Starting with the Reagan Administration in 1981, the executive and legislative branches of the Federal government rewrote the legal basis for media industries.

Mark Fowler served as chairman of the FCC from 1981-1987. The policies implemented during Fowler’s term had a significant impact on corporate organization and corporate alliances within media industries.

The Walt Disney Company, General Electric, National Amusements, News Corporation, and Time Warner currently dominate film, broadcast television, and cable television in the United States.

In November 2009, GE and Comcast announced that NBC-Universal would become a joint venture with Comcast owning 51%, GE owning 49%, and Vivendi being bought out.


Unlike the other firms, National Amusement has two main divisions:  one focuses on chains of movie theaters, including the Showcase Cinemas chain, and the other controls most of voting stock in Viacom and CBS.


Disney and Time Warner made films under different studio brands, among them Disney’s Miramax and Time Warner’s Warner Bros. Pictures.

Whereas Time Warner achieved horizontal integration only in television production, Disney’s ownership of ABC gives the company complete vertical integration in television production, distribution, and networking.

Time Warner’s ownership patterns differed from Disney’s in cable channels. Time Warner owns the premier pay channels HBO and Cinemax.

GE operated in multiple sectors of the global economy, including finance operations like GE Money.

GE’s energy infrastructure operations provide the equipment, services, and systems necessary to produce energy from a variety of sources, including wind.

GE’s aviation operations focused on specialized engines, sensors, system products, and services used in commercial and military aviation.

Among GE’s enterprise solutions is this walk-through scanner, which detects explosives and narcotics.



Media empires:
corporate structures and
lines of control

by Eileen R. Meehan

Starting with the Reagan Administration in 1981, the executive and legislative branches of the Federal government rewrote the legal basis for media industries (Bettig and Hall, 2003; Blevins, 2007; McChesney, 1999).[1] [open endnotes in new window] The rewrite changed how media companies could organize themselves (Kunz, 2007; Meehan, 2005; Wasko, 1995). This essay is based on my previous research tracing the holdings and operations of the Walt Disney Company, General Electric, National Amusements, News Corporation, and Time Warner. I selected these five companies because they dominate film, broadcast television, and cable television in the United States. Each had its particular properties and arrangements. Yet, overall, I found two organizational patterns that described how four of the companies were structured (Meehan, forthcoming).

Disney, News Corporation, and Time Warner were organized as transindustrial media conglomerates, that is, as companies whose holdings spanned media industries and were both vertically and horizontally integrated. General Electric (GE) was a trans-sectoral conglomerate whose holdings spanned sectors of the economy. GE’s media holdings, NBC Universal, followed the transindustrial structure but with two differences.

First, NBC Universal (NBC-U) was embedded in the much larger conglomerate GE. Second, GE controlled NBC-U through GE’s ownership of 80% of NBC-U. The remaining 20% was owned by Vivendi SA, which had been a strong trans-sectoral conglomerate in the 1980s and 1990s. As the much weaker entity, Vivendi was believed (falsely) to have been selling its share back to GE in small increments (Caslon Analytics, n.d., Hodgson, 2009). In November 2009, GE and Comcast announced that NBC-U would become a joint venture with Comcast owning 51%, GE owning 49%, and Vivendi being bought out (Comcast, 2009a; Comcast and GE, 2009; Goldman and Pepitone, 2009). If that happens, relationships will shift but NBC-U will still be controlled by entities outside itself.

In contrast to all of these firms, National Amusements owned movie theaters and no other media operations (National Amusements, 2009). However, rather like GE, National Amusements owned the majority of voting stock in two media transindustrial conglomerates, Viacom and CBS. Stock ownership gave National Amusements control over Viacom and CBS. Exercising that control in a manner reminiscent of GE, National Amusements assembled and ran a media empire rivaling that of Disney, News Corporation, and Time Warner. This combination of control and structure made National Amusements an interesting anomaly.

Disney, News Corporation, and Time Warner are organized as transindustrial media conglomerates.

The purpose of this essay is to understand how corporate structures and lines of control have been used by firms in ways that seem both typical and atypical. I begin by examining Disney, News Corporation, and Time Warner in order to illuminate the structural features that make them transindustrial media conglomerates. I then trace GE’s trans-sectoral structure and the transindustrial media conglomerate embedded within it. A brief sketch of Vivendi’s structure as a trans-sectoral conglomerate provides a second example of that corporate form. I address the GE-Comcast proposal in terms of GE’s control over NBC-U. That leads to an examination of National Amusements, Viacom, and CBS in terms of both structure and lines of control. With this overview in mind, we turn first to the most widely used model of media ownership and its exemplars.

The dominant model:
the transindustrial media conglomerate

These conglomerates usually organized their holdings in two ways. First, in each media industry, the conglomerates were vertically integrated. In network television, full vertical integration required ownership of a production company, distribution company, owned-and-operated television station (O&O), and network. Conglomerates arranged their holdings so that they had vertical stacks in every medium of interest: film, broadcast television, cable television, recorded music, newspapers, etc. Within each level of these vertical stacks, conglomerates often acquired multiple units performing the same function, thereby becoming horizontally integrated in that function. In network television, full horizontal integration meant owning multiple production companies, distribution companies, O&Os, and networks.

As the Federal government erased rules that once separated media industries, and which limited or discouraged complete vertical and horizontal integration within each industry, companies enthusiastically began merging, acquiring, and integrating media operations. Under the new rules, a single company could operate in as many media industries as it liked. Within each industry, the firm could vertically and horizontally integrate its holdings. Companies once centered in a particular media industry restructured themselves as conglomerates whose holdings spanned multiple media industries—as transindustrial media conglomerates within the entertainment-information sector of the economy.

This form of corporate organization was used by the Walt Disney Company, News Corporation, and Time Warner. Each firm’s holdings varied. But all three owned operations in film, network television, and cable television that were vertically and horizontally integrated. All three were major players in the US and global markets for movies and television. I will quickly sketch their holdings in film, network television, and cable television beginning with News Corporation, currently the largest of the three conglomerates and owned by Rupert Murdoch.[2] News Corporation had operations in the United States, South America, Europe, Asia, Australia, and New Zealand. I focus only on the U.S. operations.

In film, News Corporation owned the Twentieth Century Fox Film Corporation, Fox 2000 Pictures, Fox Searchlight Pictures, and Blue Sky Studios (animation). Film distribution was generally through Twentieth Century Fox Film Corporation. News Corporation did not own movie theaters. The company synergized its films, using Twentieth Century Fox Home Entertainment to repackage them as videos and DVDs, Fox Music to deal with soundtracks, and Twentieth Century Fox Licensing and Merchandising to promote them and earn secondary revenues. In film, then, News Corporation was vertically integrated in production and distribution, horizontally integrated in its ownership of four studios, and synergized through connections to other operations.

Rupert Murdoch, owner of News Corporation, currently the largest of the three media conglomerates. News Corporation is vertically and horizontally integrated in its television operations.

It produces and distributes television programming through 20th Century Fox Television and is able to air those programs on its Fox network as well as its My Network TV.

In film, News Corporation owns Blue Sky Studios, which produces animated films like “Ice Age.” In cable, News Corporation owns channels like FX, which airs original series like “It’s Always Sunny in Philadelphia” as well as reruns.

In television, News Corporation was vertically and horizontally integrated. The company owned three operations producing and distributing television programming: Twentieth Century Fox Television, Fox Television Studios, and Twentieth Television. Besides licensing some of its programming and films to other networks or cable channels, News Corporation ran its television programming on its Fox network and MyNetwork, which had both O&Os and affiliated stations. The Fox network owned seventeen O&Os, MyNetwork owned ten.

The new rules not only allowed News Corporation to own twenty-seven stations and two networks but also to own two stations in each of nine markets: New York, Los Angeles, Chicago, Dallas, Houston, Phoenix, Minneapolis, Orlando and Washington, D.C. These so-called duopolies were affiliated with either the Fox network or MyNetwork. Thus, News Corporation achieved complete vertical integration in broadcast television in its ownership of television production, distribution, O&Os, and networks. News Corporation achieved horizontal integration in its ownership of multiple O&Os and networks. These achievements were intensified, first, by News Corporation’s duopolies—eighteen stations in nine markets—and then by each duopoly being split between the Fox network and MyNetwork.

For cable operations, News Corporation used its production and distribution arms to repackage films, recirculate broadcast programming, and generate cable programming. The company was horizontally integrated in the ownership of cable channels: FOX Business Network, Fox College Sports channel, Fox Movie Channel, FOX News Channel, Fox Reality Channel (reruns of reality television series), Fox Regional Sports Networks, Fox Soccer Channel, FSN (for Fox Sports Network), FX channel (reruns and original series), SPEED (auto racing), and FUEL TV (extreme sports). News Corporation participated in one joint venture in the U.S., owning 67% of the National Geographic Channel.[3]

By integrating its production and distribution operations in film and network television with its cable channels, News Corporation achieved vertical and horizontal integration as well as synergy. Supporting these operations and building more synergy were News Corporation’s Fox Music, Twentieth Century Fox Home Entertainment, and Twentieth Century Fox Licensing and Merchandising.

The general pattern of vertical and horizontal integration across News Corporation’s holdings in film, network television, and cable television was repeated in the organization of both the Walt Disney Company and Time Warner, although with variations. [4] Like News Corporation, Disney and Time Warner had operations in film production and distribution. Disney and Time Warner made films under different studio brands, among them Disney’s Miramax and Hollywood Pictures as well as Time Warner’s Fine Line and Warner Bros. Pictures. However, the firms also manifested some interesting differences. In film, only Time Warner had achieved full vertical integration through Warner Bros. International Cinema, which owned or had interests in ninety multiplex theaters in Italy, Japan, and the United States.

Time Warner is a prolific producer of television series that air on other networks. “Two and a Half Men” is produced by Warner Bros. Television for broadcast on CBS. Time Warner’s ownership of movie theaters has made it fully integrated in film.
Time Warner’s basic cable channels included six acquired from Ted Turner. Among them was Cartoon Network, which currently airs shows like “Ben 10 Alien Force.”

In network television, Disney and Time Warner produced programming, using various brand names. Time Warner was a prolific producer with many series airing on networks owned by other companies. Both companies had distribution arms: Disney’s Buena Vista Television and Time Warner’s Warner Bros. Television. Each firm achieved vertical integration in television production and distribution as well as horizontal integration in production.

However, their profiles in terms of stations and networks differed. Disney owned one major network (ABC) and ten O&Os. Time Warner and National Amusement’s CBS co-owned a minor network, CW. Time Warner had no O&Os. Thus, Disney was fully vertically integrated in production, distribution, and networking as well as horizontally integrated in production and O&Os. In contrast, Time Warner’s co-ownership of a minor network weakened its vertical integration and the firm achieved horizontal integration only in television production. The particular ways in which Disney, Time Warner, and News Corporation achieved vertical and horizontal integration in network television varied but the overall pattern of such integration remained across the three firms.

A consideration of Disney’s and Time Warner’s cable holdings may suggest some reasons for their differences in ownership of stations and networks. Both Disney and Time Warner owned multiple cable channels but the ownership patterns differed. Time Warner owned the premier pay channels HBO and Cinemax. Disney had none. Time Warner’s basic cable channels included six acquired from Ted Turner (Cartoon Network, TBS, TNT, Turner Classic Movies, and the news channels CNN and HLN) as well as truTV (previously the co-owned Court TV) and Boomerang (old cartoons). In contrast, Disney’s basic channels included both wholly owned operations (like The Disney Channel, Toon Disney, ABC Family, and SOAPnet) as well as joint ventures (A&E, Biography, the ESPN channels, Lifetime, Lifetime Movie Network, and History).[5]

Where Disney owned no cable systems, Time Warner had long owned the second largest group of cable systems, which was spun off as Time Warner Cable in 2009. Although legally separate, Time Warner Cable’s name suggested that it was still committed to carrying Time Warner channels on Time Warner Cable’s systems. In cable television, then, the overall pattern observed in News Corporation of horizontal integration through ownership of multiple channels and multiple production units as well as vertical integration through ownership of production, distribution, and channels recurred. Again, all three firms have divisions that supported corporate synergy ranging from Disney’s book publishing to Time Warner’s comic books, but always with a division dedicated to music, home entertainment, and licensing and merchandising.

These brief sketches of News Corporation, Time Warner, and the Walt Disney Company show a repeated tendency for each firm to vertically integrate production and distribution in film and television programming. Each company owned multiple production units making films or television programs, thereby horizontally integrating holdings in production. In broadcast television, News Corporation and Disney capped off, so to speak, their vertical integration through the ownership of stations and networks, although each firm took a different approach.

Time Warner provided an interesting contrast. Its ownership of movie theaters made it fully vertically integrated in film. In cable, Time Warner’s apparent connections to Time Warner Cable suggested a continuing relationship that aped full vertical integration in cable. Lacking O&Os and a major network, Time Warner seemed weaker than Disney or News Corporation in broadcast television. Regardless of the individual firm’s strengths or weaknesses, however, the pattern of vertical and horizontal integration across media industries held for all three companies. With this pattern in mind, we turn now to the trans-sectoral conglomerate as exemplified by General Electric and its organization of NBC-Universal as a transindustrial conglomerate embedded in a trans-sectoral conglomerate.

Trans-sectoral conglomeration and an embedded transindustrial media conglomerate

GE was typically rated among the top five corporations in the world and has functioned historically as an invention factory. GE operated in the following sectors of the global economy: energy, transportation, heavy manufacturing, consumer manufacturing, healthcare, security, finance, and entertainment-information (GE 2009). GE’s 10k identified six areas of operation: energy infrastructure, aviation, technology infrastructure, consumer and industrial manufacturing, capital and finance, and NBC Universal (NBC-U). I will merge aviation into technology infrastructure, where GE discusses its other transportation operations, and briefly describe each of GE’s four non-media segments, sketch Vivendi’s holdings, and then profile GE’s NBC Universal (NBC-U).

GE’s operations in energy infrastructure included providing the equipment, services, and systems necessary to produce energy from oil, gas, coal, steam, wind, nuclear reactions, and the sun. A second series of operations focused on water with GE producing technologies, products, and processes required to treat water so that it could be potable (including desalination), used in industrial applications (like mining), and reclaimed.

In its annual financial statement to the Securities Exchange Commission (10k filing), GE identified transportation, “enterprise solutions,” (GE, 2008, p. 5) and healthcare as comprising its operations in technology infrastructure. Transportation dealt with specialized engines for land-based vehicles, products, systems, management services, and other services needed in railroads, other transit systems, and in the oil and gas, mining, and marine industries. Aviation operations focused on specialized engines, sensors, systems products, and services used in commercial and military aviation.[7] Maintenance, repair, and rebuilding engines were themes in both aviation and transportation.

Under enterprise solutions, GE addressed issues in security including automation, computing, identification, non-intrusive testing, monitoring, sensing, communication, and prevention of unauthorized intrusion, fire, or power failure. Some synergy between enterprise solutions and healthcare seemed apparent given the use of non-intrusive imaging technologies, patient monitoring systems, information systems, filtration systems, cellular technologies, equipment maintenance and services, etc. Filtration systems seemed relevant to GE’s expertise in water treatment.

GE manufactures a variety of consumer products, such as light bulbs, refrigerators, and gas stoves.

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