Having recently announced another round of furloughs, it is hardly surprising that Q2 revenues and profits were down for Media General. TV was the best performer, but revenues were down along with the newspaper and digital media segments.
“Media General’s second-quarter results reflected the impact of a faltering economic recovery. Our broadcast television stations and website operations delivered relatively strong results, while our print operations, which are more immediately sensitive to economic shifts, and advertising services, were weaker,” said CEO Marshall Morton. “To counter economic weakness, we have reduced discretionary spending, implemented targeted reductions in force and scheduled a furlough program for the second half of the year. We now expect total operating costs for this year to be down 3% from last year,” he said, adding that capital spending planning is also being ratcheted back.
Television revenues were down 3% to $70.4 million. Local gained 5.5% to $45 million and national rose 2.3% to $22.7 million, while political fell 91.6% to $591K. Retrans gained 14.6% to $5.4 million.
Newspaper revenues fell 9.7% to $74.8 million and digital media dropped 10.8% to $9.6 million.
“Our television stations did an excellent job of replacing a large portion of last year’s political revenues. Excluding political advertising in both years, broadcast revenues increased 6.6% in the second quarter. Local time sales grew 5.5% while national time sales increased 2.3%. We have garnered political advocacy advertising in several markets already this year and we look for heightened activity in the second half of this year. We currently expect total political revenues for 2011 to be approximately $7 million. Automotive advertising, which weakened in the past few months, is expected to strengthen by the end of summer,” Marshall said. That $7 million compares to $41.6 million for the 2010 election year.
Classified advertising plunged in Q2 for Media General’s newspapers, down 22.3% to $15.3 million. National also dropped dramatically, falling 29.6% to $4.1 million, mostly due to the lack of the heavy spending a year earlier by BP to bolster its image in the wake of its Gulf of Mexico oil spill. Local print advertising fell only 8% to $33.7 million.
RBR-TVBR observation: At least on the television side you know that political is cyclical and will come rushing back next year. What is there to look forward to for newspapers? If we knew how to fix the newspaper business we could become very rich selling access to the secret.