Warren Buffett's Berkshire Hathaway Inc has hired Lee Enterprises Inc to manage its newspaper and digital operations in 30 markets, hoping to boost readership and draw more advertisers as print circulation declines.
REUTERS: Warren Buffett's Berkshire Hathaway Inc has hired Lee Enterprises Inc to manage its newspaper and digital operations in 30 markets, hoping to boost readership and draw more advertisers as print circulation declines.
Berkshire said on Tuesday it will continue to own BH Media Group, which owns 30 daily newspapers, including its hometown Omaha World-Herald in Nebraska, and 47 weekly newspapers.
The five-year agreement calls for Lee to be paid US$5 million a year plus a share of profits. It takes effect on July 2.
"I love our newspapers and am passionate about the vital role they serve in our communities," Buffett said in a statement. "Although the challenges in publishing are clear, I believe we can benefit by joining efforts."
Lee shares rose about 33 percent to US$3.20 in pre-market trading. The Davenport, Iowa-based company said it publishes 46 daily newspapers and nearly 300 specialty publications in 21 U.S. states.
Print circulation has dropped at many Berkshire-owned newspapers, which also include the Richmond Times-Dispatch in Virginia and Tulsa World in Oklahoma.
Buffett lamented at Berkshire's annual meeting on May 5 that only the Wall Street Journal, the New York Times and perhaps the Washington Post had come up with a digital model that could overcome declines in print ad revenue.
(Reporting by Jonathan Stempel in New York; Editing by Chizu Nomiyama)