Warren Buffett and Berkshire Hathaway have agreed to sell BH Media and the Buffalo News to Lee Enterprises, Inc., for $140 million in cash, marking a “rare divestiture after he spent years snapping up local newspapers.” This according to an article in Bloomberg.
Buffett, who reportedly first invested in the industry to capitalize on strong local advertising revenues, said last year that most newspapers are “toast” because of changing economics. The article notes that BH Media has been “cutting jobs for years” due to decreased ad revenue. In a statement this week, Buffett said, “We had zero interest in selling the group to anyone else for one simple reason: We believe that Lee is best positioned to manage through the industry’s challenges.”
In 2018, the article reports, Buffett admitted surprise at the continued decrease in demand for newspapers and at the fact that Berkshire had been unable to find a successful strategy to turn it around. While Buffett is known for holding onto business, this deal is Berkshire’s second divestiture in less than a year (it also sold an insurance business in late 2019).
Berkshire Hathaway will lend Lee the money for the purchase, which will include 49 weekly publications and 31 daily papers.