Media General Chief Makes No Promises about TV Station Transactions
In its first operating quarter as a pure-play broadcaster, Media General doesn’t anticipate selling any TV stations soon, and may not be a buyer in the current market, CEO Marshall Morton said Wednesday on the company’s earnings call. The company sold most of its newspapers to Berkshire Hathaway (CD May 18 p12) in a transaction that closed in June. “I don’t see us as a seller right now,” Morton said. “Maybe as an exchanger if we find a way to step up markets or tighten our focus."
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Media General also probably won’t buy stations “in the near term,” because the company wants to focus on paying down some of its debt, Morton said. “I see us pushing hard in the digital front, where it doesn’t take brick and mortar [operations] to win market share.” But the company is “always open to the idea of consolidation,” he said.
Media General is most interested in adding stations in markets where it operates, Morton said. Another opportunity could be providing services to other broadcasters in a market, he said. That’s something the company did a lot of in its newspaper business, he said. Media General’s TV stations already share certain operations among each other, such as traffic and on-screen graphics, Morton said. “We're looking at ways to spread that into third-party work, and also do more in the duopoly area."
Q2 sales from its broadcast and digital operations increased 17 percent from a year earlier to $84.1 million. Part of the increase came from higher political ad sales, which were $7.5 million compared to $600,000 a year earlier. Core revenue excluding political ads was also higher, the company said. That’s continuing to hold true in Q3, Morton said during the teleconference. During the last year, Media General added more news programming at stations where it expected higher political sales to create more ad inventory attractive to politicians, Morton said. That has helped ease the “crowding out” of core ads that can happen during an election year, he said.
Among its TV stations’ digital operations, Media General is seeing increased traction with visitors to its mobile website, Morton said. “The mobile searcher for information has a bias toward broadcast websites in his community to get information,” he said. “Some of it has to do with the very frequent updating mentality that resides in our broadcast newsroom, some of it has to do with video.” Such mobile news sites are distinct from the company’s mobile DTV operations, which it has begun at four stations, he said. “That’s a market that will continue to grow and we'll continue to devote ourselves to it as most major broadcasters are."
Media General’s net loss ballooned to $146.3 million from $15.4 million a year earlier on a $131 million loss it recorded relating to exiting the newspaper business. The stock rose 12 percent Wednesday.