UPDATE 2-Media General posts loss,sees stronger ad spending

* Q3 loss $2.80 per share includes writedown

* Revenue falls 18 percent

* Company sees signs of improving ad spending in Q4

* Shares fall 2.8 percent (Adds details on writedown, background on newspapers)

By Robert MacMillan

NEW YORK, Oct 21 (Reuters) - Media General Inc (MEG.N) reported a quarterly loss on Wednesday because of a writedown and said revenue fell 18 percent, but the newspaper publisher also said it sees signs that ad spending is improving.

Media General, which owns U.S. papers such as the Richmond Times-Dispatch and Tampa Tribune, reported a third-quarter net loss of $62.5 million, or $2.80 a share, compared with year-earlier net income of $6.1 million, or 27 cents a share.

Excluding one-time items, income from continuing operations fell to $4.4 million, or 20 cents a share, from $5.7 million, or 25 cents a share.

The results included an $84 million pretax writedown for goodwill, Federal Communications Commission broadcast licenses, network affiliation agreements and publishing licenses.

Like other newspaper publishers in the United States, Media General has been cutting expenses as ad revenue falls. By the end of the third quarter, the company had 770 fewer full-time equivalent employees this year than last, it said.

It also has lowered its newsprint consumption, and by the end of this year, employees will have taken 15 days off under furloughs.

Revenue fell to $158 million from $193 million. Publishing revenue fell 18.5 percent, while broadcasting revenue from the company's local television stations fell 20 percent.

Third-quarter ad spending was challenging, but the fourth quarter could show an improvement, the company said.

Media General also has raised newspaper prices, contributing to an 11 percent gain in circulation revenue in the quarter.

The company joins other newspaper owners that reported quarterly revenue declines because of weaker ad sales, including USA Today publisher Gannett Co Inc (GCI.N), Miami Herald publisher McClatchy Co (MNI.N) and Milwaukee Journal Sentinel publisher Journal Communications Inc (JRN.N).

The New York Times Co (NYT.N) is likely to report similar declines on Thursday.

Shares of Media General were down 2.8 percent at $10.69 in morning trading. (Reporting by Robert MacMillan; editing by John Wallace and Lisa Von Ahn)