Tulsa World to be acquired by Berkshire Hathaway subsidiary
The Tulsa World announced today that BH Media Group, a subsidiary of Berkshire Hathaway, will buy the newspaper from the Lorton family, with the sale expected to close in March.
A sale to Berkshire Hathaway is good news for the employees of the World, at least those involved directly in producing content. It has long been Warren Buffett's policy to let an acquired company's management continue to run things without interference from Omaha. When Berkshire Hathaway acquired FlightSafety in 1997, there were no immediate or radical changes to policies or management structure. Changes happened, but gradually and driven by FlightSafety's management. What did change was access to capital for improvements that would allow the company to expand.
There is a difference between this acquisition and the FlightSafety purchase. FlightSafety came into Berkshire Hathaway as a standalone subsidiary, but the World will be one paper out of dozens of dailies and weeklies owned by BH Media Group. As part of a multi-newspaper group, the World may also be able to cut costs by taking advantage of central purchasing and central administration, perhaps to include IT support and web development. So the news may not be so good for the administrative and support staff at the paper.
It's also good news for coverage of Tulsa. Buffett's May 23, 2012, letter to the publishers and editors of the newspapers he was about to acquire from Media General Group:
Though the economics of the business have drastically changed since our purchase of The Buffalo News, I believe newspapers that intensively cover their communities will have a good future. It's your job to make your paper indispensable to anyone who cares about what is going on in your city or town. That will mean both maintaining your news hole - a newspaper that reduces its coverage of the news important to its community is certain to reduce its readership as well - and thoroughly covering all aspects of area life, particularly local sports. No one has ever stopped reading when half-way through a story that was about them or their neighbors.
Don't expect the World's metered model of limited web access to change. From the same letter:
We must rethink the industry's initial response to the Internet. The original instinct of newspapers then was to offer free in digital form what they were charging for in print. This is an unsustainable model and certain of our papers are already making progress in moving to something that makes more sense. We want your best thinking as we work out the blend of digital and print that will attract both the audience and the revenue we need.
Berkshire Hathaway bought its hometown newspaper, the Omaha World-Herald, in December 2011 for $200 million. In May 2012, BH Media Group was formed to include the World-Herald and the newspapers acquired from Media General for $142 million, to be managed by a sister company, World Media Enterprises. Earlier this month, BH Media Group announced the acquisition of the Greensboro News and Record from Landmark Media Group.
A cautionary note: In November 2012, BH Media Group cut 105 jobs, shutting down the Manassas (Va.) News & Messenger and its related website and weekly paper, and cutting 72 positions elsewhere in the chain.
Greater Tulsa Reporter Newspapers, a chain of six monthlies, takes the occasion to declare themselves "the only remaining locally-owned community newspaper group in the Tulsa metro region." Of course, the Tulsa Beacon, Urban Tulsa Weekly, and This Land Press are all locally owned. The Journal Record, which has a Tulsa office, is based in Oklahoma City. Community Publishers, Inc., based in Bentonville, publishes nine newspapers in the Tulsa metro area.
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