Warren Buffett is the chairman of Berkshire Hathaway. His investment group owns a small group of newspapers. One of them being the Press of Atlantic City.
Buffett recently spoke about the newspaper industry during his company’s annual meeting. Here’s some of what he had to say:
No one except The Wall Street Journal, New York Times and The Washington Post has come up with a digital product that will replace the revenue being lost as print newspapers lose both print circulation and advertising.
Newspapers are losing daily and Sunday circulation, street sales and home delivery sales.
Buffett: “I’ve been surprised that the rate of decline has not moderated in the last five years.”
“We bought all our papers at reasonable prices, so it’s not a great economic consequence to Berkshire”
“It is very difficult to see important dollars arising from digital. It’s difficult to see how the print product survives over time. I’m afraid that’s true of the 1,300 papers in this country.
“I hope that we find something or help others find something, because we’ll copy it.”
The newspaper business has changed in a very material way. We haven’t been able to figure any solutions, but we will keep trying.
In 2012, BH established BH Media Group. The company has operations in 10 states and owns 31 daily newspapers and their digital sites. The company also has 47 paid weekly newspapers and 32 other print products.
Five years ago Buffett and his partner, Charlie Munger, have acknowledged the risk of owning newspapers, but still believed that papers delivering comprehensive and reliable information to tightly bound communities and having a sensible internet strategy would remain viable for a long time.
“The decline was faster than we thought it was going to be. So it was not our finest bit of economic prediction,” said Munger, Berkshire’s vice chairman. “I think it’s even worse to the extent we miscalculated. We may have done it because we both love newspapers and have considered them so important in our country.
These little local newspaper monopolies tended to be owned by people who behaved well and tended to control the politicians, and we are going to miss these newspapers if they disappear.”
“The figures are not good, Warren,” Munger said.