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By the Project for Excellence in Journalism

The corporations that own the three network news divisions — CBS Corp. (CBS), General Electric (NBC) and the Walt Disney Company (ABC) — are large entities with investments in products and services other than news programming.

There are noteworthy differences between the three corporations. While General Electric is an industrial-financial conglomerate, Disney is a corporation consisting largely of media properties, entertainment and theme parks. And CBS is primarily a broadcaster. But for all three, journalism is an ancillary product.

In 2007, each corporation made acquisitions, formed partnerships and invested in their existing media properties as they dealt with concerns about sagging stock prices.

These titans of the media industry continued to face stiff competition from small start-up companies, especially on the Internet. Each implemented different strategies for dealing with these challenges in 2007.

The Big Picture


The CBS Corp. was formed in 2005, when Viacom split into two separate companies, one now known as Viacom and the other CBS Corp. After the split, Viacom was left with a number of cable properties, most notably MTV and Comedy Central. CBS Corp. consisted of a number of radio and television holdings, including CBS.

The company, with 23,650 employees, can be broken down into four segments: television, radio, outdoor and publishing.1

Television: The television segment accounted for 66% of all revenue in 2006, according to CBS’ 2006 Annual Report. In real dollars, that was $9.5 billion for the full year.

As of January 2008, the CBS Corp. owned 29 local television stations.2 Most of these stations are local CBS and CW affiliates, according to CBS’ Web site.3

But that number is notably lower than a year earlier. Heading into 2007, the company owned 40 television stations, and during the year sold 11 of them. Analysts have attributed these sales to CBS’ long-term strategy to divest holdings in medium and smaller markets, and concentrate on stations in the country’s largest ones — such as Los Angeles, Chicago and New York — which CBS Corp. executives consider more profitable.4

CBS Corp.’s television holdings also include two cable networks: Showtime and CSTV: College Sports Television.

Outdoor: The best-known form of outdoor advertising (15% of total revenue) is billboards, but the category also includes ads posted on buses and in train stations, mall kiosks and sports arenas.

Radio (14% of total revenue): In 2007, CBS Corp. sold four of its radio stations, bringing its total to 140 as of January 2008. Since 2006, the company has sold 39 stations.

As with its local television properties, analysts attribute these sales to the company’s growing focus on larger markets.

In 2006, the last year for which there are complete data, CBS Corp. had the most profitable radio news operation in terms of average revenue per news station ($26.6 million), followed by Citadel/ABC ($24.5 million), according to data from the BIA Financial Network. (See Radio Chapter.)

Publishing (6% of revenue): CBS Corp. also owns the Simon & Schuster publishing house, which publishes 1,800 books each year, according to its corporate Web site.

In the first nine months of 2007, total revenues at the CBS Corp. fell 1%, to $10.3 billion. While revenues increased in the outdoor and publishing segments, they declined in the radio and television divisions. Television, which accounted for 66% of all revenues in this time period, declined 2% compared to the first nine months of 2006, according to documents filed with the Securities and Exchange Commission.5

Profits, reaching $1.9 billion in the first nine months of 2007, were essentially flat, falling by less than 1% compared to what they were in the first nine months of 2006, according to SEC filings.

Profits in the television division were also flat (down less than 1%) to $1.3 billion, while radio declined 15%. The segments that produced the least revenue, outdoor and publishing, increased their profits by 9% and 90%, respectively.6

The following tables below analyze the revenue and profits for each division within CBS Corp. through the first nine months of 2007 and compare them to the same time frame in 2006.

CBS Corp. Revenues
First Nine Months 2007 vs. First Nine Months 2006
In Millions

2007 2006 Increase/Decrease

Source: SEC filings

CBS Corp. Profits
First Nine Months 2007 vs. First Nine Months 2006
In Millions

2007 2006 Increase/Decrease

Source: SEC filings

In 2007, CBS Corp.’s stock price fell 11%, from 30 in January to 27 by the end of the year.7

A critical component of CBS Corp.’s investment strategy involves online media properties, particularly the idea of scale, which occurs when large companies reach a wider audience in the most efficient manner. “Advertisers are looking for greater scale, and, with our native properties, we weren’t always able to deliver that when I came on,” said Patrick Keane, who joined CBS Corp. in February 2007 as the company’s interactive executive vice president and chief marketing officer, after previously serving as the head of ad sales for Google.8

In 2007, CBS Corp. made a number of moves that underscore this approach.

In February, it invested $7 million in the Electric Sheep Co., a virtual world content developer. Virtual world sites, like Second Life, are part of the growing online gaming industry. Pricewaterhouse Coopers projected that the worldwide online gaming industry would generate $38 billion in revenue in 2007, and estimated that number would grow to $49 billion by 2011.9 “We believe that all these virtual worlds represent next-generation communications platforms,” CBS Corp.’s interactive president, Quincy Smith, said when the deal was announced.10

In April, CBS launched CBS Audience Network, which streams full episodes of its television shows to more than 100 Web sites, including AOL and According to analysts, this move seemed to validate CBS’s understanding that a large number of people are watching CBS content on sites the company does not own. Indeed, a quarter of CBS’s online content is consumed on a Web site other than, the Los Angeles Times reported.11 According to a CBS spokesperson, these online destinations external to include not only its partners — like AOL and — but also sites that it does not have a formal deal with, such as YouTube.

“It takes an awful lot of humility to recognize that it’s better to distribute the stuff off your site than to try to attract people to it,” said Josh Bernoff, an analyst with Forrester Research, a technology and market research company. “That means if the viewer community wants to talk about it somewhere else, let them take it somewhere else.” 12

In May, CBS Corp. purchased the video blog for $5 million. This was followed by its acquisition of, a music recommendation site, which it bought for $280 million.13

In October, CBS Corp. paid $10 million for Dotspotter, a celebrity blog. The acquisition comes at a time when AOL’s TMZ, which drew 9.5 million unique visitors in August 2007, dominates the online celebrity genre.14

Since October 2006, CBS Corp. has had its own channel on YouTube, the most popular online video-sharing site, with over 57 million viewers each month in the U.S. as of March 2007.15 According to the deal, CBS and YouTube will share ad revenue from the video content, which includes its hit series “Survivor” and “CSI” as well as news programming, such as the CBS Evening News with Katie Couric, 60 Minutes, and the Early Show.16

General Electric (NBC)

General Electric, with a total of 319,000 employees worldwide, is the one of the world’s largest corporations. In 2006, Forbes magazine ranked the conglomerate as the fourth biggest company in the world.17

GE can be broken down into six different segments: infrastructure, commercial finance, GE Money, healthcare, NBC Universal, and industrial.

Infrastructure: This segment, the most lucrative one, according to GE’s 2006 Annual Report in terms of total revenue (29%), takes in a wide range of goods.18 These include jet engines, motorized wheels for off-highway vehicles, gas and steam turbines, water purification equipment, and solar and geothermal technology.

Industrial: This segment (21% of revenue) includes major household appliances, such as refrigerators, freezers, ovens, dishwashers, washers and dryers, microwave ovens and lamps. Also in this category are telecommunications equipment, car parts, land and marine shipping containers and home security equipment.

Commercial Finance: GE (15% of revenues) services loans and leases to companies, particularly those in the construction, manufacturing, telecommunications and healthcare industries.

GE Money: In addition to providing loans to companies, GE Money (14% of revenues) issues personal loans, as well as credit cards, bank cards, home equity loans and car loans. It also offers debt consolidation services and credit insurance to customers in the United States and abroad.

Healthcare: Manufactured goods in this segment (10% of revenues) include MRI and CT scanners, ultrasound devices and cardiology monitoring equipment. GE’s customers, including hospitals and pharmaceutical and biotechnology companies, can be found across the globe. Spending on GE’s healthcare products is part of the $2.1 trillion that was spent on health care in the United States in 2006, a 6.7% increase compared the year before, according to the federal government.19

NBC Universal: In addition to the NBC network, NBC Universal, which in 2006 generated $16 billion (or 10% of the company’s total revenue), includes Telemundo, and the MSNBC, CNBC, Bravo, USA and the Sci-Fi cable television channels. The segment also consists of a movie and television studio, 230 local affiliates, theme parks, and a number of online digital properties.

Three differences are worth noting in the ownership of NBC’s news operations.

First, is joint ownership. GE owns 80% of NBC Universal, and the 20% balance is held by Vivendi, the French media conglomerate. The second is that NBC, unlike its broadcast rivals, operates two cable news channels (MSNBC and CNBC) and amortizes people and costs across the platforms. Third, NBC has a different relationship with its new Web site. is jointly owned with Microsoft and is produced largely by people in Washington State working at the Microsoft corporate “campus.”

Through the first nine months of 2007, GE’s revenues were up 12%, to $124 billion, compared with the same time frame in 2006, according to a company press release.20

Growth at GE Money led the way (up 28% over the first nine months in 2006). There were also strong performances in the infrastructure (21%) and commercial finance (16%) segments. Healthcare revenues grew just 1%. Revenues declined in both the NBC Universal (-9%) and industrial (-2%) segments.

Profits also grew in the first nine months as well. According to a company press release, GE collected $15.5 billion in earnings during the first three quarters of 2007, up 9% compared to $14.2 billion the previous year.21 Again, GE Money led the way, with 40% more profit than the year before, followed by infrastructure (20%) and commercial finance (17%). There was less robust, but still positive, growth, in the NBC Universal (5%) and industrial (4%) segments. Healthcare profits declined 2% during this time.

GE Revenues, First Nine Months 2007 vs. First Nine Months 2006
In Millions

2007 2006 Increase/Decrease
GE Money
NBC Universal
Consolidated revenues

Source: SEC filings

GE Profits, First Nine Months 2007 vs. First Nine Months 2006
In Millions

2007 2006 Increase/Decrease
GE Money
NBC Universal
Consolidated net earnings

Source: SEC filings

Despite revenue and profit gains in 2007, GE’s stock value moved just one point during the year, from 36 in early January to 37 at the end of the year.22 But the stock price is down more than 30% from what it was when its former CEO, Jack Welch, was running the company from 1984 to 2001.

NBC Universal has received much of the criticism for GE’s sagging stock value. Critics point to its poor prime-time ratings, which in 2007 remained behind rivals CBS and ABC.23 And its movie studio, Universal, ranked last among major studios in terms of domestic revenue as of mid-2007.24

In April 2007, Jeffrey Sprague, an analyst with Citigroup, called for GE to sell NBC Universal as way to boost its stock value.25

In response to a poor economic performance, there were news reports that GE would continue to cut costs at NBC Universal.26 In the second quarter of 2007, for instance, NBC Universal spent an estimated $28 million on buyouts and severance packages.27

At the same time as it was restructuring, the company also made a number of forward-looking investments, both in television and in online media, in 2007.28

Over a three-year span (2004 to 2007), NBC Universal said it has increased its prime-time development budget by 25%.29

It also made a notable acquisition. In October 2007, NBC Universal announced it had purchased Oxygen, a cable channel aimed at young women, for $925 million. When it was founded in 1998, Oxygen initially received enthusiastic support from a number of celebrities, including Oprah Winfrey, but its viewership and ratings had long disappointed its investors.

But with more than 40% of its audience women between the ages of 18 and 49, one of the most sought-after demographics by advertisers, executives at NBC believed its television and online properties could increase Oxygen’s visibility and bring much-needed revenue to the NBC Universal segment.

“We love the brand,” said NBC Universal’s CEO and president, Jeff Zucker. “The only changes that we would envision are to put more resources behind making [Oxygen] bigger and make it more widely known.”30

NBC also sought to tinker with its own brand, by emphasizing a company-wide commitment to save the environment, which was announced in May 2007.

In November 2007, the company devoted a whole week to the cause. It tinted its television logo green and displayed graphics on how to cut carbon emissions. On The Biggest Loser, a reality show about obese people trying to lose weight, participants learned how to exercise without using electricity. And two of its morning news hosts, Ann Curry and Matt Lauer, broadcast segments from Antarctica and the Arctic Circle that week.

“NBC Universal really has the ability to be positioned as the media market leader in green. Among all of our customers — consumers, advertisers, employees — the demand is rising for that,” said Lauren Zalaznick, the president of Bravo Media, another cable network owned by NBC Universal.31

NBC Universal is also investing in online media properties as a way to generate more revenue.

In March 2007, it announced it had formed a joint-online venture with the News Corp. to distribute the companies’ entertainment programming. Like other traditional media companies, NBC Universal continues to face competition from YouTube as well as disagreements about how YouTube uses traditional media companies’ copyrighted material.

The joint venture, referred to in the press as either “Caterpillar” or “New Site,” does not yet have a Web site. The site was expected to include user-generated video in addition to video from the companies’ television and film archives. The site will be supported by ad revenue, the New York Times reported.32

In August, the project received a $100 million investment from Providence Equity Partners, a media investment firm.33

“Large distribution, a good revenue share and content protection are the three key reasons anybody who wants their content disseminated as widely as possible would want to join,” said Zucker.34

Until this new venture is complete, NBC Universal will allow users to download its entertainment programming online free for the first week. After the first seven days, the file download will expire. NBC announced this service in September 2007, shortly after it cut ties with Apple’s iTunes when Apple balked at NBC’s request to triple the amount it charges per television episode download.35 But by mid-year 2008, NBC says it has plans to start charging consumers for episodes.36

Disney (ABC)

The Walt Disney Company was the third-largest media company in the U.S. in 2006 when ranked by revenue generated from media properties.37

The company, with more than 137,000 employees, is divided up into four segments: media networks, parks and resorts, studio entertainment and consumer products.38

Media Networks: At roughly $15 billion (or 42% of total revenue), this segment was Disney’s most lucrative in 2007. It includes the ABC Television Network, 10 local television stations, and 46 radio stations.

Disney also owns a number of cable and satellite properties, including the various ESPN channels, the Disney Channel, the ABC Family Channel, Toon Disney, and SOAPnet. It is also in a joint operation to produce programming for the Lifetime and A&E channels.

Parks and Resort: The two best-known properties in this segment (30% of total revenue) are the Walt Disney World Resort in Florida and the Disneyland Resort in California. In addition to theme parks, these resorts include golf courses, restaurants and hotels. Disney also has a 40% stake in EuroDisney, outside Paris, and a 43% interest in Hong Kong Disneyland. The company also operates a cruise line based in Florida as well as the ESPN Zone sport-themed restaurants in eight U.S. cities.

Studio Entertainment (21% of total revenue): Disney also produces movies. Its live-action and animation films are distributed under the Walt Disney Pictures, Touchstone Pictures and Miramax banners. In 2006, it acquired Pixar, a computer-animation studio that has produced such hits as “Toy Story,” “Cars” and “Ratatouille.”

Consumer Products (7% of total revenue): Disney designs and distributes books and magazines, video games and computer software. These products can be purchased online at and retail outlets in North America, Europe, and Japan.

Disney operates on a different fiscal year calendar than the CBS Corp. and General Electric. Therefore, revenue and profit totals are not from the first nine months of 2007 but for the 12-month period that ended September 30, 2007.

In the 2007 fiscal year, total revenues rose 5% at Disney, reaching $36 billion worldwide during this time. This rate of growth, however, was down from an 8% rate of growth the year before.39

Media networks, parks and resorts, and consumer products each grew at a 7% clip. But revenue at the studio entertainment segment declined 1%.

What accounted for strong growth in the media networks segment? According to Disney, increases were largely attributed to a contractual rate increases that the company signed with cable and satellite operators for the distribution of ESPN. In addition, less significant increases were driven by more ad revenue from NASCAR programming on ESPN.

Disney’s profits surged in 2007, to $7.8 billion, an increase of 23% compared to 2006. That increase comes on the heels of 28% growth in 2006.

Though its revenue declined, profits in the studio entertainment segment grew at 65%. The increase in profits was caused by improvements in its home entertainment division, which includes DVDs.40 That increase at Disney bucks the overall trend of falling DVD sales, which fell 3.6% in 2007.41 In addition to more DVD sales, production and marketing costs declined, according to documents filed with the SEC.

Profits in the media networks segment rose 23% in Disney’s fiscal year, to $4.3 billion. Again, an increase in profits could be largely attributed to growth among its cable channels, especially ESPN, as well and cutting production costs at ABC, largely achieved by cutting the number of hours devoted to sports programming on the broadcast network.

Disney Revenues, FY 2007 vs. FY 2006
In Millions

2007 2006 Increase/Decrease
Media Networks
Parks and Resorts
Studio Entertainment
Consumer Products
Total revenue

Source: SEC filings

Disney Profits, FY 2007 vs. FY 2006
In Millions

2007 2006 Increase/Decrease
Media Networks
Parks and Resorts
Studio Entertainment
Consumer Products
Total operating income

Source: SEC filings

Disney’s stock was fairly stable in 2007, decreasing one point, and ending the year at $32 a share.42

After five consecutive years of double-digit profit growth, what does Disney’s investment in media look like?43

It is hard to identify one overarching strategy. In its broadcast division, which as late as 2004 trailed its chief rivals, it has had a series of recent hits, including Dancing With the Stars, Brothers and Sisters and Ugly Betty. It consistently ranked first in 2007 among adults 18 to 49, according to Nielsen Media Research.44

To increase its television audience, ABC’s strategy was to become the first of the Big Four networks — Fox, ABC, NBC and CBS — to attract more Hispanics. This meant investing in dubbing shows into Spanish and hiring more Hispanic actors.45

On the Internet, Disney has been criticized for not doing enough to appeal to one of its largest customer bases: children. Increasingly, Disney’s children’s Web sites are facing stiff competition from smaller companies, the New York Times reported.46

In response, Disney redesigned its Web site ( in early 2007, and it now offers more social networking components, as well as more games and video. While children chat and play games, parents can monitor how they are using the site.

According to Robert Iger, Disney’s CEO, the redesigned Web site is “the single most important company-wide strategy Disney is currently implementing.”47

In August 2007, Disney acquired one of its competitors, the Canadian-based Club Penguin, a rapidly growing virtual community that was launched in 2005. Club Penguin, which cost Disney $350 million at the time, attracted five million unique visitors in June 2007, an increase of 159% compared to the same month a year earlier.48

Thus, while the lineup of companies that control network broadcast news has remained the same, the companies are rapidly changing in many ways.


1. Form 10-K for the fiscal year ending December 31, 2006, United States Securities and Exchange Commission.

2. John Eggerton, “Complete Deal, Divestiture of 50 Medium and Smaller Market Stations,” Broadcasting & Cable, January 10, 2008.

3. Sixteen are local CBS affiliates, nine are CW, and the remaining four are KCAL ( Los Angeles), WSBK ( Boston), KTXA (Dallas/Fort Worth) and WBFS ( Miami). See http://c for a complete listing.

4. David B. Wilkerson, “CBS explores radio sales in smaller markets,” MarketWatch, May 23, 2006.

5. Form 10-Q for the quarterly period that ended September 30, 2007, United States Securities and Exchange Commission.

6. CBS’ filing with the SEC attributed growth in the publishing division to higher sales in its Adult and International Group, including a best-seller, The Secret, by Rhonda Byrne. Form 10-Q for the quarterly period that ended September 30, 2007, United States Securities and Exchange Commission.

7. Yahoo Finance, research conducted by the Project for Excellence in Journalism.

8. Gavin O’Malley, “CBS Pays $10 Million For Celebrity Blog,” Online Media Daily, October 12, 2007.

9. “More than a game,” Economist, December 4, 2007..

10. Kenneth Li, “CBS to invest in virtual designer Electric Sheep,” Reuters, February 26, 2007.

11. Dawn C. Chmielewski, “CBS aims to be the talk of the Web,” Los Angeles Times, September 20, 2007.

12. Ibid.

13. Gavin O’Malley, “CBS Pays $10 Million for Celebrity Blog,” Online Media Daily, October 12, 2007.

14. Jim Hopkins, “ lets readers talk to the blog,” USA Today, September 18, 2007.

15. “Google Sites Ranked by comScore as Top U.S. Video Property in March 2007,” comScore press release, June 4, 2007.

16. Mike Shields, “CBS to Stream on YouTube,” MediaWeek, October 9, 2006.

17. Forbes used four measures — sales, market value, assets and profits — to produce a composite measure of bigness. “ The World’s 2,000 Largest Public Companies,”, March 29, 2007.

18. In 2006, the infrastructure segment generated the most revenue: $47 billion, surpassing commercial finance ($23.8 billion), GE Money ($21.8 billion), healthcare ($16.6 billion), NBC Universal ($16.1 billion), and industrial ($33.5 billion). cf. “Invest and Deliver,” GE 2006 Annual Report, February 9, 2007.

19. Kevin Freking, “Drug spending raises US health care tab,” Associated Press, January 8, 2008.

20. “GE Reports Third-Quarter Net EPS up 15% to $.54 per Share and Continuing EPS up 9% to $.50 per Share; Orders of $24 billion, up 20%; Revenues of $42.5 billion, up 12%; Reaffirms Total Year 2007 Guidance,” GE Press Release, October 12, 2007.

21. Ibid

22. Yahoo Finance, research conducted by the Project for Excellence in Journalism.

23. 2007 Nielsen Media Research. Time frame analyzed was 9/24-12/30, 2007.

24. Michael Cieply and Brooks Barnes, “Chief of Universal Finds Success at the Back of the Pack,” the New York Times, July 16, 2007.

25. Nelson D. Schwartz, “Is G.E. Too Big for Its Own Good?” the New York Times, July 22, 2007;

Paul R. La Monica, “NBC must see some sales growth,”, April 13, 2007.

26. Nelson D. Schwartz, “Is G.E. Too Big for Its Own Good?” the New York Times, July 22, 2007.

27. David Goetzl, “GE Sees Light: NBCU Upfront Speeds Turnaround,” Media Daily News, July 16, 2007.

28. Nelson D. Schwartz, “Is G.E. Too Big for Its Own Good?” the New York Times, July 22, 2007

29. David Goetzl, “GE Sees Light: NBCU Upfront Speeds Turnaround,” Media Daily News, July 16, 2007

30. Phil Rosenthal, “NBC looks to resuscitate Oxygen,” the Chicago Tribune, October 10, 2007

31. Brian Stelter, “At NBC, the Brand Becomes a Slogan,” the New York Times, November 5, 2007.

32. Richard Siklos, “News Corp. and NBC in Web Deal,” the New York Times, March 23, 2007.

33. Brad Stone, “Equity Firm Invests in NBC Universal-News Corp. Online Venture,” the New York Times, August 9, 2007.

34. Laurie Petersen, “NBC Universal/News Corp. Create Network To Distribute and Monetize Online Content,” Online Media Daily, March 23, 2007.

35. “iTunes Store to Stop Selling NBC Television Shows,” Apple press release, August 31, 2007.

36. Bill Carter, “NBC to Offer a Free Video Download Service,” the New York Times, September 19, 2007.

37. Advertising Age magazine compiled the top 100 media companies by revenue. The top 10, with their 2006 U.S. revenue from media companies in parentheses, were: Time Warner ($33 billion); Comcast ($27 billion); Walt Disney ($17 billion); News Corp. ($14 billion); DirecTV Group ($14 billion); GE’s NBC Universal ($13 billion); CBS Corp. ($12 billion); Cox Enterprises ($10 billion); EchoStar Communication Corp. ($9.4 billion); and Viacom ($8 billion). “100 Leading Media Companies,”

38. Form 10-K for the fiscal year that ended September 30, 2007, United States Securities and Exchange Commission.

39. Ibid

40. Disney’s chief executive, Robert Iger, has been focusing the movie unit on family movies to increase profit, according to Bloomberg News. cf. “Disney Profits Double on Strong DVD Sales of ‘Cars’ and ‘Pirates’” Bloomberg News, February 8, 2007.

41. Diane Garrett, “DVD sales down 3.6% in ’07,” Variety, January 7, 2008.

42. Yahoo Finance, research conducted by the Project for Excellence in Journalism.

43. Brooks Barnes, “Slowing Economy Posing Test for Disney,” the New York Times, November 13, 2007.

44. Brooks Barnes, “A Made-for-TV Boss Helps Revive ABC,” the New York Times, October 7, 2007.

45. Ibid.

According to the Associated Press, “ Spanish subtitled versions of the shows will be found on Closed Caption 2 (CC2). Viewers will be able to access the Spanish-dubbed programs via the SAP — secondary audio program — option on their televisions.” “ABC expands Spanish-dubbing of series,” Associated Press, July 18, 2006.

46. Brooks Barnes, “Disney Acquires Web Site for Children,” the New York Times, August 2, 2007.

47. Merissa Marr, “Updated Offers Networking for Kids,” the Wall Street Journal, January 2, 2007.

48. Brooks Barnes, “Disney Acquires Web Site for Children,” the New York Times, August 2, 2007.