Warren Buffett Chooses New Path for Newspapers After Lamenting Decline
Warren Buffett Chooses New Path for Newspapers After
Lamenting Decline
By Katherine Chiglinsky 26 June 2018, 6:21 PM 26 June
2018, 8:53 AM
(Bloomberg) -- Warren Buffett’s Berkshire Hathaway Inc.
struck a deal for Lee Enterprises Inc. to manage its newspapers in 30 markets
as the billionaire seeks a way to grapple with falling revenue in the media
industry.
Berkshire will pay Lee to manage the papers and work to
transform the businesses in exchange for an annual fee of $5 million plus a
percentage of profits above benchmarks over five years, Lee said Tuesday in a
statement. The deal doesn’t include the Buffalo News.
Terry Kroeger is stepping down as chief executive officer
of BH Media Group, which controls some of Berkshire’s papers, according to the
Omaha World-Herald, one of the companies included in the deal.
The changes come just months after Buffett said at his
annual shareholder meeting that he hadn’t succeeded in finding a way to
overcome the decline in newspapers in recent years. Berkshire has been cutting
jobs at BH Media, announcing a plan earlier this year to reduce staff by 148
employees and not fill 101 vacant roles.
“Although the challenges in publishing are clear, I
believe we can benefit by joining efforts,” Buffett, who is chairman and CEO of
Berkshire Hathaway, said in the statement Tuesday. “Lee Enterprises’ growth in
digital market share and revenue has outpaced the industry.”
©2018 Bloomberg L.P.
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