By: Mark Fitzgerald
Media General Inc. Wednesday afternoon joined the chorus of newspaper publishers telling the UBS Global Media and Communications Conference in New York City that they see the long drought of advertising spending beginning to break.
“Advertiser spending patterns have firmed in the fourth quarter,” Media General CEO Marshall N. Morton said. Total revenue for the broadcast station owner and publisher of The Tampa Tribune and 20 other dailies likely will be down 14% to 16% for the fourth quarter, he added. But Morton noted this quarter’s results face tough comparables with last year’s presidential election period, and that the decline shows a lessening from the 18% decline in Q3.
“On the newspaper side, we’ve seen positive signs with local [auto] dealers in some markets, including Tampa and Richmond,” Morton said. “Within the classified category, auto has been declining at a much lower rate than employment or real estate. The preprints placed in our newspapers over the Thanksgiving holiday met or exceeded last year’s levels in several markets, and this has continued.”
Media General COO Reid Ashe said the company had weaned itself from its dependence on classified upsells in online advertising.
“Today, our direct-to-the-Internet help wanted sales outpace newspaper upsells,” he said. “Through our Yahoo HotJobs partnership, we provide more job listings in most of our markets than either Monster or Careerbuilder.”
Total digital revenue for the year are expected to increase 8% from 2008 to $42 million — account for 6% total revenue, up from 4.7% last year, Ashe said.
Like other companies at the UBS conference, Media General emphasized its aggressive cost-cutting. In 2009, Media General eliminated across-the-board salary increases, suspended the company match for the 401(k) plan, implemented 15 furlough days for essentially all employees, froze retirement plan benefits and suspended its stock dividend, Morton noted.
In the past 10 years, Media General has reduced the number of printing plants to nine from 25.
“To further leverage our printing assets, early this year, we set up a new group to run our printing and distribution operations and focus on outside sales,” he said, adding the group has generated more than $5.5 million in annualized outside revenue.
Media General’s “lower cost structure will more than offset the impact of lower revenues,” CFO and Vice President-Finance John Schauss told the conference.
“While visibility for 2010 is limited, our view at this point is that total revenues will be flat to slightly up,” he said. ” We expect a low-to-mid single digit increase in broadcast revenues.”
Media General has also aggressively paid down its debt, which has been reduced by nearly $200 million, or 22%, in the past three years, Morton said. At the end of Q3, Media General’s debt stood at $706 million, and should fall another $6 million to $10 million by the end of the year, he added.