Friday, May 18, 2012

Times Dispatch Finds Sugar Daddy in Warren Buffett

Berkshire Hathaway execs address T-D employees about purchase.
Looks like Warren Buffett's newest venture is saving newspapers, some of them in Virginia. The Richmond Times-Dispatch reports that Buffet's Berkshire Hathaway has purchased "63 newspapers from Richmond-based Media General Inc. for $142 million."

With the announcement, shares of Media General rose a third to $4.18 a share.

Berkshire Hathaway bought all of Media General's newspapers except The Tampa Tribune and about 25 other daily, weekly and niche papers in Florida, says the report. Area papers that are part of the deal include Winston-Salem Journal in North Carolina and newspapers in Lynchburg, Charlottesville, Danville, Bristol, Waynesboro, Culpeper and Prince William County in Virginia. Media General will keep its 18 television stations.

Landmark tried to shed itself of its local daily in Roanoke a couple of years ago, but here were no takers in a newspaper market where ad lineage is sinking at Titanic proportions. Both the T-D and the Roanoke paper have been hit by wave after wave of layoffs and buyouts, losing most of their best and longest-serving news professionals (at the T-D that included my friend Rex Bowman, a two-time Pulitzer nominee, who wound up in Roanoke for a year before leaving for a government job and steady paycheck). There has been considerable grumbling among reporters about their salaries--always low by professional standards--but even from this chronically discontent group, the levels of complaint seem higher these days.

Buffett expressed his faith in the newspaper business: "In towns and cities where there is a strong sense of community, there is no more important institution than the local paper." Through a spokesman, Buffett told T-D employees, "Tell those people I wish I was there and I did this because I love newspapers," according to the T-D story.

According to the story, Media General newspapers will be part of BH Media Group, along with the Omaha World-Herald Co. newspapers. Douglas Hiemstra, the chief operating officer of the Omaha World-Herald Co., has been named president of World Media Enterprises, which will manage the Media General newspapers that BH Media will acquire.

The deal will help Media General get rid of crippling debt. According to the story, "The company had been looking to raise at least $225 million in new debt by May 25 to pay off outstanding loans due in March 2013.The deal announced Thursday solves that problem."

(Photo: Richmond Times-Dispatch)

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