Media General announces $5.3-million revenue decline one day after record low stock price
One day after the Associated Press reported the stock price of the owner of the Tampa Tribune, WFLA-Ch. 8 and TBO.com fell to its lowest level in decades, the company released a report on October earnings revealing a $5.3-million drop in revenue compares with last year, including a 22.4 percent decline in Florida.
The initial stock price dip was caused by dissident investor Harbinger Capital Partners selling shares of the company to cut its stake.
This is something I've heard present and former Media General employees complain about for a while. Since their 401(k) matching funds come in stock, the dipping prices have hurt the retirement plans of many staffers. Amid the frustration and concern, critics have blamed everything from bad management to too much debt assumed in acquiring companies to build up the media chain.
In what may be a troubling sign, Media General's dip in revenues came despite receiving $21-million in political advertising on TV outlets, many in contested states such as Ohio, Virginia and Florida. The company projected $38-million in political advertising revenues for 2008.
The open question for stations such as WFLA: What will happen to their revenues in a year with no national elections and no Summer Olympics?
In publishing, revenues declined nearly 17 percent; classified ads, which still bring the bulk of newspaper revenues, dipped nearly 38 percent. And as usual, print saw steep revenue declines in ads for employment, real estate, automotive and retail. Circulation revenues did rise 4.6 percent, reflecting price increases in several markets, including Tampa.
Reuters reported that the earnings report brought a stock price dip of as much as 54 percent over the day, but the stock closed at $2.17, a 26 percent dip from Wednesday.