Warren Buffett bought 63 daily and weekly newspapers in the Southeast for $142 million from financially troubled Media General Inc. of Richmond, Va.
Buffett said he might buy more newspapers. “Any time we can add properties we like, to management we like, at a price we like, we’re ready to go.”
The newspapers are in Virginia, North Carolina, South Carolina, Alabama and Florida.
“In towns and cities where there is a strong sense of community, there is no more important institution than the local paper,” said Buffett. “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.”
The purchase includes the newspapers’ web sites, printing operations and related businesses. Berkshire would make a debt-refinancing loan to Media General, which would keep its TV stations and sell separately the Tampa (Fla.) Tribune, its largest newspaper.
The sale will close June 25, subject to Federal Trade Commission and anti-trust reviews.
The largest newspapers in the acquired group are the Richmond Times-Dispatch, which sells about 115,000 copies on weekdays and 165,000 on Sundays, and the Winston-Salem (N.C.) Journal, which sells about 58,000 copies daily and 76,000 on Sundays.
Altogether, the 17 daily newspapers sell about 400,000 copies on weekdays. World-Herald Co. dailies’ weekday circulation is about 200,000.
We might wonder, how with all the papers that have gone down, the long standing Chicago Sun Times for instance, the Rocky Mountain News, another venerable paper… leaving most towns with only one newspaper touting only one point of view instead of the old two-newspaper town model that gave a better idea of both polarities. …and it seems that Buffet is intent on ‘community’ being the thing that will make the papers thrive.
At the time he acquired the World-Herald, Buffett said he would not interfere with its editorial or news policies and he expected the newspaper company to continue doing its best work. He has a history of acquiring companies with good managers in place and letting them run their businesses with minimal control from his office.
Berkshire owns about 80 businesses with more than 300,000 employees, and Buffett has said he and his 20-person office rely on each company’s managers to conduct their businesses as if they were the owners.
Buffett has often said that newspapers were an excellent business when the owner of a newspaper had “the only megaphone in town.” In 1992, before digital media arose, he said newspapers are “enormously valuable.”
But in 2009 he said, “For most newspapers in the United States, we would not buy them at any price. They have the possibility of going to just unending losses.”
Then, when Berkshire bought The World-Herald for $200 million in December, he said, “I saw good financial performance,” plus the benefits of a good local economy in Omaha and a desire to continue local control of the community’s newspaper.
“I think newspapers . . . have a decent future,” he said at the time. “It won’t be like the past. But there are still a lot of things newspapers can do better than any other media. They not only can be sustained, but are important.”
Buffett has said 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.
Smart words for niche business for Buffet, or fatuous nostalgia. We shall see.