S&P downgrades Media General view to negative

Standard & Poor's said it revised the outlook on Media General Inc.'s B- rating to negative from stable.

The outlook change reflects an expectation that Media General could face difficulties in maintaining covenant compliance in 2012 due to the absence of meaningful election revenues and secular declines in publishing revenue, S&P said.

The negative outlook also considers an expectation that continued secular declines in newspaper ad revenue, along with an absence of political ad spending, will cause Media General's cushion of compliance with tightening covenants to narrow, potentially causing a violation in 2012, the agency said.

The ratings also take into consideration that revenue softness in 2011 will cause credit metrics and discretionary cash flow to deteriorate over the next six to 12 months, S&P added.

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