News that the company owned by superstar investor Warren Buffett will buy almost all the newspapers owned by Media General Inc., based in Richmond, Va., for $142 million cash left one detail unanswered.
What will happen to Media General's print operations in Florida, including the Tampa Tribune, which were excluded from the deal?
The transaction, announced Thursday by Buffett's Berkshire Hathaway Inc. and Media General, involved 63 print outlets in the Southeastern United States, Tennessee and Ohio, including the Richmond Times-Dispatch and the Winston-Salem Journal.
But no one at Media General or Berkshire Hathaway has said why the Tampa area print outlets were excluded. A Securities and Exchange Commission filing noted that the Tampa Tribune lost $15 million in 2011. A Media General spokesman stressed that there are interested parties seeking to purchase the Tampa print outlets, which include regional newspapers.
Industry expert Rick Edmonds works at the Poynter Institute, the nonprofit school that owns the Tampa Bay Times. He cited three likely scenarios for a Tribune purchase.
Halifax Media, the company that recently bought 16 regional newspapers from the New York Times Co., including the Ledger in Lakeland and the Sarasota Herald-Tribune, could buy the paper, Edmonds said.
An unknown buyer could purchase and radically transform the Tribune, perhaps by focusing on digital or reducing the days the print product is produced.
Or the Tampa Bay Times could buy the newspapers, salvage the advertising and subscriber lists and shut down the competing newspaper, Edmonds said.
Because the newspaper's operations for years have been intertwined with Media General's TV station, WFLA-Ch. 8, it isn't clear what a Tribune buyer might receive in a purchase, particularly since both outlets' newsrooms are in the same building.
Paul Tash, chairman and CEO of Times Publishing Co., did not comment on the possibility of the Tampa Bay Times buying the Tribune, saying, "I see it as a strong vote of confidence in the newspaper business that such a savvy investor as Warren Buffett sees attractive prospects for nearly all of Media General's newspapers."
Along with the $142 million, Media General will receive a $400 million loan and $45 million in revolving credit to pay off existing bank debts; Buffett's company gets Class A stock representing about 20 percent of outstanding shares.
The deal will close June 25, allowing Media General to focus on its digital and television businesses.
In November, Buffett's company bought the company that publishes the Omaha World-Herald newspaper in Buffett's hometown. A sister company, World Herald Enterprises, will manage the Media General newspapers.
The famous investor told a reporter for the World-Herald that he might buy even more newspapers. "Any time we can add properties we like, to management we like, at a price we like, we're ready to go," he told the newspaper Thursday.
Of the Media General papers, Buffett noted, "they're in good communities. And it's important that their potential readers care about their communities."
Media analyst Ken Doctor said Buffett's company acquired the newspapers relatively cheaply. Halifax, for instance, paid $143 million for the New York Times' 16 regional papers. Buffett's company could also see ancillary benefits from any included real estate or buildings.
"Buffett's got a financing deal paying him 10 percent and the ability to buy into a now mostly broadcast company," Doctor said. "Essentially, he agreed to take the papers off Media General's hands and eased up their debt situation. Everybody wins."
Larry King, vice president of content for the company that runs the World-Herald, said the current deal will double the size of the company's print operations.
"This has only been under discussion for about two or three weeks," said King, who could not say why the deal excluded Tampa. "We're just being introduced to the Media General newspapers today."
Also Thursday, the Tribune named managing editor Richard "Duke" Maas as the newspaper's new executive editor. Media General's stock price surged 33 percent Thursday to close at $4.18 a share, up $1.04.
Times staff writer Jeff Harrington contributed to this report.