23rd Annual 100 Leading Media Companies

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As ad spending begins to stagger back from the advertising meltdown of 2001, strong revenue growth in the cable and direct broadcast satellite TV segments managed to keep the overall media company revenue stream positive last year.

In the 23rd annual report of Advertising Age's 100 Leading Media Companies, the Top 100 eked out a 1.8% increase to $183.69 billion in 2001 despite the fact revenues of newspaper, magazine, TV and radio segments of these companies were hit hard, each declining at least 6.5% or more. The year's narrow growth was the lowest for the Top 100 companies since the 1991 recession, when revenues fell 0.27%, and the second worst growth year in the history of this report.

The cable segment, increasing 12.6% to $60.67 billion in revenue from the 33 cable companies in the Top 100, was not only the dominant media force, but seemingly the one facing the most government scrutiny: No. 1 AOL Time Warner, which drew nearly 50% of its media revenue from cable, faces a Securities & Exchange Commission probe into its accounting practices; No. 18 Adelphia Communications Corp. filed for bankruptcy in June, and the federal government is preparing indictments and a civil suit.

But cable is slowing. Cable network advertising, 15% of the segment's total revenue, decreased 10.9% through May of this year, according to Taylor Nelson Sofres' CMR. It was up 0.8% in 2001. Conversely, other segments, down sharply last year, have begun to bounce back.

Mergers alter list

Consolidation continues to change the face of the Top 100, with the cable TV segment the most active. No. 11 Comcast Corp. agreed to buy No. 3 AT&T Broadband from AT&T Corp. AT&T Broadband and Comcast would produce a media company with estimated revenue of $15.46 billion if the deal to create AT&T Comcast goes through as planned.

Cable's nemesis, direct broadcast satellite, has consolidated to the point one company may soon represent the entire segment. No. 16 EchoStar Communications Corp., owner of DISH Network, awaits a ruling from government regulators on its acquisition of Hughes Corp., the General Motors Corp. division that owns No. 10 DirecTV. DISH Network and DirecTV rose 52.4% and 18.2%, respectively, in revenue.

Other acquisitions across various media segments have consumed several Top 100 players in the past year: No. 4 Walt Disney Co.'s ABC Cable Networks Group bought Fox Family from No. 7 News Corp. and Saban Entertainment; No. 23 Primedia added Emap USA; No. 8 Clear Channel Communications acquired Ackerley Group; No. 28 Vivendi Universal bought the entertainment assets of USA Networks; No. 6 NBC-TV acquired Telemundo Communications Group, and No. 34 Univision Communications is set to gain a radio segment by buying No. 92 Hispanic Broadcasting Corp. Telemundo's revenues have been added to NBC's numbers for this report. Hispanic Broadcasting is ranked separately from Univision pending finalization of the deal.

Radio was the hardest hit among the segments, dropping 7.3% to $8.8 billion in revenue for the 28 media companies in radio among the Top 100.

In TV, revenue was off 6.5% to $30.6 billion for the 40 companies among the 100 in the medium. No. 2 Viacom, parent of CBS-TV and the top company by TV revenue, grew 2.1% in the medium, and No. 6 NBC -TV and No. 4 Walt Disney Co.'s ABC-TV declined 15.2% and 9.1%, respectively, in revenue from their networks and owned-and-operated stations. Ad spending on network TV, abetted by the Winter Olympics in February, is up 3.9% through May. Spot TV has been positive all year, up 7.6% in the same period.

The 38 newspaper companies fell 6.8% to $32.68 billion in 2001. The Wall Street Journal publisher No. 24 Dow Jones & Co. and Rocky Mountain News publisher No. 26 E.W. Scripps were hard hit, their newspaper revenue falling more than 22%.

The two top magazine publishers, No. 1 AOL Time Warner and No. 14 Hearst Corp., showed positive magazine revenue growth last year, though the segment was down 6.7% among the Top 100, to $20.89 billion. The picture seems to be slowly improving for consumer magazines as 2002 progresses, though according to CMR, ad spending for consumer magazines is still down 6.2% through May `02, versus -7.2% in all of 2001.

Business and tech magazine publishers saw ad revenue plunge severely last year, and the ad drought is continuing in 2002. Spending in the B-to-B category is down 21.8% through May, according to CMR.

The 100 Leading Media Companies are ranked by net revenue generated by U.S. media properties (See footnotes on Pages S-2 and S-6 for methodology). Yellow Pages advertising is not included in the Top 100. A separate survey by Ad Age found the top 10 Yellow Pages publishers (see chart above) generated $14.43 billion in 2001, up 4.2%.

Staff for this report: R. Craig Endicott, DataCenter editor; Kevin Brown, group data manager; Scott MacDonald, research editor; Mark Schumann, research coordinator; and Jennie Sierra, special assistant.

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