Sunday, July 09, 2006

Media company profits exceed oil company profits

Oil companies have what Forbes Magazine called "huge bulls-eyes on their backs" because of their record profits. Exxon-Mobil, for example, made $36-billion in 2005. Most of the major newspapers in the country have had at least one article that puts these huge profits in a negative light.

But there is one group of companies that made even bigger profits. You guessed it: media companies, including some of the very companies that own newspapers that -- on their editorial pages -- are calling for a windfall profits tax!

Exxon-Mobil's profit margin in 2005 was about 16 percent. (I'm defining profit here as earnings before interest, taxes, and depreciation.) That's pretty good by virtually any measure. But there were at least 10 media companies that had bigger margins. These media companies include the Washington Post (23%), the New York Times (18%), and Knight Ridder (20%), which was recently bought by McClatchy (28%).

What's interesting is that the company leading the way is Gannett (32%), owner of USA Today. People say that the newspaper business is dead, but does anyone know of a technology company that posted these kinds of numbers in 2005?

OK, there were a few, but not many.

The (pun intended) bottom line is this: If I were a reporter working for a big-city daily, and I wanted to do an expose on the robber-barons of the 21st century, I think I'd check the top floor of my own building first.


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