A $142 million deal fortifies his view that local newspapers can be sustained
POSTED: 01:30 a.m. HST, May 18, 2012
NEW YORK » Billionaire Warren Buffett's company is making another foray into newspapers, agreeing to buy 63 newspapers from Media General Inc. for $142 million.
Berkshire Hathaway Inc. is also extending a $445 million loan to Media General and taking a 19.9 percent stake in the company, which will still own 18 TV stations. Media General also owns some websites, such as coupon provider DealTaker.com.
Media General on Thursday said the deal includes all of its newspapers except the Tampa Tribune of Florida and smaller newspapers in that market. It's in talks to sell those newspapers to other buyers.
Berkshire Hathaway is buying the Richmond Times-Dispatch in Virginia, the Winston-Salem Journal in North Carolina and the Morning News of Florence, S.C., among others.
Berkshire Hathaway has owned the Buffalo News of New York for decades and bought its hometown paper, the Omaha World-Herald, in December. The company is also the largest shareholder of Washington Post Co., with a 23 percent stake.
Buffett has defended newspapers, saying that they will have a decent future if they continue delivering information that can't be found elsewhere. They also need to stop offering news free online, he has said.
"In towns and cities where there is a strong sense of community, there is no more important institution than the local paper," Buffett said in a statement Thursday. "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."