AP reporter Dan D’Ambrosio couched the battle between EchoStar and Viacom in “David and Goliath” terms:
Satellite TV giant EchoStar pulled the plug … in an escalating legal dispute with Viacom over the price of programming.
The implication is that EchoStar is the large bully (Goliath) and Viacom the victim (David). However, his characterization of EchoStar as the “giant” is a serious case of role reversal.
Viacom, a media conglomerate, is currently trading at at $38.63 with 1.62 billion shares outstanding. Market capitalization is $61.85 billion. Revenue for 2003 was $26.6 billion.
Viacom operates through five segments: television, video, cable networks, Infinity, and entertainment.
Brands owned (or with ownership interest) include BET, Blockbuster, CBS TV Network, Comedy Central, CMT: Country Music Television, Flix, The Movie Channel, MTV, Nickelodeon, Nike at Night, Noggin, Paramount Pictures, Showtime, Spike TV, the Sundance Channel, TV Land, UPN, VH1. The company also owns Simon & Schuster, a publishing company; Paramount Pictures, a movie studio; 1700 movie theatres; five regional theme parks (Paramount Parks); CBS.com and CBSNews.com; and 100,000 copyrighted songs.
Details on the broadcast side of the business from the corporate web site:
The Viacom Television Stations Group consists of 39 television stations, reaching 15 of the top 20 television markets in the United States. The division includes 16 owned-and-operated CBS stations, four CBS satellite stations, 18 UPN-affiliated stations and one independent station. The CBS Television Stations Division includes duopolies in eight major markets, including Boston, Dallas, Detroit, Los Angeles, Miami, Philadelphia, Pittsburgh and San Francisco.
The Infinity Broadcasting is one of the largest radio station operators in the US (Clear Channel is number one); it owns and operates 185 radio stations.
But of course, it’s no giant.
EchoStar owns Dish Network, one of two major satellite TV providers and primary competitors with cable networks. It is currently trading at $34.54 with market capitalization of $16.74 billion and 246.15 million shares outstanding.
While no small firm, it is a shadow of Viacom in size.
The Motley Fool reports that Dish had 8.18 million subscribers at the close of 2003. EchoStar designs, develops, distributes and sells receiver systems and operates seven DBS satellites.
In the satellite TV world, EchoStar isn’t even the largest player — although you wouldn’t know it from the lead graph of the AP Story. That title belongs to DirecTV, which reportedly has 10 million customers.
In its latest change of hands, DirecTV is now owned by Australian Rupert Murdoch, a man whose media empire includes FOX Broadcasting (including more than 20 FOX-owned local TV stations), FX Cable and Twentieth Century Fox well as The Chicago Sun-Times, The New York Post, The (London) Times, TV Guide, The Village Voice, and various newspapers in Australia.
The US Federal Communications Commission (FCC) wouldn’t approve EchoStar’s bid for DirecTV — saying that it would stiffle competition. But the sale to Murdoch and company will help competition? Oh, that’s right. Vertical integration couldn’t possibly be anti-competitive:
“I’ve always felt for years that if you’re in the content creation business, you must be somewhere in the distribution business to make sure you’re not wasting your efforts and your money,” Murdoch explained when the sale was approved.
This is the same FCC that believes relaxing rules on media ownership — in other words, encouraging homogenization and consolidation — is a good thing.
CBS Marketwatch (10 Mar – Viacom owns CBS); Seattle Times (AP – 10 Mar)