Warren Buffett gives up on newspapers

Berkshire Hathaway, the corporate holding company owned mostly by billionaire Warren Buffett, will sell its newspaper operations to publisher Lee Enterprises Inc. for $140 million, per a Wednesday announcement.

Why it matters: Buffett loves the newspaper business. His first job was a newspaper delivery boy for the Washington Post — and he has long been a vocal supporter of local news. The fact that he is finally giving up on the industry, which he has warned in recent years is "toast" due to terminal advertising decline, is significant and symbolic.

Details: The deal will expand Lee's newspaper audience by about 50% percent and add titles to its portfolio in new parts of the country.

• The publishing conglomerate will acquire BH Media Group (BHMG) and the Buffalo News. BHMG owns 30 daily newspapers and more than 100 weekly publications in the Midwest and Southeast.
• Included in the deal is the Omaha World-Herald, Buffett's hometown paper, as well as North Carolina's Winston-Salem Journal and Texas' Waco Tribune-Herald.
• The deal, expected to close in March, gives Lee Enterprises $576 million in long-term financing at a 9% annual interest rate in order to help refinance its existing debt of $400 million. Its shares were up 57% in pre-market trading with the news.

The state of play: The deal isn't shocking to investors. Berkshire inked a deal with Lee in 2018 to have it manage those papers in order to produce efficiencies.

The big picture: The newspaper business has been in serious decline over the past two decades, coinciding with the rise of the internet. The internet has taken up much of the advertising market share that used to be owned primarily by print newspapers.

• Regulators, aware of the realities that the newspaper and local media industries face in a digital world, have tried to level the playing field by trying to roll back decades-old rules that may be keeping them from growing, but their efforts have mostly been moot.

Go deeper:

• Rural areas hardest hit by death of American newspapers
• Cities are turning into news deserts
• 50% of newspapers in the U.S. could be gone by 2021