Media General announces $5.3-million revenue decline one day after record low stock price

The numbers haven't been kind to Media General lately.

One day after the Associated Press reported the stock price of the owner of the Tampa Tribune, WFLA-Ch. 8 and TBO.com fell to its lowest level in decades, the company released a report on October earnings revealing a $5.3-million drop in revenue compares with last year, including a 22.4 percent decline in Florida.

The initial stock price dip was caused by dissident investor Harbinger Capital Partners selling shares of the company to cut its stake.

This is something I've heard present and former Media General employees complain about for a while. Since their 401(k) matching funds come in stock, the dipping prices have hurt the retirement plans of many staffers. Amid the frustration and concern, critics have blamed everything from bad management to too much debt assumed in acquiring companies to build up the media chain.

In what may be a troubling sign, Media General's dip in revenues came despite receiving $21-million in political advertising on TV outlets, many in contested states such as Ohio, Virginia and Florida. The company projected $38-million in political advertising revenues for 2008.

The open question for stations such as WFLA: What will happen to their revenues in a year with no national elections and no Summer Olympics?

In publishing, revenues declined nearly 17 percent; classified ads, which still bring the bulk of newspaper revenues, dipped nearly 38 percent. And as usual, print saw steep revenue declines in ads for employment, real estate, automotive and retail. Circulation revenues did rise 4.6 percent, reflecting price increases in several markets, including Tampa.

Reuters reported that the earnings report brought a stock price dip of as much as 54 percent over the day, but the stock closed at $2.17, a 26 percent dip from Wednesday.

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Comments

[beltwaybandit]

Media General ended the day at $1.39 per share, down 37.67% for the day.

Since 2003, Media General has gone from a stock price exceeding $70 per share to today's $1.39.

Perhaps the bigger issue is that total volume of shares traded was 2.3 million, compared with an average daily volume of 281,000.

When a listed company's price falls below $5, most mutual funds are prohibited from owning it, forcing sale of the stock.

You can expect more large volume sale days ahead just based on market rules, never mind the poor performance of the company.

Media General will be trading closer to Sirius quite soon.

[joe hillman]

>>>I'd like to see the fired staffers put together their own local paper.<<<

good luck finding an investor. unless someone is looking to throw money away to evade taxes, starting a newspaper isn't exactly smart investing.

unless you have a creative accountant who can classify the venture as "charity."

[Brad]

There are fools running Media General... or should we call it Mediocre General. They are very good at collecting easy money and very bad at running a business.

They have managed to synergize WFLA, the Trib, and TBO.com so that none of them are worth reading, watching, or advertising in. WTG!!

I'd like to see the fired staffers put together their own local paper. They'd run Media General out of town in a year.

[joe hillman]

>>>Today, you could buy a share of each for less than $10 total.<<<

i'd rather buy sirius stock at .15. at least that has a chance of surviving and your investment will be (literally) pocket change.

[Jim Johnson]

NYT (12%) and MEG (24%) are both down again today... along with MNI (McClatchy)...

Today, you could buy a share of each for less than $10 total.

[Jim Johnson]

MEG traded as lost as 1.39 during the day today... http://finance.yahoo.com/q?s=MEG

Personally, I believe WFLA television is the only reason we still have the Tampa Tribune in our fair city. If Media General didn't have a TV station here, the newspaper probably would have folded by now.

That may still happen, and it would be both a sad day for the employees and an unfortunate day for news in our area.