RICHMOND, Va., Dec. 9 /PRNewswire-FirstCall/ -- Media General, Inc.
(NYSE: MEG) will update investors today on the company's business
strategy at the 37th Annual UBS Global Media & Communications
Conference in New York at 1:30 p.m. ET. Company speakers will be
Marshall N. Morton, president and chief executive officer; Reid
Ashe, executive vice president and chief operating officer, and
John A. Schauss, vice president-finance and chief financial
officer. Mr. Morton said, "Advertiser spending patterns have firmed
in the fourth quarter. We expect total revenues to be down 14-16
percent from last year, which compares sequentially with an 18
percent decrease in the third quarter of this year. Last year's
fourth quarter included $23 million of Political revenues and the
third quarter of last year included $7.5 million of Political
revenues. The improvement we've seen is primarily in the automotive
and Retail categories. On the television side, higher automotive
spending is mostly coming from the manufacturers, although we've
seen an uptick in local dealer advertising in some markets. On the
newspaper side, we've seen positive signs with local dealers in
some markets, including Tampa and Richmond. Within the Classified
category, auto has been declining at a much lower rate than
employment or real estate. The preprints placed in our newspapers
over the Thanksgiving holiday met or exceeded last year's levels in
several markets, and this has continued. Digital Media advertising
revenues continue to increase, most notably in the Local and
advertising services categories. "Through the first nine months of
this year, our total operating costs were down 19 percent compared
with last year. We expect to end the year at that same level. Our
2008 total operating costs were 6 percent below 2007," he said. In
2009, Media General eliminated across-the-board salary increases,
suspended the company match for the 401(k) plan, implemented 15
furlough days for essentially all employees, froze retirement plan
benefits and suspended the dividend. Workforce reductions have been
accomplished through streamlining, consolidating, centralizing and
outsourcing. Today, Media General has nine newspaper printing
facilities, down from 25 facilities 10 years ago. "To further
leverage our printing assets, early this year, we set up a new
group to run our printing and distribution operations and focus on
outside sales. This approach has freed our Publishers to focus on
content and advertising sales and has generated more than $5.5
million in annualized outside revenues," Mr. Morton said. "During
the difficult operating environment of the past three years, we've
reduced our debt by nearly $200 million, or 22 percent, using free
cash flow and proceeds from asset sales. At the end of the third
quarter, our debt was $706 million. We expect to reduce debt an
additional $6-$10 million by the end of the year," he said. Media
General has pared back capital spending to an expected $20 million
in 2009, and the 2010 spending level is expected to be $28-29
million. "Tough times also have inspired us to stretch in new
directions and with great urgency. We've continued to embrace all
the new opportunities provided by advancing technologies and
changing consumer preferences. We've placed tremendous emphasis on
strengthening our sales culture to drive new revenues, especially
for online and mobile platforms. We greatly heightened our focus on
innovation throughout the company. All properties have innovation
teams in place to drive new ideas that meet customer and local
market needs. We quickly identify high-potential new products and
services that can be scaled across the enterprise," Mr. Morton
said. Reid Ashe, executive vice president and chief operating
officer, reviewed the company's digital strategy. "We're building
new services customized for mobility and tailored to the specific
devices people carry. Strategic partnerships, notably with Yahoo!,
are also an important part of our digital strategy. We combine our
deep customer relationships and local credibility with other's
global scale and best-of-class technology." Mr. Ashe said, "Our
digital strategies continue to drive double-digit audience growth.
This year, our unique visitors are on track to increase more than
30 percent. Our total digital revenues this year are expected to
reach $42 million, up 8 percent from last year. This will account
for 6 percent of our total revenues, up from 4.7 percent last year.
According to Borrell's, we're among the top performers in our
industry for this metric. Online Classifieds no longer dominate as
they once did when we were almost exclusively reliant on upsells to
the Web from ads placed in our newspapers. Today, our
direct-to-the-Internet Help Wanted sales outpace newspaper upsells.
Through our Yahoo! HotJobs partnership, we provide more job
listings in most of our markets than either Monster or
Careerbuilder." Local direct-billed revenue is Media General's
largest and fastest growing category. "This year it's up nearly 30
percent. Many of our online customers are brand new to us," Mr.
Ashe said. Revenues from Yahoo! online products will be $7 million
in 2009 with two-thirds from HotJobs ads. More than 8 million
visitors year-to-date have come to Media General's Web sites as a
result of local news headlines on Yahoo! pages, an increase from 5
million in 2008. "Mobile versions of our local Web sites draw about
2 million page views a month from more than 400,000 unique
visitors. Our mobile Web sites are designed for display on any
mobile device, and they all provide mobile video," Mr. Ashe said.
Media General is part of a broadcast industry partnership to define
standards and explore business models for digital mobile
television. "We foresee expanded viewership through mobile and
hand-held devices, and we believe the revenue model has potential
to include both advertising and subscriptions," he said. "Our
newest interactive service, DealTaker.com, finds the best prices on
the Web for a wide variety of consumer items. DealTaker is one of
the top ten sites of its kind, and it averages more than 60,000
unique visitors a day. It's highly profitable and growing fast.
DealTaker's Black Friday revenues were ahead of last year by 50
percent, and Cyber Monday was 75 percent ahead of last year," Mr.
Ashe said. Media General's newspaper circulation revenue is up 8.5
percent in 2009. "We've aggressively raised prices. We're finding a
stable base of loyal readers who value the content and service we
provide. After slowing our subscription sales pressure earlier in
the year for cost reasons, we've now picked up the pace and
circulation is growing again. Nine of our newspapers offer
e-editions, which are exact online replicas of the print versions.
E-editions count as paid circulation and include all our ROP ads.
We can price them attractively because they require no
manufacturing or materials cost," Mr. Ashe said. John Schauss, vice
president-finance and chief financial officer, said, "As we near
the close of the fourth quarter, we are encouraged by the firming
of advertiser spending we've seen, although we do not expect to
fully replace the $23 million of Political revenues that we
garnered in last year's fourth quarter. Nonetheless, our lower cost
structure will more than offset the impact of lower revenues. In
the fourth quarter, we will recognize a tax benefit of $25-30
million, for which we will also receive a cash refund next year. We
will use the tax refund for debt reduction. This came about as a
result of Congressional carry-back legislation." Mr. Schauss said,
"While visibility for 2010 is limited, our view at this point is
that total revenues will be flat to slightly up. We expect a
low-to-mid single digit increase in broadcast revenues. Key drivers
will be Political and Olympics revenues, stronger transactional
business, and growth in cable retransmission fees." Media General
projects Political revenues in 2010 next year of $32-34 million.
Key election races will be in Alabama, Florida, Georgia, Ohio,
Rhode Island, South Carolina and Virginia. The Winter Olympics are
projected to generate $7 million in revenues for its eight NBC
stations. Cable retransmission fees next year will be $18-19
million, compared to $16 million in 2009. Mr. Schauss said,
"Newspaper revenues are expected to be flat to down slightly
compared with this year. Our newspaper business will benefit from
the incremental revenues from new outside printing and distribution
customers, and also from growing circulation revenues. "On the
expense side, until market conditions allow, we will hold in place
our programs for controlling employee compensation expense, except
that we plan to enter 2010 with the expectation that furlough days
are behind us. We expect the Board will revisit the dividend at the
appropriate time. Currently, we're benefiting from significantly
lower newsprint expense. While newsprint prices are expected to
increase next year, our overall newsprint expense is expected to be
down as a result of lower consumption. We expect a low-to-mid
single-digit increase in total operating costs next year, before
interest expense," Mr. Schauss said. "While our bank facilities do
not mature until mid-2011, we're encouraged by the recently
completed and pending refinancing activity in our space. We're
evaluating refinancing opportunities in the bank, public, and
institutional markets, and we are optimistic about the options that
will be available to us. Our refinance package will carry higher
interest expense over the current one but will provide us with
greater flexibility. We expect the increase will be $25-30 million
over this year's projected $42 million in interest expense," Mr.
Schauss said. Mr. Morton concluded, "As we look to the New Year, we
believe we've reached equilibrium between revenues and expenses.
We're in a strong position to benefit from a recovery. We look
forward to next year's Political and Olympics revenues, and we
expect a lift from an improving economy. However, we're not just
going to ride those waves. The future that will sustain us is going
to be one of our own making in our own markets. With our market
focus, our sales culture transformation, and our success with new
products and services, Media General is executing on a strategy
that is designed to control our own destiny for the long run. "We
also will continue to draw profitable growth from all the positives
that drive us. We're deeply embedded as a leading media company in
the Southeastern United States, which, despite the recession,
remains one of the nation's strongest regions. We own outstanding
assets in highly attractive markets. Our lower cost base greatly
increases our flexibility to do new things. In the digital world,
the new things that we can do don't cost a lot on an incremental
basis. With all the opportunities available for growth via digital
and electronic means, we no longer have to buy into new markets, or
make significant acquisitions, to realize meaningful growth over
the long term," Mr. Morton said. "Our customer- and market-focused
company is ahead of the game in transforming itself in a rapidly
changing industry. We believe our financial results will improve
over time, based on the clear and consistent initiatives we're
executing and on the fundamental strengths of our assets and our
region. We are committed to increasing long-term shareholder
value," Mr. Morton said. Following today's presentation, a full
text and slides from the presentation will be available on Media
General's Web site, http://www.mediageneral.com/. An audio replay
will be available on Wednesday, December 9, 2009. Click on the link
on the Media General Home Page. Forward-Looking Statements This
news release contains forward-looking statements that are subject
to various risks and uncertainties and should be understood in the
context of the company's publicly available reports filed with the
Securities and Exchange Commission. Media General's future
performance could differ materially from its current expectations.
About Media General Media General is a leading provider of news,
information and entertainment across multiple media platforms,
serving consumers and advertisers in strong local markets,
primarily in the Southeastern United States. Media General's
operations are organized in five geographic market segments and a
sixth segment that includes the company's interactive advertising
services and certain other operations. The company's operations
include 18 network-affiliated television stations and associated
Web sites, 21 daily newspapers and associated Web sites, more than
200 specialty publications that include weekly newspapers, and
niche publications targeted to various demographic, geographic and
topical communities of interest. Many of the company's specialty
publications have associated Web sites. Media General operates
three interactive advertising services companies: Blockdot, which
specializes in interactive entertainment and advergaming
technologies; DealTaker.com, a coupon and shopping Web site; and
NetInformer, a leading provider of wireless media and mobile
marketing services. DATASOURCE: Media General, Inc. CONTACT:
Investors, Lou Anne Nabhan, +1-804-649-6103, or Media, Ray
Kozakewicz, +1-804-649-6748, both of Media General, Inc. Web Site:
http://www.mediageneral.com/
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