10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 30, 2007

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period              to             

Commission File No. 1-6383

MEDIA GENERAL, INC.

(Exact name of registrant as specified in its charter)

Commonwealth of Virginia	54-0850433
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

333 E. Franklin St., Richmond, VA	23219
(Address of principal executive offices)	(Zip Code)

(804) 649-6000

Registrant’s telephone number, including area code

Securities registered pursuant to Section 12(b) of the Act:          

Class A Common Stock	New York Stock Exchange
(Title of class)	(Name of exchange on which registered)

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes  x    No  ¨

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.    Yes  ¨    No  x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this form 10-K.  x

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. (as defined in Rule 12b-2 of the Act).

Large accelerated filer  x    Accelerated filer  ¨    Non-accelerated filer  ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

The aggregate market value of voting and non-voting stock held by nonaffiliates of the registrant, based upon the closing price of the Company’s Class A Common Stock as reported on the New York Stock Exchange, as of July 1, 2007, was approximately $693,923,000.

The number of shares of Class A Common Stock outstanding on February 3, 2008, was 22,301,600. The number of shares of Class B Common Stock outstanding on February 3, 2008, was 555,992.

The Company makes available on its Web site, www.mediageneral.com, its annual report on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K as soon as reasonably practicable after being electronically filed with the Securities and Exchange Commission.

Part I, Part II and Part III incorporate information by reference from the Annual Report to Stockholders for the year ended December 30, 2007. Part III also incorporates information by reference from the proxy statement for the Annual Meeting of Stockholders to be held on April 24, 2008.

Index to Media General, Inc.

Annual Report on Form 10-K for the Year Ended December 30, 2007

		Page
Item No.
Part I
1.	Business
	General	1
	Publishing	2
	Broadcast	2
	Interactive Media	5
1A.	Risk Factors	6
1B.	Unresolved Staff Comments	9
2.	Properties	9
3.	Legal Proceedings	9
4.	Submission of Matters to a Vote of Security Holders	10
	Executive Officers of Registrant	10
Part II
5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	11
6.	Selected Financial Data	11
7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	11
7A.	Quantitative and Qualitative Disclosures About Market Risk	11
8.	Financial Statements and Supplementary Data	11
9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	11
9A.	Controls and Procedures	11
9B.	Other Information	12
Part III
10.	Directors, Executive Officers and Corporate Governance	12
11.	Executive Compensation	12
12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	12
13.	Certain Relationships and Related Transactions, and Director Independence	12
14.	Principal Accountant Fees and Services	12
Part IV
15.	Exhibits and Financial Statement Schedules	13
Schedule II—Valuation and Qualifying Accounts and Reserves		15
Index to Exhibits		36
Signatures		40

Part I

Item 1. Business

General

Media General, Inc., is an independent, publicly owned communications company situated primarily in the Southeast with interests in newspapers, television stations, and interactive media. The Company employs approximately 6,900 people on a full or part-time basis. The Company’s businesses are somewhat seasonal; the second and fourth quarters are typically stronger than the first and third quarters.

The Company owns 25 daily newspapers and more than 150 other publications, as well as 23 television stations. The Company also operates more than 75 online enterprises. The Company has placed significant emphasis on convergence. Convergence combines the unique strengths of newspapers, television, and the Internet to enable the Company to better gather and present news and information to its readers, viewers, and users and on behalf of its advertisers. These efforts were initiated in the Tampa market, where The Tampa Tribune, WFLA-TV and TBO.com share the Company’s News Center facility and work side by side to provide the most comprehensive news, information and entertainment in that market. The success of this initial venture led the Company to expand convergence to five additional markets in the Southeast where it operates market-leading newspapers, television stations, and Web sites in contiguous regions.

On December 18, 2007, the Federal Communications Commission (FCC) adopted a revised media ownership rule regulating the common ownership of a newspaper and a television station in the same market. The FCC amended the existing 32-year old absolute ban on newspaper/broadcast cross-ownership by crafting a rule that would presumptively allow a newspaper to own one television station or one radio station in the 20 largest markets, subject to certain limitations. The rule would also consider such combinations in other markets subject to certain public interest showings including the provision of local news by the television station, again subject to certain limitations. These new cross-ownership regulations modify the existing ban that has remained in place as a result of a stay imposed by the United States Court of Appeals for Third Circuit in 2003. In addition, the FCC announced that it would grant permanent waiver to the existing newspaper/broadcast combinations that were grandfathered in conjunction with the 1975 rule and that in certain instances involve one newspaper and one broadcast property in the same market. As a result of these actions, the FCC granted permanent waivers to the Company’s convergence partnership in Tampa and its newspaper-television combinations in the following television markets: Columbus, Georgia; Florence – Myrtle Beach, South Carolina; Panama City, Florida; and Tri-Cities (Tennessee and Virginia). The Company’s newspaper-television partnership in Roanoke/Lynchburg/Danville, Virginia does not require an FCC waiver.

While the Company is gratified that the FCC has provided permanent waivers to the stations operating in five of its convergence markets, the Company will continue to press for cross-ownership relief in all markets, regardless of size.

Industry Segments

The Company operates in three significant industry segments. For financial information related to these segments see pages 39 and 40 of the 2007 Annual Report to Stockholders, which are incorporated herein by reference. These segments are Publishing, Broadcast, and Interactive Media. Additional information related to each of the Company’s significant industry segments is included below.

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Publishing Business

At December 30, 2007, the Company’s wholly owned publishing operations included daily and Sunday newspapers in Virginia, Florida, North Carolina, Alabama, and South Carolina. Combined average paid circulation for these newspapers in 2007 was as follows (in thousands):

Newspaper Location	Daily	Sunday	Weekly
Virginia	334	379	46
Florida	224	292	1
North Carolina	160	172	7
Alabama	48	50	6
South Carolina	31	34	8
Total	797	927	68

The newspaper publishing industry in the United States comprises hundreds of public and private companies ranging from large national and regional companies, publishing multiple newspapers across many states, to small privately held companies publishing one newspaper in one locality. The Company is one of the largest publicly held newspaper publishing companies in the United States based on circulation and publishes more daily newspapers in the Southeast than any other company. Moreover, the Company is third in total circulation in its chosen southeastern area of focus.

All of the Company’s newspapers compete for circulation and advertising with other newspapers published nationally and in nearby cities and towns and for advertising with magazines, radio, broadcast and cable television, the Internet and other promotional media. All of the newspapers compete for circulation principally on the basis of content, quality of service and price.

The primary raw material used by the Company in its publishing operations is newsprint, which is purchased at market prices from various Canadian and United States sources, including SP Newsprint Company (SPNC), in which the Company presently owns a one-third equity interest. SPNC has mills in Dublin, Georgia, and Newberg, Oregon, with a combined annual capacity in excess of one million short tons. The publishing operations of the Company consumed approximately 106,000 short tons of newsprint in 2007. Management of the Company believes that sources of supply under existing arrangements, including a commitment to purchase 35,000 short tons from SPNC, will be adequate in 2008.

In January 2008, SPNC announced that it had entered into an agreement with certain affiliates of White Birch Paper Company to be acquired. The acquisition, which is subject to regulatory approval, is expected to close during March or April of 2008. For additional information regarding the sale, see page 37 of the Annual Report to Stockholders.

In June 2005, the Company sold its 20% ownership in The Denver Post Company (Denver), parent company of the Denver Post, to MediaNews Group, Inc. For additional information regarding the sale, see page 37 of the Annual Report to Stockholders.

Broadcast Business

The Broadcast Television Division operates 23 network-affiliated television stations in the United States. The Company has initiated a plan to divest WMBB in Panama City, Florida, KALB/NALB in Alexandria, Louisiana, and WNEG in Toccoa, Georgia. The divestitures are expected to occur in the first half of 2008. For additional information, see pages 35 and 36 of the Annual Report to Stockholders. The following table sets forth certain information on each of the Company’s stations:

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Station Location and Affiliation	National Market Rank (a)	Station Rank (a) *	Audience % Share (a) *	Expiration Date of FCC License (b)	Expiration Date of Network Agreement
WFLA-TV NBC (c) Tampa, FL	13	2	8%	02/01/05	01/01/12
WNCN-TV NBC (d) Raleigh-Durham, NC	28	3	5%	12/01/12	01/01/12
WCMH-TV NBC (d) Columbus, OH	32	2	11%	10/01/13	01/01/12
WSPA-TV CBS Greenville, SC	36	1	13%	12/01/04	06/30/15
Spartanburg, SC
Satellite:
WNEG-TV, Toccoa, GA				04/01/05	06/30/15
WYCW-TV CW Asheville, NC	36	5	2%	12/01/04	09/18/11
WVTM-TV NBC (d)(g) Birmingham, AL	40	4	7%	04/01/13	01/01/12
WCWJ-TV CW Jacksonville, FL	49	5	3%	02/01/13	09/18/11
WJAR-TV NBC (d)(g) Providence, RI	52	1	15%	04/01/07	01/01/12
WKRG-TV CBS Mobile, AL Pensacola, FL	61	1	14%	04/01/13	04/02/15
WTVQ-TV ABC Lexington, KY	64	3	10%	08/01/05	06/30/14
WSLS-TV NBC Roanoke, VA	67	3	10%	10/01/04	01/01/12
WJTV-TV CBS (g) Jackson, MS	90	1	19%	06/01/05	12/31/14
WJHL-TV CBS Johnson City, TN	91	2	16%	08/01/05	12/31/14
WSAV-TV NBC (e)(f) Savannah, GA	97	2	10%	04/01/13	01/01/12
WCBD-TV NBC (h) Charleston, SC	100	2	12%	12/01/04	01/01/12

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Station Location and Affiliation	National Market Rank (a)	Station Rank (a) *	Audience % Share (a) *	Expiration Date of FCC License (b)	Expiration Date of Network Agreement
WBTW-TV CBS (e)(f) Myrtle Beach/Florence, SC	103	1	22%	12/01/04	06/30/15
WNCT-TV CBS (h) Greenville, NC	105	1	16%	12/01/04	12/31/14
WJBF-TV ABC (g) Augusta, GA	115	2	18%	04/01/13	06/30/14
WRBL-TV CBS Columbus, GA	128	2	12%	04/01/05	03/31/15
WMBB-TV ABC Panama City, FL	154	2	14%	02/01/05	06/30/14
WHLT-TV CBS Hattiesburg, MS	168	2	8%	06/01/05	08/31/15
KALB-TV NBC (i) Alexandria, LA	180	1	21%	06/01/05	01/01/12

(a) Source: November 2007 Nielsen Media Research.

(b) Television broadcast licenses are granted for maximum terms of eight years and are subject to renewal upon application to the FCC; the Company filed applications for renewal of all television station licenses in a timely manner prior to the applicable expiration dates. Refer to “Risk Factors” for further discussion of the FCC license renewal process.

(c) Station also holds a digital affiliation with NBC Weather Plus Network that expires on 12/31/08.

(d) Station also holds a digital affiliation with NBC Weather Plus Network that expired on 12/31/07.

An extension is currently being negotiated.

(e) Station also holds a digital affiliation with MyNetworkTV that expires on 9/17/11.

(f) Station also holds a digital affiliation with Retro Television Network that expires on 8/31/08.

(g) Station also holds a digital affiliation with Retro Television Network that expires 9/30/09.

(h) Station also holds a digital affiliation with CW PLUS Network that expires on 9/18/11.

(i) Station also holds a digital affiliation with CBS that expires on 12/31/09.

* Sign-On to Sign-Off Households.

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The primary source of revenues for the Company’s television stations is the sale of commercial time to national and local advertisers and political candidates. Additionally, the Company’s Professional Communications Systems operating unit derives revenue from the sale and integration of broadcast equipment to third parties including other broadcasters, corporate and governmental enterprises, and colleges and universities.

The Company’s television stations compete for audience and advertising revenues with other television and radio stations, cable programming channels, and cable television systems as well as magazines, newspapers, the Internet and other promotional media. A number of cable television systems and direct-to-home satellite companies (which operate generally on a subscriber payment basis) are in business in the Company’s broadcasting markets and compete for audience by presenting broadcast television, cable network, and other program services. The television stations compete for audience on the basis of program content and quality of reception, and for advertising revenues on the basis of price, share of market and performance.

In the third quarter of 2006, the Company acquired four NBC stations; WNCN in Raleigh, North Carolina, WCMH in Columbus, Ohio, WJAR in Providence, Rhode Island and WVTM in Birmingham, Alabama. In the third and fourth quarters of 2006, the Company sold four CBS stations; KWCH in Wichita, Kansas, and its three satellites, WIAT in Birmingham, Alabama, KIMT in Mason City, Iowa, and WDEF in Chattanooga, Tennessee. For additional information regarding the acquisition and dispositions, see page 36 of the Annual Report to Stockholders.

The television broadcast industry has largely implemented the transition from analog to digital technology in accordance with a mandated conversion timetable established by the Communications Act and the FCC. In February 2006, President Bush signed into law the Digital Television Transition and Public Safety Act setting February 17, 2009, as the deadline for completion of the transition from analog to digital television broadcasting. The law requires the FCC to terminate the licenses for all full-power analog television stations on February 18, 2009. The Company’s television stations, with the exception of its satellite stations, have substantially transitioned to digital technology. The Company is in the process of completing the final stages of digital channel assignment in several markets and expects to achieve full compliance by the FCC mandated deadline.

Interactive Media Business

The Interactive Media Division (IMD), which was launched in January 2001, operates in conjunction with the Publishing and Broadcast Divisions to provide online news, information and entertainment to its customers without geographic restrictions. The Division comprises more than 75 interactive enterprises, as well as a minority investment. In July 2005, the Division acquired Blockdot, Inc., a Dallas-based advergaming and game development firm. The Division focuses on the following areas of the interactive business: improving content, driving viewership, and increasing advertising and game production revenue. As the Internet is both a medium and a marketplace, direct online sales are increasing because of expanded viewership and enhanced content. While some of the Division’s online enterprises were profitable in 2007, the Division’s results were adversely affected by the decline in classified volume experienced by the Publishing Division. In contrast, Blockdot’s advergaming business experienced tremendous growth in 2007. The Division expects that it will be moderately profitable in 2008 due in large measure to continued success at Blockdot.

Among the online enterprises included in the Interactive Media Division, each of the Company’s daily newspapers and television stations is affiliated with a Web site featuring content complementary to but increasingly more expansive than its published products or its television offerings. Online revenues are derived primarily from advertising, which includes various classified products as well as banner and sponsorship advertisements. The most successful revenue initiatives have involved classified products placed on the Company’s Web sites; these products represented approximately forty percent of the Division’s revenues in 2007. The majority of these revenues are derived from upsell arrangements under which customers pay an additional fee to have

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their classified advertisement placed online simultaneously with its publication in the newspaper. Revenue generated from Blockdot’s advergaming business grew substantially in 2007, accounting for more than twenty percent of the Division’s revenues in 2007.

In December 2006, the Company entered into a strategic alliance with Yahoo! Inc., joining a national consortium of over 20 media companies representing more than 500 newspapers to deliver classified advertising to consumers. In 2007, the Company worked with Yahoo! to transition the online career sections of its 25 daily newspapers to a Yahoo!HotJobs-driven platform. Now that the implementation is complete, a large portion of the career-related advertising sold through its daily newspaper Web sites is also posted on Yahoo!HotJobs, which gives the ads increased visibility to career seekers across the country. The Division is also proceeding with the launch of an ad serving platform which will provide Yahoo! users the ability to access local content provided by the Division’s daily newspaper Web sites. The Division expects that Yahoo!’s search capabilities and advertising reach coupled with the Division’s local content will result in increased traffic and advertising revenue for both parties.

The Company’s online enterprises compete for advertising, as well as for users’ discretionary time, against newspapers, magazines, radio, broadcast and cable television, other Web sites and other promotional media. These Web sites compete for users principally on the basis of content relevance and accessibility, and for advertisers primarily on viewer demographics and the innovative means in which advertising is delivered. Blockdot, through its advergaming production, also competes for advertising by providing major consumer product brands a unique method to deliver their message.

Item 1A. Risk Factors

The following paragraphs describe several risk factors which are unique to the Company:

The Company is subject to risks of decreased advertising revenues and potentially adverse effects of emerging technologies.

The Company’s revenue is primarily driven by advertiser spending, which is generally lower in the first and third fiscal quarters as consumer activity slows during those periods. Additionally, advertising revenue in the Broadcast Division tends to be higher in even-numbered years, when both political and Olympics coverage occurs. The level of advertising revenue is also dependent on a variety of factors including:

• economic conditions in the Southeast, particularly in the Tampa, Richmond, and Winston-Salem markets;

• competition from other newspapers, television broadcasters, and Internet sites;

• mergers and bankruptcies of large advertisers;

• the financial condition of the Company’s large customers.

The Company’s two largest industry segments, Publishing and Broadcast, operate in mature businesses. Today’s “on demand” culture has shifted consumers’ historical newspaper reading and television viewing behaviors, particularly among younger segments of the population. As a result, the Company’s revenues are being challenged by new, often-times Internet-based, competitors who have differing business models. Additionally, the shift in consumer behaviors has the potential to modify the terms and conditions of future network affiliation agreements. The Company’s future success is dependent upon its ability to evolve and adapt its Publishing and Broadcast operations to this changing business environment, and to ensure the continued growth of its Interactive Media businesses.

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A significant change in the price of newsprint will make operating results more volatile.

Newsprint, the Company’s most significant raw material, is a commodity whose price continually responds to supply / demand imbalances. Historically, its price has been quite volatile. Higher newsprint prices have, in the past, provided a net benefit to the Company by virtue of its one-third investment in SPNC. However, as indicated above, with the sale of SPNC in early 2008, the Company will no longer be a net producer of newsprint. Consequently, effective with that sale, lower newsprint prices in the future would benefit the Company’s operating results and higher newsprint prices in the future would adversely affect the Company’s operating results.

The television broadcasting industry is highly regulated.

The ownership, operation and sale of broadcast television stations, including those licensed to the Company, are subject to the jurisdiction of the FCC, which engages in extensive regulation of the broadcasting industry under authority granted by the Communications Act and the rules and regulations of the FCC. The Communications Act requires broadcasters to serve the public interest. Among other things, the FCC assigns frequency bands; determines stations’ locations and operating parameters; issues, renews, revokes and modifies station licenses; regulates and limits changes in ownership or control of station licenses; regulates equipment used by stations; regulates station employment practices; regulates certain program content and commercial matters in children’s programming; has the authority to impose penalties for violations of its rules or the Communications Act; and imposes annual fees on stations. Reference should be made to the Communications Act, as well as to the FCC’s rules, public notices and rulings for further information concerning the nature and extent of federal regulation of broadcast television stations.

Congress and the FCC have under consideration, and in the future may adopt, new laws, regulations and policies regarding a wide variety of matters that could affect, directly or indirectly, the operation, ownership transferability and profitability of the Company’s broadcast television stations and affect the ability of the Company to acquire additional stations. In addition to the matters noted above, these include, for example, spectrum use fees, political advertising rates, potential restrictions on the advertising of certain products (such as alcoholic beverages), program content, increased fines for rule violations and ownership rule changes. Other matters that could potentially affect the Company’s broadcast properties include technological innovations and developments generally affecting competition in the mass communications industry, such as personal video recorders, satellite radio and television services, wireless cable systems, low-power television stations, and Internet delivered video programming services.

As indicated previously, the FCC adopted a new newspaper/broadcast ownership rule in December 2007. However, uncertainty about media ownership regulations may continue to dampen the acquisition market until the Courts have had an opportunity to review the FCC’s recent action and, perhaps, until Congress considers whether it wishes to take any further action in this area.

Additionally, a rejection of license renewals and waivers by the FCC could have a material, adverse effect on the Company’s business. Typically, the FCC begins processing renewal applications over the last month of the renewal term. Since the television license renewal cycle commenced in June 2004, however, the FCC has held up almost all television renewal applications filed by affiliates of the major networks pending FCC disposition of a backlog of indecency and other complaints against the networks’ programming. The Company filed all of its applications for renewal in a timely manner prior to the applicable expiration dates and expects its applications will be approved as the FCC works through its backlog.

While the Company strongly supports the complete elimination of all newspaper/broadcast cross-ownership restrictions, the FCC’s recent modification of the cross-ownership rule could contribute generally to

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increased realignments of media entities and the convergence of various types of media. The opportunity for realignments and convergence may benefit the Company but, as other companies also may realign their properties, regulatory changes also could increase competition in the Company’s markets and could adversely affect the Company’s future operating results.

A declining stock market and lower interest rates could affect the value of the Company’s retirement plan assets and increase its retirement obligations. An unexpected rise in health care costs would adversely impact the Company’s postretirement obligations.

The Company has a funded, qualified non-contributory defined benefit retirement plan which covers substantially all employees hired before January 1, 2007, and non-contributory unfunded supplemental executive retirement and ERISA excess plans which supplement the coverage available to certain executives. There is also an unfunded plan that provides certain health and life insurance benefits to retired employees who were hired prior to 1992 and a retirement medical savings account established as of January 1, 2007. Two significant elements in determining pension expense are the expected return on plan assets and the discount rate used in projecting benefit obligations. Large declines in the stock market and lower rates of return could increase the Company’s expense and cause additional cash contributions to the pension plan. The Company mitigated this risk by freezing the service accrual in the defined benefit retirement plan effective January 1, 2007.

The Company currently anticipates that the annual growth rate in the per capita costs of covered health care benefits will decrease gradually between 2008 and 2014; however should the actual growth rate deviate significantly from this assumption, the Company’s postretirement obligations could increase.

The Company may experience lost advertising, damaged property and increased expense due to natural disasters.

Due to the Company’s concentration in the Southeast United States, its operations are particularly susceptible to tropical storms and hurricanes. These storms can cause lost advertising revenue and higher expenses if either the Company’s broadcasting or newspaper markets are threatened or are directly in the path of the storms. Additionally, the Company’s property could experience severe damage in the event of a major storm.

The Company may acquire or divest properties that significantly affect its results of operations and financial position.

All acquisitions involve risk, which may include increases in debt to finance the acquisition, higher costs to integrate the new operations, lower-than-expected operating results, differing levels of internal control effectiveness at the acquired entities, and other unanticipated problems and liabilities. Periodically, acquired intangible assets are tested for possible impairment. The Company may record an impairment charge if the financial statement carrying value of an asset exceeds its estimated fair value which could be adversely affected by changing market conditions. Divestitures also have inherent risks, including possible delays in closing transactions and that the Company may not realize the sales price it expects for the businesses divested.

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Item 1B. Unresolved Staff Comments

None

Item 2. Properties

The headquarters buildings of Media General, Inc., and the Richmond Times-Dispatch are owned by the Company and are adjacent to one another in Richmond, Virginia. The Company owns a third adjacent building which houses the Interactive Media Division’s and Broadcast Division’s management. The Richmond newspaper is printed at a production and distribution facility in Hanover County, Virginia, near Richmond. The Company owns eight other daily newspapers in Virginia, all of which are printed in or around their respective cities at production and distribution facilities. The Tampa, Florida, newspaper is located in a single unit production plant and office building. The headquarters of the Company’s Brooksville and Sebring, Florida, daily newspapers are located on leased property in their respective cities. The Winston-Salem newspaper is headquartered in one facility in downtown Winston-Salem; its newspaper is printed at a nearby production and distribution facility. The remaining twelve daily newspapers (seven in North Carolina, three in Alabama, and one each in South Carolina and Florida) are printed at production and distribution facilities located in or around their respective cities. The Company owns substantially all of its newspaper production equipment, production buildings and the land where these production facilities reside.

The Company’s broadcast television station, WFLA-TV in Tampa, Florida, owns its headquarters and studio building; this building adjoins The Tampa Tribune. This structure also serves as a multimedia news center where efforts are combined and information is shared among The Tampa Tribune, WFLA-TV and TBO.com.

The Company’s 23 television stations are located in 12 states (ten southeastern) as follows: four in Georgia; three each in Florida, North Carolina, and South Carolina; two each in Alabama and Mississippi; and one each in Kentucky, Louisiana, Ohio, Rhode Island, Tennessee, and Virginia. Substantially all of the television stations are located on land owned by the Company. Eleven stations own their tower and the land, six stations own their tower but lease the land, four stations participate in 50/50 partnerships that own both the tower and the land or own the tower but lease the land, and two stations lease space on towers.

The Interactive Media Division primarily operates out of and in conjunction with the Publishing and Broadcast properties but does lease space in Dallas, Texas for its advergaming operations.

The Company considers all of its properties, together with the related machinery and equipment contained therein, to be well maintained, in good operating condition, and adequate for its present needs. The Company continually evaluates future needs and from time-to-time will undertake significant projects to replace or upgrade facilities. New facilities in Bristol, Virginia and Opelika, Alabama were put in service in 2006. Projects in Lynchburg, Virginia and Myrtle Beach, South Carolina are expected to be completed in 2008.

Item 3. Legal Proceedings

None

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Item 4. Submission of Matters to a Vote of Security Holders

None

Executive Officers of the Registrant

Name	Age	Position and Office	Year First Took Office*
J. Stewart Bryan III	69	Chairman	1985
Marshall N. Morton	62	President and Chief Executive Officer	1989
O. Reid Ashe, Jr.	59	Executive Vice President and Chief Operating Officer	2001
H. Graham Woodlief, Jr.	63	Vice President, President of Publishing Division	1989
James A. Zimmerman	61	Vice President, President of Broadcast Division	2001
C. Kirk Read	38	Vice President, President of Interactive Media Division	2007
Stephen Y. Dickinson	62	Controller and Chief Accounting Officer	1989
George L. Mahoney	55	Vice President, General Counsel and Secretary	1993
Lou Anne J. Nabhan	53	Vice President, Corporate Communications	2001
John A. Schauss	52	Vice President - Finance and Chief Financial Officer	2001
James F. Woodward	48	Vice President, Human Resources	2005

* The year indicated is the year in which the officer first assumed an office with the Company.

Officers of the Company are elected at the Annual Meeting of the Board of Directors to serve, unless sooner removed, until the next Annual Meeting of the Board of Directors and/or until their successors are duly elected and qualified.

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PART II

Item 5. Market for Registrant’s Common Equity and Related Stockholder Matters and Issuer Purchases of Equity Securities

Reference is made to page 49 of the 2007 Annual Report to Stockholders, which is incorporated herein by reference, for information required by this item.

Item 6. Selected Financial Data

Reference is made to page 50 of the 2007 Annual Report to Stockholders, which is incorporated herein by reference, for information required by this item.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Reference is made to pages 19 through 25 of the 2007 Annual Report to Stockholders, which are incorporated herein by reference, for information required by this item.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Reference is made to pages 23, 34, and 38 of the 2007 Annual Report to Stockholders, which are incorporated herein by reference, for information required by this item.

Item 8. Financial Statements and Supplementary Data

Consolidated financial statements of the Company as of December 30, 2007, and December 31, 2006, and for each of the three fiscal years in the period ended December 30, 2007, and the independent registered public accounting firm’s report thereon, as well as the Company’s unaudited quarterly financial data for the fiscal years ended December 30, 2007, and December 31, 2006, are incorporated herein by reference from the 2007 Annual Report to Stockholders pages 28 through 49.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None

Item 9A. Controls and Procedures

The Company’s management, including the chief executive officer and chief financial officer, performed an evaluation of the effectiveness of the design and operation of the Company’s disclosure controls and procedures. Based on that evaluation, the Company’s management, including the chief executive officer and chief financial officer, concluded that the Company’s disclosure controls and procedures were effective as of the end of the period covered by this report.

11

The Company’s attestation report on internal control over financial reporting as of December 30, 2007, and the independent registered public accounting firm’s report on internal control over financial reporting as of December 30, 2007, are incorporated herein by reference from the 2007 Annual Report to Stockholders pages 26 and 27.

During the second quarter of 2007, the Company completed the installation and integration of an advertising and billing system at its third largest Publishing operation and several smaller newspapers which will upgrade information system capabilities, improve business processes and expand customer service opportunities. In addition to these objectives, the new system will result in enhanced internal controls. This new system has already been successfully installed at the Company’s two largest Publishing operations and will be rolled out to the Company’s remaining newspapers and certain online operations through the third quarter of 2009.

Item 9B. Other Information

None

PART III

Item 10. Directors, Executive Officers and Corporate Governance

Incorporated herein by reference from the Company’s definitive proxy statement for the Annual Meeting of Stockholders on April 24, 2008, with respect to directors, executive officers, Code of Business Conduct and Ethics, audit committee, and audit committee financial experts of the Company and Section 16(a) beneficial ownership reporting compliance, except as to certain information regarding executive officers included in Part I.

Item 11. Executive Compensation

Incorporated herein by reference from the Company’s definitive proxy statement for the Annual Meeting of Stockholders on April 24, 2008.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Incorporated herein by reference from the Company’s definitive proxy statement for the Annual Meeting of Stockholders on April 24, 2008.

Item 13. Certain Relationships and Related Transactions, and Director Independence

Incorporated herein by reference from the Company’s definitive proxy statement for the Annual Meeting of Stockholders on April 24, 2008.

Item 14. Principal Accountant Fees and Services

Incorporated herein by reference from the Company’s definitive proxy statement for the Annual Meeting of Stockholders on April 24, 2008.

12

PART IV

Item 15. Exhibits and Financial Statement Schedules

(a) 1. and 2. Financial Statement Schedules

The financial statements and schedules listed in the accompanying index to financial statements and financial schedules are filed as part of this annual report.

3. Exhibits

The exhibits listed in the accompanying index to exhibits are filed as part of this annual report.

Index to Financial Statements and Financial Statement Schedules—Item 15(a)

	Form 10-K	Annual Report to Stockholders
Media General, Inc. (Registrant)
Report of management on Media General, Inc.’s internal control over financial reporting		26
Report of independent registered public accounting firm on internal control over financial reporting		27
Report of independent registered public accounting firm		28
Consolidated statements of operations for the fiscal years ended December 30, 2007, December 31, 2006, and December 25, 2005		29
Consolidated balance sheets at December 30, 2007, and December 31, 2006		30-31
Consolidated statements of stockholders’ equity for the fiscal years ended December 30, 2007, December 31, 2006, and December 25, 2005		32
Consolidated statements of cash flows for the fiscal years ended December 30, 2007, December 31, 2006, and December 25, 2005		33
Notes 1 through 11 to the consolidated financial statements		34-48
Schedule:
II—Valuation and qualifying accounts and reserves for the fiscal years ended December 30, 2007, December 31, 2006, and December 25, 2005	15

13

	Form 10-K	Annual Report to Stockholders
SP Newsprint Co. (Unconsolidated affiliate)
Report of independent auditors	18
Consolidated balance sheets at December 30, 2007, and December 31, 2006	19-20
Consolidated statements of operations for the fiscal years ended December 30, 2007, December 31, 2006, and December 25, 2005	21
Consolidated statements of partners’ capital for the fiscal years ended December 30, 2007, December 31, 2006, and December 25, 2005	22
Consolidated statements of cash flows for the fiscal years ended December 30, 2007, December 31, 2006, and December 25, 2005	23
Notes to consolidated financial statements	24-35

Schedules other than Schedule II, listed above, are omitted since they are not required or are not applicable, or the required information is shown in the financial statements or notes thereto.

The consolidated financial statements of Media General, Inc. listed in the above index which are included in the Annual Report to Stockholders of Media General, Inc., for the fiscal year ended December 30, 2007, are incorporated herein by reference. With the exception of the pages listed in the above index and the information incorporated by reference included in Parts I, II and III, the 2007 Media General, Inc. Annual Report to Stockholders is not deemed filed as part of this report.

14

Media General, Inc.

Schedule II—Valuation and Qualifying Accounts and Reserves

Fiscal Years Ended December 30, 2007, December 31, 2006, and December 25, 2005

(in thousands)	Balance at Beginning of period (a)		Additions charged to expense-net (a)		Deductions Net (a)			Transfers (b)		Balance at end of period (a)
2007
Allowance for doubtful accounts	$	6,519	$	5,916	$	(6,393	)	$	31	$	6,073
2006
Allowance for doubtful accounts	$	5,839	$	5,834	$	(5,496	)	$	342	$	6,519
2005
Allowance for doubtful accounts	$	5,752	$	5,970	$	(5,899	)	$	16	$	5,839

^(a) Amounts presented for continuing operations for all periods.

^(b) Amounts associated with acquisitions of businesses.

15

CONSOLIDATED FINANCIAL STATEMENTS

SP Newsprint Co. and Subsidiaries

Years Ended December 30, 2007 and December 31, 2006

With Report of Independent Auditors

An Unconsolidated Affiliate of Media General, Inc.

16

SP Newsprint Co. and Subsidiaries

Consolidated Financial Statements

Years Ended December 30, 2007 and December 31, 2006

Contents

Report of Independent Auditors	18
Audited Consolidated Financial Statements
Consolidated Balance Sheets	19
Consolidated Statements of Operations	21
Consolidated Statements of Partner’s Capital	22
Consolidated Statements of Cash Flows	23
Notes to Consolidated Financial Statements	24

17

Report of Independent Auditors

The Partners

SP Newsprint Co. and Subsidiaries

We have audited the accompanying consolidated balance sheets of SP Newsprint Co. (a Georgia Partnership) and subsidiaries as of December 30, 2007 and December 31, 2006, and the related consolidated statements of operations, partners’ capital, and cash flows for each of the three years in the period ended December 30, 2007. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Company’s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of SP Newsprint Co. and subsidiaries at December 30, 2007 and December 31, 2006, and the consolidated results of their operations and their cash flows for each of the three years in the period ended December 30, 2007, in conformity with accounting principles generally accepted in the United States.

As discussed in Note 1, the accompanying financial statements have been prepared assuming that SP Newsprint Co. will continue as a going concern. The Company’s revolving credit facility, which had an outstanding balance at December 30, 2007 of $19,850,000, is due and payable on May 30, 2008. In addition, the Company is in violation of a covenant pursuant to its Credit Agreement. At December 30, 2007, there were letters of credit issued under the Credit Agreement totaling $143 million used to support the Company’s Industrial Revenue Bond (IRB) debt of $138,250,000. Accordingly, the IRB balance has been classified as a current liability in the accompanying balance sheet as of December 30, 2007. The Company does not currently have the funds to repay the revolving credit facility and the IRB debt, nor does it have a commitment from a lender to refinance these amounts. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The Company’s owners have entered into a definitive agreement to sell all of their partnership interests in the Company, and the sale is scheduled to close during 2008. However, there can be no assurances that such sale will be consummated. The 2007 financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the outcome of these uncertainties.

As discussed in Note 4, effective December 31, 2006, the Company adopted the provisions of Statement of Financial Accounting Standard (SFAS) No. 158, Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans, an amendment of FASB Statements No. 87, 88, 106 and 132(R).

	/s/ Ernst & Young LLP
Atlanta, Georgia
January 22, 2008

18

SP Newsprint Co. and Subsidiaries

Consolidated Balance Sheets

	December 30, 2007			December 31, 2006
	(In Thousands)
Assets
Current assets:
Cash	$	17		$	18
Trade receivables, net of allowance for doubtful accounts of $170 for 2007 and 2006		58,636			54,175
Trade receivables from affiliates		15,936			19,980
Other receivables		1,592			629
Inventories (Note 2)		38,608			35,270
Prepaid expenses		5,603			2,799
Total current assets		120,392			112,871
Property, plant, and equipment:
Land		13,425			14,425
Land improvements		14,350			14,506
Buildings and leasehold improvements		51,414			52,395
Machinery, equipment, and other		928,402			911,807
Construction-in-progress		3,235			7,108
		1,010,826			1,000,241
Less accumulated depreciation		(663,631	)		(622,095	)
		347,195			378,146
Goodwill, net (Note 2)		—			10,989
Other, including deferred charges		1,887			4,627
Total assets	$	469,474		$	506,633

See accompanying notes.

19

	December 30, 2007			December 31, 2006
	(In Thousands)
Liabilities and partners’ capital
Current liabilities:
Short-term borrowings and current portion of long-term debt (Note 3)	$	158,370		$	—
Accounts payable		27,549			16,721
Accrued liabilities:
Compensation and related amounts		15,566			17,180
Interest		1,953			473
Other		30,148			25,713
Total current liabilities		233,586			60,087
Liability for pension benefits (Note 4)		25,556			37,807
Liability for postretirement benefits (Note 4)		23,468			19,865
Other liabilities		2,818			2,459
Long-term debt, less current portion (Note 3)		—			138,520
Commitments and contingencies (Note 5)
Partners’ capital		196,359			271,298
Accumulated other comprehensive loss		(12,313	)		(23,403	)
Total partners’ capital		184,046			247,895
Total liabilities and partners’ capital	$	469,474		$	506,633

See accompanying notes.

20

SP Newsprint Co. and Subsidiaries

Consolidated Statements of Operations

	Year Ended
	December 30, 2007			December 31, 2006			December 25, 2005
	(In Thousands)
Net sales:
Third parties	$	430,381		$	487,541		$	457,579
Affiliates		141,744			150,836			126,582
Total net sales		572,125			638,377			584,161
Cost of goods sold		572,650			553,868			533,386
Gross (loss) profit		(525	)		84,509			50,775
Selling, general, and administrative expenses		30,815			38,229			33,240
Goodwill impairment (Note 2)		10,989			—			—
Income (loss) from operations		(42,329	)		46,280			17,535
Interest expense		(14,896	)		(13,959	)		(13,558	)
Interest income		276			303			141
Loss related to derivative investments		—			(238	)		(377	)
Other expense		(2,990	)		(824	)		(1,241	)
Net income (loss)	$	(59,939	)	$	31,562		$	2,500

See accompanying notes.

21

SP Newsprint Co. and Subsidiaries

Consolidated Statements of Partners’ Capital

(In Thousands)

	Invested Capital			Net Income Since Inception			Cash Distributions Since Inception			Accumulated Other Comprehensive Income (Loss)			Total Partners’ Capital
Balance at December 26, 2004	$	66,000		$	357,414		$	(180,178	)	$	(1,233	)	$	242,003
Net income		—			2,500			—			—			2,500
Minimum pension liability		—			—			—			(598	)		(598	)
Comprehensive income		—			—			—			—			1,902
Balance at December 25, 2005		66,000			359,914			(180,178	)		(1,831	)		243,905
Net income		—			31,562			—			—			31,562
Minimum pension liability		—			—			—			671			671
Comprehensive income		—			—			—			—			32,233
Adjustment to initially adopt SFAS 158		—			—			—			(22,243	)		(22,243	)
Return of Partners’ Capital		(6,000	)		—			—			—			(6,000	)
Balance at December 31, 2006		60,000			391,476			(180,178	)		(23,403	)		247,895
Net loss		—			(59,939	)								(59,939	)
Net change in unrecognized prior service cost, actuarial loss, and transition assets		—			—			—			11,090			11,090
Comprehensive loss		—			—			—			—			(48,849	)
Return of Partners’ Capital		(15,000	)		—			—			—			(15,000	)
Balance at December 30, 2007	$	45,000		$	331,537		$	(180,178	)	$	(12,313	)	$	184,046

See accompanying notes.

22

SP Newsprint Co. and Subsidiaries

Consolidated Statements of Cash Flows

	Year Ended
	December 30, 2007			December 31, 2006			December 25, 2005
	(In Thousands)
Operating activities
Net (loss) income	$	(59,939	)	$	31,562		$	2,500
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation		43,722			43,498			42,278
Amortization		1,763			1,689			1,640
Goodwill impairment		10,989			—			—
Recognition of loss on derivative instruments		—			238			377
Net gain on sale of property and equipment		(1,720	)		—			—
Changes in operating assets and liabilities
Trade and other receivables		(1,380	)		5,445			(12,835	)
Inventories		(3,338	)		(2,715	)		133
Prepaid expenses		(2,804	)		765			(228	)
Other assets		976			263			1,041
Accounts payable, accrued, and other liabilities		14,946			1,141			456
Net cash provided by operating activities		3,215			81,886			35,362
Investing activities
Purchase of property, plant, and equipment		(25,298	)		(12,155	)		(21,779	)
Proceeds from the sale of property and equipment		14,247			—			—
Net cash used in investing activities		(11,051	)		(12,155	)		(21,779	)
Financing activities
Return of Partners’ Capital		(15,000	)		(6,000	)		—
Net changes in cash overdraft		2,985			(673	)		3,533
Repayment of bank loan financing		—			—			(2,250	)
Short-term borrowings, net		19,850			—			—
Repayment of long-term debt		—			(63,063	)		(14,437	)
Cost of new financing		—			—			(659	)
Net cash provided by (used in) financing activities		7,835			(69,736	)		(13,813	)
Net decrease in cash		(1	)		(5	)		(230	)
Cash at beginning of year		18			23			253
Cash at end of year		17			18			23
Supplemental disclosure
Interest paid	$	14,896		$	15,372		$	14,097

See accompanying notes.

23

SP Newsprint Co. and Subsidiaries

Notes to Consolidated Financial Statements

1. Organization and Operation of Partnership

SP Newsprint Co. (the Company) is a Georgia partnership that operates newsprint paper mills (one in Dublin, GA and one in Newberg, OR) under an agreement ultimately among Cox Enterprises, Inc., The McClatchy Company, and Media General, Inc. (the Partners). The Company produces recycled newsprint that is sold to a variety of newspaper publishers mainly in the southeastern and western United States.

The Partners have committed to purchase a portion of the mills’ annual output with minimums as follows: Cox Enterprises, Inc. – 75,000 tons, The McClatchy Company – 90,000 tons, and Media General, Inc. – 35,000 tons. On an annual basis, the Partners may elect to purchase additional tonnage. Approximately 28%, 24%, and 22%, of the Company’s revenues in 2007, 2006, and 2005, respectively, were from sales to the Partners. As of December 30, 2007 and December 31, 2006, the Company held accounts receivable from these Partners of $15,936,000 and $19,980,000, respectively.

Agreement to Sell Partnership Interests

On January 18, 2007, the Partners entered into an agreement to sell 100% of their partnership interests to certain affiliates of Peter Brant, who is the controlling shareholder of White Birch Paper Company (White Birch Paper), for $350 million in an all-cash transaction. Pending the receipt of regulatory approval, the acquisition is expected to close during the first four months of 2008. Subject to obtaining certain consents, it is expected that the Company will become a subsidiary of White Birch Paper.

Going Concern Considerations

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company’s revolving credit facility, which had an outstanding balance at December 30, 2007 of $19,850,000, is due and payable on May 30, 2008. In addition, the Company is in violation of a covenant pursuant to its Credit Agreement (Agreement). At December 30, 2007, there were letters of credit issued under the Agreement totaling $143 million used to support the long-term classification of the Company’s Industrial Revenue Bond (IRB) debt of $138,250,000 in the event that the bondholders required a redemption during a periodic interest reset date. Accordingly, the IRB balance has been classified as a current liability in the accompanying balance sheet as of December 30, 2007. The Company does not currently have the funds to repay the revolving credit facility and the IRB debt, nor does it have a commitment from a lender to refinance these amounts. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. As described above, the Partners have entered into a definitive agreement to sell all of the partnership interests in the Company. However, there can be no assurances that such sale will be consummated. The 2007 financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the outcome of these uncertainties.

2. Summary of Significant Accounting Policies

Under terms of the partnership agreement, the Partners contribute capital and share in profits and losses equally. The partnership may be dissolved at any time by mutual agreement of the Partners, but no Partner may cause dissolution without the consent of the other Partners. Under certain conditions, including a buyout by the remaining Partners, the business of the partnership can be continued as a successor partnership without liquidation of its affairs.

24

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its wholly owned subsidiary, SP Recycling Corp. (SPRC), a Georgia Corporation. All significant intercompany balances and transactions have been eliminated.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results inevitably will differ from those estimates and such differences may be material to the financial statements.

Collective Bargaining Arrangements

At December 30, 2007, the Company had approximately 659 hourly and 163 salaried employees. Approximately 224 hourly employees at the Company’s Newberg, Oregon mill are represented by the Association of Western Pulp and Paper Workers (the Union). The existing agreement with the Union expires on March 31, 2008.

Cash

The carrying amounts reported in the balance sheet for cash approximates its fair value.

Inventories

Inventories at year-end consisted of the following (in thousands):

	December 30, 2007		December 31, 2006
Old newspapers	$	5,751	$	5,095
Materials and supplies		26,296		25,685
Finished goods		5,369		3,889
Other		1,192		601
	$	38,608	$	35,270

Old newspapers (ONP), materials and supplies, and finished goods are valued at the lower of moving average cost or net realizable value. Other inventories are valued at the lower of first-in, first-out cost or net realizable value.

ONP is the primary fiber source utilized by the Company in producing newsprint. As with newsprint, ONP costs are highly cyclical and subject to significant change. To help ensure an adequate supply of ONP, the Company operates recycling centers that procure a material portion of its ONP requirements.

25

Depreciation, Maintenance, and Repairs

Property, plant, and equipment are stated at cost. For financial reporting purposes, depreciation is determined by the straight-line method using the following estimated useful lives:

Land improvements	10-20 years
Buildings	30-45 years
Machinery and equipment	3-20 years

Expenditures for maintenance and repairs are charged to expense as incurred. Maintenance and repairs expenses totaled $40,025,000, $45,160,000, and $42,792,000 during 2007, 2006, and 2005, respectively, and are included in cost of goods sold. Expenditures for renewals and betterments are capitalized and depreciated over the related estimated useful lives indicated above.

Capitalized Interest

The Company capitalizes interest on borrowed funds during major construction. Such interest is allocated to property, plant, and equipment accounts and amortized over the related estimated useful lives indicated above. The amount of interest capitalized was not significant in 2007, 2006, and 2005.

Shipping and Handling Costs

The Company classified shipping and handling costs of $42,893,000, $43,338,000, and $39,488,000 as a component of cost of goods sold during 2007, 2006, and 2005, respectively.

Income Taxes

The Company is a partnership for income tax purposes. Accordingly, no income taxes are payable or provided for by the Company. Instead, taxable income, credits, etc., are allocated to the Partners and are included in their income tax returns. SPRC is subject to income taxes. Income tax expense for SPRC in 2006 and 2005 was not material. In 2007, SPRC had income tax expense of approximately $2,400,000. A substantial portion of SPRC’s taxable income resulted from the sale of property and equipment which resulted in a gain of approximately $3,200,000. Historically, SPRC has not generated significant taxable income and income tax expense for SPRC has not been material.

On January 1, 2007, the company adopted Financial Accounting Standards Board Interpretation (FIN) No. 48, Accounting for Uncertainty in Income Taxes, which prescribes a comprehensive model for how a company should recognize, measure, present, and disclose in its financial statements uncertain tax positions that a company has taken or expects to take on a tax return (including a decision whether to file or not to file a return in a particular jurisdiction). The adoption of FIN No. 48 on January 1, 2007 did not result in a material impact on the consolidated financial statements.

Goodwill

The Company accounts for goodwill in accordance with Financial Accounting Standards Board (FASB) Statement of Financial Accounting Standards No. 142 (SFAS 142), Goodwill and Other Intangible Assets, which requires companies to test goodwill for impairment on an annual basis (or an interim basis if an event occurs that might reduce the fair value of a reporting unit below its carrying value). SFAS 142 also requires that an identifiable intangible asset that is determined to have an indefinite useful economic life not be amortized, but separately tested for impairment using a fair value based approach.

During 2007, the Partners offered the Company for sale and received bids from interested buyers which indicated that the carrying value of one of its reporting units was less than its fair value. Factors which contributed to the decline in fair value of the reporting unit include a declining trend in the sales price of newsprint products and increasing operational costs such as the cost of fuel and raw materials. The Company performed its annual assessment of goodwill under SFAS 142 during the fourth quarter of 2007 and determined that a complete impairment existed. Accordingly, the Company recorded a goodwill impairment charge of approximately $11.0 million that was recorded in 2007.

26

Deferred Charges

Deferred charges, stated at cost less amortization, include loan procurement costs that are capitalized and amortized over the term of the related loan. Deferred charges were $9,027,000 and $8,637,000 as of December 30, 2007 and December 31, 2006, respectively. Accumulated amortization of deferred charges was $7,228,000 and $5,464,000 at December 30, 2007 and December 31, 2006, respectively.

Major Customers and Credit Concentration

The Company’s sales to The McClatchy Company, one of its Partners, represented approximately 14%, 11%, and 7% of net sales in 2007, 2006, and 2005, respectively. Receivables from The McClatchy Company were $9,576,000 and $13,058,000 at December 30, 2007 and December 31, 2006, respectively. Receivables from Media News Corporation were $8,200,000 and $3,705,000 at December 30, 2007 and December 31, 2006, respectively. Receivables from Media Procurement Services (Scripps-Howard) were $7,072,000 and $4,146,000 at December 30, 2007 and December 31, 2006, respectively. The Company performs periodic credit evaluations of its customers’ financial condition and does not require collateral. Receivables are generally due within 60 days. Credit losses have not been significant.

Revenue Recognition

The Company recognizes revenue when title passes to the buyer, which is upon shipment, and persuasive evidence of an arrangement exists, fees are fixed or determinable, and collectibility is reasonably assured.

Segment Reporting

As of December 30, 2007, the Company operated two newsprint mills in the United States as part of a single operating segment. The mills provide similar products. The facilities also possess similar long-term expected financial performance characteristics. Revenues from the mills are derived principally from newsprint sales to a variety of newspaper publishers mainly in the southeastern and western United States.

Recent Accounting Pronouncements

In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities, which provides companies with an option to report selected financial assets and liabilities at fair value. SFAS No. 159 also establishes presentation and disclosure requirements designed to facilitate comparisons between companies that choose different measurement attributes for similar types of assets and liabilities. SFAS No. 159 is effective as of the beginning of an entity’s first fiscal year beginning after November 15, 2007. The Company is currently assessing the impact of the adoption of this standard on its financial statements.

Fiscal Year

The Company’s financial reporting period consists of a five-week period and two four-week periods per quarter, with an extra five-week period recognized in the fourth quarter every six years. Accordingly, the Company’s fiscal year ends on the last Sunday of December, as defined. The Company’s fiscal year consisted of 52 weeks in 2007, 53 weeks in 2006, and 52 weeks in 2005.

Reclassifications

Certain prior year balances have been reclassified to conform to the current presentation.

27

3. Debt

Outstanding debt at year-end consisted of the following (in thousands):

	December 30, 2007		December 31, 2006
Term Loan Facility – due 2005 – 2010	$	—	$	—
Revolving Credit Facility – expiring 2008		19,850		—
2001 Industrial Revenue Bonds – due 2026		38,000		38,000
2000 Industrial Revenue Bonds – due 2025		40,520		40,520
1997 Industrial Revenue Bonds – due 2017		35,000		35,000
1993 Industrial Revenue Bonds – due 2013		25,000		25,000
		158,370		138,520
Less current portion		158,370		—
	$	—	$	138,520

Scheduled calendar maturities of long-term debt at December 30, 2007, are outlined in the table above. However, all outstanding balances are reported as current as of December 30, 2007 as a result of a violation of a covenant in the Company’s Agreement. There are $143 million of letters of credit issued under the Agreement supporting the Industrial Revenue Bond debt.

The Company amended and restated their Agreement on January 9, 2004. The Company amended the Agreement on April 19, 2005, and again on October 11, 2007. Prior to the October 11, 2007 amendment, the facility was comprised of a $225 million term loan, of which $143 million is used to support letters of credit for the Company’s IRB debt, and a $75 million revolving credit facility subject to certain restrictions. The proceeds from the facility were used to refinance existing debt, pay related fees associated with the refinancing and provide working capital and letters of credit for the general operations of the Company. Interest accrues at a risk-adjusted LIBOR based rate. Pursuant to the October 11, 2007 amendment, the revolving credit facility was reduced to a $26 million facility. At December 30, 2007, there was no borrowing availability under the $225 million term loan, and there was $6.2 million available under the revolving credit facility. At December 30, 2007, the revolving facility and the term loan expiration dates were January 9, 2008 and January 9, 2010, respectively. Subsequent to year end on January 7, 2008, the Company amended the credit facility to extend the maturity of the revolving credit facility to May 30, 2008.

Interest on borrowings under the Agreement is based, at the Company’s option, on the Base Rate or Eurodollar Rate plus various percentages, depending upon leverage, all as defined. The Company did not borrow on its Term Loan Facility during 2007. The average interest rate for borrowings under the Agreement’s term loan was 7.57% as of December 30, 2006. The interest rate for borrowings under the Agreement’s revolving credit facility was 10.00% and 10.25% as of December 30, 2007 and December 31, 2006, respectively.

Borrowings under the Agreement are secured by substantially all assets of the Company. The Agreement contains various covenants, including a debt to capital ratio and a consolidated interest coverage ratio with which the Company is required to remain in compliance. The Agreement also contains restrictions pertaining to distributions of cash to Partners and additional indebtedness.

As of December 30, 2007, the Company was in compliance with all covenants, as amended, except for an affirmative covenant to its Agreement which states that audited financial statements are to be reported within 90 days after the end of each fiscal year without a “going concern” or like qualification or exception. The Company’s projections for 2008 indicate that the Company will remain in compliance with the covenants through the revolving credit facility maturity on May 30, 2008.

The Company’s IRBs bear interest at variable rates ranging from 7.24% to 7.28% at December 30, 2007, and 6.22% to 6.29% at December 31, 2006. Interest rates on the IRBs are reset periodically (daily basis or weekly

28

basis). At such reset dates, the bondholders may require the Company to redeem the IRBs. The IRBs are secured by letters of credit provided by banks in connection with the Agreement which require the banks to purchase any IRBs presented by the bondholders and provide financing for a period of at least one year, subject to ongoing compliance with the various covenants mentioned above. As discussed in the preceding paragraph, the Company is not in compliance with a covenant under the Agreement. As a result, the amounts outstanding under the IRBs as of December 30, 2007 are classified as current liabilities in the consolidated balance sheets.

At December 30, 2007 and December 31, 2006, the Company had outstanding letters of credit of $142,742,000 supporting the IRB debt. As of December 30, 2007, the Company had an additional $1,675,000 of outstanding letters of credit. The letters of credit typically act as a guarantee of payment to certain third parties in accordance with specified terms and conditions.

4. Employee Benefit Plans

The Company has non-contributory defined benefit plans that cover substantially all employees. These plans include a non-bargaining employee plan with benefits based on years of service and the employee’s compensation during his highest consecutive five years of compensation during the last ten years of employment and a bargaining employee plan with benefits based upon years of service. The Company contributes an amount that is not less than the minimum funding or more than the maximum deductible amount to these plans.

In December 2007, the Company amended one of its pension plans to freeze the years of benefit service used for purposes of calculating a participant’s plan benefit. The amendment is effective as of December 31, 2007.

The Company has a supplemental executive retirement plan (SERP) for members of management. The Company funds the cost of the plan on a pay-as-you-go basis.

Substantially all employees retiring from the Company on or after attaining age 55, who have rendered at least ten years of service (as defined) after age 44, are entitled to certain post-retirement health care and life insurance benefits (OPEB). These benefits are subject to deductibles, co-payment provisions, and other limitations. The Company may amend or change the plan periodically. Effective January 1, 2002, the plan was amended to limit the maximum annual per capita cost per participant paid by the Company to 150% of the amount the Company provided as of January 1, 2002. Employees joining the Company on or after January 1, 2002, are not eligible to participate in the plan. The actuarially determined expected cost of these benefits is charged to expense during the years that the employees render service and earn the benefits. The Company funds these costs on a pay-as-you-go basis.

All bargaining employees retiring from the Company on or after attaining age 55 who have rendered at least ten years of service after November 10, 1999, are entitled to post-retirement health care up to age 65 and a $5,000 death benefit.

Adoption of SFAS 158

On December 31, 2006, the Company adopted the recognition and disclosure provisions of SFAS 158. SFAS 158 required the Company to recognize the funded status (i.e., the difference between the fair value of plan assets and the projected benefit obligations) of its pension plan in the December 31, 2006 statement of financial position, with a corresponding adjustment to accumulated other comprehensive income. The adjustment to accumulated other comprehensive income at adoption represents the net unrecognized actuarial losses, unrecognized prior service costs, and unrecognized transition obligation remaining from the initial adoption of Statement 87, all of which were previously netted against the plan’s funded status in the Company’s statement of financial position pursuant to the provisions of Statement 87. These amounts will be subsequently recognized as net periodic pension costs pursuant to the Company’s historical accounting policy for amortizing such amounts. Further, actuarial gains and losses that arise in subsequent periods and are not recognized as net periodic pension cost in the same periods will be recognized a component of other comprehensive income. Those amounts will be subsequently recognized as a component of net periodic pension cost on the same basis as the amounts recognized in accumulated other comprehensive income at adoption of SFAS 158.

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Included in accumulated other comprehensive income at December 30, 2007, are the following amounts that have not yet been recognized in net periodic pension cost (in thousands):

	Pension Benefits
	December 31, 2006			Losses (Gains) Arising During the Year			Reclassification Adjustments			December 30, 2007
Transition asset	$	(178	)	$	—		$	93		$	(85	)
Prior service cost		1,347			232			(203	)		1,376
Actuarial loss		18,976			(11,784	)		(770	)		6,422
	OPEB Benefits
	December 31, 2006			Losses (Gains) Arising During the Year			Reclassification Adjustments			December 30, 2007
Transition asset	$	—		$	—		$	—		$	—
Prior service cost		(1,025	)		—			151			(874	)
Actuarial loss		4,283			1,684			(493	)		5,474

The transition asset, prior service cost, and actuarial loss included in accumulated other comprehensive income and expected to be recognized in net periodic pension cost during the fiscal year-ended December 30, 2008, is as follows (in thousands):

	Pension Benefits			OPEB Benefits
Transition asset	$	(85	)	$	—
Prior service cost		201			(151	)
Actuarial loss		—			327

Reconciliation of Funded Status and Accumulated Benefit Obligation

The reconciliation of the beginning and ending balances of the projected benefit obligation and the fair value of plans assets for the year ended December 30, 2007, and the accumulated benefit obligation at December 30, 2007, for the Company’s defined benefit pension, defined benefit union pension, SERP, and OPEB plans in the consolidated balance sheet at year end (in thousands) is as follows:

	Pension Benefits						OPEB Benefits
	2007			2006			2007			2006
Change in Benefit Obligation
Projected benefit obligation at beginning of year	$	100,404		$	92,556		$	20,768		$	18,141
Service cost		4,512			4,502			1,357			1,419
Interest cost		6,218			5,753			1,416			1,160
Plan participant contributions		—			—			156			131
Plan amendments		232			—			—			—
Actuarial (gain) loss		(12,292	)		800			1,767			843
Benefits paid		(2,982	)		(3,207	)		(743	)		(1,053	)
Change in claim reserve		—			—			(91	)		92
Retiree drug subsidy paid		—			—			7			35
Projected benefit obligation at end of year	$	96,092		$	100,404		$	24,637		$	20,768

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	Pension Benefits						OPEB Benefits
	2007			2006			2007			2006
Change in Plan Assets
Fair value of plan assets at beginning of year	$	61,781		$	51,443		$	—		$	—
Actual return on plan assets		4,599			7,440			—			—
Employer contributions		6,577			6,105			587			922
Plan participants’ contributions		—			—			156			131
Benefits paid		(2,982	)		(3,207	)		(743	)		(1,053	)
Fair value of plan assets at end of year	$	69,975		$	61,781		$	—		$	—
Funded Status	$	(26,117	)	$	(38,623	)	$	(24,637	)	$	(20,768	)

The underfunded status of Company’s defined benefit pension, defined benefit union pension, SERP, and OPEB plans is recognized in the accompanying statement of financial position as current accrued other liabilities of $1,730,000 and long-term liabilities for pension benefits and postretirement benefits of $25,556,000 and $23,468,000, respectively, at December 30, 2007. The underfunded status of Company’s defined benefit pension, defined benefit union pension, SERP, and OPEB plans was recognized as current accrued other liabilities of $1,719,000 and long-term liabilities for pension benefits and postretirement benefits of $37,807,000 and $19,865,000, respectively, at December 31, 2006. No plan assets are expected to be returned to the Company during the fiscal year-ended December 31, 2008. The accumulated benefit obligation for the Company’s defined benefit pension, defined benefit union pension, SERP plans was $80,507,000 and $78,491,000 at December 30, 2007 and December 31, 2006, respectively.

Pension plan assets consist of a combination of short-term investments with financial institutions, equity investments, and U.S. government treasury bonds.

The following table sets forth the actuarial assumptions used in determining the actuarial present value of the projected benefit obligations:

	Pension Benefits				OPEB Benefits
	2007		2006		2007		2006
Discount rate	6.50	%	6.25	%	6.50	%	6.25	%
Health care cost trend rate at year end	—		—		9.00	%	9.00	%
Ultimate health care cost trend rate	—		—		5.00	%	5.00	%
Rate of salary increase	3.00	%	4.00	%	3.00	%	4.00	%

As a result of changes in certain assumptions, as noted in the table above, in determining the actuarial present value of the projected benefit obligation as of December 30, 2007 as well as the pension plan amendment previously discussed, the Company recognized an actuarial gain of approximately $12.3 million in the current period.

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The asset allocation for the Company’s pension plans at the end of 2007 and 2006, and the target allocation for 2008, by asset category, are as follows:

	Target Allocation	Percentage of Plan Assets at Year End
	2008	2007	2006
Asset Category
Equity securities	50%–70%	59%	62%
Fixed income securities	30%–50%	41%	38%
Total		100%	100%

As plan sponsor of the pension plans, the Company’s investment strategy is to achieve a rate of return on the plans’ assets that, over the long-term, will fund the plans’ benefit payments and will provide for other required amounts in a manner that satisfies all fiduciary responsibilities. A determinant of the plans’ returns is the asset allocation policy. The Company reviews the plans’ asset mix periodically, at least annually, to rebalance within the target (50% – 70% equity, 30% – 50% fixed income) mix guidelines. The Company also periodically evaluates each investment manager to determine if that manager has performed satisfactorily when compared to the defined objectives, similarly invested portfolios, and specific market indices.

The Company’s pension and OPEB recognized for each year are set forth in the following table (in thousands):

	Pension Benefits									OPEB Benefits
	2007			2006			2005			2007			2006			2005
Components of net periodic pension cost
Service cost	$	4,512		$	4,502		$	4,011		$	1,357		$	1,419		$	1,372
Interest cost		6,218			5,753			5,085			1,416			1,160			981
Expected return on assets		(5,107	)		(4,306	)		(3,700	)		—			—			—
Amortization of:
Prior service cost (benefit)		203			177			176			(151	)		(151	)		(151	)
Actuarial loss		770			1,033			589			493			272			97
Transition asset		(93	)		(92	)		(92	)		—			—			—
Net periodic pension cost	$	6,503		$	7,067		$	6,069		$	3,115		$	2,700		$	2,299

For the OPEB plan, a one percentage point increase in the assumed health care cost trend rate would have increased the Accumulated Benefit Obligation (ABO) by $2,166,000 at December 30, 2007, and increased the aggregate service and interest cost components of postretirement benefit expense for 2007 by $262,000. A one percentage point decrease in the assumed health care cost trend rate would have decreased the ABO by $1,910,000 at December 30, 2007, and decreased the aggregate service and interest cost components of postretirement benefit expense for 2007 by $231,000.

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The following table includes amounts expected to be contributed to the Plans by the Company and the gross amount of the Medicare Part D subsidiary receipts. It reflects benefit payments which are made from the Plans’ assets as well as those made directly from the Company’s assets and includes the participants’ share of the costs, which is funded by participant contributions. The amounts in the table are actuarially determined and reflect the Company’s best estimate given its current knowledge; however, actual amounts could be materially different.

	Pension Benefits		OPEB Benefits
	(In Thousands)
Employer contributions
2008 (expectation) to plan	$	5,461	$	—
2008 (expectation) to participant benefits		560		1,170
Expected benefit payments
2008		3,048		1,295
2009		3,288		1,387
2010		3,561		2,063
2011		4,089		2,229
2012		4,450		2,300
2013-2017		31,917		13,879
Expected Medicare Part D reimbursements
2008		N/A	$	88
2009		N/A		104
2010		N/A		116
2011		N/A		133
2012		N/A		147
2013-2017		N/A		1,049

The net periodic costs were determined using the following assumptions:

	Pension Benefits						OPEB Benefits
	2007		2006		2005		2007		2006		2005
Discount rate	6.25	%	6.25	%	6.25	%	6.25	%	6.25	%	6.25	%
Expected return on plan assets	8.00	%	8.00	%	8.00	%	—		—		—
Compensation increase rate	4.00	%	4.00	%	4.00	%	4.00	%	4.00	%	4.00	%

The reasonableness of the expected return on the funded retirement plan assets was determined based on the average expected return on the portfolio and the allocation of the portfolio of assets held by the plans. The discount rate was established based on a dedicated bond portfolio which was calculated based on a hypothetical portfolio of high quality corporate bonds whose cash flows match the expected projected benefit obligation expected benefit payments under the plans.

The Company has a voluntary thrift plan for non-bargaining employees under which the Company will match 50% of employee contributions (which are limited for employer matching purposes to a maximum of 6% of annual salary). The Company’s thrift plan expense totaled $1,489,000, $1,264,000, and $1,400,000, in 2007, 2006, and 2005, respectively. The Company also has a voluntary savings plan for bargaining employees under which the Company will match 50% of employee contributions up to a maximum of $1,300 in a year.

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5. Commitments and Contingencies

The Company leases office and warehouse space and equipment. Total rent expense was $7,712,000, $10,216,000, and $8,814,000, in 2007, 2006, and 2005, respectively.

In 2002, the Company entered into two sale-leaseback transactions for two gas turbines to be used in a cogeneration plant being built at the Newberg, Oregon plant. Total proceeds from the sale were approximately $29 million. There was no gain or loss related to the sale. Under the agreement, the Company has the option at the end of the lease terms to either renew the leases at then fair market rates, purchase the turbines at the fair market value during or at the end of the lease, or pay a fee and return the turbines to the lessors. The leases are being accounted for as operating leases. During 2007, the Company purchased one turbine at its contract value and subsequently sold it at a loss of $1,476,000, which was included in cost of goods sold in the accompanying consolidated statements of operations.

Future minimum lease payments under noncancellable operating leases, including the remaining gas turbine lease, with initial terms of one year or more consisted of the following at December 30, 2007:

2008	$	7,875,000
2009		5,635,000
2010		4,159,000
2011		2,560,000
2012		2,048,000
Thereafter		1,092,000
Total minimum lease payments	$	23,369,000

The Company has received notice from the Internal Revenue Service that a preliminary determination has been made that the interest on the Development Authority of Laurens County, Georgia Series 1993 Bonds and the Development Authority of Laurens County Series 1997 Bonds is includable in gross income of the bondholder for federal income tax purposes. The Company has not received a similar notice from the IRS with respect to the State of Oregon Economic Development Revenue Bonds Series 196, Series 197, Series 202 or Series 203; however, such State of Oregon Bonds are under examination by the IRS and based upon discussions and correspondence with the IRS, the Company expects to receive a similar preliminary adverse determination of taxability with respect to the Oregon Bonds.

The Company has requested a conference with the IRS to discuss the merits and legal issues in the case and the possibility of a closing agreement. At the present time, the outcome of those discussions is uncertain and there is no assurance that a closing agreement will be entered into between the Company and the IRS relating to either the Laurens County Bonds or the State of Oregon Bonds. The Company recorded a liability for bondholder exposure of $2,735,000 during 2007, representing its best estimate of the ultimate amount at which this matter can be settled.

In December 2000, the Company was notified of a claim against it by Smurfit Newsprint Corporation. The claim alleges that the Company is responsible for certain severance costs due union employees at its Newberg, Oregon mill as a result of Smurfit’s termination of its contract with the union in connection with the Company’s November 10, 1999 acquisition. During the 2005 year, the Company settled this claim for $635,000.

The Company and its subsidiaries are involved in various other legal proceedings, which are normal to its business. It is the opinion of management that the aforementioned actions and claims, if determined adversely to the Company, will not have a material impact on the financial condition or operations of the Company taken as a whole.

6. Financial Instruments

The carrying values of financial instruments such as cash, trade and other receivables, trade payables, and long-term debt approximate their fair values. Derivative financial instruments are carried at fair value unless they are related to normal purchases to be made in the ordinary course of business. Fair value is determined based on expected future cash flows, discounted at market interest rates, quotes from financial institutions, and other appropriate valuation methodologies.

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The Company enters into certain derivative transactions designed to hedge risks associated with specific assets, liabilities or future transactions. The effectiveness of the derivative as a hedge is based on a high correlation between changes in its value and changes in the value of the underlying hedged item. The Company includes in operating results amounts received or paid when the underlying transaction settles. Derivatives are carried at fair value and are included in prepaid expense, other assets, and accrued liabilities on the balance sheet.

As of December 30, 2007, the Company had entered into an aggregate amount of $6,944,000 in contracts to purchase natural gas on a forward basis through December 29, 2008, at a weighted average price of $7.64 per MMBTU to satisfy approximately 29% of forecasted usage through December 29, 2008. These contracts expire on different dates through December 29, 2008. As of December 31, 2006, the Company had entered into an aggregate amount of $13,415,000 in contracts to purchase natural gas on a forward basis through December 31, 2007, at a weighted average price of $7.51 per MMBTU to satisfy approximately 49% of forecasted usage through December 31, 2007. These contracts expired on different dates through December 31, 2007. The Company has designated these contracts under the normal purchases exclusion in accordance with Statement of Financial Accounting Standard No. 133, Accounting for Derivative Instruments and Hedging Activities. As such, the fair value of these instruments has not been recorded on the consolidated balance sheets. The purpose of entering into the natural gas contracts is to fix the price of purchasing natural gas for a portion of the Company’s production needs.

During 2004, the Company entered into an interest rate swap agreement to reduce the impact of changes in interest rates on a portion of its floating rate debt. The interest agreement was a contract to exchange variable rate for fixed rate interest payments periodically over the life of the agreement based upon the underlying notional amount of the contract of $40,000,000. The swap expired on March 15, 2006. Changes in fair value were recorded as non operating expenses as a gain or loss on derivative transactions. The net cash paid or received on these agreements was accrued and recognized as gains related to derivative instruments.

7. Other Transactions with Partners

SPRC procures ONP from a variety of sources. Approximately $5.0 million, $6.2 million, and $7.7 million of ONP were purchased from the Partners in 2007, 2006, and 2005, respectively. This volume accounted for approximately 3.8%, 7.7%, and 9.0% of 2007, 2006, and 2005, respectively, ONP requirements.

8. Amounts Accrued under SERP and Unit Plan (UP)

As described in Note 1, on January 18, 2007, the Partners signed a definitive agreement to sell their partnership interests in the Company for $350 million. The purchase price is subject to adjustment in accordance with the terms of the Partnership Purchase Agreement including certain change in control provisions in the employment agreements of certain executives who participate in the Company’s SERP described in Note 4 and unit plan (UP), which is an incentive compensation program for executives. The change in control provisions of the employment agreements require the Partners to pay certain amounts related to liabilities recorded under the Company’s SERP and UP. These amounts are payable immediately before the close of sale transaction. As of December 30, 2007, approximately $10,740,000 and $1,889,000 are recorded under the SERP and UP plans, respectively, and are included in other liabilities in the accompanying balance sheet Based on the terms of the change in control provisions in the employment agreements of executives participating in the SERP and UP plans, the Company estimates that amounts to be paid under the SERP and UP plans upon the consummation of the sale of the Company will be approximately $9,900,000 and a range of $0 to $512,000 under the SERP and UP plans, respectively. If the sale of the Company is not consummated, the SERP and UP plans will remain in effect, and no amounts will be payable until participants become eligible for benefit payments in accordance with the provisions of the SERP and UP plans. In that case, the amount recorded represents management’s best estimate of the ultimate liability that should be accrued at December 30, 2007.

***** END OF UNCONSOLIDATED AFFILIATE FINANCIAL STATEMENTS *****

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Index to Exhibits

Exhibit Number	Description
2.1	Stock and Asset Purchase Agreement, dated April 6, 2006, by and among Outlet Broadcasting, Inc., NBC Sub (WCMH), LLC, Birmingham Broadcasting (WVTM-TV), Inc., NBC WVTM License Company, NBC WNCN License Company, NBC WCMH License Company, NBC WJAR License Company, NBC Universal, Inc., and Media General, Inc., incorporated by reference to Exhibit 2.1 of Form 8-K filed on April 10, 2006.
2.2	First Amendment, dated June 26, 2006, to Stock and Asset Purchase Agreement dated April 6, 2006, by and among Outlet Broadcasting, Inc., NBC Sub (WCMH), LLC, Birmingham Broadcasting (WVTM-TV), Inc., NBC WVTM License Company, NBC WNCN License Company, NBC WCMH License Company, NBC WJAR License Company, NBC Universal, Inc., and Media General, Inc., incorporated by reference to Exhibit 2.1 of Form 8-K filed on June 27, 2006.
3 (i)	Articles of Incorporation of Media General, Inc., amended and restated as of May 28, 2004, incorporated by reference to Exhibit 3(i) of Form 10-Q for the fiscal period ended June 27, 2004.
3 (ii)	Bylaws of Media General, Inc., amended and restated as of May 28, 2004, incorporated by reference to Exhibit 3(ii) of Form 10-Q for the fiscal period ended June 27, 2004.
10.1	Form of Option granted under the 1976 Non-Qualified Stock Option Plan, incorporated by reference to Exhibit 2.2 of Registration Statement 2-56905.
10.2	Additional Form of Option to be granted under the 1976 Non-Qualified Stock Option Plan, incorporated by reference to Exhibit 2 to Post-Effective Amendment No. 3 Registration Statement 2-56905.
10.3	Addendum dated January 1984, to Form of Option granted under the 1976 Non-Qualified Stock Option Plan, incorporated by reference to Exhibit 10.13 of Form 10-K for the fiscal year ended December 31, 1983.
10.4	Addendum dated June 19, 1992, to Form of Option granted under the 1976 Non-Qualified Stock Option Plan, incorporated by reference to Exhibit 10.15 of Form 10-K for the fiscal year ended December 27, 1992.
10.5	Addendum dated June 19, 1992, to Form of Option granted under the 1987 Non-Qualified Stock Option Plan, incorporated by reference to Exhibit 10.20 of Form 10-K for the fiscal year ended December 27, 1992.
10.6	Shareholders Agreement, dated May 28, 1987, between Mary Tennant Bryan, Florence Bryan Wisner, J. Stewart Bryan III, and as trustees under D. Tennant Bryan Media Trust, and Media General, Inc., D. Tennant Bryan and J. Stewart Bryan III, incorporated by reference to Exhibit 10.50 of Form 10-K for the fiscal year ended December 31, 1987.
10.7	Media General, Inc., Supplemental 401(K) Plan, amended and restated effective January 1, 2008, incorporated by reference to Exhibit 10.01 of Form 8-K filed on February 6, 2008.

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10.8	Media General, Inc., Executive Supplemental Retirement Plan, amended and restated effective January 1, 2008, incorporated by reference to Exhibit 10.07 of Form 8-K filed on February 6, 2008.
10.9	Deferred Income Plan for Selected Key Executives of Media General, Inc., and form of Deferred Compensation Agreement thereunder dated as of December 1, 1984, incorporated by reference to Exhibit 10.29 of Form 10-K for the fiscal year ended December 31, 1989.
10.10	Media General, Inc., Management Performance Award Program, adopted November 16, 1990, and effective January 1, 1991, incorporated by reference to Exhibit 10.35 of Form 10-K for the fiscal year ended December 29, 1991.
10.11	Media General, Inc., Deferred Compensation Plan, amended and restated as of January 1, 2008, incorporated by reference to Exhibit 10.04 of Form 8-K filed on February 6, 2008.
10.12	Media General, Inc., ERISA Excess Benefits Plan, amended and restated effective January 1, 2008, incorporated by reference to Exhibit 10.06 of Form 8-K filed on February 6, 2008.
10.13	Media General, Inc., 1995 Long-Term Incentive Plan, amended and restated as of April 26, 2007.
10.14	Media General, Inc., 1996 Employee Non-Qualified Stock Option Plan, amended as of December 31, 2001, incorporated by reference to Exhibit 10.14 of Form 10-K for the fiscal year ended December 26, 2004.
10.15	Media General, Inc., 1997 Employee Restricted Stock Plan, amended as of December 31, 2001, incorporated by reference to Exhibit 10.15 of Form 10-K for the fiscal year ended December 26, 2004.
10.16	Media General, Inc., Directors’ Deferred Compensation Plan, amended and restated as of November 16, 2001, incorporated by reference to Exhibit 10.16 of Form 10-K for the fiscal year ended December 26, 2004.
10.17	Form of an executive life insurance agreement between the Company and certain executive officers (who were participants on or before November 19, 2007), incorporated by reference to exhibit 10.17 of Form 10-K for the fiscal year ended December 29, 2002.
10.18	Media General, Inc., Executive Automobile Program, incorporated by reference to Exhibit 10.18 of Form 10-K for the fiscal year ended December 26, 2004.
10.19	Media General, Inc., Executive Financial Planning and Income Tax Program, amended and restated effective January 1, 2008, incorporated by reference to Exhibit 10.08 of Form 8-K filed on February 6, 2008.
10.20	Media General, Inc., Executive Health Program adopted November 22, 2004, incorporated by reference to Exhibit 10.20 of Form 10-K for the fiscal year ended December 26, 2004.
10.21	Media General, Inc., Stock Appreciation Rights Plan adopted January 31, 2007, incorporated by reference to Exhibit 10.01 of Form 8-K filed on February 5, 2007.
10.22	Media General, Inc., Form of Stock Appreciation Rights Agreement (select executives) granted under Stock Appreciation Rights Plan, incorporated by reference to Exhibit 10.02 of Form 8-K filed on February 5, 2007.

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10.23	Media General, Inc., Form of Stock Appreciation Rights Agreement (other recipients) granted under Stock Appreciation Rights Plan, incorporated by reference to Exhibit 10.03 of Form 8-K filed on February 5, 2007.
10.24	Media General, Inc., Supplemental Profit Sharing Plan, effective as of January 1, 2007, incorporated by reference to Exhibit 10.02 of Form 8-K filed on February 6, 2008.
10.25	Media General, Inc., Retirement Transition Planning Program, effective January 1, 2008, incorporated by reference to Exhibit 10.09 of Form 8-K filed on February 6, 2008.
10.26	Form of an executive life insurance agreement between the Company and certain executive officers (who become participants subsequent to November 19, 2007), incorporated by reference to Exhibit 10.03 of Form 8-K filed on February 6, 2008.
10.27	Amendment to form of Deferred Compensation Agreement dated as of December 1, 1984, incorporated by reference to Exhibit 10.05 of Form 8-K filed on February 6, 2008.
10.28	Amended and Restated Partnership Agreement, dated November 1, 1987, by and among Virginia Paper Manufacturing Corp., KR Newsprint Company, Inc., and CEI Newsprint, Inc., incorporated by reference to Exhibit 10.31 of Form 10-K for the fiscal year ended December 31, 1987.
10.29	Amended and Restated Umbrella Agreement, dated November 1, 1987, by and among Media General, Inc., Knight - Ridder, Inc., and Cox Enterprises, Inc., incorporated by reference to Exhibit 10.34 of Form 10-K for the fiscal year ended December 31, 1987.
10.30	Newsprint Purchase Contract, dated September 5, 2007, by and among Southeast Paper Manufacturing Co., Media General, Inc., McClatchy, Inc., and Cox Enterprises, Inc.
10.31	Television affiliation letter agreement, dated April 16, 2001, between Media General Broadcast Group and the NBC Television Network incorporated by reference to Exhibit 10.24 of Form 10- K for the fiscal year ended December 30, 2001.
10.32	Amended and Restated Credit Agreement, dated March 14, 2005, among Media General, Inc., and various lenders, incorporated by reference to Exhibit 10.1 of Form 8-K filed on March 14, 2005.
10.33	First Amendment to Amended and Restated Credit Agreement, dated May 31, 2006, among Media General, Inc., and various lenders, incorporated by reference to Exhibit 10 of Form 8-K filed on June 12, 2006.
10.34	Second Amendment to Amended and Restated Credit Agreement, dated October 19, 2007, and various lenders, incorporated by reference to Exhibit 10.2 of Form 8-K filed on October 22, 2007.
10.35	Credit Agreement, dated August 8, 2006, among Media General, Inc., and various lenders, incorporated by reference to Exhibit 10 of Form 8-K filed on August 10, 2006.
10.36	First Amendment to Credit Agreement, dated October 18, 2007, and various lenders, incorporated by reference to Exhibit 10.1 of Form 8-K filed on October 22, 2007.

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13	Media General, Inc., Annual Report to Stockholders for the fiscal year ended December 30, 2007.
21	List of subsidiaries of the registrant.
23.1	Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm.
23.2	Consent of Ernst & Young LLP, Independent Auditors.
31.1	Section 302 Chief Executive Officer Certification
31.2	Section 302 Chief Financial Officer Certification
32	Section 906 Chief Executive Officer and Chief Financial Officer Certification
	Note: Exhibits 10.1-10.27 are management contracts or compensatory plans, contracts or arrangements.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	MEDIA GENERAL, INC.
Date: February 26, 2008	/s/ Marshall N. Morton
	Marshall N. Morton, President and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature	Title	Date
/s/ J. Stewart Bryan III	Chairman	February 26, 2008
J. Stewart Bryan III
/s/ O. Reid Ashe, Jr.	Executive Vice President,	February 26, 2008
O. Reid Ashe, Jr.	Chief Operating Officer and Director
/s/ John A. Schauss	Vice President – Finance and	February 26, 2008
John A. Schauss	Chief Financial Officer
/s/ Stephen Y. Dickinson	Controller and Chief Accounting Officer	February 26, 2008
Stephen Y. Dickinson
/s/ Diana F. Cantor	Director	February 26, 2008
Diana F. Cantor
/s/ Charles A. Davis	Director	February 26, 2008
Charles A. Davis
/s/ Thompson L. Rankin	Director	February 26, 2008
Thompson L. Rankin
/s/ Rodney A. Smolla	Director	February 26, 2008
Rodney A. Smolla
/s/ Walter E. Williams	Director	February 26, 2008
Walter E. Williams
/s/ Coleman Wortham III	Director	February 26, 2008
Coleman Wortham III

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EX-10.13

Exhibit 10.13

MEDIA GENERAL, INC.

1995 LONG-TERM INCENTIVE PLAN

Amended and Restated as of April 26, 2007

1. Purpose. The purpose of this 1995 Long-Term Incentive Plan, amended and restated as of April 26, 2007 (the “Plan”), of Media General, Inc. together with any successor thereto (the “Company”), is (a) to promote the identity of interests between Shareholders and employees of the Company by encouraging and creating significant ownership of Class A Common Stock of the Company by officers and other salaried employees of the Company and its subsidiaries; (b) to enable the Company to attract and retain qualified officers and employees who contribute to the Company’s success by their ability, ingenuity and industry; and (c) to provide meaningful long-term incentive opportunities for officers and other employees who are responsible for the success of the Company and who are in a position to make significant contributions toward its objectives.

2. Definitions. In addition to the terms defined elsewhere in the Plan, the following shall be defined terms under the Plan:

2.01. “Award” means any Performance Accelerated Restricted Stock, Performance Award, Option, Stock Appreciation Right, Restricted Stock, Deferred Stock or Other Stock-Based Award or any other right or interest relating to Shares or cash granted to a Participant under the Plan.

2.02. “Award Agreement” means any written agreement, contract or other instrument or document evidencing an Award.

2.03. “Board” means the Board of Directors of the Company.

2.04. “Code” means the Internal Revenue Code of 1986, as amended from time to time. References to any provision of the Code shall be deemed to include successor provisions thereto and regulations thereunder.

2.05. “Committee” means the Compensation Committee of the Board, or such other Board committee as may be designated by the Board to administer the Plan, or any subcommittee of either; provided, however, that the Committee, and any subcommittee thereof, shall consist of two or more directors, each of whom is a “disinterested person” within the meaning of Rule 16b-3 under the Exchange Act and an “outside director” within the meaning of Section 162(m) of the Code.

2.06. “Company” is defined in Section 1.

2.07. “Covered Employee” has the same meaning as set forth in Section 162(m) of the Code, and successor provisions.

2.08. “Deferred Stock” means a right, granted to a Participant under Section 6.05, to receive Shares at the end of a specified deferral period.

2.09. “Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time. References to any provision of the Exchange Act shall be deemed to include successor provisions thereto and regulations thereunder.

2.10. “Fair Market Value” means, as of any given date, with respect to Shares, Awards or other property, the closing price for the Shares as reported on the New York Stock Exchange or other primary market in which Shares are traded (or if the Shares were not traded on such date, then on the next preceding day on which the Shares were traded), or on any other reasonable basis determined by the Committee using actual transactions in the Shares as reported by such market and consistently applied.

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2.11. “Option” means a right, granted to a Participant under Section 6.06, to purchase Shares, other Awards or other property at a specified price during specified time periods and which is not intended to satisfy the requirements of Section 422 of the Code.

2.12. “Other Stock-Based Award” means a right, granted to a Participant under Section 6.08, that relates to or is valued by reference to Shares.

2.13. “Participant” means a person who, as an officer or salaried employee of the Company or any Subsidiary, has been granted an Award under the Plan.

2.14. “Performance Accelerated Restricted Stock” means Restricted Stock granted to a Participant under Section 6.02 containing certain performance criteria established by the Committee which, if met, shall accelerate the vesting thereof.

2.15. “Performance Award” means a right granted to a Participant under Section 6.03 to receive cash, Shares, other Awards or other property, the payment of which is contingent upon achievement of performance goals specified by the Committee.

2.16. “Performance-Based Restricted Stock” means Restricted Stock that is subject to a risk of forfeiture if specified performance criteria are not met within the restriction period.

2.17. “Plan” is defined in Section 1.

2.18. “Restricted Stock” means Shares granted to a Participant under Section 6.04 that are subject to certain restrictions and to a risk of forfeiture.

2.19. “Rule 16b-3” means Rule 16b-3, as from time to time amended and applicable to Participants, promulgated by the Securities and Exchange Commission under Section 16 of the Exchange Act.

2.20. “Shareholders” means the holders of all issued and outstanding Shares.

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2.21. “Shares” means the Class A Common Stock, $5.00 par value, of the Company and such other securities of the Company as may be substituted for Shares or such other securities pursuant to Section 9.

2.22. “Stock Appreciation Right” means a right granted to a Participant under Section 6.07 to be paid an amount measured by the appreciation in the Fair Market Value of Shares from the date of grant to the date of exercise of the right, with payment to be made in cash, Shares, other Awards or other property as specified in the Award or determined by the Committee.

2.23. “Subsidiary” means any corporation (other than the Company) with respect to which the Company owns, directly or indirectly, 50 percent or more of the total combined voting power of all classes of stock. In addition, any other related entity may be designated by the Board as a Subsidiary, provided such entity could be considered as a subsidiary according to generally accepted accounting principles.

2.24. “Year” means a calendar year.

3. Administration.

3.01. Authority of the Committee. The Plan shall be administered by the Committee. The Committee shall have full and final authority to take the following actions, in each case subject to and consistent with the provisions of the Plan:

(i) to select and designate Participants;

(ii) to designate Subsidiaries;

(iii) to determine the type or types of Awards to be granted to each Participant;

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(iv) to determine the number of Awards to be granted, the number of Shares to which an Award will relate, the terms and conditions of any Award granted under the Plan (including, but not limited to, any exercise price, grant price or purchase price, any restriction or condition, any schedule for lapse of restrictions or conditions relating to transferability or forfeiture, exercisability or settlement of an Award and waivers or accelerations thereof, based in each case on such considerations as the Committee shall determine (including the effect of Section 162(m) of the Code)) and all other matters to be determined in connection with an Award;

(v) to determine whether, to what extent and under what circumstances an Award may be settled, or the exercise price of an Award may be paid, in cash, Shares, other Awards or other property, or an Award may be cancelled, forfeited or surrendered;

(vi) to determine whether, to what extent, and under what circumstances cash, Shares, other Awards or other property payable with respect to an Award will be deferred either automatically, at the election of the Committee or at the election of the Participant; provided, however, that any such deferral will be made in accordance with Section 409A of the Code;

(vii) to prescribe the form of each Award Agreement, which need not be identical for each Participant;

(viii) to establish the performance criteria, pursuant to Section 7.01 hereof, under which Performance Accelerated Restricted Stock, Performance-Based Restricted Stock and other Performance Awards are to be granted, and to determine and certify whether such criteria have been attained;

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(ix) to adopt, amend, suspend, waive and rescind such rules and regulations and appoint such agents as the Committee may deem necessary or advisable to administer the Plan;

(x) to correct any defect or supply any omission or reconcile any inconsistency in the Plan and to construe and interpret the Plan and any Award, rules and regulations, Award Agreement or other instrument hereunder; and

(xi) to make all other decisions and determinations as may be required under the terms of the Plan or as the Committee may deem necessary or advisable for the administration of the Plan.

3.02. Manner of Exercise of Committee Authority. Unless authority is specifically reserved to the Board under the terms of the Plan or applicable law, the Committee shall have sole discretion in exercising such authority under the Plan. Any action of the Committee with respect to the Plan shall be final, conclusive and binding on all persons, including the Company, Subsidiaries, Shareholders, Participants and any person claiming any rights under the Plan from or through any Participant. The express grant of any specific power to the Committee and/or the taking of any action by the Committee shall not be construed as limiting any power or authority of the Committee. A memorandum signed by all members of the Committee shall constitute the act of the Committee without the necessity, in such event, to hold a meeting. The Committee may delegate to officers or managers of the Company or any Subsidiary the authority, subject to such terms as the Committee shall determine, to perform administrative functions under the Plan.

3.03. Limitation of Liability. Each member of the Committee shall in good faith be entitled to rely or act upon any report or other information furnished to such member by any officer or other employee of the Company or any Subsidiary, the Company’s independent

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certified public accountants or any executive compensation consultant or other professional retained by the Company to assist in the administration of the Plan. No member of the Committee, nor any officer or employee of the Company acting on behalf of the Committee, shall be personally liable for any action, determination or interpretation taken or made in good faith with respect to the Plan, and all members of the Committee and any officer or employee of the Company acting on their behalf shall, to the extent permitted by law, be fully indemnified and protected by the Company with respect to any such action, determination or interpretation.

4. Shares Subject to the Plan. Effective April 26, 2007, the total number of Shares reserved and available for Awards under the Plan shall be increased by 1,500,000 (for a total of 5,000,000 since the Plan’s inception in 1995) of which up to 300,000 Shares (for a total of 1,100,000 Shares since the Plan’s inception in 1995) may be reserved for awards of Performance Awards, Performance-Based Restricted Stock, Performance Accelerated Restricted Stock, Deferred Stock and Other Stock-Based Awards.^* For purposes of this Section 4, the number of and time at which Shares shall be deemed to be subject to Awards and therefore counted against the number of Shares reserved and available under the Plan shall be the earliest date at which the Committee reasonably can estimate the number of Shares to be distributed in settlement of an Award or with respect to which payments will be made; provided, however, that the Committee may adopt procedures for the counting of Shares relating to any Award for which the number of Shares to be distributed, or with respect to which payment will be made, cannot be fixed at the date of grant to ensure appropriate counting, avoid double counting (in the case of tandem or substitute awards) and provide for adjustments in any case in which the number of Shares actually distributed or with respect to which payments are actually made differs from the number

^* As of December 31, 2006, only 266,356 Shares remained available for the future Awards, of which 168,694 Shares may be used for full-value Awards.

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of Shares previously counted in connection with such Award. Gross issuance amounts, not net issuance amounts, shall be utilized in counting Shares against the number of Shares reserved, and Shares withheld by or otherwise remitted to the Company to satisfy a Participant’s tax withholding obligations upon the lapse of any restrictions on Performance Accelerated Restricted Stock, Restricted Stock, or other Stock-Based Awards, upon the exercise of any Options or Stock Appreciation Rights or upon the payment or issuance of Shares under the Plan with respect to any Award, will not be available for Awards under the Plan.

If any Shares to which an Award relates are forfeited or the Award is settled or terminates without a distribution of Shares (whether or not cash, other Awards or other property is distributed with respect to such Award), any Shares counted against the number of Shares reserved and available under the Plan with respect to such Award shall, to the extent of any such forfeiture, settlement or termination, again be available for Awards under the Plan.

5. Eligibility. Awards may be granted only to individuals who are officers or other salaried employees (including employees who also are directors) of the Company or a Subsidiary; provided, however, that no Award pursuant to this Plan shall be granted to any member of the Committee.

6. Specific Terms of Awards.

6.01. General. Awards may be granted on the terms and conditions set forth in this Section 6. In addition, the Committee may impose on any Award or the exercise thereof, at the date of grant or thereafter (subject to Section 11.02), such additional terms and conditions, not inconsistent with the provisions of the Plan, as the Committee shall determine, including without limitation the acceleration of vesting of any Awards or terms requiring forfeiture of Awards in the event of termination of employment by the Participant.

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6.02. Performance Accelerated Restricted Stock. Subject to the provisions of Sections 7.01 and 7.02, the Committee is authorized to grant Performance Accelerated Restricted Stock to Participants on the following terms and conditions:

(i) Awards and Dividends. Performance Accelerated Restricted Stock Awards shall be denominated in Shares. The Participant thereupon shall be a Shareholder with respect to the Shares awarded, including the right to vote such Shares and to receive all dividends and distributions paid with respect thereto.

(ii) Certificates of Shares. Performance Accelerated Restricted Stock granted under the Plan may be evidenced in such manner as the Committee shall determine. If certificates representing Performance Accelerated Restricted Stock are registered in the name of a Participant, such certificates shall bear an appropriate legend referring to the terms, conditions and restrictions applicable to such Performance Accelerated Restricted Stock, the Company shall retain physical possession of the certificates, and the Participant shall deliver a stock power to the Company, endorsed in blank, relating to that Performance Accelerated Restricted Stock.

(iii) Restrictions and Acceleration. At the time of the award of Performance Accelerated Restricted Stock, the Committee shall specify a period commencing on the date of the Award and ending on a date that is no more than 10 years thereafter. At the time of each such Award, the Committee also shall specify and advise the Participant of such performance targets as the Committee shall determine to be appropriate which, if met, shall accelerate the termination of the foregoing restricted period for all or such other portion of the Performance Accelerated Restricted Stock as the Committee shall deem appropriate.

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(iv) Forfeiture. Except as otherwise determined by the Committee, upon termination of employment (as determined under criteria established by the Committee) during an applicable restriction period, all Performance Accelerated Restricted Stock that remains subject to such applicable restriction period shall be forfeited; provided, however, that the Committee may provide, by rule or regulation or in any Award Agreement, or may determine in any individual case, that restrictions or forfeiture conditions relating to Performance Accelerated Restricted Stock will be waived in whole or in part in the event of termination resulting from specified causes, and the Committee in other cases may waive in whole or in part the forfeiture of Performance Accelerated Restricted Stock.

6.03. Performance Award. Subject to the provisions of Sections 7.01 and 7.02, the Committee is authorized to grant Performance Awards to Participants on the following terms and conditions:

(i) Awards and Conditions. A Performance Award shall confer upon the Participant rights, valued as determined by the Committee, and payable to, or exercisable by, the Participant to whom the Performance Award is granted, in whole or in part, as determined by the Committee, conditioned upon the achievement of performance criteria determined by the Committee.

(ii) Other Terms. A Performance Award shall be denominated in Shares and may be payable in cash, Shares, other Awards or other property, and the same may have such other terms as shall be determined by the Committee.

6.04. Restricted Stock. The Committee is authorized to grant Restricted Stock to Participants on the following terms and conditions:

(i) Issuance and Restrictions. Restricted Stock shall be subject to such restrictions on transferability and other restrictions as the Committee may impose (including, without limitation, limitations on the right to vote Restricted Stock or the right to receive dividends thereon), which restrictions may lapse separately or in combination at such times, under such circumstances, in such installments or otherwise as the Committee shall determine.

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(ii) Forfeiture. Performance-Based Restricted Stock shall be forfeited unless the pre-established performance criteria established by the Committee are satisfied during the applicable restriction period. Except as otherwise determined by the Committee, including any vesting of Restricted Stock and accelerated vesting of Performance Accelerated Restricted Stock, upon termination of employment (as determined under criteria established by the Committee) during the applicable restriction period, Performance Accelerated Restricted Stock or other Restricted Stock that is at that time subject to restrictions shall be forfeited and reallocated to other Awards to be granted under the Plan; provided, however, that the Committee may provide, by rule or regulation or in any Award Agreement, or may determine in any individual case, that restrictions or forfeiture conditions relating to Performance Accelerated Restricted Stock or other Restricted Stock will be waived in whole or in part in the event of termination of employment resulting from specified events.

(iii) Certificates of Shares. Restricted Stock granted under the Plan may be evidenced in such manner as the Committee shall determine. If certificates representing Restricted Stock are registered in the name of the Participant, such certificates shall bear an appropriate legend referring to the terms, conditions and

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restrictions applicable to such Restricted Stock, the Company shall retain physical possession of the certificates, and if required by the Committee, the Participant shall deliver a stock power to the Company, endorsed in blank, relating to the Restricted Stock.

(iv) Dividends. Dividends paid on Restricted Stock shall be paid to the Participant in cash. Shares distributed in connection with a stock split or stock dividend, and other property distributed as a dividend, shall be subject to restrictions and a risk of forfeiture to the same extent as the Restricted Stock with respect to which such stock or other property has been distributed.

6.05. Deferred Stock. The Committee is authorized to grant Deferred Stock to Participants on the following terms and conditions:

(i) Award and Restrictions. Delivery of Shares will occur upon expiration of the deferral period specified for Deferred Stock by the Committee (or, if permitted by the Committee, as elected by the Participant). Any deferral election by the Participant that is permitted by the Committee shall be made in accordance with Section 409A of the Code. In addition, Deferred Stock shall be subject to such restrictions as the Committee may impose, which restrictions may lapse at the expiration of the deferral period or at earlier specified times, separately or in combination, in installments or otherwise as the Committee shall determine.

(ii) Forfeiture. Except as otherwise determined by the Committee, upon termination of employment (as determined under criteria established by the Committee) during the applicable deferral period or portion thereof (as provided in the Award Agreement evidencing the Deferred Stock), all Deferred Stock that is at that time subject to deferral (other than a deferral at the election of the Participant) shall be

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forfeited; provided, however, that the Committee may provide, by rule or regulation or in any Award Agreement, or may determine in any individual case, that restrictions or forfeiture conditions relating to Deferred Stock will be waived in whole or in part in the event of termination of employment resulting from specified causes, and the Committee may in other cases waive in whole or in part the forfeiture of Deferred Stock.

6.06. Options. The Committee is authorized to grant Options to Participants on the following terms and conditions:

(i) Exercise Price. The exercise price per Share purchasable under an Option shall be determined by the Committee; provided, however, that such exercise price shall be not less than the Fair Market Value of a Share on the date of grant of such Option. An Option may not be repriced without the approval of Shareholders after the date of grant of such Option. For this purpose, a repricing means any of the following (or such other action that has the same effect as any of the following): (a) amending the terms of an Option to reduce the exercise price of such Option; (b) taking any action that is treated as a repricing under generally accepted accounting principles; and (c) repurchasing for cash or canceling an Option in exchange for another Award at a time when the exercise price of such Option is greater than the Fair Market Value of the Shares, unless the cancellation and exchange occurs in connection with an event set forth in Section 9. Such cancellation and exchange is considered a repricing regardless of whether it is treated as a repricing under generally accepted accounting principles and regardless of whether it is voluntary on the part of the Participant.

(ii) Time and Method of Exercise. The Committee shall determine the time or times at which an Option may be exercised in whole or in part, the methods by

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which such exercise price may be paid or deemed to be paid, the form of such payment, including, without limitation, cash, Shares (including Shares acquired from the Company if held at least six months prior to such exercise), other Awards or awards issued under other Company plans, or other property (including notes or other contractual obligations of Participants to make payment on a deferred basis, such as through “cashless exercise” arrangements), and the methods by which Shares will be delivered or deemed to be delivered to Participants. Options shall expire not later than 10 years after the date of grant.

6.07. Stock Appreciation Rights. The Committee is authorized to grant Stock Appreciation Rights to Participants on the following terms and conditions:

(i) Right to Payment. A Stock Appreciation Right shall confer on the Participant to whom it is granted a right to receive, upon exercise thereof, the excess of (A) the Fair Market Value of one Share on the date of exercise over (B) the grant price of the Stock Appreciation Right as determined by the Committee as of the date of grant of the Stock Appreciation Right, which shall be not less than the Fair Market Value of one Share on the date of grant. A Stock Appreciation Right may not be repriced without the approval of Shareholders after the date of grant of such Stock Appreciation Right. For this purpose, a repricing means any of the following (or such other action that has the same effect as any of the following): (a) amending the terms of a Stock Appreciation Right to reduce the grant price of such Stock Appreciation Right; (b) taking any action that is treated as a repricing under generally accepted accounting principles; and (c) repurchasing for cash or canceling a Stock Appreciation Right in exchange for another Award at a time when the grant price of such Stock Appreciation Right is greater than the

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Fair Market Value of the Shares, unless the cancellation and exchange occurs in connection with an event set forth in Section 9. Such cancellation and exchange is considered a repricing regardless of whether it is treated as a repricing under generally accepted accounting principles and regardless of whether it is voluntary on the part of the Participant.

(ii) Other Terms. The Committee shall determine the time or times at which a Stock Appreciation Right may be exercised in whole or in part, the method of exercise, the method of settlement, the form of consideration payable in settlement, the method by which Shares will be delivered or deemed to be delivered to Participants and any other terms and conditions of any Stock Appreciation Right. Stock Appreciation Rights shall expire not later than 10 years after the date of grant.

6.08. Other Stock-Based Awards. The Committee is authorized to grant to Participants such other Awards that are denominated or payable in, valued in whole or in part by reference to, or otherwise based on or related to, Shares, as deemed by the Committee to be consistent with the purposes of the Plan, including without limitation, Shares awarded purely as a “bonus” and not subject to any restrictions or conditions, convertible or exchangeable debt securities, other rights convertible or exchangeable into Shares, purchase rights and Awards valued by reference to book value of Shares or the value of securities of or the performance of specified Subsidiaries. The Committee shall determine the terms and conditions of such Awards, which may include performance criteria. Shares delivered pursuant to an Award in the nature of a purchase right granted under this Section 6.08 shall be purchased for such consideration, paid for at such times, by such methods and in such forms, including, without limitation, cash, Shares, other Awards or other property, as the Committee shall determine.

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7. Certain Provisions Applicable to Awards.

7.01. Performance-Based Awards. Performance Awards, Performance-Based Restricted Stock, and certain Other Stock-Based Awards subject only to performance criteria are intended to be “qualified performance-based compensation” within the meaning of Section 162(m) of the Code and shall be paid solely on account of the attainment of one or more pre-established, objective performance goals within the meaning of, and subject to such additional approval of the Company’s Shareholders as may be required by, Section 162(m) of the Code and the regulations thereunder. Until otherwise determined by the Committee, the performance goals shall be based upon the attainment of one or more of the following pre-established criteria: net sales; pretax income before allocation of corporate overhead and bonus; budget; earnings per share; net income; division, group, or corporate financial goals; return on stockholders’ equity; return on assets; attainment of strategic and operational initiatives; appreciation in or maintenance of the price of the Common Stock or any other publicly-traded securities of the Company; market share; gross profit; earnings before interest and taxes; earnings before interest, taxes, depreciation and amortization; economic value-added models; comparisons with various stock market indices; or reductions in costs.

The payout of any such Award may be reduced, but not increased, based on the degree of attainment of other performance criteria or otherwise at the direction of the Committee.

7.02. Maximum Yearly Awards. No Participant may be granted an Option or Stock Appreciation Right exceeding 200,000 Shares in any Year. The maximum individual payment with respect to Performance Awards is $2,000,000 in any year or 100,000 Shares in any Year. The maximum number of Shares that may be awarded with respect to Awards of Performance-

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Based Restricted Stock, Performance Accelerated Restricted Stock and Other Stock-Based Awards is 100,000 Shares in any Year or 200,000 Shares in any two-Year period.

7.03. Stand-Alone, Additional, and Tandem Awards. Awards granted under the Plan may, in the discretion of the Committee, be granted either alone or in addition to or in tandem with any other Award granted under the Plan or any award granted under any other plan of the Company, any Subsidiary or any business entity to be acquired by the Company or a Subsidiary, or any other right of a Participant to receive payment from the Company or any Subsidiary. Awards granted in addition to or in tandem with other Awards or awards may be granted either as of the same time as or a different time from the grant of such other Awards or awards.

7.04. Term of Awards. The term of each Award shall be for such period as may be determined by the Committee; provided, however, that in no event shall the term of any Option or a Stock Appreciation Right granted in tandem therewith exceed a period of 10 years from the date of its grant.

7.05. Form of Payment Under Awards. Subject to the terms of the Plan and any applicable Award Agreement, payments to be made by the Company or a Subsidiary upon the grant or exercise of an Award may be made in such forms as the Committee shall determine, including without limitation, cash, Shares, other Awards or other property, and may be made in a single payment or transfer, in installments or on a deferred basis, provided that any such deferred payments satisfy the requirements of Section 409A of the Code. Such payments may include, without limitation, provisions for the payment or crediting of reasonable interest on installment or deferred payments, subject in any event to the requirements of Section 162(m) of the Code.

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8. General Restrictions Applicable to Awards.

8.01. Compliance with Rule 16b-3. It is the intent of the Company that this Plan comply in all respects with Rule 16b-3 in connection with any Award granted to a person who is subject to Section 16 of the Exchange Act. Accordingly, if any provision of this Plan or any Award Agreement does not comply with the requirements of Rule 16b-3 as then applicable to any such person, such provision shall be construed or deemed amended to the extent necessary to conform to such requirements with respect to such person.

8.02. Limits on Transfer of Awards; Beneficiaries. No right or interest of a Participant in any Award shall be pledged, encumbered or hypothecated to or in favor of any party (other than the Company or a Subsidiary) or shall be subject to any lien, obligation or liability of such Participant to any party (other than the Company or a Subsidiary). No Award subject to any restriction shall be assignable or transferable by a Participant otherwise than by will or the laws of descent and distribution (except to the Company under the terms of the Plan); provided, however, that a Participant may, in the manner established by the Committee, designate a beneficiary or beneficiaries to exercise the rights of the Participant and to receive any distribution with respect to any Award upon the death of the Participant. A beneficiary, guardian, legal representative or other person claiming any rights under the Plan from or through any Participant shall be subject to all terms and conditions of the Plan and any Award Agreement applicable to such Participant.

8.03. Registration and Listing Compliance. The Company shall not be obligated to deliver any Award or distribute any Shares with respect to any Award in a transaction subject to regulatory approval, registration or any other applicable requirement of federal or state law, or subject to a listing requirement under any listing or similar agreement between the Company and

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any national securities exchange, until such laws, regulations and contractual obligations of the Company have been complied with in full, although the Company shall be obligated to use reasonable efforts to obtain any such approval and comply with such requirements as promptly as practicable.

8.04. Share Certificates. All certificates for Shares delivered under the Plan pursuant to any Award or the exercise thereof shall be subject to such stop-transfer order and other restrictions as the Committee may deem advisable under applicable federal or state laws, rules and regulations thereunder, and the rules of any national securities exchange on which Shares are listed. The Committee may cause a legend or legends to be placed on any such certificates to make appropriate reference to such restrictions or any other restrictions that may be applicable to Shares, including under the terms of the Plan or any Award Agreement. In addition, during any period in which Awards or Shares are subject to restrictions under the terms of the Plan or any Award Agreement, or during any period during which delivery or receipt of an Award or Shares has been deferred by the Committee or a Participant, the Committee may require the Participant to enter into an agreement providing that certificates representing Shares issuable or issued pursuant to an Award shall remain in the physical custody of the Company or such other person as the Committee may designate.

9. Adjustment Provisions. In the event that the Committee shall determine that any dividend or other distribution (whether in the form of cash, Shares or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, spin-off, combination, repurchase or share exchange or other similar corporate transaction or event affects the Shares such that an adjustment is determined by the Committee to be appropriate in order to prevent dilution or enlargement of the rights of Participants under the Plan, then the Committee

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shall, in such manner as it may deem equitable, adjust any or all of (i) the number and kind of Shares which may thereafter be issued in connection with Awards, (ii) the number and kind of Shares issued or issuable in respect of outstanding Awards, and (iii) the exercise price, grant price or purchase price relating to any Award or, if deemed appropriate, make provision for a cash payment with respect to any outstanding Award. In addition, the Committee is authorized to make adjustments in the terms and conditions of, and the criteria included in, Awards (other than Options or Stock Appreciation Rights that would create a deferral of income or a modification, extension or renewal under Section 409A of the Code of any Option or Stock Appreciation Right, except as may be permitted in applicable Treasury Regulations) in recognition of unusual or nonrecurring events (including, without limitation, events described in the preceding sentence) affecting the Company or any Subsidiary or the financial statements of the Company or any Subsidiary, or in response to changes in applicable laws, regulations or accounting principles.

10. Plan Amendments. The Board may amend, alter, suspend, discontinue or terminate the Plan without the consent of Shareholders or Participants, except that any such amendment, alteration, suspension, discontinuation or termination shall be subject to the approval of the Company’s Shareholders no later than one year after such Board action if such Shareholder approval is required by any federal or state law or regulation, including without limitation Section 162(m) of the Code, or the rules of any stock exchange on which the Shares may be listed, or if the Board in its discretion determines that obtaining such Shareholder approval is for any reason advisable; provided, however, that without the consent of an affected Participant, no amendment, alteration, suspension, discontinuation or termination of the Plan may impair the rights of such Participant under any Award theretofore granted to him.

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11. General Provisions.

11.01. No Rights to Awards. No Participant or employee shall have any claim to be granted any Award under the Plan, and there is no obligation for uniformity of treatment of Participants and employees.

11.02. No Shareholder Rights. No Award shall confer on any Participant any of the rights of a Shareholder of the Company unless and until Shares are duly issued or transferred to the Participant in accordance with the terms of the Award.

11.03. Tax Withholding. The Company or any Subsidiary is authorized to withhold from any Award granted, any payment relating to an Award under the Plan, including from a distribution of Shares, or any payroll or other payment to a Participant, amounts for withholding and other taxes due with respect thereto, its exercise or any payment thereunder and to take such other action as the Committee may deem necessary or advisable to enable the Company and Participants to satisfy obligations for the payment of withholding taxes and other tax liabilities relating to any Award. This authority shall only include authority to withhold or receive Shares or other property and to make cash payments in respect thereof in satisfaction of a Participant’s minimum withholding tax obligations.

11.04. No Right to Employment. Nothing contained in the Plan or any Award Agreement shall confer, and no grant of an Award shall be construed as conferring, upon any employee any right to continue in the employ of the Company or any Subsidiary or to interfere in any way with the right of the Company or any Subsidiary to terminate his employment at any time or increase or decrease his compensation from the rate in existence at the time of granting of an Award.

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11.05. Unfunded Status of Awards. The Plan is intended to constitute an “unfunded” plan for incentive and deferred compensation. With respect to any payments not yet made to a Participant pursuant to an Award, nothing contained in the Plan or any Award Agreement shall give any such Participant any rights that are greater than those of a general creditor of the Company; provided, however, that the Committee may authorize the creation of trusts or make other arrangements to meet the Company’s obligations under the Plan to deliver cash, Shares, other Awards or other property pursuant to any award, which trusts or other arrangements shall be consistent with the “unfunded” status of the Plan unless the Committee otherwise determines with the consent of each affected Participant.

11.06. Other Compensatory Arrangements. The Company or any Subsidiary shall be permitted to adopt other or additional compensation arrangements (which may include arrangements which relate to Awards), and such arrangements may be either generally applicable or applicable only in specific cases.

11.07. Fractional Shares. No fractional Shares shall be issued or delivered pursuant to the Plan or any Award. The Committee shall determine whether cash, other Awards or other property shall be issued or paid in lieu of fractional Shares or whether such fractional Shares or any rights thereto shall be forfeited or otherwise eliminated.

11.08. Governing Law. The validity, construction and effect of the Plan, any rules and regulations relating to the Plan and any Award Agreement shall be determined in accordance with the laws of the Commonwealth of Virginia, without giving effect to principles of conflicts of laws and applicable federal law.

12. Effective Date. The amended and restated Plan shall become effective upon the approval of the affirmative vote of the holders of a majority of the votes cast by the holders of

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Class A and Class B Common Stock of the Company, voting together and not as separate classes, at a meeting of the Company’s Shareholders to be held on April 26, 2007, or any adjournment thereof.

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EX-10.30

Exhibit 10.30

NEWSPRINT PURCHASE CONTRACT

This Newsprint Purchase Contract (this “Agreement”) is made as of September 5, 2007 (the “Execution Date”) and is effective as of September 1, 2007 (the “Effective Date”), by and between SP Newsprint Co., a Georgia general partnership (f/k/a Southeast Paper Manufacturing Company) (“SP”), and Media General Operations, Inc., a Delaware corporation (“Media General”) (“Purchaser”). SP and Purchaser are referred to herein as the “Parties” and each, individually, as a “Party”.

WHEREAS, SP entered into separate agreements, each dated April 20, 1977, with Media General, Knight-Ridder, Inc. (“Knight-Ridder”), a Florida corporation (by way of reference, Knight-Rider was acquired by McClatchy in 2006) and Cox Enterprises, Inc., a Delaware corporation (“Cox”) (collectively, the “1977 Agreements”), for the purchase of newsprint from SP’s mill located near Dublin, Georgia (“Dublin Mill”); and

WHEREAS, SP, Media General, Knight-Ridder and Cox terminated the 1977 Agreements and entered into that certain Amended Newsprint Purchase Contract, dated as of November 1, 1987, by and among SP, Media General, Knight-Ridder and Cox (the “1987 Agreement”), for the purchase of newsprint from the Dublin Mill;

WHEREAS, the 1987 Agreement expires as of October 31, 2007;

WHEREAS, SP desires to enter into a new agreement, effective as of the Effective Date, with Purchaser for the purchase of newsprint from SP’s then-current facilities, including any SP facilities acquired or otherwise utilized by SP after the Effective Date (“SP Facilities”); and

WHEREAS, simultaneously with the execution of this Agreement, SP is entering into a similar agreement with each of Media General (“Media General Agreement”), McClatchy (“McClatchy Agreement”) and Cox Newsprint Supply (“Cox Agreement”) (with this Agreement, the Media General Agreement, McClatchy Agreement and the Cox Agreement, collectively and together with this Agreement, referred to herein as “Purchase Contracts” and the parties thereto and hereto, other than SP, collectively referred to herein as “Purchasers”).

NOW, THEREFORE, in consideration of the mutual covenants and conditions contained herein, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties hereby agree as follows:

1. TERM

1.1 SP agrees to sell and Purchaser agrees to purchase white standard commercial newsprint paper (in accordance with the specifications set forth in Section 6 below) (“Newsprint”) upon the terms and conditions contained herein. Subject to Section 1.2, this Agreement shall be for an initial term of five (5) years from the Effective Date unless sooner terminated as provided herein and will automatically renew for successive five (5) year terms unless terminated by either Party upon prior written notice to the other Party at least one year prior to the expiration of the then-current term.

1.2 Notwithstanding Section 1.1, if there is a Change in Control of SP (i) the initial term of this Agreement shall be six (6) years from date of the Change in Control unless sooner terminated as provided herein; and (ii) such six (6) year term will automatically renew for successive one (1) year terms unless terminated by either Party upon prior written notice to the other Party at least two (2) years prior to the expiration of the then-current term. For clarification, following a Change in Control of SP, this Agreement will terminate six (6) years from the date of the Change in Control if written notice of such termination is received prior to the fourth anniversary of the date of the Change in Control. The following example is provided for further clarification:

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Following a Change in Control of SP that is effective as of January 1, 2008, the initial term of this Agreement would end six (6) years after January 1, 2008 (or December 31, 2013), except that this Agreement will automatically renew for an additional one (1) year term unless written notice of termination is received prior to January 1, 2012. Further, this Agreement will be extended for additional renewal terms of one (1) year each unless written notice of termination is receive prior to January 1 of each subsequent year. As a result, in order for a Party to terminate this Agreement effective December 31, 2014, written notice of such termination must be received prior to January 1, 2013.

“Change in Control” shall mean the: (a) consolidation or merger of an entity with or into any entity in which the interest holders or shareholders of the first entity immediately prior to such transaction are not holders of a majority of the voting power of the surviving entity immediately thereafter; (b) sale, transfer, or other disposition of all or substantially all of the assets of an entity to a person or entity; or (c) acquisition by any person or entity, or group of persons or entities acting in concert, of Control of the outstanding voting securities or other ownership interests of an entity. “Control” or “Controlled” shall mean, with respect to any entity, the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such entity, whether through the ownership of voting securities (or other ownership interest), by contract or otherwise.

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2. PURCHASE OBLIGATIONS

2.1 Amount.

Purchaser agrees to purchase Newsprint from SP in the annual amount of 35,000 tons of Newsprint per calendar year (“Annual Tonnage Commitment”). Such annual amount (i) will be pro rated for any partial year under this Agreement and (ii) will be purchased by Purchaser at an approximate rate of 1/12 of the annual tonnage per month.

Purchaser may elect, upon written notice to SP within ten (10) days following the execution of this Agreement and/or within thirty (30) days following a Change of Control of SP, to adjust (but not below the Annual Tonnage Commitment as defined in the paragraph above) Purchaser’s Annual Tonnage Commitment for the remainder of 2007 (on a pro rated basis) and Purchaser’s Annual Tonnage Commitment for 2008 (which adjusted Annual Tonnage Commitment will be effective only for the remainder of 2007 or 2008, as the case may be) to an amount not to exceed the amount of Newsprint purchased by Purchaser from SP during the previous twelve (12) month period under this Agreement and the 1987 Agreement at the prices set forth in this Agreement. With respect to the Annual Tonnage Commitment for each year thereafter, on or prior to the end of the third quarter of each calendar year: (i) Purchaser may elect on an annual basis, upon written notice to SP, to increase Purchaser’s Annual Tonnage Commitment for the following calendar year (which increased Annual Tonnage Commitment will be effective only for such calendar year) to an amount not to exceed the amount of Newsprint purchased by Purchaser from SP during the previous twelve (12) month period at the prices set forth in this Agreement; and (ii) tonnage allotment for each SP Facility will be determined by the Parties for the following calendar year. Except as set forth in this Section 2.1, purchases of Newsprint in excess of Purchaser’s Annual Tonnage Commitment and/or changes in allotments for each SP Facility will be subject to the mutual agreement of Purchaser and SP.

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For purposes of this Section 2.1, a ton means a short (2,000 lb.) ton with the tonnage obligations being actual tons as weighed on a scale (and not recalculated on an equivalent ton basis if average basis weight changes).

2.2 Shortages.

If the amount of Newsprint available for distribution by SP in any given month is, or is reasonably estimated by SP to be, less than the amount to be supplied by SP to (a) Purchasers, (b) customers with a firm written commitment from SP with an initial term of at least five years, and (c) customers of SP where SP has been the sole supplier of Newsprint for a period of at least six months preceding the applicable month of such shortage (collectively with Purchasers, the “Take-or-Pay Customers”), the Parties will cooperate in good faith to adjust the amount of tonnage to be distributed to Purchaser for such month, including adjusting any scheduled monthly deliveries and/or providing for increased shipments in a subsequent month. SP also agrees to work with other Take-or-Pay Customers to make adjustments in their tonnage distributions (including any scheduled monthly deliveries and/or providing for increased shipments in a subsequent month) and to use commercially reasonable efforts to include language substantially similar to the preceding sentence of this Agreement in all future Agreements with Take-or-Pay Customers. If the Parties do not mutually agree to adjust such scheduled monthly deliveries and/or provide for increased shipments in a subsequent month, (i) such shortage shall first be allocated among all of the customers of SP, other than Take-or-Pay Customers, and to the extent a shortage still exists, any remaining shortage shall be allocated among the Take-or-Pay Customers in proportion to the amount of Newsprint

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actually purchased from SP by the Take-or-Pay Customers in the in the prior three months, and (ii) the Annual Tonnage Commitment for the remainder of the term of this Agreement (or such lesser period as Purchaser may elect) will be reduced by the amount of the applicable shortage.

2.3 Affiliates.

“Affiliate” shall mean, as applied to a specified entity, (i) any other entity that directly or indirectly, through one or more intermediaries, Controls, is Controlled by or is under common Control with, the specified entity, (ii) any other entity that directly or indirectly, through one or more intermediaries, owns 20% or more of any class of equity securities (including any equity securities issuable upon the exercise of any option or convertible security) of the specified entity, or (iii) any other entity 20% or more of any class of equity securities (including any equity securities issuable upon the exercise of any option or convertible security) of which is owned or Controlled by the specified entity. Upon the written request of Purchaser to SP at any time, Purchaser may elect either or both of the following options: (i) purchases of Newsprint by or for the benefit of Purchaser’s Affiliates from SP shall count toward the fulfillment of Purchaser’s Annual Tonnage Commitment under Section 2.1 of this Agreement; or (ii) such Affiliates shall be entitled to purchase the Newsprint at Purchaser’s price.

Notwithstanding the foregoing paragraph, if an entity becomes an Affiliate of Purchaser and such entity had in force a Newsprint purchase contract with SP at the time it became an Affiliate, the quantity of Newsprint purchased by such entity may, upon Purchaser’s request, count toward Purchaser’s fulfillment of its Annual Tonnage Commitment under Section 2.1 hereof upon the earlier of (x) the expiration or termination of such Affiliate’s then-current agreement to purchase Newsprint from SP,

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and (y) twelve (12) months after Purchaser’s written notice to SP that Purchaser has acquired such Affiliate and is electing to count the quantity of Newsprint purchased by such entity toward Purchaser’s fulfillment of its Annual Tonnage Commitment, (except, in all cases, at the written request of Purchaser and upon becoming an Affiliate of Purchaser, such Affiliates shall be entitled to Purchaser’s purchase price for Newsprint).

Except to the extent that Purchaser partially assigns this Agreement pursuant to Section 13, if Purchaser divests an Affiliate, and/or sells a publication or publications, then the purchases of Newsprint by such divested entity or buyer of divested assets shall count towards fulfillment of Purchaser’s Annual Tonnage Commitment set forth in Section 2.1 of this Agreement if the Purchaser acts as purchasing agent for such divested entity or buyer of divested assets or otherwise negotiates or facilitates purchases of Newsprint on behalf of such divested entity or buyer of divested assets as agent, consultant or otherwise. For example, if such divested entity or buyer of divested assets does not enter into an agreement with SP containing terms and conditions substantially similar to the terms and conditions set forth in this Agreement such that Purchaser is not entitled to partially assign this Agreement pursuant to Section 13 hereof, but such divested entity or buyer of divested assets continues to buy Newsprint from SP at Purchaser’s request, then such purchases of Newsprint shall count towards fulfillment of Purchaser’s Annual Tonnage Commitment set forth in Section 2.1 of this Agreement.

Notwithstanding any other provision in this Agreement, each Party will be responsible for its Affiliates’ (other than divested Affiliates) compliance with the terms and conditions of this Agreement.

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3. PRICE

3.1 Price Per Ton.

The price per ton (2,000 pounds) of Newsprint to be paid by Purchaser under this Agreement shall be the lowest quartile weighted average price of all Purchase Contracts to purchase Newsprint executed by Media General, McClatchy and Cox Newsprint Supply, calculated in accordance with the methodology set forth in Section 3.2 below (including freight costs or charges). Such price per ton will be determined at the time of shipment for deliveries to the destination to which Purchaser directs, less any discounts as may be determined by SP. If one or more Purchase Contracts are terminated or if additional Purchase Contracts are added pursuant to Section 13 of this Agreement, the price per ton of Newsprint will equal the lowest quartile weighted average price of the Purchase Contracts then in effect. The price per ton by basis weight of Newsprint shall be the same for each Purchaser.

3.2 Pricing Methodology.

Purchaser will provide a blind listing of all of its current purchase orders from newsprint suppliers with whom Purchaser has no equity interest to the Chief Executive Officer or the Chief Financial Officer of SP, which listing will include the following information for each purchase order:

(a) the transaction price, as determined in accordance with generally accepted accounting principles;

(b) the tonnage for the month; and

(c) the basis weight.

SP will provide an estimate of the purchase price for the applicable quarter based upon such information and based upon market forecasts. Pricing for the then-current quarter will be adjusted prior to the fifteenth (15^th) day of the third (3^rd) month of each calendar quarter to reflect the actual price for such quarter. The actual quarterly price

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will be the monthly weighted average price for such quarter, as determined by calculating the average of the three monthly prices in such quarter (i.e., the sum of the three monthly weighted average prices divided by three). An example of the pricing methodology is set forth on Attachment A to this Agreement.

3.3 Change in Control.

If there is a Change in Control of SP, then Purchaser, McClatchy and Cox Newsprint Supply, will select an independent third-party accounting firm reasonably acceptable to SP (or its successor, if applicable) to receive the information described in Section 3.2 from Purchasers with respect to pricing under this Agreement and the other Purchase Contracts. Such third-party accounting firm will be selected by a majority of Purchaser, McClatchy and Cox Newsprint Supply (with Purchaser, McClatchy and Cox Newsprint Supply, having one vote). Any fees attributable to such third-party accounting firm will be borne equally by Purchasers. The third-party accounting firm will forward the price calculations to the Chief Executive Officer and Chief Financial Officer of SP (or its successor, if applicable) in accordance with section 3.2 herein. Any pricing submitted to such third-party accounting firm by Purchasers as well as calculations derived by such third-party accounting firm will be subject to audit by SP (or its successor, if applicable). If such audit is requested, SP (or its successor, if applicable), will utilize a separate third-party accounting firm acceptable to Purchaser, McClatchy and Cox Newsprint Supply. Cost of such audit will be borne by SP (or its successor, if applicable).

4. SHIPMENT

4.1 The Newsprint shall be shipped in rolls with freight allowed to such destinations as Purchaser shall specify. Freight costs shall not include warehousing, storage, local cartage, delivery or similar charges not customarily allowed in SP Newsprint agreements, with such costs to be borne by Purchaser.

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4.2 Route and carrier shall be determined by SP, and delivery will be made by truck or rail f.o.b. SP’s Facility with freight prepaid to destination.

4.3 As an incentive for Purchaser to select shipping destinations beneficial to SP, a freight allowance (“Freight Allowance”) will be offered by SP for each Purchaser shipping destination that has all-in freight rates for tons purchased by Purchaser under this Agreement that are lower than SP’s average all-in freight rate, excluding the Purchase Contracts. Such Freight Allowance will be determined as follows:

(a) SP will calculate its average all-in freight rate for all of its customers for each SP Facility, excluding the Purchase Contracts for the then-current calendar quarter, to establish a freight rate baseline.

(b) SP will calculate Purchaser’s average all-in freight rate under this Agreement for each SP Facility and each Purchaser shipping destination for the then-current calendar quarter.

(c) Purchaser will be entitled to a Freight Allowance for the subsequent calendar quarter for each Purchaser shipping destination with an all-in freight rate calculated in Section 4.3(b) that is lower than SP’s freight rate baseline calculated in Section 4.3(a). For clarification, the Freight Allowance will be calculated separately for each SP Facility and each Purchaser shipping destination, with such Freight Allowance being calculated as the difference per ton between the freight rate baseline and

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the Purchaser’s all-in freight rate. No Freight Allowance will be paid for any Purchaser shipping destination with all-in freight rates that exceed the applicable freight rate baseline for then-current quarter. Freight Allowances will be calculated and revised on a quarterly basis, with any applicable changes being applied to all shipments beginning on the first calendar day of each quarter and ending on the last calendar day of each quarter.

(d) The Freight Allowance, if applicable, will be applied to all tons shipped to the shipping destination of Purchaser from each SP Facility during such calendar quarter.

(e) Payment of the Freight Allowance will be made in a manner that is mutually agreed to by the Parties. For example, Freight Allowances may be aggregated for all Purchaser shipping destinations to which Newsprint is provided under this Agreement and issued by SP monthly or quarterly as a single credit, or issued as a credit to individual invoices.

An example of the Freight Allowance methodology is set forth on Attachment B to this Agreement.

5. TITLE

Title to the Newsprint shall pass to Purchaser in the event of shipment by independent carrier upon delivery to such independent carrier, or its agent, consigned to Purchaser, or in the event of shipment by other than independent carrier, upon delivery to Purchaser or its agent.

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6. SPECIFICATIONS

The basis weight of the Newsprint shall be customary ranges defined from time-to-time as newsprint (e.g., 43 grams per meter squared (gsm) to 52.1 gsm). Purchaser shall provide SP, prior to the 15^th day of each month, with complete specification expressed in tons with respect to core size, roll widths and diameter for the shipments to be made during the following month. If SP fails to receive such specification from Purchaser, SP may deliver Newsprint in accordance with the specifications last received. Rolls shall be wound on non-returnable paper cores unless Purchaser requests returnable metal tip cores.

Quality specifications are set forth in Attachment C to this Agreement. Attachment C may be amended from time-to-time upon the prior written approval of both Parties, which approval will not be unreasonably withheld or delayed, to reflect changes in applicable industry standards during the term of this Agreement.

If Newsprint delivered to Purchaser by SP does not comply with the quality specifications set forth on Attachment C, Purchaser will notify SP in writing (or by telephone or email if promptly confirmed in writing by Purchaser) promptly upon Purchaser’s knowledge of such non-compliance, including providing SP with reasonably specific detail of the items and reasons for such non-compliance. Upon SP’s receipt of such notice of non-compliance, (i) SP will use commercially reasonable efforts to remedy such non-compliance (and, upon SP’s reasonable request, Purchaser will use commercially reasonable efforts to assist SP in its attempt to remedy such non-compliance provided that Purchaser shall not be required to assist with or accept any remedy that is inconsistent with Purchaser’s past practices) , and/or (ii) SP may, at its sole expense and within thirty (30) days of SP’s receipt of such notice, supply Purchaser

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with Newsprint from an alternate SP Facility that complies with the quality specifications set forth on Attachment C. If SP remedies such non-compliance as to quality and quantity of Newsprint within such thirty (30) day period, there will be no adjustment to Purchaser’s Annual Tonnage Commitment.

If SP is unable to provide Newsprint in the required quantities that complies with the quality specifications set forth on Attachment C within such thirty (30) day period, Purchaser may elect, upon ninety (90) days prior written notice to SP, to reduce its Annual Tonnage Commitment:

(i) for the remainder of the term of this Agreement (or such lesser period as Purchaser may elect) by an amount, calculated on an ongoing basis, equal to the Tonnage Reduction Amount; provided, however, if SP cures such non-conformance as to quality and quantity within such ninety (90) day period, Purchaser will promptly resume its Annual Tonnage Commitment for the then-current year (except to the extent of any applicable Surplus Amount during such then-current year) and in full for the remainder of the term of the Agreement thereafter; and

(ii) for the then-current year by an amount equal to the Surplus Amount, if any.

For clarification, Purchaser will not be responsible for purchasing, and the Annual Tonnage Commitment for the then-current year will be reduced by, the Surplus Amount (if any).

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The “Tonnage Reduction Amount” means the amount of Newsprint that SP is obligated to provide under this Agreement minus the amount of Newsprint that SP delivers in accordance with the quality specifications set forth on Attachment C.

The “Surplus Amount” means (a) the amount of Newsprint that SP delivers in accordance with the quality specifications set forth on Attachment C during the applicable period, plus (b) the amount of newsprint that Purchaser acquired from other sources for the applicable period (and not for future periods) that SP did not supply Newsprint in accordance with the quality specifications set forth on Attachment C, minus (c) the amount of Newsprint that SP is obligated to provide under this Agreement during the applicable period.

In addition, if (a) Newsprint delivered to Purchaser by SP does not comply with the quality specifications set forth on Attachment C and SP does not cure such failure as to quality and quantity within the ninety (90) day period set forth above two (2) or more times during any twelve (12) month period, and (b) such non-conforming Newsprint equals at least ten thousand (10,000) tons, then, Purchaser may elect, within sixty (60) days of the occurrence of the second (or more) such failure to conform, to terminate this Agreement upon sixty (60) days prior written notice to SP. For example, if there are five occurrences of such noncompliance that are not cured within the ninety (90) period set forth above and Purchaser has not elected to terminate, Purchaser may still elect to terminate within sixty (60) days of the most recent uncured noncompliance if the last two occurrences (i.e., the fourth and fifth occurrences) were within the preceding twelve (12) month period. The foregoing termination right is not an exclusive remedy and is in addition to any other rights or remedies Purchaser may have under this Agreement at law or in equity.

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7. INVOICES

Invoices shall be based on the gross weight of rolls on shipment, including paper, wrappings and plugs.

8. TERMS OF PAYMENT AND TAXES

Terms of payment shall be net cash no later than the last day of the month for Newsprint delivered to Purchaser during the previous month. Interest at the rate of either 6% per annum or the “Base Rate” charged from time to time by Citibank, New York, New York, plus 1%, whichever is greater, shall be paid on all amounts remaining unpaid following the due dates. Any taxes, levies, rates, assessments or duties imposed by any governmental authority, other than taxes measured by SP’s profits, which directly or indirectly apply to the Newsprint, shall be paid by Purchaser.

9. CLAIMS

No allowance shall be made for Newsprint left on cores or for waste or damage after delivery of the Newsprint to a carrier for shipment to Purchaser, unless such damage is not visible on delivery in which case a claim must be made by Purchaser to SP within fifteen (15) days after the removal of the wrapper. No claim shall be allowed for consequential damage. In case of a claim by Purchaser of any nature with respect to any shipment of the Newsprint pursuant hereto, Purchaser shall notify SP thereof within 15 days after the receipt of such shipment. If Purchaser fails to give such notice, it shall be deemed to have waived such claim.

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10. CONTINGENCIES

In case SP shall be unable or fail at any time to supply or ship any Newsprint covered by this Agreement because of war, terrorist attack, national defense, riot, civil commotion, act of the public enemy, act of God, fire, explosion, accident, strike, lockout, labor disturbances, flood, drought, embargo, or any other delay or contingency resulting from a cause or causes beyond its reasonable control (“force majeure”), SP shall not be liable to Purchaser for any failure to supply such Newsprint in proportion to the extent of such disability nor for any delay due to force majeure; and if Purchaser shall be unable or shall fail at any time to take any of the Newsprint in consequence of force majeure, Purchaser likewise shall not be liable to SP for any such failure in proportion to its disability or for any delay. Notwithstanding the foregoing, Purchaser agrees to accept shipments in transit when any of the above described events occur.

11. DEFAULT

If Purchaser fails to pay any amount due hereunder or fails to perform any other provisions of this Agreement, SP may, notwithstanding any other provisions of this Agreement, and in addition to any other remedies available to it under applicable law, make deliveries subject to payment upon presentation of sight draft attached to Bill of Lading or refuse to furnish any additional Newsprint hereunder to Purchaser and declare the obligations of Purchaser hereunder due forthwith, but Purchaser shall remain liable to SP for all loss and damage sustained by reason of such failure.

12. NOTICES

Except as otherwise expressly set forth in this Agreement, all notices given hereunder shall be in writing and shall be delivered in hard copy using one of the following methods and shall be deemed delivered upon receipt: (i) by hand, (ii) by an express courier with a reliable system for tracking delivery, or (iii) by registered or

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certified mail, return receipt requested, postage prepaid. Unless otherwise notified by a Party to the other Party in the manner specified above, the foregoing notices shall be delivered as follows:

If to SP:

SP Newsprint Co.

Vice President of Marketing

245 Peachtree Center Avenue

Atlanta, Georgia 30303

with a copy to:

SP Newsprint Co.

Vice President of Operations

245 Peachtree Center Avenue

Atlanta, Georgia 30303

If to Purchaser:

Media General Operations, Inc.

c/o Media General, Inc.

333 East Franklin Street

Richmond, VA 23219

Attention: Treasurer

with a copy to:

Media General Operations, Inc.

c/o Media General, Inc.

333 East Franklin Street

Richmond, VA 23219

Attention: General Counsel

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13. ASSIGNMENT

Except as otherwise set forth below in this Section 13, this Agreement may not be assigned by either Party without the written consent of the other Party and any such attempted assignment will be void. This Agreement may be assigned by a Party, without the consent of the other Party, upon written notice to other Party (i) in connection with a Change in Control of a Party, (ii) in the case of Purchaser, to an Affiliate; provided, however, such assignment will not relieve Purchaser of its obligations hereunder, or (iii) in the case of SP, by SP to one or more lenders as security for indebtedness for borrowed money.

Additionally, upon the prior written consent of SP (which consent will not be unreasonably withheld or delayed), if Purchaser divests an Affiliate that received, and/or sells a publication or publications that consumed, at least five thousand (5,000) tons of Newsprint under this Agreement from SP during the preceding twelve (12) month period and such divested entity or buyer of divested assets agrees to be bound by terms and conditions substantially similar to the terms and conditions set forth in this Agreement (including, without limitation, agreeing to an annual tonnage commitment for the remainder of the term of this Agreement), then, Purchaser may assign its rights and delegate its obligations to such divested entity or buyer of divested assets. Upon such assignment and delegation (or other assignment and delegation consented to in writing by SP), (i) such divested entity or buyer of divested assets will be included in the definition of “Purchasers” under this Agreement; (ii) the agreement between SP and such divested entity or buyer of divested assets will be included with the definition of “Purchase Contracts” under this Agreement; and (iii) the Annual Tonnage Commitment set forth in Section 2.1 shall be reduced by an amount equal to the annual tonnage commitment that

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the third party agrees to purchase from SP for such period under this Agreement as the third party agrees to make such annual tonnage commitment, and Purchaser shall be fully released with respect to all obligations relating thereto.

14. CONTRACT COMPLETE

This Agreement sets forth the entire agreement of the Parties, including all of the terms and conditions of the agreement between the Parties with respect to the sale and purchase of the Newsprint, and supersedes all prior executed and unexecuted versions of this Agreement. This Agreement may not be altered in any respect by either Party, except with the consent of both Parties in writing executed by their respective duly authorized officers; provided, however, prior to a Change in Control of SP, this Agreement may not be altered in any respect by either Party, except with consent of both Parties in writing executed by their respective duly authorized officers and the prior consent of the SP Management Board. This Agreement is the valid and binding Agreement of the Parties and their permitted successors and assigns. The Parties acknowledge that newsprint purchase contracts are frequently treated by the parties thereto and by the newsprint and newspaper industries merely as expressions of intent, and not as binding contractual commitments legally enforceable in accordance with their terms. However, the Parties expressly disclaim and negate such usage of trade or industry practices, and any prior course of dealing between the Parties, or between SP and others, which may have followed such usage of trade, and the Parties explicitly agree and affirm that this Agreement is valid, binding and legally enforceable upon them in accordance with its terms, and that either Party may seek specific performance hereof in a court of appropriate jurisdiction.

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15. CONFIDENTIALITY

15.1 Confidential Information.

From time to time, either Party (the “Disclosing Party”) may disclose or make available to the other Party (the “Receiving Party”), whether orally or in physical form, confidential or proprietary information concerning the Disclosing Party and/or its business, products, services or deliverables from its professional advisors or agents (together, “Confidential Information”) in connection with this Agreement. Each Party agrees that during the term of this Agreement and thereafter (i) it will use Confidential Information belonging to the Disclosing Party solely for the purpose(s) of this Agreement and (ii) it will take all reasonable precautions to ensure that it does not disclose Confidential Information belonging to the Disclosing Party to any third party (other than the Receiving Party’s employees, agents and/or professional advisors on a need-to-know basis who are made aware of the nondisclosure and limited use obligations contained herein) without first obtaining the Disclosing Party’s written consent. The Receiving Party is responsible for any breach of the confidentiality provisions of this Agreement by its employees or agents. Upon request by the Disclosing Party, the Receiving Party will return all copies of any Confidential Information to the Disclosing Party. For Confidential Information that does not constitute “trade secrets” under applicable law, these confidentiality obligations will expire three (3) years after the termination or expiration of this Agreement.

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15.2 Exceptions.

For purposes hereof, “Confidential Information” will not include any information that the Receiving Party can establish by written evidence (i) was independently developed by the Receiving Party without use of or reference to any Confidential Information belonging to the Disclosing Party; (ii) was acquired by the Receiving Party from a third party having the legal right to furnish same to the Receiving Party; (iii) was at the time in question (whether at disclosure or thereafter) generally known by or available to the public (through no fault of the Receiving Party); or (iv) was in possession of or known to the Receiving Party prior to the disclosure by the Disclosing Party.

15.3 Governmental Authorities.

These confidentiality obligations will not restrict any disclosure required by order of a court or any government agency, provided that the Receiving Party gives prompt notice to the Disclosing Party of any such order and reasonably cooperates with the Disclosing Party at the Disclosing Party’s request and expense to resist such order or to obtain a protective order.

16. APPLICABLE LAW

This contract shall be governed by the laws of the State of Georgia, without regard to or application of conflicts of laws rules or principles.

17. RIGHTS OF THE PARTIES ARE CUMULATIVE

The rights of the Parties hereunder are cumulative and no exercise or enforcement by a Party of any right or remedy hereunder shall preclude the exercise or enforcement by a Party of any other right or remedy hereunder or which a Party is entitled by law or equity to enforce.

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18. 1987 AGREEMENT

On the Effective Date, the Parties acknowledge and agree that this Agreement will be in full force and effect and that the 1987 Agreement will terminate; provided, however (i) the annual tonnage commitment set forth in Section 2 of the 1987 Agreement, including any applicable obligation relating to surplus Newsprint set forth in Section 2.2(b) of the 1987 Agreement, will continue to apply through the end of the term of the 1987 Agreement (October 31, 2007), and (ii) the Annual Tonnage Commitment set forth in this Agreement will not be applicable until November 1, 2007.

[signatures on next page]

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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Execution Date set forth above.

SP NEWSPRINT CO.
By:	/s/ Joseph R. Gorman
Name:	Joseph R. Gorman
Title:	President
MEDIA GENERAL OPERATIONS, INC.
By:	/s/ John A. Schauss
Name:	John A. Schauss
Title:	Treasurer

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Attachment A

SP Newsprint Co.

Methodology To Calculate First Quartile Weighted Average

All Numbers Hypothetical - Listing of Purchaser Contracts Sorted by Price

	Metric Tons					First Quartile				Second Quartile				Third Quartile			Fourth Quartile
Contracts		Price		Total		Tons	Price		Total	Tons	Price		Total	Tons	Price	Total	Tons	Price		Total
1	8,000	$	715.00	$	5,720,000	8,000	$	715.00	5,720,000	—			—
2	2,500	$	720.00	$	1,800,000	2,000	$	720.00	1,440,000	500	$	720.00	360,000
3	900	$	720.00	$	648,000					900	$	720.00	648,000
4	2,700	$	720.00	$	1,944,000					2,700	$	720.00	1,944,000
5	750	$	720.00	$	540,000					750	$	720.00	540,000
6	11,500	$	722.00	$	8,303,000					5,150	$	722.00	3,718,300	6,350	$722.00	4,584,700
7	1,500	$	722.00	$	1,083,000									1,500	$722.00	1,083,000
8	7,900	$	720.00	$	5,688,000									2,150	$720.00	1,548,000	5,750	$	720.00	4,140,000
9	300	$	725.00	$	217,500												300	$	725.00	217,500
10	200	$	725.00	$	145,000												200	$	725.00	145,000
11	200	$	730.00	$	146,000												200	$	730.00	146,000
12	100	$	730.00	$	73,000												100	$	730.00	73,000
13	250	$	730.00	$	182,500												250	$	730.00	182,500
14	800	$	730.00	$	584,000												800	$	730.00	584,000
15	200	$	730.00	$	146,000												200	$	730.00	146,000
16	800	$	730.00	$	584,000												800	$	730.00	584,000
17	400	$	730.00	$	292,000												400	$	730.00	292,000
18	1,000	$	730.00	$	730,000												1,000	$	730.00	730,000
	40,000	$	720.65	$	28,826,000	10,000	$	716.00	7,160,000	10,000	$	721.03	7,210,300	10,000	$721.57	7,215,700	10,000	$	724.00	7,240,000

	Quartile	Wgt. Avg of Quartile
1st Quartile	10,000	$	716.00
2nd Quartile	10,000	$	721.03
3rd Quartile	10,000	$	721.57
4th Quartile	10,000	$	724.00
Total	40,000	$	720.65

Purchaser price is equal to lowest quartile weighted average or in this example $716.00.

Attachment B

Methodology To Calculate Freight Allowance

Freight Allowances to be Revised Quarterly

All Numbers Hypothetical

All values calculated per short ton in this example		Dublin Mill		Newberg Mill
Step 1. Determine the then-current quarter average freight for all shipments excluding those with Purchase Contracts separately for each SP Facility. This will be the baseline that cannot be exceeded to qualify for freight allowance.		$	35	$	50
Step 2. Determine the Purchaser’s all-in average freight rate for each Purchaser shipping destination for the then-current quarter.	Purchaser A     Location 1     Location 2	$ $	20 35	$ $	55 35
	Purchaser B     Location 1     Location 2	$ $	15 49	$ $	15 60
	Purchaser C     Location 1     Location 2	$ $	25 25		NA NA
Step 3. Determine the Freight Allowance for subsequent quarter based on the difference between the baseline freight rate calculated in step 1 and the all-in average freight rate calculated in step 2 (i.e., the value of step 1 less the value step 2) if greater than zero. If not greater than zero, no Freight Allowance is available for the subsequent quarter for such SP Facility/Purchaser shipping destination combination. The Freight Allowance will be provided by SP for each ton shipped to a qualifying Purchaser destination during the calendar quarter in a manner mutually agreeable by the parties (e.g., a credit or applied to each invoice). If a Purchaser shipping location’s all-in freight costs exceed the baseline for the then-current quarter, no allowance will be allowed for such location in the subsequent quarter. However, if the Purchaser shipping location’s all-in freight costs drop below the baseline in a future quarter, the location will become eligible for a Freight Allowance for shipments made during the subsequent quarter.	Purchaser A     Location 1     Location 2	$ $	15 0	$ $	0 15
	Purchaser B     Location 1     Location 2	$ $	20 0	$ $	35 0
	Purchaser C     Location 1     Location 2	$ $	10 10		NA NA

Attachment C

Quality Specifications

[See Schedules C-1 through C-6 attached to this Attachment C]

The quality specifications set forth in Schedules C-1 through C-6 reflect industry standard specifications as of the Execution Date for the basis weights set forth in such Schedules. As industry standard quality specifications change during the term of this Agreement, Schedules C-1 through C-6 may be amended from time-to-time upon the prior written approval of both Parties, which approval will not be unreasonably withheld or delayed, to reflect such changes.

Schedule C-1

Dublin Mill – 26.43 STANDARD (43 g/m2) Quality Specifications

PHYSICAL AND OPTICAL CHARACTERISTIC SPECIFICATIONS

FOR NEWSPRINT

Tests @ 48%-52% Relative Humidity and 71^o- 76^oF

(Based on Reel Averages – Not Single Position Tests)

Newsprint will be deemed to conform to the quality specifications set forth below if such Newsprint is delivered to Purchaser within the following limits and ranges:

	MIN REJECT LIMIT	TARGET (Reel Avg.)		MAX REJECT LIMIT
Basis Weight (lbs/3000 ft2)	25.9	26.43 (43 g/m	2)	26.9
Moisture (%)	6.50	8.70		9.50
Brightness Top – % (ISO Standard)	56.0	57.0		59.0
Color (L*) Color (a*) Color (b*)	N/A -1.0 2.5	83.5 -.50 3.4		N/A 0.01 3.9
Opacity – Top (%)	92.0	93.5		N/A

Core Type:	Customer specified type
Roll Width:	+/- 1/16”
Roll Diameter:	+1/4” -3/4”
Splices:	Limit 2 per roll No splices within 1” of top of roll (2” roll diameter)

In addition, with respect to the following items, Newsprint will be deemed to conform to the quality specifications set forth below if such Newsprint is delivered to Purchaser consistent in all material respects with the industry standards applicable to the following items:

Bar Codes:	Printed clearly, no smudges or scratches (TAPPI, IFRA or other)
Wrapped Rolls:	Roll packages are clean and intact
	Roll labels are clean and legible
	Label stencils are readable by scanners
Other:	Loaded per safety and customer requirements
	Appropriate dunnage utilized
	Seals applied to secure closed doors
	Correct bill of lading issued
	Customer Paper Test Analysis provided, if required by customer

Schedule C-2

Dublin Mill – 27.66 STANDARD (45 g/m²) Quality Specifications

PHYSICAL AND OPTICAL CHARACTERISTIC SPECIFICATIONS

FOR NEWSPRINT

Tests @ 48%-52% Relative Humidity and 71^o- 76^oF

(Based on Reel Averages – Not Single Position Tests)

Newsprint will be deemed to conform to the quality specifications set forth below if such Newsprint is delivered to Purchaser within the following limits and ranges:

	MIN REJECT LIMIT	TARGET (Reel Avg.)	MAX REJECT LIMIT
Basis Weight (lbs/3000 ft2)	27.1	27.66 (45 g/m2)	28.1
Moisture (%)	6.50	8.70	9.50
Brightness Top – % (ISO Standard)	56.0	57.5	59.0
Color (L*) Color (a*) Color (b*)	N/A -1.0 2.5	83.5 -.50 3.4	N/A 0.01 3.9
Opacity – Top (%)	92.4	93.9	N/A

Core Type:	Customer specified type
Roll Width:	+/- 1/16”
Roll Diameter:	+1/4” -3/4”
Splices:	Limit 2 per roll
	No splices within 1” of top of roll (2” roll diameter)

In addition, with respect to the following items, Newsprint will be deemed to conform to the quality specifications set forth below if such Newsprint is delivered to Purchaser consistent in all material respects with the industry standards applicable to the following items:

Bar Codes:	Printed clearly, no smudges or scratches (TAPPI, IFRA or other)
Wrapped Rolls:	Roll packages are clean and intact
	Roll labels are clean and legible
	Label stencils are readable by scanners
Other:	Loaded per safety and customer requirements
	Appropriate dunnage utilized
	Seals applied to secure closed doors
	Correct bill of lading issued
	Customer Paper Test Analysis provided, if required by customer

Schedule C-3

Dublin Mill – 30 STANDARD (48.8 g/m²) Quality Specifications

PHYSICAL AND OPTICAL CHARACTERISTIC SPECIFICATIONS

FOR NEWSPRINT

Tests @ 48%-52% Relative Humidity and 71^o- 76^oF

(Based on Reel Averages – Not Single Position Tests)

Newsprint will be deemed to conform to the quality specifications set forth below if such Newsprint is delivered to Purchaser within the following limits and ranges:

	MIN REJECT LIMIT	TARGET (Reel Avg.)	MAX REJECT LIMIT
Basis Weight (lbs/3000 ft2)	29.5	30.0 (48.8 g/m2)	30.5
Moisture (%)	6.50	8.70	9.50
Brightness Top – % (ISO Standard)	56.0	57.5	59.0
Color (L*) Color (a*) Color (b*)	N/A -1.0 2.5	83.5 -.50 3.4	N/A 0.01 3.9
Opacity – Top (%)	93.7	94.7	N/A

Core Type:	Customer specified type
Roll Width:	+/- 1/16”
Roll Diameter:	+1/4” -3/4”
Splices:	Limit 2 per roll
	No splices within 1” of top of roll (2” roll diameter)

In addition, with respect to the following items, Newsprint will be deemed to conform to the quality specifications set forth below if such Newsprint is delivered to Purchaser consistent in all material respects with the industry standards applicable to the following items:

Bar Codes:	Printed clearly, no smudges or scratches (TAPPI, IFRA or other)
Wrapped Rolls:	Roll packages are clean and intact
	Roll labels are clean and legible
	Label stencils are readable by scanners
Other:	Loaded per safety and customer requirements
	Appropriate dunnage utilized
	Seals applied to secure closed doors
	Correct bill of lading issued
	Customer Paper Test Analysis provided, if required by customer

Schedule C-4

Newberg Mill – 26.4# STANDARD (43 g/m² ) Quality Specifications

PHYSICAL AND OPTICAL CHARACTERISTIC SPECIFICATIONS

FOR NEWSPRINT

Tests @ 48%-52% Relative Humidity and 71^o- 76^oF

(Based on Reel Averages – Not Single Position Tests)

Newsprint will be deemed to conform to the quality specifications set forth below if such Newsprint is delivered to Purchaser within the following limits and ranges:

	MIN REJECT LIMIT	TARGET (Reel Avg.)	MAX REJECT LIMIT
Basis Weight (lbs/3000 ft2)	25.2	26.4 (43 g/m2)	27.6
Moisture (%)	6.5	9.2	10.0
Brightness Top – % (ISO Standard)	55.8	57.0	N/A
Color (a*) Color (b*)	-0.5 2.2	0.0 3.2	0.5 4.2
Opacity – Top (%)	92.0	93.5	N/A

Core Type:	Customer specified type
Roll Width:	+/- 1/16”
Roll Diameter:	+1/4” -3/4”
Splices:	Limit 2 per roll
	No splices within 1” of top of roll (2” roll diameter)

In addition, with respect to the following items, Newsprint will be deemed to conform to the quality specifications set forth below if such Newsprint is delivered to Purchaser consistent in all material respects with the industry standards applicable to the following items:

Bar Codes:	Printed clearly, no smudges or scratches (TAPPI, IFRA or other)
Wrapped Rolls:	Roll packages are clean and intact
	Roll labels are clean and legible
	Label stencils are readable by scanners
Other:	Loaded per safety and customer requirements
	Appropriate dunnage utilized
	Seals applied to secure closed doors
	Correct bill of lading issued
	Customer Paper Test Analysis provided, if required by customer

Schedule C-5

Newberg Mill – 27.66# STANDARD (45 g/m² ) Quality Specifications

PHYSICAL AND OPTICAL CHARACTERISTIC SPECIFICATIONS

FOR NEWSPRINT

Tests @ 48%-52% Relative Humidity and 71^o- 76^oF

(Based on Reel Averages – Not Single Position Tests)

Newsprint will be deemed to conform to the quality specifications set forth below if such Newsprint is delivered to Purchaser within the following limits and ranges:

	MIN REJECT LIMIT	TARGET (Reel Avg.)	MAX REJECT LIMIT
Basis Weight (lbs/3000 ft2)	26.5	27.66 (45 g/m2)	29.0
Moisture (%)	6.5	9.2	10.0
Brightness Top – % (ISO Standard)	55.8	57.0	N/A
Color (a*) Color (b*)	-0.5 2.2	0.0 3.2	0.5 4.2
Opacity – Top (%)	92.3	94.5	N/A

Core Type:	Customer specified type
Roll Width:	+/- 1/16”
Roll Diameter:	+1/4” -3/4”
Splices:	Limit 2 per roll
	No splices within 1” of top of roll (2” roll diameter)

In addition, with respect to the following items, Newsprint will be deemed to conform with the quality specifications set forth below if such Newsprint is delivered to Purchaser consistent in all material respects with the industry standards applicable to the following items:

Bar Codes:	Printed clearly, no smudges or scratches (TAPPI, IFRA or other)
Wrapped Rolls:	Roll packages are clean and intact
	Roll labels are clean and legible
	Label stencils are readable by scanners
Other:	Loaded per safety and customer requirements
	Appropriate dunnage utilized
	Seals applied to secure closed doors
	Correct bill of lading issued
	Customer Paper Test Analysis provided, if required by customer

Schedule C-6

Newberg Mill – 30# STANDARD (48.8 g/m² ) Quality Specifications

PHYSICAL AND OPTICAL CHARACTERISTIC SPECIFICATIONS

FOR NEWSPRINT

Tests @ 48%-52% Relative Humidity and 71^o- 76^oF

(Based on Reel Averages – Not Single Position Tests)

Newsprint will be deemed to conform to the quality specifications set forth below if such Newsprint is delivered to Purchaser within the following limits and ranges:

	MIN REJECT LIMIT	TARGET (Reel Avg.)	MAX REJECT LIMIT
Basis Weight (lbs/3000 ft2)	29.0	30.0 (48.8 g/m2)	31.0
Moisture (%)	6.5	9.2	10.0
Brightness Top – % (ISO Standard)	55.8	57.0	N/A
Color (a*) Color (b*)	-0.5 2.2	0.0 3.2	0.5 4.2
Opacity – Top (%)	92.9	94.5	N/A

Core Type:	Customer specified type
Roll Width:	+/- 1/16”
Roll Diameter:	+1/4” -3/4”
Splices:	Limit 2 per roll
	No splices within 1” of top of roll (2” roll diameter)

In addition, with respect to the following items, Newsprint will be deemed to conform to the quality specifications set forth below if such Newsprint is delivered to Purchaser consistent in all material respects with the industry standards applicable to the following items:

Bar Codes:	Printed clearly, no smudges or scratches (TAPPI, IFRA or other)
Wrapped Rolls:	Roll packages are clean and intact
	Roll labels are clean and legible
	Label stencils are readable by scanners
Other:	Loaded per safety and customer requirements
	Appropriate dunnage utilized
	Seals applied to secure closed doors
	Correct bill of lading issued
	Customer Paper Test Analysis provided, if required by customer

EX-13

Exhibit 13

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS

This discussion addresses the principal factors affecting the Company’s financial condition and operations during the past three years and should be read in conjunction with the consolidated financial statements and the Five-Year Financial Summary found elsewhere in this report.

OVERVIEW

The Company is a diversified communications company located primarily in the southeastern United States. Its mission is to be the leading provider of high-quality news, information and entertainment in the Southeast by continually building its position of strength in strategically located markets. The Company is committed to providing excellent local content in growth markets over multiple platforms, to continually developing new products and services that will stimulate audience and revenue growth, and to successfully executing its convergence strategy through diversification, forging new partnerships, and through strategic plans to sell non-core assets and operations. The Company implements its strategy and manages its operations through three business segments: Publishing, Broadcast and Interactive Media. The Company owns 25 daily newspapers and more than 150 other publications, 20 network-affiliated television stations (excluding discontinued operations), and it operates more than 75 online enterprises.

Toward the latter part of 2007, the Company set in motion several plans which will allow it to reduce debt, strengthen its balance sheet and focus on its core business as a pure media company. The Company entered into an agreement (along with its other two equal partners) to sell its one-third ownership stake in SP Newsprint to White Birch Paper Company. The sale is expected to be completed in March or April of 2008 and will eliminate the earnings volatility the Company has experienced in recent years due to the highly cyclical nature of newsprint prices. Additionally, the Company has initiated a plan to divest three of its television stations and their associated websites located in mid-sized markets in the Southeastern United States. These stations are WMBB in Panama City, Florida, KALB/NALB in Alexandria, Louisiana, and WNEG in Toccoa, Georgia (an independent satellite station of WSPA in Spartanburg, South Carolina). The Company is also entertaining bids for two other stations (WCWJ in Jacksonville, Florida and WTVQ in Lexington, Kentucky) but plans to sell these two stations were not sufficiently advanced at year-end to characterize these assets as held for sale. These divestitures would allow for further debt reduction, while helping to position the Company to pursue future growth opportunities.

The Company seized strategic opportunities in 2006 which included the acquisition of four NBC owned and operated television stations as well as the disposition of several CBS stations in markets which were not strategically aligned with the Company’s vision. The stations acquired included: WNCN in Raleigh, North Carolina; WCMH in Columbus, Ohio; WVTM in Birmingham, Alabama; and WJAR in Providence, Rhode Island. This acquisition expanded the Company’s southeastern footprint to include the key Raleigh-Durham market. The divested stations included: KWCH in Wichita, Kansas (including that station’s three satellites); WIAT in Birmingham, Alabama (as agreed upon when granted FCC approval for the purchase of WVTM in Birmingham); WDEF in Chattanooga, Tennessee; and KIMT in Mason City, Iowa.

Media General relies heavily on advertising from all three of its segments as its primary source of revenue. The distribution of advertising revenues in the United States continues to shift among numerous established media, as well as many new entrants, resulting in increased competition. While Internet advertising growth rates have been the highest of all media, the growth is from a relatively small base. The Company’s Interactive Media Division has benefited from this trend, posting revenue increases of 33% in each of the last two years. The Company recognizes the challenges facing its Publishing Division not only from Internet competition, but also from structural changes in industries that have historically been major purchasers of print advertising, from a generally soft economy and from a sharp downturn in Florida’s economy which significantly impacts the Company’s largest market (the Tampa Bay region). While speculation continues to exist regarding the pace and intensity of a shift away from traditional print advertising, the Company has taken steps to reposition its newspapers to embrace this change. The Interactive Media, Publishing and Broadcast Divisions have teamed together to create a “Web-First” approach to news reporting which provides an immediate platform for breaking news and positions the Interactive Media Division for strong long-term growth. Additionally, the Company continues to focus on creating ways to grow revenues by diversifying its traditional businesses, acquiring a rapidly growing advergaming enterprise, introducing specialty print products targeted to specific demographics, and partnering with Yahoo! and a consortium of Publishing companies that represent more than 500 newspapers in the online classified employment arena.

Advertising at the Broadcast Division can be significantly impacted by events like the Olympics and the Super Bowl, as well as national and statewide political races which generate additional advertising dollars. These events, or their absence in a given year, cause a certain cyclicality in the Company’s Broadcast revenues as even-numbered years tend to increase due to an influx of Political revenues and Olympics advertising. The following graph shows Political advertising as a percentage of total time sales, clearly demonstrating how Political advertising contributes to this cyclicality.

Accordingly, 2007 yielded predictably lower Political advertising revenues, which was in sharp contrast to 2006 as it reaped the benefits of almost $50 million in Political advertising revenues (including $20 million from the newly acquired NBC stations).

In December 2007, the Federal Communications Commission (FCC) modified its cross-ownership rule which presumptively will allow a company to own a newspaper and broadcast station in the largest twenty U.S. markets if certain standards are met. Additionally, the FCC granted permanent waivers to the Company’s convergence partnership in Tampa and to its existing common ownership of newspapers and television stations in four smaller markets where Media General has implemented convergence. The Company has never wavered in its belief that cross-ownership translates into better local television and higher-quality news for communities of all sizes.

CRITICAL ACCOUNTING ESTIMATES AND ASSUMPTIONS

The preparation of financial statements in accordance with generally accepted accounting principles in the United States (GAAP) requires that management make various estimates and assumptions that have an impact on the assets, liabilities, revenues, and expenses reported. The Company considers an accounting estimate to be critical if

19

that estimate requires assumptions be made about matters that were uncertain at the time the accounting estimate was made, and if changes in the estimate (which are reasonably likely to occur from period to period) would have a material impact on the Company’s financial condition or results of operations. The Audit Committee of the Board of Directors has reviewed the development, selection and disclosure of these critical accounting estimates. While actual results could differ from accounting estimates, the Company’s most critical accounting estimates and assumptions are in the following areas:

Intangible assets

The Company reviews the carrying values of both goodwill and other identified intangible assets, including FCC licenses, in the fourth quarter each year, or earlier if events indicate impairment may have arisen, utilizing discounted cash flow models. The preparation of such discounted future operating cash flow analyses requires significant management judgment with respect to operating profit growth rates, appropriate discount rates, and residual values. The fourth-quarter 2007 tests indicated no impairment. However, since the estimated fair values in the discounted cash flow model are subject to change based on the Company’s performance and overall market conditions, future impairment charges are possible.

Pension plans and postretirement benefits

The determination of the liabilities and cost of the Company’s pension and other postretirement plans requires the use of assumptions. The actuarial assumptions used in the Company’s pension and postretirement reporting are reviewed annually with independent actuaries and compared with external benchmarks, historical trends, and the Company’s own experience to determine that its assumptions are reasonable. The assumptions used in developing the required estimates include the following key factors:

• Discount rates

• Expected return on plan assets

• Salary growth

• Mortality rates

• Health care cost trends

• Retirement rates

• Expected contributions

A one percentage-point change in the expected long-term rate of return on plan assets would have resulted in a change in pension expense for 2007 of approximately $2.9 million. A one percentage-point change in the discount rate would have raised or lowered by approximately $5 million the plans’ 2007 expense and would have changed the plans’ projected obligations by approximately $65 million as of the end of 2007. Effective for fiscal 2007, the Company redesigned its defined benefit and defined contribution retirement plans and also added certain new employee benefit programs. The changes included: freezing the service accrual in the defined benefit retirement plan for existing employees (while closing this plan to new employees), increasing the maximum company match in the 401(k) defined contribution plan to 5% from 4% of an employee’s earnings, adding a profit sharing feature to the 401(k) plan, and establishing new retiree medical savings accounts. The Company took these steps to reduce the volatility of future pension expense and contributions while continuing to offer competitive retirement benefits to its employees.

Self-insurance liabilities

The Company self-insures for certain medical and disability benefits, workers’ compensation costs, and automobile and general liability claims with specified stop-loss provisions for high-dollar claims. The Company estimates the liabilities for these items (approximately $19 million at December 30, 2007) based on historical experience and advice from actuaries and claim administrators. Actual claims experience as well as changes in health care cost trends could result in the Company’s eventual cost differing from the estimate.

Income taxes

The Company files income tax returns with various state tax jurisdictions in addition to the Internal Revenue Service and is regularly audited by both federal and state tax agencies. From time to time, those audits may result in proposed adjustments. The Company has considered the alternative interpretations that may be assumed by the various tax agencies and does not anticipate any material impact on its earnings as a result of the various audits. The Company adopted Interpretation No. 48, Accounting for Uncertainty in Income Taxes – an interpretation of FASB Statement No. 109, in the first quarter of 2007. This interpretation requires that income tax positions recognized in an entity’s tax returns have a more-likely-than-not chance of being sustained prior to recording the related tax benefit in the financial statements. If subsequent information becomes available that changes the more-likely-than-not assessment of either a previously unrecognized or recognized tax benefit, the corresponding tax benefit or expense would be recorded in the period in which the information becomes available.

The Company records income tax expense and liabilities in accordance with SFAS No. 109, Accounting for Income Taxes, under which deferred tax assets and liabilities are recorded for the differing treatments of various items of income and expense for financial reporting versus tax reporting purposes. The Company bases its estimate of those deferred tax assets and liabilities on current tax laws and rates as well as expected future income. Therefore, any significant changes in enacted federal and state tax laws or in expected future earnings might impact income tax expense and deferred tax assets and liabilities.

Summary

Management believes, given current facts and circumstances, supplemented by the expertise and concurrence of external resources, including actuaries and accountants, that its estimates and assumptions are reasonable and are in accordance with GAAP. Management further believes that the assumptions and estimates actually used in the financial statements, taken as a whole, represent the most appropriate choices from among reasonably possible alternatives and fairly present the financial position, results of operations and cash flows of the Company. Management will continue to discuss key estimates with the Audit Committee of the Board of Directors.

RESULTS OF OPERATIONS

Net income

The Company recorded net income of $11 million in 2007, $79 million in 2006, and a net loss of $243 million in 2005. In order to facilitate a meaningful comparison of results for the last three years, several items merit separate consideration. As discussed previously, the Company initiated a plan toward the end of 2007 to divest three of its television stations; since the Company does not expect to recover its carrying value less its costs to sell, the Company accrued an after-tax loss of $2 million related to these divestitures. Additionally, the Company sold several CBS stations in 2006 resulting in an after-tax gain of $11 million. The results of the sold stations and those currently held for sale (as well as their associated web sites) have been reported as discontinued operations for all years presented. The remainder of this discussion focuses only on results from continuing operations. Unless otherwise indicated, results of the four NBC stations acquired in the third quarter of 2006 are also excluded to provide relevant year-over-year comparisons. See Note 2 for a detailed discussion of the Company’s 2007 and 2006 acquisitions and divestitures. The Company

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also entered into an agreement to sell its one-third investment share in SP Newsprint (SPNC) to White Birch Paper Company (see Note 4 for a detailed discussion); the Company recognized an approximate loss of $15 million in the fourth quarter of 2007 due to sale-related costs and write-downs as the Company’s book basis in SPNC was higher than the expected net proceeds. The loss related to the sale of SPNC was more than offset by a $17.6 million gain recorded on an insurance settlement related to a 2007 fire at the Company’s Richmond Times-Dispatch printing plant (see Note 11 for a detailed discussion). Additionally, fiscal 2006 included an extra (53^rd) week, the estimated effect of which impacts several comparisons in the following analysis. This extra week contributed approximately $18 million in revenues and $2.5 million to net income and, accordingly, influenced virtually all of the year-over-comparisons. Results for 2005 were substantially impacted by the adoption of EITF Topic D-108, Use of the Residual Method to Value Acquired Assets Other Than Goodwill, which requires the use of a direct method for valuing all acquired intangible assets other than goodwill. The direct method resulted in recording a cumulative effect of change in accounting principle charge of $325.5 million ($13.63 per diluted share). See Note 3 for a full discussion of this accounting change. Also influencing 2005 results was the sale of the Company’s 20% interest in The Denver Post Company to MediaNews Group, Inc., which resulted in an after-tax gain of $19.4 million ($0.81 per diluted share).

Income in 2007 from continuing operations fell $52.8 million (84%) from 2006. Three factors contributed almost equally to the year-over-year downturn. First, Broadcast Division operating profits (including the NBC stations acquired in the third quarter of 2006) declined $29.5 million (31%) reflecting substantially reduced political advertising in this odd-numbered year. Second, Publishing Division operating profits fell more than $29 million (24%) as all major advertising categories were down from the prior year due in large part to a pronounced economic downturn in Florida’s economy. Third, excluding the sale-related costs and write-downs associated with SP Newsprint, the Company’s share of SPNC’s underlying operating results produced a $26 million adverse turnaround, primarily reflecting the impact of lower newsprint prices and higher raw material costs. Also impacting the first half of the year was higher interest expense as a result of increased debt levels associated with the acquisition of the NBC stations.

Excluding the Denver gain, income in 2006 from continuing operations before the cumulative effect of the change in accounting principle rose $2.6 million (4.4%) over 2005. Factors which fueled this increase included a 53% rise in Broadcast operating income (including the NBC stations acquired in mid-2006) due to vigorous Political advertising, a nine-fold increase in the Company’s share of SPNC’s results (primarily attributable to higher newsprint selling prices), and a 53^rd week in the year which accounted for approximately $2.5 million in additional income. Conversely, several items served to temper these increases including a 65% rise in interest expense and a 12% increase in intangibles amortization, both overwhelmingly due to the acquisition of the NBC stations. The Publishing Division experienced a 7.5% decline in operating profits as slightly higher advertising revenues were unable to offset higher divisional expenses. Also negatively impacting results was $5.6 million of non-cash stock option expense recorded in 2006 as a result of the required adoption of Statement 123(R) (see Note 8 for a complete discussion of the adoption).

Publishing

Operating income for the Publishing Division decreased $29.1 million in 2007 from the prior year despite successful cost containment measures which appreciably mitigated a $56.4 million decline in revenues (including approximately $10.5 million of revenues associated with the extra week in 2006). As shown in the following chart, Classified advertising suffered the largest portion of the revenue decline as employment, automotive and real estate advertising struggled at most locations. The Tampa market contributed more than 80% of the Classified reduction as the Company’s largest market continued to struggle due to the real estate-induced, sharp downturn in Florida’s economy. The current year’s unfavorable market conditions in the Tampa Bay region were amplified because they followed several years of booming growth in that area. Retail revenues were down in 2007 due to the additional week in 2006 and to lower advertising levels in the home improvement and furnishing categories. While the National revenue decline presented in the chart below was less severe than other advertising categories, the decrease was overwhelmingly attributable to the current depressed conditions in the Tampa market (driven by weak automotive and pharmaceutical advertising as well as the impact of the extra week in 2006).

The Company reacted to the challenging advertising environment by implementing a performance improvement plan to better align expenses with the reduced revenue environment by consolidating certain functions and outsourcing others, resulting in the elimination of over 200 authorized positions. The Division’s 2007 year-to-date results included pretax charges of approximately $2.3 million for severance costs related to this realignment. In addition, the Division has implemented several sales initiatives to stimulate Classified advertising sales and continues to aggressively manage its discretionary spending.

Excluding the above-mentioned severance costs, Publishing Division operating expenses decreased $29.6 million in 2007 (which included approximately $8 million of additional expense as a result of the extra week in 2006). Newsprint costs were down $16.1 million due to reduced consumption as a result of switching to lighter weight newsprint, concerted conservation efforts and decreased advertising and circulation volumes, as well as to lower average newsprint prices which were down $58 per short ton. A 5% decrease in employee benefits and compensation costs also contributed to the overall expense reduction, due in large part to lower retirement and healthcare costs, a decrease in advertising commissions, and to a lesser degree, the performance improvement plan.

In 2006 excluding the Denver gain, operating income for the Publishing Division was down $9.6 million as compared to 2005. A $13.3 million increase in revenues (including approximately $10.5 million associated with the 53^rd week in 2006) was more than offset by higher operating expenses. Classified revenues remained the Division’s growth engine, with Retail advertising developing into a close contender. Due in large part to the strength of these two advertising categories, 2006 marked the fourth consecutive year in which the Division posted year-over-year growth in overall revenues. Classified advertising revenues rose 4.4% and contributed 60% of the total advertising growth due primarily to explosive real estate advertising and

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the extra week. Retail advertising improved nearly 4% and reflected new revenue initiatives and consistent growth in several categories, particularly home improvement, as well as the extra week. Conversely, National advertising labored due to weakness in the telecommunications category (which spilled over from 2005) and in the automotive category. Circulation revenues fell below the prior-year level due to a change in wholesale rates to independent carriers in some markets, for which there was a corresponding expense decrease, as well as to small volume declines.

Publishing Division operating expenses increased $22.7 million in 2006 (which included approximately $8 million of additional expense associated with the 53^rd week) over the previous year. A 4.5% rise in compensation and employee benefit costs accounted for the largest portion of this increase due to the extra week and to normal salary increases combined with higher retirement costs. Despite a leveling off of newsprint prices for the latter half of 2006, newsprint expense was up 4.6% in the year as average newsprint prices increased $74 per short ton over 2005’s average price. Reduced newsprint consumption due to switching to lighter weight newsprint, concerted conservation efforts and decreased circulation volumes helped to significantly offset these higher newsprint prices as well as the impact of the extra week. Additionally, depreciation and amortization expense rose 9.5% in 2006 as a result of two new printing facilities and a new advertising system, as well as accelerated depreciation related to the reduction of web-widths on printing presses.

Broadcast

Broadcast results for all of 2007 and the second half of 2006 included the four NBC stations which the Company acquired at the beginning of the third quarter of 2006. In the second half of 2006, these stations contributed revenues in excess of $60 million due to extremely strong Political races particularly in Columbus, Ohio and Providence, Rhode Island. In 2007, revenues for the full year rose to $90 million but profits declined by two-thirds as lower NBC primetime ratings combined with a significant decline in Political advertising in this odd-numbered year. As mentioned earlier, for purposes of the remainder of this discussion and for the chart that follows, results of these NBC stations and all discontinued operations are excluded.

Broadcast operating income decreased $16.7 million in 2007 from the prior year primarily due to a $14.9 million decrease in revenues (including approximately $5.7 million relating to the extra week in 2006). A predictable, but nonetheless large, decline in Political advertising accounted for the majority of the Division’s lower revenues. As illustrated in the following chart, National advertising revenues have demonstrated consistency and steadfast growth over the past two years primarily on the strength of the telecommunications category. In 2007, Local time sales were slightly below the 2006 level due to restrained automotive spending as dealers remained cautious, but this category began to regain a foothold by the close of the year on strong grocery store advertising. There was no surprise surrounding the more than 70% decline in Political time sales in this off-election year; political revenues generated from Presidential primaries, gubernatorial races and issue advertising curbed what could have been an even larger descent from the prior year.

Broadcast operating expense rose $1.8 million in 2007 compared to the prior year (including $4 million of additional expense from 2006’s 53^rd week) due to higher compensation expense and depreciation costs. Depreciation costs increased 10% on new digital equipment as the Division has virtually completed its government-mandated conversion to broadcast high definition television and despite an extra week a year ago. Employee compensation costs increased 2.2% due to higher sales commissions as the Division worked to replace Political revenues through sales development initiatives. Lower healthcare and retirement-related costs helped to constrain the increase in overall employee compensation and benefits costs to less than 1%.

In 2006, Broadcast Division operating profits exceeded the 2005 level by $13.4 million as the direct result of a $26.1 million increase in revenues. These strong results were bolstered by a 53^rd week which augmented operating profits and revenues by approximately $1.7 million and $5.7 million, respectively. Robust advertising time sales, driven predominantly by a surge in Political advertising, significantly outpaced higher operating expenses. Advertising revenues rose in all categories in 2006 over 2005. Political advertising revenues contributed nearly 85% of the Division’s increase in overall advertising time sales (up 12.2%) as campaign spending was going full throttle for gubernatorial, Senate, House, and state and local races in the election year. Despite the advertising dollars being channeled into Political advertising in 2006, Local and National garnered a respectable share of advertising revenues as they showed improvement on the strength of the telecommunications and services categories.

Broadcast Division operating expenses increased $12.7 million in 2006 over 2005 (including approximately $4 million of additional expense associated with the 53^rd week). The primary factor driving the increase was higher employee compensation and benefit costs which grew approximately 6.5% due to merit pay raises and increased sales commissions associated with new business, including the extra week. Programming costs were up more than 10% due in large part to the extra week and higher syndication costs. Another dynamic which contributed to the Division’s higher expense level was the continuation of its government-mandated conversion to broadcast high definition television, which translated into increased depreciation on the new equipment and higher electricity costs associated with operating the new transmitters and other digital equipment.

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Interactive Media

The 2006 purchase of four NBC television stations included their associated websites. These websites contributed revenues of $1.8 million in 2007 and $1 million in 2006. For purposes of the remainder of this discussion and for the chart that follows, results from both the acquired NBC websites as well as the discontinued website operations are excluded. The primary components comprising the Interactive Media Division are the website group associated with newspapers and television stations (the online group), the advergaming business which was purchased in the third quarter of 2005 (Blockdot), and interactive investments. Net write-downs of an interactive investment totaled $3.4 million in 2007 and $.7 million in 2006 and have been excluded for purposes of the divisional discussion that follows. This investment in a company that produces interactive entertainment and to which the Company has licensed proprietary game content was written down to reflect the extended period the stock price of this publicly traded security has been below the Company’s carrying value. Also of note, the 53^rd week in 2006 generated $.3 million in revenues, but also spawned a $.2 million operating loss in that period as the result of higher expenses.

In 2007, absent the above-mentioned net write-down, the Division generated robust double-digit revenue growth (up 32% from 2006) and reduced its operating loss by 54% from the prior year as revenue growth outpaced higher expenses. Blockdot was an instrumental factor in the Division’s success as Blockdot transformed an operating loss of $1.2 million in 2006 into operating profits of $2.6 million in 2007. IMD revenues increased $8.3 million with two-thirds of that growth coming from Blockdot, where advergaming revenues tripled. The remaining divisional revenue growth was generated by a 41% increase in Local online advertising as banners and sponsorships showed solid growth, combined with National/Regional online revenues that more than doubled as strengthening relationships with an expanding network of national agencies translated into more advertisers. As illustrated by the following chart, advertising revenues rose in all categories over the past two years with the exception of Classified advertising which declined 7% in 2007 from the prior year. Online Classified advertising, where customers pay an additional fee to have their classified advertisement placed online simultaneously with its publication in the newspaper, has historically been the backbone of the Division and produced strong revenue growth. However, IMD’s online Classified advertising is directly impacted by Classified performance in the Publishing Division and has suffered comparably, particularly because of Florida’s struggling economy. Initial revenues from the Company’s strategic alliance with Yahoo!HotJobs helped mitigate the overall decline in online Classified advertising.

IMD’s operating expense increased $6.6 million in 2007 compared to 2006 primarily reflecting higher employee compensation and benefits expense due to additional staffing, increased commissions, and annual salary increases due to a focus on recruiting, as well as retaining, talented sales personnel. The Division also incurred expenses related to its Yahoo!HotJobs agreement that were not present a year ago.

In 2006, absent the aforementioned write-down of its investment, the Division reduced its operating loss by 16.6% as compared to 2005. Results of its online group improved significantly in that same period, while Blockdot’s operating loss rose slightly over the prior year. Divisional revenues grew by 28% in 2006 with the online group supplying the lion’s share of the year-over-year improvement. Classified advertising rose more than 15% in 2006 and remained the foundation for the Division’s revenue improvement in 2006 as upsell arrangements and other classified products continued to thrive. IMD’s operating expenses were up $5.1 million in the year, predominantly resulting from higher employee compensation and benefits expense due to additional staffing in key areas, higher sales-related commissions (commensurate with higher revenues) and annual salary increases. Additionally, higher costs were incurred as the Division expanded its advergaming business by investing in its infrastructure and by attracting, as well as retaining, high-quality employees.

The Interactive Media Division remains focused on positioning itself for strong long-term growth, by increasing visitor and page-view growth, creating a dynamic online presence across all the Company’s websites, and generating revenue growth with expanded product and service offerings. The Division continues to seek opportunities to broaden its online product portfolio to meet the growing needs of its advertisers. Its strategic alliance with Yahoo! and a consortium of over 500 newspapers creates both content and distribution opportunities and provides more effective advertising solutions to customers.

Interest expense

Interest expense increased $11.1 million in 2007 from the prior year due entirely to an increase in average debt outstanding of $200 million as a result of additional borrowings associated with the acquisition of the four NBC stations which were purchased at the beginning of the third quarter of 2006.

In the third quarter of 2006, the Company entered into three interest rate swaps (where it pays a fixed rate and receives a floating rate) to manage interest cost and cash flows associated with variable interest rates, primarily short-term changes in LIBOR, not to trade such instruments for profit or loss. These interest rate swaps are cash flow hedges with notional amounts totaling $300 million; swaps with notional amounts of $100 million will mature in 2009, and $200 million will mature in 2011. Changes in cash flows of the interest rate swaps offset changes in the interest payments on the Company’s $300 million bank term loan. These swaps effectively convert the Company’s variable rate bank term loan to fixed rate debt with a weighted average interest rate approximating 6.4% at December 30, 2007.

Income taxes

The Company’s effective tax rate on income from continuing operations was approximately 32%, 37% and 38% in 2007, 2006 and 2005, respectively. The sharp reduction in the 2007 rate was due primarily to the relatively greater impact that favorable permanent differences (book versus tax) had on the current year’s reduced pre-tax income. Additionally, the Company recognized a tax benefit of $786 thousand in the third quarter of 2007 to record the favorable resolution of an outstanding state income tax assessment. The 2006 tax rate was down slightly from 2005 primarily due to increased fuel credits generated by SP Newsprint as well as the absence of the gain from the 2005 sale of the Company’s 20% interest in Denver, which had a relatively higher effective rate.

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The Company adopted the provisions of FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes – an interpretation of FASB Statement No. 109 at the beginning of fiscal 2007. The Company recognized an approximate $4.9 million net increase in the liability for uncertain tax positions, which was accounted for as a reduction of retained earnings, as of January 1, 2007. See Note 7 for a complete discussion of the adoption of this standard.

LIQUIDITY

The Company has a $1 billion revolving credit facility and a $300 million variable bank term loan agreement (together the “Facilities”). As shown in the following table, at the end of 2007 there were borrowings of $595 million outstanding under the revolving credit facility and $300 million outstanding under the term loan. The Facilities have both interest coverage and leverage ratio covenants. These covenants, which involve debt levels, interest expense, and a rolling four-quarter calculation of EBITDA (a measure of cash earnings as defined in the revolving credit agreement), can affect the Company’s maximum borrowing capacity (approximately $1.1 billion at December 30, 2007) allowed by the Facilities. Due to the reduced operating results during 2007, in the fourth quarter, the Company amended certain provisions of its Facilities to increase the maximum leverage ratio covenant and reduce the minimum interest ratio covenant for a period of three fiscal quarters. The amendment also modified the circumstances under which certain subsidiary guarantees would be in place. The Company was in compliance with all covenants throughout the year and expects to remain in compliance going forward.

In the first quarter of 2007, the Company repaid, at maturity, $95 million in debt that existed as the result of consolidating certain variable interest entities in which the Company had controlling financial interest by virtue of certain real property leases. At that time, the Company purchased the facilities by using existing capacity under its revolving credit facility.

The Company expects net cash flows over the next year to provide it with sufficient resources to manage working capital needs, pay dividends, and finance capital expenditures. Major capital expenditures in 2008 will include expansion of the Company’s Florence newspaper building to include a television studio for the Company’s Myrtle Beach station which will create shared space to facilitate stronger convergence in that market, as well as press and production projects at the Company’s Publishing operations in Richmond, Winston-Salem and Lynchburg.

The Company typically generates strong net cash from operations (ranging from $102 million to $158 million over the last five years). In 2007, the Company used cash generated from operating activities to repurchase stock for $48.7 million, to make capital expenditures of $78.1 million, to pay dividends to stockholders of $21.2 million and to reduce debt by $18.8 million. The Company’s philosophy is to use excess cash flow to repay debt, which has the effect of strengthening the balance sheet. With the absence of major acquisitions from 2001 to 2004, the Company aggressively reduced debt in those years. The Company expects to complete the sale of its one-third ownership stake in SP Newsprint in March or April of 2008, generating proceeds between $37 million to $40 million which will be used for debt repayment. Net proceeds from the three held-for-sale stations (which are currently being reported as discontinued operations), would also be used to reduce debt. A stronger balance sheet enhances the Company’s ability to qualify for favorable terms under its existing revolving credit facility, negotiate beneficial terms for new borrowing facilities, and produces the financial flexibility to take advantage of attractive strategic opportunities.

The Company does not have material off-balance sheet arrangements. The table that follows shows long-term debt and other specified obligations of the Company:

(In millions)	Payments Due By Periods
Contractual obligations1	Total		2008		2009 2010		2011 2012		2013 and beyond
Long-term debt:2
Revolving credit facility	$	595.0	$	—	$	—	$	595.0	$	—
Term loan facility		300.0		—		—		300.0		—
Other		2.6		2.5		0.1		—		—
Operating leases3		36.7		7.1		11.6		8.2		9.8
Broadcast film rights4		70.4		15.1		39.8		14.1		1.4
Estimated benefit payments from Company assets5		69.7		5.3		11.6		13.7		39.1
Purchase obligations6		204.7		133.9		46.2		19.2		5.4
Total specified obligations	$	1,279.1	$	163.9	$	109.3	$	950.2	$	55.7

¹ As disclosed in Note 7, the Company had a non-current liability for uncertain tax positions of approximately $15.4 million at December 30, 2007. The Company cannot reasonably estimate the amount or period in which the ultimate settlement of these uncertain tax positions will occur, therefore the contractual obligations table excludes this liability.

² The Company has the legal right to prepay its long-term debt without penalty; accordingly no future interest expense has been included.

³ Minimum rental commitments under noncancelable lease terms in excess of one year.

⁴ Broadcast film rights include both recorded short-term and long-term liabilities for programs which have been produced and unrecorded commitments to purchase film rights which are not yet available for broadcast.

⁵ Actuarially estimated benefit payments under pension and other benefit plans expected to be funded directly from Company assets through 2017.

⁶ Includes: 1) all current liabilities not otherwise reported in the table that will require cash settlement, 2) significant purchase commitments for fixed assets, and 3) significant non-ordinary course contract-based obligations.

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OUTLOOK FOR 2008

The Publishing Division is facing challenges which include a depressed Florida economy that encompasses the Company’s largest market, increasing competition from numerous media, and rising newsprint prices. However, the Broadcast Division looks forward to the return of revenues from Political advertising and the Summer Olympics which should more than offset any Publishing declines. The Publishing Division will also introduce a number of targeted specialty products to supplement revenues from its traditional newspapers and provide advertisers with more opportunities to reach their target customers while exploring opportunities to further reduce expenses. The Interactive Media Division expects its strong advergaming revenues to assist the Division in achieving profitability by the end of 2008. The 2008 sale of SP Newsprint will allow the Company to eliminate the earnings volatility associated with the cyclicality of newsprint prices, while reducing debt and strengthening its balance sheet. The sales of certain television stations is expected to allow the Company to further reduce debt. The Company looks forward to increasing long-term shareholder value in 2008.

*    *    *    *    *    *    *

Certain statements in this annual report that are not historical facts are “forward-looking” statements, as that term is defined by the federal securities laws. Forward-looking statements include statements related to pending transactions and contractual obligations, critical accounting estimates and assumptions, the impact of new accounting standards and the Internet, and expectations regarding the effects and timing of acquisitions and dispositions, the Yahoo! agreements, newsprint prices, pension and postretirement plans, general advertising levels and political advertising levels, and the effects of changes to FCC regulations. Forward-looking statements, including those which use words such as the Company “believes,” “anticipates,” “expects,” “estimates,” “intends,” “projects,” “plans,” “hopes” and similar words, are made as of the date of this filing and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in or implied by such statements. The reader should understand that it is not possible to predict or identify all risk factors. Consequently, any such list should not be considered a complete statement of all potential risks or uncertainties.

These forward-looking statements should be considered in light of various important factors that could cause actual results to differ materially from estimates or projections including, without limitation: changes in advertising demand, changes to pending accounting standards, changes in circulation levels, changes in relationships with broadcast networks, the availability and pricing of newsprint, fluctuations in interest rates, the performance of pension plan assets, health care cost trends, regulatory rulings including those related to ERISA and tax law, natural disasters, and the effects of acquisitions, investments and dispositions on the Company’s results of operations and its financial condition. Actual results may differ materially from those suggested by forward-looking statements for a number or reasons including those described in Part I, Item 1A, “Risk Factors” of the Company’s Form 10-K.

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Report of Management on Media General, Inc.’s

Internal Control over Financial Reporting

Management of Media General, Inc., (the Company) has assessed the Company’s internal control over financial reporting as of December 30, 2007, based on criteria for effective internal control over financial reporting described in “Internal Control – Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, management believes that as of December 30, 2007, the Company’s system of internal control over financial reporting was properly designed and operating effectively based upon the specified criteria.

Management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting. The Company’s internal control over financial reporting is comprised of policies, procedures and reports designed to provide reasonable assurance, to the Company’s management and board of directors, that the financial reporting and the preparation of financial statements for external purposes has been handled in accordance with accounting principles generally accepted in the United States. Internal control over financial reporting includes those policies and procedures that (1) govern records to accurately and fairly reflect the transactions and dispositions of assets of the Company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (3) provide reasonable safeguards against or timely detection of material unauthorized acquisition, use or disposition of the Company’s assets.

Internal controls over financial reporting may not prevent or detect all misstatements. Additionally, projections as to the effectiveness of controls to future periods are subject to the risk that controls may not continue to operate at their current effectiveness levels due to changes in personnel or in the Company’s operating environment.

January 30, 2008

/s/ Marshall N. Morton	/s/ John A. Schauss	/s/ O. Reid Ashe Jr.
Marshall N. Morton	John A. Schauss	O. Reid Ashe Jr.
President and Chief Executive Officer	Vice President-Finance and Chief Financial Officer	Executive Vice President and Chief Operating Officer

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Report of Independent Registered Public Accounting Firm

on Internal Control over Financial Reporting

The Board of Directors and Stockholders

Media General, Inc.

We have audited Media General, Inc.’s internal control over financial reporting as of December 30, 2007, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the COSO criteria). Media General, Inc.’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Report of Management on Media General, Inc.’s Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, Media General, Inc. maintained, in all material respects, effective internal control over financial reporting as of December 30, 2007, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Media General, Inc., as of December 30, 2007, and December 31, 2006, and the related consolidated statements of operations, stockholders’ equity and cash flows for each of the three fiscal years in the period ended December 30, 2007, and our report dated January 30, 2008, expressed an unqualified opinion thereon.

	/s/ Ernst & Young LLP
Richmond, Virginia
January 30, 2008

27

Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders

Media General, Inc.

We have audited the accompanying consolidated balance sheets of Media General, Inc., as of December 30, 2007, and December 31, 2006, and the related consolidated statements of operations, stockholders’ equity, and cash flows for each of the three fiscal years in the period ended December 30, 2007. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Media General, Inc., at December 30, 2007, and December 31, 2006, and the consolidated results of its operations and its cash flows for each of the three fiscal years in the period ended December 30, 2007, in conformity with U.S. generally accepted accounting principles.

As discussed in Note 7 to the financial statements, in 2007 the Company changed its method of accounting for uncertain income tax positions to comply with the provisions of Financial Accounting Standards Board Interpretation No. 48, Accounting for Uncertainty in Income Taxes – an interpretation of FASB Statement No. 109.

As discussed in Note 8 to the financial statements, in 2006 the Company changed its method of accounting for stock-based compensation to comply with the provisions of Financial Accounting Standards Board Statement No. 123(R), Share-Based Payment.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Media General, Inc.’s internal control over financial reporting as of December 30, 2007, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated January 30, 2008, expressed an unqualified opinion thereon.

	/s/ Ernst & Young LLP
Richmond, Virginia
January 30, 2008

28

Media General, Inc.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

	Fiscal Years Ended
	December 30, 2007			December 31, 2006			December 25, 2005
	(53 weeks)
Revenues	$	932,181		$	964,857		$	860,393
Operating costs:
Production		417,057			413,588			365,765
Selling, general and administrative		350,263			345,179			313,553
Depreciation and amortization		75,235			68,409			59,583
Gain on insurance recovery		(17,604	)		—			—
Total operating costs		824,951			827,176			738,901
Operating income		107,230			137,681			121,492
Other income (expense):
Interest expense		(59,577	)		(48,505	)		(29,408	)
Investment income (loss) – unconsolidated affiliates		(31,392	)		10,598			1,119
Gain on sale of investment in The Denver Post Corporation		—			—			33,270
Other, net		(2,307	)		323			2,454
Total other income (expense)		(93,276	)		(37,584	)		7,435
Income from continuing operations before income taxes and cumulative effect of change in accounting principle		13,954			100,097			128,927
Income taxes		3,622			37,012			49,088
Income from continuing operations before cumulative effect of change in accounting principle		10,332			63,085			79,839
Discontinued operations:
Income from discontinued operations (net of income taxes of $1,506 in 2007, $3,150 in 2006 and $1,644 in 2005)		2,355			4,928			2,572
Net gain (loss) related to divestiture of discontinued operations (net of income taxes of $722 in 2007 and $6,748 in 2006)		(2,000	)		11,029			—
Cumulative effect of change in accounting principle (net of income tax benefit of $190,730)		—			—			(325,453	)
Net income (loss)	$	10,687		$	79,042		$	(243,042	)
Earnings (loss) per common share:
Income from continuing operations before cumulative effect of change in accounting principle	$	0.45		$	2.67		$	3.39
Income from discontinued operations		0.02			0.68			0.11
Cumulative effect of change in accounting principle		—			—			(13.83	)
Net income (loss)	$	0.47		$	3.35		$	(10.33	)
Earnings (loss) per common share – assuming dilution:
Income from continuing operations before cumulative effect of change in accounting principle	$	0.45		$	2.65		$	3.34
Income from discontinued operations		0.02			0.67			0.11
Cumulative effect of change in accounting principle		—			—			(13.63	)
Net income (loss)	$	0.47		$	3.32		$	(10.18	)

Notes to Consolidated Financial Statements begin on page 34.

29

Media General, Inc.

CONSOLIDATED BALANCE SHEETS

(In thousands, except shares and per share amounts)

ASSETS
	December 30, 2007			December 31, 2006
Current assets:
Cash and cash equivalents	$	14,215		$	11,929
Accounts receivable (less allowance for doubtful accounts 2007 – $6,073; 2006 – $6,519)		137,397			136,930
Inventories		6,690			9,650
Other		53,860			41,092
Assets of discontinued operations		61,564			64,519
Total current assets		273,726			264,120
Investments in unconsolidated affiliates		52,360			84,854
Other assets		67,250			70,596
Property, plant and equipment, at cost:
Land		37,233			37,340
Buildings		303,401			292,440
Machinery and equipment		541,457			548,504
Construction in progress		41,233			26,747
Accumulated depreciation		(439,445	)		(429,089	)
Net property, plant and equipment		483,879			475,942
FCC licenses and other intangibles		668,792			686,157
Excess of cost over fair value of net identifiable assets of acquired businesses		925,059			923,559
Total assets	$	2,471,066		$	2,505,228

Notes to Consolidated Financial Statements begin on page 34.

30

LIABILITIES AND STOCKHOLDERS’ EQUITY
	December 30, 2007			December 31, 2006
Current liabilities:
Accounts payable	$	32,938		$	34,039
Accrued expenses and other liabilities		103,500			91,972
Income taxes payable		—			4,516
Liabilities of discontinued operations		878			1,074
Total current liabilities		137,316			131,601
Long-term debt		897,572			916,320
Deferred income taxes		311,588			281,670
Other liabilities and deferred credits		211,583			238,277
Commitments and contingencies (Note 11)
Stockholders’ equity:
Preferred stock ($5 cumulative convertible), par value $5 per share:
authorized 5,000,000 shares; none outstanding
Common stock, par value $5 per share:
Class A, authorized 75,000,000 shares; issued 22,055,835 and 23,556,472 shares		110,279			117,782
Class B, authorized 600,000 shares; issued 555,992 shares		2,780			2,780
Additional paid-in capital		19,713			55,173
Accumulated other comprehensive loss:
Unrealized loss on equity securities		—			(706	)
Unrealized loss on derivative contracts		(8,417	)		(5,129	)
Pension and postretirement		(68,860	)		(105,413	)
Retained earnings		857,512			872,873
Total stockholders’ equity		913,007			937,360
Total liabilities and stockholders’ equity	$	2,471,066		$	2,505,228

Notes to Consolidated Financial Statements begin on page 34.

31

Media General, Inc.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In thousands, except shares and per share amounts)

	Class A Shares		Common Stock					Additional Paid-in Capital			Accumulated Other Comprehensive Income (Loss)			Retained Earnings			Total
			Class A			Class B
Balance at December 26, 2004	23,230,109		$	116,150		$	2,780	$	36,659		$	(50,652	)	$	1,078,832		$	1,183,769
Net loss				—			—		—			—			(243,042	)		(243,042	)
Unrealized loss on equity securities (net of deferred tax benefit of $1,747)				—			—		—			(3,065	)		—			(3,065	)
Unrealized gain on derivative contracts (net of deferred taxes of $1,390)				—			—		—			2,421			—			2,421
Minimum pension liability (net of deferred tax benefit of $7,837)				—			—		—			(13,322	)		—			(13,322	)
Comprehensive income (loss)																		(257,008	)
Cash dividends to shareholders ($0.84 per share)				—			—		—			—			(20,163	)		(20,163	)
Exercise of stock options	111,564			558			—		4,726			—			—			5,284
Performance accelerated restricted stock	146,520			733			—		2,523			—			—			3,256
Income tax benefits relating to stock-based compensation				—			—		811			—			—			811
Other	2,503			12			—		137			—			(272	)		(123	)
Balance at December 25, 2005	23,490,696			117,453			2,780		44,856			(64,618	)		815,355			915,826
Net income				—			—		—			—			79,042			79,042
Unrealized loss on equity securities (net of deferred tax benefit of $176)				—			—		—			(309	)		—			(309	)
Reclassification of loss included in net income (net of deferred tax benefit of $254)				—			—		—			446			—			446
Unrealized loss on derivative contracts (net of deferred tax benefit of $899)				—			—		—			(1,578	)		—			(1,578	)
Minimum pension liability (net of deferred taxes of $5,359)				—			—		—			10,048			—			10,048
Comprehensive income																		87,649
Pension and postretirement adoption (SFAS #158) (net of deferred tax benefit of $31,477)				—			—		—			(55,237	)		—			(55,237	)
Cash dividends to shareholders ($0.88 per share)				—			—		—			—			(21,180	)		(21,180	)
Exercise of stock options	55,700			279			—		1,324			—			—			1,603
Stock-based compensation				—			—		8,244			—			—			8,244
Income tax benefits relating to stock-based compensation				—			—		306			—			—			306
Other	10,076			50			—		443			—			(344	)		149
Balance at December 31, 2006	23,556,472			117,782			2,780		55,173			(111,248	)		872,873			937,360
Net income				—			—		—			—			10,687			10,687
Unrealized loss on equity securities (net of deferred tax benefit of $912)				—			—		—			(1,600	)		—			(1,600	)
Reclassification of loss included in net income (net of deferred tax benefit of $1,314)				—			—		—			2,306			—			2,306
Unrealized loss on derivative contracts (net of deferred tax benefit of $1,874)				—			—		—			(3,288	)		—			(3,288	)
Pension and postretirement (net of deferred taxes of $21,021)				—			—		—			36,553			—			36,553
Comprehensive income																		44,658
Uncertain tax position adoption (FIN #48)				—			—		—			—			(4,921	)		(4,921	)
Cash dividends to shareholders ($0.92 per share)				—			—		—			—			(21,156	)		(21,156	)
Exercise of stock options	14,800			74			—		348			—			—			422
Repurchase of common stock	(1,500,000	)		(7,500	)		—		(41,216	)		—			—			(48,716	)
Stock-based compensation				(82	)		—		5,230			—			—			5,148
Income tax benefits relating to stock-based compensation				—			—		110			—			—			110
Other	(15,437	)		5			—		68			—			29			102
Balance at December 30, 2007	22,055,835		$	110,279		$	2,780	$	19,713		$	(77,277	)	$	857,512		$	913,007

Notes to Consolidated Financial Statements begin on page 34.

32

Media General, Inc.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

	Fiscal Years Ended
	December 30, 2007			December 31, 2006			December 25, 2005
	(53 weeks)
Cash flows from operating activities:
Net income (loss)	$	10,687		$	79,042		$	(243,042	)
Adjustments to reconcile net income (loss):
Cumulative effect of change in accounting principle		—			—			325,453
Depreciation		53,109			47,791			43,296
Amortization		25,341			24,842			24,673
Deferred income taxes		16,289			11,176			7,241
Provision for doubtful accounts		5,929			5,660			5,866
Investment loss (income) – unconsolidated affiliates		31,392			(10,598	)		(1,119	)
Insurance proceeds related to repair costs		19,959			—			—
Gain on insurance recovery		(17,604	)		—			—
Net loss (gain) related to divestiture of discontinued operations		2,000			(11,029	)		—
Net gain on sale of Denver investment		—			—			(19,391	)
Net write-down of investments		3,433			700			—
Change in assets and liabilities:
Retirement plan contributions		—			(15,000	)		(15,000	)
Retirement plan accrual		5,444			16,543			14,233
Income taxes payable		(17,518	)		711			(23,431	)
Accounts payable, accrued expenses and other liabilities		(6,636	)		(1,699	)		(5,412	)
Other, net		(996	)		9,920			(11,579	)
Net cash provided by operating activities		130,829			158,059			101,788
Cash flows from investing activities:
Capital expenditures		(78,142	)		(93,896	)		(74,424	)
Purchases of businesses		(2,525	)		(611,385	)		(6,676	)
Proceeds from sales of discontinued operations and investment		—			135,111			45,850
Insurance proceeds related to machinery and equipment		27,841			—			—
Distribution from unconsolidated affiliate		5,000			2,000			—
Other, net		8,245			(2,853	)		4,573
Net cash used by investing activities		(39,581	)		(571,023	)		(30,677	)
Cash flows from financing activities:
Increase in debt		570,000			1,459,000			344,000
Repayment of debt		(588,823	)		(1,027,984	)		(391,976	)
Stock repurchase		(48,716	)		—			—
Debt issuance costs		(1,010	)		(1,780	)		(3,793	)
Cash dividends paid		(21,156	)		(21,180	)		(20,163	)
Other, net		743			1,861			5,975
Net cash (used) provided by financing activities		(88,962	)		409,917			(65,957	)
Net increase (decrease) in cash and cash equivalents		2,286			(3,047	)		5,154
Cash and cash equivalents at beginning of year		11,929			14,976			9,822
Cash and cash equivalents at end of year	$	14,215		$	11,929		$	14,976

Notes to Consolidated Financial Statements begin on page 34.

33

Media General, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1: Summary of Significant Accounting Policies

Fiscal year

The Company’s fiscal year ends on the last Sunday in December. Results for 2007 and 2005 are for the 52-week periods ended December 30, 2007 and December 25, 2005, respectively; results for 2006 are for the 53-week period ended December 31, 2006.

Principles of consolidation

The accompanying financial statements include the accounts of Media General, Inc., subsidiaries more than 50% owned and certain variable interest entities, now dissolved (see Note 5), for which Media General, Inc. was the primary beneficiary (collectively the Company). All significant intercompany balances and transactions have been eliminated. The equity method of accounting is used for investments in companies in which the Company has significant influence; generally, this represents investments comprising approximately 20 to 50 percent of the voting stock of companies and certain partnership interests. Other investments are generally accounted for using the cost method.

Use of estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. The Company re-evaluates its estimates on an ongoing basis. Actual results could differ from those estimates.

Presentation

Certain prior-year financial information has been reclassified to conform with the current year’s presentation.

Revenue recognition

The Company’s principal sources of revenue are the sale of advertising in newspapers, the sale of newspapers to individual subscribers and distributors, and the sale of airtime on television stations. In addition, the Company sells advertising on its newspaper and television websites and portals, and derives revenues from other online activities, including an online advergaming and game development firm. The Company also derives revenue from the sale of broadcast equipment and studio design services. Advertising revenue is recognized when advertisements are published, aired or displayed, or when related advertising services are rendered. Newspaper advertising contracts, which generally have a term of one year or less, may provide rebates or discounts based upon the volume of advertising purchased during the terms of the contracts. Estimated rebates and discounts are recorded as a reduction of revenue in the period the advertisement is displayed. This requires the Company to make certain estimates regarding future advertising volumes. Estimates are based on various factors including historical experience and advertising sales trends. These estimates are revised as necessary based on actual volume realized. Subscription revenue is recognized on a pro-rata basis over the term of the subscription. Amounts received from customers in advance are deferred until earned. Revenues from fixed price contracts (such as studio design services or advergaming development) are recognized under the percentage of completion method, measured by actual cost incurred to date compared to estimated total costs of each contract.

Cash and cash equivalents

Cash in excess of current operating needs is invested in various short-term instruments carried at cost that approximates fair value. Those short-term investments having an original maturity of three months or less are classified in the balance sheet as cash equivalents.

Derivatives

Derivatives are recognized as either assets or liabilities on the balance sheet at fair value. If a derivative is a hedge, a change in its fair value is either offset against the change in the fair value of the hedged item through earnings, or recognized in Other Comprehensive Income (OCI) until the hedged item is recognized in earnings. Any difference between the fair value of the hedge and the item being hedged, known as the ineffective portion, is immediately recognized in earnings in the line item “Other, net” during the period of change. For derivative instruments that are designated as cash flow hedges, the effective portion of the change in value of the derivative instrument is reported as a component of the Company’s OCI and is reclassified into earnings (interest expense for interest rate swaps and newsprint expense for newsprint swaps) in the same period or periods during which the hedged transaction affects earnings. For derivative instruments not designated as hedging instruments, the gain or loss is recognized in the Company’s current earnings during the period of change. Derivative instruments are carried at fair value on the Consolidated Balance Sheets in the applicable line item “Other assets” or “Other liabilities and deferred credits”.

Accounts receivable and concentrations of credit risk

Media General is a diversified communications company which sells products and services to a wide variety of customers located principally in the southeastern United States. The Company’s trade receivables result from its publishing, broadcast and interactive media operations. The Company routinely assesses the financial strength of significant customers, and this assessment, combined with the large number and geographic diversity of its customer base, limits its concentration of risk with respect to trade receivables. The Company maintains an allowance for doubtful accounts based on both the aging of accounts at period end and specific allocations for certain customers.

Inventories

Inventories consist principally of raw materials (primarily newsprint) and broadcast equipment, and are valued at the lower of cost or market using the specific identification method.

Self-Insurance

The Company self-insures for certain employee medical and disability income benefits, workers’ compensation costs, as well as automobile and general liability claims. The Company’s responsibility for workers’ compensation and auto and general liability claims is capped at a certain dollar level (generally $100 thousand to $500 thousand depending on claim type). Insurance liabilities are calculated on an undiscounted basis based on actual claim data and estimates of incurred but not reported claims. Estimates for projected settlements and incurred but not reported claims are based on development factors, including historical trends and data, provided by a third party.

Broadcast film rights

Broadcast film rights consist principally of rights to broadcast syndicated programs, sports and feature films and are stated at the lower of cost or estimated net realizable value. Program rights and the corresponding contractual obligations are recorded as other assets (based upon the expected use in succeeding years) and as other liabilities (in accordance with the payment terms of the contract) in the Consolidated Balance Sheets when programs become available for use. Generally, program rights of one year or less are amortized using the straight-line method; program rights of longer duration are amortized using an accelerated method based on expected useful life of the program.

Property and depreciation

Plant and equipment are depreciated, primarily on a straight-line basis, over their estimated useful lives which are generally 40 years for buildings and range from 3 to 30 years for machinery and equipment. Depreciation deductions are computed by accelerated methods for income tax purposes. Major renovations and improvements and interest cost incurred during the construction period of major additions are capitalized. Expenditures for maintenance, repairs and minor renovations are charged to expense as incurred.

34

Intangible and other long-lived assets

Intangibles consist of goodwill (which is the excess of purchase price over the net assets of businesses acquired), FCC licenses, subscriber lists, network affiliations, other broadcast intangibles, intellectual property, and trademarks. Indefinite-lived intangible assets are not amortized, but finite-lived intangibles are amortized by the straight-line method over periods ranging from 1 to 25 years. Internal use software is amortized on a straight-line basis over its estimated useful life, not to exceed 5 years.

When indicators of impairment are present, management evaluates the recoverability of long-lived tangible and finite-lived intangible assets by reviewing current and projected profitability using undiscounted cash flows of such assets. Annually, or more frequently if impairment indicators are present, management evaluates the recoverability of indefinite-lived intangibles using estimated discounted cash flows to determine their fair value.

Income taxes

The Company accounts for income taxes in accordance with SFAS No. 109, Accounting for Income Taxes, which requires recognition of deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the financial statements or tax returns.

Comprehensive income

The Company’s comprehensive income consists of net income, pension and postretirement related adjustments, unrealized gains and losses on certain investments in equity securities (including reclassification adjustments), and changes in the value of derivative contracts as well as the Company’s share of Other Comprehensive Income from its investments accounted for under the equity method.

Recent accounting pronouncements

In September 2006, the FASB issued FASB Statement No. 157, Fair Value Measurements (FAS 157), which establishes a common definition for fair value under U.S. generally accepted accounting principles and creates a framework for measuring fair value. The FASB believes that the new standard will make the measurement of fair value more consistent and comparable and improve disclosures about those measures. FAS 157 is effective for fiscal years beginning after November 15, 2007. The Company adopted FAS 157 at the beginning of fiscal 2008, which will result in additional disclosures relating to its financial assets and liabilities such as available-for-sale securities and interest rate swaps. The Company is continuing to evaluate the future impact of FAS 157 on its financial statements regarding non-financial assets and liabilities.

In December 2007, the FASB issued FASB Statement No. 141(R), Business Combinations, which amended the provisions of FAS 141 and will provide international conformity with respect to accounting for business combinations. Some of the more significant aspects of this Statement include: the acquiring entity in a business combination must recognize 100% of the assets acquired and liabilities assumed in the transaction as well as any minority interest; establishes the acquisition date as the measurement point for all consideration; and requires expensing transaction costs related to the business combination. This Statement is effective for fiscal years beginning after December 15, 2008.

In September 2006, the FASB issued EITF 06-1, Accounting For Consideration Given by a Service Provider to Manufacturers or Resellers of Equipment Necessary for an End-Customer to Receive Service from the Service Provider, which expands the scope of the previously issued EITF 01-9, Accounting for Consideration Given by a Vendor to a Customer (Including a Reseller of the Vendor’s Products) to include third-party manufacturers and resellers who are not customers of the vendor. Pursuant to this accounting guidance, cash consideration paid to these parties is typically required to be recorded as a reduction of revenue rather than as expense. The Company’s adoption of EITF 06-1 at the beginning of fiscal 2008 will have no impact on net income and will amount to less than 1.5% of consolidated revenues.

Note 2: Acquisitions, Dispositions and Discontinued Operations

The Company has initiated a plan to divest three of its television stations and their associated websites located in mid-sized markets in the Southeastern United States. The divestitures are expected to occur during the first half of 2008. The stations are: WMBB in Panama City, Florida, KALB/NALB in Alexandria, Louisiana, and WNEG in Toccoa, Georgia (an independent satellite station of WSPA in Spartanburg, South Carolina). The divestitures may occur in more than one transaction. Since the Company does not expect to recover its carrying value less its costs to sell, the Company has accrued an after-tax loss of $2 million related to these divestitures.

In the second half of 2006, the Company sold KWCH in Wichita, Kansas (including that station’s three satellites), WIAT in Birmingham, Alabama, WDEF in Chattanooga, Tennessee, and KIMT in Mason City, Iowa, to three different buyers. Gross proceeds from the divestitures were $135 million, including working capital; a net after-tax gain of $11 million was recorded. The Company facilitated these transactions as a tax-deferred, like-kind exchange in conjunction with the acquisition of four NBC stations (discussed below). Depreciation and amortization of assets sold ceased during the second quarter of 2006.

The 2007 accrued loss related to the stations currently held for sale, and the 2006 net gain from the stations sold in that year, are shown on the face of the Consolidated Statements of Operations on the line “Net gain (loss) related to divestiture of discontinued operations (net of income taxes).” The results of these stations and their associated web sites have been presented as discontinued operations in the accompanying Balance Sheets and the Statements of Operations for all periods presented. Income from discontinued operations in the accompanying Consolidated Statements of Operations for the years ended December 30, 2007, December 31, 2006 and December 25, 2005 included:

(In thousands)	2007		2006		2005
Revenues	$	19,071	$	50,409	$	57,544
Costs and expenses		15,210		42,331		53,328
Income before income taxes		3,861		8,078		4,216
Income taxes		1,506		3,150		1,644
Income from discontinued operations	$	2,355	$	4,928	$	2,572

35

As of December 30, 2007, the assets of discontinued operations consisted of approximately $3 million of current assets, $13 million of fixed assets, and $46 million of intangible assets including FCC licenses, network affiliations and $11 million of goodwill.

The Company completed the acquisition of four NBC owned and operated television stations at the beginning of the third quarter of 2006 for $609 million, including transaction costs. This transaction was accounted for as a purchase and has been included in the Company’s consolidated results of operations since its date of acquisition. The stations acquired were: WNCN in Raleigh, North Carolina, WCMH in Columbus, Ohio, WVTM in Birmingham, Alabama, and WJAR in Providence, Rhode Island.

The following summary presents the Company’s unaudited pro forma consolidated results of operations for the years ended December 31, 2006 and December 25, 2005, as if the acquisition of the four television stations from NBC had been completed as of the beginning of each period presented. The pro formas do not purport to be indicative of what would have occurred had the acquisition actually been made as of such date, nor are they indicative of results which may occur in the future.

	Years Ended
(In thousands, except per share amounts)	December 31, 2006		December 25, 2005
Revenues	$	1,015,851	$	962,853
Income from continuing operations before cumulative effect of change in accounting principle	$	58,886	$	70,413
Income from discontinued operations		4,928		2,572
Gain on sale of discontinued operations		11,029		—
Cumulative effect of change in accounting principle		—		(325,453	)
Net income (loss)	$	74,843	$	(252,468	)
Earnings (loss) per common share – assuming dilution:
Income from continuing operations before cumulative effect of change of accounting principle	$	2.47	$	2.94
Discontinued operations, including 2006 gain on sale of $0.46 per share		0.67		0.11
Cumulative effect of change in accounting principle		—		(13.63	)
Net income (loss)	$	3.14	$	(10.58	)

Note 3: Intangible Assets

The Consolidated Statements of Operations include amortization expense from continuing operations for finite-lived intangibles of $17.8 million, $17 million and $15.2 million in 2007, 2006 and 2005, respectively. Currently, intangibles amortization expense is projected to be approximately $16 million in 2008, decreasing to approximately: $13 million in 2009, $12 million in 2010 and 2011, and $9 million in 2012. The following table shows the gross carrying amount and accumulated amortization for intangible assets as of December 30, 2007, and December 31, 2006:

	As of December 30, 2007				As of December 31, 2006
(In thousands)	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Amortizing intangible assets (including network affiliation, advertiser, programming and subscriber relationships):
Broadcast	$	246,919	$	76,352	$	246,919	$	61,943
Publishing		35,531		32,434		35,141		29,637
Interactive Media		2,570		1,883		2,570		1,316
Total	$	285,020	$	110,669	$	284,630	$	92,896
Indefinite-lived intangible assets:
Goodwill:
Broadcast	$	280,996			$	280,996
Publishing		642,161				640,661
Interactive Media		1,902				1,902
Total goodwill		925,059				923,559
FCC licenses		492,436				492,436
Other		2,005				1,987
Total	$	1,419,500			$	1,417,982

36

The Company adopted EITF Topic D-108 at the beginning of fiscal 2005. D-108 requires the use of a direct method for valuing all intangible assets other than goodwill. The Company had used the residual value method, a commonly used method at the time, to value the FCC licenses purchased in conjunction with acquisitions made in 1997 and 2000. It had also recorded goodwill, primarily related to deferred taxes, as part of these transactions. In connection with the adoption of D-108, the Company eliminated the distinction between goodwill and FCC license intangible assets that were recorded as part of these prior acquisitions by reclassifying $190.3 million from goodwill to FCC licenses. Concurrent with the adoption, the Company increased the carrying amount of FCC license intangible assets by an additional $111.5 million with a corresponding increase to deferred tax liabilities. There was no impact on impairment results previously reported. Further, the Company valued its FCC licenses using a direct method discounted cash flow model and assumptions that included the concept that cash flows associated with FCC licenses are limited to those cash flows that could be expected by an average market participant. In contrast, the residual value method formerly used by the Company included other elements of cash flows which contributed to station value. The results of this direct method were then compared to the carrying value of FCC licenses (including the reclassified amounts) on a station-by-station basis and a $325.5 million write-down, net of income tax benefit, was recorded as a cumulative effect of change in accounting principle in 2005.

Note 4: Investments

The Company’s equity method investments include a one-third partnership interest in SP Newsprint Company (SPNC), a domestic newsprint manufacturer, and an approximate 18% interest in a limited partnership investment company which the Company recognizes on a three-month lag. In June 2005, the Company sold its 20% interest in The Denver Post Company (Denver) when MediaNews Group, Inc., exercised its option to purchase the Company’s interest. The Company sold Denver for $45.9 million and recorded an after-tax gain of $19.4 million (net of taxes of $13.9 million) on that sale in 2005.

The Company’s share of results from SPNC declined significantly during 2007 due to the combination of lower newsprint selling prices and higher raw materials costs. A strategic review initiated by the partners in May 2007 resulted in SPNC’s announcement, in January 2008, that it had entered into an agreement with certain affiliates of White Birch Paper Company to be acquired for $350 million in an all-cash transaction. The acquisition, which is subject to regulatory approval, is expected to close during the first four months of 2008. As a result of this agreement, SPNC wrote off goodwill on its books (the Company’s share of this write-off was $3.7 million) and the Company recorded an additional pre-tax write-down of $10.7 million to its investment in SPNC. Both losses were recorded in “Investment income (loss) – unconsolidated affiliates” on the Consolidated Statements of Operations. The additional write-down recorded is subject to final adjustment upon closing of the sale. The chart below presents the summarized financial information for the Company’s investment in SPNC together with the additional write-down taken by the Company.

SP Newsprint Company

(In thousands)				2007		2006
Current assets				$	120,392	$	112,871
Noncurrent assets					349,082		393,762
Current liabilities					233,586		60,087
Noncurrent liabilities					51,842		198,651
(In thousands)	2007			2006		2005
Net sales	$	572,125		$	638,377	$	584,161
Gross profit (loss)		(525	)		84,509		50,775
Net income (loss)		(59,939	)		31,562		3,114
Company’s equity in net income (loss)		(19,980	)		10,521		1,038
Additional write-down of Company’s investment		(10,656	)		—		—

The Company is committed to purchase 35 thousand tons of newsprint annually from SPNC. In 2007, the Company purchased approximately 58 thousand tons of newsprint from SPNC at market prices, which totaled $30 million and approximated 56% of the Company’s newsprint needs; in 2006 and 2005, the Company purchased approximately 57 thousand tons of newsprint from SPNC which approximated 46% and 42%, respectively, of the Company’s newsprint needs in each of those years and totaled approximately $34 million and $30 million in 2006 and 2005, respectively. Additionally, in order to facilitate SPNC extending the maturity of its revolving credit agreements for several months, the partners have pledged to make additional capital contributions (not to exceed $7.3 million per partner) to SPNC if certain events related to its sale do not take place.

Retained earnings of the Company at December 30, 2007, included $7.7 million related to undistributed earnings of unconsolidated affiliates.

The Company has an investment in a company that produces interactive entertainment including games and to whom the Company has licensed proprietary game content. The Company, which carries this investment at fair value, recognized write-downs of its investment in 2007 and 2006 of $3.6 million and $700 thousand, respectively, to reflect its approximate fair value due to the extended period the stock price of this publicly traded security has been below the Company’s carrying value.

37

Note 5: Long-Term Debt and Other Financial Instruments

Long-term debt at December 30, 2007, and December 31, 2006, was as follows:

(In thousands)	2007		2006
Revolving credit facility	$	595,000	$	505,000
Bank term loan facility		300,000		300,000
Borrowings of consolidated variable interest entities		—		95,320
Bank lines		2,500		16,000
Capitalized lease		72		—
Long-term debt	$	897,572	$	916,320

The Company has a $1 billion revolving credit facility as well as a $300 million variable bank term loan agreement (together the “Facilities”) which mature in 2011. The Company’s debt covenants require the maintenance of an interest coverage ratio in addition to a leverage ratio, as defined. In the fourth quarter of 2007, the Company amended the Facilities to increase the maximum leverage ratio covenant and reduce the minimum interest ratio covenant for a period of three fiscal quarters. The amendment also modified the circumstance under which certain subsidiary guarantees would be in place. Interest rates under the Facilities are based on the London Interbank Offered Rate (LIBOR) plus a margin ranging from 0.3% to 0.7% (0.7% at December 30, 2007), determined by the Company’s leverage ratio. The Company pays fees (0.175% at December 30, 2007) on the entire commitment of the facility at a rate also based on its leverage ratio. As of December 30, 2007, the Company was in compliance with all covenants and expects that the covenants will continue to be met.

In the first quarter of 2007, the Company repaid, at maturity, $95 million in debt that existed as the result of consolidating certain variable interest entities (VIEs) in which the Company had controlling financial interest by virtue of certain real property leases. At that time, the Company purchased the facilities by using existing capacity under its revolving credit facility.

At December 30, 2007, the Company had borrowings of $2.5 million from bank lines due within one year with an interest rate of 5% that were classified as long-term debt in accordance with the Company’s intention and ability to refinance these obligations on a long-term basis under existing facilities.

Long-term debt maturities during the five years subsequent to December 30, 2007, aggregating $897.6 million, were $2.6 million in 2008 and $895 million in 2011.

In the third quarter of 2006, the Company drew down the full bank term loan that existed at that time and redeemed $200 million of senior notes which matured on September 1, 2006. Also in the third quarter of 2006, the Company entered into several interest rate swaps as part of an overall strategy to manage interest cost and risk associated with variable interest rates, primarily short-term changes in LIBOR. These interest rate swaps are cash flow hedges with notional amounts totaling $300 million; swaps with notional amounts of $100 million will mature in 2009 and $200 million will mature in 2011. Changes in cash flows of the interest rate swaps offset changes in the interest payments on the Company’s $300 million bank term loan. These swaps effectively convert the Company’s variable rate bank term loan to fixed rate debt with a weighted average interest rate approximating 6.4% at December 30, 2007.

The table that follows includes information about the carrying values and estimated fair values of the Company’s financial instruments at December 30, 2007 and December 31, 2006:

(In thousands)	2007		2006
Assets:
Investments	$	1,874	$	4,426
Liabilities:
Long-term debt:
Revolving credit facility		595,000		505,000
Bank term loan facility		300,000		300,000
Borrowings of consolidated variable interest entities		—		95,320
Bank lines		2,500		16,000
Interest rate swap agreements		13,214		5,822

38

The Company’s investments which have a readily determinable value and are classified as available-for-sale are carried at fair value, with unrealized gains or losses, net of deferred taxes, reported as a separate component of stockholders’ equity. The carrying value of the long-term debt in the chart above approximates its fair value. The interest rate swaps are carried at fair value based on a discounted cash flow analysis of the estimated amounts the Company would have received or paid to terminate the swaps.

Note 6: Business Segments

The Company, located primarily in the southeastern United States, is a diversified communications company which has three operating segments: Publishing, Broadcast and Interactive Media. The Publishing Segment, the Company’s largest based on revenue and segment profit, includes 25 daily newspapers and more than 150 weekly newspapers and other publications. The Broadcast Segment consists of 20 network-affiliated broadcast television stations and a provider of equipment and studio design services. The Interactive Media Segment consists of all of the Company’s online enterprises and an online advergaming and game development firm.

Management measures segment performance based on operating cash flow (operating income plus depreciation and amortization) as well as profit or loss from operations before interest, income taxes, and acquisition related amortization. Amortization of intangibles is not allocated to individual segments although the intangible assets themselves are included in identifiable assets for each segment. Intercompany sales are accounted for as if the sales were at current market prices and are eliminated in the consolidated financial statements. The Company’s reportable segments, which are managed separately and contain operations that have been aggregated based on similar economic characteristics, are strategic business enterprises that provide distinct products and services using diverse technology and production processes.

(In thousands)	Publishing			Broadcast			Interactive Media			Eliminations			Total
2007
Consolidated revenues	$	544,757		$	358,367		$	36,181		$	(7,124	)	$	932,181
Segment operating cash flow	$	115,131		$	91,587		$	(941	)				$	205,777
Allocated amounts:
Net write-down of investments								(3,433	)					(3,433	)
Depreciation and amortization		(25,095	)		(25,691	)		(1,852	)					(52,638	)
Segment profit (loss)	$	90,036		$	65,896		$	(6,226	)					149,706
Unallocated amounts:
Interest expense														(59,577	)
Investment loss – unconsolidated affiliates														(31,392	)
Acquisition intangibles amortization														(17,773	)
Corporate expense														(37,856	)
Gain on insurance recovery														17,604
Other														(6,758	)
Consolidated income from continuing operations before income taxes													$	13,954
Segment assets	$	968,436		$	1,226,078		$	12,028					$	2,206,542
Corporate														202,960
Discontinued operations														61,564
Consolidated assets													$	2,471,066
Segment capital expenditures	$	34,933		$	36,553		$	1,316					$	72,802
Corporate														4,010
Discontinued operations														1,330
Consolidated capital expenditures													$	78,142

39

(In thousands)	Publishing			Broadcast			Interactive Media			Eliminations			Total
2006
Consolidated revenues	$	601,144		$	343,118		$	27,113		$	(6,518	)	$	964,857
Segment operating cash flow	$	144,048		$	115,304		$	(1,629	)				$	257,723
Allocated amounts:
Write-down of investment								(700	)					(700	)
Depreciation and amortization		(24,876	)		(19,936	)		(1,479	)					(46,291	)
Segment profit (loss)	$	119,172		$	95,368		$	(3,808	)					210,732
Unallocated amounts:
Interest expense														(48,505	)
Investment income – unconsolidated affiliates														10,598
Acquisition intangibles amortization														(17,018	)
Corporate expense														(39,997	)
Other														(15,713	)
Consolidated income from continuing operations before income taxes													$	100,097
Segment assets	$	966,008		$	1,223,613		$	16,453					$	2,206,074
Corporate														234,635
Discontinued operations														64,519
Consolidated assets													$	2,505,228
Segment capital expenditures	$	48,632		$	32,337		$	1,823					$	82,792
Corporate														3,698
Discontinued operations														7,406
Consolidated capital expenditures													$	93,896
2005
Consolidated revenues	$	587,849		$	256,900		$	20,365		$	(4,721	)	$	860,393
Segment operating cash flow	$	151,268		$	77,478		$	(2,344	)				$	226,402
Allocated amounts:
Equity in net income of unconsolidated affiliate		221												221
Gain on sale of Denver		33,270												33,270
Depreciation and amortization		(22,709	)		(15,090	)		(1,419	)					(39,218	)
Segment profit (loss)	$	162,050		$	62,388		$	(3,763	)					220,675
Unallocated amounts:
Interest expense														(29,408	)
Investment income – unconsolidated affiliates														898
Acquisition intangibles amortization														(15,191	)
Corporate expense														(37,785	)
Other														(10,262	)
Consolidated income from continuing operations before income taxes and cumulative effect of change in accounting principle													$	128,927
Segment assets	$	944,482		$	606,833		$	15,762					$	1,567,077
Corporate														231,508
Discontinued operations														176,769
Consolidated assets													$	1,975,354
Segment capital expenditures	$	36,548		$	22,476		$	1,438					$	60,462
Corporate														5,393
Discontinued operations														8,569
Consolidated capital expenditures													$	74,424

40

Note 7: Taxes on Income

Significant components of income taxes from continuing operations are as follows:

(In thousands)	2007			2006		2005
Current:
Federal	$	(10,710	)	$	23,662	$	38,521
State		(1,957	)		2,174		3,326
Total		(12,667	)		25,836		41,847
Deferred:
Federal		13,432			8,298		5,383
State		2,857			2,878		1,858
Total		16,289			11,176		7,241
Income taxes	$	3,622		$	37,012	$	49,088

Temporary differences, which gave rise to significant components of the Company’s deferred tax liabilities and assets at December 30, 2007, and December 31, 2006, are as follows:

(In thousands)	2007			2006
Deferred tax liabilities:
Difference between book and tax bases of intangible assets	$	303,252		$	276,736
Tax over book depreciation		87,346			89,816
Other		567			7,666
Total deferred tax liabilities		391,165			374,218
Deferred tax assets:
Employee benefits		(37,271	)		(32,963	)
Acquired net operating losses		(2,107	)		(2,686	)
Other comprehensive income items		(44,245	)		(63,793	)
Other		(5,908	)		(2,797	)
Total deferred tax assets		(89,531	)		(102,239	)
Deferred tax liabilities, net		301,634			271,979
Deferred tax assets included in other current assets		9,954			9,691
Deferred tax liabilities	$	311,588		$	281,670

Reconciliation of income taxes computed at the federal statutory tax rate to actual income tax expense from continuing operations is as follows:

(In thousands)	2007			2006			2005
Income taxes computed at federal statutory tax rate	$	4,884		$	35,034		$	45,125
Increase (reduction) in income taxes resulting from:
State income taxes, net of federal income tax benefit		585			3,283			3,365
Other		(1,847	)		(1,305	)		598
Income taxes	$	3,622		$	37,012		$	49,088

41

The Company paid income taxes of $6.9 million, $27.1 million and $51 million, respectively, net of refunds in 2007, 2006 and 2005.

The Company adopted the provisions of FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes – an interpretation of FASB Statement No. 109 (FIN 48), on January 1, 2007. The Company recognized an approximate $4.9 million net increase in the liability for uncertain tax positions, which was accounted for as a reduction of retained earnings, as of January 1, 2007. A reconciliation of the beginning and ending balances of the gross liability for uncertain tax positions is as follows:

(in thousands)
Balance at January 1, 2007	$	17,278
Additions based on tax positions related to the current year		190
Additions for tax positions for prior years		1,531
Reductions for tax positions for prior years		(722	)
Reductions due to settlements		(2,856	)
Balance at December 30, 2007	$	15,421

The entire balance of the liability for uncertain tax positions would impact the effective rate (net of related asset for uncertain tax positions) if underlying issues were sustained or favorably settled. The Company recognizes interest and penalties accrued related to uncertain tax positions in the provision for income taxes. At December 30, 2007, the liability for uncertain tax positions included approximately $5.2 million of estimated interest and penalties.

For federal tax purposes, the Company’s tax returns have been audited through 2003 and remain subject to audit for years 2004 and beyond. The Company has various state income tax examinations ongoing and at varying stages of completion, but generally its state income tax returns have been audited or closed to audit through 2003.

Note 8: Common Stock and Stock Options

In the second quarter of 2007, the Company entered into an accelerated share repurchase program with an investment bank. Under this program, the investment bank delivered 1.5 million shares of Class A Common Stock to the Company for approximately $57 million ($38.10 per share). Those shares were immediately retired and accounted for as a reduction of stockholders’ equity. The share repurchase was funded with borrowings under the Company’s existing credit agreements. As part of the transaction, the Company entered into a forward contract with the investment bank. The forward contract was settled in the third quarter and included a price adjustment based on the volume weighted-average price of the Company’s Class A Common Stock, as defined in the agreement. After this adjustment, the final share repurchase totaled $48.7 million ($32.48 per share).

Holders of the Class A common stock are entitled to elect 30% of the Board of Directors and, with the holders of Class B common stock, also are entitled to vote on the reservation of shares for stock awards and on certain specified types of major corporate reorganizations or acquisitions. Class B common stock can be converted into Class A common stock on a share-for-share basis at the option of the holder. Both classes of common stock receive the same dividends per share.

The Company adopted Statement 123(R), Share-Based Payment, a revision of SFAS No. 123, Accounting for Stock-Based Compensation, as of the beginning of 2006 using the modified prospective method. Results for 2005 have not been restated. Prior to the adoption of Statement 123(R), the Company’s stock-based employee compensation plans were accounted for in accordance with APB 25, under which no compensation expense was recorded because the exercise price of employee stock options equaled the market price of the underlying stock on the date of grant. Had the Company adopted Statement 123(R) in 2005, the impact of that statement would have approximated the impact of FAS 123 (as if the fair-value-based recognition provisions of that statement had been applied) as shown in the following table. The weighted-average grant date fair value of stock options awarded in 2005 ($20.59) was estimated at the date of grant using the Black-Scholes option-pricing model with the following weighted-average assumptions: risk-free interest rate of 4.1%; dividend yield of 1.5%; volatility factor of 27%; and an expected life of 8 years.

(In thousands, except per share amounts)	Year Ended 2005
Net loss, as reported	$	(243,042	)
Deduct: total stock-based employee compensation expense determined under fair value method for all awards, net of related tax effects		(4,928	)
Pro forma net loss	$	(247,970	)
Earnings (loss) per share:
Basic - as reported	$	(10.33	)
Basic - pro forma	$	(10.54	)
Diluted - as reported	$	(10.18	)
Diluted - pro forma	$	(10.39	)

42

Under the Company’s Long-Term Incentive Plan (LTIP), the Company has historically granted stock-based awards to key employees in the form of nonqualified stock options (Non-Qualified Stock Option Plan) and non-vested shares (Performance Accelerated Restricted Stock Plan (PARS)). At the Company’s 2006 Annual Meeting, amendments, including one allowing for additional shares to be made available for future awards, were not approved. Consequently, the Company did not grant additional stock options or PARS in 2007. The Company resumed this practice in 2008 after amendments to the LTIP were approved at the 2007 Annual Stockholder Meeting. In the first quarter of 2007 in order to maintain long-term compensation objectives for key employees, the Board adopted the Stock Appreciation Rights (SAR) Plan and approved grants of individual awards thereunder on January 31, 2007.

A SAR, which is settled in cash and designed to help align key employees’ interests with those of the Company’s stockholders, provides the grantee the ability to benefit from appreciation in the value of the Company’s Class A Common Stock. The amount realized upon exercise of a SAR is the difference between the fair market value of Class A Common Stock on the date of grant and the fair market value of Class A Common Stock on the date of exercise, subject to a maximum increase in value (100% for awards granted in 2007). SARs vest ratably over a three-year period from the date of grant and have a maximum five-year term. SARs vest immediately upon the grantee’s death or disability during employment or upon retirement after age 63 with ten years of service provided that the grantee is employed on December 31 of the year in which the SAR was granted. Upon termination of employment, the grantee has up to 12 months thereafter to exercise any vested SAR.

The Company granted 512,600 SARs with an exercise price of $40.01 in the first quarter of 2007 at a grant-date fair value of $8.79 using a binomial lattice valuation method. No SARs were exercised during 2007, but 37,200 were forfeited. The weighted-average grant-date fair value of SARs awarded in 2007 was estimated on the date of grant using the following assumptions: risk-free interest rate of 4.8%, dividend yield of 2.2%, volatility of 24%, and an expected life of 4.4 years. Each quarter, the Company records compensation expense or benefit ratably over the service period and adjusts for changes in the fair value of SARs. The Company recognized non-cash compensation expense related to SARs of approximately $0.1 million during 2007. This compensation expense was included on the “Selling, general and administrative” line of the Consolidated Condensed Statements of Operations. Based on the fair value of SARs ($0.57 per SAR) at December 30, 2007, there was $0.1 million of total unrecognized compensation cost related to SARs, which would be recognized over a weighted-average period of approximately 2 years. However, a significant increase in stock price would cause the actual compensation cost recognized to be higher due to the variable nature of expense under the SARs Plan. The Company believes that the issuance of stock options and PARS provides for less volatility and better aligns the interests of its stockholders and employees than SARs awards; therefore, the Company does not anticipate authorizing further SARs awards provided adequate shares remain available under the LTIP.

The LTIP is administered by the Compensation Committee and permits the grant of share options and shares to its employees for up to 5 million shares (of which no more than 1.1 million can be used for PARS). At December 30, 2007, a combined 1,937,025 shares were available for grants of PARS (no more than 491,431) and stock options under the LTIP. Grant prices of stock options are equal to the fair market value of the underlying stock on the date of grant. Unless changed by the Compensation Committee, options are exercisable during the continued employment of the optionee but not for a period greater than ten years and not for a period greater than one year after termination of employment; they generally become exercisable at the rate of one-third each year from the date of grant. For awards granted prior to 2006, the optionee may exercise any option in full in the event of death or disability or upon retirement after at least ten years of service with the Company and after attaining age 55. For awards granted in 2006, the optionee must be 63 years of age, with ten years of service, and must be an employee on December 31 in order to be eligible to exercise an award upon retirement. The Company has options for less than 70,000 shares outstanding under former plans with slightly different exercise terms.

As indicated above, no stock options were granted in 2007. The Company valued stock options granted in 2006 using a binomial lattice valuation method. The volatility factor was estimated based on the Company’s historical volatility over the contractual term of the options. The Company also used historical data to derive the option’s expected life and employee forfeiture rates within the valuation model. The risk-free interest rate was based on the U.S. Treasury yield curve in effect at the date of grant. The dividend yield was predicated on the current annualized dividend payment and the average stock price over the year prior to the grant date. The weighted-average grant-date fair value of stock options awarded in 2006 ($15.50) was estimated on the date of grant using the following assumptions: risk-free interest rate of 4.4%, dividend yield of 1.4%, volatility of 28%, and an expected life of 6.6 years.

The following is a summary of option activity for the year ended December 30, 2007:

(In thousands, except per share amounts)	Shares		Weighted- Average Exercise Price		Weighted-Average Remaining Contractual Term (in years)*	Aggregate Intrinsic Value
Outstanding-beginning of year	2,032		$	54.43
Granted	—			—
Exercised	(15	)		28.50
Forfeited or expired	(148	)		55.58
Outstanding-end of year	1,869		$	54.54	5.8	$	16
Outstanding-end of year less estimated forfeitures	1,846		$	54.60	5.8	$	16
Exercisable - end of year	1,474		$	54.99	5.2	$	16

* Excludes 900 options which are exercisable during the lifetime of the optionee and 63,000 options which are exercisable during the continued employment of the optionee and for a three-year period thereafter

43

The Company recognized non-cash compensation expense related to stock options of approximately $3.4 million ($2.2 million after-tax) and $5.6 million ($3.6 million after-tax) for 2007 and 2006, respectively. This compensation expense was included on the “Selling, general and administrative” line of the Consolidated Condensed Statement of Operations. As of December 30, 2007, there was $2 million of total unrecognized compensation cost related to stock options expected to be recognized over a weighted-average period of approximately 1 year. The total intrinsic value of options exercised during 2007 was $0.1 million; cash received from these options exercised was $0.4 million. The actual tax benefit realized from option exercise of share-based payment arrangements was nominal. In 2007, the Company also reflected $0.1 million of excess tax benefits as a financing cash flow in its Statement of Cash Flows.

Certain executives are eligible for Performance Accelerated Restricted Stock (PARS), which vests over a ten-year period. If certain earnings targets are achieved (as defined in the plan) vesting may accelerate to either a three, five or seven year period. The recipient of PARS must remain employed by the Company during the vesting period. PARS is awarded at the fair value of Class A shares on the date of the grant. At December 30, 2007, the following shares remain unvested under the terms of the plan: 144,600 shares granted in 2005 at $63.18, 136,600 shares granted in 2003 at $56.03, 102,500 shares granted in 2001 at $51.41, and 57,400 shares granted in 1999 at $47.91. All restrictions on PARS granted prior to 1999 have been released.

As of the end of 2007, there was $9.9 million of total unrecognized compensation cost related to PARS under the LTIP; that cost is expected to be recognized over a weighted-average period of approximately 5.8 years. The amount recorded as expense in 2007, 2006, and 2005 was $1.8 million, $2.6 million, and $3.3 million, respectively.

Each non-employee member of the Board of Directors of the Company participates in the Directors’ Deferred Compensation Plan. The plan provides that each non-employee Director shall receive half of his or her annual compensation for services to the Board in the form of Deferred Stock Units (DSU); each Director additionally may elect to receive the balance of his or her compensation in either cash, DSU, or a split between cash and DSU. Other than dividend credits, deferred stock units do not entitle Directors to any rights due to a holder of common stock. DSU account balances may be settled after the Director’s retirement date by a cash lump-sum payment, a single distribution of common stock, or annual installments of either cash or common stock over a period of up to ten years. The Company records expense annually based on the amount of compensation paid to each director as well as recording an adjustment for changes in fair value of DSU. In 2007, 2006, and 2005, the Company recognized benefits of $0.5 million, $0.4 million and $0.2 million, respectively, under the plan due to the decrease in fair value of DSU.

Note 9: Retirement Plans

The Company has a funded, qualified non-contributory defined benefit retirement plan which covers substantially all employees, and non-contributory unfunded supplemental executive retirement and ERISA excess plans which supplement the coverage available to certain executives. The Company also has a retiree medical savings account (established as of the beginning of 2007) which reimburses employees who retired from the Company for certain medical expenses. In addition, the Company also has an unfunded plan that provides certain health and life insurance benefits to retired employees who were hired prior to 1992. The previously mentioned plans are collectively referred to as the “Plans”. The Company used a measurement date of December 31 for the Plans.

In the second quarter of 2006, the Company announced a redesign of its defined benefit and defined contribution retirement plans as well as the addition of certain new employee benefit programs. These changes are expected to reduce the volatility of future pension expense while continuing to provide competitive retirement benefits to employees. The changes became effective at the beginning of 2007 and included: freezing the service accrual in the current defined benefit retirement plan for existing employees (while closing this plan to new employees), increasing the maximum Company match in the current 401(k) defined contribution plan to 5% from 4% of an employee’s earnings, adding a profit sharing component to the 401(k) plan, and establishing a retiree medical savings account.

Benefit Obligations

The following table provides a reconciliation of the changes in the Plans’ benefit obligations for the years ended December 30, 2007, and December 31, 2006:

	Pension Benefits						Other Benefits
(In thousands)	2007			2006			2007			2006
Change in benefit obligation:
Benefit obligation at beginning of year	$	437,267		$	417,972		$	50,995		$	32,166
Service cost		1,096			14,535			491			396
Interest cost		24,995			25,235			2,943			2,559
Participant contributions		—			—			1,121			1,047
Plan amendments		(18	)		—			2,189			13,210
Actuarial gain		(38,239	)		(4,807	)		(6,828	)		(110	)
Acquisition		—			—			—			5,011
Benefit payments		(16,808	)		(15,668	)		(3,163	)		(3,284	)
Benefit obligation at end of year	$	408,293		$	437,267		$	47,748		$	50,995

44

The accumulated benefit obligation at the end of 2007 and 2006 was $349 million and $361 million, respectively. The Company’s policy is to fund benefits under the supplemental executive retirement, excess, and all postretirement benefits plans as claims and premiums are paid. As of December 30, 2007 and December 31, 2006, the benefit obligation related to the supplemental executive retirement and ERISA excess plans included in the preceding table was $46.4 million and $51.2 million, respectively. The Plans’ benefit obligations were determined using the following assumptions:

	Pension Benefits				Other Benefits
	2007		2006		2007		2006
Discount rate	6.50	%	6.00	%	6.50	%	6.00	%
Compensation increase rate	4.00		4.00		4.00		4.00

A 9.5% annual rate of increase in the per capita cost of covered health care benefits was assumed for both 2007 and 2006. This rate was assumed to decrease gradually each year to a rate of 5% in 2014 and remain at that level thereafter. These rates can have a significant effect on the amounts reported for the Company’s postretirement obligations. A one-percentage point increase or decrease in the assumed health care trend rates would change the Company’s accumulated postretirement benefit obligation by approximately $800 thousand and the Company’s net periodic cost by $75 thousand.

Plan Assets

The following table provides a reconciliation of the changes in the fair value of the Plans’ assets for the years ended December 30, 2007, and December 31, 2006:

	Pension Benefits						Other Benefits
(In thousands)	2007			2006			2007			2006
Change in plan assets:
Fair value of plan assets at beginning of year	$	297,622		$	265,205		$	—		$	—
Actual return on plan assets		25,860			31,386			—			—
Employer contributions		1,734			16,699			2,524			2,727
Participant contributions		—			—			1,121			1,047
Benefit payments		(16,808	)		(15,668	)		(3,645	)		(3,774	)
Fair value of plan assets at end of year	$	308,408		$	297,622		$	—		$	—

The asset allocation for the Company’s funded retirement plan at the end of 2007 and 2006, and the asset allocation range for 2008, by asset category, are as follows:

	Asset Allocation Range	Percentage of Plan Assets at Year End
Asset Category	2008	2007	2006
Equity securities	55%-75%	73%	73%
Fixed income securities	25%-45%	27%	27%
Total		100%	100%

As plan sponsor of the funded retirement plan, the Company’s investment strategy is to achieve a rate of return on the plan’s assets that, over the long-term, will fund the plan’s benefit payments and will provide for other required amounts in a manner that satisfies all fiduciary responsibilities. A determinant of the plan’s returns is the asset allocation policy. The Company’s investment policy provides absolute ranges (55%-75% equity, 25%-45% fixed income) for the plan’s long-term asset mix. The Company periodically (at least annually) reviews and rebalances the asset mix if necessary. The Company also reviews the plan’s overall asset allocation to determine the proper balance of securities by market capitalization, value or growth, U.S. or international, or the addition of other asset classes. Periodically, the Company evaluates each investment manager to determine if that manager has performed satisfactorily when compared to the defined objectives, similarly invested portfolios, and specific market indices.

45

Funded Status

The following table provides a statement of the funded status of the Plans at December 30, 2007, and December 31, 2006:

	Pension Benefits						Other Benefits
(In thousands)	2007			2006			2007			2006
Amounts recorded in the balance sheet:
Current liabilities	$	(1,660	)	$	(1,667	)	$	(3,466	)	$	(3,879	)
Noncurrent liabilities		(98,225	)		(137,978	)		(44,282	)		(47,116	)
Net amount recognized	$	(99,885	)	$	(139,645	)	$	(47,748	)	$	(50,995	)

The following table provides a reconciliation of the Company’s accumulated other comprehensive income prior to any deferred tax effects:

	Pension Benefits									Other Benefits
(In thousands)	Net actuarial (gain) loss			Prior service (credit) cost			Total			Net actuarial (gain) loss			Prior service cost		Total
December 31, 2006	$	143,525		$	(259	)	$	143,266		$	13		$	14,801	$	14,814
Current year change		(47,588	)		35			(47,553	)		(6,754	)		468		(6,286	)
December 30, 2007	$	95,937		$	(224	)	$	95,713		$	(6,741	)	$	15,269	$	8,528

The Company anticipates recognizing $5 million of actuarial loss and $1.7 million of prior service cost, both of which are currently in accumulated other comprehensive income, as a component of its net periodic cost in 2008.

Expected Cash Flows

The following table includes amounts that are expected to be contributed to the Plans by the Company and amounts the Company expects to receive in Medicare subsidy payments. It reflects benefit payments that are made from the Plans’ assets as well as those made directly from the Company’s assets and includes the participants’ share of the costs, which is funded by participant contributions. The amounts in the table are actuarially determined and reflect the Company’s best estimate given its current knowledge; actual amounts could be materially different.

(In thousands)	Pension Benefits		Other Benefits		Medicare Subsidy Receipts
Employer Contributions
2008 (expectation) to participant benefits	$	11,713	$	4,064	$	—
Expected Benefit Payments / Receipts
2008		16,595		4,064		487
2009		16,998		4,471		532
2010		18,000		4,488		586
2011		19,444		4,873		639
2012		20,985		4,744		699
2013-2017		129,265		24,600		4,308

Net Periodic Cost

The following table provides the components of net periodic benefit cost for the Plans for fiscal years 2007, 2006, and 2005:

	Pension Benefits									Other Benefits
(In thousands)	2007			2006			2005			2007			2006		2005
Service cost	$	1,096		$	14,535		$	13,796		$	491		$	396	$	295
Interest cost		24,995			25,235			22,440			2,943			2,559		1,866
Expected return on plan assets		(24,808	)		(25,306	)		(24,871	)		—			—		—
Amortization of prior-service cost		(53	)		11			209			1,721			1,182		462
Amortization of net loss (gain)		8,296			7,412			7,078			(74	)		—		853
Curtailment loss		—			497			—			—			—		—
Net periodic benefit cost	$	9,526		$	22,384		$	18,652		$	5,081		$	4,137	$	3,476

46

As part of its purchase accounting for the 2006 NBC station acquisition, the Company recorded $5.3 million of liabilities in that year related to post-retirement and retiree medical savings account benefits granted to those new employees.

The net periodic costs for the Company’s pension and other benefit plans were determined using the following assumptions:

	Pension Benefits				Other Benefits
	2007		2006 1		2007		2006 1
Discount rate	6.00	%	5.80	%	6.00	%	5.80	%
Expected return on plan assets	8.50		8.80		—		—
Compensation increase rate	4.00		3.75		4.00		3.75

¹ Assumption as of the beginning of the year. The Plans were remeasured as of April 30, 2006 in conjunction with the redesign of retirement benefits using the following assumptions: discount rate 6.5%, expected return on plan assets 8.5%, and compensation increase rate 4.0%.

The reasonableness of the expected return on the funded retirement plan assets was determined by four separate analyses: 1) review of 18 years of historical data of portfolios with similar asset allocation characteristics done by a third party, 2) analysis of 10 years of historical performance assuming the current portfolio mix and investment manager structure done by a third party, 3) review of the Company’s actual portfolio performance over the past 10 years, and 4) projected portfolio performance, assuming the plan’s asset allocation range, done by a third party. Net periodic costs for 2008 will use a discount rate of 6.5%, an expected rate of return on plan assets of 8.5%, and a compensation increase rate of 4.0%.

The Company also sponsors a 401(k) plan (which beginning in 2007 included a profit-sharing component) covering substantially all employees under which the Company matches 100% of participant pretax contributions up to a maximum of 5% of the employee’s salary in 2007 (maximum match was 4% prior to 2007). Eligible account balances may be rolled over from a prior employer’s qualified plan. Contributions charged to expense under the plan were $10.6 million, $8.7 million and $8.2 million in 2007, 2006 and 2005, respectively. The Company also recorded $5.8 million of expense in 2007 reflecting the amount it expects to pay in profit sharing contributions.

Note 10: Earnings Per Share

The following chart is a reconciliation of the numerators and the denominators of the basic and diluted per share computations for income from continuing operations before cumulative effect of change in accounting principle, as presented in the Consolidated Statements of Operations.

	2007						2006						2005
(In thousands, except per share amounts)	Income (Numerator)			Shares (Denominator)	Per Share Amount		Income (Numerator)			Shares (Denominator)	Per Share Amount		Income (Numerator)			Shares (Denominator)	Per Share Amount
Basic EPS
Income from continuing operations available to common stockholders before cumulative effect of change in accounting principle	$	10,332		22,656	$	0.45	$	63,085		23,597	$	2.67	$	79,839		23,527	$	3.39
Effect of Dilutive Securities
Stock options				—						—						121
Restricted stock and other		(58	)	171				(54	)	187				(68	)	236
Diluted EPS
Income from continuing operations available to common stockholders plus assumed conversions before cumulative effect of change in accounting principle	$	10,274		22,827	$	0.45	$	63,031		23,784	$	2.65	$	79,771		23,884	$	3.34

47

Note 11: Commitments, Contingencies and Other

Broadcast film rights

Over the next 6 years the Company is committed to purchase approximately $53.4 million of program rights that currently are not available for broadcast, including programs not yet produced. If such programs are not produced, the Company’s commitment would expire without obligation.

Capital commitments

The Company currently has several significant projects involving new buildings and press equipment. It also is in the process of replacing a centralized traffic system in its Broadcast Division. Remaining commitments on these projects at December 30, 2007, totaled approximately $8.1 million.

Lease obligations

The Company rents certain facilities and equipment under operating leases. These leases extend for varying periods of time ranging from one year to more than twenty years and in many cases contain renewal options. Total rental expense from continuing operations amounted to $9.2 million in 2007, $7.9 million in 2006 and $6.0 million in 2005. Minimum rental commitments for continuing operations under operating leases with noncancelable terms in excess of one year are as follows: 2008 – $7.1 million; 2009 – $6.0 million; 2010 – $5.6 million; 2011 – $4.5 million; 2012 – $3.7 million; subsequent years – $9.8 million.

Interest

In 2007, 2006 and 2005, the Company’s interest expense related to continuing operations was $59.6 million (net of $1.4 million capitalized), $48.5 million (net of $1 million capitalized) and $29.4 million (net of $0.8 million capitalized), respectively. Interest paid for all operations during 2007, 2006 and 2005, net of amounts capitalized, was $58.3 million, $48.4 million and $23.6 million, respectively.

Other current assets

Other current assets included program rights of $15.8 million and $15.7 million at December 30, 2007, and December 31, 2006, respectively. At December 30, 2007, other current assets also included refundable income taxes of $12.9 million.

Accrued expenses and other current liabilities

Accrued expenses and other current liabilities consisted of the following:

(In thousands)	2007		2006
Payroll and employee benefits	$	34,677	$	31,565
Unearned revenue		21,244		21,567
Fire damage repair costs received in advance (see below)		14,428		—
Program rights		14,936		16,001
Other		18,215		22,839
Total	$	103,500	$	91,972

Insurance Recovery

In the second quarter of 2007, one of three presses at the Company’s Richmond Times-Dispatch printing facility near Richmond, Virginia, caught fire; damage to the remainder of the facility was minimal and the remaining presses were back in operation the next day. The Company has insurance to cover the damage as well as the interruption to its business. In the fourth quarter, the Company reached a settlement with the insurance company and received cash of $47.7 million (net of the $100,000 deductible that was recorded as an expense in the second quarter) which covered the damaged press as well as the Company’s clean-up and repair costs, $14.4 million of which will be expended subsequent to year end. The Company wrote off the net book value of the destroyed equipment totaling $10.2 million. The insured value of the property exceeded its net book value by $17.6 million, which was recorded as a gain on insurance settlement in the fourth quarter.

Other

The FCC has mandated a reallocation of a portion of the broadcast spectrum to others, including Sprint/Nextel. According to the FCC order, broadcasters must surrender their old equipment to prevent interference within a narrowed broadcasting frequency range. In exchange for the relinquished equipment, Sprint/Nextel is providing broadcasters with new digital equipment and reimbursing associated out-of-pocket expenses. Over the next two years, Sprint/Nextel will provide the Company with new equipment which is capable of meeting the narrowed broadcasting frequency criteria. The Company recorded gains of $.9 million in 2007 in the line item “Selling, general and administrative” on the Consolidated Statements of Operations and anticipates recording gains approaching $7 million in total over the next two years relating to the new equipment.

48

Media General, Inc.

Quarterly Review

(Unaudited, in thousands, except per share amounts)	First Quarter			Second Quarter		Third Quarter		Fourth Quarter
2007
Revenues	$	226,299		$	236,646	$	225,451	$	243,785
Operating income		6,515			24,444		23,458		52,813
Income (loss) from continuing operations		(6,609	)		4,696		1,804		10,441
Income from discontinued operations		105			424		678		1,148
Net loss related to divestiture of discontinued operations		—			—		—		(2,000	)
Net income (loss)		(6,504	)		5,120		2,482		9,589
Income (loss) per share from continuing operations		(0.27	)		0.21		0.08		0.47
Income (loss) per share from continuing operations – assuming dilution		(0.27	)		0.21		0.08		0.47
Net income (loss) per share		(0.27	)		0.23		0.11		0.43
Net income (loss) per share – assuming dilution		(0.27	)		0.22		0.11		0.43
Shares traded		9,475			18,389		24,771		14,633
Stock price range	$	36.50-43.94		$	32.32-39.50	$	26.68-34.62	$	20.25-31.40
Quarterly dividend paid	$	0.23		$	0.23	$	0.23	$	0.23
2006
Revenues	$	213,529		$	225,629	$	236,273	$	289,426
Operating income		17,543			31,556		24,961		63,621
Income from continuing operations		6,637			17,752		7,409		31,287
Income from discontinued operations		30			2,424		1,359		1,115
Net gain on sale of discontinued operations		—			—		11,802		(773	)
Net income		6,667			20,176		20,570		31,629
Income per share from continuing operations		0.28			0.75		0.31		1.33
Income per share from continuing operations – assuming dilution		0.28			0.75		0.31		1.32
Net income per share		0.28			0.85		0.87		1.34
Net income per share – assuming dilution		0.28			0.85		0.87		1.33
Shares traded		6,434			9,135		10,116		7,690
Stock price range	$	46.17-53.00		$	35.74-47.74	$	35.65-44.16	$	33.80-38.79
Quarterly dividend paid	$	0.22		$	0.22	$	0.22	$	0.22

* Media General, Inc., Class A common stock is listed on the New York Stock Exchange under the symbol MEG. The approximate number of equity security holders of record at February 3, 2008, was: Class A common – 1,462, Class B common – 11.

* In the fourth quarter of 2007, the Company initiated a plan to sell three of its televisions stations and recorded a net loss related to the divestitures of $2 million (net of income taxes of $0.7 million). In the third and fourth quarters of 2006, the Company sold certain television stations and reported a net gain on these sales of $11 million (net of income taxes of $6.7 million). All prior periods have been restated to reflect these items as discontinued operations.

49

Five-Year Financial Summary

Certain of the following data were compiled from the consolidated financial statements of Media General, Inc., and should be read in conjunction with those statements and Management’s Discussion and Analysis which appear elsewhere in this report.

(In thousands, except per share amounts)	2007			2006			2005			2004			2003
Summary of Operations
Operating revenues (a)(b)	$	932,181		$	964,857		$	860,393		$	843,372		$	786,408
Net income (loss)	$	10,687		$	79,042		$	(243,042	)	$	80,185		$	58,685
Adjustments to reconcile to operating cash flow:
Cumulative effect of change in accounting principle (c)		—			—			325,453			—			8,079
Income from discontinued operations (a)		(2,355	)		(4,928	)		(2,572	)		(4,998	)		(4,118	)
Loss (gain) related to divestiture of discontinued operations (a)		2,000			(11,029	)		—			—			(6,754	)
Gain on sale of investment in The Denver Post Corporation		—			—			(33,270	)		—			—
Investment (income) loss – unconsolidated affiliates		31,392			(10,598	)		(1,119	)		(1,551	)		4,672
Other, net		2,307			(323	)		(2,454	)		(7,477	)		(10,666	)
Interest expense		59,577			48,505			29,408			31,082			34,424
Income taxes		3,622			37,012			49,088			43,897			32,783
Operating income		107,230			137,681			121,492			141,138			117,105
Depreciation and amortization		75,235			68,409			59,583			58,097			57,465
Operating cash flow	$	182,465		$	206,090		$	181,075		$	199,235		$	174,570
Per Share Data: (a) (b) (c)
Income from continuing operations	$	0.45		$	2.67		$	3.39		$	3.22		$	2.42
Income from discontinued operations		0.02			0.68			0.11			0.21			0.47
Cumulative effect of change in accounting principle		—			—			(13.83	)		—			(0.35	)
Net income (loss)	$	0.47		$	3.35		$	(10.33	)	$	3.43		$	2.54
Per Share Data – assuming dilution: (a) (b) (c)
Income from continuing operations	$	0.45		$	2.65		$	3.34		$	3.17		$	2.39
Income from discontinued operations		0.02			0.67			0.11			0.21			0.46
Cumulative effect of change in accounting principle		—			—			(13.63	)		—			(0.35	)
Net income (loss)	$	0.47		$	3.32		$	(10.18	)	$	3.38		$	2.50
Other Financial Data:
Total assets (b)	$	2,471,066		$	2,505,228		$	1,975,354		$	2,480,335		$	2,498,278
Working capital (excluding discontinued assets and liabilities) (a)		75,724			69,074			64,344			35,565			40,909
Capital expenditures		78,142			93,896			74,424			37,835			31,774
Total debt		897,572			916,320			485,304			533,280			627,289
Cash dividends per share		0.92			0.88			0.84			0.80			0.76

(a) In the fourth quarter of 2007, the Company initiated a plan to divest WNEG in Toccoa, Georgia, KALB/NALB in Alexandria, Louisiana, and WMBB in Panama City, Florida, and recorded a loss on the divestitures of $2 million (net of income taxes of $0.7 million). In the second half of 2006, the Company sold KWCH in Wichita, Kansas (including that station’s three satellites); WIAT in Birmingham, Alabama; WDEF in Chattanooga, Tennessee; and KIMT in Mason, Iowa. The Company reported a gain of $11 million (net of income taxes of $6.7 million). In October 2003, the Company sold Media General Financial Services and reported a gain of $6.8 million (net of income taxes of $3.9 million). All prior periods have been restated to reflect these items as discontinued operations (net of taxes).

(b) In the third quarter of 2006, the Company acquired WNCN in Raleigh, North Carolina, WCMH in Columbus, Ohio, WJAR in Providence, Rhode Island and WVTM in Birmingham, Alabama.

(c) Includes the recognition in the first quarter of 2005 of a charge, related to using the direct method to revalue FCC licenses of $325.5 million (net of a tax benefit of $190.7 million) as the cumulative effect of a change in accounting principle resulting from the adoption of EITF Topic D-108, Use of the Residual Method to Value Acquired Assets Other Than Goodwill. Also includes the recognition in July of 2003 of a charge related to variable interest entities of $8.1 million (net of a tax benefit of $3.4 million) as the cumulative effect of a change in accounting principle resulting from the adoption of FASB Interpretation 46, Consolidation of Variable Interest Entities.

50

EX-21

Exhibit 21

Subsidiaries of the Registrant

Listed below are the major subsidiaries of the Company, including equity investees, each of which is in the consolidated financial statements of the Company and its Subsidiaries, and the percentage of ownership by the Company (or if indented, by the subsidiary under which it is listed). Subsidiaries omitted from the list would not, if aggregated, constitute a significant subsidiary:

Name of Subsidiary	Jurisdiction of Incorporation	Securities Ownership
Media General Communications, Inc.	Delaware	100	%
Media General Operations, Inc.	Delaware	100	%
Birmingham Broadcasting Co., Inc.	Delaware	100	%
Birmingham Broadcasting (WVTM-TV), LLC	Delaware	100	%
Blockdot, Inc.	Texas	100	%
Media General Communications Holdings, LLC	Delaware	100	%
NES II, Inc.	Virginia	100	%
Professional Communications Systems, Inc.	Florida	100	%
Virginia Paper Manufacturing Corp.	Georgia	100	%
SP Newsprint Company (Partnership)	Georgia	33.33	%

EX-23.1

Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

We consent to the incorporation by reference in this Annual Report (Form 10-K) of Media General, Inc. of our reports dated January 30, 2008, with respect to the consolidated financial statements of Media General, Inc. and the effectiveness of internal control over financial reporting of Media General, Inc., included in the 2007 Annual Report to Stockholders of Media General, Inc.

Our audits also included the financial statement schedule of Media General, Inc., listed in Item 15(a). This schedule is the responsibility of the Company’s management. Our responsibility is to express an opinion based on our audits. In our opinion, as to which the date is January 30, 2008, the financial statement schedule referred to above, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein.

We also consent to the incorporation by reference in the following Registration Statements of our reports dated January 30, 2008, with respect to the consolidated financial statements of Media General, Inc. and the effectiveness of internal control over financial reporting of Media General, Inc., incorporated by reference from the Annual Report to Stockholders, and our report included in the preceding paragraph with respect to the financial statement schedule of Media General, Inc., included in this Annual Report (Form 10-K) of Media General, Inc., for the fiscal year ended December 30, 2007.

Registration Statement Number	Description
2-56905	Form S-8
33-23698	Form S-8
33-26853	Form S-3
33-52472	Form S-8
333-16731	Form S-8
333-16737	Form S-8
333-69527	Form S-8
333-54624	Form S-8
333-57538	Form S-8
333-138843	Form S-8
333-142769	Form S-8
333-148976	Form S-8

	/s/ Ernst & Young LLP
Richmond, Virginia
February 22, 2008

EX-23.2

Exhibit 23.2

Consent of Independent Auditors

We consent to the incorporation by reference in this Annual Report (Form 10-K) of Media General, Inc. of our report dated January 22, 2008, with respect to the consolidated financial statements of SP Newsprint Co. and Subsidiaries.

We also consent to the incorporation by reference in the following Registration Statements of our report dated January 22, 2008, with respect to the consolidated financial statements of SP Newsprint Co. and Subsidiaries, included in this Annual Report (Form 10-K) of Media General, Inc., for the fiscal year ended December 30, 2007.

Registration Statement Number	Description
2-56905	Form S-8
33-23698	Form S-8
33-26853	Form S-3
33-52472	Form S-8
333-16731	Form S-8
333-16737	Form S-8
333-69527	Form S-8
333-54624	Form S-8
333-57538	Form S-8
333-138843	Form S-8
333-142769	Form S-8
333-148976	Form S-8

	/s/ Ernst & Young LLP
Atlanta, Georgia
February 25, 2008

EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO RULE 13a-14(a) and RULE 15d-14(a)

OF THE SECURITIES EXCHANGE ACT AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Marshall N. Morton, certify that:

1. I have reviewed this annual report on Form 10-K of Media General, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	February 26, 2008
		/s/ Marshall N. Morton
		Marshall N. Morton
		President and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO RULE 13a-14(a) and RULE 15d-14(a)

OF THE SECURITIES EXCHANGE ACT AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, John A. Schauss, certify that:

1. I have reviewed this annual report on Form 10-K of Media General, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	February 26, 2008
		/s/ John A. Schauss
		John A. Schauss
		Vice President - Finance and Chief Financial Officer

EX-32

Exhibit 32

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Media General, Inc. (the “Company”) on Form 10-K for the year ended December 30, 2007, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), we, Marshall N. Morton, President and Chief Executive Officer, and John A. Schauss, Vice President-Finance and Chief Financial Officer, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Marshall N. Morton

Marshall N. Morton

President and Chief Executive Officer

February 26, 2008

/s/ John A. Schauss

John A. Schauss

Vice President - Finance and Chief Financial Officer

February 26, 2008