Berkshire Hathaway is emerging as a sizable media player.
After snapping up the Omaha World Herald, Warren Buffett’s company is adding Media General to its stable of newspaper/digital holdings. Not a part of the deal is the Tampa Tribune, due to continuing negotiations with potential buyers.
Buffett has been warming up to newspapers after once saying he was unhappy with the business. He has long had a sizable stake in the Washington Post and Buffalo News. The sage of Omaha is also pleased the conversion of newspaper websites to the subscription or paywall model that charges for content.
Still, Berkshire’s move provides scant comfort for many media companies.
Media General is a company that does not make a lot of big mistakes and has a reputation as a well-managed company. It kept its television station holdings and did not pile up a mountain of debt or cut operations to the bone. Unlike some of its competitors, it did not overpay for newspapers.
In fact, it shopped its newspaper portfolio because it had wisely gone on a buying spree and broadcast holdings were beginning to dominate its revenue stream.
Another regional publisher, Lee Enterprises, ditched its TV holdings, went on a shopping spree, overpaid for the St. Louis Post Dispatch and paid a brief trip to bankruptcy court.
Such examples are all to common in the industry and Berkshire Hathaway has the luxury of buying less leveraged publishers that have inflicted less damage to their franchises. If it looks like the industry has slowed a massive revenue slide, it could snap up individual papers that are not in bad shape, but rarely entire companies.
In its release, Berkshire Hathaway noted that is paying off the bank debt of the acquired news operations, giving the new owner more breathing room as the business moves toward a digital model.
It’s still good news, but don’t count on more patient ownership becoming more widespread in the business.
Here is a release on the Media General Sale.
