Media General shares are up about 20% in initial trading this morning following the announcement that it will combine with privately held Young Broadcasting in an all-stock transaction. The deal will create a company with 30 TV stations in 27 markets, reaching 14% of all U.S. viewers. The new entity, to keep the Media General name, will  have affiliates with all of the major networks including CBS (11 stations), NBC (9), ABC (7) Fox (1), CW (1) and MyNetwork TV (1). “The business combination of Media General and Young is a transformational event that will benefit shareholders, employees and the communities we serve,” Media General Chairman J. Stewart Bryan III says. He adds that the new Media General will find it easier to refinance its debt and take advantage of  “attractive synergies” — but also vows to promote “quality local journalism” while “operating top-rated TV stations.” Next year the company expects to reduce the size of its combined board from 14 members to 11 with five apiece from Media General and Young plus one director picked by the Nominating Committee. The deal comes a little more than a year after Warren Buffett’s Berkshire Hathaway bought Media General’s newspapers. That gave the debt-laden surviving TV company a little more latitude to join other station owners who are eager consolidate: Sellers see this as a good time to exit a mature business while buyers expect additional growth from pay TV retransmission consent fees.

Here’s the release with financial details: (more…)