Sept. 30 (Bloomberg) -- U.S. media and entertainment companies have ``generally healthy'' liquidity and will be supported by predictable revenue and high profit margins in the current credit crunch, Fitch Ratings said in a report.

Diversified companies including Walt Disney Co., News Corp., Time Warner Inc. and Viacom Inc. are best positioned to weather market conditions, Fitch analysts Jamie Rizzo and Mike Simonton said.

The companies have ``no significant exposure'' to Lehman Brothers Holdings Inc., which filed for bankruptcy, and the mergers of Citigroup Inc. with Wachovia Corp. and Bank of America Corp. with Merrill Lynch & Co. are unlikely to affect their credit lines, Fitch said. The industry's cash on hand and free cash flow exceed debt coming due over the next three years.

``These factors make media companies attractive borrowers for banks and bondholders, even under more selective market conditions,'' the analysts wrote.

Tribune Co., which went private in an $8.3 billion buyout led by Sam Zell, has a ``very limited margin of error,'' the rating company said. An 8 percent drop in the publisher and broadcaster's earnings before interest, taxes, depreciation and amortization would violate loan terms, Fitch said.

Broadcasters Belo Corp. and Hearst-Argyle Television Inc. will use existing bank credit to pay down debt that matures in the next 15 months.

Even in a market with fewer potential buyers, media companies including CBS Corp., Cox Communications Inc., Disney and Thomson Reuters Corp. have sold assets within the past 24 months, Fitch said.

``The potential to deconsolidate media portfolios to pay down debt could further support creditors in a downturn,'' Fitch said.

To contact the reporter on this story: Andy Fixmer in Los Angeles at afixmer@bloomberg.net

Last Updated: September 30, 2008 12:19 EDT