Buffett sells World-Herald, other newspapers to Lee Enterprises
By Kevin Cole / World-Herald staff writer Jan 29, 2020
By Kevin Cole / World-Herald staff writer Jan 29, 2020
Lee Enterprises announced Wednesday that it is buying the Berkshire Hathaway newspaper operations, including The Omaha World-Herald.
Kevin Mowbray, president and chief executive officer of Lee Enterprises, said Berkshire Hathaway will finance all debt. The deal adds 31 local daily news publications to the company's holdings. In 2018, Lee Enterprises, which is based in Davenport, Iowa, announced it would take over management of The World-Herald and other papers that had been assembled into the BH Media Group.
Kevin Mowbray, president and chief executive officer of Lee Enterprises, said Berkshire Hathaway will finance all debt. The deal adds 31 local daily news publications to the company's holdings. In 2018, Lee Enterprises, which is based in Davenport, Iowa, announced it would take over management of The World-Herald and other papers that had been assembled into the BH Media Group.
Warren Buffett, Berkshire Hathaway’s chairman and CEO, said, “My partner Charlie Munger and I have known and admired the Lee organization for over 40 years. They have delivered exceptional performance managing BH Media’s newspapers and continue to outpace the industry in digital market share and revenue.
"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."
A press release from Lee Enterprises said Lee is acquiring BH Media Group’s publications and The Buffalo News for $140 million in cash.
The deal ends local ownership of The World-Herald, which was founded in 1889.
"Berkshire Hathaway is providing approximately $576 million in long-term financing to Lee at a 9% annual rate," the press release reads. "The proceeds from the Berkshire financing will be used to pay for the acquisition, refinance Lee’s approximately $400 million of existing debt and provide enough cash on Lee’s
"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."
A press release from Lee Enterprises said Lee is acquiring BH Media Group’s publications and The Buffalo News for $140 million in cash.
The deal ends local ownership of The World-Herald, which was founded in 1889.
"Berkshire Hathaway is providing approximately $576 million in long-term financing to Lee at a 9% annual rate," the press release reads. "The proceeds from the Berkshire financing will be used to pay for the acquisition, refinance Lee’s approximately $400 million of existing debt and provide enough cash on Lee’s
balance sheet to allow for the termination of Lee’s revolving credit facility. Subsequent to the deal closing, Berkshire Hathaway will be Lee’s sole lender," according to the press release.
In the 2018 account of the agreement putting Lee in charge of the management of BH Media, World-Herald reporter Steve Jordon noted that BH Media accounted for a tiny fraction of Berkshire Hathaway’s $242 billion in revenue.
BH Media’s holdings also include the Richmond Times-Dispatch in Virginia and the Tulsa World in Oklahoma, along with dailies in North Platte, Kearney and Grand Island.
Lee owns the Lincoln Journal Star. Its portfolio includes properties in St. Louis; Madison, Wisconsin; Davenport, Iowa; Billings, Montana; Bloomington, Illinois; and Tucson, Arizona.
The addition of the BH Media newspapers will increase Lee's portfolio of daily papers from 50 to 81, and it will nearly double its audience size.
Mary Junck, Lee’s chairman, said, “This is a compelling and transformative transaction for Lee. It both refinances our long-term debt on attractive terms and provides new revenue opportunities as well as operational synergies across an expanded portfolio.
"We have enjoyed a strong, long-term relationship with Berkshire Hathaway, which has been a significant investor across our capital structure for years. As manager of BH Media for the past 18 months, we have developed a deep knowledge of these properties and tremendous respect for their operators. We know first-hand the power this acquisition brings for further accelerating our industry-leading digital revenue growth while maintaining our focus on delivering high-quality local news.
In the 2018 account of the agreement putting Lee in charge of the management of BH Media, World-Herald reporter Steve Jordon noted that BH Media accounted for a tiny fraction of Berkshire Hathaway’s $242 billion in revenue.
BH Media’s holdings also include the Richmond Times-Dispatch in Virginia and the Tulsa World in Oklahoma, along with dailies in North Platte, Kearney and Grand Island.
Lee owns the Lincoln Journal Star. Its portfolio includes properties in St. Louis; Madison, Wisconsin; Davenport, Iowa; Billings, Montana; Bloomington, Illinois; and Tucson, Arizona.
The addition of the BH Media newspapers will increase Lee's portfolio of daily papers from 50 to 81, and it will nearly double its audience size.
Mary Junck, Lee’s chairman, said, “This is a compelling and transformative transaction for Lee. It both refinances our long-term debt on attractive terms and provides new revenue opportunities as well as operational synergies across an expanded portfolio.
"We have enjoyed a strong, long-term relationship with Berkshire Hathaway, which has been a significant investor across our capital structure for years. As manager of BH Media for the past 18 months, we have developed a deep knowledge of these properties and tremendous respect for their operators. We know first-hand the power this acquisition brings for further accelerating our industry-leading digital revenue growth while maintaining our focus on delivering high-quality local news.
"We look forward to capturing the tremendous value of this transaction for readers, advertisers and shareholders.”
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