Media General is a company on the move. Each of my letters over the past several years has described a series of strengthening moves designed to implement the mission statement we introduced in 1995.

This year, as you already may know, we have taken even more dramatic steps to reshape our Company for growth in the Information Age. We have sharpened our focus on providing high-quality news, information and entertainment to the southeastern region that we know best; and as you read this year’s annual report, I believe you will share our optimism and enthusiasm.

1999 was a remarkable year for us. The most significant, transforming event was the sale of our Cable Division to Cox Communications in October. A number of factors converged to provide the impetus for that sale. First, we recognized that industry-wide consolidation had begun to put more competitive pressure on our Fairfax County cable system, which served most of the Division’s 260,000 subscribers. Second, to retain our competitive position in that market, we had identified capital requirements of more than $200 million. Third, valuations in the cable industry were rising rapidly. And, fourth, we happily found a purchaser for our cable systems who shared our fundamental values.

The $1.4 billion sale produced a record $5,360 per subscriber. That value reflects the hard work of our Cable Division employees who built — from the ground up — what we believe is the pre-eminent cable system in America. Our Cable Division employees unfailingly kept all of the promises we made to our subscribers. We thank them, and we shall miss them; but we also are confident that they will find even greater opportunities to excel with Cox Communications.

The Cable Division sale allowed us to pay off all our bank debt, creating unprecedented financial strength and flexibility.

Then we were faced with the question of how best to use that strength and flexibility to build value for our shareholders. The answer came with the opportunity to acquire Spartan Communications for approximately $605 million. Spartan will add 13 network affiliates to our Broadcast Television Division, doubling our number of stations and expanding our penetration of southeastern television households from 22 percent to 30 percent. Each of the Spartan stations ranks either first or second in its respective market, and each is operated by an experienced and talented management team.

The Spartan acquisition demonstrates our belief that broadcast television stations will continue to thrive in the Information Age. Much has been written about the fragmentation of the network television audience, principally as a result of the proliferation of cable channels. But those reports mask growth over the past 30 years in the number of actual households that watch network television. So, while network television’s share of the overall market has declined, it still takes dozens of cable channels to equal the audience of just one traditional network broadcast channel. Also, with the explosion of consumer choice on cable, we believe that demand for high-quality content will continue to increase. These elements play to our strengths: the gathering and dissemination of local news and information.

Our local news coverage is breaking new ground in Tampa, where WFLA-TV, The Tampa Tribune, and Tampa Bay Online (TBO.com) are collaborating in the new building pictured on the cover of this report. Within this News Center, editors, producers, and researchers coordinate coverage of stories that lend themselves to a multimedia approach. This highly digital facility is the only place in the nation where print, broadcast and online media are coming together to cover local news in such an innovative way. We expect to capitalize on similar opportunities in some of our other southeastern markets.

In addition to building new facilities that encourage media convergence, we are finding ways to share existing resources among our growing number of newsrooms in the Southeast. Foremost among these projects is the Media General News Bank, a nascent network that allows our newspapers to share their best stories, features and photographs. Since October 1998, our News Bank has distributed more than 25,000 stories plus 8,000 photographs and graphics. And for the first time, we are in a position to market selected content from this News Bank to our peers in the industry.

We will deliver this content to our newspaper customers using Internet technology that allows us to greatly leverage the value of our news, information, and entertainment. Another beneficiary of the Internet is Media General Financial Services, a highly profitable subsidiary that is finding online outlets for its top-notch financial data. Media General Financial Services now has more than two dozen alliances with major Internet players such as Quicken.com and Multex.com.

While our Internet efforts are beginning to pay dividends, our traditional newspapers continue to generate high returns. Declining newsprint prices and the booming southeastern economy produced another record year for our Publishing Division, which produced nearly $150 million in operating income. While we’ve experienced weakness in some advertising categories — mainly due to consolidations and withdrawals by major retailers — classified advertising remains strong and national linage is particularly robust. In both major and smaller markets, our newspapers enjoy critically important leadership positions in their communities, and we have extended virtually all of our newspapers’ franchises with Web sites, providing an emerging source of advertising revenue.

In our Broadcast Division, our small- and mid-market stations performed well in 1999. These stations gained market share and improved their demographics by investing in the “three Ps” of broadcasting — people, programming, and promotion. Also, WFLA has regained market share in Tampa through the addition of more demographically appealing programming. This NBC affiliate also has benefited from the network’s improved per- formance in the prime time ratings race.

Our biggest challenge in 1999 came from our Newsprint Division, which continued to suffer from falling prices due to industry-wide overcapacity. Lower newsprint prices helped our Publishing Division, but Media General remains a net producer of newsprint, so the bad news outweighed the good. However, with the firming of Asian economies, we believe we have begun to witness a stabilization of newsprint pricing.

Reflecting our optimism that 2000 will be a good year for Media General, we again increased your dividend in January. The strategic plan that we adopted in 1995 is working, and we remain committed to focusing our efforts on fast-growing southeastern markets. Financially, we are stronger than ever, and our ability to gather and disseminate news and information continues to grow via strategic expansions and acquisitions. For all of these reasons, we believe Media General is in a prime position to reap the rewards of being a high- quality content provider in this exciting Information Age.

The best is yet to come.

Yours sincerely,

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

March 1, 2000