Warren Buffett has apparently realized that even he can't find cigar butts worth holding onto in the cushions of medium-sized daily papers. All BH Media plus the separately incorporated Buffalo News have been sold to Lee Enterprises. Lee also got a loan, at sweetheart terms per loans made in the newspaper world today, to complete the sale. BH had refinanced old debt of Lee's in the middle of the last decade at the same 9 percent rate.
I didn't realize that Lee had already been operating them since 2018.
And, although Buffett thinks most newspapers are toast, Dow Jones apparently does not. Lee's stock quote more than doubled on the announcement.
Here in Texas, BH had the Waco Tribune and the Bryan-College Station Eagle. Lee had no newspapers in Texas before the acquisition. It also had none in Virginia or North Carolina, where the bulk of BH's operations are. The move is big for Lee in Nebraska; it already owned the Lincoln Journal Star and several smaller papers. Adding the Omaha World-Herald locks up eastern Nebraska and also ties with Lee's holdings in Iowa.
Given the terms, and the synergy in Iowa and Nebraska, and the previous operating arrangement, it seems like a good deal for Lee, and I can understand its stock price going up — although not doubling.
As for how Wall Street sees it? BH's stock was up just slightly, meaning that the papers hadn't been seen as a big drag, mainly by being such a small percentage of the BH conglomerate.
Update: The union in Omaha is pissed, claiming it had a deal with Buffett for it to buy the paper first. I guess the fact that Buffett has a history of anti-union activity going back to Buffalo News days didn't cross their minds. I agree with the union's criticisms of Lee; I've long read Bill McClellan at the Post-Dispatch. But, Warren Buffett's a businessman, ultimately.
The deal was probably that Buffett was willing to give them some sort of shot, but somebody at Lee may have gotten wind of it. Alternate? Buffett got preliminary information on who the union had lined up and figured they would either have a lowball offer or else would need financing.
And, nobody was likely to make a better offer than Lee, for the reasons I note. Yes, it's craptacular, but some of the union's whining is just that. It is headquartered out of state, but it's not like Dubuque, Iowa, is on the far side of the moon from Omaha, either. It's NOT owned by vulture capitalists, either, and within today's relatively larger newspaper chains, is on relatively sound fiscal footing.
Well, scratch that! Per Ken Doctor, the vulture capitalists at Alden (owners of Dead Fucking Media and the engulfed carcass of Media Snooze Group) have taken about 6 percent ownership. And, it did so via the back door of two intermediaries. Did Buffett know about this possibility? Have even an inkling? If so, he definitely owes the union more explanation. (That said, while Buffett is more ethical than some business honchos, there's others that pass him. The Costco owner comes to mind.)
And tie to this, this new CJR piece about how even media companies as allegedly librul as Slate are using Trump's National Labor Relations Board interpretation and backstopping on labor law to be more and more anti-union.
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