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HEROES

Integrated oil companies surged after Saudi Arabia, Venezuela, and Mexico agreed to cut their monthly oil production by some 1.1 million barrels a day starting in April. Exxon Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: XON)") else Response.Write("(NYSE: XON)") end if %> added $1 1/2 to $68 5/8, Atlantic Richfield <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: ARC)") else Response.Write("(NYSE: ARC)") end if %> gained $1 1/2 to $81 7/8, and Amoco <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: AN)") else Response.Write("(NYSE: AN)") end if %> bounced $1 9/16 to $88 3/16 despite reporting that Year 2000 expenditures will cut 1998 income by $55 million (pre-tax). Royal Dutch Petroleum <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: RD)") else Response.Write("(NYSE: RD)") end if %> added $1 1/4 to $58 1/4 and also reported that it had received approval to build gas stations in Venezuela. Oil production & exploration companies and marketers also gained, with Pennzoil <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: PZL)") else Response.Write("(NYSE: PZL)") end if %> up $1 1/2 to $66 15/16, Enron Oil & Gas Co. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: EOG)") else Response.Write("(NYSE: EOG)") end if %> up $1 7/16 higher at $23 3/4, and Talisman Energy <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: TLM)") else Response.Write("(NYSE: TLM)") end if %> up $2 1/8 to $31 3/4.

Oil drillers and energy services companies also gained ground on what could be more a psychological turning point for investors than an economic turning point for the industry. Diamond Offshore <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: DO)") else Response.Write("(NYSE: DO)") end if %> ascended $1 7/8 to $48 15/16, R&B Falcon <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: FLC)") else Response.Write("(NYSE: FLC)") end if %> gained $2 1/4 to $32 1/16, Global Marine <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: GLM)") else Response.Write("(NYSE: GLM)") end if %> added $1 1/2 to $26, Marine Drilling Co. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: MDCO)") else Response.Write("(Nasdaq: MDCO)") end if %> gushed $1 15/16 to $23 1/4, Ensco International <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: ESV)") else Response.Write("(NYSE: ESV)") end if %> rose $2 to $30, Halliburton <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: HAL)") else Response.Write("(NYSE: HAL)") end if %> surged $3 5/8 to $51 3/4, and Schlumberger <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: SLB)") else Response.Write("(NYSE: SLB)") end if %> gained $4 9/16 to $78 1/8. Equipment and services companies EVI Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: EVI)") else Response.Write("(NYSE: EVI)") end if %>, tacked on $3 5/8 to $46 5/8, and Smith International <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: SII)") else Response.Write("(NYSE: SII)") end if %> rose $4 1/2 to $58 1/8.

Telemarketing services firm Telespectrum Worldwide <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: TLSP)") else Response.Write("(Nasdaq: TLSP)") end if %> rang up a $1 9/16 gain to $6 5/16 after naming Keith Alessi its new president and CEO. Alessi is the former CEO of tax preparer Jackson Hewitt, which was rolled into consumer services giant Cendant Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CD)") else Response.Write("(NYSE: CD)") end if %> in January. Jackson Hewitt was last year's Wall Street story of the year, after the company recorded a breath-taking 1527% gain before finally being scooped up by Cendant predecessor HFS Inc. Is a repeat performance in the works? Not likely. Telespectum was formed by the combination of six telemarketing firms back in 1996, prompting a whopping $139.1 million charge to goodwill, or $5.52 per share, taken in this past quarter as an impairment charge. Although writing off some goodwill can help future numbers, the company still faces all the normal hazards of the teleservices business, including non-existent earnings; volatile SG&A expenses in order to train and retain personnel (90% of which are part-time); dependence on key contracts that are subject to frequent renegotiations, usually monthly; and low barriers to entry, despite the perception to the contrary.

Lost in the oil sector's euphoria today was Plains Resources' <% if gsSubBrand = "aolsnapshot" then Response.Write("(AMEX: PLX)") else Response.Write("(AMEX: PLX)") end if %> acquisition of the oil pipeline business of Goodyear Tire & Rubber <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: GT)") else Response.Write("(NYSE: GT)") end if %>. Yes, it's true -- Goodyear actually was in the oil biz. The Akron, Ohio-based tire maker spent $1.6 billion in 1983 to build the 1,223 mile-long All American Pipeline System, which stretches from California to Texas. The attempt at diversification failed, though, resulting in Plains Resources taking the pipeline and an oil gathering system off of Goodyear's hands today to the tune of $420 million in cash, sending Plains Resources shares up $2 1/8 to $17 13/16. More than 700,000 barrels of crude oil flows through the pipeline from California's San Joaquin Valley each day, which accounts for 15% of the total oil production of the continental U.S. According to Plains Resources, the operation generated EBITDA (earnings before interest, taxes, depreciation, and amortization) of $65 million in fiscal 1997. The acquisition appears to offer sizable synergies to the Houston-based oil exploration and transportation company, as it will allow the firm to connect wells in the San Joaquin Valley with the firm's massive 2 million barrel crude oil terminal and storage facility in Cushing, Oklahoma.

QUICK TAKES: Hotel operator Servico Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: SER)") else Response.Write("(NYSE: SER)") end if %> gained $7/8 to $18 5/8 after agreeing to merge with Impac Hotel Group, which operates Marriott, Doubletree, Holiday Inn, and other brand-name hotels, in a deal valued at $513 million, including $406 million in assumed debt. The new company will operate 140 hotels in 35 states under the new name of Lodgian... Australian Internet services provider OzEmail Ltd. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: OZEMY)") else Response.Write("(Nasdaq: OZEMY)") end if %> followed the yellow brick road $2 15/16 higher to $16 1/4 after announcing that it has completed a central hub to route Internet telephone calls on its Interline network to over 200 countries... Film production and character licensing firm Harvey Entertainment Co. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: HRVY)") else Response.Write("(Nasdaq: HRVY)") end if %> rose $1 1/4 to $14 after retaining two executives from media properties management company Global Media Management Group to act as its interim CEO and CFO.

Real estate brokerage Kennedy-Wilson Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: KWIC)") else Response.Write("(Nasdaq: KWIC)") end if %> climbed $3 1/2 to $39 1/2 after announcing a three-for-one stock split on Friday... Wireless telecommunications power amplifier company Microwave Power Devices <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: MPDI)") else Response.Write("(Nasdaq: MPDI)") end if %> surged $1/2 to $7 7/8 after announcing on Friday that it won a $1.2 million follow-up order to provide amplifiers for Qualcomm's <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: QCOM)") else Response.Write("(Nasdaq: QCOM)") end if %> cellular base stations... Plastic container maker Ultra Pac Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: UPAC)") else Response.Write("(Nasdaq: UPAC)") end if %> picked up $8 5/16 to $15 after agreeing to merge with specialty packaging products maker Ivex Packaging Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: IXX)") else Response.Write("(NYSE: IXX)") end if %>. Under the deal, Ivex will launch a cash tender offer for all of the outstanding shares of Ultra Pac at $15.50 per share.

Appliance manufacturer Maytag Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: MYG)") else Response.Write("(NYSE: MYG)") end if %> gained $7/16 to $48 3/16 after saying its fiscal Q1 EPS will be "much better" than the $0.61 expected by analysts surveyed by First Call. Sales are expected to rise by as much as 25% from their year-ago levels due to strong demand for new products introduced last year and improved operating margins... Great Lakes Chemical Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: GLK)") else Response.Write("(NYSE: GLK)") end if %> traded $3 3/16 higher to $52 7/8 after Morgan Stanley raised its rating on the company to "strong buy" from "outperform." The specialty chemical company also named Mark Bulriss as its new president and CEO following the retirement of Robert McDonald... Home healthcare provider American HomePatient <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: AHOM)") else Response.Write("(Nasdaq: AHOM)") end if %> added $1 1/2 to $20 7/8 on reporting Q4 EPS of $0.31 versus $0.30 a year ago, which was below the Street estimate of $0.37.

Fort Bend Holding Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: FBHC)") else Response.Write("(Nasdaq: FBHC)") end if %>, the holding company for Rosenberg, Texas-based Fort Bend Savings and Loan Association, jumped $6 3/4 to $27 1/2 after receiving an unsolicited buyout offer of $28 to $32 per share in cash from Millers Mutual Fire Insurance Co. The bid represents a 35% to 54% premium to the company's closing price of $20 3/4 on Friday... Auto parts distributor and advanced engineering products developer Consulier Engineering <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: CSLR)") else Response.Write("(Nasdaq: CSLR)") end if %> added $2 1/4 to $6 1/2 after announcing a two-for-one stock split effective April 15... Administrative outsourcing firm ProBusiness Services <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: PRBZ)") else Response.Write("(Nasdaq: PRBZ)") end if %> advanced $3 to $29 3/4 after soft drink maker Coca-Cola <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: KO)") else Response.Write("(NYSE: KO)") end if %> selected the company to provide payroll tax services.

Specialty electric and telecommunications infrastructure contracting services provider Quanta Services <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: PWR)") else Response.Write("(NYSE: PWR)") end if %> surged $2 1/16 to $15 after buying two fiber optic installation services companies and an electric utility contracting firm. The three unnamed companies are expected to earn a combined $57 million in revenues in fiscal 1998... Novell Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: NOVL)") else Response.Write("(Nasdaq: NOVL)") end if %> gained $9/16 to $10 5/8 after the network software provider received a favorable write-up in the latest edition of Barron's. Also up on positive comments in the magazine was applications shareware developer Banyan Systems <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: BNYN)") else Response.Write("(Nasdaq: BNYN)") end if %>, which added $1 to $5 11/16... PC maker Compaq Computer <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CPQ)") else Response.Write("(NYSE: CPQ)") end if %> gained $1 11/16 to $24 15/16 after the European Union's antitrust authorities gave their nod to the company's proposed merger with Digital Equipment Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: DEC)") else Response.Write("(NYSE: DEC)") end if %>.

CyberShop International <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: CYSP)") else Response.Write("(Nasdaq: CYSP)") end if %> rose $2 1/4 to $8 3/4 after the Internet retailer sold 2.3 million shares in an initial public offering this morning at $6 1/2 per share... Drug maker Pfizer Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: PFE)") else Response.Write("(NYSE: PFE)") end if %> tacked on $4 1/8 to $96 1/4 on continued positive sentiment concerning its Viagra impotence drug, which is currently awaiting FDA approval... Local and wide area network systems provider 3Com Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: COMS)") else Response.Write("(Nasdaq: COMS)") end if %> moved $1 15/16 higher to $35 1/8 as some investors believe the company has brought its inventory levels under control. The firm will report fiscal Q3 earnings after the market close tomorrow.

Online reference services provider Infonautics Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: INFO)") else Response.Write("(Nasdaq: INFO)") end if %> climbed $1 3/4 to $5 5/8 after Internet services company America Online <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: AOL)") else Response.Write("(NYSE: AOL)") end if %> agreed to use the company's Electric Library as its primary supplier of consumer and small business research services... Information technology education company Computer Learning Centers <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: CLCX)") else Response.Write("(Nasdaq: CLCX)") end if %> added $1 1/4 to $19 3/4 after mutual fund giant Fidelity Investments reported owning a 14.3% stake in the company, or about 2.3 million shares, on Friday.

GOATS

Boeing <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: BA)") else Response.Write("(NYSE: BA)") end if %> fell $1 13/16 to $51 5/8 after The Wall Street Journal reported that new bottlenecks are hampering deliveries of more than 50 of the Seattle-based plane maker's latest 737 models, just weeks before their production is scheduled to double. The latest problems, due to chronic parts shortages and unexpected modifications to meet European and U.S. safety regulations, have slowed assembly of as many as 35 of Boeing's new generation of 737 twin-jets, valued at roughly $1.4 billion. Also, another 18 finished planes need fixes, and a few more already in service may be returned to Boeing for additional work. Boeing has delivered eight of the 20 new 737s it had slated to turn over in the first quarter. Troubles last year in meeting a big jump in orders forced the world's leading maker of commercial jet aircraft to close some assembly lines temporarily and report its first annual loss (totaling $178 million) in 50 years.

After climbing nearly 14% on talk of a possible merger agreement that began early this month, casino owner and operator Circus Circus Enterprises <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CIR)") else Response.Write("(NYSE: CIR)") end if %> plunged $3 to $21 3/4 after announcing that talks with Hilton Hotels <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: HLT)") else Response.Write("(NYSE: HLT)") end if %> have been terminated. As part of the $2.8 billion deal, Hilton would have split its gaming and lodging operations into two public companies through a tax-free spin-off, and Circus Circus would have merged into the resulting gaming company in a stock-for-stock transaction. In December, Circus Circus began shopping for a buyer and had preliminary talks with three real estate investment trusts about selling its Las Vegas Luxor, Excalibur, and Circus Circus casinos. The casino operator has been hurt by stiff competition as a glut of hotels and increasingly promotional pricing in Las Vegas drives down revenues per available room. Last year, Circus Circus reported year-end earnings of $0.95 per share versus $0.99 for the previous year and $1.33 for the year before that.

QUICK CUTS: Walt Disney Co. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: DIS)") else Response.Write("(NYSE: DIS)") end if %> fell $4 to $103 after this weekend's Barron's printed an analysis of the company's financials by an eminent professor of accounting. According to Abraham Briloff, CPA, "Disney, though the agency of accounting, has adeptly masked the negative impact of its Cap Cities/ABC acquisition on its earnings over the past two years"... Coca-Cola Co. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: KO)") else Response.Write("(NYSE: KO)") end if %> fell $1 5/8 to $75 7/8 after Lehman Brothers lowered earnings per share forecasts for the world's largest beverage company to $1.63 from $1.72 for 1998 and to $1.90 from $2.03 for 1999 due to the negative effect of foreign exchange... Salomon Smith Barney cut its rating of DVI Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: DVI)") else Response.Write("(NYSE: DVI)") end if %> to "neutral" from "buy," sending the leasing and finance company down $2 to $23 1/16.

Cendant Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CD)") else Response.Write("(NYSE: CD)") end if %> lost $7/8 to $39 1/8 after American Bankers Insurance Group <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: ABI)") else Response.Write("(NYSE: ABI)") end if %> agreed to a $67 per share acquisition offer made by Cendant last week. That topped by 15% a previous offer by insurance underwriter American International Group <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: AIG)") else Response.Write("(NYSE: AIG)") end if %> and is apparently the final play in a protracted bidding war between AIG and Cendant... Florida-based BankAtlantic Bancorp <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: BBX)") else Response.Write("(NYSE: BBX)") end if %> slipped $1 to $13 1/2 after announcing late Friday that it expects first quarter earnings will be less than the $6.3 million reported for Q1 1997 due to increased mortgage prepayments as a result of lower interest rates and higher expenses associated with the company's growth initiatives.

TSR Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: TSRI)") else Response.Write("(Nasdaq: TSRI)") end if %>, which provides computer programming consulting services and Year 2000 software solutions, shed $3 5/16 to $16 1/4 after reporting third quarter earnings of $0.17 per share versus $0.08 for the prior-year period. The company said the pace of its Year 2000 business hasn't met its original estimates due in part to growing competition and longer sales cycles... Athletic and outdoor footwear superstore Just for Feet <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: FEET)") else Response.Write("(Nasdaq: FEET)") end if %> tripped for $1 13/16 to $18 9/16 after reporting fourth quarter earnings of $0.20 per share versus $0.16 for the year-earlier quarter and the First Call mean estimate of $0.19... Abercrombie & Fitch <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: ANF)") else Response.Write("(NYSE: ANF)") end if %> slid $2 to $45 1/2 after Bear Stearns lowered its rating on the men's and women's casual apparel retailer to "attractive" from "buy."

Graham-Field Health Products <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: GFI)") else Response.Write("(NYSE: GFI)") end if %> plummeted $11 9/16 to $8 1/16, or 59%, after the healthcare products manufacturer reported a fourth quarter loss of $1.47 per share, including restructuring and acquisition charges, compared with a loss of $0.89 (also after charges) for the year-earlier period... Luggage maker Samsonite Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: SAMC)") else Response.Write("(Nasdaq: SAMC)") end if %> lost $2 1/16 to $30 5/16 after announcing a charge of around $2.6 million in its fiscal 1999 first quarter, which ends April 30, 1998, to restructure its Torhout, Belgium, softside manufacturing operations. The company expects annual savings of $2.2 million from the restructuring, or roughly $0.07 per share after taxes.

Airline stocks experienced some turbulence today, falling on news that a group of the world's leading oil producers agreed to curb output to counter a slide in oil prices. Southwest Airlines <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: LUV)") else Response.Write("(NYSE: LUV)") end if %> dropped $1 3/4 to $28 3/8. Continental Airlines <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CAI.B)") else Response.Write("(NYSE: CAI.B)") end if %> lost $2 3/4 to $57 1/2. US Airways <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: U)") else Response.Write("(NYSE: U)") end if %> fell $2 9/16 to $70 7/8. United Airlines parent UAL Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: UAL)") else Response.Write("(NYSE: UAL)") end if %> dipped $1 13/16 to $88 1/16. Delta Air Lines <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: DAL)") else Response.Write("(NYSE: DAL)") end if %> slipped $2 11/16 to $115 3/4. American West Holdings <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: AWA)") else Response.Write("(NYSE: AWA)") end if %> sank $2 3/8 to $24 1/4. Alaska Air Group <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: ALK)") else Response.Write("(NYSE: ALK)") end if %> tumbled $4 1/8 to $52 13/16, and Midwest Express Holdings <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: MEH)") else Response.Write("(NYSE: MEH)") end if %> fell $3 11/16 to $45 3/4... Creative Computers <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: MALL)") else Response.Write("(Nasdaq: MALL)") end if %> plunged $2 3/8 to $8 3/8 after the personal computer hardware, software, and peripherals seller announced that it expects to report a first quarter loss on sales exceeding $160 million due to slower Macintosh-related sales. The company also will take a charge for the closing last Friday of six of its seven stores.

Integrated Circuit Systems <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: ICST)") else Response.Write("(Nasdaq: ICST)") end if %> sank $3 5/16 to $20 1/8 after announcing late Friday the resignation of its president and CEO, Stavro Prodromou. Company chairman Henry Boreen has assumed the position of interim CEO, and the company, which supplies fast ethernet integrated circuits and frequency timing generators, has started looking for a replacement for Prodromou... Financial services industry information technology provider BancTec Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: BTC)") else Response.Write("(NYSE: BTC)") end if %> was cut $2 to $23 15/16 after announcing that its first quarter earnings will fall below expectations and be comparable to the $0.46 EPS for the same period last year due to lower-than-anticipated revenues in its domestic systems integration business.

Computer network services and products provider Data Systems Network <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: DSYS)") else Response.Write("(Nasdaq: DSYS)") end if %> fell $1 to $6 1/4 after announcing that the board-appointed special committee looking into previously announced accounting irregularities is nearing the conclusion of its investigation. Based on preliminary findings, the company predicts the results will have an impact of $1.5 to $2 million in 1996, and though they won't affect 1997 revenue numbers, they will impact earnings, resulting in a possible loss.

FOOL ON THE HILL
An Investment Opinion
by Jim Surowiecki

Rupert & The Dodgers

It may be just the latest chapter in the unhappy history of global media companies' quest for the ever-elusive grail of synergy. But, as these things go, the $311 million acquisition of the Los Angeles Dodgers by Rupert Murdoch's News Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: NWS)") else Response.Write("(NYSE: NWS)") end if %> actually qualifies as a potentially smart move, which is more than you can say for most acquisitions that media companies make. Even with the price tag, the Dodgers represent an investment that on its own terms is a possible cash cow. More importantly, the L.A. franchise is that rare property that can be leveraged across different media, and that -- if managed correctly -- could have a serious impact on the fortunes of News Corp.'s other businesses, most notably its heretofore floundering global satellite and cable networks and Fox SportsNet, its budding joint venture with Tele-Communications Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: TCOMA)") else Response.Write("(NYSE: TCOMA)") end if %> and Cablevision <% if gsSubBrand = "aolsnapshot" then Response.Write("(AMEX: CVC)") else Response.Write("(AMEX: CVC)") end if %>. And it's that kind of leveraging that, in theory, synergy is all about.

Murdoch's entry into the tradition-soaked world of major league baseball has, of course, occasioned the predictable headshaking and predictions of imminent demise from those who carry around in their heads some imaginary idea of a past in which baseball owners were uninterested in how much their teams made. In the case of the Dodgers, though, such lamentations are especially inappropriate, since the team is only in Los Angeles as a result of Walter O'Malley's cold-blooded decision to abandon Brooklyn in favor of the sunnier -- in more sense than one -- clime of Chavez Ravine. Whatever innocence the Bums of Brooklyn once had was lost long ago. In any case, in a world where Time Warner <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: TWX)") else Response.Write("(NYSE: TWX)") end if %> owns the Atlanta Braves and Disney <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: DIS)") else Response.Write("(NYSE: DIS)") end if %> owns the Anaheim Angels (and the Mighty Ducks), it's hard to see how News Corp.'s entry onto the scene changes matters in a substantive way.

Nonetheless, Murdoch's acquisition -- which was approved last week by a 27-2 vote of the major-league owners -- is an important moment in that it represents the consolidation of the foothold that corporate ownership has made in professional sports. For most of major-league sports' history, owners were wealthy individuals, like George Steinbrenner, or family dynasties, like that of the Buschs in St. Louis. Over the past decade, though, a variety of factors -- including the skyrocketing price of franchises, the growing fusion of sports and entertainment, and more sophisticated sports marketing -- has combined to make sports teams increasingly attractive to large corporations, particularly media corporations. As a result, there are 52 public companies that have at least minority ownership of a professional sports (NBA, NHL, MLB) franchise, while only the National Football League currently bars corporate ownership of any kind.

In a sense, a franchise like the Dodgers, with its storied history, its carefully defined identity, and its loyal fan base (even if these are fans who leave games in the seventh inning), is the closest thing to a ready-made brand as a company can imagine buying. And unlike clothes or athletic equipment, baseball teams don't really go out of style, nor do they -- like TV shows -- run their course and then go off the air. Although baseball has struggled in recent years to reclaim its fans after the labor turmoil of recent years, and although basketball is clearly the sport of the moment, brand name sports teams in general, and the Dodgers in particular, are remarkably durable.

On the other hand, sports teams are also not exactly profit machines. Last year, for instance, the Dodgers made close to $15 million while grossing around $78 million, which is a respectable margin, but hardly earth-shattering in the context of either the $311 million purchase price -- 20 times earnings -- or News Corp.'s $11.2 billion in revenue. But that, of course, is where the concept of synergy comes in.

What Murdoch hopes to do is use the Dodgers to strengthen his broadcast ventures, to lend them instant credibility and, in doing so, to make the Dodgers themselves a more prominent and popular team. The idea, in other words, is to create a virtuous circle in which television and sports feed off each other's strength. Internationally, the Dodgers will help satisfy the demand for baseball in Asia, where News Corp. has satellite networks, and in Latin America, where it owns a cable network. Domestically, the Dodgers will likely be a centerpiece of Fox Sports Net, which is a potentially brilliant venture involving the stringing together of 25 different regional sports networks that together own the broadcast rights to 65 different sports teams.

Fox SportsNet will now be able to offer viewers their local teams' games and Dodger games when there's nothing else on, or even a combination of the two. ESPN, which is now among the most profitable of all cable networks, labored for many years without anything resembling that fusion of local and national appeal. It's also likely that the Dodgers will end up on FX, which News Corp. owns. Though Fox is also the network for major league baseball, concerns about Los Angeles games dominating the Fox schedule are almost certainly misplaced, since it's hardly in Fox's interest to wreck a long-term relationship with the sport in the short-term interest of one of News Corp.'s smaller properties.

News Corp. still labors under a fair amount of debt and its revenue growth in the last two years has been less than staggering. At the same time, though, it is one of the few media companies to produce not merely positive cash flow but also real earnings. And while Murdoch seems unable to escape the busybody streak that produces gaffes like his recent quashing of the memoir by former Hong Kong Governor Chris Patten, his broadcast maneuverings over the last year have been more focused and strategic. The Dodgers acquisition is not a silver bullet, of course, and if there are real synergistic benefits from the pairing of News Corp. and the Dodgers we won't see them for a couple of years. But right now this looks like a very smart move on News Corp.'s part, and at a P/E of just 22, which is low when you consider the premium valuation of media companies in general, News Corp. merits a much closer look than it did even six or eight months ago.

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