Billionaire investor Warren Buffett announced plans Wednesday to sell his media operations including more than 30 US dailies, following a high-profile bet on newspapers eight years ago.
Buffett's holding company Berkshire Hathaway said it would sell its BH Media Group publications and The Buffalo News for $140 million in cash to Lee Enterprises, which owns more than 40 US daily newspapers and other print operations.
Buffett, one of the world's richest people known for his investing acumen, said he agreed to sell to Lee, which has been managing the operations of BH Media since 2018.
"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," the 89-year-old investor and philanthropist said in a statement.
"No organization is more committed to serving the vital role of high-quality local news, however delivered, as Lee. I am confident that our newspapers will be in the right hands going forward."
The transaction comes with print newspapers struggling to keep up in the digital world, with declining circulation and tough competition for advertising.
One study showed that the US has lost more than 60 dailies and 1,700 weeks since 2004, and many of the remaining ones have cut staff or reduced the number of days of publication.
Buffett invested more than $300 million in newspapers over the past decade, including his hometown Omaha World-Herald.
"I believe newspapers that intensively cover their communities will have a good future," Buffett said at the time of the investment.
Wednesday's announcement is not a total divestment. As part of the deal, Berkshire Hathaway is providing $576 million in financing to Lee at a nine percent annual rate.
This will refinance Lee's $400 million of existing debt and make the holding company the media group's sole lender.
"This is a compelling and transformative transaction for Lee," said Mary Junck, Lee's chairman.
"It both refinances our long-term debt on attractive terms and provides new revenue opportunities as well as operational synergies across an expanded portfolio."
Lee is acquiring the 30 BH Media dailies and dozens of weeklies as well as the Buffalo newspaper, which is owned separately by Buffett's group.
The deal does not include the real estate of the BH publications, but Lee will take a 10-year lease for BH properties, paying $8 million annually.