ION Media Networks, Inc. Files Plan of Reorganization and Disclosure Statement Reflecting Agreement with Majority of Its First Lien Lenders on Full Debt-to-Equity Conversion

Plan of Reorganization Contemplates Full Conversion of $150 Million DIP Facility and Extinguishment of Over $2.7 Billion in Legacy Obligations

ION Media Networks, Inc. (“ION”), owner and operator of the ION Television network, today announced that it, together with its debtor subsidiaries, filed a joint plan of reorganization (the “Plan”) and disclosure statement (the “Disclosure Statement”) with the United States Bankruptcy Court for the Southern District of New York. A hearing to consider the Disclosure Statement is scheduled for September 30, 2009.

The Plan, which is supported by holders of over 70% of ION’s first lien secured debt, who also served as the source of ION’s $150 million debtor in possession financing facility, contemplates a complete extinguishment of over $2.7 billion in legacy debt and preferred stock claims.

“The filing of our Plan is a significant step towards emerging from Chapter 11 as a stronger, more competitive company,” said Brandon Burgess, ION’s Chairman and CEO. “We are pleased to have the support of our lenders and appreciate their cooperation in facilitating ION’s restructuring. We have made substantial progress in addressing our operational and financial challenges and we are confident that the company will be well-positioned to create value for all of its stakeholders upon emergence.”

As previously announced, the Plan provides for the following:
upon consummation, the Debtors’ $150 million debtor in possession financing facility will convert into 62.5% of the new common stock of reorganized ION;
the holders of ION’s first lien secured debt claims will receive their pro rata share of 37.5% of the new common stock of reorganized ION;
the holders of ION’s second priority notes claims will receive, on a pro rata basis, warrants to purchase 5% of the new common stock at an equity value of $1 billion;
the holders of general unsecured claims will receive, on a pro rata basis, warrants to purchase 5% of the new common stock at an equity value of $1.5 billion; and
all outstanding ION equity interests, including common stock, preferred stock and any options, warrants or rights to acquire any equity interests, will be cancelled and extinguished and holders thereof will not receive a distribution.

The Disclosure Statement filed today contains a historical profile of the company, a description of proposed distributions to creditors and an analysis of the Plan’s feasibility, as well as many of the technical matters required for the solicitation process, such as descriptions of who will be eligible to vote on the Plan and the voting process itself.

The Plan and Disclosure Statement have not been approved by the Bankruptcy Court. As a result, the Plan and Disclosure Statement may be materially modified before approval.

ION’s Plan and Disclosure Statement are available at http://www.kccllc.net/ION.

This release is not intended as a solicitation for a vote on the Plan.

Kirkland & Ellis LLP is serving as legal counsel to ION and Moelis & Company LLC is serving as financial advisor in connection with the restructuring.

About ION Media Networks

ION Media Networks, Inc. owns and operates the nation’s largest broadcast television station group and ION Television, which reaches over 96 million U.S. television households via its nationwide broadcast television, cable and satellite distribution systems, and features popular TV series and movies from the award-winning libraries of CBS Television, NBC Universal, Sony Pictures Television, Twentieth Television and Warner Bros., among others. Using its digital multicasting capability, ION has launched several digital TV brands, including ION Life, a channel dedicated to active living and personal growth. ION also has launched Open Mobile Ventures Corporation, a business unit focused on the research and development of portable, mobile and out-of-home transmission technology using over-the-air digital television spectrum. For more information, visit www.ionmedia.com.

Forward-Looking Statements

This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are subject to the safe harbor provisions created by that Act. Forward-looking statements can be identified by the use of terms such as “expects,” “should,” “may,” “believes,” “anticipates,” “will,” and other future tense and forward-looking terminology. There can be no assurance as to the actual results of the undertakings described herein. These forward-looking statements are made only as of the date of this release, and ION undertakes no obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise.

Contacts

For ION Media Networks, Inc.
Abernathy MacGregor
Lex Suvanto / Adam Miller, 212-371-5999
lex {at} abmac(.)com
alm {at} abmac(.)com