One of the world's largest corporations is handing over control of its newspapers to a publisher based in the Quad Cities.
Berkshire Hathaway, the holding company led by billionaire investment guru Warren Buffett, announced Tuesday it has entered into an agreement with Davenport-based Lee Enterprises for Lee to manage operations for its print subsidiary, BH Media, beginning July 2.
Lee publishes the Quad-City Times, The Dispatch–Argus, the St. Louis Post-Dispatch, and dozens of other papers in 49 media markets. BH Media's publications will add 30 markets to Lee's portfolio.
The agreement consists of an initial term of five years in which Lee will receive an annual fixed fee of $5 million plus a percentage of profits over benchmarks. Lee president Kevin Mowbray says BH Media will retain editorial control.
"Lee Enterprises' growth in digital market share and revenue has outpaced the industry," Buffett said in a statement. "Lee also has led the industry in overall innovation and performance, all while faithfully fulfilling its public trust as an indispensable source for local news, information and advertising. Our missions and goals match exactly, our markets are similar, and we both have excellent managers."
Lee has struggled with debt. In 2011, it filed for Chapter 11 bankruptcy, which it later exited and is still recovering from.
Berkshire Hathaway is known for its stake in a number of well-known companies: GEICO, Dairy Queen, and MidAmerican Energy, among many others.
According to Forbes, Berkshire Hathaway is the fourth-largest publicly traded corporation in the world and Buffett is the third-richest person in the world.