NEWS - Banking & Finance

SBJ Staff Report

Nov 7, 2011 – Media General, owner of WSAV-TV in Savannah, reported a net loss of $30 million in the third quarter ending Sept. 30, 2011, on Friday, which brings the company to $71 million loss for the first nine months of 2011.

The results included a non-cash goodwill impairment charge. The weakening economic recovery combined with the market’s perception of the value of media company stocks led the Company to perform a third-quarter goodwill impairment test. The company took a $26.6 million pretax non-cash goodwill impairment charge – a write down in the company’s total assets - related to certain print properties in the Virginia/Tennessee market.

Excluding the impairment charge, the Company’s net loss was only $14 million for the third quarter; this compares to a net loss of $11 million in the same quarter last year.

The driving factor behind the reduction in year-over-year performance was an 11% and 8.1% decline in revenues in the third quarter and first nine months from the equivalent 2010 periods. As the economic recovery has faltered this year, weakness at the company’s print advertising properties has continued. Additionally, significantly reduced political advertising in this odd-numbered year has contributed to the company’s overall revenue shortfall versus last year.

In a concerted effort to mitigate the revenue weakness, discretionary spending was reduced and is being held to a minimum as evidenced by an 8.4% quarter-over-quarter decrease in operating costs (excluding impairment) in the third quarter of 2011. Additionally, aggressive expense management led to a 2.6% decrease in operating costs (excluding impairment) in the first nine months of 2011 over the equivalent prior-year period despite a $1.3 million year-over-year increase in severance expense. The company has also required all employees to take 15 days off unpaid between July and December to cut expenses.