BUFFETT BETS ON NEWSPAPERS: Big-money investor Warren Buffett offered a little hope for newspaper companies in general and a lot of cash for one in particular Wednesday when he cut a $200 million deal to buy the Omaha World-Herald Co.
The agreement will add the World-Herald and six other daily newspapers and several weekly newspapers in Nebraska and Iowa to the stables of Berkshire Hathaway Inc., which Buffett heads as chairman and chief executive officer.
This story first appeared in the December 1, 2011 issue of WWD. Subscribe Today.
“I wouldn’t do this if I thought this was doomed to some sort of extinction,” said Buffett, according to the World-Herald’s coverage of the deal. “It’s not a crazy price. It certainly is not a bargain price. I was willing to pay more than I would have for some papers I don’t feel have as good of a future.
“I think newspapers…have a decent future,” said the noted value investor. “It won’t be like the past. But there are still a lot of things newspapers can do better than any other media. They not only can be sustained, but are important.’’
Buffett said he earned $5,000 delivering newspapers as a child and parlayed that money into investments that became Berkshire, which now has a market capitalization of more than $193 billion.
“I’m not comfortable without an honest-to-God newspaper in my hand,” Buffett said.
The deal for the employee-owned newspaper company includes $150 million in cash and $50 million in debt. Berkshire also owns just over a quarter of the Washington Post Co.