In towns and cities where there is a strong sense of community, there is no more important institution than the local paper. 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.
Warren Buffet, founder, Bershire Hathaway, in a statement announcing the fund’s purchase of almost all newspapers currently owned by Media General, 63 titles in all mostly located in Virginia, North Carolina, South Carolina and Alabama.
Via Yahoo Finance:
A subsidiary of Berkshire Hathaway, BH Media Group, will purchase all of the newspapers owned by Media General, with the exception of the Tampa group, for $142 million in cash. Media General said it is in discussions with other prospective buyers for its Tampa print assets.
Under a separate credit agreement, Berkshire Hathaway will provide Media General with a $400 million term loan and a $45 million revolving credit line. The new loan will be used to fully repay the company’s existing bank debt due March 2013 and will mature in May 2020. In conjunction with this, Media General will issue Berkshire Hathaway penny warrants for approximately 4.6 million Class A shares, which represents 19.9 percent of Media General’s existing shares outstanding. In addition, Berkshire Hathaway has the option to nominate a director to Media General’s Board of Directors.
Possible Takeaway: It’s good to have one of the world’s richest people on your side.
Now imagine if Bon Appetit, instead of The Little Owl, ran with a cover photo of some Kamakaze Kool-Aid Roll from Monster Sushi or wherever. Well, that’s essentially what’s going on here with Groupon, a national brand is giving national attention to a local joint that doesn’t deserve it, and as a result, a lot of people’s money is being misallocated. It’s anti-economic. Groupon is the invisible hand of capitalism sucker punching good restaurants that deserve to succeed and helping out mediocre venues that deserve to fail.