By: Mark Fitzgerald
In a switch from its publishing peers, Media General Inc. reported a net loss for the second quarter Wednesday, but said revenue rose 2% — its first increase in three years.
The parent of The Tampa Tribune and Richmond Times-Dispatch recorded a net loss of $4.3 million, or 19 cents per share, which t attributed to higher interest expense resulting from its debt restructuring earlier this year as well as non-cash tax expense. The net loss compares to a net gain in the 2009 second quarter of $20.6 million, or 90 cents per share, which included a tax benefit of $11 million and a gain of $7.1 million from the sale of a television station in Jacksonville, Fla.
Total revenue rose mostly as a result of political advertising at Media General’s television stations, the company said.
“Media General’s second-quarter operating results included $7 million in Political revenues and our television stations also benefited from increased automotive spending, which was up nearly 42% compared with last year,” President and CEO Marshall N. Morton said in a statement.
Newspaper and other publishing revenue continued to fall, although at a moderating rate, Media General said. Publishing revenue was down 7% compared to the year-ago period.
Morton noted an improvement in publishing classifieds: “Year-over-year declines in classified revenues moderated to the mid-to-low single digits in all markets except Florida. Our North Carolina market produced a nearly 3% increase in classified advertising in the quarter.
Media General’s total “Digital Media” revenue increased 8%, with Websites generating a 16% increase. Local online revenue jumped 26%.
Online classifieds were up for the second consecutive quarter, increasing nearly 16%, which Morton attributed largely to sales initiatives related to partnerships with Yahoo and Zillow.
Interest expense was $17.1 million in the second quarter, compared with $11.3 million last year, a result, Media General said, of its new financing structure.
Debt at the end of second quarter of 2010 was $673 million, compared with $693 million at the end of the first quarter of 2010 and $712 million at the beginning of the year. Media General said the reduction reflects a tax refund received in April of approximately $26 million that was used to reduce debt.
Here is how Media General reported its market segments:
Virginia/Tennessee segment profit in the second quarter was $10.5 million, compared to $11.3 million in the 2009 second quarter. Revenues declined 3 percent from last year, while expenses decreased 2 percent. Broadcast revenues were about even with the prior year, despite limited Political advertising at the market’s two television stations in 2010 as the Virginia gubernatorial election was held in 2009. Publishing revenues decreased 4.5 percent. Higher third-party printing and distribution revenues partially offset declines in Local, National and Classified advertising. Local revenues decreased 1 percent, and Classified revenues were down 4 percent. National revenues declined 19 percent, due primarily to lower spending by telecommunications advertisers in Richmond. Digital revenues rose 15 percent, reflecting increases in Local and Classified online advertising.
Florida segment profit was $1.5 million, compared with $193,000 a year ago. Expenses decreased 4 percent, offsetting a 1 percent decline in total revenues. Broadcast revenues increased 17 percent, due to strong Political advertising on WFLA, but were more than offset by lower Publishing revenues. Political revenues were $1.6 million compared with essentially none last year, reflecting gubernatorial, U.S. Senate and U.S. House races. Classified and Local revenues decreased 22 percent and 3 percent, respectively. National revenues increased 11 percent, mostly the result of advertising related to the Gulf of Mexico oil spill. Digital revenues increased 25 percent, due to solid growth in Local, National and Classified online advertising.
Mid-South segment profit was $9.6 million, compared with $6 million in the prior year. Total revenues increased 12 percent, and Broadcast revenues increased 17 percent. The Mid-South Market includes 11 television stations and only three community newspapers. Political revenues were $4.4 million, compared with $311,000 in 2009 and included robust spending for primary elections in South Carolina and Alabama. Local revenues increased 4.5 percent, while National and Classified revenues decreased 3 percent and 5 percent, respectively. Digital media revenues rose 11 percent.
North Carolina segment profit was $1.5 million, which was up slightly from last year. Revenues decreased 2 percent, and expenses were down 4 percent from last year. Broadcast revenues increased 10 percent and included Political revenues of approximately $100,000 at the market’s two television stations. The Raleigh station also benefited from significantly increased National revenues. Publishing revenues in North Carolina declined 8 percent in the second quarter. National and Classified revenues increased 2 percent and 3 percent, respectively, while Local revenues declined 6 percent. Digital media revenues increased 14 percent.
Ohio/Rhode Island segment profit was $3.7 million, compared with $2.6 million last year, due to strong Political and National revenues from the segment’s two television stations. Total revenues increased 10 percent. Political revenues were $708,000 compared with $119,000 in 2009. National advertising increased 20 percent, due to increased automotive, entertainment and health care advertising. Local revenues declined 2 percent. Digital media revenues rose 9.5 percent.
Advertising Services and Other segment profit was $884,000, a 14 percent increase from last year. DealTaker.com, the company’s shopping and coupon Web site, drove the improvement. Revenues rose 11 percent and profit increased 7 percent at DealTaker.com.