Buffett's firm will close suburban DC newspaper
OMAHA, Neb. (AP) - Warren Buffett's company is planning to close a small Virginia newspaper that it bought from Media General earlier this year.
The 10,000-circulation Manassas (Va.) News & Messenger, which began publishing in 1869, has been struggling to compete in the Washington, D.C., suburbs. It will print its last issue on Dec. 30.
Buffett's Berkshire Hathaway Inc. said Wednesday it has no plans to close any of its other newspapers.
The Manassas closing will eliminate 33 jobs. An additional 72 corporate positions that Berkshire acquired with the Media General deal will be eliminated.
The Omaha World-Herald reported the closure on Wednesday. Officials at Berkshire's newspaper unit, which is run by World-Herald executives, declined to comment on the closing.
Buffett said the Omaha World-Herald announced the closure because it oversees Berkshire's newspapers, but he didn't respond to questions about the decision.
After Berkshire bought the Media General newspapers, Buffett said Berkshire may buy more newspapers as long as they cover their communities well and aren't very large.
The Manassas newspaper certainly fit Buffett's criteria as a small publication, but Terry Kroeger, who oversees Berkshire's newspaper division, told the Omaha World-Herald that the News & Messenger had a difficult time maintaining a sense of community in the area it covered, and it had been losing money for years.
The News & Messenger, which is based in Prince William County, Va., is also competing directly with several other media outlets in the Washington D.C. metropolitan area, including the Washington Post, in which Buffett's company has a large ownership stake.
"We didn't see any way to really turn it back into a profitable enterprise, reliably, so what made the most sense was to just cease publication," Kroeger said to the Omaha World-Herald. Kroeger said he recommended the closing to Buffett.
Outsell Inc. media analyst Ken Doctor said the closing appears to be a result of Berkshire's initial review of the Media General newspapers it bought. Doctor said the Manassas newspaper didn't appear to be in a strong position in a competitive market, so it didn't fit well with Berkshire's model.
"They really prefer to be in communities where they can be the big dog," Doctor said.
Along with the Manassas newspaper, a companion newspaper, NOVA Weekly, and two websites associated with the publications will close. The employees losing their jobs will receive severance pay and assistance finding other jobs, the company said in a statement posted on the News & Messenger's website.
Aside from the 62 Media General papers Berkshire bought earlier this year, Buffett's company owns the Buffalo News, the Omaha World-Herald and several other newspapers in Nebraska and Iowa.
Buffett said in May that he was looking to purchase newspapers in cities and towns where residents care deeply about where they live.
"If a citizenry cares little about its community, it will eventually care little about its newspaper," Buffett said.
Newspapers remain a relatively small part of Berkshire Hathaway, which owns an assortment of more than 80 subsidiaries and holds major investments in companies such as Coca-Cola Co., Wells Fargo and IBM. Berkshire's subsidiaries include insurance, manufacturing, railroad, utility, furniture and restaurant firms.
Follow Josh Funk online at www.twitter.com/funkwrite
Berkshire Hathaway Inc.: www.berkshirehathaway.com
Announcement on Manassas newspaper website: http://bit.ly/RD38NH
(Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)