Big Four in the black

For the first time in years, in fiscal 2000 the four major TV networks made money . The margins weren't huge, but they were respectable, particularly in the case of NBC-TV, which had pretax earnings of $770 million, up 20%, on a 19% revenue gain, to almost $4.8 billion.

With a big assist from the hit game show Who Wants to Be a Millionaire?, ABC-TV saw a profit of $522 million last year, in contrast an $11 million loss in 1999.

CBS-TV posted significantly better profits—in part due to the hit reality show Survivor. The network's pretax earnings last year quadrupled to $200 million, on a 7% revenue gain to almost $3.5 billion.

The Fox network also posted a profit: $47 million, in contrast to a $23 million loss the prior year. Revenues for Fox were flat in fiscal 2000, at close to $1.8 billion.

Among the four major networks, NBC-TV had the highest pretax profit margin, at 16%. ABC-TV posted a 12% margin, and CBS-TV and Fox logged 6% and 3%, respectively.

Network executives frequently point to their low profit margins in talks with affiliates about their future relationship and the need to reshape its economics by doing away with compensation and having affiliates contribute to programming costs. Affiliates counter that the broader profit margins of the networks' parents are much higher and belie the network's argument.

And the margins are considerably higher—close to those of a well-run broadcast station—when all the media profits are considered for each network company. At Viacom, pretax profits for its electronic-media divisions (see breakout in table) totaled $4.2 billion on $13.8 billion in revenue, yielding a margin of 30%. UPN, which Viacom also bought last year (separately from CBS), isn't included in that calculation, but its $200 million or so in revenue last year and $120 million loss do not change the results materially.

NBC's companywide margin was almost as good, at 28%. Disney's combined radio, TV (including production and syndication) and cable assets yielded a profit margin of 25%. The comparable assets at the Fox Entertainment Group (which does not include any of News Corp.'s worldwide satellite-TV holdings) posted a 19% margin in fiscal 2000.