Media General TV Station Profit Plunges

Company cuts 300 jobs, freezes pension plan
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RICHMOND, VA.: Media General’s 19 TV stations generated around $3.3 million in profit in 1Q09, down 57 percent from same period a year ago. The decline was equal to the $4.4 million of political revenues Media General (NYSE: MEG) took in during 1Q08. Total revenues decline by 19 percent from nearly $75 million last year to $60.6 million 1Q09. Gross time sales declined by about 25 percent. Local was down 20 percent and national was down 21 percent. Lower automotive spending was the main factor in both categories.

MEG cut broadcast expenses by 14.5 percent, excluding severance, due to reduced salary expense from workforce reductions and furloughs, other cost containment initiatives, and lower costs of goods sold at a broadcast equipment subsidiary. Salary expense, excluding severance but including furlough savings, declined 16 percent. Benefits expense decreased 28 percent. (Story continues after Sponsored Link.)

MEG’s combined TV stations, 270-plus newspapers and online division logged a net loss for the quarter of $21.3 million, including severance of $4.5 million. Net loss one year earlier was $20.3 million, including $10.4 million in discontinued operations.

Media General said it cut 300 jobs during the week of March 31, and announced today it was freezing the employee pension plan effective May 31.

“Media General has responded swiftly to the revenue declines we have experienced over the past three years, and we have dramatically reshaped and reduced our cost structure,” said Marshall N. Morton, president and chief executive officer. “The net result of the cost saving actions implemented during 2008 and this year are expected to reduce our total operating costs for 2009 by 15 percent from the 2008 level, excluding severance and special charges.” -- Deborah D. McAdams