Some of your hometown newspapers could be sold to new owners. Wednesday the broadcasting and publishing company, Media General, announced it is exploring the sale of dozens of its newspapers.
Newspapers in and around Charlottesville could be at risk. The Daily Progress in Charlottesville, the Orange County Review, the Greene County Record, the Madison County Register, the Star-Exponent in Culpeper, The News Virginian in Waynesboro and the Richmond Times-Dispatch are all potentially on the chopping block.
In a statement released by Media General, the company says they have received inquiries from several third parties regarding the potential purchase of certain print assets.
While the company is reluctant to say which operations - if any - will be affected, they have made it clear to employees that their main goal is to get out of significant long term debt.
Wells Fargo advisors LLC, Senior Vice President Bob Schneller says he has seen this scenario play out before. "Media General lost money 7 in the last 8 quarters, they're carrying about $667 million worth of debt and they've got to pay it down, so they're going to go to the newspaper operations, some of their print operations, to try to pay down this debt," he stated.
Media General says they are in the starting phases of the process and have not made a decision on which newspapers or regions are most at risk.
The company has encouraged employees to stay focused and continue to increase audience and revenue.
We did try to reach out to papers across our area that are owned by Media General, employees told us they are reluctant to comment until the process is further along.
MEDIA GENERAL PRESS RELEASE
FOR IMMEDIATE RELEASE
Wednesday, February 22, 2012
Media General Exploring Potential Sale of Newspapers
RICHMOND, VA. – Media General, Inc. (NYSE: MEG) today announced that it is exploring the potential sale of newspaper operations. Media General said it has received inquiries from several third parties regarding the potential purchase of certain of its print assets. The company wishes to ensure that any divestiture it may make maximizes shareholder value.
Media General has indicated in recent months that it will consider asset sales at valuations that reflect the strength of its properties as a means of reducing total debt outstanding over time. The company noted that the valuations of local media properties in recent merger and acquisition transactions, including local newspapers, have reflected the strong market positions of the entities being sold. Media General's newspaper brands are the leading print products in their core markets.
The company said there can be no assurance that any transaction will take place. Media General provided no definitive timetable for the evaluation process to conclude. Additional information will be provided if and when the company enters into a transaction. The investment banking advisory firm Peter J. Solomon Company is assisting Media General with the strategic evaluation process.
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 leading provider of news, information and entertainment across multiple media platforms, serving consumers and advertisers in strong local markets, primarily in the Southeastern United States. The company is transforming itself over time to a digital media model, while continuing to effectively manage its larger, cash producing broadcast television and print platforms. Media General's operations are organized in five geographic market segments and a sixth segment that includes the company's interactive advertising services and certain other operations. The company's operations include 18 network-affiliated television stations and their associated websites and 23 newspapers and their associated websites. Media General operates three digital media advertising services companies: Blockdot, which specializes in interactive entertainment and advergaming technologies; DealTaker.com, a coupon and shopping website; and NetInformer, a leading provider of wireless media and mobile marketing services.
Email sent to Media General employees:
February 22, 2012
Dear Fellow Employees,
This afternoon Media General issued a press release announcing that the company is exploring the potential sale of newspaper operations.
Several times over the past few months, we have stated publicly that to reduce total debt outstanding over time we would consider asset sales if we could obtain valuations that reflected the strength of our properties. In the latter part of 2011, a number of transactions were completed for local media properties, including newspapers, at valuation levels that have not occurred in a number of years, certainly not since the economic downturn began. This is a positive development for the industry. This new marketplace compels us to consider various alternatives.
As we undertake this exploration process, we cannot say that any particular transaction will or will not take place. What we can say is that we will consider various options as we work to increase overall cash flow and reduce total debt outstanding over time.
Any decision to part with any of our properties and their associated employees would be difficult. These are people we value. At the same time, we are mindful that we have sold eight television stations since 2006 and created new opportunities for those properties and employees, and our own acquisitions have done the same.
As we evaluate options, the best course for all of us is to stay focused on continuing to execute our strategy of increasing audience, revenues and cash flow. Your hard work and dedication as we strive to achieve the best outcome for Media General are a key part of accomplishing that goal.
Ray Kozakewicz
Manager Corporate Communications
Media General, Inc.
