 90% of the New York Times revenues in 2000 came from its publishing operations. The company's broadcast group contributed 5% to the top line. The broadcast group consists of eight network-affiliated TV stations in markets 40 to 118 and two New York radio stations.
Coudersport, Pa.
(NYSE: ADLAC)
Fiscal year ended:
Dec. 31, 2000
Rank last year:
22
John Rigas, chairman
Revenues:
$2.9 billion
Operating cash flow:
$1.1 billion
Operating income:
$216 million
52-week high:
$52.25
52-week low:
$23.50
Adelphia has long been near the top of every deal-maker's list of most likely MSOs to sell out, but the Rigas family keeps proving them wrong. The company's huge debt load, which for years has run at nine times cash flow, continues to be a big cloud. So is cash-hungry telephone affiliate Adelphia Business Solutions, which investors fear will require a bailout.
New York
(privately held)
Fiscal year ended:
Dec. 31, 2000
Rank last year:
23
Michael R. Bloomberg, president, CEO and founder
Revenues:
$2.5 billion (estimated)
Operating cash flow:
Unavailable
Operating income:
Unavailable
Estimates put Bloomberg's revenues up about 25% in 2000, with U.S distribution doubling to more than 11 million. Distribution deals on Time Warner digital cable systems open the door to 12.6 million new subscribers.
Washington
(NYSE: WPO)
Fiscal year ended:
Jan. 2, 2000
Rank last year:
21
Donald E. Graham, chairman/CEO
Revenues:
$2.4 billion
Operating cash flow:
$520 million
Operating income:
$339 million
52-week high:
$651.50
52-week low:
$496.06
One of the most conservative and least acquisitive of the major media companies, Washington Post Co. is also supremely vulnerable to a recession. But the death of matriarch Katharine Graham at Herb Allen's summer camp is not expected to trigger the kind of shakeup that might occur at other family-controlled companies.
Littleton, Colo.
(NASDAQ:DISH)
Fiscal year ended:
Dec. 31, 2000
Rank last year:
25
Charles W. Ergen, president/CEO
Revenues:
$2.3 billion
Operating cash flow:
-$187 million
Operating income:
-$424 million
52-week high:
$56.43
52-week low:
$20.50
Chairman Charlie Ergen's struggle to steal DirecTV away from Rupert Murdoch seems an unlikely quest. But win or lose, he'll have to deal with the DBS business' slowing growth, surging marketing costs, competition from digital cable. Less competition from DirecTVwould certainly help, of course.
Cincinnati
(NYSE: SSP)
Fiscal year ended:
Dec. 31, 2000
Rank last year:
24
Ken Lowe, president/CEO
Revenues:
$1.72 billion
Operating cash flow:
$464 million
Operating income:
$345 million
52-week high:
$71.70
52-week low:
$47.43
The cable networks are Scripps' fastest-growing business segment; its revenues rose 37% last year, to almost $314 million. Three existing networks-Home & Garden, Food Network and Do It Yourself-will be joined by a fourth, Fine Living, set to launch in the fourth quarter. Scripps has 10 TV stations, including nine network affiliates, six of which are affiliated with ABC. The stations generated $343 million in revenue last year.
