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THE GABELLI
GLOBAL
MULTIMEDIA
TRUST INC.
Third Quarter Report
September 30, 1998
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THE GABELLI
GLOBAL
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
interdependent economic world.
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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. The Fund seeks opportunities for
long-term growth within the context of two main investment universes: companies
involved in creativity, as it relates to the development of intellectual
property rights (copyrights); and companies involved in distribution, as it
relates to the delivery of these copyrights. Additionally, the Fund will invest
in companies participating in emerging technological advances in interactive
services and products.
This report is printed on recycled paper.
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To Our Shareholders,
In the third quarter of 1998, multimedia stocks held up relatively well in
the broad-based global market decline. Buoyed by deregulation and ongoing
consolidation in the industry, on average, our U.S. and European
telecommunications and cable television holdings posted more than respectable
gains. Returns from entertainment software companies were mixed, while
broadcasters, recorded music and publishers generally disappointed. Advertiser
supported media was chilled by concern over a profits' recession in 1999 and a
related cut back in advertising.
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THE GABELLI
GLOBAL
MULTIMEDIA
TRUST INC.
Investment Performance
For the nine months ended September 30, 1998, The Gabelli Global
Multimedia Trust Inc.'s ("Multimedia Trust") net asset value per share increased
5.0% to $10.11 on September 30, 1998. This compares to the average 2.6% decline
of the 236 Global Funds tracked by Lipper Analytical Services. For the third
quarter ended September 30, 1998, the Fund's net asset value declined 12.6%.
Since its inception on November 15, 1994, the Multimedia Trust's net asset value
has achieved a 77.2% total return after adjusting for the rights offering and
all distributions. This equates to a 15.9% average annual return.
The Multimedia Trust's common shares ended the third quarter at $8.6875
per share on the New York Stock Exchange, down 11.7% for the quarter and an
increase of 2.1% for the nine-month period ending September 30, 1998. The common
shares have increased 42.8% since inception after adjusting for all
distributions and the rights offering.
What We Do
The success of momentum investing in recent years and investors' desire
for instant gratification have combined to make value investing appear dull. At
the risk of being dull, we will once again describe the "boring" value approach
that has seen us through both good and bad markets over the last 4 years at The
Gabelli Global Multimedia Trust and for over 20 years at Gabelli Asset
Management Company. In past reports, we have tried to articulate our investment
philosophy and methodology. The following graphic further illustrates the
interplay among the four components of our valuation approach.
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Our focus is on free cash flow; earnings before interest, taxes,
depreciation and amortization (EBITDA) minus the capital expenditures necessary
to grow the business. We believe free cash flow is the best barometer of a
business' value. Rising free cash flow often foreshadows net earnings
improvement. We also look at earnings per share trends. Unlike Wall Street's
ubiquitous earnings momentum players, we do not try to forecast earnings with
accounting precision and then trade stocks based on quarterly expectations and
realities.
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We simply try to position ourselves in front of long-term earnings uptrends. In
addition, we analyze on and off balance sheet assets and liabilities such as
plant and equipment, inventories, receivables, and legal, environmental and
health care issues. We want to know everything and anything that will add to or
detract from our private market value (PMV) estimates. Finally, we look for a
catalyst; something happening in the company's industry or indigenous to the
company itself that will surface value. In the case of the independent telephone
stocks, the catalyst is a regulatory change. In the agricultural equipment
business, it is the increasing world-wide demand for American food and feed
crops. In other instances, it may be a change in management, sale or spin-off of
a division or the development of a profitable new business.
Once we identify stocks that qualify as fundamental and conceptual
bargains, we then become patient investors. This has been a proven long-term
method for preserving and enhancing wealth in the U.S. equities market. At the
margin, our new investments are focused on businesses that are well-managed and
will benefit from sustainable long-term economic dynamics. These include macro
trends, such as the globalization of the market in filmed entertainment and
telecommunications, and micro trends, such as an increased focus on productivity
enhancing goods and services.
THE PORTFOLIO OVERVIEW
Global Allocation
The chart at the right represents the Multimedia Trust's holdings by
geographic region as of September 30, 1998. 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.
HOLDINGS BY GEOGRAPHIC REGION - 9/30/98
[THE FOLLOWING TABLE WAS DEPICTED AS A PIE CHART IN THE PRINTED MATERIAL.]
United States 82.0%
Europe 7.8
Canada 3.
Asia/Pacific Rim 3.4%
Latin America 2.9%
Equity Mix
The Multimedia Trust's investment premise falls within the context of two
main investment universes: a) companies involved in creativity, as it relates to
the development of intellectual property rights (copyrights); and b) 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.
The chart at the right depicts our equity mix of the copyright/creativity
and distribution companies in our portfolio as of September 30, 1998.
HOLDINGS BY GEOGRAPHIC REGION - 9/30/98
[THE FOLLOWING TABLE WAS DEPICTED AS A PIE CHART IN THE PRINTED MATERIAL.]
Distribution 59.1%
Copyright/Creativity
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COMMENTARY
Through the Looking Glass
What do investors see as they peer through the looking glass? Like Alice
after she has eaten the mushroom, is the market still shrinking or ready to
grow? Should savvy investors be heading through the keyhole or smiling like the
Cheshire cat? What do we see happening in the stock market Wonderland?
Equity valuations pivot on the outlook for earnings and on the multiple
accorded those earnings. The earnings picture has been muddied by global
economic turmoil. However, we continue to believe that on a longer term secular
basis, U.S. corporations can grow earnings at high single digit rates. In light
of this favorable long term secular earnings forecast and the positive outlook
for inflation and interest rates, we believe at current prices, most stocks are
now quite reasonably valued. So, going forward, we believe equity owners will be
adequately rewarded.
The Four M's
In the third quarter of 1998, consumers and investors focused on the Four
M's:
Market
McGwire
Monica
Meriwether
M as in Market
The sharp crack in U.S. equities during the third quarter raises several
questions. Will the economy be impacted either through a reduction in consumer
spending or a cutback in corporate expenditures? Since the U.S. economy has been
the engine of global growth, will a slow-down accentuate a global spiral?
Our answer to the first is, yes, lower spending by consumers and
corporations will cause an economic and profit slowdown. However, we believe the
odds favor just that, a slowdown, not a recession. The Russell 2000 Index, Wall
Street jargon for the average U.S. company, has already discounted a recession.
Should we avoid one, stocks will likely recover sharply.
Our answer to the second question is also yes. U.S. economic weakness will
have a negative impact on the rest of the world. But, we see some very positive
signs as well. The Japanese are finally addressing their economic problems.
Stimulation in Japan should buttress overall economic activity, particularly in
Southeast Asia. The same applies to Euroland (the new name for the countries
participating in European Monetary Union), where economic cooperation is
supporting economic growth prospects. Moreover, part of the global
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economic disequilibrium we have been experiencing stems from the strong dollar.
With the dollar weakening against the mark and the yen, some global economic
balance should be restored.
McGwire
Mark McGwire and Sammy Sosa's heroics put baseball back on the front
pages. In places other than New York, Boston, Los Angeles and San Francisco,
most people were more captivated by the historic home run record chase than what
was occurring in the economy and the stock market. Will they continue to focus
on the day-to-day elements that impact their lives and their own individual
economic expectations? Job security, low inflation, low interest rates
(resulting in much lower mortgage payments) and the prospects of reduced taxes
should make most people feel relatively good.
Monica
The histrionics associated with the President's current predicament have
also taken center stage. Will the U.S. be in a position to provide moral
leadership on such issues as nuclear armaments? (Most of us now understand
Kashmir is not a sweater). Will President Clinton be able to energize the new
Congress and focus on critical economic issues in a timely fashion? Will Robert
Rubin and Alan Greenspan resign if Clinton is not in power?
We have long maintained the view that a great democracy like ours has many
flaws. But, the underpinnings of our system, being rooted in personal freedom
and ownership of capital, will survive flaws and sometimes even flourish in the
absence of credible leadership.
Meriwether
We, like virtually everyone in the financial community, were surprised by
the extent of leverage that an organization could accomplish and the extent of
damage that leverage could have on the financial system. A shutdown in lending,
so vital to both domestic and global growth, is occurring. We have a liquidity
crisis, but one different than past "credit crunches". When asked how to become
a millionaire, Warren Buffett quipped, "Start with $1 billion and buy an
airline." We now offer our version, "Start with $1 billion and give it to a
hedge fund manager who focuses on emerging market debt with leverage."
While the first chapter is still being written on the Long Term Capital
Management debacle, we will wait for the smoke to clear, the floor boards to be
lifted and the foundation inspected before commenting further. However, we
believe global cooperation will help curtail the damage.
Looking Ahead
We believe companies directly involved in the telecommunications
revolution--telecom service providers, cable television operators and
communications equipment manufacturers--have good short and intermediate term
growth prospects even in this uncertain global economic environment. Modern
telecommunications systems are the most essential element for competing
effectively on the global economic
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stage. Capital investment in these systems is not an option. It is a requirement
for economic survival in the information age.
This is not to say there won't be winners and losers across the broad
industry spectrum. We have written extensively about convergence--the telephone,
computer and television converging into one all purpose interactive tool. It is
happening! We will also see segmentation. In some markets, the combination of
telephone and cable television infrastructures will prevail. In other markets,
technologically upgraded systems (digitally enhanced copper wire augmented with
fiber optics) will allow dominant wireline franchises to go it alone. In still
other markets, the wireless providers will win. Not all communications equipment
companies will survive and prosper. All this competition is driven by an ever
expanding global customer base demanding the best and most efficient
telecommunications services. This competition will continue to fuel growth in
the industry and reward stock pickers able to distinguish between those
companies that will move to the forefront and those that will be left behind.
More economically sensitive media businesses such as broadcasting,
recorded music and publishing will have a more difficult time growing earnings
over the short term if Asian economies continue to contract, Latin American
economies prove vulnerable, and U.S. and European economies slow. However, we
believe we will continue to see consolidation in these media sectors as
companies jockey for domestic and global market share.
We are not macroeconomists or market timers. We are stock pickers with a
long term perspective. Consequently, we will continue to focus our attention on
what we believe are the best companies with the best long term growth prospects
across the media industry spectrum.
Corporate Governance
The Gabelli Global Multimedia Trust continues to consider actions that may
reduce or eliminate the market discount of its shares. How do we accomplish
this? There are several factors that historically have worked to narrow the
discounts of closed-end funds. One of these is a stock repurchase program, which
we instituted back in July of 1996.
Stock Repurchase Plan - Q & A
Q: What is a stock repurchase plan?
A stock repurchase plan allows a company to buy back its own shares in the
open market (in our case, the New York Stock Exchange). This reduces the total
number of shares outstanding and increases the earnings per share.
Q: When did the Multimedia Trust implement a stock repurchase plan?
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. On February 26, 1997, the Board voted to increase the
authorized shares which may be repurchased to 750,000 and on May 13, 1998, the
Board
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increased the authorized shares which may be repurchased by another 250,000
shares to 1,000,000 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. In total,
through September 30, 1998, 606,533 shares were repurchased in the open market.
Back on October 19, 1987, an affiliated closed-end fund, The Gabelli
Equity Trust, was the first company on the New York Stock Exchange to implement
a stock buyback program after the market crash. At the time, the Equity Trust
was trading at a discount to net asset value and represented an excellent value
for the Trust to acquire its own shares. This stock repurchase plan resulted in
the purchase of 800,000 shares in the open market from 1987 to 1988.
Similarly, the first company on the New York Stock Exchange to announce a
stock repurchase program on October 27, 1997 - a day in which the market
declined 554.26 points, or 7.2% -- was our other affiliated closed-end fund, The
Gabelli Convertible Securities Fund.
Q: What is the benefit of a stock repurchase plan?
When the Multimedia Trust purchases its own shares at a discount to NAV,
the Trust realizes a benefit equal to the difference between the net asset value
and the purchase price. This benefit is credited to the net assets of the
remaining shares, thus boosting the NAV. The larger the discount, the greater
the benefit on the NAV.
The market price is determined by supply and demand factors. If there are
more sellers than buyers the price will decline until buyers enter the market to
establish a sales price. A stock repurchase program increases demand for the
Gabelli Global Multimedia Trust's shares in the open market. This provides a
willing buyer of fund shares which offsets, at least in part, sales of fund
shares.
Preferred Stock -- An Investment For The Future
On June 4, 1997, the Trust successfully completed its offering of
cumulative preferred stock which is rated `aaa' by Moody's Investors Service,
Inc. The Trust issued 1,250,000 Preferred Shares at $25 with an annual dividend
rate of $1.98 per share. The Preferred Shares are trading on the New York Stock
Exchange under the symbol "GGT Pr" and closed at $25.50 on September 30, 1998.
We thought we would answer some questions about preferred stock.
Q: What is Preferred Stock?
Preferred stock is a form of equity investment which has certain rights
that differ from those of common stock. In our case, the preferred stock was
issued at $25 per share with a fixed dividend rate of $1.98. The Trust is
obligated to pay this dividend to the Preferred Shareholders before any
dividends are paid to the holders of common shares. Thereafter, any return
earned in excess of this dividend rate would work to benefit the Common
Shareholders.
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Q: How would Preferred Shares benefit Common Shareholders?
From its inception on November 15, 1994 through September 30, 1998, the
Multimedia Trust has earned a 15.9% average annual return. The only obligation
that the Trust has to the Preferred Shareholders is to pay the stated dividend
rate. Given the current market environment, we considered this to be an ideal
opportunity to take advantage of relatively low long-term interest rates and to
earn an excess return for our Common Shareholders consistent with our
conservative investment approach. Any return earned in excess of the stated
dividend rate, which is less than the Trust's average annual return, would
directly benefit Common Shareholders; however, any shortfall from the stated
rate would impact the Common Shareholders in the opposite fashion. Therefore, by
taking advantage of the current relatively low interest rate environment and
achieving our investment objectives, the Preferred Share issuance offers what we
believe is a conservative method of adding wealth for our Common Shareholders.
Furthermore, Common Shareholders stand to receive certain tax benefits as
a result of the Preferred Stock offering. Since taxable income is allocated to
the Preferred Shareholders before Common Shareholders, taxable distributions to
Common Shareholders are not required to the extent they would be if the
Preferred Shares were not outstanding. Common Shareholders thus avoid having to
pay taxes on that portion of taxable income that previously would have been
distributed to them. By deferring these taxable distributions and taxes
associated therewith, the net asset value of the common shares are likely to
grow at a faster rate.
Q: Why did the Trust consider Preferred Shares?
Long-term interest rates were at relatively low levels. The dividend rate
that the Trust is required to pay on the Preferred Shares was related to
long-term rates. In this environment, we had a great opportunity to create value
by earning a return in excess of the Preferred's dividend rate over the long
term. Therefore, we believe this represented an opportunistic time for the Trust
to take advantage of these low rates.
Q: Will Gabelli Funds, Inc. be paid a management fee on the Preferred Capital?
With the completion of the preferred offering, the Adviser has agreed to
waive the management fee on the incremental assets if the net asset value total
return on the Trust does not exceed the stated dividend rate on the Preferred
Shares.
Q: What were the offering costs involved with the Preferred Shares?
Consistent with our conservative approach, the Trust issued the Preferred
Shares in a cost efficient manner at less than $0.13 per share. This modest
investment provided the underpinnings for successful returns in the future and
incrementally boosted the Trust's twelve month returns to 13.1% with the
preferred offering versus 11.5% had the Preferred Shares not been issued. Stated
differently, shareholders have received approximately 2% in incremental returns
over the twelve-month period due to the fact that the Preferred Shares are
outstanding.
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Let's Talk Stocks
The following are stock specifics on selected holdings of the Multimedia
Trust. 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.
Ascent Entertainment Group Inc. (GOAL - $8.00 - Nasdaq) is a fully independent
media and entertainment company. Ascent owns 57% of On Command Corp., which is
the worldwide lodging industry's leading provider of on-demand, in-room video
entertainment and information services, with a total of over 890,000 rooms
served at year end 1997. Ascent also owns two professional sports franchises:
the Denver Nuggets and the Colorado Avalanche. The Denver Arena Co., a division
of Ascent, is building a new arena to house these professional basketball and
hockey teams. The arena is expected to open for the 1999-2000 NBA and NHL
seasons.
Cablevision Systems Corp. (CVC - $43.1875 - AMEX), based in Woodbury, NY, is one
of the nation's leading telecommunications and entertainment companies, with
operations including high speed multimedia delivery, subscription cable
television services, professional sports teams and national cable television
program networks. Cablevision serves over 3.3 million cable customers primarily
in three core media markets: New York, Boston and Cleveland. CVC's revenue per
subscriber is the highest in the cable industry. CVC has exercised its option to
purchase ITT's 50% stake in MSG (Madison Square Garden) Properties, including
the NY Knicks and NY Rangers. In March, Cablevision purchased
Tele-Communications Inc.'s New York area cable properties with 829,000
subscribers by issuing almost 24.5 million shares (adjusted for the March 30,
1998 two-for-one stock split) and assuming $670 million of TCI's debt. These
shares represent a one-third stake in CVC. The company's new, vigorous activity
includes the sale of a 40% stake in Rainbow Sports to a News Corp./TCI joint
venture with the proceeds used to pay down a significant portion of MSG's debt.
With its upgraded cable systems, CVC is well-positioned to offer telephony, high
speed data and enhanced video services.
Gaylord Entertainment Co. (GET - $29.8125 - NYSE) is a diversified entertainment
company operating in the hospitality, country music and family entertainment
segments. Its properties include WSM Radio and the Grand Ole Opry, the Opryland
Hotel, the Opryland Music Group, CMT International, Word Entertainment, KTVT-TV
in Dallas-Ft. Worth, Z Music Television, the Wildhorse Saloon and the Ryman
Auditorium. The Opryland theme park was closed at the end of 1997.
MediaOne Group Inc. (UMG - $44.4375 - NYSE), formerly US West Media Group, has
finalized its split from the parent company US West. UMG is involved in domestic
and international cable and telephony and international wireless communications.
It is the third largest broadband cable company in the U.S. with over 5 million
subscribers and 8 million homes passed. Its Directory and Informational business
has been transferred to US West. MediaOne's strong financial position should
allow the company to be one of the leaders in the upgrading of cable
infrastructures. The Group has a variety of investment interests including 25%
of Time Warner Entertainment (which includes Warner Brothers Studio and Home Box
Office), 24% of PCS Prime Co. and almost 27% of TeleWest plc.
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Tele-Communications Inc. (TCOMA - $39.125 - Nasdaq), one of the largest cable
television operators in the U.S., is guided by Dr. John Malone - one of the most
shareholder sensitive managers we have found. Regulation has historically played
an important role in the valuation of cable properties. Passage of The
Telecommunications Reform Act of 1996, combined with the current deregulatory
climate in Congress, is providing a significant catalyst for cable stocks. TCOMA
is a well-positioned industry leader, from its wireless telephony PCS venture
with Sprint, Comcast and Cox Communications to its innovative Internet access
business, dubbed "@Home", and its 80% stake in Tele-Communications International
(TINTA - $20.75 - Nasdaq). An important strategic shift for the company is
underway as some cable properties are being sold or transferred to
allianced-partners, shifting debt and strengthening the company's balance sheet.
AT&T (T - $58.4375 - NYSE) has agreed to acquire TCI, offering 0.7757 AT&T
shares for each TCOMA share.
Tele-Communications Inc./Liberty Media Group (LBTYA - $36.6875 - 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 Corp. and Tele-Communications
International Inc. have created a global sports joint venture, Fox Sports, that
offers 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. Liberty Media is to be
merged into AT&T as part of AT&T's acquisition of TCI. Thereafter, AT&T will
issue a "tracking stock" on a one-to-one ratio.
Telephone and Data Systems Inc. (TDS - $34.875 - AMEX) is a diversified
telecommunications company with established cellular and local telephone
operations and a developing personal communications services ("PCS") business.
TDS provides high quality telecommunications services to 2.8 million customers
in 35 states. The company was active in the PCS auctions and was the high bidder
in markets with a combined population of 27 million. TDS owns 81.1% of United
States Cellular Corp. (USM - $29.8125 - AMEX) and 82.4% of Aerial Communications
(AERL - $3.6875 - Nasdaq), TDS's PCS subsidiary which owns the licenses to
provide PCS service in six major trading areas encompassing approximately 27.6
million population equivalents. The transfer of substantially all of the assets
of American Paging to TSR Wireless Holdings has been completed.
Time Warner Inc. (TWX - $87.5625 - NYSE), with its 1996 acquisition of Turner
Broadcasting System, is further entrenched as the global leader in media and
entertainment with interests in filmed entertainment, television production and
broadcasting, recorded music, cable television programming, magazine and book
publishing, direct marketing and cable television systems. The combined
companies have more than $24 billion in revenues and nearly $5.5 billion in
EBITDA. Time Warner controls a host of powerful brands, such as CNN, Warner
Brothers, HBO, Cinemax and Time and People magazines. Under the leadership of
Chairman Gerald Levin and Vice Chairman Ted Turner, the company is now focused
on reducing its almost $10 billion in debt and simplifying its capital
structure.
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USA Networks Inc. (USAI - $19.4375 - Nasdaq), through its subsidiaries, engages
in diversified media and electronic commerce businesses that include: electronic
retailing, ticketing operations and television broadcasting. Chairman and CEO
Barry Diller has brought together under one umbrella: the USA Network, the
Sci-Fi Channel, USA Networks Studios, USA Broadcasting, The Home Shopping
Network and the Ticketmaster Group. The plan is to integrate these assets,
leveraging programming, production capabilities and electronic commerce across
this strong distribution platform.
Viacom Inc. (VIA - $57.50 - AMEX), long a major provider of entertainment
"content", has evolved into one of the world's dominant media companies.
Paramount Communications and Blockbuster Entertainment were acquired. Non-core
assets are being divested and debt has been reduced to approximately $8 billion.
Viacom is focusing on global expansion of its media franchises. Viacom is
particularly well-positioned in music (notably MTV) and cable networks (such as
Nickelodeon).
Dividends
The Trust recently distributed an interim dividend of $0.25 per share from
realized capital gains to Common Shareholders on September 28, 1998. This is the
first time the Gabelli Global Multimedia Trust has paid an interim distribution
and it is expected that a year-end distribution will also be paid in December
reflecting all remaining income and capital gains earned during the year.
Our Preferred Shareholders were recently paid a dividend of $0.495 per
share on September 28, 1998. This is the first quarterly distribution received
by Preferred Shareholders since the Board of Directors, at a meeting held on May
13, 1998, elected to pay dividends on the Trust's Preferred Shares quarterly
rather than semi-annually. Accordingly, the Preferred Shareholders will receive
quarterly distributions of $0.495 per share going forward. For the twelve months
ended September 30, 1998, the Preferred Shareholders received a total
distribution of $2.6015 per share. This includes an initial distribution paid on
December 26, 1997 of $1.1165 per share which represented the accrual period from
June 4, 1997 through December 26, 1997.
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, IRAs, 401(k)s, quarterly reports, closing prices and other
current news. You can send us e-mail at [email protected].
Shareholders will soon be able to receive quarterly reports from Gabelli
Funds via e-mail. We anticipate that this service will be available in early
1999. If you are interested in receiving your quarterly report via e-mail,
please send an e-mail to [email protected] with your name and address and
we will provide you with the appropriate forms. Our investor representatives are
available at 1-800-GABELLI (1-800-422-3554) to assist you as well.
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In Conclusion
Unsettled stock markets create challenges and opportunities. The broad
investment landscape has changed and the near term outlook for some sectors of
the multimedia industry is clouded. However, we believe multimedia will continue
to be one of the great long term growth industries. We will continue to do the
research required to identify great media companies and maintain the discipline
to buy them at the most opportunistic prices.
Sincerely,
/s/ Mario J. Gabelli
Mario J. Gabelli, CFA
President and Chief Investment Officer
October 30, 1998
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Top Ten Holdings
September 30, 1998
Viacom Inc. Gaylord Entertainment
TCI-Liberty Media Group Time Warner Inc.
Cablevision Systems Corp. MediaOne Group Inc.
USA Networks Inc. Ascent Entertainment Group
Telephone & Data Systems Tele-Communications Inc.
- --------------------------------------------------------------------------------
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.
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The Gabelli Global Multimedia Trust Inc.
Portfolio of Investments -- September 30, 1998 (Unaudited)
================================================================================
Market
Shares Value
------ ------
COMMON STOCKS - 76.1%
COPYRIGHT/CREATIVITY COMPANIES - 31.5%
Advertising - 0.0%
1,300 Bowlin Outdoor Advertising &
Travel Inc...................................... $ 6,500
200 Havas Advertising SA ............................. 30,716
200 Publicis SA ...................................... 32,358
100 Lamar Advertising Co. ............................ 2,800
--------------
72,374
--------------
Cable Programmers - 3.3%
15,000 CANAL +, Sponsored ADR+ .......................... 729,238
6,000 Flextech plc+ .................................... 58,398
200,000 USA Networks Inc.+ ............................... 3,887,500
--------------
4,675,136
--------------
Diversified Publishers - 7.6%
10,000 American Media Inc., Cl. A+ ...................... 55,624
10,000 Arnoldo Mondadori Editore SpA .................... 116,256
30,000 Belo (A.H.) Corp., Cl. A ......................... 600,000
2,500 Central Newspapers Inc., Cl. A ................... 142,500
8,000 Dow Jones & Co. Inc. ............................. 372,000
10,000 Golden Books Family Entertainment
Inc.+ .......................................... 1,563
700 Hachette Filipacchi Medias ....................... 131,255
8,000 Harcourt General Inc. ............................ 387,000
17,000 Harte-Hanks Communications Inc. .................. 380,375
1,000 Hollinger International Inc. ..................... 14,375
4,500 Houghton Mifflin Co. ............................. 139,500
58,000 Independent Newspapers Ltd., ORD ................. 208,034
8,000 Knight-Ridder Inc. ............................... 356,000
21,000 Lee Enterprises Inc. ............................. 544,688
14,000 McClatchy Newspapers Inc., Cl. A ................. 420,000
7,000 McGraw-Hill Companies Inc. ....................... 554,750
5,000 Media General Inc., Cl. A ........................ 193,750
22,000 Meredith Corp. ................................... 704,000
115,000 Nation Multimedia Group .......................... 23,932
100,000 New Straits Times Press Berhad ................... 48,158
125,000 Oriental Press Group ORD ......................... 13,228
22,000 Penton Media Inc. ................................ 299,750
10,000 Playboy Enterprises Inc., Cl. A+ ................. 124,375
110,900 Post Publishing Co. Ltd. ......................... 120,574
9,000 PRIMEDIA Inc.+ ................................... 97,875
26,000 Pulitzer Publishing Co. .......................... 2,057,250
9,000 Reader's Digest Association Inc.,
Cl. A .......................................... 172,125
25,600 Reader's Digest Association Inc.,
Cl. B .......................................... $ 486,400
38,280 Singapore Press Holdings Ltd. .................... 317,488
250,000 South China Morning
Post Holdings ORD .............................. 98,402
300 SPIR Communication ............................... 17,733
30,000 Thomas Nelson Inc. ............................... 382,500
4,500 Times Mirror Co., Cl. A .......................... 239,063
50,000 Times Publishing Ltd. ............................ 65,166
5,000 Tribune Co. ...................................... 251,563
10,000 United News & Media plc, ADR ..................... 192,500
200 Wiley (John) & Sons Inc., Cl. A .................. 12,263
1,000 Wolters Kluwer NV ................................ 192,051
3,000 Ziff-Davis Inc. .................................. 21,750
--------------
10,555,816
--------------
Entertainment Production - 6.5%
300,000 Ascent Entertainment Group Inc.+ ................. 2,400,000
2,523 EMI Group plc .................................... 15,559
10,000 EMI Group plc, Sponsored ADR ..................... 125,000
7,000 Grammy Entertainment plc+ ........................ 29,027
3,500 Granada Group plc ................................ 44,033
7,000 GTECH Holdings Corp.+ ............................ 185,938
2,000 Harvey Entertainment Co.+ ........................ 18,250
2,000 Livent Inc. ...................................... 13,500
300 NRJ SA ........................................... 48,752
3,877 People's Choice TV Corp.+ ........................ 1,817
2,000 Powerhouse Technologies Inc. ..................... 17,750
4,000 Princeton Video Image Inc.+ ...................... 16,500
100,000 Shaw Brothers (Hong Kong) Ltd. ................... 37,425
35,000 Spelling Entertainment Group Inc.+ ............... 247,187
165,000 Tele-Communications Inc./Liberty
Media Group, Cl. A ............................. 6,053,437
4,000 Tring International Group+ ....................... 441
--------------
9,254,616
--------------
Farming and Agriculture - 0.8%
13,000 Dekalb Genetics Corp., Cl. B ..................... 1,196,000
--------------
Global Media and Entertainment - 10.1%
1,000 Boston Celtics Ltd. .............................. 8,187
60,000 Grupo Televisa SA, GDR+ .......................... 1,158,750
21,000 News Corp. Ltd., ADS ............................. 538,125
33,000 PolyGram NV ...................................... 1,872,750
38,000 Seagram Co. Ltd. ................................. 1,090,125
1,000 Sony Corp., ADR .................................. 68,750
31,000 Time Warner Inc. ................................. 2,714,438
12
<PAGE>
The Gabelli Global Multimedia Trust Inc.
Portfolio of Investments (Continued) -- September 30, 1998 (Unaudited)
================================================================================
Market
Shares Value
------ ------
COMMON STOCKS (Continued)
COPYRIGHT/CREATIVITY COMPANIES (Continued)
Global Media and Entertainment (Continued)
115,000 Viacom Inc., Cl. A+ .............................. $ 6,612,500
9,000 Walt Disney Co. .................................. 227,813
--------------
14,291,438
--------------
Hotels and Gaming - 2.4%
5,000 Churchhill Downs Inc. ............................ 152,500
143 Gaming Lottery Corp.+ ............................ 428
95,000 Gaylord Entertainment Co., Cl. A ................. 2,832,187
5,000 Hilton Hotels Corp. .............................. 85,313
60,847 Ladbroke Group plc ............................... 226,547
2,000 Mirage Resorts Inc. .............................. 33,500
1,000 MGM Grand Inc. ................................... 13,875
2,500 Quintel Entertainment Inc.+ ...................... 6,875
--------------
3,351,225
--------------
Information Publishing - 0.2%
4,000 Berlitz International Inc.+ ...................... 105,500
25,000 Data Broadcasting Corp.+ ......................... 117,188
1,000 Dun & Bradstreet Corp. ........................... 27,000
500 Scholastic Corp.+ ................................ 21,250
--------------
270,938
--------------
Software - 0.6%
1,000 Activision Inc.+ ................................. 11,250
2,000 EarthLink Network Inc.+ .......................... 82,500
500 Electronic Arts Inc.+ ............................ 21,937
1,000 Excaliber Technologies Corp.+ .................... 7,375
12,000 H&R Block Inc. ................................... 496,500
1,000 Intel Corp. ...................................... 85,750
1,000 Microsoft Corp.+ ................................. 110,063
4,000 Mobius Management Systems ........................ 24,000
200 Netscape Communications Corp.+ ................... 4,375
100 Pixar Inc.+ ...................................... 3,913
2,000 Registry Magic Inc. .............................. 12,000
--------------
859,663
--------------
TOTAL COPYRIGHT/CREATIVITY
COMPANIES .................................................. 44,527,206
--------------
DISTRIBUTION COMPANIES - 44.6%
Broadcasting - 8.5%
70,000 Ackerley Group Inc. .............................. $ 1,382,500
5,550 American Tower Systems, Cl. A .................... 141,524
1,000 Audiofina ........................................ 42,213
3,000 Baton Broadcasting Inc.+ ......................... 31,663
1,500 BHC Communications Inc., Cl. A ................... 175,500
2,500 British Sky Broadcasting Group,
Sponsored ADR .................................. 130,469
18,000 CanWest Global Communications
Corp. .......................................... 218,296
2,000 Carlton Communications plc,
Sponsored ADR .................................. 67,750
7,000 CBS Corporation .................................. 169,750
1,000 Chancellor Media Corp., Cl. A+ ................... 33,375
29,077 Chris-Craft Industries Inc. ...................... 1,284,840
500 Clear Channel Communications Inc.+ ............... 23,750
5,000 Cox Radio Inc., Cl. A+ ........................... 175,625
500 Emmis Broadcasting Corp., Cl. A+ ................. 18,875
200 Europe 1 Communication ........................... 40,001
18,120 Fisher Companies Inc. ............................ 1,236,690
2,500 General Electric Co. ............................. 198,906
8,750 Gray Communications Systems Inc. ................. 247,734
40,000 Gray Communications Systems Inc.,
Cl. B .......................................... 995,000
7,000 Groupe AB SA, ADR+ ............................... 27,563
5,000 Grupo Radio Centro, SA de CV, ADR ................ 31,875
500 Jacor Communications Inc.+ ....................... 25,313
15,000 King World Productions Inc.+ ..................... 391,875
700 LaGardere S.C.A .................................. 19,988
20,000 Liberty Corp. .................................... 831,250
400 Metropole TV M6 SA ............................... 60,716
1,100 Nippon Television Broadcasting ................... 307,782
5,000 NTN Communications Inc.+ ......................... 3,438
5,000 Pathe SA ......................................... 937,533
55,000 Paxson Communications Corp., Cl. A+ .............. 505,313
1,220 SAGA Communications Inc., Cl. A+ ................. 19,215
2,000 Scandanavian Broadcasting System SA+ ............. 42,500
43,000 Sistem Televisyen Malaysia Berhad ................ 9,336
50,000 Television Broadcasting Ltd. ORD ................. 127,762
2,500 Television Francaise 1 ........................... 428,587
52,000 Tokyo Broadcasting System ........................ 469,247
2,500 TV Azteca, SA de C.V.+ ........................... 16,406
10,000 United Television Inc. ........................... 1,067,500
--------------
11,937,660
--------------
13
<PAGE>
The Gabelli Global Multimedia Trust Inc.
Portfolio of Investments (Continued) -- September 30, 1998 (Unaudited)
================================================================================
Market
Shares Value
------ ------
COMMON STOCKS (Continued)
DISTRIBUTION COMPANIES (Continued)
Business Services - 0.1%
4,000 Checkfree Holdings Corp .......................... $ 39,500
1,000 IMS Health Inc. .................................. 61,938
333 Nielsen Media Research Inc. ...................... 3,413
7,600 R.H. Donnelley Corp. ............................. 94,050
--------------
198,901
--------------
Cable - 11.0%
30,750 Cable Michigan Inc.+ ............................. 1,068,562
93,800 Cablevision Systems Corp., Cl. A+ ................ 4,050,987
25,000 Century Communications Corp.,
Cl. A+ ......................................... 596,874
5,000 Comcast Corp., Cl. A ............................. 233,125
1,000 Comcast Corp., Cl. A Special ..................... 46,938
4,000 Comcast U.K. Cable Partners Ltd.,
Cl. A+ ......................................... 62,000
2,000 General Cable plc, ADR+ .......................... 39,125
57,000 MediaOne Group Inc. .............................. 2,532,938
10,000 Mercom Inc. ...................................... 108,750
3,000 NTL Inc.+ ........................................ 129,000
80,000 Rogers Communications Inc., Cl. B+ ............... 445,000
100,000 TCI Ventures Group + ............................. 1,793,750
55,000 Tele-Communications Inc., Cl. A+ ................. 2,151,880
50,000 Tele-Communications International
Inc., Cl. A + .................................. 1,037,500
12,000 Telewest Communications plc,
Sponsored ADR+ ................................. 270,000
90,000 United International Holdings Inc.,
Cl. A+ ......................................... 871,875
10,000 Videotron Groupe ................................. 105,215
1,000 Wireless One Inc.+ ............................... 625
--------------
15,544,144
--------------
Consumer Services - 0.4%
10,000 Allied Domecq plc ................................ 72,253
17,000 Cendant Corp. .................................... 197,625
2,000 Lowe's Companies Inc. ............................ 63,625
1,000 Department 56 Inc.+ .............................. 27,000
19,000 N2K Inc.+ ........................................ 136,563
3,000 Travel Services Intl. Inc. ....................... 40,688
--------------
537,754
--------------
Entertainment Distribution - 1.0%
6,896 AMC Entertainment Inc. ........................... $ 89,648
25,000 GC Companies Inc.+ ............................... 965,625
10,000 Loews Cineplex Entertainment ..................... 86,250
19,500 Shaw Communications Inc., Cl. B
(Toronto) ...................................... 325,969
2,000 TCI Music Inc.+ .................................. 8,500
--------------
1,475,992
--------------
Equipment - 0.7%
2,000 CommScope Inc.+ .................................. 23,124
4,500 Gemstar International Group Ltd. ................. 208,688
2,500 L-3 Communications Hldgs Inc. .................... 99,219
6,000 Lucent Technologies Inc. ......................... 414,375
2,000 Northern Telecom Ltd. ............................ 64,000
1,000 Philips Electronics N.V., New York ............... 53,375
3,000 Scientific-Atlanta Inc. .......................... 63,375
--------------
926,156
--------------
International Telephone - 6.7%
65,000 BC TELECOM Inc. .................................. 1,533,973
36,000 BCE Inc. ......................................... 1,005,749
5,000 BHI Corp. ........................................ 130,000
38,000 Cable & Wireless plc, Sponsored ADR .............. 1,042,625
29,000 Compania de Telecomunicaciones de
Chile SA, Sponsored ADR ........................ 554,625
500 CPT Telefonica del Peru SA,
Sponsored ADR .................................. 6,125
200,000 CPT Telefonica del Peru, Cl. B ................... 245,539
2,000 Deutsche Telekom AG, ADR+ ........................ 58,875
2,000 Esprit Telecom Group plc, ADR+ ................... 52,000
1,000 France Telecom SA, Sponsored ADR+ ................ 58,750
42,000 GST Telecommunications Inc.+ ..................... 262,500
500 Magyar Tavkozlesi Rt, Sponsored ADS .............. 10,844
80 Japan Telecom Co., Ltd. .......................... 480,498
10 Nippon Telegraph & Telephone Corp. ............... 72,880
11,000 Philippine Long Distance Telephone Co. ........... 222,750
7,000 PT Indosat ADR ................................... 37,188
4,000 PT Telekomunikasi Indonesia ...................... 11,750
6,000 Quebec-Telephone ................................. 59,786
4,000 Rostelecom, Sponsored ADR ........................ 8,000
3,600 Telecom Argentina Stet -
France Telecom SA,
Sponsored ADR .................................. 106,875
14
<PAGE>
The Gabelli Global Multimedia Trust Inc.
Portfolio of Investments (Continued) -- September 30, 1998 (Unaudited)
================================================================================
Market
Shares Value
------ ------
COMMON STOCKS (Continued)
DISTRIBUTION COMPANIES (Continued)
International Telephone (Continued)
1,000 Telecom Corp. of New Zealand Ltd.,
ADR ............................................ $ 30,125
16,500 Telecomunicacoes Brasileiras SA
(Telebras), Sponsored ADR ...................... 1,138,500
3,000 Telefonica de Argentina SA, Sponsored
ADR ............................................ 88,313
15,000 Telefonica de Espana, Sponsored
ADR ............................................ 1,619,063
12,000 Telefonos De Mexico SA, Cl. L, ADR ............... 531,000
600 Telstra Corporation Ltd., ADR+ ................... 33,375
--------------
9,401,708
--------------
Satellite - 1.5%
300 Asia Satellite Telecommunications
Holdings Ltd., Sponsored ADR+ .................. 3,786
40,000 COMSAT Corp. ..................................... 1,410,000
5,000 EchoStar Communications Corp., Cl. A+ ............ 120,000
1,000 General Motors Corp., Cl. H ...................... 36,813
4,000 Globalstar Telecommunications+ ................... 46,250
12,008 Loral Space & Communications Ltd. ................ 177,118
70,000 TCI Satellite Entertainment Inc.,
Cl. A+ ......................................... 201,250
9,000 U.S. Satellite Broadcasting Co.+ ................. 63,563
--------------
2,058,780
--------------
Speciality Chemicals - 1.0%
20,000 BetzDearborn Inc. ................................ 1,382,500
--------------
Telecommunications - 3.0%
2,000 Allegiance Telecom Inc. .......................... 16,750
10,000 Alltel Corp. ..................................... 473,750
4,000 Bruncor Inc. ..................................... 45,233
10,000 CoreComm Ltd. .................................... 108,750
3,000 Electric Lightwave Inc., Cl. A+ .................. 25,500
40,000 Frontier Corp .................................... 1,095,000
1,306 Hellenic Telecommunication
Organization SA (OTE) .......................... 31,309
7,000 Metromedia International Group Inc.+ ............. 27,125
3,000 NewTel Enterprises Ltd. .......................... 57,032
50,000 RCN Corporation+ ................................. 650,000
20,000 Southern New England
Telecommunications Corp. ....................... 1,562,500
3,000 Telegroup Inc.+ .................................. 17,250
12,000 Tel-Save Holdings Inc.+ .......................... 134,250
2,000 USN Communications Inc. .......................... $ 2,750
--------------
4,247,199
--------------
Telecommunications - Long Distance - 1.6%
20,754 AT&T Corp. ....................................... 1,212,835
6,220 MCI Worldcom Inc. ................................ 303,978
7,000 Sprint Corp. ..................................... 504,000
2,000 STARTEC Global Communications
Corp.+ ......................................... 13,750
17,500 Viatel Inc. ...................................... 185,938
--------------
2,220,501
--------------
U.S. Regional Operators - 1.3%
5,000 Cincinnati Bell Inc. ............................. 130,000
47,075 Citizens Utilities Co., Cl. B+ ................... 382,488
22,000 Commonwealth Telephone Enterprises
Inc.+ .......................................... 577,500
11,000 GTE Corp. ........................................ 605,000
1,462 SBC Communications Inc. .......................... 64,968
2,000 US WEST Communications Group+ .................... 104,875
--------------
1,864,831
--------------
Wireless Communications - 7.8%
90,000 Aerial Communications Inc.+ ...................... 331,874
2,000 AirTouch Communications Inc. ..................... 114,000
5,000 BCE Mobile Communications Inc.+ .................. 116,358
3,000 Cable & Wireless Communications plc,
ADR ............................................ 99,375
1,000 CAI Wireless Systems Inc.+ ....................... 40
10,000 Cellular Comm of Puerto Rico ..................... 116,250
40,000 Centennial Cellular Corp., Cl. A+ ................ 1,280,000
30,000 Century Telephone Enterprises Inc. ............... 1,417,500
24,000 Iridium World Communications Ltd. ................ 918,000
250 Leap Wireless International Inc. ................. 1,171
8,447 NEXTEL Communications Inc.,
Cl. A+ ......................................... 170,524
5,000 Omnipoint Corp.+ ................................. 37,188
3,904 Price Communications Corp.+ ...................... 30,500
1,000 Qualcomm Inc.+ ................................... 47,938
37,000 Rogers Cantel Mobile Communications
Inc., Cl. B+ ................................... 284,438
2,000 Rural Cellular Corp., Cl. A+ ..................... 24,000
14,200 SK Telecom Co. Ltd., ADR ......................... 100,288
300,000 Telecom Italia Mobile SpA ........................ 1,748,402
83,900 Telephone and Data Systems Inc. .................. 2,926,013
8,000 Teligent Inc., Cl. A+ ............................ 220,000
15
<PAGE>
The Gabelli Global Multimedia Trust Inc.
Portfolio of Investments (Continued) -- September 30, 1998 (Unaudited)
================================================================================
Market
Shares Value
------ ------
COMMON STOCKS (Continued)
DISTRIBUTION COMPANIES (Continued)
Wireless Communications (Continued)
18,000 Total Access Communications plc .................. $ 11,970
20,000 U.S. Cellular Corp.+ ............................. 596,250
12,000 Vanguard Cellular System Inc. .................... 228,000
4,000 Vimpel-Communications Sponsored ADR+ ............. 21,000
10,000 WinStar Communications Inc.+ ..................... 237,500
--------------
11,078,579
--------------
Utilities - 0.1%
2,000 Orange & Rockland Utilities ...................... 109,750
--------------
TOTAL DISTRIBUTION COMPANIES 62,984,455
--------------
TOTAL COMMON STOCKS 107,511,661
--------------
PREFERRED STOCKS - 3.1%
Broadcasting - 0.2%
7,500 Granite Broadcasting Corp., Cv. Pfd. ............. 249,375
--------------
Consumer Services - 0.1%
4,000 Cendant Corp., Cv. Pfd. .......................... 87,000
--------------
Diversified Publishers - 0.0%
1,000 Golden Books Family Entertainment Inc.
8.75% Cv. Pfd. ................................. 16,250
--------------
Global Media and Entertainment - 1.0%
62,765 News Corp. Ltd., Sponsored ADR, Pfd. ............. 1,404,367
--------------
US Regional Operators - 1.2%
41,000 Citizens Utilities Co., 5.00% Cv. Pfd. ........... 1,763,000
--------------
Wireless Communications - 0.6%
13,000 AirTouch Communications Inc.,
Ser. B, 6.00% Cv. Pfd. ......................... 611,000
3,000 AirTouch Communications Inc.,
Ser. C, 4.25% Cv. Pfd. ......................... 244,500
--------------
855,500
--------------
TOTAL PREFERRED STOCKS ....................................... 4,375,492
--------------
COMMON STOCK WARRANTS AND RIGHTS - 0.0%
200 Havas Advertising, Warrants, expires 05/13/01 .... $ 479
4,400 Commonwealth Telephone Enterprise, Rights ........ 12,650
--------------
TOTAL COMMON STOCK WARRANTS
AND RIGHTS ................................................. 13,129
--------------
Principal
Amount
---------
CORPORATE BONDS - 0.4%
Cable - 0.2%
$300,000 Tele-Communications International Inc.,
Sub. Deb. Cv., 4.50% due 02/15/06 .............. 288,375
100,000 Rogers Communications Inc., Sub. Deb. Cv.,
7.50% due 09/01/99 ............................. 64,571
--------------
352,946
--------------
Equipment - 0.1%
90,000 Trans-Lux Corp., Deb. Cv.,
7.50% due 12/01/06 ............................ 76,950
--------------
Global Media and Entertainment - 0.1%
20,000 Boston Celtics, Deb.,
6.00% due 06/30/38 ........................... 11,779
100,000 Viacom Inc., Sub. Deb.,
8.00% due 07/07/06 ........................... 102,250
--------------
114,029
--------------
Hotels and Gaming - 0.0%
16,000 Hilton Hotels Corp., Deb. Cv.,
5.00% due 05/15/06 .......................... 13,960
--------------
Software - 0.0%
50,000 BBN Corp., Sub. Deb. Cv.,
6.00% due 04/01/12 .......................... 48,563
--------------
TOTAL CORPORATE BONDS 606,448
--------------
16
<PAGE>
The Gabelli Global Multimedia Trust Inc.
Portfolio of Investments (Continued) -- September 30, 1998 (Unaudited)
================================================================================
Principal Market
Amount Value
--------- ------
U.S. TREASURY BILLS - 21.1%
$29,849,000 4.64% to 4.98% ++
due 10/15/98 to 12/24/98 ..................... $ 29,746,761
-------------
TOTAL INVESTMENTS
(Cost $113,627,087) (a) - 100.7% .......................... 142,253,491
-------------
OTHER ASSETS, LIABILITIES AND
LIQUIDATION VALUE OF CUMULATIVE
PREFERRED STOCK - (22.9%) ................................ (32,382,589)
-------------
NET ASSETS - COMMON STOCK
(10,870,015 common shares outstanding) - 77.8% ........... 109,870,902
-------------
NET ASSETS - CUMULATIVE
PREFERRED STOCK
(1,250,000 preferred shares outstanding) - 22.2% ......... 31,346,250
-------------
TOTAL NET ASSETS - 100.0% .................................. $ 141,217,152
=============
NET ASSET VALUE PER COMMON SHARE
($109,870,902 / 10,870,015 shares outstanding ) .......... $ 10.11
=============
SCHEDULE OF FORWARD FOREIGN
EXCHANGE CONTRACTS
Expiration Unrealized
Date Depreciation
---------- ------------
Forward Foreign Exchange Contracts to Deliver
2,200,000(b) Hong Kong Dollars in exchange
for USD $279,782 .................... 02/26/99 ($5,563)
======
- ----------
(a) For Federal tax purposes:
Aggregate cost .................................... $ 113,627,069
=============
Gross unrealized appreciation ..................... $ 37,666,657
Gross unrealized depreciation ..................... (9,040,235)
-------------
Net unrealized appreciation ....................... $ 28,626,422
=============
(b) Principal amount denoted in Hong Kong Dollars
+ Non-income producing security.
++ Represents annualized yield at date of purchase.
ADR -- American Depositary Receipt
ADS -- American Depositary Share
USD -- United States Dollars
ORD -- Ordinary Share
GDR -- Global Depositary Receipt
% of
Market Market
Geographic Diversification Value Value
- -------------------------- ------ ------
United States .......................... 82.0% $115,798,065
Europe ................................. 7.8 11,014,938
Canada ................................. 3.9 5,507,469
Asia/Pacific Rim ....................... 3.4 4,801,383
Latin America .......................... 2.9 4,095,297
----- ------------
Net Assets ........................... 100.0% $141,217,152
===== ============
17
<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 Inc.
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
18
<PAGE>
payment date or, if that date is not a NYSE trading day, the next trading day.
If the net 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 NYSE 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 business
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.
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DIRECTORS AND OFFICERS
THE GABELLI GLOBAL MULTIMEDIA TRUST INC.
One Corporate Center, Rye, NY 10580-1434
Directors
Mario J. Gabelli, CFA
Chairman & Chief Investment Officer
Gabelli Funds, Inc.
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, The Bethlehem Corp.
Officers
Mario J. Gabelli, CFA
President & Chief Investment Officer
Bruce N. Alpert
Vice President & Treasurer
Peter W. Latartara
Vice President
James E. McKee
Secretary
Investment Advisor
Gabelli Funds, Inc.
One Corporate Center
Rye, New York 10580-1434
Custodian
State Street Bank and Trust Company
Counsel
Willkie Farr & Gallagher
Transfer Agent and Registrar
State Street Bank and Trust Company
Stock Exchange Listing
Common 7.92% Preferred
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NYSE-Symbol: GGT GGT Pr
Shares Outstanding: 10,870,015 1,250,000
The Net Asset Value appears in the Publicly Traded Funds column, under the
heading "General Equity Funds," in Sunday'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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THE GABELLI GLOBAL MULTIMEDIA TRUST INC.
One Corporate Center
Rye, NY 10580-1434
Internet: http:/ /www.gabelli.com
Third Quarter Report
September 30, 1998
GGT 09/98
