* Deal expected to close in late December
* Buffett paying $150 mln cash - paper
* World-Herald circulation 135,000 per day
By Ben Berkowitz
NEW YORK, Nov 30 Billionaire investor
Warren Buffett buys newspapers every day, including his
hometown daily, but on Wednesday he dispensed with the
single-issue price and bought the whole company instead.
Buffett's conglomerate Berkshire Hathaway said it
would buy the Omaha World-Herald Co, owner of the paper of the
same name, six other dailies and a series of weekly papers in
Nebraska and Iowa.
The World-Herald, which calls itself the last major
employee-owned paper in the country, splashed the news across
its website, with a picture of the paper's publisher introducing
Buffett to the staff. It is 80 percent owned by employees and 20
percent by the Peter Kiewit Foundation.
The paper reported that Buffett would pay $150 million cash,
or about $1,109 per subscriber, and assume $50 million in debt.
"I wouldn't do this if I thought this was doomed to some
sort of extinction," the paper said Buffett told a gathering of
employees. "It is a reasonable investment. There is no question
it is affected by the fact that I am extremely bullish on Omaha,
The World-Herald's publisher, Terry Kroeger, told the paper
the holding company would have needed a capital infusion at some
point in the future, as older shareholders were selling stock
back faster than younger reporters were buying it.
The news appears to have stunned the reporters, for whom
Buffett was one of the biggest subjects of their business
coverage. The paper's designated Buffett reporter even did a
weekly online chat about Buffett called "Warren Watch."
"I don't think anyone's going to be covering anything today.
Everyone seems to be too busy talking about the Buffett news,"
World-Herald reporter Roseann Moring said on her Twitter feed in
response to a request for coverage of another item.
With average daily circulation of just over 135,000, it is
one of the larger papers in the country. The World-Herald Co
said in a statement that Buffett's ownership would make it
easier for the paper to raise money while preserving local
One newsroom employee, who spoke under condition of
anonymity, said Wednesday's announcement was positive.
"It's obviously good news for the paper because we were
facing a pretty heavy load of debt to pay to older stockholders
(as they retired).
"This is good news for the employees. I think it is good
long-term news for the paper, which is in good shape, but was
facing some pretty heavy bills down the road."
The holding company had already made some cuts in 2008 and
2009 to improve its finances, including nearly 100 layoffs. It
also sold some smaller Iowa papers last year.
'NEARLY UNENDING LOSSES'
Berkshire is no stranger to the newspaper business. The
company bought the Buffalo News in New York in 1977 and has
operated it since, though Buffett said in 2009 his owning the
paper was not entirely rational.
Buffett was also a long-time board member of the Washington
Post Co and a confidante of legendary publisher
Buffett has said that U.S. newspapers face years of "nearly
unending losses" because they lack a sustainable business
Advertising revenue and circulation at many U.S. papers
have fallen in the past several years as people turned to the
Internet for free news and advertising, forcing some newspapers
out of business and some publishers into filing for bankruptcy
protection or laying off thousands of employees.
But the 81-year-old "Oracle of Omaha" struck a more moderate
tone on Wednesday as he addressed the paper's staff.
"I think newspapers ... have a decent future. 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," he was quoted as saying.
The deal also adds to Buffett's stable of local businesses.
Though his focus is usually national or global, he owns a number
of large Omaha brands, including the sprawling Nebraska
Furniture Mart and the jeweler Borsheim's.