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Friday, February 12, 2010

Media General Announces Amended and Extended Credit Facility and Completion of Senior Notes Placement

Richmond, Va. – Media General (NYSE: MEG) today announced that the company has successfully put in place a new financing structure that will provide it with enhanced financial flexibility in the coming years.  Simultaneously, the company amended its existing credit facilities and completed the sale of its previously announced private placement of Senior Notes.

Following the transactions, the company has in place with its syndicate of banks a $400 million term loan that is fully drawn and a $70 million revolving credit line with approximately $6 million drawn.  Also outstanding are 11.75% Senior Notes with a par value of $300 million issued at a discount, which mature in 2017.  The amended credit facility matures in March 2013 and bears an interest rate of LIBOR plus a margin based on the company’s leverage ratio, as defined in the agreement.  The covenants have been amended to reflect the current operating environment and position the company to emerge from the economic downturn.  Total debt outstanding is approximately $700 million.

“We are pleased with the overall parameters of our new financing structure as well as the strong response we received from our lenders and new fixed income investors.  Our amended and extended credit facility and Senior Notes placement provide Media General with greater financial flexibility as we execute our business strategy while continuing to navigate soft economic conditions,” said Marshall N. Morton, president and chief executive officer.

“We are committed to further strengthening our financial position and building shareholder value over the long term.  In combination with our significantly reduced cost structure, Media General is well-positioned to capitalize on an improved economy.  Our focus will continue to be on the development of our fast-growing digital media businesses and building on the strong content-generating strengths of our local broadcast television and newspaper platforms,” said Mr. Morton.

The company expects interest expense in 2010 to approximate $72 million, which includes approximately $6 million of new and existing debt issuance costs to be expensed immediately.  Excluding this $6 million, the all-in interest rate in 2010 approximates 8.5%.

Media General expects free cash flow in 2010 will be approximately $58-60 million, an increase from the previous estimate of $48-$50 million, which mostly reflects the timing of the second interest payment on the bonds moving into early 2011.  Capital expenditures are expected to be approximately $26 million, down from the previous forecast of $28-29 million.

A copy of the new credit agreement and several documents relating to the Senior Notes are available on the company’s Web site as an SEC Form 8-K filing posted to the Investor Relations section.

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 interactive advertising services and certain other operations.  The company’s operations include 18 network-affiliated television stations and their associated Web sites, three metropolitan and 20 community newspapers and their associated Web sites, and 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 additionally operates three interactive advertising services companies:  Blockdot, which specializes in interactive entertainment and advergaming technologies;, a coupon and shopping Web site; and NetInformer, a leading provider of wireless media and mobile marketing services.

8-K: New Financing Structure (Feb. 12, 2010)

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

Media Contact:
Ray Kozakewicz
(804) 649-6748