Media General, the owner of the Charlottesville Daily Progress and the Richmond Times-Dispatch, has agreed to sell its newspapers to Berkshire Hathaway, Inc., Warren Buffett’s investment company.
Details of the transaction, which is scheduled to close June 25, were released this morning via press release. BH Media Group, a Berkshire Hathaway subsidiary, will purchase all of the newspapers owned by Media General excepting its Tampa Bay group, for $142 million in cash. The cash transaction is only part of a deal that looks designed to solve Media General’s impending debt crisis. Berkshire Hathaway has agreed to a separate credit agreement that will provide Media General with a $400 million term loan and a $45 million revolving credit line that the company will use to fully repay its existing bank debt due March 2013.
Media General announced in February that it had hired a financial advisor to explore the sale of its newspaper assets. Warren Buffett said earlier this month at Berkshire Hathaway’s annual shareholder meeting that he was interested in buying more newspapers.
Buffett currently owns the Buffalo News, the Omaha World-Herald (which he purchased for $200 million last year), and a large part of the Washington Post.
“In towns and cities where there is a strong sense of community, there is no more important institution than the local paper,” Buffett said in the announcement. “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."
Larry King, VP of content for the Omaha World Herald Company and a spokesman for BH Media Group, said the company has no immediate plans to shake up staffing at the papers it acquired.
"We have to learn all about the Media General properties and become familiar with them," he said. "But the management of those newspapers is going to remain the same for the foreseeable future, so I wouldn’t look for any changes for a while."