Media General Inc., owner of the Richmond Times-Dispatch and newspapers in Charlottesville, Lynchburg, Danville, Bristol and other Virginia communities, has been placed on S&P credit watch following an announcement that it would post a 1Q loss this year. Writes the Associated Press:
The ratings agency said it would keep the newspaper and TV broadcast company credit rating at ‘BBB-‘ shortly after the company lowered its guidance for the first-quarter to a loss of 26 cents to 30 cents per share. Analysts polled by Thomson Financial had been looking for a profit of 20 cents per share.
Revenues at Media General’s broadcast division got hammered the worse, suffering a 27.4 percent decline in revenues. I don’t spend much time watching local television news, so cutbacks in the coverage of murders, traffic accidents and thunderstorms doesn’t particularly distress me. But revenues continue to erode — 4.2 percent — in the publishing division. That’s where the serious news gathering takes place.
It can’t be much fun working for Media General right now. Said CEO Marshall N. Morton in a prepared statement: “We have implemented an aggressive plan to align our cost structure with the revenue environment we are experiencing. Our goal is to restore profit-performance to our original expectations for the year.” Translation: More budget cuts. Newsrooms will not escape the budgetary axe.
There’s not much chance that the Interactive Media Division will ride to the rescue. Revenues did increase 28.6 percent, but that was on a tiny revenue base. Essentially, IMD is a parasite. The vast bulk of its content is generated by broadcast and print. If the traditional media can’t produce as much content, IMD lacks the resources to make up the difference.
As much as I tout the Internet and blogosphere, I take no joy in this. Many of my friends work for Media General. I’m planning to get a pension one day from Media General. And I have yet to see signs of an Internet business model that can come close to delivering the content that we take forgranted from the Mainstream Media. I have my quarrels with MSM reporting, but I hate to see newspapers wither away.