Media General turns a profit

mediageneral1Media General posted a $20.6 million profit in the second quarter, primarily due to layoffs, cutting benefits and selling assets.

Revenue at the Richmond-based company (which also owns the Times-Dispatch) fell 20 percent from a year ago.  But the company cut costs by 23 percent. The cost cutting measures are hefty and painful for employees and former employees of the company.

From the quarterly report:

“Actions driving the lower expenses included reductions in force across the company, a furlough program, a suspension of matching in the company’s 401(k) plan in 2009, and the final freeze of the company’s pension plan effective May 31, 2009.  Service accruals ceased in the partial freeze of the plan in 2006 and now future salary increases do not affect retirement benefits. “

The company reports that even though they had to make some difficult reductions to stay ahead of the down economy, it sees a silver lining.

The company reaped $7.1 million from the sale of a TV station in Jacksonville and has confidence that its moves to online and digital media will pay off in the end.

Meanwhile McClatchy Company, the parent company of Raleigh News & Observer, reported a $40 million profit, which was also due to 30 percent cost cuts. The reduction in revenues for McClatchy, which owns almost exclusively newspapers, was even more dramatic. They lost nearly 30 percent of revenue from ad sales.

Media General’s shares are trading up about 50 percent this morning.

mediageneral1Media General posted a $20.6 million profit in the second quarter, primarily due to layoffs, cutting benefits and selling assets.

Revenue at the Richmond-based company (which also owns the Times-Dispatch) fell 20 percent from a year ago.  But the company cut costs by 23 percent. The cost cutting measures are hefty and painful for employees and former employees of the company.

From the quarterly report:

“Actions driving the lower expenses included reductions in force across the company, a furlough program, a suspension of matching in the company’s 401(k) plan in 2009, and the final freeze of the company’s pension plan effective May 31, 2009.  Service accruals ceased in the partial freeze of the plan in 2006 and now future salary increases do not affect retirement benefits. “

The company reports that even though they had to make some difficult reductions to stay ahead of the down economy, it sees a silver lining.

The company reaped $7.1 million from the sale of a TV station in Jacksonville and has confidence that its moves to online and digital media will pay off in the end.

Meanwhile McClatchy Company, the parent company of Raleigh News & Observer, reported a $40 million profit, which was also due to 30 percent cost cuts. The reduction in revenues for McClatchy, which owns almost exclusively newspapers, was even more dramatic. They lost nearly 30 percent of revenue from ad sales.

Media General’s shares are trading up about 50 percent this morning.

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