Kroeger out as Buffett gives BH Media management to Lee

Jun 26, 2018 at 07:25 pm by Staff


Terry Kroeger is looking for a new challenge after Warren Buffett handed management of his North American newspaper group to Lee Enterprises, a company he has invested in.

Kroeger (pictured) - chairman and chief executive of BH Media Group and 33 years with its Omaha World-Herald - will remain for "a short transition period" and is looking for the "next adventure".

Lee will manage BH's newspaper and digital operations in 30 markets from July 2, with flexibility to implement "revenue initiatives and business transformation consistent with how it manages its own newspaper and digital operations" in 49 markets.

BH Media's television assets and its Buffalo News newspaper are excluded from the deal.

Buffett says that while the challenges in publishing are clear, he believes we can benefit by joining efforts: "Lee Enterprises' growth in digital market share and revenue has outpaced the industry (and it) has led the industry in overall innovation and performance, all while faithfully fulfilling its public trust as an indispensable source for local news, information and advertising.

"Our missions and goals match exactly, our markets are similar, and we both have excellent managers. Operating together will strengthen both of us, and Lee is logical to lead the process."

Berkshire Hathaway has been a significant investor in Lee Enterprises for some time, most recently in the $94 million refinancing of its Pulitzer Notes, redeemed in 2015, two years ahead of schedule. "Our relationship has been positive for both and has become a foundation for us to come together in this agreement," says executive chairman Mary Junck.

She says the strategic alliance is attractive as it enables Lee to generate more cash flow, speed debt reduction, enhance our industry leadership and "further advance our abilities" as it introduces its digital and print strategies at BH Media properties.

"Also, we are honoured to be trusted by Warren Buffett and Berkshire Hathaway, among the most admired business icons in history."

The management agreement has an initial term of five years, with Lee receive an annual fixed fee of $5 million plus a "significant percentage" of profits over benchmarks. The operating framework gives Lee "broad latitude" to manage, while strategic decisions will be agreed upon jointly, and BH Media will retain editorial control.

Among new opportunities are shared services and contracts with vendors and suppliers.

BH Media Group owns 30 daily newspaper and digital operations, 47 paid weekly newspapers with websites and 32 other print products.

Sections: Newsmedia industry

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