Investor increases stake in Media General

Investor Mario J. Gabelli has increased his stake in Media General Inc. to nearly 30 percent of the Richmond-based company's Class A shares.

Gabelli's investment firm, New York-based GAMCO Investors, and other funds it controls now own more than 6.6 million shares, according to a filing with the Securities and Exchange Commission earlier this week.

His companies bought 442,437 shares since mid-March, increasing Gabelli's stake from 27.94 percent to 29.87 percent, the filings show.

Gabelli, who has been a Media General shareholder since the late 1980s, had held a 22 percent stake in the company in April 2008.

An assistant for Gabelli said yesterday that the investment firm increased its stake in the parent company of the Richmond Times-Dispatch after moving out of an index fund, a type of mutual fund. Gabelli had no further comment, the assistant said.

A Media General spokesman said the company does not comment on market activity or individual investors.

GAMCO has said, in its SEC filings this week and in previous filings, that it may nominate one or more people for election to the company's board of directors at its annual meeting in 2010.

"If he is increasing his position in the stock, that could be a logical step for him," said Steve Marascia, a research analyst at Capitol Securities Management in Henrico County.

Gabelli, he said, "normally buys stock in companies if he thinks there is some embedded value in them," even when the stock has been declining.

Media General shares have fallen 98 percent since reaching a 52-week high of $18.30 on Sept. 18. The stock closed yesterday at $2.12, up 1 cent.

Many other media companies have seen their shares decline dramatically in the past year as the markets plummeted and as advertising revenue eroded, but Gabelli could be increasing his stake on the belief that the economy will improve and help lift media stocks, analysts say.

"They are all in the same boat, more or less," said Edward J. Atorino, a media industry analyst with The Benchmark Cos. in New York. "They have declined 70 or 80 or 90 percent."

"There are certainly bargains, if one had the conviction that things are going to stop getting worse or start getting better," he said. "There is some hope that things will stop getting worse as we get into the second half [of this year], but at the moment the second quarter is going to be another rather rough quarter."

In addition to The Times-Dispatch, Media General owns 20 other daily newspapers, more than 250 weekly newspapers and other targeted publications, 18 network-affiliated television stations and associated Web sites.

Contact John Reid Blackwell at (804) 775-8123 or .