On newspapers, I agree with Buffet

Published 8:00pm Saturday, March 9, 2013

Last year the newspaper landscape in Alabama and Louisiana was rocked by the announcement Advance Media Group, which owns the Birmingham News, Mobile Press Register, Huntsville Times and the Times Picayune in New Orleans was cutting their print distribution from seven days to three. It sparked a wave of consternation and outrage from subscribers, advertisers and newspaper publishers, large and small, that struggled to understand why and what it meant to them.

Locally, I was asked what it meant for your newspaper, and newspapers like The Selma Times-Journal. Comparing The Selma Times-Journal to any of the aforementioned metro newspapers is like comparing apples and oranges. They’re both fruits, and are grown on trees, but much, much different. Unlike a large metro, your community newspaper focuses on nothing but local news. You won’t read about national or international news, national politics or the NFL in your newspaper. What you will read about is local politics, local high school football and profiles on the people, places and events that happen here and affect our community.

Interestingly, while Advance was making news for cutting print distribution days and laying off staff, another company was making news for investing in newspapers – Berkshire Hathaway. They are lead by Warren Buffet, who was recently named by Forbes, again, to its billionaires list. With an estimated net worth of $53.5 billion, Buffet has been buying newspapers as if they were printed with gold ink.

In late 2011 Buffet bought his hometown newspaper, The Omaha World-Herald and followed that last year by purchasing 63 dailies and weeklies from Media General, including some in Alabama. So far this year he’s purchased the Tulsa World and the Greensboro News & Record in North Carolina, among others. His company now owns 278 daily newspapers in small and medium sized communities, but has shied away from purchasing metro newspapers.

In a story this week in USA Today, Buffet said to be successful, a newspaper must provide content that is important to its readers that they can’t find elsewhere. “You can define that better in a smaller city than a sprawling metropolitan area,” Buffet said.

In an era where newspapers are struggling to keep up in a digital age, Buffet’s commitment to local news is clear. “I don’t want one inch of newshole cut,” he says, adding, “If we go down, we’re going down with a big newshole.”

And while Advance Media has said they will never charge for their content online, something I heard at an Advance presentation last year, Buffet’s plan is contrary to that.

“I’m not interested in the Internet for money. I’m interested in preventing the erosion of print,” adding “I could kick myself for not figuring this out earlier.”

While there are many vast differences between Berkshire Hathaway and The Selma Times-Journal, it’s comforting to know, at least based on Buffet’s comments, that we believe in same formula – produce community news, and a lot of it, ask a reasonable fee for delivering that content and those who value it will pay to receive it.

In a letter to shareholders, released Friday, Buffet wrote extensively about newspapers, why he bought them and why he would continue to buy them.

“…I believe that papers delivering comprehensive and reliable information to tightly-bound communities and having a sensible Internet strategy will remain viable for a long time,” he wrote. “We do not believe that success will come from cutting either the news content or frequency of publication. Indeed, skimpy news coverage will almost certainly lead to skimpy readership. And the less-than-daily publication that is now being tried in some large towns or cities – while it may improve profits in the short term – seems certain to diminish the papers’ relevance over time. Our goal is to keep our papers loaded with content of interest to our readers and to be paid appropriately by those who find us useful, whether the product they view is in their hands or on the Internet.”

I couldn’t agree more.

 

  • Tony_Almeida

    Warren Buffett spells his surname with two ‘t’s', not one.

    Of course, the author is in good company given Carol Loomis’s first ever Fortune article on the Sage misspelled his name with one ‘t’.

  • Pingback: On newspapers, I agree with Buffet « Grupo Media

Editor's Picks