Richmond-based Media General Inc. said yesterday that it has reached new debt-agreement terms with its bank lenders to give the company more flexibility as the economic downturn cuts into advertising revenue.
The new terms "will provide us with the flexibility we desire, and at a cost that will be manageable," John Schauss, Media General's vice president-finance and chief financial officer, said in a statement. The company said more details would be disclosed when the agreements are completed next week.
Media General, owner of the Richmond Times-Dispatch and seven other dailies in Virginia, is among several media companies which, faced with a severe slump in advertising revenue, have negotiated new terms for the financial targets required by their lenders.
In September, McClatchy Co., the No. 3 U.S. newspaper company, said it had renegotiated the terms of its credit agreements. A.H. Belo Corp., publisher of The Dallas Morning News and three other newspapers, said in October that it had secured changes to its debt terms.
Lee Enterprises Inc., an Iowa-based publisher of 49 daily newspapers, also said in October that its lenders had agreed to new terms, but the changes meant the company had to suspend its dividend.
Media General shares rose 19 cents, or 12 percent, to $1.77 yesterday on the New York Stock Exchange.
The company has sold four television stations this year and is planning to sell a fifth to reduce its debt, which will stand at about $730 million at the end of the year, down from $898 million at the end of 2007, company executives said yesterday. The company expects to cut its debt to about $710 million by the end of 2009, not including any proceeds from asset sales.
The station sales, along with job cuts and attrition, have reduced the company's work force by 17 percent since the start of 2007 to 5,750, producing about $55 million in annual savings.
Media General owns 24 daily papers, about 275 weeklies and other publications, 19 network-affiliated television stations, Web sites associated with its newspapers and television stations, and three interactive advertising services companies.
Contact John Reid Blackwell at (804) 775-8123 or jblackwell@timesdispatch.com.
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