Media General Expects ’12 Political to Reach a Record $64 Million

NEW YORK – Media General will end the year with record political ad revenues, executives said Wednesday at the 40th 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 $58 million.

“We benefited from operating top-ranked stations, where political advertisers prefer to place their ads,” said George L. Mahoney, vice president and chief operating officer.

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 financial officer,

“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 management.”

For full 2012, Media General is expected to report the following results:

Political revenues

$64 million

Retransmission revenues

$37 million

Digital revenues

$10 million

Total net revenues

$350 million

Broadcast Cash Flow

$141 million

Broadcast Cash Flow Margin

40 percent


$100 million


28 percent

Cash Interest

$69 million

Non-Cash Interest Expense

$9 million

Capital Expenditures

$17 million

Pension Contribution

$9 million

Cash Taxes


The company provided the following guidance for the full year 2013:

Cash Interest

$68 million

Non-Cash Interest Expense

$9 million

Capital Expenditures

$15 million

Pension Contribution

$4.5 million

Cash Taxes


Media 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.