Lee Enterprises to Manage Berkshire Hathaway Newspapers
Davenport-based Lee Enterprises is entering into an agreement to manage the newspaper and digital operations of Berkshire Hathaway.
The BH Media division of the company headed by Warren Buffett owns newspapers in 30 markets. Its holdings include the Council Bluffs Nonpareil and the Omaha World-Herald.
The president and CEO of Lee, Kevin Mowbray, says combining the two chains under one management roof leads to benefits.
“Operating together, we gain significant scale leading to a total of 79 markets," Mowbray says. "This opens up even more opportunities, especially in digital sales, advertising customer relationships, shared services, and contracts with vendors and suppliers.”
Mowbray says the deal will bring in significant revenue.
“The initial five-year contract calls for Lee to receive a fixed fee of $5 million a year, plus a significant percent of profits above benchmarks," he says. "We believe over the five years we can match or exceed the fixed fee for a total goal of at least $50 million.”
In a statement, Buffett says “although the challenges in publishing are clear, I believe we can benefit by joining efforts.”
Berkshire Hathaway has long held an investment interest in Lee, most recently providing $94 million in refinancing.
Buffett says, “I love our newspapers and am passionate about the vital role they serve in our communities.”