Media Stocks Crush Market Averages in 2012

Entertainment conglomerates in 2012 proved they can weather a faltering economy better than other industries, thus their shareholders were rewarded with outsized profits.

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The S&P 500 rose 13.4 percent in 2012, but six of the seven media conglomerates significantly outperformed that benchmark, the laggard being Sony, which saw its stock drop 38 percent during the year.

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The best performer was NBCUniversal parent Comcast, which enjoyed a 61 percent surge, leaving the company with a $99.3 billion market capitalization, making it the most valuable company among the seven conglomerates.

The next best performer was News Corp., as investors looked beyond a phone-hacking and bribery scandal that shut down its News of the World publication and bid shares 45 percent higher on the year.

CBS was next with a 42 percent rise, followed by Time Warner (up 36 percent), Walt Disney (up 35 percent) and Viacom, which rose 19 percent even as analysts fretted over lackluster ratings at Nickelodeon.

Cable networks, though, were generally strong, a trend that helped Discovery Communications notch a 55 percent gain in 2012.

Outperforming all the conglomerates was Lionsgate Entertainment, which rode its $413 million acquisition of Summit Entertainment along with The Hunger Games and Twilight film franchises to a 97 percent gain in 2012.

Shares of DreamWorks Animation, on the other hand, ended the year roughly where they began.

New-media was equally impressive, with Sirius XM Radio rising 61 percent as Liberty Media purchased shares and forced out CEO Mel Karmazin. Amazon.com rose 45 percent, TiVo was up 37 percent, and Netflix and Apple each rose 33 percent.

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Among Internet media, AOL rose a whopping 127 percent in 2012, far outpacing Yahoo, up 23 percent and Google, up 10 percent.

Among the losers in 2012 were video game stocks. Despite hit franchises like Call of Duty and Skylanders, Activision Blizzard was off 13 percent, while Take-Two Interactive Software fell 19 percent, and Electronic Arts fell 30 percent.

A couple of high-profile new-media companies that went public in 2012 – Facebook and Zynga – disappointed investors despite pre-IPO hype. Facebook shares fell 30 percent since their closing price on their first day of trading, while Zynga shares fell 67 percent.