UPDATE 1-Media General exits newspaper biz; raises political ad revenue forecast

(Adds details, updates share movement)

Oct 8 (Reuters) - Media General Inc exited itsnearly two-centuries-old newspaper business by selling the TampaTribune, and raised its revenue forecast for politicaladvertising on its TV stations due to stronger-than-anticipateddemand in key election battlegrounds.

The company expects to get $57 million to $58 million thisyear from political advertisements, higher than the $50 millionit had expected, boosted by the U.S. presidential election andhotly contested Senate races this year.

Media General has stations in four states that are key tothe presidential election - Ohio, Florida, Virginia and NorthCarolina.

This year's political advertising during the presidentialelection could net revenue of $2.8 billion in local TV revenues,Moody's Investors Service said last month.

"Our Virginia, Rhode Island and Ohio stations are alsobenefiting from hotly contested Senate races," Media GeneralChief Executive Marshall Morton said in a statement.

The company sold almost all its newspapers to BerkshireHathaway in May for $142 million to focus onits broadcast business.

The newspaper industry has over the past few years beendogged by plummeting advertising revenue and readers who preferdigital formats over paper and ink.

The sale of the Tampa Tribune to Revolution Capital Groupfor $9.5 million completes Media General's switch to abroadcast television and digital media company.

The newspaper, which has been with Media General since 1927and has won a Pulitzer in 1966, has an average Monday to Fridaycirculation of about 144,000, according to the Audit Bureau ofCirculation.

The company said plans are underway to increase broadcastcash flow and EBITDA margins.

The company said its corporate staffing has been reduced inhalf since June, partly as a result of the sale of itsnewspapers and party due to the layoffs in the third quarterthat affected 75 employees.

CEO Morton also said the company's financial position hasbeen strengthened by a new financing arrangement with BerkshireHathaway.

Berkshire Hathaway disclosed a 17 percent stake in thecompany last month.

Media General shares were down 3 percent at $5.14 in Mondaymorning trade on the New York Stock Exchange.

(Reporting by Sruthi Ramakrishnan in Bangalore; Editing bySreejiraj Eluvangal)

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