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Report: Watchin' Corporations, Nets And Cable Grow

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It's dandy news for the media industry, and good news-bad news for the Screen Actors Guild (SAG) and American Federation of Television and Radio Artists (AFTRA).

Veronus Suhler, a media merchant bank, recently released its annual communications industry report for 1999, a 481-page look at what it concludes is "an insatiable American appetite for entertainment, news, and information."

The report seems to support SAG and AFTRA's long-standing concern about the growth of media companies becoming powerhouses which might try to overrun unions.

It bodes well for the unions' upcoming feature film-TV negotiations next year with an industry that's booming. It doesn't look good for the two unions, which recently agreed to a new commercials contract with no increase in network residuals, and no new pay-per-play residuals structure for cable.

The 10 largest entertainment companies by income include major names familiar to SAG and AFTRA: "Even before its announced merger with AOL, Time Warner was the most dominant company covered with communications and media revenues of $28.4 billion in 1999," the report asserts. The Walt Disney Company ranks second with $17.3 billion, followed by Bertelsmann ($11.2 billion), Sony ($10.8 billion), Viacom ($8.3 billion), Fox Entertainment Group ($8 billion) and General Electric/NBC ($5.8 billion).

The top 10 companies accounted for 39% of all '99 revenues of companies covered in the report.

The film entertainment industry—major studios, independent film companies, and TV program producers, i.e., the execs with whom SAG and AFTRA will negotiate a new pact next year—"remain by far the largest portion of the entertainment industry segment with nearly $31 billion" in '99 revenues. Time Warner's entertainment segment brought in $11.9 billion followed by Sony ($10.8 billion), and Walt Disney ($9.8 billion).

That news should prove valuable for SAG-AFTRA negotiators when they begin feature film-TV pact negotiations.

In broadcast television, the study ranks the four major networks, with Disney's ABC leading at $7.5 billion, up 5.2% over 1998 income. Fox was the lowest at $3.5 billion. But Fox tallied the highest growth rate at 14.2%, followed by NBC's 9.9%.

North America's ad agencies posted a fifth straight year of double-digit revenue gain, with the top five companies—with income ranging from $5.1 billion to $1.4 billion—controlling 80% of that revenue.

Those are the leading firms represented by the Joint Policy Committee that negotiated the new commercials contract with SAG and AFTRA. And those big plus numbers, along with the growth at networks, can't be pleasing to the unions, which walked away from bargaining just holding on to, not gaining in, network residuals.

As for cable, networks' revenues rose 8.3% to $11.7 billion. Those figures obviously put cable as a major player in media revenue. Some SAG members have complained that cable deserved a stronger union negotiation effort at securing a residuals payment structure for spots shown there.

But the report also backs the unions' dedication to getting jurisdiction over the Internet. While most Internet companies operated at a loss, the top five controlled over 71% of the income, which overall grew 69.3%.

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