Buffett's Media General Buy Backs Struggling Newspapers
"These newspapers are great institutions and powerful brands in their respective markets," said Terry Kroeger, president of BH Media Group, the Berkshire unit that will be responsible for the investment. The Media General newspapers will be added to BH Media Group's portfolio of assets that include the Omaha World-Herald. Kroeger joined Berkshire Hathaway through its acquisition of the Herald.
"Selling our newspapers represents a monumental change for us. We're very happy that our newspapers will become part of Berkshire Hathaway's BH Media Group, a company with a strong commitment to local news leadership and community engagement," said Media General chief executive Marshall N. Morton in a statement. The deal accelerates Media General's on its broadcast television business and new opportunities like digital content and Mobile DTV, added Morton.
Buffett's biggest newspaper investment, his stake in The Washington Post Company has fallen roughly 20% in the last year as its Kaplan education unit struggles and print sales in its media unit deteriorate. Still, Buffett isn't likely to depart his 27%-plus stake in the company's shares anytime soon.
In a recent Vanity Fair feature on The Washington Post Buffett was quoted as saying that it's unlikely he'll ever sell his stake. "I can afford to be sentimental," said Buffett. Thursday's deal to buy the newspapers and provide financial support to Media General, and his previous acquisition of the Omaha World-Herald may signal that those sentiments extend throughout the newspaper industry.
For more on Warren Buffett's deal making see why Berkshire's Elephant Gun could be targeted at utilities. For more on Buffett's recent investments, see why Warren Buffett's latest bet on America is GM.
-- Written by Antoine Gara from New York.