Welcome to the Lee Enterprises Berkshire Hathaway transaction webcast and conference call. The call is being recorded and will be available for replay beginning later this morning at lee.net. At the close of the planned remarks, there will be an opportunity for questions. Participants accessing this call by webcast may submit written questions through the website, and they will be answered during the call as time permits. Otherwise, you will receive a response later. A link to the live webcast can be found at www.lee.net. I will now turn the call over to your host, Jamie Surak, Corporate Controller.
Good morning. Thank you for joining us on short notice. Speaking on this morning's call will be Lee's Chairman, Mary Junck, President and Chief Executive Officer, Kevin Mowbray, and Vice President, Chief Financial Officer, and Treasurer, Tim Millage. They will all be available for questions. Earlier today, we issued a news release announcing our transaction with Berkshire Hathaway. It is available at lee.net as well as at major financial websites.
We also filed details regarding this transaction with the SEC. Before we begin, I want to remind participants that some of our comments will include forward-looking statements that are based on our current expectations. These statements are subject to certain risks, trends, and uncertainties that could cause actual results to differ materially. Such factors are described in this morning's news release and also in our SEC filings.
During the call, we make reference to certain non-GAAP financial measures which are defined in our news release. Reconciliation to the relevant GAAP measures are included in tables accompanying the release. I'll turn the call over to our Chairman, Mary Junck.
Thank you, Jamie Surak, and thank you to everyone for joining us this morning. We're excited to discuss the transaction with Berkshire Hathaway we announced earlier this morning. It's a compelling transaction that positions Lee Enterprises for success. We are confident it will create value for our readers, our advertisers, and our shareholders. It also deepens our strong and long-term relationship with Berkshire Hathaway, a valuable partner that shares our business goals and commitment to local news.
As outlined in our press release, Lee Enterprises is acquiring 30 local daily news publications from Berkshire Hathaway Media Group and The Buffalo News, Berkshire Hathaway's separately owned newspaper. Berkshire Hathaway is financing the acquisition and refinancing all of our existing debt at an attractive rate. The transaction has multiple benefits. It provides new revenue opportunities and achievable operational synergies across an expanded and fully integrated portfolio.
It addresses our maturing long-term debt at attractive terms. It deepens a long relationship with Berkshire Hathaway, which has been a significant investor across our capital structure for years. We will have a single long-term lender who knows us well and is committed to our success.
We are honored that Warren Buffett has again endorsed Lee Enterprises for our track record of innovation and deep-rooted commitment to local news. Importantly, Berkshire Hathaway Media Group's properties are ones we know inside and out, having managed all but The Buffalo News for the past 18 months under the management agreement that we announced in 2018. Before turning the call over to Kevin Mowbray, I want to share our view of the market for local news and our strategy to grow and create value. Lee's focus is on delivering valuable, intensely local, original news and information.
The media landscape is evolving rapidly, and that evolution will continue as audiences and advertising dollars shift from print to digital. We know that our readers will continue to demand local news and information, and they continue to look to us for it. We have proven ourselves to be flexible and nimble at rethinking, repositioning, and redeveloping our business with a digital-first mindset.
Digital has been fully integrated into our strategy, and today, Lee Enterprises captures more than twice the industry average in digital market share, according to third-party research and we have the highest programmatic digital rates in the industry. Berkshire Hathaway Media Group's publications and The Buffalo News play a vital role in the communities they serve and are a perfect fit for our portfolio.
That's why we're very excited about the opportunities we have for Lee Enterprises in capturing the value for readers, advertisers, and shareholders created by this transaction. With that, I'll turn it over to Kevin Mowbray to discuss the operational benefits of this transaction.
Thanks, Mary Junck. We look forward to leading these outstanding publications as owner and delivering on the opportunities from having a much larger, fully integrated portfolio. Our acquisition of BH Media's 30 daily newspapers and The Buffalo News will add significant size and scale to our operations, bringing our portfolio of daily newspapers to 81 from 50 and nearly doubling our audience size. This transaction significantly enhances our financial profile.
It's expected to be immediately accretive to earnings and will enable us to accelerate our digital growth. For context, Berkshire Hathaway Media Group had 2019 revenue of $373 million and adjusted EBITDA of $37.4 million. With the addition of Berkshire Hathaway Media Group and The Buffalo News, revenue will be 87% higher, and adjusted EBITDA would improve 40%. Having managed the BH Media properties for the past 18 months, we already have deep knowledge into their operations.
Using these insights, we've identified approximately $20 million-$25 million of achievable synergies, including approximately $5 million in revenue synergies and $20 million in cost synergies. Our success in digital was the reason Berkshire Hathaway selected Lee Enterprises to manage their newspapers and digital operations in 2018. As Warren Buffett stated today at the press release, our management of Lee Enterprises' publications has delivered terrific results.
We expect to realize the revenue synergies through the continued application of the digital advertising and subscriber programs we already have underway through the management agreement. For example, in the first year of the management agreement, we increased digital programmatic revenue more than 90% by directly managing their programmatic campaigns. In regards to subscription revenue, we applied Lee Enterprises' pricing methodology and increased subscription revenue by 6.5%.
For these and other initiatives, Berkshire Hathaway Media Group is now fully integrated into the Lee Enterprises structure, and we believe we will achieve additional synergies in these areas. Cost synergies will primarily come from reduction of administrative expenses. We expect to full run rate within 24 months of closing, which is anticipated in mid-March of 2020. Approximately 75% of the synergies should be achieved within the first 12 months of closing.
Importantly, we've developed a strong and positive relationship with BH Media team and have a deep respect for their operatives who have a similar culture and values, and most importantly, are aligned in our mission to deliver high-quality local news, information, and advertising. In short, this transaction is terrific for Lee Enterprises, and we are excited about what it means for our future together. Now I'll turn it over to Tim Millage to share more color on the refinancing and balance sheet.
Thanks, Kevin Mowbray. Let me jump right into the details. Berkshire Hathaway will provide approximately $576 million in financing. This includes approximately $140 million to fund the acquisition of Berkshire Hathaway Media Group's properties and The Buffalo News, approximately $400 million to refinance all of Lee's outstanding debt at the closing, and provide enough balance sheet liquidity to allow for the termination of our revolving credit facility.
Of note, the acquisition of Berkshire Hathaway Media Group excludes real estate, including perimeter cash equipment and cash. We'll enter a 10-year lease for their real estate and Lee Enterprises will assume responsibility for maintenance and expense associated with each property. The refinancing has significant benefits and highly attractive terms. The debt will have a 9% annual rate with a 25-year maturity and will save approximately $5 million in interest expense annually on Lee's refinanced debt.
As you know, all of our long-term debt matures in 2022, and we have been actively exploring refinancing opportunities for some time. Compared to the terms we have seen with potential open market transactions, the financial benefits of this refinancing are even clearer. In addition, we avoid the tens of millions in fees and potential equity dilution associated with a traditional refinancing agreement. There are no performance covenants with the financing from Berkshire Hathaway.
Share repurchases, dividends, and other restrictive payments are precluded under the terms of the financing. Under the Berkshire Hathaway debt agreement, strategic acquisitions can be made if agreed to by both Lee Enterprises and Berkshire Hathaway. The timing is also advantageous, as the call protection on our notes steps down on March 15th, 2020. We expect to close the refinancing shortly thereafter, avoiding $8.5 million in breakage costs.
Another significant benefit is that this financing is from a single long-term partner who knows us well and is committed to our success. Subsequent to the deal closing, Berkshire Hathaway will be Lee's sole lender. With a stronger growth profile through the addition of Berkshire Hathaway Media Group and more flexible balance sheet, we will be able to de-lever more quickly over the long term with the goal of reaching our target leverage of under 2.0 times.
The acquisition of Berkshire Hathaway Media Group and The Buffalo News immediately reduces leverage to 3.4 times even before any synergies. Before we open the line for questions, we wanted to take care of one housekeeping item. As previously announced, Lee Enterprises will release its first quarter fiscal 2020 results on Thursday, February 6th, prior to market opening. The company will not hold another call on February 6th, the management team is available as usual to address any questions following the issuance of the release. Now I'll go ahead and take any questions. Jamie Surak, back to you.
Thank you, Tim Surak. Our first question: Will the existing Lee Enterprises first-lien notes and second-lien term loans be repaid at par?
Yes, that's a good question. The timing of the transaction is expected to close in mid-March after the next step-down of our call protection on our notes. As I mentioned, this saves approximately $8.5 million in breakage costs. When we refinance our debt, it will all be payable at par.
A second question. Now that we have runway with the extended timeline on debt payments, what new initiatives will you be able to develop to reverse the revenue declines?
First off, as I mentioned on the call, we've done a really terrific job working with the operators of Berkshire Hathaway Media Group to drive programmatic revenue. We think there's a lot of opportunity there. Secondly, we're really only into the first 18 months of Lee's playbook on circulation and audience revenue strategies, and we've got two to three more years of pricing action and revenue growth there.
As it relates to some of the new digital initiatives that we've implemented in Lee Enterprises, those will be launched at the community group, including a publisher meeting. We're going to be getting everybody together in February to go over some very specific initiatives we want to launch there in the coming months.
Our next question, "Lee Enterprises described a 25-year, 9% financing. Is it a loan or bond form?" The second part of the question, "Can we prepay any amount at any time at par so that we can continue to de-lever?
Yeah, that's a good question. This is a term loan from Berkshire Hathaway Media Group . As we mentioned, the interest rate is attractive, 9% rate with a 25-year maturity. There are no prepayment penalties. All of the debt is prepayable at par. There's an excess cash flow sweep that requires us to use all of our excess cash flow to prepay debt at par. There are no performance covenants. There are no financial covenants or maintenance covenants associated with this refinancing.
As you know, as we talked about, we've been exploring an opportunity to refinancing for some time. Compared to what we've seen based on our discussions with lenders, the benefits of this transaction cannot be overstated. It is a significant deal on the financing side, and we think this is great for the company.
That's it for questions. I'll now turn the call back over to Kevin Mowbray for brief closing remarks.
Well, thank you for joining on the call today. This is a terrific opportunity for Lee Enterprises and our union employees at The Buffalo News and Berkshire Hathaway Media Group, and we look forward to much success in the coming months. Thank you.
Thank you. Ladies and gentlemen, this concludes our call.