(Bloomberg) -- Warren Buffett's Berkshire Hathaway Inc. struck a deal for Lee Enterprises Inc. to manage its newspapers in 30 markets as the billionaire seeks a way to grapple with falling revenue in the media industry.
Berkshire will pay Lee to manage the papers and work to transform the businesses in exchange for an annual fee of $5 million plus a percentage of profits above benchmarks over five years, Lee said Tuesday in a statement. The deal doesn't include the Buffalo News.
Terry Kroeger is stepping down as chief executive officer of BH Media Group, which controls some of Berkshire's papers, according to the Omaha World-Herald, one of the companies included in the deal.
The changes come just months after Buffett said at his annual shareholder meeting that he hadn't succeeded in finding a way to overcome the decline in newspapers in recent years. Berkshire has been cutting jobs at BH Media, announcing a plan earlier this year to reduce staff by 148 employees and not fill 101 vacant roles.
“Although the challenges in publishing are clear, I believe we can benefit by joining efforts,” Buffett, who is chairman and CEO of Berkshire Hathaway, said in the statement Tuesday. “Lee Enterprises' growth in digital market share and revenue has outpaced the industry.”
To contact the reporter on this story: Katherine Chiglinsky in New York at kchiglinsky@bloomberg.net
To contact the editors responsible for this story: Michael J. Moore at mmoore55@bloomberg.net, Steve Dickson, Steven Crabill
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