Belo, Media General Are Optimistic

By: Seth Sutel, AP Business Writer (AP) Newspaper publishers expressed guarded optimism about a recovery in the advertising market Tuesday, saying the effects of the war in Iraq are dissipating.

Speaking to Wall Street analysts and investors at the Mid-Year Review, a conference sponsored by the newspaper industry, executives also welcomed new federal rules allowing publishers to own broadcasting outlets in the same market.

Robert Decherd, chief executive of Dallas-based Belo, said he was confident the publishing and broadcasting company would "work well in a deregulated media environment."

However, he said Belo would be "very patient and smart in how we approach acquisitions. ... We don't feel a compulsion to act just because the rules have changed."

Dunia Shive, Belo's chief financial officer, said the company expects to report earnings per share of 33 cents in the second quarter, below the 36 cents that analysts surveyed by Thomson First Call had been expecting. The company had not previously issued earnings guidance for the quarter.

"We started the year strong, then things slowed down with the war and momentum has been slow to return," Shive said.

Decherd said that while the company had been "bouncing along the bottom" from an operating standpoint, Belo was "pretty optimistic about what we're seeing in July."

Decherd said Belo was making a "modest" investment of "a few million dollars" in a new Spanish-language newspaper in northern Texas called Al Dia. The newspaper is expected to begin publishing by the fourth quarter.

Belo's four daily newspapers include The Dallas Morning News, and it also owns 19 television stations.

J. Stewart Bryan III, chief executive of Richmond, Va.-based Media General Inc., saw signs of improvement in advertising, saying a recovery was "well under way," even though the outlook remains difficult to predict.

"The advertising outlook is improving and we're well-positioned to benefit from its recovery," Bryan said at the conference.

Bryan also said Media General would benefit from the new FCC rules allowing cross-ownership of newspapers and broadcasters. Media General already owns a TV station and newspaper in Tampa, Fla., under an exception from the old rules, and executives say the combination has allowed them to increase the audiences for both properties there.

However, Bryan said Media General would be a "disciplined" bidder in making acquisitions. "We intend to grow in a deliberate way."

Last week, the company reaffirmed its previously issued earnings guidance of 72 cents to 74 cents per share for the second quarter.

Media General's daily newspapers include the Richmond Times-Dispatch, The Tampa (Fla.) Tribune, and 23 other newspapers. It also owns 26 network-affiliated television stations.