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Nine analysts and top management from thirty-six sector firms examine the Media & Entertainment sector in this special 199-page issue from The Wall Street Transcript, available at (212/952-7433) or http://www.twst.com/info/info389.htm

TWST: Jim, let’s begin with the approach that you take to investing in the media in general and, specifically, in the radio and TV broadcasters.

Mr. Goss: I try to look at the specific media companies in terms of how each participates in the various industry sectors. The individual media subsectors derive their revenues from varying blends of advertising versus content sources, the latter including such elements as movie tickets, CD and DVD sales, and magazine or cable television subscription fees. Currently, content revenue sources are providing an element of stability and predictability in the face of an advertising slowdown. Ad revenue trends generally will track the economy but with a slight tendency to outperform. Certain subsegments within the advertising economy will have market share gains or losses over time, depending on a variety of things. Radio, specifically, is entirely advertising-driven. The radio industry subsector has enjoyed a significant boom in recent years following passage of the telecommunications deregulation act of 1996, which allowed any agent to accumulate a virtually unlimited number of radio stations, including as many as eight stations in a given market. That cumulative effect, within a large market, would allow a single entity to gross up a much larger revenue base within a market than was previously possible. Also, it enabled management to adjust the way in which it approached a specific market in terms of the combinations of programming formats used to attract the demographic characteristics sought in that specific market. In addition, management could also rationalize the cost structure in a specific market. Therefore, radio opportunities have included both increasing revenues and simultaneously expanding cash flow margins. Stock Performance.

TWST: As we consider the outlook for TV and radio broadcasters going forward, let’s just set the stage with regard to changes or developments to watch for. Are there any regulatory developments that investors should be aware of that could alter the playing field for radio station or TV station ownership positively or negatively, if not in 2002 or 2003, looking further out?

Mr. Goss: Yes, I would agree that radio probably has gotten as much as it’s going to get, unless they were to allow more than eight stations in a market. Although eight is an arbitrary number, I don’t know that there would be any move to do anything further than that. As it is, one company can own a virtually unlimited number of stations in the aggregate right now. Gannett (NYSE:GCI) has begun operating in a multimedia framework in Phoenix, and has not operated in that type of situation before. Gannett has indicated that the new operating structure represents an improvement — it may be worth several million dollars in revenues for them — but it’s not something that’s making a huge difference in the company. So relaxation of newspaper/broadcast restrictions might be more incremental than hugely meaningful. There could also be an elimination of the ownership caps, in terms of the percentage of US television households a single operator can reach, but if that were to take place, it would only affect a couple of companies right now, frankly. I think CBS and Fox are the only ones at the limit. Even the other ones that are fairly large are below that limit. And so they have a lot of room to acquire before they get to that point. But it’s not something that would have a huge immediate impact.

This special issue includes:

1) Broadcasting - TV & Radio - In an in-depth (10,600 words) Analyst Roundtable, James Goss, Vice President at Barrington Research Associates, Inc. and Alissa Grahm, Media Analyst at William Blair & Company, examine the outlook for the sector including, general market radio, regulatory outlook and share specific stock recommendations.

2) The TWST confidential Off-The-Record survey of management performance at nineteen sector firms asked market insiders about the ability of management teams to create shareholder value.

3) Media & Entertainment Stocks - In an in-depth (3,100 words) Analyst Interview, Edward Hatch, Head of Media & Entertainment Equity Research Group for SG Cowen Securities Corp., examines the outlook for the sector and shares specific stock recommendations.

4) Entertainment & Media Stocks - In an in-depth (6,500 words) Analyst Interview, David Miller, Media and Entertainment Analyst at Sutro & Co., Inc., examines the outlook for the sector and shares specific stock recommendations.

5) Newspaper Stocks - In an in-depth (3,300 words) Analyst Interview, Leland Westerfield, Director in the Communications Group of UBS Warburg Equity Research, examines the outlook for the sector and shares specific stock recommendations.

6) Internet Media Stocks - In an in-depth (3,600 words) Analyst Interview, Safa Rashtchy, Vice President of U.S. Bancorp Piper Jaffray, examines the outlook for the sector and shares specific stock recommendations.

7) Outlook for Media & Internet Media Stocks - In an in-depth (3,400 words) Analyst Interview, Jordan Rohan, Head of Media Research at Wit SoundView Corp., examines the outlook for the sector and shares specific stock recommendations.

8) Interactive Television & New Media Technologies - In an in-depth (5,100 words) Analyst Interview, Murray Arenson, Equity Research Analyst at Morgan Keegan & Company, examines the outlook for the sector and shares specific stock recommendations.

9) Interactive Technology - In an in-depth (4,100 words) Analyst Interview, David Lee Smith, Senior Analyst covering the media sector for Dain Rauscher Wessels, examines the outlook for the sector and shares specific stock recommendations.

10) CEO interviews (average 2,500 words). Top management of thirty-six sector firms examine the outlook for their firm and the sector.