Buffett's Berkshire sells newspaper business, including hometown paper, to Lee Enterprises

(Reuters) – Warren Buffett’s Berkshire Hathaway Inc (N:) said on Wednesday it is selling its newspaper operations to Lee Enterprises Inc (N:), abandoning an industry the billionaire investor had long supported and defended even as its financial prospects deteriorated.

Lee, whose papers include the St. Louis Post-Dispatch, said it will pay $140 million in cash for the 30 daily newspapers and several dozen weekly and other products owned by BH Media Group.

The newspapers being sold include the Omaha World-Herald in Berkshire’s hometown in Nebraska, as well as the Buffalo News in western New York state, a newspaper that Berkshire bought in 1977.

Berkshire will also refinance Lee’s existing debt, providing $576 million in long-term financing at a 9% interest rate, and become the company’s sole lender.

While newspapers represented only a small part of Berkshire, which bought most of its holdings in the last decade, it is very unusual for Buffett to sell an entire business.

Buffett, who delivered newspapers as a teenager, has long lamented the decline of the industry, telling Berkshire shareholders in May 2018 that only the Wall Street Journal, the New York Times and perhaps the Washington Post had found digital models strong enough to offset declining print ad revenue.

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