The Sage of Omaha is saving the floundering Richmond Times-Dispatch, marking the end of an era for the Bryan family, one of the city’s most prominent and politically powerful families that has long owned the paper.
Warren Buffett, the billionaire head of the Omaha-based Berkshire Hathaway investment firm, is picking up the Times-Dispatch and 62 other Media General newspapers throughout the Southeast, including the Winston-Salem Journal, for the bargain-basement price of $142 million and other assets. He bought just one newspaper, his hometown Omaha World-Herald, for $200 million last year, showing just what a good price he got with Richmond-based Media General.
The announcement of the buy by Berkshire Hathaway subsidiary BH Media Group comes just as Media General, staggering under more than $600 million in debt, was a week away from picking up $225 million in new financing. The purchase clears the way for Media General to win more financing, salvage its tanking stock, and pursue its goal of focusing on broadcasting and digital media.
The turn of events could be good news for the 150-year-old Times-Dispatch, which, like many metropolitan newspapers across the country, has been through a series of cuts in staff and space for news. With deep-pocketed Berkshire Hathaway in charge, there should be less pressure to cut costs. Analysts praised the deal saying that it is a boon for Media General shareholders and newspaper staff members. “I am sure that employees in the newspaper division are probably happy to work for a firm with better management than what (Media General) offers,” says Amit Chokshi of Kinnaras Capital Management, a Norwalk, Conn. hedge fund.
While Buffett believes there is great value in community newspapers, there is no indication of major changes coming at the Times-Dispatch just yet. Buffett so far has had a “hands off” policy involving editorial management at his newspapers in Omaha and Buffalo. A Media General spokesman says that there will be no changes among top officials at the Times-Dispatch.
For now, Buffett’s influence will be to help Media General with its debt problems. The deal clears the way for Buffett to lend up to $400 million to help refinance debt.
A considerable part of that debt came from what some analysts say was the ill-advised decision in 2006 by Media General Chief Executive Marshall Morton to buy four medium-sized television stations for $600 million. In exchange, Buffett gets control of a seat on the Media General board and warrants giving his firm rights to purchase 19.9 percent of Media General, whose stock took a 33 percent jump when the sale was announced Thursday.
For Richmonders, the deal marks the passing of an era. The Bryan family, which has controlled the Times-Dispatch since 1887, has advocated editorial policies and news coverage by turns genteel and thoughtful, while also benefiting the area’s ruling elite. At one time, it also led the charge against desegregation.
Virginius Dabney, the newspaper’s most famous editor, won a Pulitzer Prize in 1948 for opposing the state-wide political machine of Harry F. Byrd and other work. A decade later, the Bryan family refused to let Dabney write editorials fighting the state’s Massive Resistance policies opposing racial integration.
The last Bryan to control the newspaper, J. Stewart Bryan III, said in an interview with the Times-Dispatch that he deeply regrets the sale that he helped engineer: “My head says well done, while my heart is crying.”
Editors' note: A previous version of this story failed to properly attribute J. Stewart Bryan's quote to the Richmond Times-Dispatch. We regret the error.