S&P cuts Media General outlook to negative

Standard & Poor's said it revised its outlook on Media General Inc. to negative from stable.

At the same time, the agency said it affirmed its ratings on the company, including the BBB- corporate credit rating.

The outlook revision reflects a weaker pro forma financial profile resulting from Media General's agreement to acquire four NBC owned and operated television stations from NBC Universal for about $600 million in cash, the agency said.

S&P said that the transaction will strengthen Media General's broadcasting business with these higher-margin and larger market stations, as well as increase the percentage of broadcasting operations in the company's revenue and cash flow mix.

The ratings on Media General reflect the company's significant pro forma debt levels due to the planned acquisition, historical growth through acquisition, higher capital expenditures, a challenging business environment and medium-sized cash flow base, S&P said, adding that these factors are tempered by strong market positions, diversified mix of newspaper and television operations and historically meaningful internal cash flow generation.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.