Warren Buffett made good Thursday on his promise to buy more newspapers, agreeing to buy 63 daily and weekly newspapers in the Southeast for $142 million from financially troubled Media General Inc. of Richmond, Va.
And Buffett said Thursday he may buy more newspapers. “Any time we can add properties we like, to management we like, at a price we like, we're ready to go.”
What an odd purchase. It's obvious to even the most hardcore Luddite that newspapers are a thing of the past, about to be buried by the avalanche of ever-more-convenient portable digital devices. It's like buying up 63 buggy factories in the early 1900's. Sure, you might want one or two to have a monopoly on the buggy market - there's always the Amish. and those romantic rides through Central Park - but you'd likely need no more than that.
Warren Buffett is no dummy; he's supposed to be the savviest investor in the universe. Does he really believe the daily is going to make a huge comeback? Or is he planning on parlaying this purchase into more...tangible benefits?
The newspapers, in Virginia, North Carolina, South Carolina, Alabama and Florida, would be combined with the Omaha World-Herald Co. into a new Berkshire Hathaway Inc. division called BH Media Group. They would be managed by World Media Enterprises, a new sister company of The World-Herald...
The sale would close June 25, subject to Federal Trade Commission and anti-trust reviews.
Interesting list of locations. Swings states all, save South Carolina.
With a closing date of 6/25, that leaves plenty of time for Warren to install compliant editorial boards prior to the 2012 election. Shoot, he can have them in place by the time the Democratic convention opens in NC in early September.
Is this purchase of 63 newspapers at a realitively piddling sum really an investment in...Barack Obama?
Would be Buffett's second in a week, actually. On the very same day he made his massive press purchase:
The investment by Warren Buffett's investment company in General Motors gave the automaker's stock at least a short-term bump.
Omaha, Neb.-based Berkshire Hathaway's purchase of 10 million shares for $256.6 million, revealed in a U.S. Securities and Exchange Commission filing, energized investors.
GM shares rose 2.29% to close at $21.91 on Wednesday, the first day of trading after the investment was made public. At one point, shares were up more than 4%.
"Just having the Berkshire name attached to it gives it a nice little bounce," Morningstar analyst David Whiston said.
Any bounce helps for a government-owned company that had its IPO at $33 a share, but needed $50 per for the taxpayers to break even, and is currently sitting below half of that figure.
And we know that Obama has helped Buffett before - the president's bizarre refusal to build the Keystone Pipeline turns out to have turned quite the profit for the "Wizard of Omaha".
Quid pro quo, Mr. Buffett?
Or just a savvy investment for a man who feels he can make more money as a crony of the corrupt and economically illiterate Barack Obama, than he can working with a hard-headed capitalist like Mitt Romney?
Should be interesting to see the editorial pages of those former Media General properties come the heat of election season...