Is AOL Time Warner Inflating Results of its Cable Nets?

ShowBIZData.com ^ | 4/30/02

[GeneD]

The cofounder of CNN has suggested that AOL Time Warner pulled the wool over the eyes of the public when it reported that its Turner Broadcasting unit is successfully roping in advertisers. On his website http://www.meandted.com/bits.htm, Reese Schonfeld notes that in reality the Turner cable networks' biggest advertiser may be AOL Time Warner itself. Turner Network Television (TNT) and TBS, he says, both showed sizable gains in 2001, with TNT up 189 percent and TBS up 16 percent. But, Schonfeld observes, "More than 30% of all the money spent on TNT and more than 34% of all the money spent on TBS came from AOL/TW. It's taking money out of one pocket and putting it in the other."

[GeneD]

Schonfeld's comments in full:

Speaking of wool over one’s eyes --- Turner Broadcasting may yet win a special award this year. Electronic Media did a special report on television advertising this week. It looks at the top ten cable networks and compares advertising revenue year 2001 against year 2000. As a group, seven of the top ten went up. MTV and Lifetime were the leaders, up more than 30% each. AOL/Time Warner looks good too. Electronic Media says Turner Network Television was up 18.9% and TBS was up 16%. But that’s when the wool begins to invade my optics. More than 30% of all the money spent on TNT and more than 34% of all the money spent on TBS came from AOL/TW. It’s taking money out of one pocket and putting it in the other.

What I’d like to know, and what Wall Street analysts will need to know, is how much money AOL/TW spent on TNT and TBS last year in comparison to what they spent this year. Right now it looks like funny money. I think it’s this kind of stuff that drives down AOL/Time Warner stock. Tell the truth, get the bad news out of the way and give investors confidence that no one is playing games with the numbers. I know it drives me crazy and I can’t imagine that market analysts don’t feel the same way.

[Tall_Texan]

CNN could spend their entire broadcast day shilling for other AOL Time Warner products and most of the public wouldn't notice.

There's AOL, Time, Sports Illustrated, Warner Music, Netscape, Warner Bros. Films, HBO, Cinemax, People, TNN, TBS, etc. etc.

As for the plundering stock prices, what can you say? Somebody steps up to bash the investment value of AOL Time Warner in the media on a daily basis. Can't help stock prices when everyone else is kicking the drunk on the ground.