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May 2001
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TOP 5 U.S.
DISTRIBUTORS

   As of the end of April the current top five domestic distributors of 2001 are as follows:

1.) PARAMOUNT
Grossed: $414,081,880
16.16%

2.) WARNER BROS.
Grossed: $298,865,479
11.66%

3.) SONY
Grossed: $268,609,852
10.48%

4.) 20TH CENTURY FOX
Grossed: $264,860,576
10.33%

5.) MGM/UA
Grossed: $213,820,062

8.34%



DISNEY INCOME UP - OR IS IT

   The Walt Disney Co. posted better-than-expected fiscal second-quarter income but the report may include a lot of smoke and mirrors.
   Disney profits were up, but the earnings don't include $1 billion in charges related to the company's closure of its Go.com Internet portal and the shuttering of about 70 Disney stores. After one-time charges, Disney posted a loss of $567 million, or 26 cents a share. Total revenue declined nearly 4% to $6.05 billion.
   The company's film studio and consumer products units kept losses from its ABC broadcast business and theme parks from stunting the company's growth. Disney's studio division clearly out performed the company's usual earnings leaders, theme parks and media networks. Video and DVD sales of "Lady and the Tramp II: Scamp's Adventure" and the boxoffice success of the low-budget film "Recess: School's Out," saw the studio division's operating income more than triple to $164 million from $46 million a year ago.
   Without the one-time charges, Disney saw its overall net income rise 33% to $391 million, or 19 cents a share, from last year's $294 million, or 14 cents a share.





DISNEY CUTS JOBS

   The Walt Disney Company has cut 4,000 jobs from its corporate system due to a weakening economy, sources reported. The job cuts cross all of Disney's divisions, including ABC, the film studio, cable channels and the corporate division of the company. The reduction also means that two of Disney's entertainment web sites will also close. MrShowBiz.com, which focuses mainly on movies and television, and WallofSound.com, which specializes in music, will both close before year's end.
   The Disney layoffs follow major staff reductions at AOL-Time Warner and General Electric's NBC. Not long ago, Disney cut about 500 jobs from its Internet group and closed its Go.com portal.


MGM SUFFERS $400 MIL LOSS

   New accounting rules caused MGM to report a first quarter net loss of $399.8 million, compared to an income of $5.2 million in the same quarter last year. The loss was due to a one-time charge taken to reflect newly adopted rules for handling marketing and advertising costs for motion pictures. Other studios and media companies have taken similar charges this year. Before the charges, MGM reported income of $12.6 million.


DREAMWORKS DEALS WITH VIVENDI/UNIVERSAL

   DreamWorks studio has signed a 5 year deal with Universal Studios to distribute Dreamworks projects through Universal/Vivendi to the international theatrical, worldwide video and DVD markets. DreamWorks had been in talks with AOL Time Warner for months, but when negotiations ended, it was Vivendi Universal who inked the deal.




MOVIES OVER THE WEB?

   Media mogul Vivendi Universal and it's web partners Yahoo and Sony plan to distribute music on the net through a joint agreement, but Vivendi chairman Jean-Marie Messier told the Wall Street Journal that the companies will also be exploring ways to include TV and film content in the mix in the near future.
   The expanding alliance between Sony, Vivendi and Yahoo is the only serious rival to the current AOL Time Warner strangle-hold on the web.
   The music - more than one million titles - will be available for a fee through the Yahoo website, the world's most widely used portal.

   There are also rumors that Vivendi Universal may be looking at eventually buying the Yahoo portal.


VIVENDI UNIVERSAL REVENUE UP 10%

   Vivendi Universal reported its media and communications businesses posted a 10% revenue gain in the first quarter, more than doubling its income from last year. Vivendi Universal's Studios Group filmed entertainment operations revenue was 13% higher. Vivendi Universal was formed in December with the three-way merger of Vivendi, French pay TV giant Canal Plus and Universal's parent Seagram Co.


VIACOM POSTS LOSSES BUT REMAINS UPBEAT

   Viacom reported a $7.3 million first-quarter loss due to slower ad sales and costs related to its recent CBS merger, but the parent company of Paramount, CBS and MTV still beat Wall Street expectations and believes the rest of the year looks good for the company. Viacom chairman and CEO Sumner Redstone and president and chief operating officer Mel Karmazin insisted that Viacom (the world's largest advertising platform) would not only survive any downturn in ad spending, it would use the weakness to boost its market share.
   Karmazin said. "We continue to pick up market share and outperform our competitors, and we'll do that in any kind of environment."