F I N A N C E
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Edited by
Pat Regnier● Warren Buffett just gave
up on local news. But other
investors look even less friendlyBerkshire’s 31 daily newspapers and some other pub-
lications for $140 million. Buffett set up the sale in a
way that allows him to make money from the deal
foryearstocome.LeewillpayBerkshirea 9%annual
interestrateona 25-yearloanthatit willusepartlyto
payforthedealandpartlytorefinance Lee’s other
debt and provide cash. Berkshire will also keep the
newspapers’ real estate and lease the buildings
back to Lee. “Berkshire Hathaway wouldn’t be the
company it is without making money in any envi-
ronment,” says Ken Doctor, a longtime newspaper
analyst. Some aspects of the Lee deal, such as the
refinancing, could also make it easier for the chain
to get through a difficult time for the industry.
Still, the transaction was another disappoint-
ing milestone for those who still love and dependWarren Buffett always had a soft spot for newspa-
pers. He didn’t just own a lot of them. He described
himselfasa newspaperaddictandfondlyrecalled
deliveringthemasa teenager.Formanyyearshe
hosteda newspaper-throwing contest at the annual
meeting of his Berkshire Hathaway Inc. conglom-
erate, challenging anyone to toss a rolled-up paper
closer to the front door than he could.
Now he’s getting out of the business. On Jan. 29,
Lee Enterprises Inc. announced that it’s buyingWhat Use Does Wall
Have for Newspapers?