At Least There's a Newspaper Still Standing in Richmond and Beyond
That Berkshire Hathaway bought Media General's newspaper division, with the exception of the Tampa Tribune, has to be viewed as nothing but a positive for the remaining employees, who have been blistered by layoffs, furloughs, benefit cuts and pay freezes over the years. In that regard, Media General is no different from every other newspaper company, battered, belaguered and waxing nostalgic for better days that will never return.
So, along comes Uncle Warren to the rescue. The Oracle already owns newspaper properties, including his hometown Omaha World-Herald and the Buffalo News. He also owns a significant minority stake in The Washington Post Co. Buffett likes to make a profit as much as the next billionaire, but his management approach is fairly hands off. Install the best managers who know how to hit their targets and watch the money grow.
That's a much taller order nowadays in the newspaper business, which is why the division went for a mere $142 million plus a $400 million term loan to pay down debt and a $25 million revolving credit line. That's for 63 daily and weekly newspapers. But Media General has fallen far and fast. Ten years ago, it would have cost you $54.50 to buy a share of the company stock. It closed today at $4.18, and that includes a $1.04 bump after the purchase was announced.
Buffett again professed his love for newspapers today, warming the cockles of this ink-stained wretch's heart. Clearly, he's not doing this to lose money, but he's certainly not expecting to make a mint either. Been there, done that.