Situation:
Media General is a mature company which has a lot of business including newspapers, television broadcasting and digital businesses primarily serving the southeastern U.S. (Over 18 TV stations and 64 newspapers). While because of the popular of Internet from the 2000s, more than 300 daily newspapers disappeared and daily circulation of newspapers fell to 44 million in 2011, the U.S. newspaper industry is dropping. With the decreasing market, the profitability of newspaper industry is declining. Newspaper revenues came from two sources: advertising and circulation representing approximately 80% and 20% of revenue, respectively. But between 2000 and 2010, annual newspaper advertising revenue declined by 57%, from $49 billion to $21 billion. Although advertising revenue from newspaper websites was growing, it fell far short of the decline in print advertising. And Craigslist.org, a network of mostly free classified-advertising websites, makes a big negative function in newspaper advertising. At this time, as revenues decreasing, the costs of printed newspaper were increasing, such as wages, distribution expenses, equipment and other raw materials. The price of a ton of wood pulp is also higher than a ton of newspaper. The declining revenue and rising costs led to falling margins and increasing leverage, the EBITDA, EBIT, net income margins only were 16%, 11% and -2% in 2011, but the market value leverage ratios well above their historic levels of 20% to 40%. As the result, eight major U.S. newspaper companies filed for bankruptcy. Within this declining market, Media General’s performance is also deteriorating, the total revenues fell from $983 million in 2006 to $616 million in 2011, and company lost money in each of the next four years. The company also faced to a large number of debts which the maturity dates is nearby. In this situation, Warren Buffett’s Berkshire Hathaway