Buffett's Berkshire dumps newspaper giant Gannett, bets on US direct-broadcast satellite service provider Dish Network
In a surprise turn of events, Warren Buffett's investment firm Berkshire Hathaway diluted its entire shareholding in Gannett Company Inc., the largest newspaper publisher in the US as measured by total daily circulation, according to a US Securities and Exchange Commission filing by the firm. In the filing, Berkshire mentioned that it no longer held any shares of Gannett in the second quarter ended June 30, 2013. The firm had 1.7 million shares of Gannett (worth about $38 million) in the first quarter this year.
In addition, the firm purchased around 5.47 lakh shares of Dish Network (worth about $23 million) in the second quarter. Dish Network is an American direct-broadcast satellite service provider that offers satellite television, audio programming, and interactive television services to commercial and residential customers in the US. It may be noted that Berkshire already holds over 33 million shares of DirecTV (worth about $1.3 billion), a rival cable company.
The move comes as a surprise since Buffett is known for advocating for newspapers. He has already purchased a lot of local papers that include The Press of Atlantic City (in New Jersey) and the Roanoke Times (in Virginia). In fact, he had mentioned in his annual letter to shareholders that he and business partner Charlie Munger loved newspapers and papers delivering comprehensive and reliable information to tightly-bound communities and having a sensible internet strategy will remain viable for a long time. They also continued to reign supreme, in the delivery of local news, he had stated.
But everything said and done, this time the firm did opt in favour of a digital media company instead of a traditional newspaper. Have the winds of change finally begun to blow?
What about Washington Post?
It was also interesting to see that even though Berkshire has held stock in The Washington Post Co. for four decades, it passed on an opportunity to purchase the company's newspaper when it went up for sale this year. Amazon.com Inc. founder Jeff Bezos bought the newspaper for $250 million in a surprise deal that ended the Graham family's 80-year ownership and instead placed its reigns in the hands of the technology entrepreneur.
Bezos called his acquisition a personal endeavour and reassured Post employees and readers that he will preserve the paper's journalistic tradition, while driving innovation.
"I understand the critical role the Post plays in Washington DC and our nation, and the Post's values will not change. There will of course be change at the Post over the coming years. That's essential and would have happened with or without new ownership," Bezos said in a letter addressed to employees and published on the newspaper's website.
(Edited by Joby Puthuparampil Johnson)