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Thursday, June 14, 2007

Media General Reports May 2007 Revenues; Provides Second-Quarter Outlook

RICHMOND, Va. – Media General, Inc. (NYSE: MEG) today reported May 2007 total revenues of $75.4 million, a 2.8 percent increase from May 2006, including the revenues of four NBC television stations acquired June 26, 2006.  Excluding the new stations, total revenues declined 7.8 percent.  By business segment, Publishing Division total revenues decreased 12.8 percent.  Broadcast Division total revenues increased 31.3 percent, including the new stations, and decreased 1.9 percent, excluding the new stations.  Interactive Media Division total revenues rose 43.1 percent.

“The economic downturn in Florida continues to hamper our Tampa operations.  This situation is affecting the performance of all three divisions as a result of lower results at The Tampa Tribune, WFLA-TV, and,” said Marshall N. Morton, president and chief executive officer.  “We have implemented a performance improvement plan in Tampa to better align expenses with the current revenue environment, as previously announced, and we are assessing other opportunities.

“Publishing Division results in May reflected continued significant weakness in Classified advertising.  We were very disappointed to see the Retail category decline, a reflection of major retailers holding back on spending in virtually every market.  We saw a few bright spots in May, including increases in real estate Classified advertising in Richmond, a market that has not yet been severely affected by the national housing downturn.  In addition, National revenues increased at The Richmond Times-Dispatch, the Winston-Salem Journal and in our community newspaper group; however, these increases were offset by a decline at The Tampa Tribune,” said Mr. Morton. 

“In the Broadcast Division, lower same-station gross time sales mostly reflected a $1.2 million decline in Political revenues from May 2006.  Higher National time sales were offset by lower Local time sales.  The performance of our new NBC stations was again short of our expectations, partially due to the ongoing weakness in the primetime line-up.  In addition, these stations are being integrated into Media General systems and they are not fully up to the level we expect to see by early next year. We’ve also launched new initiatives at all four stations that are designed to further enhance their ratings.  Weak market conditions in Columbus and Raleigh further challenged those two stations in May.  Overall in our Broadcast business, shrinking automotive advertising budgets, higher levels of order cancellations, and ad dollars being deferred until later in the year are all having an unfavorable impact,” said Mr. Morton.

“To mitigate the effect of the advertising downturn, in addition to Tampa’s performance improvement plan, we have frozen hiring on most open positions, except sales jobs, which we are accelerating our efforts to fill.  We are reducing discretionary spending wherever possible and have asked all of our properties to accelerate new product introductions and intensify their focus on new revenue development,” said Mr. Morton.

“We continue to be pleased with the growth of our Interactive Media Division.  May’s results were driven mostly by strong Local and National/Regional spending and a significant increase in advergaming revenues.  Softness in Classified advertising was partially offset by our new employment initiative with Yahoo!HotJobs.  Page views and visitor sessions increased 24 percent and 31 percent, respectively, including the new NBC station Web sites,” said Mr. Morton.

Publishing Division

Newspaper advertising revenues in May declined $6.1 million, or 14.9 percent, due to lower spending in all advertising categories.

Classified advertising revenues decreased $3 million, or 16.9 percent.  This was principally due to a 38.2 percent decline at The Tampa Tribune, and declines of 3-3.5 percent across the rest of the division.

Employment linage at the company’s three metro newspapers decreased 27.8 percent.  This included declines of 41.5 percent at The Tampa Tribune, 19.4 percent at the Richmond Times-Dispatch, and 25.7 percent at the Winston-Salem Journal.

Automotive linage for the three metros decreased 18.8 percent, and included declines of 27.5 percent at The Tampa Tribune, 14.7 percent at the Richmond Times-Dispatch, and 0.7 percent at the Winston-Salem Journal, which has cycled through large cutbacks by automotive advertisers.

Real estate linage for the three metros was down 25.2 percent.  The Richmond Times-Dispatch generated a 12.5 percent increase, benefiting from continued solid advertising from real estate developers as well as the longer average periods that houses are remaining on the market.  The Tampa Tribune experienced a 46.7 percent decline and the Winston-Salem Journal was down 16.8 percent.

Retail advertising revenues in May decreased $2.5 million, or 13.1 percent.  The Tampa Tribune and its associated newspapers experienced a decline of 17.5 percent as a result of lower home improvement, financial, grocery store and medical advertising.  The Richmond Times-Dispatch reported a 9.9 percent decrease, due to lower drug store, department store and furniture advertising.  The Winston-Salem Journal reported a 17 percent decline, which included lower spending in the department store, grocery store and home improvement categories, and the Community newspaper group was down 10.2 percent.

National revenues decreased $470,000, or 13.9 percent.  The Richmond Times-Dispatch and Winston-Salem Journal generated small increases, while The Tampa Tribune and its associated newspapers saw a decrease of 26.3 percent due to lower telecommunications, financial and entertainment advertising.  The Community newspapers posted a 25.7 percent increase, reflecting higher spending in South Carolina, Northern Virginia and Lynchburg, Virginia.

While Circulation revenues declined $235,000, or 3.8 percent, approximately 85 percent of the decrease was the result of a change in wholesale rates to carriers at several newspapers for which there is a corresponding expense decrease.  Seven Media General newspapers generated increases in net-paid Daily Circulation, and seven did so for Sunday, including the Winston-Salem Journal. All Media General newspapers have implemented content enhancement programs to drive readership.

Broadcast Division

In the Broadcast Division, gross time sales increased $8.2 million, or 33.8 percent, including the new stations.  Same-station time sales decreased 3.5 percent, as higher National advertising revenues were offset by lower Local revenues, and as expected, Political spending decreased.

Local time sales increased $4.9 million, or 32.6 percent, including the new stations.  Same-station Local time sales declined 3.5 percent, principally due to lower spending by automotive advertisers.

National time sales increased $4.4 million, or 57.8 percent, including the new stations.  Same-station National time sales increased 11.9 percent, as a result of higher spending in the telecommunications and entertainment categories, offsetting declines in the automotive and corporate categories. Political revenues of $365,000 compared to $1.5 million last May, and represented early campaign spending from gubernatorial candidates in Kentucky and issue advertising in Florida, Ohio and Alabama.

Interactive Media Division

Interactive Media Division total revenues, including the new NBC station Web sites, rose 43.1 percent.  Higher Local and National/Regional advertising, as well as solid advergaming sales, drove the increased revenues.

Excluding the new NBC station Web sites, Local revenues increased 42 percent over last year, reflecting increased direct sales and the continued focus on staffing and training.  National/Regional advertising more than tripled as a result of strong volume from national networks, especially in the automotive and telecommunications categories, mostly on  Classified revenues decreased 11.2 percent, reflecting the continued weakness in help-wanted advertising, partially offset by revenues from the company’s new employment initiative with Yahoo!HotJobs.  Phase A of this initiative completed its fourth month in most of the company’s markets and Phase B will be launched at on June 20.  Sales from the division’s Blockdot advergaming business more than tripled.


Media General’s outlook for the second quarter is earnings per share in the range of 20 to 25 cents, compared with 77 cents from continuing operations in the second quarter of 2006.

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 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