By David B. Wilkerson
CHICAGO (Dow Jones) -- Newspaper publisher and broadcaster Media
General Inc. said Thursday that it swung to a fourth-quarter loss
on a charge related to the diminished value of some of its assets
and a steep decline in print advertising revenues, reflecting an
industry-wide trend.
Richmond, Va.-based Media General (MEG) said it lost $85.5
million, or $3.86 per share, in the three months ended Dec. 31. The
loss includes a non-cash after-tax impairment charge of $83.1
million, reflecting the reduced value of FCC licenses issued to its
television stations and network affiliation agreements maintained
by those stations.
Across the U.S., media companies have seen the market values of
their TV and radio stations drop far below their book values as the
perception of media assets has waned over the past year. Such
companies are then required to make note of the discrepancy in
those values and account for the difference.
Excluding the impairment charge and other items, Media General
would have earned $8.6 million, or 39 cents a share in the latest
quarter. A year earlier, excluding severance costs, the company
earned $10.2 million, or 46 cents a share.
Revenue dropped nearly 12% to $207 million, reflecting a 20%
drop in newspaper advertising revenue.
At the company's newspapers, including The Tampa Tribune and 23
other dailies, revenue fell 17%.
Classified ad revenue, traditionally the most important source
of income for newspapers, dropped 38%, driven primarily by declines
in the company's three metropolitan markets. In those three areas,
help-wanted ad revenue plunged 60%, real estate by 50%, and
automotive by 46%.
In recent years, newspaper classifieds had been curtailed to
some degree by competitors like Craigslist and Monster.com -- but
the economic downturn that became a worldwide financial meltdown in
the second half of 2008 has sent classified revenues crashing
through the floor, as year-over-year decreases of 30% or more have
become commonplace, in markets of varying sizes.
At Media General's 19 television stations, revenue fell 7%, with
gross ad sales down 6.4%. As with so many other local TV outlets
across the country, a precipitous fall-off in automotive ads was
the main reason for the decline.
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