January 29, 2009 / 1:10 PM / 9 years ago

UPDATE 5-Media General posts loss, stops dividend

* Media General posts loss after $130.4 mln writedown

* Company eliminates dividend

* Company to stop releasing monthly revenue numbers

* Shares fall as much as 19 percent (Adds details on debt, updates market activity)

By Robert MacMillan

NEW YORK, Jan 29 (Reuters) - Media General Inc MEG.N posted a quarterly loss on Thursday because of a writedown. Newspaper advertising revenue fell 20 percent, and the company eliminated its dividend.

Shares shed as much as 19 percent of their value on the New York Stock Exchange on Thursday.

The results mirror the performance of other U.S. newspaper publishers, which are struggling to survive as ad revenue plunges. The New York Times Co (NYT.N) reported a nearly 18 percent drop in ad revenue on Wednesday.

Many publishers are trying to pay loads of debt despite ever lower amounts of cash. Media General said it is suspending its dividend to help pay off about $730 million of debt.

The move is disheartening for investors because publishers typically have paid fat dividends over the years. Still, analysts have said that the action is necessary to avoid inching closer to default.

Company executives reassured analysts on a conference call that Media General intended to remain repay its loans without violating the borrowing terms. They also said they did not think they would have to renegotiate the terms.

Media General, which publishes the Richmond Times-Dispatch in Virginia and The Tampa Tribune in Florida, said classified ad revenue fell almost 37 percent in the quarter, and said its three major metropolitan newspaper markets were hardest hit. Real estate classified ad revenue fell by almost half.

Media General posted a fourth-quarter net loss of $85.5 million, or $3.86 a share, compared with a profit of $9.6 million, or 43 cents a share, a year earlier.

Media General wrote down the value of network affiliate agreements and broadcast licenses from the U.S. Federal Communications Commission.

Excluding the $130.4 million pretax writedown and other charges, Media General reported a profit of 39 cents a share, down from 46 cents a year ago. Revenue fell 11.9 percent to $207 million.

In a separate statement, Media General said it will stop issuing monthly revenue reports.

Media General, which publishes newspapers and runs local television stations in the U.S. Southeast, said publishing ad revenue declines included a nearly 38 percent drop in classified ad revenue. Publishing profit fell 57.2 percent.

Revenue grew 10 percent in Media General’s online division, while its operating loss narrowed to $1.6 million. Still, online classified advertising fell nearly 25 percent.

Media General shares closed down 68 cents at $2.16 on the New York Stock Exchange. (Editing by John Wallace, Derek Caney, Matthew Lewis, Leslie Gevirtz)

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