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Wednesday, November 15, 2006

Media General Reports October Revenues

RICHMOND, Va. – Media General, Inc. (NYSE: MEG) today reported October 2006 total revenues of $110.2 million, a 24.9 percent increase from October 2005, including the revenues of four new NBC television stations. Excluding the new stations, total revenues increased 7 percent. By business segment, Publishing Division total revenues declined 1.4 percent. Broadcast Division total revenues increased 80.5 percent, or 23.7 percent excluding the new stations. Interactive Media Division total revenues rose 22.1 percent.

“Media General’s revenue growth in October was driven principally by $20.7 million of Political revenues, an all-time monthly record for the company. Political advertising was particularly strong at our Tampa station, and spending was also robust at our new stations in Columbus, Ohio, and Providence, Rhode Island. Our four new NBC stations contributed nearly one-half of the month’s Political revenues,” said Marshall N. Morton, president and chief executive officer.

“Newspaper advertising revenues, including print and online, were just about even with last year, a solid performance in the current soft advertising environment and one that continues to be near the top of peer group results. The brightest spots for the month in the Publishing Division were a 2.3 percent increase in Retail revenues, a 2.3 percent increase in advertising growth at the Richmond Times-Dispatch and growth of 2.4 percent in our Community newspaper group. 

“Interactive Media Division revenues of $2.8 million were a monthly record, and we continue to generate strong revenue growth year-over-year. Page views and visitor sessions rose 18 percent and 16 percent, respectively, for the month,” said Mr. Morton.

“Also in October, we completed the sale of several television stations ahead of our original expectation of doing so by year-end, and we exceeded our expectations of $100 million in net proceeds. We used the after-tax net proceeds of $125 million for debt repayment. This earlier-than-anticipated debt reduction will save on interest expense in the fourth quarter,” he said.

Newspaper print advertising revenues in October declined $300,000, or 0.6 percent. Including online revenues, newspaper advertising revenues decreased 0.3 percent for the month.

Retail advertising revenues increased $530,000, or 2.3 percent, and included continued growth in new products. Retail revenues for The Tampa Tribune and its associated newspapers increased 5 percent, reflecting higher spending in the home furnishings, home improvement, grocery store and drug store categories as well as revenues from Centro, a new Spanish-language weekly. Retail revenues for the Community newspaper group rose 2.3 percent and reflected growth in the Alabama and Northern Virginia markets. At the Winston-Salem Journal, Retail revenues increased 0.6 percent, mostly from a special section. Retail revenues for the Richmond Times-Dispatch declined 1.6 percent, primarily due to lower spending in the department store and medical categories, partially offset by higher spending in the financial and electronic categories.

Classified advertising revenues declined $310,000, or 1.4 percent, due to softness in the automotive and employment categories, partially offset by strength in real estate. Classified revenues at the Richmond Times-Dispatch increased 10.1 percent and held steady in the Community newspaper group, while declining at The Tampa Tribune and the Winston-Salem Journal by 8.2 percent and 7.4 percent, respectively. 

Real estate linage for the company’s three metros increased 9.1 percent. This amount included growth of 5.3 percent at The Tampa Tribune, an increase of 14.4 percent at the Richmond Times-Dispatch, assisted by a special section on new homes, and growth of 10 percent at the Winston-Salem Journal.

Employment linage at the three metros declined 16 percent. The Tampa Tribune’s help-wanted Classified decreased 32.8 percent, and the Richmond Times-Dispatch was down 10.6 percent. On the other hand, the Winston-Salem Journal generated a 4.3 percent increase in help-wanted linage. Automotive linage for the three metros declined 16.4 percent for the month.

National revenues, reflecting continued weakness in telecommunications advertising, declined $520,000, or 12 percent. The Tampa Tribune reported a decline of 18.9 percent, which reflected decreases in the automotive, financial and telecommunications categories. National revenues at the Richmond Times-Dispatch declined 9.3 percent as a result of reduced telecommunications advertising. At the Winston-Salem Journal, revenues decreased 1.5 percent, due to lower spending in the telecommunications and medical categories. National revenues for the Community newspaper group were up 25 percent.

Although Circulation revenues declined $540,000, or 6.7 percent, approximately 70 percent of the decrease was the result of a change in wholesale rates to carriers at several newspapers. Excluding this impact, Circulation revenues declined only 3.2 percent. Ten Media General newspapers generated increases in net-paid Daily Circulation, including the Richmond Times-Dispatch; six did so for Sunday.

In the Broadcast Division, gross time sales increased $27.1 million, or 95.7 percent, including the Company’s four new NBC stations. Excluding the new stations, gross time sales increased 29 percent.

Total Political revenues of $20.7 million compared with $495,000 last October, and were driven by hotly contested gubernatorial races in Rhode Island, Florida and Ohio, and by U.S. Senate campaigns in Rhode Island, Ohio, Florida and Tennessee. This was augmented by heavy issue spending in Rhode Island, Florida and Ohio. Political revenues included $9.3 million from the four new NBC stations. 

Local time sales increased $3.9 million, or 21.4 percent, including the new stations. Excluding these stations, Local time sales decreased 7.5 percent. National time sales increased $3 million, or 30.9 percent, including the new stations. Excluding these stations, National time sales decreased 14.3 percent. The decline in Local and National transactional sales is attributable in part to the intense demand placed on inventory by Political advertising during the month as well as frequent advertisers opting to delay media buys during that time. Lower transactional sales also reflected continuing weakness in certain spending categories, especially automotive.

In the Interactive Media Division, online Classified revenues were down slightly compared to last October as a result of fewer advertisements being upsold to the Web sites from Media General newspapers. Help-wanted was particularly affected. Reflecting an emphasis on generating substantial growth in other online advertising categories, Local revenues increased 50 percent, and National/Regional advertising more than doubled. Revenues from Media General’s Blockdot advergaming business were up 67 percent in October.

About Media General
Media General is a multimedia company operating leading newspapers, television stations and online enterprises primarily in the Southeastern United States. The company’s publishing assets include three metropolitan newspapers, The Tampa Tribune, Richmond Times-Dispatch, and Winston-Salem Journal; 22 daily community newspapers in Virginia, North Carolina, Florida, Alabama and South Carolina; and more than 150 weekly newspapers and other publications. The company’s broadcasting assets include 23 network-affiliated television stations that reach more than 32 percent of the television households in the Southeast and nearly 9.5 percent of those in the United States. The company’s interactive media assets include more than 75 online enterprises that are associated with its newspapers and television stations. Media General also owns a 33 percent interest in SP Newsprint Company, a manufacturer of recycled newsprint.

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Investor Contact:
Lou Anne Nabhan
(804) 649-6103

Media Contact:
Ray Kozakewicz
(804) 649-6748