Media General Sells Tampa Tribune For $9.5M

Media General Inc. today sold The Tampa Tribune and its associated print and digital products to Tampa Media Group Inc., a new company formed by Revolution Capital Group. The sale closed today.

The sale price was $9.5 million, subject to adjustments for working capital and other items, yielding net proceeds before expenses of approximately $2 million, the company said.

“It’s a bittersweet day for Media General to complete the sale of its last remaining newspaper group,” said Marshall N. Morton, president-CEO. “The Tampa Tribune was our largest and second oldest newspaper. Many Tribune employees have decades of service. The Tribune staff has been extraordinarily dedicated to providing their readers with excellent journalism, creating value for their advertisers and supporting the local community. We are pleased that they will have the opportunity for continued future success serving the Tampa community with excellent local content. We will miss our colleagues at The Tribune and its associated print and digital platforms, and we wish them the very best.”

Robert Loring, founder and managing partner of Revolution Capital Group, said: “We are delighted to be the new owner of The Tampa Tribune, a newspaper with strong brand equity and a long history of serving its readers, advertisers and community exceedingly well. We believe strongly in the value of local content.”

Media General’s Morton added: “With this transaction, we complete the transformation of Media General’s business model to one focused on broadcast television and digital media. We believe our future prospects are strong, based on operating 18 top-ranked local television stations in growing and important markets, mostly in the Southeast. In addition, our financial position was greatly strengthened this year as a result of our new financing arrangement with Berkshire Hathaway.

“We have an attractive economic model, fueled by revenue growth, including political, retransmission and digital revenues. For example, political advertisers prefer top-ranked stations like ours. In the third quarter of 2012, Media General generated political revenues of nearly $20 million, which brings our year-to-date total to more than $33 million.

“Media General has stations in four of the key battleground states for the presidential election:  Ohio, Florida, Virginia and North Carolina. Our Virginia, Rhode Island and Ohio stations are also benefiting from hotly contested Senate races. We have increased our outlook for political revenues for the full year 2012 to $57 million-$58 million,” Morton added.

“Plans are underway to increase broadcast cash flow and EBITDA margins. At the market level, we are focused on ratings and share increases as well as expense management. As we’ve said previously, corporate expense will decrease from $32 million to $20 million, a run rate we are already close to achieving.

“Since June, our corporate staffing has been reduced in half, including employees who went to work for World Media Enterprises, the Berkshire Hathaway company that bought our newspapers in June, and a staffing reduction we implemented in the third quarter that affected 75 employees. Increasing cash flow will support and accelerate our deleveraging plan and we have good incentive to do so. Our new financing provides a step-down in the interest rate from 10.5 percent to 9 percent if leverage were to reach 3.50x,” Morton said.