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Big Four in the black

Fiscal 2000 was a profitable year for ABC, CBS, Fox and NBC, with decent margins 5/27/2001 08:00:00 PM Eastern

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.

Fiscal 2000: The four-network picture
Revenue ($ million) Change from ‘99 Profit ($ million) Change from ‘99
Notes: Estimates are Broadcasting & Cable's. Sources include network executives, media analysts and company financial reports.
Revenues are net or agency commissions. Profits are pretax earnings and include the following amounts of depreciation and amortization: ABC, $140 million; CBS, $1.5 billion (due to merger with Viacom); NBC, $75 million; and Fox, $389 million.
NC = No change; NM = not meaningful
ABC (Disney)
Radio $595 8% $229 33%
TV network 4,140 33% 522 NM*
Owned TVs 1,100 10% 630 22%
TV production/synd. 325 4% 0 NC
Cable 3,455 24% 1,057 11%
Total 9,615 28% 2,438 49%
CBS (Viacom)
Radio/outdoor $2,765 13% $1,283 20%
TV network 3,480 7% 200 316%
Owned TVs 1,600 60% 775 20%
TV production/synd. 2,030 -6% 450 25%
Cable 3,895 28% 1,495 42%
Total 13,770 87% 4,203 157%
Fox
TV network $1,751 NC $47 NM*
Owned TVs 1,635 11% 774 3%
TV production/synd. 1,100 15% 140 15%
Cable 1,250 300% 107 NM*
Total 5,736 24% 1,068 49%
NBC (General Electric)
TV network $4,775 19% 770 12%
Owned TVs 1,400 19% 775 35%
Cable 620 24% 370 30%
Total 6,795 17% 1,915 22%
March