A pioneer among women in journalism, Washington Post Co. Chairwoman Katharine Graham died July 17 at age 84. In 1963, Graham became the first woman to run a major media company, when her husband committed suicide and she took over The Washington Post.
Graham's Post helped set the national agenda with its co-publication of the Pentagon Papers and its Watergate coverage. In the process, she transformed an also-ran paper that her father had bought out of bankruptcy in 1933 into one of the nation's best, and built a media empire around it. The company, which has revenues of $2.4 billion, includes Newsweek and six TV network affiliates. After Graham passed control of the company to her son, Donald E. Graham, in 1991, she wrote her memoirs, Personal History, for which she won a Pulitzer Prize.
Graham was interested in business until the end: She was attending Allen & Co.'s annual media powwow in Idaho, where she died after a fall. For months, AOL Time Warner executives have confidently proclaimed that despite the economic downturn, the media giant would deliver on its aggressive revenue and cash-flow growth targets for 2001. Wall Street largely seemed to believe it, sending AOL (AOL) shares up by as much as 20% since early January. But the company's second-quarter revenue gain of 3%, to $9.2 billion, fell short of analysts' expectations because of weak advertising and lower revenues in the music and publishing divisions. The shortfall spread fears that AOL might not be as immune to a sour economy as its execs have promised. The news sent AOL's stock down 10%, to $44.65 that day. AOL CEO Gerald Levin predicted that a strong second half will help AOL achieve its aggressive 15% revenue growth target, to $40 billion, for the year. For the first time in almost 30 years, venture capitalists posted negative returns in their portfolios for two consecutive quarters. According to a July 18 study by researcher Venture Economics, U.S. funds were hit with an average loss of 8.9% for the first quarter of 2001. This follows a 13.4% loss in the fourth quarter of 2000. The bad news stems from the stock market's steep decline as well as plummeting valuations for private companies backed by venture capitalists. Experts say that the industry is unlikely to feel relief anytime soon. American Express (AXP) said on July 18 that it would cut 4,000 to 5,000 jobs and take an $826 million charge to cover severance costs and losses in its investment portfolio. The move came as a surprise to analysts and investors, who anticipated that AmEx earnings would be on track following an Apr. 2 writedown. All told this year, AmEx wrote off more than a third of 2000's $2.81 billion net income, while cutting 7% of its workforce. Large investments in high-yield securities are to blame for the losses, the financial-services giant said. The Detroit auto makers seem fresh out of pals in Washington, and that's going to cost them. The National Academy of Sciences will soon recommend that Congress stiffen the fuel economy regulations for auto makers. The Bush Administration has said that it will use the NAS report to decide which way it will lean in the fuel economy debate. Congress is on the same page as the NAS. There are several proposals in the House and Senate that would raise fuel economy standards. By law, vehicles sold by the car companies must average 27.5 miles per gallon for cars and 20.7 mpg for trucks and sport-utility vehicles or the auto makers must pay fines. Most proposals would push the truck requirements closer to the passenger car mandate over a period of five to seven years. Tiger Woods may win more tournaments and bag the most prize money. But the Tiger Effect is making his fellow golf pros a lot richer, too. That was evident on July 16, when the PGA Tour announced a new four-year TV deal that takes effect in 2003. Industry sources put the value of the contract with ABC, NBC, CBS, and three cable outlets at about $850 million, 50% above the tour's current TV deal. Credit Woods and his knack for attracting millions of new viewers for most of the increase. While ratings for the major team sports have declined, the TV audience for golf is up--way, way up when Woods is teeing off. -- Boeing (BA) raised its annual revenue forecast by $1 billion.
-- Albertson's will close 165 of its 2,541 stores.
-- Apria Healthcare said that its Medicare overcharges and penalties could range from $4.8 billion to $9 billion. Investors in Coca-Cola Enterprises (CCE) probably aren't humming a jingle. The world's largest bottler reported worse-than-expected second-quarter income and said it will cut 3% of its workforce. The culprits: currency swings, grocery price wars, and lackluster ad support from parent Coca-Cola. CCE's shares dropped 15% on the news, to $15.05, on July 18.