Warren Buffett, the world’s most famous investor, has made a big bet on small newspapers.
The billionaire investor has bought Media General, owner of 63 local US newspapers covering markets across Alabama, North Carolina, South
Carolina and Virginia.
Buffet’s BH Media, part of his Berkshire Hathaway investment company, paid $142m in cash for the titles. Under a separate credit agreement, Berkshire Hathaway will provide Media General with a $400m loan and a $45m revolving credit line.
The move is just the latest foray into print from Buffett. Last year Berkshire bought the Omaha World Herald Company, owner of Buffett’s local newspaper and six other local titles. At Berkshire’s recent annual shareholder meeting Buffett said he was considering other local newspaper acquisitions. “We may buy more newspapers. I think the economics will be ok, but it will be nothing like the old days,” he told the meeting.
Announcing his latest purchase Buffett said: “In towns and cities where there is a strong sense of community, there is no more important institution than the local paper. 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.”
Buffett, a former newspaper delivery boy, has long been a fan of newspapers and an investor in The Washington Post. But only a few years ago he was making dire predictions about the future of the industry.
Asked about newspapers as investments in 2009, Buffett said: “For most newspapers in the United States, we would not buy them at any price. They have the possibility of going to just unending losses.”
Buffett isn’t the only billionaire showing an interest in newspapers. Carlos Slim, the Mexican telecoms billionaire, is a major shareholder in the New York Times. Earlier this year Gina Rinehart, billionaire daughter of mining magnate Lang Hancock, became one of the largest shareholders in Australia’s Fairfax Media, publisher of The Age, Sydney Morning Herald and other titles.
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