Warren Buffett, whose Berkshire Hathaway is buying 63 Media General newspapers, told the Omaha World-Herald, which he also owns, he’s not planning any future newspaper purchases, but he’d consider them:
“There aren’t a lot of buyers in the field whose checks will clear. … Any time we can add properties we like, to management we like, at a price we like, we’re ready to go.”
These purchases are not sentimental, said Wally Weitz.
“When it comes to Media General, it’s going to be all business,” Weitz said. “As a Berkshire shareholder, I have to assume that he knows more about investing in newspapers than anybody else, and he’s had decades of recognition that the business has changed and it’s not what it used to be. I would trust him to have made a really good deal.
“Sometimes he does things and you don’t figure out why until later.”
Buffett said the dailies are “all doing OK, to varying degrees, and I think they’ll do even better when we get our people in there. They’re keepers.”
Berkshire Hathaway Media Group President Terry Kroeger, who is visiting Media General newspapers today, said there are no immediate changes planned.
“What we’ve got here is a group of what really is in our sweet spot, which is community newspapers … Richmond and Omaha are large community newspapers that are very plugged into what’s going on in their communities. That’s what really makes for great journalism and great newspapers. These newspapers are very, very integrated parts of their communities.”
There will be time during the transition to disentangle Media General’s converged print and broadcast operations, Kroeger said, though centralized editing and design work will remain in place.
Poynter media business analyst Rick Edmonds said by email Thursday that there may be some less obvious reasons the purchase makes business sense.
My guess is that real estate and other hard assets are a share of it. The contract printing subsidiary appears to be thriving. So the papers’ traditional circulation and advertising may be [worth] a lot less than $142 million — though another of my hunches is that once you take Tampa out, the group is modestly profitable.
Benchmark media analyst Ed Atorino agrees. He told the World-Herald, “After extracting the Tampa Tribune, this is a clean group of papers that are making money and in pretty good shape.”
The Tribune, Atorino said, “is losing money and has no immediate chance of winning its battle against the Tampa Bay Times, owned by the not-for-profit Poynter Institute.”
Media General announced Thursday that it was talking to another prospective buyer about the Tampa properties. So, who is it? One possibility is Halifax Media Group, which owns nearby papers purchased from the New York Times Company. But, Edmonds points out, “all the papers they have bought to date are profitable and without strong competition — the Tribune is neither.”
“Could be a mystery buyer,” he says, “a wealthy Tampa resident or someone who wants to fold most print and remake it as a Sunday and digital operation, conceivably with a non-traditional focus. Also, should the Tribune fold, its subscriber list would be of value to the Tampa Bay Times (and, over time, support higher ad rates).”
Though it’s been rumored that the Times would buy the Tribune or its subscriber list, Edmonds says he’s “not sure how or whether this would come together as a deal.”
Paul Tash, chairman and CEO of Times Publishing Co., did not comment on the possibility of the Tampa Bay Times buying the Tribune, saying, “I see it as a strong vote of confidence in the newspaper business that such a savvy investor as Warren Buffett sees attractive prospects for nearly all of Media General’s newspapers.”