Business News

Media General Reports April 2008 Revenues

Friday 23. May 2008 - Media General, Inc. (NYSE:MEG) today released its monthly revenues report for April 2008. Total company revenues were $78.7 million, compared with $88.3 million in April 2007. The year-over-year decline was primarily attributable to lower Publishing Division revenues, driven mostly by continued weakness in Classified advertising, especially in the Tampa market.

In the Broadcast Division, increased Political advertising revenues partially offset lower National and Local time sales. In the Interactive Media Division, revenues rose 15.5 percent due to higher Local advertising and revenues generated during the first month of the company’s ownership of DealTaker.com.

“The Publishing Division’s April results reflected the continued deep recession in Florida, which impacted all major advertising categories at our Tampa operations, particularly Classified advertising,” said Marshall N. Morton, president and chief executive officer.

“The Broadcast Division in April generated $1.3 million in Political revenues, partially offsetting a decline in National time sales, driven by weak automotive and telecommunications advertising,” Mr. Morton said.

“In the Interactive Media Division, our recent acquisition of DealTaker.com was the primary driver of increased online revenues. Higher local advertising spending, which was up 42 percent, largely offset a decline in online Classified revenue. Our Web-First breaking news focus continues to drive audience growth. For example, local news page views were up 59 percent at TBO.com in Tampa,” he said.

“Media General continues to implement its announced performance improvement initiatives across all parts of the company and particularly within the Publishing Division,” said Mr. Morton. “Our efforts to reduce operating costs have necessarily included personnel. We began our workforce reductions in early 2007 in response to the deepening recession in Florida and the overall slowing of the U.S. economy. Compared to our peak 2007 employment at the start of the year, by the beginning of the third quarter of this year we will have reduced the number of full-time equivalent positions from 6,900 to 6,150, or a total of 750. This equates to annualized cost savings of $40 million, the full amount of which will be realized in 2009. We expect to expense severance costs of $4 million to $4.5 million in the second quarter of 2008,” said Mr. Morton. “In addition, we anticipate further improvement in profitability through reduced newsprint consumption and lower discretionary spending as well as new revenue development initiatives. We will be better able to quantify the full impact of these actions later in the year,” he said.

The net reduction of 750 full-time equivalent positions includes reducing the workforce by approximately 745 in the Publishing Division, 45 in the Broadcast Division, 20 across various Corporate Staff departments, and an increase of 60 in the Interactive Media Division as a result of the company’s focus on direct online sales initiatives and a Web-First/Continuous News approach.

Publishing Division

Publishing Division revenues in April 2008 declined 14.3 percent compared with April 2007. Excluding Florida, where revenues declined 27 percent, Publishing Division total revenues in April were down 8.1 percent. Revenues in Virginia, North Carolina and Alabama decreased 9.9 percent, 7.6 percent and 2.1 percent, respectively. Revenues rose 3.7 percent in South Carolina driven by revenues from a new weekly newspaper in the greater Florence/Myrtle Beach market.

Classified advertising revenues decreased $5.5 million, or 29 percent, driven mostly by shortfalls in the Tampa market, and, to a lesser degree, in Richmond. For the company’s three metro markets combined, employment revenues decreased 42 percent, real estate revenues were down 40 percent, and automotive revenues declined 38 percent.

Retail advertising revenues declined $1.2 million, or 5.5 percent, primarily due to lower spending in Tampa across most categories, while Retail revenues in Richmond increased nominally, due to higher advertising in the grocery store and medical categories. National revenues decreased $720,000, or 20 percent, as a result of lower advertising for the telecommunications, financial and automotive categories in the Tampa market. Circulation revenues decreased $220,000, reflecting Daily and Sunday net-paid circulation volume declines.

Broadcast Division

Gross time sales decreased $1.3 million, or 3.8 percent, primarily as a result of lower National time sales, partially offset by a $900,000 increase in Political advertising revenues in April. The Political revenues were generated from presidential primary spending in North Carolina and in the company’s bordering South Carolina stations, gubernatorial primary spending in North Carolina, U.S. Congressional races in North Carolina and Ohio, and issue spending in Ohio, Mississippi, Florida, Georgia and Virginia.

Local time sales declined $260,000, or 1.2 percent, primarily from lower furniture store and specialty store advertising, partially offset by higher spending in the automotive category. National time sales declined $1.9 million, or 15.9 percent, as a result of decreased advertising in the automotive and telecommunications categories.

Interactive Media Division

In the Interactive Media Division, revenues from DealTaker.com, acquired March 31, 2008, and a 42 percent increase in Local advertising, more than offset lower Classified advertising and a decline in revenues in the advergaming business. A year-over-year increase in revenues from the company’s Yahoo!HotJobs partnership helped mitigate the Classified revenue decline.

Higher Local online revenues reflected continued growth in direct sales driven by a focus on staffing, training and new products. National/Regional advertising declined 23 percent, resulting from lower spending by national agencies. The decreased spending in the advergaming business reflected a slower pace of major projects in early 2008. Page views and visitor sessions increased 0.4 percent and 9.6 percent, respectively. The year-over-year comparison is impacted by the Virginia Tech tragedy in April 2007, which produced a heavy volume of visitors at multiple Media General Web sites.

Forward-Looking Statements

This news release contains forward-looking statements that are subject to various risks and uncertainties and should be understood in the context of the company’s publicly available reports filed with the Securities and Exchange Commission. Media General’s future performance could differ materially from its current expectations.