Buffett’s Berkshire Hathaway Makes Print Play, Acquires 63 Media General Newspapers
RICHMOND, VA—May 17, 2012—Media General has signed agreements with Warren Buffett’s Berkshire Hathaway investment firm for the purchase of newspapers and new financing. A subsidiary of Berkshire Hathaway, BH Media Group, will purchase all of the newspapers owned by Media General, with the exception of the Tampa group, for $142 million in cash.
The newspapers being purchased include 63 daily and weekly titles in Virginia, North Carolina, South Carolina and Alabama, in addition to digital assets, including websites and mobile and tablet applications. The newspapers also have a substantial commercial printing business.
Under a separate credit agreement, Berkshire Hathaway will provide Media General with a $400 million term loan and a $45 million revolving credit line. The new loan will be used to fully repay the company’s existing bank debt due March 2013 and will mature in May 2020.
“These newspapers are great institutions and powerful brands in their respective markets,” said Terry Kroeger, president of BH Media Group. “We are honored to have the opportunity to work with our new colleagues as we continue to produce top-notch news and advertising products in both print and digital platforms.”
The Media General newspapers will be part of BH Media Group, along with the Omaha World-Herald Co. newspapers. World Media Enterprises will manage the Media General newspapers.
“In towns and cities where there is a strong sense of community, there is no more important institution than the local paper,” said Warren Buffett, chairman of Berkshire Hathaway. “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.”
Marshall N. Morton, president and CEO of Media General, added, “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. This single transaction for virtually all of our newspapers accelerates the timing of our strategy to focus on our broadcast television business and its future growth opportunities, including digital content and Mobile DTV.”