RICHMOND, VA.—Media General announced today that it has sold The Tampa Tribune and its associated print and digital products to Tampa Media Group, Inc., a new company formed by Revolution Capital Group. The sale closed today. The sale price was $9.5 million, subject to adjustments for working capital and other items, yielding net proceeds before expenses of approximately $2 million.
“It’s a bittersweet day for Media General to complete the sale of its last remaining newspaper group,” said Marshall N. Morton, president and CEO. “The Tampa Tribune was our largest and second oldest newspaper. Many Tribune employees have decades of service. The Tribune staff has been extraordinarily dedicated to providing their readers with excellent journalism, creating value for their advertisers and supporting the local community.”
The sale completes Media General’s transformation into a pure-play broadcaster. Morton said the company’s prospects were now “strong, based on operating 18 top-ranked local television stations in growing and important markets, mostly in the Southeast. In addition, our financial position was greatly strengthened this year as a result of our new financing arrangement with Berkshire Hathaway.”
Morton said the company has generated $33 million in political revenues so far this year, and put it’s full-year outlook for the category at between $57 million and $58 million.
“Plans are underway to increase broadcast cash flow and EBITDA margins,” he added. “At the market level, we are focused on ratings and share increases as well as expense management. As we’ve said previously, corporate expense will decrease from $32 million to $20 million, a run rate we are already close to achieving. Since June, our corporate staffing has been reduced in half, including employees who went to work for World Media Enterprises, the Berkshire Hathaway company that bought our newspapers in June, and a staffing reduction we implemented in the third quarter that affected 75 employees. Increasing cash flow will support and accelerate our deleveraging plan, and we have good incentive to do so. Our new financing provides a step-down in the interest rate from 10.5 percent to 9 percent if leverage were to reach 3.50x.”
Media General will report third-quarter 2012 results on Oct. 17, 2012 before the market opens, as previously announced.