Media General

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Splitsville: Why newspapers and TV are going their separate ways corporately

Like the sale of the Washington Post this time last year, the merger of E.W. Scripps and Journal Communications, announced last night, and their reorganization into separate print and broadcast companies came as a jaw-dropping surprise.

But the morning after, the complicated transaction makes perfect sense.

  • Local broadcasting is seeing a wave of consolidations. The business is healthy, and getting bigger provides station groups more leverage negotiating retransmission fees with cable providers. That has become a significant new source of revenue growth as political and automotive advertising remain strong.
  • Financially squeezed newspapers drag down the share price of companies with prospering TV, cable and digital divisions. The spinoff of Tribune Publishing scheduled next week and the division of News Corp a year ago give the remaining parent television and entertainment companies investment wind at their back.
  • At the same time, newspaper groups theoretically do better with management whose exclusive focus is on the particular challenges of that industry. 
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LIN Media, Media General plan broadcast merger

LIN Media and Media General announced Friday morning that they are merging to form the second largest pure-play U.S. broadcasting group.

If the FCC approves the merger, the new combined group will reach 46 markets or about 23 percent of the American population.

Half of the stations involved are affiliated with one of the big four networks.

At least a few of the stations may have to be sold off or run by other companies to avoid FCC restrictions on cross ownership in a single market.

It is just the latest in a flurry of acquisitions and mergers in the TV industry that has seen Belo broadcast and Gannett merge and earlier, Media General and Young Broadcasting combined forces. Other players including Meredith, Journal, Tribune, NBC Universal and Sinclair have been recent buyers, too.

According to the announcement by LIN and Media General, which came before the stock market opening Friday, LIN will receive $763 million in cash and 49.5 million shares of stock. Read more


Media General-New Young Broadcasting merger gets FCC, shareholder approval

Media General | Richmond Times-Dispatch

The FCC Friday approved Media General’s planned merger with New Young Broadcasting Holding Co. The companies plan to close the deal Nov. 12, a Media General release says.

On Thursday, Media General’s shareholders approved the deal, which was first announced in June. Significantly for the company, the merger means it will soon own WRIC-TV in Richmond, where the company will remain based after the merger. FCC rules once prevented Media General from owning a television station in Richmond, as it used to own the Richmond Times-Dispatch. Read more


Family control will end at Media General following merger

Richmond Times-Dispatch

The Bryan family will no longer control Media General if a planned merger with New Young Broadcasting occurs. The deal will end a streak going back to the end of the 19th century, when Lewis Ginter gave The (Richmond, Va.) Daily Times to Joseph Bryan.

The agreement will eliminate the “dual-class stock structure that has given [J. Stewart Bryan III], the company’s chairman and former CEO, voting power to elect 70 percent of its board of directors,” John Reid Blackwell reports.

Bryan, the great-grandson of the founder of the newspaper company that grew to become Media General, will remain the combined company’s chairman. He has said he will own about 1 million shares, but his holdings won’t put him among the five largest shareholders — the smallest has about a 5 percent stake — in the new company, regulatory filings show.

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Media General reports net loss, CNN has higher ratings

Media General | TVNewsCheck | Los Angeles Times

Media General reported a net loss of $16 million in the second quarter of 2013, but revenues grew in several advertising categories, including automotive, furniture and home improvement.

Revenue from political advertising fell 86 percent, not exactly a surprise in an odd-numbered year. Also missing this year: Olympics revenue. “Total station revenues in the third quarter this year will decrease due to the near absence of these revenues,” the company says in its earnings release.

The company spent $19.5 million on interest in the second quarter. Retransmission fees increased, as did digital revenue.

Time Warner announced its second quarter earnings Wednesday, reporting a 10 percent rise in revenue. CNN’s ratings were up “almost 70 percent in its key demo,” the company’s release says. Read more

Warren Buffett

Warren Buffett’s big payday, and other notes on Media General’s merger with Young

Few paid much attention to the blandly worded announcement a week ago of a merger between Media General and New Young Broadcasting. That was no surprise — an agreement between two midsize local broadcasting companies isn’t nearly as big a deal as, say, Gannett’s $2.2 billion acquisition of Belo today.

But there were at least three spicy stories lurking beneath the corporate-speak:

Warren Buffett’s Berkshire Hathaway cashed in big

In May 2012 Buffett and Berkshire Hathaway bought all of Media General’s newspapers except the Tampa Tribune.

That deal included two related transactions.

First, Berkshire Hathaway loaned Media General $445 million to refinance a crushing debt load coming due. The initial interest rate was an eye-popping 10.5 percent.

Second, as thanks for saving Media General from that life-threatening financial distress, BH received penny-a-share warrants to acquire 19.9 percent of the company — 4.6 million shares in all.

One benefit of the merger, Media General said last week, is that it will be able to refinance its debt at a considerable savings of interest expense. Read more

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Media General to merge with New Young Broadcasting

Richmond Times-Dispatch | Bloomberg News

Media General and the New Young Broadcasting company of Nashville, Tenn., will merge, the Richmond Times-Dispatch reports.

The new company, which will be called Media General, will own 30 television stations. It will be based in Richmond, Va., where Media General currently operates. Read more


Retiring Media General CEO was ‘always attempting to look to the next mountaintop’

Richmond BizSense
In an exit interview with Michael Schwartz, outgoing Media General CEO Marshall Morton says he’ll have no difficulty “unplugging” — ” I was always attempting to look to the next mountaintop and then decide what pathway would be the most productive one to get there,” Morton says — and that selling the conglomerate’s newspapers to Warren Buffett was a “relief”:

In the past, if we encountered two years of downturn in revenue, we’d have said, “It’s a cycle. It’ll turn around. It always has.” But I did worry about the newspapers. These were our long-term employees who worked hard in a business that had a lot of value in our community. But we just were not able to make any headway. They did induce concern on my part. We’re talking about real people here. So to find an owner like Warren Buffett or Berkshire Hathaway, it was the answer.

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Local advertising grows at Media General, 3rd quarter earnings report shows

Media General
Media General reported strong revenue from automotive, political and Olympics advertising in the third quarter of 2012, but interest on the company’s debt and losses from what remained of its newspaper division drove it to a loss of $30.3 million.

Operating income was up nearly $18 million over the third quarter of 2011. Advertising revenue was up 20 percent at the company’s TV station websites, where local advertising in particular was up 28 percent. Across its properties, local advertising revenue was up 15.6 percent, to $47 million. Station costs were up, in part because of higher sales commissions, the earnings report says. The company has reduced expenses slightly, partly due to corporate layoffs announced in July, and expects more revenue growth in the fourth quarter.

Media General sold most of its newspapers to Berkshire Hathaway in May and sold The Tampa Tribune, its last remaining newspaper, to a private equity firm earlier this month. Read more


Tampa Tribune sold to investment firm

The Tampa Tribune | Tampa Bay Times | MarketWatch
Media General sold The Tampa Tribune to Revolution Capital Group, the companies announced Monday. The sales price was $9.5 million.

“It’s a bittersweet day for Media General to complete the sale of its last remaining newspaper group,” Media General CEO Marshall Morton said in a press release. “We believe strongly in the value of local content,” Revolution managing partner Robert Loring said in the release.

Loring told Tampa Tribune reporter Richard Mullins “We are definitely in this for the long haul. We don’t flip businesses.” Read more

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