Media General Presents at Mid-Year Media Review

RICHMOND, Va., June 19 /PRNewswire-FirstCall/ -- Media General, Inc. today updated investors on the company's growth strategies and its outlook for 2007 at the Mid-Year Media Review in New York. The full text of the presentation will be available today on the home page of Media General's Web site, http://www.mediageneral.com/.

Marshall N. Morton, president and chief executive officer, said, "For more than a dozen years, our strategy has been to focus on being a leading provider of high-quality news, information and entertainment in every market we serve. We're long past being just a newspaper or broadcast company. We distribute our content over a variety of platforms, including the Internet, mobile devices, and targeted products that reach geographic, demographic and topical communities of interest."

Mr. Morton said, "At the core of our strategy is the goal of increasing our total audience in all markets. We're achieving this by creating a strong Internet presence, by introducing new products and services, and by continually enhancing our newspapers and television stations. Strategic acquisitions, such as our purchase last year of four NBC stations in large growth markets, and partnerships, such as our alliance with Yahoo!, are also important elements of our growth strategy."

He said Media General expects online revenues to reach $40 million in 2007 and $50 million in 2008. Classified advertising has been the early growth driver, but other categories are growing. "Going forward, we are focusing increasingly on display and rich media ads from Local and National advertisers. These categories have grown 65% and 103%, respectively, in 2007."

Regarding the company's partnership with Yahoo!, he said, "We've implemented the Yahoo! HotJobs upsell at all of our newspapers. Phase B of the Yahoo! HotJobs partnership is being rolled out this summer. All of our online career sections will be powered by Yahoo! HotJobs, and they will be co-branded. All of Media General's Web sites will launch the new HotJobs features by November 30. "A major expansion of the agreement, announced in April, will create the first real online advertising network for the newspaper industry, and it will significantly expand newspaper companies' presence on the Internet," Mr. Morton said.

Reid Ashe, executive vice president and chief operating officer, said, "Innovation is very important to us. It's one of our core values and we're infusing it deeply into our culture. Many of our innovations involve the Internet. We're finding new ways to attract traffic and new ways to build revenue. In many ways, the Internet is no longer an add-on. For many applications, such as breaking news or, increasingly, classified advertising, it's now our primary medium."

He reviewed Media General's newspaper content improvements and new targeted products to connect more closely with readers. "This spring, The Tampa Tribune folded the content of its zoned sections into eight community newspapers and gave each of them an interactive Web site. We believe this provides better, deeper hyper-local coverage and better connects advertisers to their targets." The Tampa Tribune has introduced content changes and product enhancements in its Monday, Friday, Saturday and Sunday newspapers, including a redesigned Business page, a health and fitness publication, a four-color magazine, a new entertainment section and new Classified sections. "Our Tampa team introduced a new real estate section, WeekendHomeSeeker, this spring to serve advertisers in a weak resale market. Advertisers build their own ads on-line. We price the section competitively and it's solidly profitable."

Media General's combined reach in Tampa with The Tampa Tribune, WFLA-TV and TBO.com is an unduplicated 76 percent, which is greater than any of its competitors, he said.

In Richmond, the company has a new regional portal, inRich.com. Mr. Ashe said, "inRich.com offers the best in breaking news and information from a number of sources. The Richmond Times-Dispatch is the primary provider, along with our hyper-local and specialty products, as well as outside sources of Richmond-area news and information. inRich.com is our first site to invite users to upload videos."

Media General's Broadcast Division is growing through new channels and new programs. "We've invested $50 million to equip our stations for digital transmission. One of the benefits is that we can now carry multiple channels simultaneously. Last year we launched a number of new companion channels," Mr. Ashe said.

He said Broadcast has launched 24/7 weather channels at 11 television stations, which help extend local weather brands and provide a valuable service to viewers. Other broadcast products focus on local non-news programming.

Mr. Ashe said, "Our television stations are also doing an excellent job developing their Web presence. Many provide Web-exclusive news programs and others stream their regular newscasts live."

John A. Schauss, vice president-finance and chief financial officer, updated investors on the company's outlook and financial position for 2007. "The Publishing Division looks for some top-line improvement in the latter two quarters of the year compared with first-half results. We will have more favorable comparisons in the Classified category and have planned for new products to fuel growth. Publishing Division expenses are expected to decrease, reflecting declines in salaries and most other expense lines. Newsprint expenses have declined as the result of reduced consumption and lower prices. Publishing segment profit in 2007 will be down from 2006."

Mr. Schauss said the Broadcast Division expects revenues for the full year to increase 8 percent, including the new NBC stations. "We expect same-station revenues to decline 3-3.5 percent, as the result of soft transactional sales, including much lower spending in the automotive category." Broadcast same-station expenses will increase approximately 4.5 percent, reflecting salary increases and higher costs for employee benefits, depreciation and investments in revenue growth initiatives. Broadcast segment profit will be lower than 2006, which generated a record $50 million of Political revenues.

For its Interactive Media Division, Media General forecasts a 40-45 percent revenues increase for 2007 and a modest profit. Also, the company expects a loss of approximately $5.5 million from its equity investment in SP Newsprint for all of 2007, if the company owns SP for the full year.

"We are in a difficult economic environment, driven by weak advertiser spending in a number of categories and markets," Mr. Schauss said. "Therefore, we are taking action on a number of fronts to better align expenses with revenues. In addition to Tampa's performance improvement plan, we have frozen hiring on most open positions - except for sales jobs, which we are accelerating our efforts to fill.

"We are also reducing discretionary spending wherever possible. We have asked all of our properties to accelerate new product introductions and to intensify their focus on new revenue development. The Publishing Division continues to pursue synergies in call centers, clustered printing, and product and distribution processes. The Broadcast Division plans to centralize its graphics operations in Richmond this year."

He said Media General's capital spending for 2007 is projected to be about $75 million. Publishing and Broadcast plan to spend $39 million and $32 million, respectively, while the Interactive Media Division expects to spend approximately $1 million. Corporate capital spending is estimated at about $3 million.

Media General's total debt at the end of the second quarter is expected to be $973 million and approximately $950 million at the end of 2007.

The company expects 2008 to be a strong year. Mr. Schauss said, "We will realize synergies from integrating the new NBC stations, and all nine of our NBC affiliates will benefit from the summer Olympics advertising. Political revenues should be very strong in a Presidential year, and also from state and local races and issues advertising. We're optimistic about the potential for cable retransmission fees."

Mr. Morton concluded the presentation. "We believe the best way to create long-term value for our shareholders is to invest in the growth of our business. We operate in strong and growing markets and our revenue growth is peer leading because of the strength of our markets and also our internal initiatives. Our new Broadcast assets will provide long-term value creation and increased cash flow. Strong cash flows in our Publishing segment will help fund growth in all areas. A possible SP Newsprint transaction would generate funds for debt reduction.

"We've done a good job looking at new ways to use the information we've been generating for years and getting it to customers in new ways - when they want it and in the fashion they want it. We understand the present, and, based on the progress that we've made in a changing environment, I believe it shows that we understand how to harness the potential of the future. This is a time to be creative and nimble in our thinking and to be willing to try new things in new ways."

Mr. Morton said, "We know we've got the information. We know we've got strong markets. What we have to understand is how to take new ideas and put them to work in ways that are profitable. We've proven that we know how to do that, and we will continue to do that."

An audio replay of the presentation will be available today at 1 p.m. and will remain available for 60 days. Click on the link on the Media General Home Page, or visit http://www.midyearmediareview.com/.

Forward-Looking Statements

This news release contains forward-looking statements that are subject to various risks and uncertainties and should be understood in the context of the company's publicly available reports filed with the Securities and Exchange Commission. Media General's future performance could differ materially from its current expectations.

About Media General

Media General is a multimedia company operating leading newspapers, television stations and online enterprises primarily in the Southeastern United States. The company's publishing assets include three metropolitan newspapers, The Tampa Tribune, Richmond Times-Dispatch, and Winston-Salem Journal; 22 daily community newspapers in Virginia, North Carolina, Florida, Alabama and South Carolina; and more than 150 weekly newspapers and other publications. The company's broadcasting assets include 23 network-affiliated television stations that reach more than 32 percent of the television households in the Southeast and nearly 9.5 percent of those in the United States. The company's interactive media assets include more than 75 online enterprises that are associated with its newspapers and television stations. Media General also owns a 33 percent interest in SP Newsprint Company, a manufacturer of recycled newsprint.