Annual Report Index

H. Graham Woodlief, Jr., president, Publishing Division

A: The Publishing Division of Media General currently owns 21 dailies, 36 weeklies and over 175 total products with a distribution of over 4.5 million copies. In fact, Media General’s publishing products reach 750,000 households on a daily basis and almost one million households on Sunday. This strong penetration advances our mission of being a leading source of news, information and entertainment in the Southeast.

Q: How is the integration of the Park acquisition proceeding?

A: The integration is proceeding on schedule, and we are pleasedwith the results. One example of our success is in Prince William County, Virginia, where two of our properties are located. One, the Manassas Journal Messenger was unprofitable, while the other, the Potomac News, also had problems. In the year since the acquisition, we combined certain operations such as advertising and production, while preserving the individual identity of each news department. In addition, we eliminated a money losing free circulation publication and converted the Potomac News to a morning cycle. The result was sharply higher combined revenue growth for the first year, and a return to profitability in Manassas.

Q: What is your strategy to deal with rising newsprint costs?

A: We have been aggressive in our conservation measures. In the near term we are planning for a reduction of web widths, and we continue to search for other ways to reduce newsprint waste. In fact, our newsprint consumption in 1998 is expected to be almost two percent less than in 1997, despite more newspapers and more linage.

Q: What competitive threats do you face?

A: Our biggest competition today comes from new entrants to the market who offer specialized products and services. These niche players attempt to erode our advertising market share and our circulation base. In response, we are establishing on-line networks for distribution of information and classified ads that meet our customer and advertisers’ needs, and add value to our products and services. At the same time, this strategy helps to establish Media General as a technology leader.

Q: Are you planning to continue to make acquisitions?

A: The newspaper industry is consolidating and Media General’s Publishing Division has been active in acquiring companies. We will continue to look for those candidates that fit our geographic and strategic goals.

Q: What other synergies are you realizing from your recent acquisitions?

A: Our recent expansion has given the Publishing Division a chance to benefit from economies of scale and synergies among our newspapers. Two areas we are pursuing are production clustering and sharing of our proprietary content among Media General newspapers with similar interests.

Q: What steps are you taking to keep costs under control?

A: We are accelerating our highly successful “rightsizing” program. This program is not designed to be a one-time effort. In 1998, we plan to study our performance in day-to-day operations. Continuous process re-engineering of operations at both the division and local levels will help us identify and institute revenue growth and cost savings initiatives, and develop better business practices. This will better position the Publishing Division to respond to the changes in the markets around us.

Q: What are the benefits of production clustering?

A: Through production clustering, we are able to utilize more efficiently our production resources in both personnel and equipment. Another positive is the reduction of safety and environmental issues for personnel. In addition, excess space and equipment created through consolidation can be re-assigned within our organization.

Q: What are your goals for 1998?

A: Our 1998 goal for the Publishing Division is to increase revenues and market share through the introduction of new, targeted products and services, as well as to improve the quality of our sales efforts. In 1998, we will further develop the types of synergies that allow us to operate more efficiently and enhance the quality of our products.