Warren Buffett

Roanoke Times’ top editor will be replaced by Daily Progress publisher

Roanoke Times Executive Editor Joseph Stinnett will retire at the end of July, staffers were told at a meeting Monday afternoon. Stinnett replaced Carole Tarrant as editor last summer; he’d previously edited the The News & Advance in Lynchburg, Virginia. Lawrence McConnell, the publisher of The Daily Progress in Charlottesville, will replace Stinnett as editor.

Warren Buffett’s BH Media agreed last May to buy the Times. The Times has seen some other recent departures: statehouse reporter Mike Sluss left to join former AP reporter Bob Lewis at the Richmond law/consulting firm McGuire Woods, outdoors editor Mark Taylor became a communication director at Trout Unlimited and opinion editor Christina Nuckols became a communications advisor to the Virginia Department of Medical Assistance Services. Read more


Times public editor calls Joe Nocera column ‘intrinsically flawed,’ calls for more than a correction

New York Times public editor Margaret Sullivan has weighed in on a dispute between two heavyweights. In one corner is high-profile Times columnist Joe Nocera. In the other, billionaire investor Warren Buffett.

In the end, she sides with Buffett, writing that a Nocera column about Buffett is “so intrinsically flawed, a standard correction didn’t get the job done.” She’s right, for the reasons she cites and for another that I’ll note below.

Sullivan’s post focused on a pair of columns (1,2) by Nocera about Buffett and recent decisions related to executive compensation at Coca-Cola, a company in which Buffett’s Berkshire Hathaway is the largest shareholder.

Sullivan notes that both of Nocera’s columns required corrections for factual errors. But even more than the mistakes, the major concern for her is that “The entire premise of the second column is built on a mistake: that Mr. Buffett had changed his tone after ‘licking his wounds’ over the reaction to statements he made on April 23, including Mr. Nocera’s criticism.”

Nocera’s second column played up the apparent change of heart as his reason writing:

I am returning to this subject because, on Monday, following widespread criticism of his decision, Buffett gave a remarkable interview to Fortune magazine’s Stephen Gandel, an interview that was strikingly different in tone from his remarks of last week.

But that Fortune interview happened before Nocera’s initial column (and other criticism) was published. So Nocera’s stated reason to return to the subject was in fact wrong.

This is the exact situation people often raise with me when expressing their frustration with the way the press handles errors. When an article or opinion column is based on an incorrect fact or mistaken assumption, they expect there to be something more than just a simple correction. They expect the offending party to admit they were wrong, or to significantly alter their original assertions.

Sullivan agrees. Calling the column “intrinsically flawed,” she outlined her preferred remedy:

Mr. Nocera should have devoted at least part of another column to telling his readers what happened and why. In his email to me, Mr. Nocera referred to the second column’s fundamental mistake as “bad/dumb/embarrassing.”

Such a forthright admission should not be confined to an email answer to the public editor’s question, but should be published in the same Times pages where the two columns ran. Ideally, the online version of the second column would provide a clear link to the mea culpa.  That would go a long way toward making this right.

This raises another issue that remains unresolved: most people reading the offending column will likely read all of the incorrect assertions before getting to the correction.

The Times places its corrections at the bottom of an offending story, and it also puts  “Corrections Appended” at the top of the story, and hyperlinks that text to the correction. In most cases, this is great; you can go to the correction right away if you like, or just start with the story.

However, in a situation such as this, the issue is that the Times leaves the original, incorrect text intact even after adding the correction.

Any reader who gets the bottom of the Nocera column and sees the correction is going to feel like they just read all of this stuff about Buffet’s change of heart, only to discover that it’s not the case. It should be noted right away, or in the text itself.

To Sullivan’s point, when a column is so badly flawed there needs to be something more done for readers (and the aggrieved party). Either put the correction text at the top so that it’s clearly spelled out for everyone before they read, or require Nocera to fix the column, and offer an explanation, as Sullivan suggests.

As it stands, the correction’s placement and the lack of a corrected column exacerbate the mistake.

One final note: Sullivan’s post includes a necessary disclosure that she for years worked as the top editor at a paper owned by Buffett’s company:

(Disclosure: From 1999 to 2012, I was the editor of The Buffalo News, a paper owned by Berkshire and of which Mr. Buffett is the chairman. I own no shares of Berkshire.)

I had a lingering question after reading her post: how much interaction did she have with Buffett while in her role as the top editor of a paper he owned? It occurred to me because her post for the Times includes several quotes from an interview she had with Buffett. I wondered if they had spoken before.

“I’ve met him several times over the years,” she told me after I sent a question via a Twitter direct message. “We’ve had a cordial though not close relationship.”

It’s not an issue for her to have had past interactions with Buffett. But if I wondered about that, perhaps others did, too.

Update May 13: It looks like Sullivan’s post had the desired effect. Nocera has a new column up, and he uses it to offer a more meaningful mea culpa An excerpt:

“Although The Times published a strong correction, Margaret Sullivan, the public editor, wrote that she didn’t think it went far enough because my column was ‘so intrinsically flawed.’ Upon reflection, I agree with her. I sincerely regret the error.”

Good on Nocera, and nice work by the public editor. Read more


Warren Buffett buys a TV station

Graham Holdings Company

Berkshire Hathaway will buy “a wholly-owned subsidiary of Graham Holdings Company” that includes Miami’s WPLG-TV. The consideration is “approximately 1.6 million shares of Graham Holdings Class B common stock currently owned by Berkshire Hathaway,” Graham Holdings says in a press release. Graham Holdings used to be known as the Washington Post Co.

“I am sure this is a mutually beneficial transaction for both companies,” said Warren E. Buffett, chairman and chief executive officer of Berkshire Hathaway. “While this transaction will greatly reduce our position in Graham Holdings, our admiration for the company and its management is undiminished.”

Berkshire Hathaway purchased most of Media General’s newspapers in 2012, and it’s added lots of newspapers since.

Reuters reported in February that Berkshire Hathaway was in talks with Graham Holdings “to trade the shares it owns in the education and media company for control of a yet-to-be-formed unit of Graham.”

Graham Holdings still owns TV stations in Detroit and Houston. Read more


Buffett group reportedly looking at some Tribune papers


There are certainly good parts of the company we’d have a good interest in,” BH Media Group CEO Terry Kroeger told NetNewsCheck’s Lou Carlozo about Tribune Co.’s newspapers. Kroeger “declined to elaborate further,” Carlozo writes, but during a speech Monday he said: “The big money-center markets are not what we do best,” and that his division of Berkshire Hathaway, which owns dozens of newspapers, is “best in the 40,000 to a 100,000 circulation range.”

By that metric, Tribune papers like The Morning Call of Allentown, Pa., the Daily Press of Newport News, Va., and the Hartford Courant could interest Warren Buffett’s company, Carlozo writes. Last December, Buffett told reporters from the Morning Call that “Allentown is our kind of place” and that while he hadn’t heard from Tribune directly, “if the phone rings, I’ll answer.”

Tribune Co. reportedly planned to sell its print newspapers after it emerged from bankruptcy at the end of last year, but it later announced it would separate its print and broadcast properties. That didn’t necessarily mean the company had abandoned the idea of selling its print properties, Walter Hamilton wrote at the time, but he noted it had “yet to open the newspapers’ books to potential buyers.”

A Tribune spokesperson declined to comment to Carlozo. Read more


Buffett-owned Richmond Times-Dispatch introduces paywall

Richmond Times-Dispatch

Giving away content online no longer can be sustained,” Richmond (Va.) Times-Dispatch Publisher Tom Silvestri writes in a letter to readers. “Not if we want to be around for another 160-plus years serving the Richmond region and Virginia with the kind of news reporting that makes a difference and advertising deals that delight.”

The Times-Dispatch’s “All Access” plan, coming Tuesday, will operate in a manner now familiar to paywall observers: People who don’t subscribe to the paper will be able to see 20 stories per 30-day period without hitting a gate. Videos, obituaries, classified ads, section fronts and wire copy won’t count against the meter.

And subscription prices will rise next year, Silvestri says, when the paper “will install a comparatively small increase to cover projected higher costs, some of which result from this month’s rollout of new sections and added pages.” Read more


Roanoke Times eliminates 31 jobs, hopes to become ‘more efficient’

The Roanoke Times

The Roanoke Times laid off employees Wednesday, an action the paper says will make the operation “more efficient and locally focused.”

31 positions vanished. The paper says the reductions will be a net improvement and it will “add news gathering resources.” But two sources tell Poynter the newsroom lost five positions, including two reporters.

Warren Buffett’s media group bought the Times in May. In July, the paper replaced Editor Carole Tarrant with Joseph P. Stinnett. Also in July, the Tulsa World, which Buffett picked up in February, announced it would eliminate about 50 positions, deliver newspapers to distribution centers rather than “drop points” for carriers and move to nonproprietary software.

The (Greensboro, N.C.) News & Record has had two rounds of layoffs since Buffett bought the paper in January. And last year Buffett’s group closed the Manassas (Va.) News & Messenger, citing the difficulties the paper was having competing in the greater Washington, D.C., area. Read more


Roanoke Times changes editors

A memo sent to staffers on behalf of publisher Terry Jamerson says Joseph P. Stinnett will replace Carole Tarrant as editor of the paper. Warren Buffett’s BH Media Group announced in late May it would purchase the newspaper.

Stinnett comes to the paper from The News & Advance in Lynchburg, Va. Jamerson joined the Times from The News & Advance concurrent with Buffett’s purchase.

Reached by telephone Tuesday, Tarrant said she learned about the change Monday morning. She is currently weighing opportunities and looking forward to spending the rest of the summer with her 11-year-old son. “My Facebook page has just gone crazy with really heartfelt support,” she said. “You always hope you leave an impact.” Until she learned she was out, Tarrant said, she was unaware of any problems her bosses had with her tenure.

Tarrant joined the Times in 2005 and was named its editor in 2007.

The Times sent out a press release with what appears to be the same wording as the memo, which follows. Read more


Warren Buffett buys Press of Atlantic City


Warren Buffett’s newspaper company, Berkshire Hathaway Inc., has announced plans to buy the Press of Atlantic City, Omaha.com’s Steve Jordon reports. Mark Blum will become publisher in August, once the purchase goes into effect. This will be the 30th paper Berkshire Hathaway has purchased. Most recently, it announced the purchase of the Roanoke (Va.) Times in May. Read more

Warren Buffett

Warren Buffett’s big payday, and other notes on Media General’s merger with Young

Few paid much attention to the blandly worded announcement a week ago of a merger between Media General and New Young Broadcasting. That was no surprise — an agreement between two midsize local broadcasting companies isn’t nearly as big a deal as, say, Gannett’s $2.2 billion acquisition of Belo today.

But there were at least three spicy stories lurking beneath the corporate-speak:

Warren Buffett’s Berkshire Hathaway cashed in big

In May 2012 Buffett and Berkshire Hathaway bought all of Media General’s newspapers except the Tampa Tribune.

That deal included two related transactions.

First, Berkshire Hathaway loaned Media General $445 million to refinance a crushing debt load coming due. The initial interest rate was an eye-popping 10.5 percent.

Second, as thanks for saving Media General from that life-threatening financial distress, BH received penny-a-share warrants to acquire 19.9 percent of the company — 4.6 million shares in all.

One benefit of the merger, Media General said last week, is that it will be able to refinance its debt at a considerable savings of interest expense. BH will reportedly be paid “a $44 million premium” as part of the refinancing.

In addition, Media General’s shares jumped more than 30 percent the day the merger was announced and have roughly doubled in value since Buffett’s three-legged investment just over a year ago. That’s a tidy appreciation — to the tune of $25 million — on stock that didn’t cost Berkshire Hathaway much of anything.

Plus BH acquired 63 dailies and weeklies for a bargain price of $142 million and has used them as the base for building a bigger chain, subsequently buying papers in Tulsa, Greensboro and Roanoke.

So, consider the sweet deal a quick demonstration — on a modest scale for giant Berkshire Hathaway — of how Buffett got to be one of the five richest men in the world.

A mystery — who’s in charge here? 

The merged company will retain the Media General name, stay in its Richmond, Va., headquarters, and keep its top executives in place. Of the two companies, Media General has more stations, higher revenue and higher earnings, so it would appear to be the acquiring company or first among equals.

However, privately-held New Young comes to the party with just $164 million in debt compared with Media General’s $601 million, so it is the stronger of the two financially. New Young shareholders will end up with 67.5 percent of the new stock.

And in a phased transition to a new board of directors, New Young will ultimately control six of the new company’s 11 seats.

Both companies should benefit. They gain the mass of a bigger footprint with 30 stations, reaching nearly 15 percent of TV households, and more clout to negotiate lucrative retransmission fees from cable operators. They may turn out to be happy partners, working hand-in-hand indefinitely. But if not, it looks to me as if New Young would be in control.

So why call the company Media General? New Young is a confusing name on its surface. The name has nothing to do with youth — it’s derived from the founder’s name. The “New” part makes a distinction from old Young, whose flagship KRON-TV in San Francisco lost its NBC affiliation a decade ago and whose financial troubles festered for years before the bankruptcy.

There are precedents in the corporate world for the stronger partner keeping the weaker one’s name. When NationsBank acquired Bank of America in 1998, it opted to call the new company Bank of America.

End of an era of family control

Media General’s roots go back to the merger of Richmond’s two papers in 1940. When Media General went public in 1966 and acquired the Tampa Tribune and Winston-Salem Journal three years later, the Bryan family created two classes of stock, giving themselves a majority of the voting shares.

That’s the same structure that keeps the Grahams in control of The Washington Post and Sulzbergers at The New York Times (and prevails at E.W. Scripps and McClatchy).

The two-class arrangement held up until last week when Chairman J. Stewart Bryan III, a young man when he joined the company but now 75, said separate family voting shares would come to an end as part of the merger and that he and the family trust were voting for it.

Long story short, Media General has had ups and downs through those 70-plus years, but was always an able TV operator, with a top-rated station in Tampa and other markets.

It turned out not to be as nimble an operator in the digital era. Its showpiece converged newsroom, launched with fanfare in Tampa in 2000, was a modest success at best, while various digital acquisitions and startups fizzled.

Combine that with its purchase of several TV stations at premium prices in 2006 and deteriorating results from its newspaper division, and the company was on the brink of collapse by late 2011.

In an astonishing earnings conference call that October, analysts (who are typically gentle questioners) seemed to scoff at management’s profit projections and assurances that debt obligations could be met. Mario Gabelli, whose investment funds had held a big minority stake in Media General for several decades, got on the call and bluntly asked whether auditors would certify the company as a going concern.

The sequel was the transaction with Buffett six months later and the separate sale of the Tampa Tribune, which had been losing as much as $2 million a month, to a Los Angeles investment firm.

Through it all, Bryan and the executive team scrambled to avoid bankruptcy at all costs. They won that battle, but until last week the corporation continued floundering in debt.

I’ve had a front-row seat for the company’s fortunes — first as en employee, then as a competitor, and now as analyst — and my impression of Bryan and his team is one of proud Virgina gentlemen, unfailingly polite, sensitive to family honor and appearances.

A more ruthless operator would have cut losses much earlier at the newspapers — The Tampa Tribune especially — and perhaps would have seen the advantages of entering and coming out of bankruptcy protection for a fresh start with little debt. Even with Buffett as the buyer, I’m sure it was painful for Bryan to walk away from the flagship Richmond Times-Dispatch.

In that respect, the merger had another modest benefit: Media General didn’t have a Richmond-based TV station, but New Young brought one to the deal. So the company will regain a journalism foothold in its hometown.

Correction: This story originally misstated where New Young Broadcasting got its name from. Read more

1 Comment

What are Warren Buffett’s plans for Va., N.C. papers?

The Business Journal of the Greater Triad

Warren Buffett’s BH Media has “been buying newspapers in a fairly tight geographic area,” Mark Sutter writes.

He notes the company, which bought The Roanoke (Va.) Times last week, “has purchased at least 17 newspapers in central Virginia and central North Carolina within the last two years, including the Triad’s two major daily newspapers — the News & Record in Greensboro and the Winston-Salem Journal.”

In no other geographic area, including Buffett’s home state of Nebraska, does BH own such a cluster of newspapers.

Read more

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