The billionaire bailed on his newspapers
By Tom Jones
The Poynter Institute
If one of the richest men on the planet has soured on newspapers, what chance do newspapers have?
That was the initial gut-punch reaction many had when Warren Buffett’s Berkshire Hathaway announced that it was selling its 30 newspapers to Lee Enterprises for $140 million.
Buffett is a self-described lover of newspapers. He is on the shortlist of the smartest business minds to ever live. He has billions upon billions upon billions of dollars.
And yet even he appears to have thrown up his hands and turned his back on newspapers.
As Poynter media business analyst Rick Edmonds wrote, “I do take his exit as one more marker of big changes in the works and of falling investor confidence. One of my industry sources summarized the news as ‘Take my newspapers … please.’”
Forget that Buffett is selling to a company with a good journalism track record. Forget that that company has been managing all but one of BH’s papers for the past couple of years. The fact that Buffett is getting out of the newspaper business feels like a white flag.
That’s the depressing part, that it’s Buffett getting out.
Whenever we would start feeling blue about the future of newspapers, we could at least point to Buffett as our savior. “Hey,” we’d say, “if Buffett thinks newspapers are good business, they must be, right?”
He had owned The Buffalo News since 1977. He started scooping up more papers less than 10 years ago. Even as the industry started to shift and ad sales plummeted, Buffett kept going. A billionaire with money to burn and a passion for news was the exact formula needed to keep newspapers alive.
But even Buffett has known for a while now that he couldn’t make it work. Less than a year ago, Buffett said that most papers were “toast.” He said a few had a chance to succeed — the big boys such as The New York Times, The Washington Post and The Wall Street Journal. But the rest?
“They’re going to disappear,” he told Yahoo Finance’s Andy Serwer.
Now he is disappearing from the newspaper scene and he’s taking a lot of optimism with him. What’s next?
Anytime there’s a big newspaper chain sale, the first question always asks what happens next? Here’s another way to put it: “Will there be cuts?”
The BH Media Group sale includes The Buffalo News, Tulsa World, Richmond Times-Dispatch and Omaha World-Herald, which, by the way, is Buffett’s hometown paper. (The sale also includes the (Florence) Morning News and the Hartsville Messenger.)
In his piece about Berkshire Hathaway selling its papers to Lee Enterprises, Poynter business analyst Rick Edmonds wrote, “It would be conjecture to predict what Lee, a publicly traded chain with 50 other dailies, will do now with the properties beyond saving on operations by consolidating. My guess would be some newsroom cuts but not necessarily deep ones. Both companies have run lean.”