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Thursday, September 14, 2006

Media General Reports August Revenues, Updates Third-Quarter Outlook

RICHMOND, Va. – Media General, Inc. (NYSE: MEG) today reported August 2006 total revenues of $74.9 million, a 13.3 percent increase from August 2005. By business segment, Broadcast Division total revenues increased 41.8 percent and Interactive Media Division total revenues rose 34.2 percent, while Publishing Division total revenues declined 0.9 percent. Excluding the results of four NBC television stations acquired on June 26, 2006, Broadcast Division revenues increased 7 percent and total company revenues increased 2.3 percent. Results for all periods exclude the revenues of television stations for which the company has announced divestiture plans.

“Media General’s August revenue growth included a 3.3 percent increase in newspaper Retail advertising, healthy growth in National advertising on our television stations, strong Political advertising in several markets and continued robust online advertising growth,” said Marshall N. Morton, president and chief executive officer. “The strength in these categories, however, was partially offset by a soft performance for the month in newspaper Classified and National advertising and in Local time sales at our television stations.

“Retail advertising growth at our newspapers mostly reflected the success of our focus on new product initiatives. Our Classified advertising results mirrored industry trends, including healthy growth in real estate advertising offset by lower spending in the automotive category, and softening of help-wanted advertising compared to the robust growth of that category over the past few years,” he said.

“In the Broadcast Division, same-store National time sales increased 10 percent, driven by higher spending in the automotive, telecommunications and services categories. Total Political revenues of $3 million were driven by the gubernatorial races in Florida and Alabama and by U.S. Senate and state campaigns in Rhode Island, Ohio and Tennessee, augmented by issue spending in Rhode Island.

“We were pleased with the continued strong growth in online advertising. Page views and visitor sessions for August rose 29.8 percent and 26.1 percent, respectively, including the new stations,” said Mr. Morton.

Newspaper advertising in August increased slightly over last year, including Retail advertising revenue growth of $525,000, or 3.3 percent. At The Tampa Tribune, Retail revenues increased 8.7 percent from last year’s hurricane-weakened business environment and reflected higher spending in the financial and furniture categories and the success of a new weekly health publication. Retail revenues for the Richmond Times-Dispatch increased 0.7 percent and reflected increases in the department store category and the benefit of a special section, partially offset by lower spending in the financial and grocery store categories. The Winston-Salem Journal generated 7.2 percent growth in Retail revenues for the month, reflecting higher spending in the financial and department store categories and several special sections published in August. While Retail revenues for the Community newspaper group declined 0.5 percent in the aggregate, the Northern Virginia, Alabama and Southwest Virginia markets delivered increases for the month.

Classified advertising revenues in August decreased $425,000, or 2.5 percent, compared to an exceptionally strong August 2005. The Tampa Tribune reported a decline in Classified revenues of 7.5 percent, reflecting continued weak automotive advertising and softer help-wanted spending, partially offset by continued strength in real estate Classifieds. The Winston-Salem Journal reported a decline in Classified revenues of 11.5 percent, while the Richmond Times-Dispatch reported a 4.7 percent increase in total Classified revenues. The Community newspaper group was up 0.6 percent for total Classified advertising.

At the three metros, real estate linage in the aggregate increased 19.6 percent. The Tampa Tribune, which continued to benefit from a strong new-housing market in the Tampa region, generated a 28 percent increase in real estate Classified linage for the month. The Richmond Times-Dispatch and the Winston-Salem Journal reported real estate advertising linage increases of 30.2 percent and 1 percent, respectively.  

Employment linage at the three metro newspapers decreased 12.7 percent. The Tampa Tribune’s help-wanted Classifieds declined 30.2 percent and the Richmond Times-Dispatch decreased 4.3 percent, while the Winston-Salem Journal had a 4.7 percent increase, resulting from higher volumes from local advertisers. Automotive linage for the three metros declined 28 percent for the month and reflected continued spending restraint by automotive dealers.

National revenues declined $60,000, or 1.8 percent. The Winston-Salem Journal’s National advertising was up 21.4 percent, due to advances in telecommunications and utilities advertising. The Tampa Tribune reported a decline of 1.4 percent, reflecting a decrease in the telecommunications category partially offset by increased automotive advertising. The Richmond Times-Dispatch experienced a decrease of 3.1 percent, due to lower telecommunications advertising.

Circulation revenues were down $425,000, or 6.7 percent. Approximately 40 percent of the decline was due to the elimination of subsidies to independent carriers at several newspapers. Excluding the impact of carrier subsidies, Circulation revenues declined 3.9 percent for the month. Five Media General newspapers posted increases in net-paid Daily Circulation, while overall volume decreased.

In the Broadcast Division, gross time sales increased $10.6 million, or 53.3 percent, including the four new NBC stations. Excluding the four new NBC stations, gross time sales increased 10.3 percent.

Local time sales increased $3.7 million, or 27.9 percent, including the new stations. Excluding these stations, Local time sales decreased 2.5 percent. Declines in automotive and financial spending offset higher spending in the furniture and services categories.     

National time sales increased $4 million, or 62.6 percent, including the new stations. Excluding these stations, National time sales increased 10 percent and reflected increased automotive, services and telecommunications advertising and lower spending in the corporate and transportation categories.

Political revenues of $3 million in August included $1.1 million in spending from the four new NBC stations.

Interactive Media Division revenue growth reflected higher advertising and new products in all categories, led by increases of 9.8 percent and 72 percent in online Classifieds and Local advertising, respectively. National/Regional advertising more than doubled due to campaigns with national agencies across multiple Web sites. Solid real estate advertising growth helped offset softness in help-wanted spending in August, and nearly all Media General Web sites generated higher revenues. Local revenue growth reflected new products sold through an expanded sales force.

Based on actual July and August 2006 revenues, Media General now expects Publishing Division total revenue growth in the third quarter of approximately 1 percent compared to last year’s third quarter. This outlook anticipates continued Retail advertising growth, driven mostly by new product initiatives. In the Classified category, the company expects real estate advertising to remain strong, while automotive and help-wanted advertising should continue to be soft. National and Circulation revenues are projected to show year-over-year declines in the quarter.

For the Broadcast Division, total time sales are now expected to increase approximately 55 percent, including the four NBC stations acquired on June 26, 2006. Political revenues are now projected to be approximately $10 million.

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 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 currently include 30 network-affiliated television stations that reach more than 33 percent of the television households in the Southeast and more than 10 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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