THIRD QUARTER REPORT
GABELLI
GLOBAL [LOGO]
MULTIMEDIA
TRUST INC.
SEPTEMBER 30, 1996
<PAGE>
GABELLI
GLOBAL [LOGO]
MULTIMEDIA
TRUST INC.
Our cover icon represents the underpinnings of Gabelli. The Teton mountains in
Wyoming represent what we believe in in America -- that creativity, ingenuity,
hard work and a global uniqueness provide enduring values. They also stand out
in an increasingly complex, interconnected and inter-dependent economic world.
INVESTMENT OBJECTIVE:
The Gabelli Global Multimedia Trust Inc. is a closed-end, non-diversified
management investment company whose primary objective is long-term growth of
capital, with income as a secondary objective.
THIS REPORT IS PRINTED ON RECYCLED PAPER.
<PAGE>
DIRECTORS AND OFFICERS
THE GABELLI GLOBAL MULTIMEDIA TRUST INC.
ONE CORPORATE CENTER, RYE, NY 10580-1434
DIRECTORS
Mario J. Gabelli, CFA
CHAIRMAN
Dr. Thomas E. Bratter
PRESIDENT, JOHN DEWEY ACADEMY
Bill Callaghan
PRESIDENT, BILL CALLAGHAN ASSOCIATES
Felix J. Christiana
FORMER SENIOR VICE PRESIDENT
DOLLAR DRY DOCK SAVINGS BANK
James P. Conn
MANAGING DIRECTOR/CHIEF INVESTMENT OFFICER
FINANCIAL SECURITY ASSURANCE HOLDINGS LTD.
Karl Otto Pohl
FORMER PRESIDENT, DEUTSCHE BUNDESBANK
Anthony R. Pustorino
CERTIFIED PUBLIC ACCOUNTANT
PROFESSOR, PACE UNIVERSITY
Salvatore J. Zizza
CHAIRMAN & CHIEF EXECUTIVE OFFICER
THE LEHIGH GROUP, INC.
OFFICERS
Mario J. Gabelli, CFA
PRESIDENT & CHIEF INVESTMENT OFFICER
Bruce N. Alpert
VICE PRESIDENT & TREASURER
Douglas Neviera
ASSISTANT VICE PRESIDENT
James E. McKee
SECRETARY
INVESTMENT ADVISOR
Gabelli Funds, Inc.
One Corporate Center
Rye, New York 10580-1434
CUSTODIAN, TRANSFER AGENT AND REGISTRAR
State Street Bank and Trust Company
COUNSEL
Willkie Farr & Gallagher
STOCK EXCHANGE LISTING
NYSE-Symbol: GGT
Shares Outstanding 11,356,548
The Net Asset Value appears in the Publicly Traded Funds column, under the
heading "General Equity Funds," in Saturday's The New York Times and
"Specialized Equity Funds" in Monday's The Wall Street Journal. It is also
listed in Barron's Mutual Funds/Closed End Funds section under the heading
"Specialized Equity Funds".
The Net Asset Value may be obtained each day by calling (914) 921-5071.
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For general information about the Gabelli Funds, call 1-800-GABELLI
(1-800-422-3554), fax us at 914-921-5118, visit Gabelli Funds' Internet homepage
at: http://www.gabelli.com or e-mail us at: [email protected]
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Notice is hereby given in accordance with Section 23(c) of the Investment
Company Act of 1940, as amended, that the Multimedia Trust may from time to time
purchase shares of its capital stock in the open market when the Multimedia
Trust shares are trading at a discount of 10% or more from the net asset value
of the shares.
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<PAGE>
TO OUR SHAREHOLDERS,
In the third quarter of 1996, stronger than expected ------------------
economic growth reawakened long dormant inflationary fears
and a slumping bond market sounded a cautionary note for
stocks. Still, buoyed by favorable flow of funds -- [PHOTO]
investment in equity mutual funds remained near record
levels -- the Dow Jones Industrial Average and Standard &
Poor's 500 forged ahead. Small cap indices started to feel
the heat, however, with the Russell 2000 retreating 4.1% in ------------------
June.
For the twelve months ended September 30, 1996, the
Gabelli Global Multimedia Trust Inc.'s ("Multimedia Trust")
net asset value per share increased 11.0% to $8.49 on
September 30, 1996. This compares to the average 12.1%
increase of the 30 open-end Global Funds tracked by Lipper
Analytical Services. Year-to-date, the net asset value [LOGO]
increased 8.7% versus the 10.8% return of the average Global
Fund according to Lipper. For the third quarter ended
September 30, 1996, the Fund decreased 1.2%. Since its
inception on November 15, 1994, the Multimedia Trust's net
asset value has achieved a 25.0% total return after
adjusting for the rights offering and all distributions.
This equates to a 12.6% average annual return.
The Multimedia Trust's common shares ended the third quarter at $6.875
per share on the New York Stock Exchange, down 1.8% for the quarter from its
close of $7.00 on June 30, 1996. The common shares were down 5.0% since
inception after adjusting for all distributions and the rights offering.
COMMENTARY
THE ECONOMY AND THE STOCK MARKET
Robust second quarter GDP growth of 4.8%, higher energy and agricultural
commodities prices, and strong employment numbers rekindled inflationary fears
sparking a 7% market correction in July. In September, more encouraging economic
data, most notably modest increases in the Producer and Consumer Price Indices,
eased inflationary concerns. Fueled by strong cash flow into equity mutual
funds, the DJIA and S&P 500 moved back into record territory.
For the present, inflation appears to be in check. However, we don't
think it's been checkmated quite yet. The world-wide demand for agricultural and
selected industrial commodities is growing. Oil remains a wild card. Eventually,
higher prices will be passed along to the consumer. With outsourcing,
downsizing, globalization of labor, technology oriented productivity gains
decelerating, and unemployment at historically low levels, we still anticipate
upward pressure on wages. On the surface, the United Auto Workers recent labor
contract with Ford (F - $31.25 - NYSE) looks good. With just a 3% annual wage
hike over three years, Ford appears to have avoided inflationary wage increases.
However, by agreeing to limit outsourcing and, in effect, guaranteeing UAW
workers lifetime tenure, future productivity may be diminished. We have seen the
long-term implications of such labor rigidity in Europe. We fear Ford may have
just won a psychological victory. More importantly, if President Clinton wins in
a landslide, market observers will ask: What payback will he give to his
supporters? What will this mean for labor costs, productivity gains, inflation,
corporate earnings and the market?
<PAGE>
Based largely on better than expected news on the inflation front, our
short-term posture toward the broad market has changed slightly from cautious to
cautiously optimistic. Corporate earnings should finish the year up around 10%.
Valuations are above the historic norm, but not yet at troublesome levels. If
inflation remains subdued (we're still not convinced it isn't peeking around the
corner), long interest rates stabilize at current levels, and mutual fund cash
inflows remain strong, 1996 equities returns may well exceed our expectations
after the Presidential Election.
Whatever the market has in store for us over the next several quarters,
there are attractive long-term opportunities in a variety of industries. World
class industrial companies will get a boost from recovering economies in Europe
and the Pacific Rim. Aerospace component suppliers will continue to benefit from
the strong world-wide demand for new aircraft. Selected telecommunications
stocks will prosper as the sweeping deregulation of the industry is implemented
in the U.S. and emerging nations invest heavily in building modern systems.
Entertainment software stocks should also do well as distribution networks here
and abroad continue to expand. AND DEALS WILL BE DONE. The record levels of
mergers and acquisitions experienced in 1995-1996 may well be exceeded. The
benefits of strategic combinations in a broad spectrum of industries will keep
investment bankers busy and value investors happy in the year ahead.
THE PORTFOLIO OVERVIEW
GLOBAL ALLOCATION
The chart at the right represents the Multimedia Trust's holdings by
geographic region as of September 30, 1996. The geographic allocation will
change based on current global market conditions. Countries and/or regions and
companies represented in the chart and below may or may not be included in the
Multimedia Trust's portfolio in the future.
EQUITY MIX
The Multimedia Trust's investment premise falls within the context of two
main investment universes: 1) companies involved in creativity, as it relates to
the development of intellectual property rights (copyrights); and 2) companies
involved in distribution, as it relates to the delivery of these copyrights.
Additionally, this includes the broad scope of communications-related services
such as basic voice and data.
HOLDINGS BY GEOGRAPHIC REGION - 9/30/96
[The following tables represent two pie charts in the printed piece.]
United States 68.7%
Europe 10.0%
South America 7.7%
Canada 7.0%
Asia/Pacific Rim 6.6%
Copyright/Creativity 59.9%
Distribution 40.1%
The chart above depicts our equity mix of the copyright/creativity and
distribution companies in our portfolio as of September 30, 1996.
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WE THOUGHT WE WOULD SHARE WITH YOU ONE OF OUR RECENT
RESEARCH REPORTS
REGARDING A.H. BELO CORPORATION AND ITS PENDING ACQUISITION OF THE
PROVIDENCE
JOURNAL COMPANY. BOTH ARE HOLDINGS IN THE MULTIMEDIA TRUST'S
PORTFOLIO.
A. H. BELO (BLC - 34 5/8 - NYSE) PROVIDENCE JOURNAL ACQUISITION
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YEAR PMV A EBITDA A MULTIPLE
---- ----- -------- --------
1998P $68 $432.6 8.0x Dividend: $0.44
Current Return: 1.27%
1997P 61 373.4 9.3 Shares O/S: 71 million b
1996E 51 308.0 11.3 52-Week Range: $41 3/4 - 31
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a) PMV = Private Market Value per share. Numbers are pro forma for the pending
acquisition of The Providence Journal Company. EBITDA in millions.
b) Shares are fully diluted and pro forma for the pending acquisition of The
Providence Journal Company.
SUMMARY
On September 26th, A. H. Belo announced it will acquire The Providence Journal
Company for $12.33 in cash and 0.5333 shares of Belo Series A common stock for
each Providence Journal share. Properties to be acquired include nine owned and
operated TV stations, four TV stations operated under local marketing agreements
(LMAs), The Providence Journal-Bulletin, and several cable network and new media
investments. Concurrently, Belo has announced an increase in its stock
repurchase authorization to 13.6 million shares, a sign that it believes its
shares are underpriced. The stock is trading at a 33% discount to its 1996E PMV
of $51 and a 43% discount to its 1997P PMV of $61 per share.
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A. H. BELO CORPORATION
CALCULATION OF PURCHASE PRICE MULTIPLES
(IN MILLIONS, EXCEPT PER SHARE DATA)
Shares Outstanding, PRJ 47.0
Options 2.0
Fully Diluted Shares 49.0
Price Paid Per PRJ Share $ 32.33 c
Purchase of PRJ Equity $1,585.4
Plus: Debt (projected year-end 1996) 178.0
Less: Cash/Options Cash 25.5
Less: New Media Investments 125.0
Net Purchase Price $1,612.9
Purchase Price as a Multiple of:
1996 Media Cash Flow $108.7 14.8x
1997 Media Cash Flow 117.4 13.7
c) Uses BLC closing price of $37 1/2 on 9/26/96, prior to the announcement.
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THE ACQUISITION
* STRATEGIC FOLLOW-THROUGH. Belo is following through on its corporate strategy:
to expand in broadcasting, a business which the company believes offers greater
long-term growth prospects than newspaper publishing. Belo's EBITDA, which is
more or less evenly split between broadcasting and publishing, will become more
heavily weighted in broadcasting.
* SHARE REPURCHASE PROGRAM. The company has substantially increased its share
repurchase authorization, from 3.6 to 13.6 million shares, which is nearly 20%
of pro forma shares outstanding. We think this is an exceedingly positive aspect
of Belo's announcement, demonstrating the company's belief in the value of its
underlying assets. Belo can buy shares up until mailing of the proxies, expected
in early December.
* PURCHASE PRICE CALCULATIONS. As presented in Table 1, we estimate Belo paid
14.8x 1996E and 13.7x 1997P media cash flow (broadcast and publishing cash flow
before corporate overhead). Publishing cash flow is pro forma for a full year of
anticipated cost savings from a recently implemented restructuring at The
Providence Journal-Bulletin. We conservatively estimate that the new media
investments have a value of around $125 million. This transaction provides
3
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further evidence of continuing strength in TV station private market multiples.
Moreover, the FCC is reconsidering its one-to-a-market rule, and if the
commission decides to allow TV duopoly, we would expect multiples to be lifted
even higher.
* EARNINGS DILUTION. The acquisition should dilute 1997 EPS around 50% to $1.22,
given increased goodwill amortization of around $30 million per year and
start-up losses at the cable networks. This dilution may be partially
responsible for Belo's 9% stock price decline the day after announcement of the
acquisition. However, we believe Belo's shares are priced attractively and
should be valued using EBITDA, not EPS.
* MODERATE LEVERAGE. Pro forma, Belo's net debt is expected to be about 30% of
total market capitalization and less than four times EBITDA, with interest
coverage around four times. Although leverage may initially increase as the
company repurchases shares, the balance sheet is still moderately leveraged
compared to other broadcasting companies.
* TIMING. Belo expects to file for FCC approval within 4 weeks, mail proxies in
early December and hold shareholder meetings in mid-to-late January. Closing is
estimated anywhere from four to six months out.
TELEVISION BROADCASTING
* BIGGER IS BETTER. The PRJ acquisition boosts Belo's audience reach from 8% to
12.3% of U.S. households. This gives the combined companies greater leverage in
programming purchases, better negotiating power for national spot advertising
rates, and bargaining power for lower national rep firm fees.
* INCREASED AFFILIATION/GEOGRAPHIC DIVERSITY. In Figure 1 we present Belo's
pro
forma TV station and newspaper portfolio, illustrating its decreased dependence
on the Texas economy through the addition of nine new markets. Belo is adding
five NBC and two FOX affiliates to its stable of ABC and CBS stations. Although
Belo is expected to dispose of its only current UPN affiliate, KIRO-TV Seattle,
two of PRJ's LMA stations are UPN affiliates. The newfound affiliation diversity
should help cushion Belo's results from the effects of a downturn in any one
network's ratings and allow some benefit from the current strength of the NBC
network.
[Figure 1]
d) Belo also owns KIRO-TV Seatle (UPN) which it is expected to divest since its
purchasing KING-TV in the same market.
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* GOOD UPSIDE IN PRJ BROADCASTING PROPERTIES. The PRJ stations are poised for
significant growth. In 1995, PRJ's BCF margins were only 36%, primarily due to
the lack of cash flow contribution from its Charlotte and Honolulu stations. We
estimate that, if performing at an efficient level, these two stations would
have produced over $13 million in 1995 BCF. The Honolulu station picked up the
NBC affiliation in January 1996 and is already enjoying improved results. The
Charlotte station, also NBC, is #3 in its market and thus has ratings upside.
This year Honolulu and Charlotte are operating at an estimated 20% margin.
* CASH FLOW BOOST FROM SALE/SWAP OF KIRO. Belo plans to divest KIRO-TV
Seattle
since it is acquiring #1-rated KING-TV and the KONG-TV LMA in this market. Belo
reckons that it can swap KIRO for a station or stations in other markets which
could produce an additional $10 million BCF. We have included this expected
increase in our pro forma view of the company, but not in our calculations of
purchase price multiples paid for PRJ. Possible swap partners abound: for
example, Belo could swap KIRO to CBS, a unit of Westinghouse Electric
Corporation, which is less than pleased with the performance of the
Gaylord-owned CBS affiliate in Seattle.
NEWSPAPER PUBLISHING
* THE PROVIDENCE JOURNAL-BULLETIN. Belo owns The Dallas Morning News, the
eighth
largest and fastest growing newspaper in the U. S., and several smaller
community newspapers. The company is acquiring The Providence Journal-Bulletin,
which has a strong brand name and dominant position in Southeast New England.
*COST SAVINGS FROM RESTRUCTURING. Earlier this year, PRJ consolidated the
morning and afternoon papers and streamlined operations to save a projected $6
million in 1996 and more than $10 million annually thereafter.
* FALLING NEWSPRINT PRICES. The combined company should consume around 235
thousand tons of newsprint this year at an average cost of around $615 per ton.
Newsprint prices have dropped sharply, and we are assuming an average price per
ton of around $540 for 1997, for a savings of around $18 million.
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<TABLE>
<CAPTION>
A. H. BELO CORPORATION
PRIVATE MARKET VALUE MODEL (e)
1996PF 1997PF 1998PF 1999PF 2000PF
2001PF
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<S> <C> <C> <C> <C> <C> <C>
BROADCASTING BCF $205.1 $226.6 $243.2 $260.7
$279.1 $298.4
Valuation Multiple 13.0 13.0 12.5 12.0 11.5
11.0
Value, Broadcasting $2,665.9 $2,945.2 $3,040.2 $3,128.5
$3,209.4 $3,282.0
NEWSPAPERS EBITDA $164.0 $187.6 $205.8 $216.1
$226.9 $238.2
Valuation Multiple 12.0 12.0 12.0 12.0 12.0
12.0
Value, Newspapers $1,967.6 $2,251.8 $2,469.2 $2,592.7
$2,722.3 $2,858.4
NEW MEDIA Value, New Media 125.0 137.5 151.3 166.4
183.0 201.3
CORPORATE Overhead ($20.1) ($20.7) ($21.3) ($21.9)
($22.6) ($23.3)
Valuation Multiple 5.0 5.0 5.0 5.0 5.0 5.0
Corporate Effect ($100.3) ($103.3) ($106.4) ($109.6) ($112.9)
($116.3)
Total Private Market Value $4,658.2 $5,231.2 $5,554.2 $5,777.9
$6,001.8 $6,225.5
- - Net Debt (Cash/Options Cash) 1,017.4 891.0 713.9 507.9
288.6 31.9
Private Market Value of Equity $3,640.8 $4,340.2 $4,840.4 $5,270.1
$5,713.2 $6,193.6
Fully Diluted Shares Outstanding 71.0 71.0 71.0 71.0 71.0
71.0
PMV/SHARE $51 $61 $68 $74 $80
$87
e) Numbers are pro forma for the pending acquisition of the Providence Journal
Company. Source: Gabelli & Company, Inc. estimates.
</TABLE>
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5
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NEW MEDIA INVESTMENTS
* TV FOOD NETWORK. PRJ owns 46% of TVFN, a 24-hour cable network providing food
programming. Results are consolidated since it has board control. The network
has 17 million subscribers, growing to 21 million by year-end 1996. Break even
is estimated at 25 million subscribers, expected by the end of 1997. The company
bought 21% of TVFN in May of 1995 for $24.1 million, indicating a value for
their entire stake at around $53 million.
* AMERICA'S HEALTH NETWORK. PRJ owns 65% of AHN, a 24-hour health information
cable network including programs such as Ask the Doctor and Health Mall. Due to
a home shopping revenue component, this network is expected to break even at 15
million subscribers, which should be by the end of 1997. The company bought 35%
of the network in May of 1995 for $28 million, which values their current stake
at $52 million.
* OTHER INVESTMENTS. PRJ also owns the Northwest Cable News Network; 14.5% of
Peapod, an on-line grocery shopping service; and 1 million shares of Starsight
Telecast.
SUMMARY
The Providence Journal Company represents a good strategic fit for A. H. Belo.
The combined company should benefit from broadcasting bulk and from continuing
growth in its publishing segment. A. H. Belo has also announced a significant
stock repurchase authorization, signaling its belief in the value of its
underlying assets. The stock is trading at greater than a 40% discount to its
12-month PMV of $59.
References: Company Reports: A. H. Belo Corporation, "Buy," - 9/25/95; A. H.
Belo Corporation, "Hidden Value-Newspapers & TV," - 8/15/95.
Other companies mentioned in this report: Gaylord Entertainment (GET - 23 -
NYSE), Providence Journal (PRJ - 29 3/8 - NYSE), Starsight Telecast (SGHT - 8
11/16 - OTC), United Television Inc. (UTVI - 97 - OTC), Viacom Inc. (VIA - 36
5/8 - AMEX), and Westinghouse Electric Corporation (WX - 18 1/2 - NYSE).
NOTE: Gabelli Funds, Inc. and its affiliates own on behalf of themselves or
their clients less than 5% of A.H. Belo and The Providence Journal Company.
6
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LET'S TALK STOCKS
The following are stock specifics on selected holdings of the Multimedia
Trust's investments. Favorable EBITDA (Earnings Before Interest, Taxes,
Depreciation and Amortization) prospects do not necessarily translate into
higher stock prices, but they do express a positive trend which we believe will
develop over time.
GRUPO TELEVISA S.A. (TV - $28.875 - NYSE) is a Mexican-based entertainment
company that dominates the Spanish speaking world through its fully integrated
mix of content and distribution. The stock has suffered in line with the Mexican
market and economy. Nevertheless, it remains an excellent vehicle for accessing
the growth in disposable income among the Spanish speaking population on a
global basis. Its business mix includes film, music, cable television, and
broadcasting. Grupo Televisa also has valuable holdings in PamAmSat Corporation
(SPOT - $27.8125 - NASDAQ) and Univision Communications Inc. (UVN - $33.50 -
NYSE).
HOME SHOPPING NETWORK, INC. (HSN - $10.375 - NYSE) is a direct marketer
utilizing television, catalogs, and mail order. There are expectations that the
Home Shopping Channel will become an integral part of the "Interactive
Superhighway". The company should be a beneficiary of increased activity in
electronic retailing. Under the direction of Barry Diller, Chairman, Home
Shopping Network has agreed to merge with Silver King Communications, Inc, in a
stock swap valued at $1.3 billion.
PACIFIC TELECOM, INC. is a Vancouver, WA-based telecommunications company, whose
primary business is delivering local exchange services to rural and suburban
markets across the western and mid-western states. Pacific Telecom also has
cellular telephone interests in 29 rural and metropolitan markets representing
about two million POPS. Effective September 27, 1995, Pacific Telecom's majority
shareholder, PacifiCorp., acquired the remaining shares it did not previously
own at a price of $30.00. We believe the intrinsic value of Pacific Telecom to
be in excess of $50.00 and are seeking dissenters rights to capture this value
for our shareholders. We placed PacifiCorp in our Hall of Shame for the way it
froze out minority shareholders.
RENAISSANCE COMMUNICATIONS CORPORATION (RRR - $35.25 - NYSE) owns and
operates a
diversified group of six television stations in Dallas/Ft. Worth, Miami/Ft.
Lauderdale, Sacramento, Hartford/ New Haven, Indianapolis and Harrisburg. Four
are affiliates of the Fox Network and the other two are affiliates of the WB
Network. The company has agreed to merge with a subsidiary of the Tribune
Company by receiving $36.00 per share in cash.
SEAGRAM COMPANY LTD. (VO - $37.375 - NYSE), with its June 1995 purchase of an
80% interest in MCA from Matsushita Electric Industrial Co. for $5.7 billion,
now operates two global businesses: beverages and entertainment/communications.
Seagram produces and markets distilled spirits, wines, fruit juices and mixers.
Major beverage brands include Chivas Regal, Absolut, Martell, Mumm, Crown Royal,
Seagram's Gin and Tropicana and Dole fruit juices. MCA's film and entertainment
activities feature Universal Studios. MCA also has music, recreation services
and book publishing operations. Seagram has changed to a June fiscal year-end.
TELE-COMMUNICATIONS, INC./LIBERTY MEDIA GROUP (LBTYA - $28.625 -
NASDAQ) owns a
collection of interests in some of the most powerful programming entities in the
world. Liberty Media is the second largest investor in Time Warner, the world's
largest media company. Liberty Media, News Corporation Ltd. (NWS - $20.875 -
NYSE), and Tele-Communications International, Inc. (TINTA - $15.125 - NASDAQ)
have created a global sports joint-venture, called Fox Sports, that will offer
an integrated package of sports programming across network broadcast, national
cable, and regional cable channels. Liberty's 49% owned Discovery Communications
is a major advertiser-supported basic cable network that includes the flagship
Discovery Channel, The Learning Channel, and developing businesses such as
Discovery Europe and Animal Planet. We consider Liberty Media to be ideally
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positioned to benefit from expanding distribution channels, including direct
broadcast satellite ventures like Direc TV and the Internet.
TELEFONICA DE ESPANA (TEF - $55.625 - NYSE) is a diversified telecommunications
service provider offering services to more than 15 million lines. The company
also services a fast growing cellular subscriber base which now exceeds 2.0
million subscribers. We consider TEF an ideal way to invest in Latin America,
with a diversified portfolio of telecommunications operators in the region. Its
portfolio of publicly traded Latin American companies includes: Compania de
Telefonos de Chile, Telefonica de Argentina S.A. and Compania Peruana de
Telefonos. TEF also holds interests in non-public Latin American telecom
operators in Mexico, Colombia, Puerto Rico, Uruguay and Venezuela. The company's
long-term strategy is to create a Pan-American network, leveraging the
Spanish-speaking world.
TIME WARNER INC. (TWX - $38.625 - NYSE), having completed its acquisition of
Turner Broadcasting, is the world's largest diversified media and publishing
company. The combined companies will have more than $21 billion in revenues and
control a host of powerful media brands, such as CNN, Warner Brothers film, HBO,
and Time magazine. Under the leadership of chairman Gerald Levin and
vice-chairman Ted Turner, Time Warner is now focused on reducing debt and
simplifying its capital structure. Achievement of both goals would be greatly
aided by a successful restructuring of the Time Warner Entertainment partnership
with U.S. West Media Group. Further, Time Warner's upcoming holiday film, SPACE
JAM, starring Michael Jordan and Bugs Bunny, has the potential to be a
blockbuster hit.
VIACOM INC. (VIA - $35.25 - ASE; VIA'B - $35.50 - ASE), long a major provider of
entertainment "content", has evolved into one of the world's dominant media
companies. Following its acquisitions of Paramount Communications and
Blockbuster Entertainment, the company is now divesting non-core assets to
reduce debt and is focusing on the global expansion of its media franchises. The
company has divested its cable systems subsidiary in a transaction with
Tele-Communications Inc. which has reduced Viacom's debt by $1.7 billion and the
number of common shares outstanding by about 4%. Viacom is well-positioned in
music (notably MTV) and cable networks such as Nickelodeon, USA (50% interest)
and the Sci-Fi Channel.
MULTIMEDIA TRUST SHARE BUYBACK
At a special meeting of the Board of Directors on July 3, 1996, the
Board authorized the repurchase of up to 500,000 shares of the Multimedia
Trust's outstanding shares. The Multimedia Trust may from time to time purchase
shares of its capital stock in the open market when the shares are trading at a
discount of 10% or more from the net asset value of the shares. Through
September 30, 1996, 170,000 shares were repurchased in the open market.
INTERNET
You can now visit us on the Internet. Our home page at
http://www.gabelli.com contains information about Gabelli Funds, Inc., the
Gabelli Mutual Funds, quarterly reports, closing prices, IRAs, 401(k)s and other
current news. You can also send us e-mail at [email protected].
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IN CONCLUSION
As always, we are focusing on the individual stocks in the Multimedia
Trust's portfolio. By concentrating on niche industry groups and individual
companies that can do well independent of prevailing economic and broad market
trends, we believe we are well-positioned to prosper, even in a less generous
market environment. Our investment philosophy is simple and straightforward:
buying good businesses cheap will generate consistently superior returns.
In closing, we thank you for your confidence in our investing abilities
and will strive to achieve our shared investment objective of strong
risk-adjusted returns.
Sincerely,
/s/ Mario J. Gabelli
--------------------------------------
MARIO J. GABELLI, CFA
President and Chief Investment Officer
November 1, 1996
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TOP TEN HOLDINGS
SEPTEMBER 30, 1996
------------------
Home Shopping Network, Inc.
TCI/Liberty Media Group
Telecomunicacoes Brasileiras SA (Telebras)
Telefonica de Espana
Viacom Inc.
Grupo Televisa S.A.
Seagram Company Ltd.
Time Warner Inc.
Pacific Telecom, Inc.
Renaissance Communications
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NOTE: The views expressed in this report reflect those of the portfolio manager
only through the end of the period of this report as stated on the cover. The
manager's views are subject to change at any time based on market and other
conditions.
9
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THE GABELLI GLOBAL MULTIMEDIA TRUST INC.
PORTFOLIO OF INVESTMENTS -- SEPTEMBER 30, 1996 (UNAUDITED)
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MARKET
SHARES VALUE
------ -----
COMMON STOCKS -- 88.1%
COPYRIGHT/CREATIVITY COMPANIES -- 52.7%
ADVERTISING -- 0.0%
200 Havas Advertising, S.A...................... $ 21,077
200 Publicis SA................................. 17,241
-----------
38,318
-----------
BROADCASTING -- 13.0%
35,000 Ackerley Communications, Inc................ 1,168,125
7,000 BHC Communications, Inc., Class A........... 684,250
3,000 British Sky Broadcasting Group,
Sponsored ADR.............................. 165,000
19,875 Can West Global Communications Corp......... 194,045
2,000 Carlton Communications plc,
Sponsored ADR.............................. 76,750
1,040 CEP Communications.......................... 76,600
16,758 Chris-Craft Industries, Inc................. 699,647
1,000 Clear Channel Communications, Inc.+......... 88,500
15,000 Cox Radio Inc., Class A..................... 328,125
500 Emmis Broadcasting Corporation,
Class A.................................... 23,125
200 Europe 1 Communication...................... 40,914
750 Evergreen Media Corporation, Class A+....... 23,437
500 EZ Communications, Inc., Class A+........... 22,000
5,000 General Electric Company.................... 455,000
5,000 Granite Broadcasting Corporation+........... 71,250
40,000 Gray Communications Systems, Inc.,
Class B.................................... 725,000
5,000 Grupo Radio Centro, S.A. de CV.............. 41,250
500 Heftel Broadcasting Corporation,
Class A+................................... 21,812
4,000 Heritage Media Corporation, Class A+........ 75,500
750 Infinity Broadcasting Corporation,
Class A+................................... 23,625
500 Jacor Communications, Inc.+................. 17,250
700 LaGardere Groupe............................ 17,290
25,000 LIN Television Corporation+................. 1,025,000
400 Metropole TV M6 S.A.+....................... 36,381
4,000 Multi-Market Radio, Inc., Class A+.......... 51,000
30,000 New World Communications Group
Incorporated, Class A...................... 693,750
1,100 Nippon Television Broadcasting.............. 340,588
7,500 NTN Communications Inc.+.................... 35,156
5,000 Osborn Communications Corporation+.......... 74,375
15,000 Paxson Communications Corporation,
Class A+................................... 168,750
50,000 Renaissance Communications Corporation...... 1,762,500
781 SAGA Communications, Inc., Class A+......... 17,475
2,000 Scandinavian Broadcasting System S.A.+...... 45,000
1,000 SFX Broadcasting, Inc., Class A+............ 45,500
1,000 Silver King Communications, Inc.+........... 23,500
12,500 Sistem Televisyen Malaysia Berhad........... 25,933
12,500 Sistem Televisyen Malaysia Berhad,
Class A+ .................................. 22,841
50,000 Television Broadcasting Ltd. ORD............ 185,892
2,000 Television Francaise 1...................... 222,007
40,000 Tokyo Broadcasting System................... 649,764
99,000 United International Holdings, Inc.,
Class A+................................... 1,348,875
40,000 Westinghouse Electric Corp.................. 745,000
-----------
12,557,782
-----------
CABLE -- 6.8%
1,000 Audiofina................................... 44,323
3,000 BET Holdings, Inc., Class A+................ 86,250
25,000 Flextech plc+............................... 211,079
23,100 Gaylord Entertainment Company, Class A...... 522,638
80,000 Home Shopping Network, Inc.+................ 830,000
3,000 International CableTel Incorporated+........ 76,875
60,000 International Family Entertainment, Inc.,
Class B+................................... 982,500
75,000 Tele-Communications, Inc./Liberty Media
Group, Class A+............................ 2,146,875
45,000 Tele-Communications International, Inc.,
Class A+................................... 680,625
10,000 United Television, Inc...................... 962,500
-----------
6,543,665
-----------
ENTERTAINMENT PRODUCTION -- 2.9%
5,000 All American Communications Inc.+........... 56,250
20,000 All American Communications Inc.,
Class B+................................... 170,000
10,000 Ascent Entertainment Group Inc.+ ........... 237,500
15,000 CANAL+, Sponsored ADR....................... 737,657
4,000 Cinar Films Inc., Class B+.................. 104,250
14,000 Cinergi Pictures Entertainment Inc.+........ 28,000
2,000 DMX Inc.+................................... 3,625
13,000 EMI Group plc............................... 268,710
2,360 Fisher Companies Inc........................ 236,000
7,000 Grammy Entertainment plc.................... 83,715
3,500 Granada Group plc........................... 46,915
10,000 GTECH Holdings Corporation+................. 321,250
1,000 Harvey Entertainment Company+............... 8,125
10,000 Katz Media Group Inc.+...................... 88,750
1,000 Lancit Media Productions, Ltd.+............. 10,500
300 NRJ SA...................................... 35,742
877 People's Choice TV Corporation+............. 12,497
20,000 Savoy Pictures Entertainment Inc.+.......... 50,000
100,000 Shaw Brothers (Hong Kong) Ltd............... 102,806
10
<PAGE>
THE GABELLI GLOBAL MULTIMEDIA TRUST INC.
PORTFOLIO OF INVESTMENTS (CONTINUED) -- SEPTEMBER 30, 1996
(UNAUDITED)
- --------------------------------------------------------------------------------
MARKET
SHARES VALUE
------ -----
COMMON STOCKS (CONTINUED)
COPYRIGHT/CREATIVITY COMPANIES (CONTINUED)
ENTERTAINMENT PRODUCTION (CONTINUED)
20,000 Spelling Entertainment Group, Inc.+......... $ 150,000
3,250 THORN plc, ADR.............................. 73,531
1,700 Tring International Group................... 399
-----------
2,826,222
-----------
GAMING -- 1.6%
3,000 Bay Meadows Operating Company............... 59,625
2,500 Churchhill Downs Incorporated............... 96,250
16,000 Hilton Hotels Corporation................... 454,000
17,000 ITT Corporation, New+....................... 741,625
50,000 Ladbroke Group plc.......................... 163,934
2,500 Quintel Entertainment Inc.+................. 19,375
-----------
1,534,809
-----------
GLOBAL MEDIA AND ENTERTAINMENT -- 11.7%
70,000 Grupo Televisa S.A., GDR.................... 2,021,250
25,000 Havas, Sponsored ADR........................ 402,441
6,000 Metromedia International Group Inc.+........ 63,750
21,000 News Corporation Limited, ADR............... 357,000
21,000 News Corporation Limited, ADS............... 438,375
2,000 PolyGram NV................................. 111,500
52,500 Seagram Company Ltd......................... 1,962,188
1,000 Sony Corporation, ADR....................... 63,625
50,000 Time Warner Inc............................. 1,931,250
20,000 Turner Broadcasting System, Inc.,
Class A.................................... 570,000
55,000 Viacom Inc., Class A........................ 1,938,750
22,000 Walt Disney Company......................... 1,394,250
-----------
11,254,379
-----------
INFORMATION PUBLISHING -- 1.3%
2,500 Berlitz International Inc.+................. 55,937
20,000 Data Broadcasting Corporation+.............. 182,500
17,000 Dun & Bradstreet Corp....................... 1,013,625
500 Scholastic Corporation+..................... 36,250
-----------
1,288,312
-----------
PUBLISHING -- 11.7%
10,500 American Media Inc., Class A+............... 56,438
10,000 Arnoldo Mondadori Editore SpA............... 72,542
5,700 Belo (A.H.) Corporation..................... 196,650
2,500 Central Newspapers, Inc., Class A........... 95,313
4,000 Dow Jones & Company Inc. ................... 148,000
700 Filipacchi Medias........................... 141,302
30,000 Golden Books Family Entertainment, Inc.+.... 348,750
5,250 Gray Communications Systems Inc............. 106,312
2,000 Harcourt General, Inc....................... 110,500
28,000 Harte-Hanks Communications Inc.............. 780,500
7,000 Houghton Mifflin Company.................... 329,875
60,639 Independent Newspapers plc ORD.............. 316,014
11,000 Knight-Ridder, Inc.......................... 407,000
10,000 K-III Communications Corp.+................. 103,750
20,000 Lee Enterprises, Incorporated............... 457,500
12,000 Media General, Inc., Class A................ 378,000
20,000 Meredith Corporation........................ 987,500
60,000 Nation Publishing Group Company Ltd......... 204,174
100,000 New Straits Times Press Berhad.............. 526,631
100,000 Oriental Press Group ORD+................... 48,493
10,000 Playboy Enterprises, Inc., Class B+......... 123,750
80,000 Post Publishing Company Ltd................. 232,892
45,000 Providence Journal Company, Class A+........ 1,321,875
25,000 Pulitzer Publishing Company................. 1,428,125
7,500 Reader's Digest Association, Inc.,
Class B.................................... 282,188
60,000 Singapore Press Holdings, Ltd............... 1,095,170
600,000 South China Morning Post Holdings ORD....... 446,140
300 SPIR Communication.......................... 27,228
3,500 Thomas Nelson Inc........................... 38,062
4,000 Times Mirror Company, Class A............... 178,000
50,000 Times Publishing Ltd........................ 108,665
200 Wiley (John) & Sons, Inc., Class A.......... 5,750
1,000 Wolters Kluwer NV........................... 125,870
-----------
11,228,959
-----------
SOFTWARE -- 3.7%
3,000 Activision Inc.+............................ 42,375
7,000 BBN Corporation+............................ 119,875
2,000 Electronic Arts Inc.+....................... 74,750
5,000 Excaliber Technologies Corporation.......... 85,000
20,000 H&R Block Inc............................... 595,000
12,000 Intel Corporation........................... 1,145,250
11,000 Microsoft Corporation+...................... 1,450,625
200 NetCom ASA+................................. 1,954
200 Netscape Communications Corporation+........ 9,275
5,000 Novell Inc.+................................ 55,000
100 Pixar Inc.+................................. 1,625
1,500 Spectrum HoloByte, Inc.+.................... 9,750
-----------
3,590,479
-----------
TOTAL COPYRIGHT/CREATIVITY COMPANIES ..................... 50,862,925
-----------
DISTRIBUTION COMPANIES -- 35.4%
CABLE -- 3.5%
3,000 Bell Cablemedia plc, ADR+................... 50,250
32,000 Cablevision Systems Corporation,
Class A+................................... 1,392,000
11
<PAGE>
THE GABELLI GLOBAL MULTIMEDIA TRUST INC.
PORTFOLIO OF INVESTMENTS (CONTINUED) -- SEPTEMBER 30, 1996
(UNAUDITED)
- --------------------------------------------------------------------------------
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
DISTRIBUTION COMPANIES (CONTINUED)
CABLE (CONTINUED)
12,000 Comcast Corporation, Class A................ $ 184,500
1,000 Comcast Corporation, Class A Special........ 15,375
3,000 Comcast U.K. Cable Partners Limited,
Class A+................................... 30,375
4,000 General Cable Corporation plc, ADR+......... 55,500
2,000 NYNEX CableComms Group plc, ADR+............ 30,500
6,000 Rogers Communications, Inc., Class B+....... 36,000
5,000 Telewest Communications plc, Sponsored
ADR+....................................... 93,125
85,000 Tele-Communications, Inc., Class A+......... 1,269,688
5,000 Videotron Groupe............................ 38,906
9,000 Videotron Holdings plc, ADR+................ 153,000
100 Wireless One Inc.+.......................... 1,475
-----------
3,350,694
-----------
COMMERCIAL SERVICES -- 0.1%
2,500 Department 56, Inc.......................... 62,188
-----------
ENTERTAINMENT DISTRIBUTION -- 2.1%
150,000 Cineplex Odeon Corporation+................. 225,000
23,000 GC Companies, Inc.+......................... 828,000
2,500 Lodgenet Entertainment Corporation+......... 30,625
19,500 Shaw Communications Inc.,
Class B, Conv.............................. 126,684
45,000 US WEST Media Group+........................ 759,375
-----------
1,969,684
-----------
EQUIPMENT -- 0.6%
6,000 General Instrument Corporation.............. 148,500
6,000 Lucent Technologies, Inc.................... 275,250
1,000 Northern Telecom Limited.................... 57,750
800 Omnipoint Corporation+...................... 23,300
1,000 Philips Electronics N.V., New York.......... 35,875
2,000 Scientific-Atlanta, Inc..................... 31,750
-----------
572,425
-----------
INTERNATIONAL TELEPHONE -- 11.8%
83,000 BC TELECOM Inc.............................. 1,660,305
18,000 BCE Inc..................................... 769,500
5,000 BHI Corporation............................. 93,750
28,000 Cable & Wireless plc, Sponsored ADR......... 584,500
13,000 Compania de Telecomunicaciones
de Chile SA, Sponsored ADR................. 1,256,125
500 CPT Telefonica del Peru, ADR................ 11,438
220,000 CPT Telefonica del Peru, Class B+........... 496,774
50 DDI Corp.................................... 404,308
6,000 GST Telecommunications, Inc.+............... 68,250
20 Japan Telecom Co., Ltd...................... 495,400
10 Nippon Telegraph & Telephone Corp........... 73,592
1,100 PT Indonesia Satellite, ADR................. 36,300
1,000 PT Telekomunikasi Indonesia+................ 31,125
1,800 Telecom Argentina Stet-France Telecom
S.A., Sponsored ADR........................ 72,675
1,000 Telecom Corporation of New Zealand Ltd.,
ADR........................................ 75,750
275,000 Telecom Italia SpA.......................... 611,109
26,500 Telecomunicacoes Brasileiras SA (Telebras),
Sponsored ADR.............................. 2,080,250
3,000 Telefonica de Argentina S.A., Sponsored
ADR........................................ 74,625
37,000 Telefonica de Espana, Sponsored ADR......... 2,058,125
14,000 Telefonos de Mexico SA, Class L, ADR........ 449,750
-----------
11,403,651
-----------
TELECOMMUNICATIONS -- 4.3%
12,000 AT&T Corp. ................................. 627,000
2,000 Bruncor Inc................................. 40,007
1,000 Hellenic Telecommunications Organization
S.A. (OTE) ................................ 16,829
3,000 NewTel Enterprises Limited.................. 50,321
64,200 Pacific Telecom, Inc. (a)................... 1,926,000
3,000 Philippine Long Distance Telephone
Company+................................... 187,500
3,000 Quebec-Telephone............................ 48,669
25,000 Sprint Corporation.......................... 971,875
6,750 Tel-Save Holdings, Inc.+.................... 194,062
-----------
4,062,263
-----------
US REGIONAL OPERATORS -- 2.4%
4,000 Cincinnati Bell Inc......................... 212,000
38,000 C-TEC Corporation, Class B+................. 969,000
20,000 GTE Corporation............................. 770,000
1,000 Pacific Telesis Group Inc................... 33,625
800 Teleport Communications Group Inc.,
Class A+................................... 18,900
10,000 US WEST Communications Group................ 297,500
-----------
2,301,025
-----------
WIRELESS COMMUNICATIONS -- 10.6%
7,500 AirTouch Communications Inc.+............... 207,188
14,141 AirTouch Communications Inc., Class B+...... 403,019
9,082 AirTouch Communications Inc., Class C+...... 431,395
6,000 American Paging Inc.+....................... 34,500
10,000 American Portable Telecom, Inc.+............ 101,250
100 Asia Satellite Telecommunications
Holdings Ltd., Sponsored ADR+.............. 2,687
12
<PAGE>
THE GABELLI GLOBAL MULTIMEDIA TRUST INC.
PORTFOLIO OF INVESTMENTS (CONTINUED) -- SEPTEMBER 30, 1996
(UNAUDITED)
- --------------------------------------------------------------------------------
MARKET
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED)
DISTRIBUTION COMPANIES (CONTINUED)
WIRELESS COMMUNICATIONS (CONTINUED)
6,500 BCE Mobile Communications Inc.+............. $ 212,333
825 CAI Wireless Systems, Inc.+................. 5,981
7,000 Cellular Communications, Inc., Class A+..... 178,500
105,000 Centennial Cellular Corp., Class A.......... 1,430,625
25,000 Century Telephone Enterprises, Inc.......... 859,375
37,000 COMSAT Corporation, Series 1................ 837,125
7,200 EchoStar Communications Corporation,
Class A+................................... 196,200
15,000 General Motors Corporation, Class H......... 866,250
1,000 Globalstar Telecommunications+.............. 51,500
151 Heartland Wireless Communications, Inc.+.... 3,813
3,000 Loral Space & Communications Ltd............ 47,250
25,000 NEXTEL Communications, Inc., Class A+....... 462,500
7,000 Orion Network Systems, Inc.+................ 67,375
5,000 PanAmSat Corporation+....................... 139,062
2,000 Pittencrieff Communications, Inc.+.......... 10,750
1,000 Qualcomm, Inc.+............................. 42,500
25,000 Rogers Cantel Mobile Communications, Inc.,
Class B+................................... 493,750
5,000 Rural Cellular Corp., Class A+.............. 52,500
600,000 Telecom Italia Mobile SpA................... 1,331,359
25,000 Telephone and Data Systems, Inc............. 1,006,250
8,000 360(degree)Communications Company+.......... 188,000
22,000 Total Access Communications plc+............ 162,800
10,000 U.S. Cellular Corporation+.................. 302,500
5,000 U.S. Satellite Broadcasting Co., Inc.+...... 116,250
1,000 WinStar Communications Inc.+................ 16,625
-----------
10,261,212
-----------
TOTAL DISTRIBUTION COMPANIES ............................. 33,983,142
-----------
TOTAL COMMON STOCKS ...................................... 84,846,067
-----------
PREFERRED STOCKS -- 0.3%
BROADCASTING -- 0.2%
2,000 Granite Broadcasting Corporation,
$1.938, Conv. Pfd.......................... 151,000
-----------
CABLE -- 0.0%
2,500 Cablevision Systems Corporation,
Series 1, 8.500%, Conv. Pfd................ 61,563
-----------
ENTERTAINMENT -- 0.1%
4,000 AMC Entertainment, Inc.,
$1.75, Conv. Pfd........................... 120,000
-----------
TOTAL PREFERRED STOCKS ................................... 332,563
-----------
COMMON STOCK WARRANTS AND RIGHTS -- 0.1%
640 CEP Communications, Warrants,
expires 12/31/1997+........................ 1,203
42,500 Jacor Communications, Inc., Warrants,
expires 09/18/2001+........................ 116,875
10,000 Oriental Press Group, Warrants,
expires 10/02/1998+........................ 0
-----------
TOTAL COMMON STOCK WARRANTS AND RIGHTS ................... 118,078
-----------
PRINCIPAL
AMOUNT
---------
CORPORATE BONDS -- 2.0%
CABLE -- 1.9%
$1,500,000 Home Shopping Network, Inc., Conv. Sub.
Deb., 5.875% due 03/01/2006................ 1,541,250
300,000 Tele-Communications International, Inc.
Conv. Sub. Deb., 4.500% due
02/15/2006................................. 244,875
-----------
1,786,125
-----------
ENTERTAINMENT PRODUCTION -- 0.1%
100,000 Viacom Inc., Sub. Deb., 8.000%
due 07/07/2006............................. 93,500
-----------
EQUIPMENT -- 0.0%
22,000 Trans-Lux Corporation, Conv. Deb.,
9.000% due 12/01/2005 ..................... 22,770
-----------
TOTAL CORPORATE BONDS .................................... 1,902,395
-----------
U.S. TREASURY BILLS -- 9.9%
9,623,000 4.940% to 4.990%++ due
10/03/1996 - 11/14/1996.................... 9,586,893
-----------
TOTAL INVESTMENTS (COST $84,849,473) (B) ........ 100.4% 96,785,996
OTHER ASSETS AND LIABILITIES (NET) .............. (0.4) (384,605)
----- -----------
NET ASSETS 100.0% $96,401,391
===== ===========
NET ASSET VALUE ($96,401,391 / 11,356,548
SHARES OUTSTANDING) ................................... $8.49
=====
- ------------------
(a) Security fair valued by the Board of Directors.
(b) Aggregate cost for Federal tax purposes was $84,849,473. Net unrealized
appreciation for Federal tax purposes was $11,936,523 (gross unrealized
appreciation was $14,469,672 and gross unrealized depreciation was
$2,533,149).
+ Non-income producing security.
++ Represents annualized yield at date of purchase.
ADR-American Depositary Receipt
ADS-American Depositary Share
GDR-Global Depositary Receipt
ORD-Ordinary Share
13
<PAGE>
AUTOMATIC DIVIDEND REINVESTMENT
AND VOLUNTARY CASH PURCHASE PLAN
ENROLLMENT IN THE PLAN
It is the policy of The Gabelli Global Multimedia Trust Inc.
("Multimedia Trust") to automatically reinvest dividends. As a "registered"
shareholder you automatically become a participant in the Multimedia Trust's
Automatic Dividend Reinvestment Plan (the "Plan"). The Plan authorizes the
Multimedia Trust to issue shares to participants upon an income dividend or a
capital gains distribution regardless of whether the shares are trading at a
discount or a premium to net asset value. All distributions to shareholders
whose shares are registered in their own names will be automatically reinvested
pursuant to the Plan in additional shares of the Multimedia Trust. Plan
participants may send their stock certificates to State Street Bank and Trust
Company to be held in their dividend reinvestment account.
Registered shareholders wishing to receive their distribution in cash must
submit this request in writing to:
The Gabelli Global Multimedia Trust
c/o State Street Bank and Trust Company
P.O. Box 8200
Boston, MA 02266-8200
Shareholders requesting this cash election must include the
shareholder's name and address as they appear on the share certificate.
Shareholders with additional questions regarding the Plan may contact State
Street Bank and Trust Company at 1 (800) 336-6983.
SHAREHOLDERS WISHING TO LIQUIDATE REINVESTED SHARES held at State
Street
Bank and Trust Company must do so in writing or by telephone. Please submit your
request to the above mentioned address or telephone number. Include in your
request your name, address and account number. The cost to liquidate shares is
$2.50 per transaction as well as the brokerage commission incurred. Brokerage
charges are expected to be less than the usual brokerage charge for such
transactions.
If your shares are held in the name of a broker, bank or nominee, you
should contact such institution. If such institution is not participating in the
Plan, your account will be credited with a cash dividend. In order to
participate in the Plan through such institution, it may be necessary for you to
have your shares taken out of "street name" and re-registered in your own name.
Once registered in your own name your dividends will be automatically
reinvested. Certain brokers participate in the Plan. Shareholders holding shares
in "street name" at such participating institutions will have dividends
automatically reinvested. Shareholders wishing a cash dividend at such
institution must contact their broker to make this change.
The number of shares of Common Stock distributed to participants in the
Plan in lieu of cash dividends is determined in the following manner. Under the
Plan, whenever the market price of the Multimedia Trust's Common Stock is equal
to or exceeds net asset value at the time shares are valued for purposes of
determining the number of shares equivalent to the cash dividends or capital
gains distribution, participants are issued shares of Common Stock valued at the
greater of (i) the net asset value as most recently determined or (ii) 95% of
the then current market price of the Multimedia Trust's Common Stock. The
valuation date is the dividend or distribution payment date or, if that date is
not a New York Stock Exchange trading day, the next trading day. If the net
14
<PAGE>
asset value of the Common Stock at the time of valuation exceeds the market
price of the Common Stock, participants will receive shares from the Multimedia
Trust valued at market price. If the Multimedia Trust should declare a dividend
or capital gains distribution payable only in cash, State Street will buy Common
Stock in the open market, or on the New York Stock Exchange or elsewhere, for
the participants' accounts, except that State Street will endeavor to terminate
purchases in the open market and cause the Multimedia Trust to issue shares at
net asset value if, following the commencement of such purchases, the market
value of the Common Stock exceeds the then current net asset value.
The automatic reinvestment of dividends and capital gains distributions
will not relieve participants of any income tax which may be payable on such
distributions. A participant in the Plan will be treated for Federal income tax
purposes as having received, on a dividend payment date, a dividend or
distribution in an amount equal to the cash the participant could have received
instead of shares.
The Multimedia Trust reserves the right to amend or terminate the Plan
as applied to any voluntary cash payments made and any dividend or distribution
paid subsequent to written notice of the change sent to the members of the Plan
at least 90 days before the record date for such dividend or distribution. The
Plan also may be amended or terminated by State Street on at least 90 days
written notice to participants in the Plan.
VOLUNTARY CASH PURCHASE PLAN
The Voluntary Cash Purchase Plan is yet another vehicle for our
shareholders to increase their investment in the Multimedia Trust. In order to
participate in the Voluntary Cash Purchase Plan, shareholders must have their
shares registered in their own name and participate in the Dividend Reinvestment
Plan.
Participants in the Voluntary Cash Purchase Plan have the option of
making additional cash payments to State Street Bank and Trust Company for
investments in the Multimedia Trust's shares at the then current market price.
Shareholders may send an amount from $250 to $10,000. State Street Bank and
Trust Company will use these funds to purchase shares in the open market on or
about the 15th of each month. State Street Bank and Trust Company will charge
each shareholder who participates $0.75, plus a pro rata share of the brokerage
commissions. Brokerage charges for such purchases are expected to be less than
the usual brokerage charge for such transactions. It is suggested that any
voluntary cash payments be sent to State Street Bank and Trust Company, P.O. Box
8200, Boston, MA 02266-8200 such that State Street receives such payments
approximately 10 days before the 15th of the month. Funds not received at least
five days before the investment date shall be held for investment in the
following month. A payment may be withdrawn without charge if notice is received
by State Street Bank and Trust Company at least 48 hours before such payment is
to be invested.
For more information regarding the Dividend Reinvestment Plan and
Voluntary Cash Purchase Plan, brochures are available by calling (914) 921-5070
or by writing directly to the Multimedia Trust.
15
<PAGE>
THE GABELLI GLOBAL MULTIMEDIA TRUST INC.
One Corporate Center
Rye, NY 10580-1434
914-921-5070
http://www.gabelli.com
------------------------
First Class Mail
U.S. Postage
PAID
Rye, NY
Permit No. 109
------------------------
Third Quarter Report
September 30, 1996
09/96
