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Executives

Marshall Morton - President & Chief Executive Officer

John Schauss - Vice President of Finance & Chief Financial Officer

Reid Ashe - Executive Vice President & Chief Operating Officer

Lou Anne Nabhan - Vice President of Corporate Communications

Analysts

Ed Atorino - Benchmark

Barry Lucas - Gabellie & Company

Drake Johnstone - Davenport & Company

Ken Silver - Royal Bank of Scotland

Mike Traynor - Milwaukee Private Wealth Management

Sean Greer - Lynn Capital

Media General Inc. (MEG) Q4 2008 Earnings Call January 29, 2009 2:30 PM ET

Operator

Good day ladies and gentlemen and welcome to the fourth quarter 2008 Media General earnings conference call. My name is Heather and I’ll be your coordinator for today. (Operator Instructions)

I would now like to turn the presentation over to your host today’s conference Ms. Lou Anne Nabhan, Vice President. Please proceed.

Lou Anne Nabhan

Thank you Heather, and good morning everyone. Welcome to our conference call and webcast. Earlier today we announced fourth quarter 2008 results and revenues for the month of December. Both of those press releases are on our website and the comments from today’s call will be posted on our site immediately following the call.

Today’s presentation contains forward-looking statements which are subject to various risks and uncertainties. They should be understood in the context of the company’s publically available reports filed with SEC. Media General’s future performance could differ materially from its current expectations.

Our speakers today are Marshall Morton, President and Chief Executive Officer; Reid Ashe, Executive Vice President and Chief Operating Office; and John Schauss, Vice President of Finance and Chief Financial Officer.

Let me start with turning the presentation over to Marshall.

Marshall Morton

Thank you, Lou Anne and good afternoon everyone. As you’ve seen in our earnings release, our fourth quarter results included a non-cash intangible asset impairment charge and a tax valuation allowance. John will discuss those items later in our presentation.

Excluding those items and $6.1 million of pretax severance expense in the fourth quarter of ’08, income from continuing operations was $8.6 million or $0.39 per diluted share, compared $10.2 million or $0.46 per share in the fourth quarter of ’07. Total operating costs in the fourth quarter excluding the impairment charge in ’08 and an amount for an insurance recovery in ’07, decreased 7.1% from the prior year and reflected the benefit of the aggressive actions we’ve taken to improve the efficiency and effectiveness of our operations.

We began scaling back our work force, outsourcing certain functions and centralizing others in early 2007, when our business began to feel the impact of the housing downturn in Florida. Our number of FTEs has decreased from approximately 6,900 at the beginning of 2007 to approximately 5750 at the end of 2008. The 17% reduction provides more than $55 million of annualized savings. Approximately 20% of that amount benefited us in ’08 and the full amount will be realized in ’09.

For the year 2008 we’ll pay no profit sharing or executive bonuses. In addition, we recently announced the suspension of our 401(k) match starting April 1, 2009 through the end of this year. These steps will conserve additional cash that we will use for debt reduction. When our performance improves we’ll reinstate the 401(k) match.

A short while ago, we announced the Board of Directors had its meeting today to determine that it was prudent to suspend the dividend on Media General Class A and Class B shares. While we regret having to take this action, it will allow the company to direct additional cash flow to debt reduction.

While a portion of the revenue falloff we’ve experienced is certainly cyclical, we have no doubt that a meaningful portion is secular and will never return in its old forms. That being the case we are adapting our expense structure to conform to the realities of these changed revenue streams. For the fourth quarter of ’08 total revenues decreased 12% from the prior year.

Looking at our individual business segments, publishing division revenues declined 17% from the prior year. Publishing profits were down 57%, excluding severance expense from both years. Much of this reduced level of performance is driven by the recession in Florida, which is now entering its third year. The broadcast division enjoyed the benefit of more than $23 million of political revenues from the quarter, which largely offset a decline in local and national advertising revenues. Broadcast profits excluding severance expense were 2.6% ahead of the prior year.

The interactive media division benefited from new revenues from DealTaker.com, the online coupon of shopping business we acquired earlier this year. DealTaker is generating strong growth on its own and produced a doubling of its unique visitors in the fourth quarter, compared to its standalone performance in the prior year. Our local media sites generated a 3% increase in local online advertising revenues.

Now I'll ask Reid to provide more details on the performance of our three operating divisions in the fourth quarter.

Reid Ashe

Thank you Marshall. It was another tough quarter for our publishing division. With all the major advertising categories in retreat, overall publishing revenues were down 16.8%. Classified advertising revenue decreased 37.6% in the quarter. The largest shortfall was in Florida, followed by Richmond.

The three metro markets combined, employment revenues were down 60%, real estate revenues declined 50% and automotive revenues decreased 46.2%. Compared with the metros, the shortfalls in classified adverting were not as pronounced at our community newspapers. Legal category grew due to foreclosure notices.

Retail revenue decreased 12% as major advertisers significantly cut their advertising schedules. The weakness was pervasive across markets and categories. National revenue declined 11% mainly reflecting lower spending by automotive and telecommunications advertisers. Circulation revenue rose 5.7% in the quarter primarily as a result of price increases earlier in the year. Total publishing expenses in the quarter excluding severance in both years and certain one time costs to consolidate print sites in 2008 decreased 7.2%.

Compensation expense was down an 11.7% from the prior year, excluding severance expense of nearly $3 million in the quarter and a small amount in the same 2007 period. All time equivalence for the quarter relative to the last year decreased about $550 million or 13.5%.

With aggressive reductions in consumptions we held news print expense to 1.5% increase for the quarter. The price per short ton increased $185 or 36.3% in the quarter, where we reduced consumption by 25.6%. For the full year we reduced news spread expense 10.4%, despite a 13.5% increase in price.

Many of our new papers have redesigned our combined sections and eliminated less essential content. Four of our community print sites representing four community dailies and a number of weeklies have trimmed their page width to 11 inches. All of our other newspapers will be converted to the 11 inch page by the end of the third quarter of this year.

The broadcast division suffered the same recessionary drag as the publishing division, but political advertising helped us to increase profits by 2.6% over the prior year, excluding severance expense. On the plus side we billed $23.4 million in political advertising in the quarter.

At the same time though our largest advertiser category, the automotive industry is in perilous straits. In the fourth quarter of 2007 automotive advertising accounted for 25.7% of our total time sales. In previous years it’s been greater still. In the fourth quarter of 2008 it fell to 15.3%.

Local television ad revenue fell 25.6% for the quarter. The largest declines were in the automotive, furniture, grocery and specialty store categories. National revenues were down 30.6%, categories declining the most were automotive, entertainment and services.

As stunning as these declines are, Media General sales performance has exceeded that of the television industry. According to the Television Bureau of Advertising’s Monthly Group Survey through November, which is the latest reporting period, industry time sales decreased 4.7%, compared with Media General’s 2.8% decline. Those numbers include political advertising both for the industry and for us.

Broadcast expenses were down more than 10% excluding severance from the prior year. This reflects lower expense for salaries and benefits, lower cost of goods sold at out studio design and equipment subsidiary and other cost containment efforts in sales, administration and promotion.

In the interactive media division, an operating loss of $1.6 million for the fourth quarter, compared with a loss of $1.2 million, excluding an investment write down in the same 2007 period. Total interactive revenues increased 10% compared with last year, despite declines in classified and national revenues of 25% and 37% respectively.

DealTaker.com, which we didn’t own a year ago, helped us and so did local online advertising, which increased 43%, compared to the prior year ago. Local advertisings are more aware and receptive now to online advertising. We’ve also invested in sales training, offered better incentives and put a new focus on online only sales.

Because everybody wants to spend smarter now, our acquisition of DealTaker.com was especially timely. DealTaker finds the best prices on the web for wide variety of consumer items. It also provides coupons, product information and price comparisons. With this moderated forums, it’s a social network for shopping mavens who delight in sharing the deals they found.

When a customer clicks through to a retailer site to complete a purchase DealTaker earns a commission. It’s highly profitable and it’s growing fast. The four quarter was DealTaker’s busy season. On Black Friday, the day after Thanksgiving, visitors were up 90% from last year and commission revenue increased more 2.5 times. Traffic in December more than doubled over the prior year. In the nine months of 2008 that we owned the DealTaker, revenues were $5.7 million.

The online audience of our local media sites grew nicely in the fourth quarter. Page views increased to 10% and unique visitors grew 30% compared with the prior year. Thanks to our continuous news initiative, local page viewers are up nearly 32%. Growth is even higher in our two largest markets. Richmond is up 38% and Tampa is that more than 50%, unique visitors are up 18%.

The added pages from continuous news provide valuable local inventory, which appeals to local advertisers. Getting better at monetizing traffic at the same time that we are creating more traffic to monetize. Local entertainment is a hot topic for our Internet audience and an area of high demand for several advertiser categories. Company wide, we’ve enhanced our local entertainment sections and driven double digit increases in page views and unique visitors and thus in saleable ad inventory.

Blockdot, our advergaming and branded entertainment business moves into the New Year with great momentum and exciting new products. In December Blockdot released an iPhone version of Chicktionary, one of the most popular word games on the internet. This month the game was aimed best iPhone word game at the 2008 Best App Ever Award. It beat even scrabble. This game has been featured on the front of an itunes store as a flash hot map. Both those events have significantly boosted sales.

Now I’ll turn the presentation over to John.

John Schauss

Thank you Reid. As with us and the rest of the country and the world, economic conditions in the companies markets continue to decline in the fourth quarter. Additionally the markets perception of the value of media stocks remains negative. As a result of these factors, the company recognized a pretax non-cash impairment charge of a $130.4 million, $83.1 million after tax, primarily to write down the value of FCC licenses and network affiliation agreements in its broadcast division to their estimated fair values.

We were pleased to reached agreement with our banks in the fourth quarter regarding debt agreement modifications that provide us with the financial covenant flexibility we desire and ata cost that would be manageable. We were in compliance with all of our covenants prior to the amendment and we expect we will continue to be in compliance with them as revised. The new agreement is posted to our website in an 8-K dated December 19, 2008.

Debt at the end of 2008 was $730 million, down from $898 million at the end of 2007, reflecting conserted efforts under our de-levering plan. Interest expense was 26% below last year’s fourth quarter, due to mostly to substantial reduction in average debt outstanding and to a lesser extent a reduction in average interest rates. Interest expense for the full year was $43 million, compared with $60 million for the full year 2007, again as a result of our de-levering plan and lower interest rates.

The effective tax rate for the full year was a 31.6% tax benefit on a pretax loss as compared to a 35.4% tax expense on a pretax income in 2007. The decline in tax rate was due primarily to certain non-deductible goodwill included in the impairment charges and a $7.5 million of a tax valuation allowance that related to continuing operations.

Capital spending for the fourth quarter of 2008 was $12 million, compared with $23 million in the fourth quarter of 2007. For the full year capital expenditures were $31.5 million, compared was $78 million in 2007. The 2009 capital spending budget is $30 million.

In the fourth quarter, the publishing division invested $5.5 million, mainly on converting press equipment to reduce web width. The investments we have made in printing operations in the past few years have enabled us to consolidate the number of newspaper printing sites. We have gone from 25 sites to 11, eight of those consolidations occurred in the past three years.

The broadcast division spent $6.5 million, mainly for the final phases of the digital television conversion at many of our stations, an upgrade to our central traffic operations and a continued replacement of analog equipment with more efficient digital technology. Interactive media division and corporate expenditures were less than $0.5 million primarily for information technology.

We announced yesterday that we have signed a definitive agreement with Nexstar Broadcasting Group, for the sale of our CW Station in Jacksonville, Florida. The transaction is subject to regulatory approvals and is expected to be completed in the second of 2009.

We are pleased sign an agreement for the sale of this last of the five stations we plan to divest. When the sale has completed we were used to proceeds the pay down debt; and as we said all along, we will provide aggregate financial details on the group of five stations sold when the WCWJ closes. We expect total proceeds of $95 million to $100 million for all five stations.

And now I’ll turn it back to Marshall.

Marshall Morton

Thank you, John. With national recession in our largest market Florida and a continuing depression it won’t surprise you that we approached 2009 as a challenging year. We remain vigilant in our efforts to align expenses with the business climate and as you heard from Reid, we’re aggressively pursuing new audience and revenue growth opportunities.

Our interactive media division is focused on driving audience growth for new products as well as our highly successful web force continuous news initiative, capitalizing our mobile delivery with new advertising and marketing services such as text messaging, mobile coupon and classified vertical applications, collaborating and executing our partnerships with Yahoo and Zillow and accelerating growth in our new revenue segments taped by Blockdot and DealTaker.com.

The broadcast division is driving several initiatives to improve market share and develop new business. We completed satisfactory agreement on cable retransmission phase for all contracts that expired at the end of the 2008. When the revenue from these contracts is added to the satellite retransmission deals that were already in place, we will generate over $16 million in 2009.

The publishing division continuous to reach new audiences, for both new print products, and partnerships with our interactive media division. We recently announced the creation of our new production and distribution unit within the publishing division.

A key focus for this unit, even as it retain responsibility for the printing and distribution of our 24 daily newspapers and more than 275 weekly newspapers and niche publications, is to expand outside sales for commercial printing, including the pursuit of opportunities for high-speed offset web printing and co-distribution arrangements, primarily with other newspapers and specialty publications.

Moving printing and distribution into a separate unit allows our publishers and managers to focus on content sales and new products. We expect this innovative approach to provide operating efficiencies both internally and for third parties.

The Super Bowl on Sunday is being played in Tampa or largest market. Each of our Tampa based operations is planning comprehensive coverage including a Super Bowl commodities special section of the tribune, live broadcast direct from NFL experience on WFLA, and the most complete visitors events guide on TBO dot com and MTBO.com the mobile website. A new magazine venture that we co-own, an upscale lifestyle magazine for Tampa Bay will launch for the special Super Bowl edition, just in time for the game.

In addition to being official sponsors for the Tampa Bay Super Bowl host committee, our Tampa operations will sponsor several events surrounding the game; the NFL experience, taste of the NFL, Pepsi smash and the 10th Annual Super Bowl Gospel celebration. Sponsoring these events is an excellent way to showcase the power of our brands and highlight our exclusive content offerings.

We also benefit from utilizing NBC coverage game and event tickets to provide incentives for advertisers. We’re particularly pleased to have generated nearly $3 million of Super Bowl advertising spots on our eight NBC stations.

That concludes our report. Now we’ll be glad to take your questions.

Question-and-Answer Section

Operator

(Operator Instructions) Your first question is from the line of Sean Greer with Lynn Capital. Please proceed.

Sean Greer - Lynn Capital

Hi, just a couple of questions. First with respect to the pension plan, I was wondering if you could give us a little bit of color on the under funding, what estimate you might have as of the end of last year and what cash contributions you might expect for over the next couple of year?

Marshall Morton

Okay. John, you want to handle it.

John Schauss

Well, our pension plan typical of most pension plans in the 2008 and especially the fourth quarter of 2008 actually has declined to market value. The unfunded liability that we have is $160 million, which will be recorded in the K that you’ll receive, and I do direct you to the footnotes of the K to get specifics of that.

Sean Greer - Lynn Capital

I see. Okay, so $160?

John Schauss

That’s correct.

Sean Greer - Lynn Capital

And in terms of cash contribution I guess have you got any color on how much that would change in ‘09 versus ‘08 or going forward?

John Schauss

We have budgeted a $5 million increase in 2009 over what we contributed to the pension plan in 2008.

Sean Greer - Lynn Capital

Then I guess with respect to leverage, what was the leverage at the end of the year and given your position versus the covenants, where do you stand in terms of discussions with the banking group if you’d had to have additional conversations and so on?

John Schauss

Well as I mentioned, we in December got our banks to provide some flexibility and amendment that was approved and signed in December. At the end of December our leverage ratio was 5.62 times and the maximum leverage ratio was 6.25 times, so plenty of headroom as you can see. We don’t expect to have to back to the banks to talk about any further relief at all. Our agreements with the banks come do in June of 2011.

Sean Greer - Lynn Capital

So the covenant was 6.25 or is it 6 at the end of…

John Schauss

6.25 at the end of 2008.

Sean Greer - Lynn Capital

Does that change at all during the year or is it fixed at that during the year?

John Schauss

It actually goes down, but I do recommend that you look at our website and the 8-K of December does have all the details of the credit facility, if you’d like to get the specifics.

Sean Greer - Lynn Capital

Just as a clarification, the 160 you mentioned earlier, that was that the liability or was that the under funded portion?

John Schauss

That’s the under funded portion.

Sean Greer - Lynn Capital

Alright. That’s all I had. Thanks again guys.

Operator

Your next question is from the line of Ed Atorino with Benchmark. Please proceed.

Ed Atorino – Benchmark

Hi, good afternoon.

Marshall Morton

Hi, Ed.

Ed Atorino – Benchmark

Good afternoon. There are a lot of things that might be on the back burner that you might still be able to do to address costs, if business doesn’t get much better or are you getting near muscle and bone?

Marshall Morton

Well, I can’t say we are getting near muscle and bone. I think there are always ways to readdress an issue, but the plan fact is that we’ve taken out huge amounts of costs and we’re now pushing harder on the revenue front than on cost. But we may have mentioned this in December in our presentation; we have got a serious of triggers built into our budgets so that if our targets aren’t made, there are other things that we pull out of the expense lines.

Ed Atorino – Benchmark

Thanks.

Marshall Morton

Sure.

Operator

Your next question is from the line of Barry Lucas with Gabellie & Company. Please proceed.

Barry Lucas - Gabellie & Company

Thank you. Good afternoon.

Marshall Morton

Hi, Barry.

Barry Lucas - Gabellie & Company

One, on the operating side, you’ve got any visibility at all into the early part of the year; either how January went in print and/or what TV stations are looking like, especially autumn?

Marshall Morton

We thought a question like that might come up and Reid did poll the troops this morning to get some update. So, Reid let me hand that up to you.

Reid Ashe

Well, let me preface this by saying it is way to early to call a turn, but do we see some stirrings of life here and there? Yes we do and I’ll tell you what they consist of. If you look at our January television sales, which are now just about the all in the bag we are looking at year-over-year declines; but the year-over-year declines are not quite as severe as they were in the fourth quarter. That’s a hopeful sign, and I say that even after backing out the Super Bowl revenue. However, bookings for later in the quarter are coming in slow and could follow the January trend or not. So, it’s too early to call there.

On the newspaper side, classified and national are continuing the trend we saw in the third quarter of severe year-over-year declines. However the retail decline and it is still a decline in January, is significantly less than we saw and in either the third or fourth quarters of last years. That could be a hopeful sign.

Probably, the best encouragement is in interactive revenue, where year-over-year revenue gains ticked up nicely in December. You could explain that largely because of DealTaker which has its biggest month in December, but the January year-over-year revenue increased is significantly better even than December was. So it looks like we are building some real momentum on the interactive side. So, all together, yes, there is some signs of life, but I wouldn’t call it a turn yet.

Barry Lucas - Gabellie & Company

Reid anything you can share, provide or touch more color of auto. One of your peers who reported recently suggested that auto was pacing down 70 in 1Q and others that I’ve spoken to since than are not quite as bleak as that, but if you can add some color that would be helpful?

Reid Ashe

I don’t have a segment figure for automotive. I can tell you its bad in traditional media, but it’s also one of our bright lights in interactive media. We are making some nice headway in selling behavioral targeting, internet advertising and mobile advertising in the automotive segment.

Barry Lucas - Gabellie & Company

That’s helpful. If I can add just one more, especially since we brought it up. Behavioral we are targeting in Yahoo, how many papers are you live on? One, will you have everything up and running to the extent you can share anything on the sales experience. It would be nice to know that, especially in light to the management changes at Yahoo?

Reid Ashe

Right now, we are able to sell behavioral targeting only in Yahoo’s pages; we have not yet turned on the Yahoo ad serving system to serve our own websites and we are selling into Yahoo in only four markets. However, selling in the Yahoo, not selling into our pages and selling in only four markets, we booked about $400,000 in the sales this month.

Next month we will turn on our pilot website, which is Charlottesville Virginia for using the Yahoo ad serving platform for our sales. After we have that running smoothly for a month or two we’ll bigan to add other sites and we’ll be up company wide by the end of this year. I think if I remember correctly, the third quarter is when we are targeting to be up. But early results with behavioral targeting are very good; the automotive sector in particular seems perspective to receptive to it and we have our hopes for that.

Barry Lucas - Gabellie & Company

Great, thank you, Reid.

Operator

Your next question is from Drake Johnstone with Davenport & Company. Please proceed.

Drake Johnstone - Davenport & Company

Hi, guys.

Marshall Morton

Hi, Drake.

Drake Johnstone - Davenport & Company

Hey, a question I have for you when you referred to your layouts that reduced total expense by about $55 million. You said that roughly 20% was reflected in 2008; so the remainder I guess $39 million would be reflected in 2009. So, the question I have is [Multiple Speakers]

Marshall Morton

What I’m saying here is the rate is $55 million, but we started reducing staff in the course of the year, so you didn’t see $55 million in expense.

Drake Johnstone - Davenport & Company

I understand that. The point though is looking towards ‘09 versus ’08. Is there certain quarter were you take the annualized figure that we would look at to gauge the decline in ’09 or are we taking sort of the full ‘08 figure and then your cost might comedown $39 million from that figure?

Marshall Morton

I think that would be a great way to look out on it, a whole year, on a 12 months basis.

Drake Johnstone - Davenport & Company

Okay, thank you. Then on free cash flow, any target or range of free cash flow you are trying to achieve? Would it be within $10 million of ‘08?

Marshall Morton

Well, there is a target certainly and it is higher than that.

Drake Johnstone - Davenport & Company

Alright. So, you don’t think ‘09 will decline by as much as $10 million from ’08 then.

Marshall Morton

No, we do not.

Drake Johnstone - Davenport & Company

Okay. Thanks very much.

Marshall Morton

Sure.

Operator

Your next question is from the line of Ken Silver with Royal Bank of Scotland. Please proceed.

Ken Silver – Royal Bank of Scotland

Hi good afternoon. Thanks for taking the call. Retransmission revenues, you said that you expect them to be $16 million in 2009; do you have a 2008 number you can share with us?

Marshall Morton

Did we ever put that out? It was small. It came from satellite TV and some early bios relationships, but I don’t think we ever gave that number up, it was quite small.

Ken Silver – Royal Bank of Scotland.

So, most of the $16 million is incremental revenue.

Marshall Morton

A heavy piece of it, yes.

Ken Silver – Royal Bank of Scotland.

I know you gave some comments about January for both TV and publishing and just to sum it all up would you say that television is pacing better than newspapers or worse or same?

Marshall Morton

Business is booking a lot later than, although this is the story we’ve been repeating, but business is booking a lot later than it used to and it’s hard to draw the same conclusions from pacing than we used to. Reid do you have any numbers that would support statement or not.

Reid Ashe

I would have to dig back into the figures to answer that question.

Ken Silver – Royal Bank of Scotland.

I understand; do you think January was weaker for our newspapers or weaker for television or you’re not sure?

Reid Ashe

I think it’s risky to answer that off the top of my head, I have to dig into the numbers.

Ken Silver – Royal Bank of Scotland.

Okay, that’s fine no problem. One last question, this is a sort of more bigger picture. I mean you obviously have both newspaper and television websites, so I’m just trying to get a sense of if you sort of look across the performance of those websites, would you say that the newspaper websites typically get a higher share for the online revenue in their market than your television website or other way?

Marshall Morton

Yes and the reason is that newspaper websites have been robust for a longer period of time. When we started in this business broadband penetration was not very prevalent, it was not feasible to do a lot of video. Newspapers had a lot more text available to put up and could use that to attract a larger audience right. Also newspapers had the ability to up-sell classified advertising, so they had a lot more revenue they could devote to it.

Right now, I think it’s still true the newspaper websites are stronger in terms of traffic than broadcast websites, but broadcast websites are growing significantly faster.

Ken Silver – Royal Bank of Scotland.

Okay, do you think the gap is going is to close materially in the next couple of years or…?

Marshall Morton

I think if you look ahead, you probably won’t be able to tell a whole lot of difference between a newspaper website and a television website.

Ken Silver – Royal Bank of Scotland.

Okay. That’s great thank you very much.

Operator

(Operator Instructions) And your next question from the line of Bill Green with Claren Rhodes . Please proceed.

Bill Green – Claren Rhodes

Hey gentlemen. I just wanted to ask, you said that in January you think that newspaper ad sales are trending slightly better than they did in Q4 ’08, is that correct?

Marshall Morton

Retail is trending better. Local and national are following the same trend.

Bill Green – Claren Rhodes

And for television, did you guys say the same thing that was looking at being slightly better than Q4 ‘08?

John Schauss

January does look a little bit better in terms of a smaller decline from the same period previous year.

Bill Green – Claren Rhodes

And that’s comparing to the local being down 26% and national being down 31% in Q4 is that correct?

John Schauss

That’s right.

Bill Green – Claren Rhodes

Okay and then just a housekeeping question. Was there the same number of selling days or weeks in December this year for newspapers as last year? I know that last year when you reported these December, it was [Multiple Speakers]

John Schauss

We used fiscal period, so yes.

Bill Green – Claren Rhodes

Okay, excellent and final question, you said that you don’t expect to have to go back your banks on your current business plan, is that correct?

John Schauss

That’s right.

Bill Green – Claren Rhodes

Thank you very much. I appreciate it.

John Schauss

Thank you.

Operator

And your next question is from line of Mike Traynor with Milwaukee Private Wealth Management. Please proceed.

Mike Traynor - Milwaukee Private Wealth Management

Hi, good afternoon gentlemen.

Marshall Morton

Hi.

Mike Traynor - Milwaukee Private Wealth Management

Hi. I’m looking at your circulation revenue and I see it increase 5.7% on publishing due to rate increases. I was wondering if guys could talk a little bit more on what you’re seeing on the absolute total number of subscriptions out there. Are you seeing declines or increases; if you could talk a little bit about that that would be great?

Marshall Morton

Well, the circulations numbers are trending down and of course when you have a rate increase that does tend to test the circulation numbers. So yes, but the number you’re saying there is the total dollar increase, including the impact of reduced circulation levels.

Mike Traynor - Milwaukee Private Wealth Management

Right. Now I understand that, I guess was wonder then what initiative you guys have going forward to increase circulation?

Marshall Morton

It depends on the market as to what initiatives work best. Reid you probably tell us, you had a couple of things going on?

John Schauss

Well, the fact of the matter is that we have less money to spend on circulation sales and therefore we are selling at a whole lot more selectively and you will not see us invest in lower volume circulations, because we can only afford to sell that which is going to be most effective for the advertisers. So, you’re not going to see any increases in the total numbers.

Mike Traynor - Milwaukee Private Wealth Management

Okay. Thank you.

Operator

And there are no further questions in queue at this time.

Marshall N. Morton

In that case, thank you very much everyone. I hope you have a good weekend.

Operator

Ladies and gentlemen, thank you for your participation in today’s conference. This concludes the presentation and you may now disconnect. Have a great day.

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