A number of media companies are scrambling to refinance their considerable debt before it matures in order to avoid default.

The media industry is especially sensitive to economic cycles since it is heavily dependent on advertising. So, with most pundits predicting a worsening economy over the next few quarters, industry companies are taking a variety of actions to reduce costs and gain flexibility to weather the crisis.

Media General, for example, reportedly is seeking to change the terms of its debt, which in the third quarter was cut to $750 million from $830 million at the end of the second quarter and $898 million at the beginning of the year. The hope is to change the covenants in exchange for higher interest payments, according to an Associated Press report.

“When you look at our most likely multiyear forecast scenario, it has us good relative to covenants, but too close for comfort,” Media General CFO John Schauss said during a conference call, AP reported. “And that’s why we are talking to our banks actively right now.”

The media giant also announced it sold the fourth of five TV stations it had planned to unload. When all five sales are completed, Media General said, it expects to realize total proceeds of $100 million to $105 million, which will be used to reduce debt by $60 million to $65 million after taxes.

Last month The McClatchy Co. agreed to amend its $1.175 billion bank credit facility. Under the arrangement, the media company agreed to put up more collateral and pay higher interest rates in exchange for greater flexibility in the allowable leverage and interest coverage ratios, the agreement’s two primary financial covenants.

“We believe as we look to 2009 that the impact of the current environment on our cash flows necessitated taking the initiative to discuss the effect on our leverage with our banks and structuring an amendment,” said Pat Talamantes, McClatchy’s CFO. “The resulting amendment is a positive development for the company in that it allows us greater flexibility to work through these difficult economic times.”

Bloomberg reported that Westwood One Inc., the largest producer and distributor of informational programming to radio stations, is talking with banks and bondholders about refinancing or extending the maturities of $85 million in debt due next year. “We’re talking first to banks about getting some room to move there, maybe some extension or a total refinancing,” CEO Thomas Beusse told the wire service. “We’d like to remove the entire ’09 overhang.”

Last week privately held Morris Publishing Group work out a deal for its lenders to relax certain financial tests in exchange for higher interest rates, among other terms.

Also last week, Freedom Communications said it notified the administrative agent for its senior credit facility that it believes it may not be in compliance with formula-based financial covenants for the fiscal quarter ended September 30, 2008, which requires the maintenance of certain specified ratios. The company said it is in discussions with its lenders to address the situation.

“The company has and generates sufficient cash to meet its working capital requirements,” Freedom said. “In addition, in response to the uncertainty in the financial markets several weeks ago, Freedom Communications determined it was prudent to draw down on the balance of its revolver line of credit.”

Meanwhile, Sirius XM Radio said in a regulatory filing that it may issue shares of common stock to repay $1.05 billion in debt that matures in 2009.

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