Warren Buffett, whose Berkshire Hathaway bought most of Media General's newspapers Thursday, thinks paywalls are one of the few defenses newspapers have against the economic forces that are battering them. In an interview on CNBC in February, Buffett said, "It's expensive to turn out a paper. You start with trees up in Canada and you end up with a kid throwing it."

Newspapers "have been giving away their product at the same time they're selling it," he said, "and that is not a great business model. When they put papers up on the Internet and you get free, you're competing with yourself. And throughout the industry you're seeing a reaction to that problem and an answer to it. ... You shouldn't be giving away a product you're trying to sell."

Media General's 2011 annual report said the company was moving toward paywalls at all of its papers: (more...)

Amit Chokshi is the founder and owner of Kinnaras Capital Management, and he's been a constant pain in the collective neck of Media General's management over the past few months. Many of his beefs with Media General's leadership are summed up in a March 14 post: The bosses "missed a massive refinancing window in early 2011, costing investors potentially $15-20+MM in additional interest expense"; they have "no accountability, with the management team enjoying egregious compensation at shareholders’ expense"; and "Management appears aware of its own incompetence as illustrated by the lack of insider purchases irrespective of Media General’s price and valuation." (For other criticism, see: 1, 2, 3.)

Reached by telephone Thursday, Chokshi says "everybody got lucky" with the deal announced today whereby Berkshire Hathaway will buy Media General's newspapers and help pay off its onerous debt. "It doesn't change my view on them," Chokshi says about Media General's leadership: "They're still the worst management team around." That money -- a $400 million term loan and a $45 million credit line -- will have an interest rate of 10.5 percent, which Chokshi calls a "phenomenal deal." In return, Berkshire Hathaway will get warrants to buy about 20 percent of Media General's stock, whose value rose sharply Thursday morning. (more...)

Winston-Salem Journal | Citybizlist
Cynical journalists (those of you who are left), take heart: This is not a post about a news company executive getting a $500,000 bonus as her newspapers lay off employees. That was last week. Nor is it about an executive getting a $4.4 million severance package after overseeing a shrinking newspaper division that cut jobs and closed a major newspaper. Again: last week. This week, Media General reports that CEO Marshall Morton's income dropped 38 percent from 2010 to 2011, according to Citybizlist. The big reason: He didn't receive any stock awards. His salary also dropped 6 percent due to a companywide, 15-day furlough. (He still made $1.44 million, more than he did in 2009.) "For the fourth consecutive year, none of the top six executives received money from the company's annual incentive plan," reports the Winston-Salem Journal's Richard Craver. || Related: New publisher and president at Tampa Tribune (Associated Press)

Media General
The company reported a loss of $3.3 million on $168 million of total revenue, about 12 percent lower than the fourth quarter of 2010. The news release notes that Media General cut 165 positions at the Tampa Tribune in December. The company expects print ad revenue to continue to decrease, but said things are looking up. President and CEO Marshall N. Morton says in the news release:

“As we start the new year, we have generated strong Political revenues from the Republican primaries in South Carolina and Florida, and other campaign and issues spending is starting to ramp up. We have booked strong advance sales for the Super Bowl on our eight NBC stations. As this major election year unfolds, we expect to generate at-or-above-market shares of Political revenues at our highly ranked television stations. Our NBC stations also will benefit from Summer Olympics advertising."

Related: Media General to face debt crunch within weeks

Correction: This post originally misstated Media General's total revenue.

TBO.com | St. Petersburg Times
The website affiliated with The Tampa Tribune and WFLA-TV reports that 165 people are being notified that they'll lose their jobs at the Tribune, its affiliated community newspapers, and TBO.com. WFLA will not be affected. Among the cuts:

• Tribune TV critic Walt Belcher, who posted on Facebook: "My 35 years at The Tribune was a great ride. I probably have more bylines than anyone in the history of the paper - and the way things are going, no one will ever top that. It was never work. It was fun."
• Loren Omoto, managing editor of TBO.com, who wrote on Facebook: "In the grand tradition of 'revenue enhancement,' 'sanitation engineering' and 'celebration of life,' I'm now embarked on my next 'life stage transition.' "

(more...)

McClatchy | Gannett Blog
McClatchy reports that its ad revenue was down 8.7 percent in October and 2.4 percent in November, helped by retail and national advertising. That compares to a drop of 10.1 percent from 2010 for the first nine months of the year. Gannett CEO Gracia Martore said November's ad revenue, including pre-prints, was "demonstrably better," according to Gannett Blog's Jim Hopkins. Gannett says its newspapers are profitable – except for the Detroit Free Press, which cut back home delivery to three days a week in 2009. Sunday circulation is up at newspapers in both chains, according to executives. || Related: Media General says revenue from local media websites will be 15 percent higher this year than last and that it intends to finalize its plans for staff cuts at the Tampa Tribune by the end of the year. | Three issues for media investors in 2012 (Marketwatch)