Billionaire Buffet now believes in print media and buys 63 newspapers

Friday, May 18th 2012 - 09:34 UTC

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For many communities there is no more important institution than the local paper, said the Omaha financial sage

Billionaire Warren Buffett's company is making another foray into US newspapers, agreeing to buy 63 newspapers from Media General Inc for 142 million dollars.

Berkshire Hathaway is also extending a loan to Media General and taking a 19.9% 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, South Carolina, 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% 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 on 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.”

That's a reversal of his opinion in 2009, when he told Berkshire shareholders that most newspapers faced the possibility of unending losses because the industry had lost its essential nature.

“For most newspapers in the United States, we would not buy them at any price,” he said then.

Berkshire is also lending 445 million dollars to Media General, which it will use to pay off debt. In return, Berkshire is getting the 19.9% stake in Media General and a seat on the board.