Dissidents to exit Media General board


A knock-down, drag-out proxy fight a year ago landed three nominees of the Harbinger hedge fund on the board of directors at Media General. The annual shareholders’ meeting promises to have less drama this year. None are running for re-election and Harbinger now owns little, if any, of Media General’s stock.

Harbinger officials had complained that Media General overpaid for the four former NBC O&Os it bought from NBC Universal for $600 million, failed to pursue duopolies and shouldn’t have been buying Internet-based companies. With the eventual backing of the mutual funds managed by Mario Gabelli, another large shareholder, Harbinger elected Dan Sullivan, Eugene I. Davis and F. Jack Liebau Jr. to the board of directors, unseating three veteran directors.

As representatives of the owners of the publicly traded Class A shares, the three were still outnumbered by the six elected by the Class B shareholders, primarily the founding Bryan family. They were even more outnumbered when the board quickly expanded to 11 members and brought back two of those voted out, Walter E. Williams and Rodney A. Smolla.

The board will soon return to nine members. Williams, Smolla and a new board-backed nominee, Scott D. Anthony, will stand for election at the April 23 shareholders’ meeting, along with the six Class B directors. Anthony is President of Innosight LLC, a consulting firm.

“Three directors nominated in 2008 by Harbinger Capital Partners were not re-nominated by the Board. Harbinger Capital Partners is no longer a significant shareholder of Media General,” the company said in announcing the nominees.

Before last year’s annual meeting, Harbinger reported owning 4,058,454 shares, or 18.2% of the Class A stock. Its most recent SEC filing in December 2008 showed holdings of 895,371 shares of Media General Class A stock, or 4.03%, putting it below the 5% threshold to require further reporting.

RBR/TVBR observation: Harbinger had specifically pushed for Media General to sell WCMH-TV Columbus, OH and WJAR-TV Providence, RI, two of the four stations it bought from NBC for $600 million, and three Internet businesses which the hedge fund claimed were non-core assets. None of that happened. In one quarterly conference call Media General CEO Marshall Morton claimed that the three unwanted board members were providing useful input, but we note that the company did not even include their names in the press release that included word of their departure.