The funny thing about this move on Warren Buffett’s part is that three short years ago, at the Berkshire Hathaway annual meeting, he said that the newspaper business is on life support and the truth is that you’re only going to lose money if you are in this business. His actual quote is “for most newspapers in the United States, we would not buy them at any price.” That obviously isn’t the quote of a man interested in purchasing newspapers.
Or is it? In a stunning turn of events, the Oracle of Omaha decided to buy the Omaha World–Herald for $200 million. This is his hometown newspaper so this move possibly had some sentimental value to it. But that doesn’t explain his most recent purchase on May 17, 2012 where Berkshire Hathaway purchased 63 dailies and weeklies from the newspaper company Media General Inc. The total cost of this purchase was for $142 million in cash.
Would you like to know some of the newspapers that were purchased in this deal? The two biggest titles are the Richmond Times-Dispatch and the Winston-Salem Journal. Buffett and company did not get their hands on Media General’s largest property, which is the Tampa Tribune. They are actually in discussions with different buyers who are interested in purchasing the Tribune at this time.
The current COO in charge of the Omaha World-Herald, Douglas Hiemstra, has been named president of the managing company of the 63 newspapers recently bought. The company is called World Media Enterprises, and it was created by BH Media Group, which is a subsidiary of Berkshire Hathaway.
Warren Buffett has really changed his entire outlook regarding the future of the newspaper industry which was earlier commented on. His 2009 remarks were quite grim regarding newspapers and the entire industry in general.
In a current statement, Mr. Buffett says “in towns and cities where there is a strong sense of community, there is no more important institution then the local paper.” He also goes on to say that “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.”