Another tough quarter for Media General


It was no surprise that Media General’s TV revenues were below the political ad-inflated numbers for Q3 of 2010, but the company’s core broadcast revenues, excluding political, were down in Q3 of 2011. The TV/newspaper/digital media company posted total revenues and earnings per share (EPS) that were below Wall Street expectations

Television revenues fell 13.2% to $65.1 million. Excluding political, CEO Marshall Morton said TV was down 2.4%. Newspaper revenues were down 9.1% to $70.6 million and digital media/other revenues declined 14.8% to $9 million. Thus, total revenues were down 11.3% to $144.7 million.

The company posted an operating loss of $20.9 million – although that was due to a $26.6 million write-off for goodwill impairment – compared to an operating profit of $11.5 million a year ago. Morton said broadcast cash flow was $19 million and print cash flow was $6 million.

“Media General’s third-quarter results reflected an expected but significant drop in Political revenues in this off-election year as well as general economic uncertainty. A lack of clarity in the global financial markets, significant uncertainty regarding the US government’s plan of action domestically and a downward turn in the economy all contributed to a further softening of the advertising market,” said Morton in a statement ahead of his quarterly conference call with analysts and investors.

He did insist that there is reason for optimism. “Despite a challenging economic environment, Media General has several positive catalysts on the horizon. In the fourth quarter, we are seeing a welcome strengthening in automotive advertising. We may see Political revenues advance into the latter part of this year from early primaries in Florida and South Carolina. Fourth-quarter broadcast pacings are 9-11 percent ahead of last year, excluding Political advertising. Looking to 2012, we expect significant Political revenues as well as advertising from the Summer Olympics and the Super Bowl on our eight NBC stations. This positive outlook notwithstanding, as our properties develop budgets for 2012, core revenue assumptions will be appropriately conservative, and expenses will be scaled to the revenue opportunity a particular market is expected to generate. We continue to accelerate our digital strategy, including new ways to be paid for our content. We have differentiated local content that people need, top-rated local news and strong local advertiser relationships to support our plans to increase cash flow generation,” Morton said.

The company’s net loss in Q3 was $29.8 million, or $1.32 per share, compared to a net loss of $10.7 million, or 48 cents per share, a year ago.

RBR-TVBR observation: Media General has not only been hurt by the slumping newspaper business, but its TV group is also underperforming. Wall Street has noticed. Media General’s stock price has fallen more than 77% this year and was one of the hardest-hit broadcasting stocks in RBR-TVBR’s daily chart through the first three quarters of 2011.