According to media reports, Warren Buffett, Chairman and CEO of Berkshire Hathaway Inc. (BRK.B - Free Report) has made an announcement to buy a newspaper business named Tulsa World.
Tulsa World is a closely held newspaper company with a daily sale of 95,000. The deal is expected to come through by March.
However, in 2009, Warren Buffett stated that it was not very reasonable to continue his ownership of any newspaper business. At the time, he had declared his particular dislike of the practice of newspaper companies providing news online for free, yet charging for the same in print. According to Buffett, online news posed a threat to the print medium.
However, Buffett had changed his outlook toward the future of the newspaper industry when last year Berkshire Hathaway acquired 63 daily and weekly newspapers from Media General Inc. at approximately a 100% premium to Media General’s then-market capital.
In November 2011, Buffett announced the purchase of The Omaha World-Herald Company, publisher of Nebraska’s principal daily newspaper, for $200 million. The deal added the World-Herald and six other daily newspapers and several weekly newspapers to the company’s media business portfolio. Berkshire’s media business portfolio also includes Business Wire and The Washington Post Co. .
Buffett’s buying of newspaper businesses suggests his optimism towards the newspaper industry. The company’s newspaper unit consists of 28 small- or medium-sized dailies. Besides dailies, Berkshire owns 40 other newspapers businesses engaged in less frequent publishing along with other monthly publications and regional magazines.
According to Buffett, a newspaper is an institution, which is important in regions with a strong sense of community. He also believes that newspapers, which have been facing stiff competition from digitization, can prevent waning sales by focusing on providing community news.
Other players in the same industry Cincinnati Financial Corp.
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