NEW YORK: Media General executives are expecting a fiercely fine fourth quarter for its TV stations, and a substantially improved 2010 thanks in large part to the sacrifices of employees.
Operating profit for the first nine months alone for the stations was up 57 percent over last year, company executives said at the UBS Global Media & Communications Conference this week. Political helped, as it did for every other media company with TV stations.
“We believe the fourth quarter of this year will equal or exceed the trend that we’ve seen in the first three quarters of this year," John A. Schauss, Media General executive vice president and chief financial officer, said at the conference.
Schauss was not specific about expected 4Q results for the 18 stations. Guidance for the fourth quarter issued in late October was for total revenues to be up between 6 to 8 percent from 2009, with broadcast revenues up as much as 26 percent. Media General reported $75 million in broadcast revenues for 3Q10, up 18 percent over last year. The Media General TV stations raked in $41.5 million in political advertising revenues as of Nov. 2. Of that, $24 million came in the fourth quarter. The company has 18 TV stations as well as several print and digital properties.
Its 2010 fortunes have come at a cost to staff and operations. The company last year shuttered it’s 30-year-old Washington, D.C. bureau that was staffed by six journalists. Nearly one-third of Media General’s total workforce was cut. The remaining staff were subjected to 15 unpaid furlough days. Matching (401)k contributions were suspended in April 2009 and have remained so through 2010.
Media General said it expects salaries to increase a whopping 3 percent in 2011, “including a 2 percent merit pool.” There will also be a “phase-in” of the 401(k) match. Corporate expense is expected to rise 4 percent, due mainly to salary increases and the 401(k) match.
Meanwhile, traffic on Media General’s Web sites has increased. Local online revenues will end 2010 up by 24 percent. Total digital media revenues are on target to come in at $44 million, up 5 percent from last year, and accounting for 7.5 percent of total ad revenues.
Mobile DTV was also launched at Media General’s Tampa, Fla., and Columbus, Ohio TV stations, with more to come. Reid Ashe, Media General’s executive vice president and chief operating officer, indicated that the company intends to offer subscription mobile DTV services sometime in the future.
The company said it expects retransmission fees in 2010 to be about $19 million, and are expected to increase 5 to 6 percent next year. Most of the company’s major agreements do not expire until 2012, Ashe said.
Capex for 2011 is projected at $25 million to $29 million, compared with about $26 million in 2010. The company also plans to make a $20 million contribution to its retirement plan in 2011.
-- Deborah D. McAdams
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