Biz Briefs: Media General Posts Lower Profit

Oct 17, 2005  •  Post A Comment

Media General, a Richmond, Va.-based owner of newspapers and 26 television stations, announced last week that its third-quarter profit tumbled 38 percent to $9.8 million, hurt by weakness in the company’s publishing and broadcasting divisions. Revenue rose 1.5 percent to $220.8 million. Operating profit at the company’s broadcasting division sank 63 percent to $12.4 million, while revenue slipped 3 percent. The company blamed the unit’s decline on a sharp drop in political advertising revenue to $445,000 from a year-earlier level of $5.5 million. Another factor was the absence of Olympics revenue in the period. But those declines were partly offset by 13 percent growth in local advertising revenue.

Broadcast a Drag on Gannett Results

Gannett said last week its third-quarter profit fell more than 4 percent due to weakness at its broadcasting unit and rising costs associated with newsprint at its publishing division. The McLean, Va.-based owner of 21 television stations reported a third-quarter profit of $297 million, compared with a year-earlier profit of $310.2 million. Revenue rose 4 percent to $1.86 billion. At the company’s broadcast division, the absence of political advertising and revenue generated by the Olympics contributed to a 19 percent decline in revenue to $166.4 million, though analysts point out that excluding those factors, revenue would have risen 7 percent in the quarter.

SEC Freeze on Execs’ Assets Upheld

A legal tussle involving a pair of former executives from Gemstar-TV Guide International served as the foundation of a U.S. Supreme Court ruling last week that strengthens the ability of the Securities and Exchange Commission to freeze the assets of corporate executives being investigated for accounting fraud. The high court let stand a federal appeals court ruling that froze $37 million in termination payments to former Gemstar CEO Henry Yuen and former Chief Financial Officer Elsie Leung, who are seen as being at the center of an accounting fraud scandal that has rocked the News Corp.-controlled company. The two former executives argued that the freezing of the termination payments did not meet the extraordinary payments clause of the Sarbanes-Oxley Act of 2002, which sets forth several corporate governance guidelines. The pair are expected to go to trial on civil charges in December for their alleged misdeeds, after they failed to reach a settlement with the SEC.

DirecTV Eliminates 100 Jobs

DirecTV announced last week that it has eliminated 100 jobs at its Latin America unit as the company moves ahead with a strategy to consolidate that division’s operations into a single office. Many of the affected jobs will be at the company’s Miami Lakes, Fla., offices, which will be shuttered by second quarter 2006. Under the plan announced by the company, DirecTV Latin America will operate entirely out of offices in Long Beach, Calif., which will add 30 positions as a result of the shift.