Media General Expects ’12 Political to Reach a Record $64 Million
Up from earlier estimate
December 5, 2012
NEW YORK – Media
General will end the year with record political ad revenues, executives said
Wednesday at the 40 th Annual UBS Global Media & Communications
Conference in New York. The Richmond, Va., TV business is looking at $64
million in political revenues, up from an earlier estimate of $57 million to
“We benefited from operating top-ranked stations, where political advertisers
prefer to place their ads,” said George L. Mahoney, vice president and chief
Media General, having gone through several years of slashing and burning, shed
its newspapers this year and scored $445 million in funding from Warren Buffet’s
Berkshire Hathaway, which also bought the newspapers for $142 million.
Marshall N. Morton, Media General’s president and CEO through the end of 2012,
said the company is now focused entirely on its TV stations.
“In addition to selling our newspapers, our new focus was further tightened by
discontinuing our former digital advertising services businesses,” he said. “We
also ceased operation of a broadcast equipment subsidiary.”
Morton, who announced his pending retirement in August, said the company
refinanced $363 million in bank debt that was due March 2013, extending
maturity to 2020. Corporate expenses were shaved by $12 million to slightly
below $20 million for the 2013 run rate.
Mahoney, who has been with Media General since 1993, will succeed Morton.
The Olympics and the Super Bowl drove revenues for Media General’s eight NBC
affiliates. The group comprises 18 stations total. Retransmission revenues for
all of them collectively were up 75 percent; digital, up 18 percent.
“Further, we’ve seen healthy growth in our core business, driven by increased
spending by automotive, financial, grocery, medical, telecommunications and
travel industry advertisers,” Mahoney said.
Executives expect Media General to enter 2013 with $28 million in cash,
according to Jim Woodward, vice president of finance and the company’s chief
“Provided the capital markets are strong and open, we plan to refinance our
11.75 percent senior notes, which are callable in February of 2014, at a lower
rate,” he said. “We will have the option of using any cash on the balance sheet
at the end of 2013 to pay down a portion of that debt.
“Looking ahead to next year, total revenues in 2013 will decrease from this
year, due to the absence of non-recurring political and other event-driven
revenues. We have in place a number of key revenue drivers to help mitigate
these shortfalls from this year, starting with political revenues of at least
$5 million. The Super Bowl on CBS will benefit eight of our stations.
Retransmission revenues will increase.”
Media General’s digital revenues are predicted to grow faster than industry
rates, he said. Momentum in the core business is continuing as well.
“More local news and programming will provide more inventory,” he said. “We
will implement special incentives for volume advertisers and business
development programs to drive local time sales.”
Morton said the company will endeavor to increase cash-flow margins by driving
ratings and share increases at the stations, as well as “through expense
For full 2012, Media General is expected to report the following results:
provided the following guidance for the full year 2013:
General now compises18 network-affiliated TV stations and their associated digital
media and mobile platforms, including eight NBC stations, eight CBS stations,
one ABC station and one CW.
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