Buffett To Buy More Newspapers
Warren Buffett isn’t done buying newspapers. Berkshire Hathaway may acquire more newspapers in the next few years, according to the Omaha investment mogul, fresh from the acquisition of 26 daily newspapers and 37 weeklies and community papers from Media General.
Buffett hinted at his plans in a letter to editors and publishers on Thursday; the letter was published by the Omaha World-Herald, another recent acquisition.
Buffett didn’t say what newspapers he’s likely to buy, but there will be plenty on offer, as the newspaper business continues to experience unprecedented distress, due to the collapse of print advertising revenues.
There have been a number of big transactions in addition to Buffett’s own purchases, including The New York Times Co.’s sale of its regional media business, the acquisition of the Chicago Sun-Times by Wrapports in December 2011, and the sale of the San Diego Union-Tribune to real estate developer Doug Manchester in November 2011.
Buffett acquired all 63 publications from Media General for $142 million earlier this month, and the Omaha World-Herald for $150 million (plus $50 million in debt) in November of last year.
Buffett outlined his vision for his newly acquired newspaper properties in a letter to their publishers and editors, emphasizing the need to dominate local news reporting, thus remaining a key platform for local advertising. “It's your job to make your paper indispensable to anyone who cares about what is going on in your city or town," he wrote.
However, he also pledged to be “hands-off,” leaving the newspapers to carry out coverage as their editors and journalists see fit. He admitted to having “strong political views,” but said they would have no influence on editorial decision-making, adding that “Berkshire will always be nonpolitical.”
On the business side, Buffett said newspapers can no longer afford to give their content away for free, which he called “an unsustainable model,” hinting that online paywalls may be coming to the newspapers acquired by Berkshire. This would be in keeping with an industry trend, as online paywalls have proliferated at other small and mid-sized regional newspapers in recent months.
Earlier this week McClatchy vice president for news Anders Gyllenhaal revealed plans to introduce online paywalls at 30 daily newspapers, including The Miami Herald, Fort Worth Star-Telegram, Charlotte Observer, Kansas City Star and Sacramento Bee.
In February, Gannett Co. community publishing president Bob Dickey announced the company would implement online paywalls at the company’s 82 community newspaper Web sites. Nine Gannett properties are already charging for online content.