Media General dismisses shareholder strategy

By Robert MacMillan

NEW YORK (Reuters) - Media General Inc's chief executive dismissed on Tuesday a dissident shareholder's strategy for the company to weather tough economic times, setting the stage for a proxy battle at its annual meeting.

In presentations at a forum held by fund manager and Media General investor Mario Gabelli, both sides presented sharply different accounts of the company's performance and plans for its future. They agreed that Media General should pay off more debt, but offered little other common ground.

"Their ideas were not workable or usable," Chief Executive Marshall Morton told Reuters in an interview. "It was mostly formulas and platitudes that would work well in a management textbook, but didn't tie well to Media General."

Morton also repeated his admonition that shareholders should reject three board nominees sponsored by hedge fund Harbinger Capital Partners.

Harbinger, which owns 18.2 percent of Media General's publicly traded shares, said the company has pursued a flawed strategy and argued that it should cut publishing costs more aggressively and think about lowering its dividend and using the money to pay down more debt.

In its first public airing of its strategy for the company, the fund also said Media General should consider alternatives for its properties in Florida, which include the Tampa Tribune, although it did not specifically urge a sale.

Morton said he has no plans to meet Harbinger again. The shareholder meeting is planned for April 24 in Mechanicsville, Virginia.

Harbinger Vice President Joseph Cleverdon, who presented his side's case, told Reuters the fund was still open to discussions with the company, but has no meeting planned. "I don't think we've failed to reach an agreement until we actually get to the day of the meeting," he said.