Management didn’t bring up the topic, but when an analyst asked in the Q&A section of the company’s quarterly conference call, Media General executives didn’t hesitate to discuss how they view the marketplace for divesting some properties. Media General is currently talking with its lenders about refinancing its debt and bringing in cash from some asset sales would obviously make its balance sheet look better.
Kevin Cohen of Imperial Capital wanted to know whether asset sales “figure prominently” in how management looks at Media General’s capital structure.
“Asset sales are an element and we certainly do look at that,” replied Media General CEO Marshall Morton (pictured). “Several months ago Scripps bought some TV stations from McGraw-Hill and it created a market level for us to consider. And then more recently New York Times Regional sold. We’ve got some market activity at long last in that area. It gives us a means of measuring to best way to focus on shareholder value. So, we look at it from that standpoint.”
Morton had also talked about the possibility of asset sales in his Q3 conference call. In Thursday’s call after reporting Q4 results Media General management indicated for the first time that it is in danger of breaching covenants on its debt and is seeking changes from its lenders.
So, Cohen wanted to know, would potential sales efforts focus on print, TV, or both?
“The world is going increasingly digital, so that is a factor in our thinking. The other side of it is that we’re focused on the markets themselves,” the CEO said. So Morton indicated that he would look at selling properties where long-term growth prospects are less favorable.
RBR-TVBR observation: TV multiples are certainly stronger than newspaper multiples. But the recent sale of the NY Times regional group shows that someone is, after all, willing to step up and buy newspapers.