Bloomberg News

Berkshire Cuts 105 Jobs, Shuts Paper Bought by Buffett

November 14, 2012

Berkshire Hathaway Chairman Warren Buffet

Warren Buffett ’s Berkshire Hathaway Inc., which has purchased more than 60 newspapers in the past year, said it was closing the Manassas News & Messenger amid a review of operations acquired this year from Media General Inc. Photographer: Andrew Harrer/Bloomberg

Warren Buffett’s Berkshire Hathaway Inc. (A:US), buyer of more than 60 newspapers in the past year, will close the Manassas News & Messenger in Virginia amid a review of operations acquired from Media General Inc. (MEG:US)

Job cuts include 33 employees of the News & Messenger, which is published five days a week and has a circulation of 10,000, according to a letter posted today on the Web. Another 72 positions will be eliminated, mostly corporate staff added as part of the Media General deal.

“We looked at a bunch of different scenarios and I sent multiple teams up there,” Doug Hiemstra, chief executive officer of the World Media Enterprises unit, said in a phone interview. “We just could not get to a sustainable profitable operation for a daily newspaper there.”

Buffett, 82, has said that newspapers with local readerships could withstand an advertising slump. The News & Messenger, which traces its history to 1869, serves a northern Virginia suburb and faces competition from papers including the Washington Post.

“It’s a suburban newspaper to a metro area and we don’t really have that at our other operations,” Hiemstra said. “It makes it more difficult for the community to be engaged.”

World Media is still “bullish” on the prospects for community newspapers, Hiemstra said in the letter.

Berkshire agreed in May to pay $142 million for 63 newspapers from Media General. The deal also included a $400 million loan to the media company at 10.5 percent interest.

Berkshire plans to sell the News & Messenger building, surrounding downtown Manassas property and a nearby parking lot, he said. The final edition will be Dec. 30, according to the letter. No other job cuts are planned.

The job cuts were previously reported by the Omaha World- Herald, which is also owned by Berkshire. Buffett’s Omaha, Nebraska-based firm is the largest shareholder (WPO:US) in Washington Post Co. (WPO:US)

To contact the reporters on this story: Noah Buhayar in New York at nbuhayar@bloomberg.net; Zachary Tracer in New York at ztracer1@bloomberg.net

To contact the editor responsible for this story: Dan Kraut at dkraut2@bloomberg.net


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Companies Mentioned

  • A
    (Agilent Technologies Inc)
    • $57.47 USD
    • -0.25
    • -0.44%
  • MEG
    (Media General Inc)
    • $21.4 USD
    • -0.52
    • -2.43%
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