Media General: We’re not the New York Times

March 19, 2008

The New York Times made its peace with hostile hedge fund Harbinger Capital Partners by nominating two members of its rival slate to its board, but a few hundred miles south in Richmond, Virginia, Media General declared war instead.

Media General Chief Executive Marshall Morton stopped just short of challenging Harbinger executive Philip Falcone to a duel, and instead derided the lack of experience of three board members that Harbinger is trying to elect to the company after building up an 18.2 percent stake.

Morton elucidated in an interview with Reuters on Wednesday:

On why the newspaper publisher and broadcaster has suffered a 61 percent stock drop in the past year: Today’s world is a world where the customer is in charge, not us anymore. Media General was pretty early in figuring out that the customer was platform-independent.

On what Harbinger might do to help Media General negotiate the tricky newspaper landscape: We have yet to hear any concrete plans as to what they would have us do differently. … I don’t want anyone to think we don’t listen to new ideas. We’re in search of them. (Media General publishes the Richmond Times-Dispatch, as well as the Tampa Tribune, among other papers)

On why a buyback or special dividend to jumpstart the share price isn’t a hot idea: We’d rather invest that kind of money in new businesses or in revisions to our existing business. … Those are short-term impact kinds of actions that don’t add value to the cashflow stream.

On Media General’s family control through two classes of stock. What does the family, including Chairman J. Stewart Bryan III (who holds some 80 percent of the B shares) think about the stock price and your strategy? They’re completely on board with us.

On the bullet-point reasons in his letter about why Harbinger’s board nominees aren’t even fit for digging ditches, let alone directing a company: I have refrained from being combative and negative, but, I mean, at some point we have to respond to what they say about us.

Shall we say “Pistols at dawn?”

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