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Telecom, media, tech entrepreneurs a big part of America's wealthy list

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Telecom, media, tech entrepreneurs a big part of America's wealthy list

Opinions expressed in this piece are solely those of the author and do not represent the views of S&P Global Market Intelligence.

Telecom, media and tech billionaires account for almost one third of an estimated $2.7 trillion of aggregate wealth and 17% of the top 400 wealthiest Americans, according to my analysis of Forbes' list of the richest people in America, published Oct. 17.

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Analyzing the super rich has become somewhat of a national pastime, particularly following the "Occupy Wall Street" movement's focus on income inequality and economic class disparity. This post is not trying to make any political statement or judgement about the vaunted 1% versus everyone else. Rather, it is a comparison of how the telecom, media and tech, or TMT, wealthy class fare among their peers.

In that context, I am impressed by the capability of the TMT sectors to seemingly generate more wealth of late versus other industries. It says a lot about how much we increasingly rely on technology, even as many struggle with it or complain about it. Consider the following takeaways from Forbes' latest list:

* The aggregate worth of all 400 of the richest Americans was up about 13% in 2017 to $2.7 trillion versus about $2.4 trillion in Forbes' comparable 2016 list.

* The average net worth all 400 billionaires also grew about 12% to $6.7 billion from $6.0 billion in 2016.

* The list's 66 TMT-affiliated players averaged significantly more wealth at about $13.2 billion each in 2017.

* TMT names account for seven of the top 10 on Forbes' 2017 list of the richest Americans. Every member of the top 10 saw their wealth gain by at least a billion since 2016, according to Forbes.

* The price of admission to the exclusive club of top 400 richest Americans was $2 billion this year, up nearly 18% from the $1.7 billion threshold in Forbes' 2016 list. A record 169 billionaires "were too poor to make the cut" Forbes said.

It's not a surprise that record equity markets during the past year helped to lift America's wealthiest. From Sept. 16, 2016 (when the 2016 valuations were finalized) to Sept. 22, 2017 (when Forbes' latest list was completed) the S&P 500 rose 17.0%. During the same period the average TMT stock outperformed the S&P 500 by 560 basis points.

Although Facebook Inc.'s Mark Zuckerberg gained $15.5 billion of value in the 2017 list versus his 2016 worth — the most gained year over year by anyone on the top 400 list — he was still in fourth place overall and third among TMT's richest Americans. Those are the same rankings he held in 2016.

Forbes added 22 new names to its list this year, including two TMT billionaires: Netflix Inc. cofounder Reed Hastings, who tied for 60th place in my TMT rankings; and cable TV veteran Rocco Commisso, who founded Mediacom and owns the New York Cosmos soccer club. Commisso ranked 38th in my TMT list.

Overall, my list of 66 TMT-filtered names are dominated by veteran captains of industry such as Bill Gates (#1), Larry Ellison (#4), Michael Dell (#9), Rupert Murdoch (#19), John Malone (#24), Sumner Redstone (#34), Chuck Dolan (#35), Barry Diller (#44), Ted Turner (#60) and James Clark (#64). By definition the list does skew older because most accumulated their riches the old fashion way — over decades. The oldest person on my list is Redstone at age 94.

Still, youth is also present thanks in large part to the internet-driven and social media camps of Alphabet Inc.'s Google, Facebook, Snap Inc. and WhatsApp. The largest group of TMT billionaires comes from Cox Enterprises, whose ancestors built an old media empire a century ago beginning with The Atlanta Constitution.

A word about methodology. This is the 36th year Forbes has published its list and it readily admits the speculative nature of valuing privately held assets and balance sheets. Forbes uses public values and comparable figures whenever possible.

My TMT list did not include billionaires who are dependent more on industrial tech and pure business software. I also did not include entrepreneurs who are not having some impact on media and entertainment, communications, or telecom.