Warren Buffett Buys Hometown Newspaper

At $200M, purchase not about investing

By Mark Russell,  Newser Staff

Posted Dec 1, 2011 2:57 AM CST

(Newser) – Warren Buffett makes news for his multi-billion-dollar investments, not a piddly $200 million—but Buffett surprised many people when he announced yesterday he was spending that to buy his hometown newspaper, the Omaha World-Herald, reports Bloomberg. The billionaire slammed the newspaper industry two years ago, saying it had the "potential for unending losses," and that he would never buy one "at any price." But now Buffett seems to have changed his tune: “I wouldn't do this if I thought this was doomed to some sort of extinction,” he said, according to the Omaha World-Herald.

But at $150 million plus the assumption of $50 million in debt, purchase of the 49th-biggest newspaper in the US is not coming cheap. “He’s rooting for the home team,” explained one investor who has written a book on Buffett. “But he says it’s profitable and well run.” Other experts believe the move could be more self-serving. “It’s very difficult to see this as a financial investment,” said one analyst, adding that Buffett has a “desire to cultivate his legacy, and if he can control the first draft of history, that makes it a little bit easier."

The Omaha World Herald building is seen in Omaha, Neb., yesterday. Warren Buffett's Berkshire Hathaway said it is buying the Omaha World-Herald.
The Omaha World Herald building is seen in Omaha, Neb., yesterday. Warren Buffett's Berkshire Hathaway said it is buying the Omaha World-Herald.   (AP Photo/Nati Harnik)
US billionaire investor Warren Buffett, chairman and CEO of Berkshire Hathaway speaking from Fukushima, Japan on Nov. 21.
US billionaire investor Warren Buffett, chairman and CEO of Berkshire Hathaway speaking from Fukushima, Japan on Nov. 21.   (AP Photo/Shuji Kajiyama)
Warren Buffett attends a news conference.
Warren Buffett attends a news conference.   (Getty Images)
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