Thursday, November 02, 2006

 

Where are the Demagogues??

Time Warner announced 3Q profits yesterday…not bad:

“Revenue for Time Warner, the world's largest media company, rose 7 percent, to $10.91 billion for the quarter, and profit jumped to $2.32 billion from $853 million.”

(but The Washington Post chose to go with the negative: AOL's Revenue Drops 3 Percent)

To save you from reaching for the calculator, that’s a 21% profit on revenue. What does Time Warner do for all that money? They give us Time magazine, CNN, Warner Bros. movies, cable television and, of course, AOL internet service.

Reaction from liberal members of Congress, media mavens and so-called consumer activists was swift and savage:

“California Democrat Barbara Boxer says the Bush Administration must: “put an end to gouging." Illinois democrat Dick Durbin wants congress to talk about legislation that would channel record …profits back to consumers.” Reaction to…Profits

“…industry profits are out of line. Bill O’Reilly calls them “unconscionable.” Sen. Carl Levin deems them “absolutely obscene.” Max Schulz on...Politics on NRO

“Rep. Edward Markey, D-Mass., called the company's profits "grim news for American consumers who are paying through the nose ..." ...record profit

“But the profit was high enough to annoy some consumer…groups. The company's head of investor relations quickly acknowledged the frustration during a conference call with analysts.
"Although our company benefits from these conditions, we do recognize the impact today's high…prices have on consumers and family budgets," said …vice president for investor relations. “...hefty profits - The Clarion-Ledger

Sorry, my mistake: those are some of the recent past reactions to Exxon’s approximately 10% profit rate.

So, to recap:

Exxon – selling a non-glamorous product that employs no actors, newspaper reporters or TV talking heads - makes about 10% on sales…gets ripped for it.

Time Warner – selling CNN, Time, movies and the internet – makes about 21% on revenue…yawn.

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