Magazine article Editor & Publisher

Media General Wins One in Battle of Proxy Advisors

Magazine article Editor & Publisher

Media General Wins One in Battle of Proxy Advisors

Article excerpt

On the same day Media General Inc.'s second-largest shareholder endorsed a dissident slate for its board of directors, a major proxy advisory firm Wednesday endorsed management's nominees.

In an 11-page report, Proxy Governance criticized Media General's financial and stock performances, and suggested its executives are overpaid compared with similarly sized newspaper companies. But it concluded that Harbinger Capital Partners Master Fund Inc., the dissident shareholder nominating three representatives for election to the board of directors next week, suffers from "a similar strategic myopia" as family-controlled Media General.

"While we believe the dissident critique has certain merits, we have significant questions whether the dissident slate, including oneheavily overboarded nominee, would have sufficient time or experience to effect change without significant and counterproductivedisruption," Proxy Governance said in its conclusion.

Separately Tuesday, Mario J. Gabelli, who with his affiliates owns 21.2% of Media General's publicly traded Class A stock, said he would vote for the Harbinger. Gabelli has been critical of Media General's purchase two years ago of four NBC affiliate television stations, and voted to withhold votes from management nominees at last year's annual meeting.

Harbinger, which holds an 18.7% stake in Media General, says it started the proxy battle to seat three of its representatives because the Richmond, Va.-based newspaper publisher and broadcaster has taken on too much debt for poorly chosen acquisitions. It argues that Media General should exit the troubled Tampa Bay market, where the company owns The Tampa Tribune and a leading TV station; cut its dividend; create more broadcast duopolies; sell off recently acquired social network online sites; and impose stricter costs controls.

Media General argues that the Harbinger slate are inexperienced individuals with a has a short-sighted view of the media industry, and no real solution to the economic problems of newspapers. …

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