We filled several key positions at Garden State Paper Company, and achieved substantial improvement in production there. We signed new 15-year franchise agreements for our cable system in Fairfax County, and completed planning for a 1999 upgrade to a fiber optic cabling system. Combined subscriber count at our two northern Virginia systems exceeded 258,000 by year-end.

Perhaps most importantly, however, we started formal planning for operating in a new world of converged media. In the not too distant future, news and information from a variety of media will be combined and packaged in multiple ways. We will be ready to take full advantage of this information revolution.

For years, our Company has been gathering, editing, packaging and delivering news, information and entertainment to audiences through traditional media such as newspapers and broadcast television. While we shall continue to do that for years to come, today 31 individual Media General operations also have Internet web sites that supplement our traditional offerings.

By the end of this year, we expect to be operating web sites for all our publications and television stations, as well as our Fairfax County cable system. Furthermore, we intend to interlace our traditional and non-traditional offerings in ways that better serve our customers.

Toward that end, in 1998, we made major advances in expanding Newsbank — the shared-content news and information network now available to all of our 21 daily newspapers through the Media General Intranet. An average of 1,000 news articles and 250 photographs are posted on Newsbank monthly, and these figures continue to grow. The stories and photos, developed by our newspapers and our Washington bureau, are branded with the Media General News Service nameplate.

Newsbank will be expanded to our weeklies this year and, perhaps, to our broadcast television stations as well. Eventually the offerings could become part of an on-line news service focused on the Southeast.

Media General Financial Services (MGFS), which publishes current and historical financial data on publicly traded companies for a broad spectrum of users, including many on-line financial data services, had another highly successful year and established substantial gains in both revenues and profits. During the year MGFS strengthened its ties with Hoover’s, a leading provider of business information. MGFS also formed a strategic content alliance with Thomson Investors Network and expanded its database to include 4,000 Canadian companies.

In June 1998 we broke ground for a new 145,000-square-foot facility to house WFLA-TV, our NBC affiliate in Tampa. When it is completed late this year, this building will provide the station with state-of-the-art studios and full digital signal transmission capability. Adjoining The Tampa Tribune, it will include space for The Tribune’s 35,000-square-foot newsroom which will enable the newspaper and television news staffs to work side-by-side and to share library and other resources.

By pooling our wholly owned resources where possible, and by forming similar partnerships and alliances elsewhere, we can expand our reach and scope by offering readers and viewers enriched products and services throughout our market area.

In the past year, aggregated cable channel viewership surpassed that of the four major broadcast television networks for the first time in history. Opportunities for on-demand cable programming, and the transmission of high speed data services, which we have already inaugurated, combine to make our cable television operations particularly attractive high-growth properties. We continue to explore partnership opportunities with other operations in the Washington, D.C., area.

Newsprint production and prices were strong, especially during the first half of the year when demand and supply were in concert. During the second half, however, with increased supply from Asia, prices declined and remain lower today.

In 1998 we were privileged to welcome Roger Mudd to our Board of Directors. Formerly a correspondent with CBS and NBC News, Mr. Mudd began his distinguished career as a reporter with The Richmond News Leader. We shall benefit from his unique perspective.

As we move through these times of rapid technological and societal change, Media General is well prepared to serve the news, information and entertainment needs of our readers and viewers regardless of their medium of preference. No matter what changes technology brings, we remain dedicated to providing our customers with accurate, credible, relevant and useful news and information.

Your Company is in strong financial condition. Its plant and equipment are efficient and up-to-date and it has a clearly defined strategic focus. We increased your dividend in January 1999. Our businesses enjoy market positions of increasing strength. We believe their current performance is but an indication of the greater success we expect in the future.

Yours sincerely,

J. Stewart Bryan III
Chairman, President and
Chief Executive Officer
March 12, 1999