After several years of rapid growth, the sudden slump for the Florida housing market is taking its toll on Media General, which has a major newspaper/TV combination in Tampa. Q2 earnings dropped to 22 cents per share from 85 cents a year ago, with revenues up companywide only because the company bought four new TV stations.
"Over the past few years, we saw significant growth in our Tampa operations, as the economy and market conditions in Florida outpaced many US markets. Florida's economy, however, has dramatically reversed, driven by an adjustment in the housing market following several record-breaking years," said Media General CEO Marshall Morton, as he focused extensively on the Tampa market, particularly the Tampa Tribune, during his quarterly conference call. He noted cost cutting moves at the newspaper, as well as sales initiatives to boost classified revenues. While not as extensive, he noted that the housing slump has also hurt WFLA-TV (Ch. 8, NBC).
For the broadcast group, Morton pointed to rising revenues from the four stations which the company acquired from NBC, where he said Media General has been working to integrate those new stations and implement the company's ad sales strategies. On a same station basis, Q2 revenues were down 2.1%, with political revenues down sharply from a year ago.
"While visibility is limited, particularly in Tampa," Media General said any Q3 decline in publishing revenues should be partially offset by lower newsprint prices. "The Broadcast Division does not expect to be able to recover entirely the absence of last year's third-quarter political revenues of 11.5 million," the company's guidance statement said, adding that revenues for the Interactive Media Division are expected to be up 50%.