In yesterday’s New York Times, David Carr writes about Hollywood’s ability to return value to their shareholders. Actually, he writes about Hollywood’s inability to return value to their shareholders. He notes that, according to Jonathon A. Knee (investment banker, media professor and author with a book coming out, The Curse of the Mogul: What’s Wrong With the World’s Leading Media Companies), since the year 2000 large media companies have written down $200 billion, yep billion, in value. Sheeesh!

How did this happen? Surely, the movies weren’t that bad. No, they weren’t. It happened in large part in response to the ballyhoo surrounding the digital world. This noise caused executives to lose their focus. In many cases, the industry became afraid of an uncertain future; fearing being left behind they began acquiring digitally perceptive companies as insurance against missing a digital revolution. In the process, many executives simply lost sight of tried and true business practices. 

Here are a few things that need fixing so this doesn’t continue.

First, let’s agree that increasing shareholder value is the goal of corporate management and that corporate acquisitions often are incompatible with that target. I’m not even talking about Gerry Levin’s world-class blunder. I’m more thinking about employing proper business planning, discounted cash flow analysis, and consideration of the cost of integrating one culture into another. This stuff is heavy lifting and, God knows, it’s not very sexy. But, the shareholders will love you for it.

While we are discussing shareholder wealth, how about letting more of the free cash flow accrue to the benefit of the shareholders rather than a select few executives. See indignation about Wall Street riches for further upset. 

Second, “Content is King.” Catchy sound bite, but I don’t know what it means. For me, content becomes king when it is enjoyed and paid for by the consumer. Defensively acquiring content without knowing how to exploit it is a lazy, sloppy way to run a business. Thus far, the strength of ancillary businesses – pay television, video cassettes, video discs, and foreign markets – has masked a variety of undisciplined business practices in Hollywood. Monetizing content on the Internet is the next anticipated redemption. Pray real hard.

Finally, how about those expenses? Even Conde Nast is cutting back.

Robert M. Kreek is President of Kappa Associates, International, where he leads new ventures, growth initiatives, and reinventions of companies poised for growth.