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MAJOR GLOBAL
CONGLOMERATES
source: www.union-network.org/unimei.nsf
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Global media concentration is a constantly changing card game. This means that any survey of exactly ‘who owns what’ runs the risk of being rapidly out of date…- AOL Time Warner: the US$112 bn merger of AOL and Time Warner was, in 2000, the largest merger in US corporate history. AOL had grown rapidly from its origins as a small on-line video game company, acquiring along the way Netscape, CompuServe and other web-related businesses. Time Warner was the product of the uneasy 1989 merger between Time Inc and Warner Communications, which brought together film production, TV, music and publishing interests. Ted Turner’s media empire (including CNN) was acquired by Time Warner in 1996. The current portfolio includes: AOL (including Netscape, CompuServe), Time Warner books, HBO (cable), CNN (cable news), Warner Bros (film studios and television), magazines (Time, Fortune, etc), Warner Music group, Warner Brothers theme parks, Turner Entertainment (including Cartoon Network).
- Vivendi Universal: the dream of Jean-Marie Messier, CEO of Vivendi (formally the staid French water utility Générale des Eaux), to transform his company into a global media giant appeared to be realised with the 2000 deal with the Canadian company Seagram to create Vivendi Universal. Seagram, formerly a drinks based company, had moved into the media industry with the acquisition of MCM and, later PolyGram. The Vivendi Universal deal also involved Vivendi buying out minority shareholders to acquire full control of the important French and European television channel Canal+. Vivendi Universal continued its spending spree, purchasing MP3.com and US publisher Houghton Mifflin in 2002 and bidding unsuccessfully for NBC (from GE) and Lycos. However, reality caught up with the company’s massive corporate debts. Messier was forced out in 2002. Since then the company has attempted to generate much needed cash, by divesting itself of many of its assets. In 2003 Vivendi has engaged in an auction process to sell its US film and media interests. Portfolio (subject to further divestment): telecoms (Cegetel), Universal Music (MCA, Motown, Polygram…), Canal+. Currently under auction: Universal studios, Universal pictures, theme parks. Already sold: Houghton Mifflin, Telepiù (Italian TV), Vivendi Environnement.
- NBC (General Electric): the broadcasting arm of General Electric, the multinational giant with interests in aerospace, manufacturing, finance, automobiles and much else. At one stage almost acquired by Messier’s Vivendi Universal, NBC may have the last laugh, if the proposed acquisition of Vivendi’s US interests is successful. Portfolio: NBC network television; sports interests; many joint ventures (eg MSNBC with Microsoft).
- Disney (Walt Disney Company): the corporation, under its chairman Michael Eisner, kept clear of the merger activity of 1999-2000. Eisner’s position was called into question during 2002-1 as a result of poor returns, and the period was marked with some staffing losses, for example in the animation division and Miramax films. Nevertheless, the company continues to employ in total over 100,000 staff. Portfolio: ABC network television, Walt Disney Pictures, Disneyland theme parks and resorts, Walt Disney Co Book Publishing, magazine interests, Disney Channel.
- Viacom: the corporation developed its current shape in the middle and late1990s, first with the acquisition of Paramount studios, Blockbuster and MTV and subsequently (in 1999) with the addition of the CBS television network. The company is controlled by its veteran chief executive Sumner Redstone. Most media interest recently has been focused on speculation of a rift between Redstone and Viacom’s chief operating officer Mel Karmazin. Portfolio: Paramount Pictures, CBS network television, MTV television, Nickelodeon, radio interests in US, Simon and Schuster (book publishers), Blockbuster video, UCI cinemas (50% holding)
- Bertelsmann: this German company, founded on a publishing empire and still based in the sleepy city of Gütersloh, remains privately owned. Under the leadership of Thomas Middelhoff, the company appeared to be following a Vivendi-style trajectory, including a public share offer. Instead, Middelhoff was ousted in 2002, and the company is now adopting a more conservative strategy. Its music division BMG has 10% of the recorded music industry, and also owns the pioneering but now effectively dormant music swap service Napster. Reports suggest that Bertelsmann may be looking to sell or merge its music division. It is also retreating from e-commerce. Portfolio: RTL Group (European biggest broadcaster), Random House (book publishing), Gruner + Jahr newspaper and magazine group; BMG Music, Direct Group (internet and book clubs).
- Murdoch/News Corporation: the media empire created by Australian (now US citizen) Rupert Murdoch originated in newspaper publishing, but now encompasses film production, television and book publishing. Murdoch has received attention for the uncanny way his newspapers and TV stations almost invariably reflect his own robustly pro-business anti-‘liberal’ point of view. Murdoch’s interests in the US have been immeasurably strengthened in 2003 by his acquisition of Hughes Electronics, owners of the largest direct satellite network DirecTV. Murdoch attempted, but failed, to acquire DirecTV in 2001. It also strengthens his global satellite TV interests, including BSkyB in the UK and Star (Satellite Television Asia region) in Asia. Murdoch also recently acquired full control of Telepiù in Italy. Portfolio: Fox television, Fox News, Twentieth Century Fox (film production), HarperCollins (book publishers), DirecTV (under acquisition), New York Post, The Times of London and other major UK newspapers, Australian newspaper holdings, Star TV (Asia), sport and music interests.
- Sony: the Japanese electronics group acquired Columbia in 1989, followed a year later by its domestic rival Matsushita’s acquisition of MGM/UA. Whilst Matsushita quickly withdrew from its film and music interests with its fingers badly burned, Sony has continued its relationship with Hollywood, although not without some difficulty. Currently Sony’s electronics business contributes about 60% of the group’s profits; film adds about 10%, video games 11% and music a further 9%. Portfolio: Columbia Pictures, music division.
Top 8 Communication Industry Firms based on 2001 Revenues*| Company | 2001 Revenues
(in US$ millions) | | Time Warner | 40,258 | | Viacom | 18,814 | | Walt Disney | 15,675 | | Sony | 9,298 | | Bertelsmann | 7,765 | | Thomson | 7,027 | | Gannett | 6,344 | | Hughes Electronics | 6,304 | | Total | 168,404 |
* Note: The table only considers data for the primary media industry segments. These include broadcast radio and television, television networks, cable and satellite systems, motion pictures, recorded music, and book, magazine and newspaper publishing. Source: Veronis, Suhler & Associates, Communications Industry Reports (1995-2001)
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