I almost cracked up when I read this report on the DRUDGE REPORT this afternoon.
The BILL & MELINDA GATES FOUNDATION declares its noble mission is to bring "innovations in health and learning to the global community."
But the world's largest philanthropic organization also is among the organizations that collectively loaned nearly $400 million to MEDIANEWS GROUP INC. -- for the acquisition of newspapers in California and Minnesota!
"I thought this foundation was all about starving kids, not starving newspapers," mocked one Seattle insider.
The GATES FOUNDATION loaned an unspecified amount to MEDIANEWS, along with GENERAL ELECTRIC.
In April, MEDIANEWS agreed to buy four newspapers, including the SAN JOSE MERCURY NEWS and CONTRA COSTA TIMES, from MCCLATCHY CO. for $1 billion. MEDIANEWS also bought California's MONTEREY COUNTY HERALD and the ST. PAUL PIONEER PRESS in Minnesota. It also own the DENVER POST.
The move into funding media acquisitions was unusual for the BILL & MELINDA GATES FOUNDATION, whose donations usually go to health and anti-poverty purposes.
In June, financier Warren Buffett announced he would donate an estimated $31 billion to the GATES FOUNDATION, bringing its total endowment to more than $60 billion -- which could easily save every newspaper in America!
Foundations are huge investors. In addition to giving away money, they also invest large amounts of money. The Gates' foundation was funded with Microsoft stock (and most recently Berkshire Hathaway stock) but over time, the foundation will sell stock and diversify its investments. I don't have any inside information, but it's obvious that the foundation is not "donating" this money to the MEDIANEWS GROUP. The foundation is loaning the money. Loans are often underwritten by foundations, retirement funds, or other institutions interested in generating a return while preserving their capital. When you have billions of dollars in cash, you can't exactly open a savings account at the local savings and loan. Big corporations swap short-term (and longer term)loans around on a daily basis.
This is a big todo about nothing.