BH Media sells publications, including 10 Va. newspapers

Berkshire Hathaway Inc. is selling its BH Media Group publications portfolio, which includes the Richmond Times-Dispatch and nine other Virginia newspapers, to Lee Enterprises Inc., which has been managing the newspapers since July 2018, Lee announced Wednesday.

The Virginia papers included in the sale are the Richmond Times-Dispatch, The Roanoke Times, The Daily Progress in Charlottesville, The Free Lance-Star in Fredericksburg, Bristol Herald Courier, The News & Advance in Lynchburg, Danville Register & Bee, Martinsville Bulletin, Culpeper Star-Exponent and The News Virginian in Waynesboro.

The $140 million deal includes 31 local daily newspapers in 10 states, as well as The Buffalo News in New York, which is separately owned by Berkshire Hathaway.

Helmed by 89-year-old chairman and CEO Warren Buffett, Berkshire Hathaway will provide approximately $576 million in long-term financing to Iowa-based Lee Enterprises at a 9% annual rate, according to a news release. The proceeds from Berkshire’s financing will be used to pay for the acquisition and refinance Lee’s approximately $400 million of existing debt. Lee also will pay $8 million annually for a 10-year lease of BHMG’s real estate as part of the agreement.

Lee also said it has identified “approximately $20-25 million of highly achievable annual synergies,” specifically digital advertising and subscriber programs and reduction of administrative expenses, which the company expects to reach within two years of closing, set for mid-March. The news release did not mention job cuts or other specific changes at the publications.

“My partner Charlie Munger and I have known and admired the Lee organization for over 40 years,” Buffett said in a statement Wednesday. “They have delivered exceptional performance managing BH Media’s newspapers and continue to outpace the industry in digital market share and revenue. We had zero interest in selling the group to anyone else for one simple reason: We believe that Lee is best positioned to manage through the industry’s challenges.”

Buffett added that the company is committed to “high-quality local news.” Kevin Mowbray, Lee’s president and CEO, said in a statement that his company has “developed a strong bond and shared culture with the outstanding operators at BH Media,” with digital and subscription revenue growth and margin expansion.

Last November, Paul Farrell, formerly Lee’s vice president of sales, was named the publisher of the Richmond Times-Dispatch, replacing Thomas A. Silvestri, who retired at the end of the year after serving as publisher since 2005.

BH Media Group, a subsidiary of Omaha, Nebraska-based Berkshire Hathaway, bought Richmond-based Media General’s 63 newspapers in Virginia, North Carolina, South Carolina and Alabama for $142 million in 2012.

Lee owns 46 daily newspapers and more than 200 weekly and specialty publications in 50 markets in 20 states.