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Have Stock in Media? Read This

More public media companies held their earnings calls this week. And, like last week, the reports from the executive suite were dire. Playboy warned that its magazine may lose 47 percent of its ad pages during the third quarter. News Corporation, Rupert Murdoch’s sprawling media empire, reported a startling $3.4 billion fiscal year net loss, […]

More public media companies held their earnings calls this week. And, like last week, the reports from the executive suite were dire.

Playboy warned that its magazine may lose 47 percent of its ad pages during the third quarter.

News Corporation, Rupert Murdoch’s sprawling media empire, reported a startling $3.4 billion fiscal year net loss, driven by shrinking ad revenues for his print and online properties, including MySpace, and an unprecedented global economic downturn.

This, after a week that saw Sony, Reed Elsevier, Time Warner et al post sharp revenue declines.

To put this all in perspective – and to understand why investors often freak out during these conference calls – let’s take a look at the stock prices for a few publicly-traded media companies since the recession began (I’m going to leave Google and Yahoo out of this for now, although their stock prices have been hit, too).

For argument’s sake, let’s use September 2, 2008 as the starting point.

News Corp.
September 2, 2008: $14.40
August 7, 2009: $11.44
Change: -20.6%
Market Cap: $29.90B
Estimated Cap Gain/Loss: -$6.13B

Playboy
September 2, 2008: $4.09
August 7, 2009: $2.46
Change: -40.0%
Market Cap: $82.26M
Estimated Cap Gain/Loss: -$32.8M

Reed Elsevier
September 2, 2008: $44.99
August 7, 2009: $29.74
Change: -33.9%
Market Cap: $8.45B
Estimated Cap Gain/Loss: -$2.86B

Sony
September 2, 2008: $37.68
August 7, 2009: $28.47
Change: -24.4%
Market Cap: $28.58B
Estimated Cap Gain/Loss: -$6.99B

Time Warner
September 2, 2008: $50.10
August 7, 2009: $28.33
Change: -43.5%
Market Cap: $33.55B
Estimated Cap Gain/Loss: -$14.56B

Viacom
September 2, 2008: $30.20
August 7, 2009: $25.01
Change: -17.2%
Market Cap: $15.18B
Estimated Cap Gain/Loss: -$2.61B

These are admittedly rough estimates. But it’s clear that publicly-traded companies have lost billions since the downturn began.

Murdoch said he believes “the worst is behind us.”

We can only hope.