Media General to sell most of its newspapers to Warren Buffett’s Berkshire Hathaway

Marketwatch | Omaha World-Herald | Richmond Times-Dispatch
When Warren Buffett said earlier this month that his Berkshire Hathaway might be buying more newspapers, he meant: right now. Media General announced this morning that it would be selling its newspapers, except its Tampa properties, to Berkshire Hathaway. The Tampa properties, which compete with Poynter’s Tampa Bay Times, are being considered by another company, according to the press release. Halifax Media is a likely contender for the Tampa papers, as it now owns other papers nearby after buying 16 regional papers from the New York Times Company.

Media General announced in February that it was exploring the sale of its papers. During an April conference call about its first quarter results, CEO Marshall Morton said, “Our future is as a broadcast and digital company.”

Media General will receive $142 million cash for its 63 papers and a $400 million loan that will allow the company to pay off its debt, which was becoming increasingly problematic.

Last November, Buffett’s company bought his hometown paper, the Omaha World-Herald.

The Omaha World-Herald reports:

At Berkshire’s shareholders meeting May 5, Buffett was asked by a shareholder whether The World-Herald purchase involved “self-indulgence,” given the fact that Buffett loves newspapers and reads several each day.

Berkshire Hathaway Chairman and CEO Warren Buffett appeared on the front page of his hometown newspaper in Omaha, Neb., as shareholders gathered in the Qwest Center arena before their annual meeting Saturday, May 1, 2010. (Nati Harnik/AP)

Buffett replied that while newspapers are no longer the only source for some types of news, such as stock prices and major league sports scores, they still deliver news and advertising information that people can’t find elsewhere. He said he wanted to buy more newspapers in cities where people are interested in their communities.

“The World-Herald tells me every day things that I can’t find out elsewhere,” Buffett said at the meeting. “Most of those items, overwhelmingly, are local. They do tell me a lot about my city, about local sports, my neighbors, about things I want to know.”

In today’s release, the billionaire investor reiterated his faith in journalism:

“In towns and cities where there is a strong sense of community, there is no more important institution than the local paper,” said Warren Buffett, Chairman of Berkshire Hathaway. “The many locales served by the newspapers we are acquiring fall firmly in this mold and we are delighted they have found a permanent home with Berkshire Hathaway.”

BH Media president Terry Kroeger and Douglas Hiemstra, an executive at the Omaha World-Herald Company, met with Times-Dispatch employees at their downtown Richmond newsroom Thursday. He had a message from Buffett: “Tell those people I wish I was there and I did this because I love newspapers.” Hiemstra, who will be in charge of the transition, told the staffers Berkshire Hathaway didn’t generally make cuts to staff after it bought something.

“I’ve walked through the building three or four times, and they’re
smiling,” Times-Dispatch publisher Tom Silvestri said of the paper’s
staff when reached by phone, “because we have certainty, and they’re
smiling because we have a company that believes in not just newspapers
but also digital transformation.” Silvestri said he was pleased by the
staffers’ reactions: “To see them come downstairs and cheer the new
owners, I think that’s the best we can ask for at this point.” He
doesn’t foresee any changes for the paper at the moment. Well, maybe
one: “We’re gonna make sure href="http://news.yahoo.com/photos/warren-buffett-takes-swig-favorite-cherry-coke-berkshire-photo-200138867.html">Cherry
Cokes are in our refrigerator.”

In an interview with the World-Herald, Buffett said there was no bidding war for the papers because Berkshire Hathaway could also refinance Media General’s debt: “We came up with a solution to all of their problems, and they knew we were good for it,” he told Steve Jordon. Buffett paid $200 million for the World-Herald last November; but “The Media General purchase price also reflected Berkshire’s ability to resolve Media General’s debt problems,” Jordon writes.

The papers had another appeal to Buffett, he told Jordon:

“They’re in good communities,” he said, and it’s important that their potential readers care about their communities. “People buy papers to learn something that they don’t know that they want to know.”

Berkshire Hathaway also owns The Buffalo News and is the largest shareholder of The Washington Post Co.

The deal is expected to close June 25.

Andrew Beaujon contributed to this report.

We have made it easy to comment on posts, however we require civility and encourage full names to that end (first initial, last name is OK). Please read our guidelines here before commenting.

  • http://www.poynter.org Poynter

    Charles, thanks for the feedback. I didn’t realize the Buffett misspelling made it into the newsletter. It appeared incorrectly in the article for about 30 seconds, but that must have been when the newsletter queued up. –Julie Moos, Director of Poynter Online

  • http://www.myfriv.net/ Uyendt

     amazing. Buffett is wonderful

  • choyduoc.vn sống khỏe mỗi ngày

    The Poynter newsletter teasing this story spells it “Buffet” … twice. Fire your newsletter editor and hire an out-of-work copy editor. There are plenty of them in our brave new “second readings are such a luxury” environment.

  • http://bleacherreport.com/users/535519-nick-p nick price

     Buffett now owns the Richmond Times-Dispatch and 62 other daily and weekly papers in Virginia and the South

  • http://www.facebook.com/profile.php?id=100000118816803 Charles Lindsey

    The Poynter newsletter teasing this story spells it “Buffet” … twice. Fire your newsletter editor and hire an out-of-work copy editor. There are plenty of them in our brave new “second readings are such a luxury” environment.

  • http://www.facebook.com/profile.php?id=100000118816803 Charles Lindsey

    The Poynter newsletter teasing this story spells it “Buffet” … twice. Fire your newsletter editor and hire an out-of-work copy editor. There are plenty of them in our brave new “second readings are such a luxury” environment.

  • http://www.facebook.com/peterschorsch Saint Petersblog

    Which would you rather own 63 newspapers or 82 Taco Bells? 

    bit.ly/JyGIuu 

  • Pingback: The Morning Lowdown 5-17-12 — paidContent