Warren Buffett is giving up on The Press of Atlantic City and his other newspaper properties. Buffett is selling to Lee Enterprises. He’s unloading his newspaper & media investments. Watch for more downsizing and cutbacks.
Sadly, even though most newspapers have stripped their properties to the bone, insiders fear more cuts are coming. Especially with the announcement that Alden Global Capital, a vulture hedge fund has recently acquired a $9.2 million stake in Lee Enterprises.
Buffett has warned of newspaper’s decline. The rise of Internet sharing and online news sources like ACprimetime.com and DownbeachBuzz.com are filling the void.
Traditional media like newspaper and radio are not only losing ad revenue and following, but critical influence in the community, too.
In 2019, Buffett said the newspaper industry was “toast.” Buffett admitted that very few newspapers have digital models strong enough to offset declines in print circulation and ad revenue.
A few years back, Buffett told shareholders that he soured on the newspaper industry. Print advertising and newspaper circulation have deteriorated much faster than he expected.
Lee Enterprises will buy BH Media Group’s publications, which includes The Press of Atlantic City. Lee has managed BH Media’s publications since July 2018. Berkshire partnered with Lee in 2018 in order to lower costs.
The newspaper business has been in serious decline over the past two decades. Some blame the Internet. Others blame reporter & publisher activism. Too much focus on national and social justice issues….instead of local news.
The internet has taken up much of the advertising market share that used to be owned primarily by print newspapers.
Berkshire’s sale comes as private-equity firms and hedge funds are buying up local newspapers and slashing costs.
Half of the surviving U.S. newspapers could be gone by 2021. Many local papers fail miserably when trying to transition print customers into paying digital subscribers.
Nearly 1,800 newspapers closed between 2004 and 2018.
Mid-sized papers like the Press of Atlantic City have suffered the most. High printing & publishing costs. Online ads are a fraction of the price of print ads.
BEWARE > The loss of local newspapers could create a “news desert.” Residents less informed on the issues that matter to their region.
Newspapers have served as community watchdog. A check on the power of local officials. Without local media oversight, city governments often become less efficient. Fewer run for political office. See: Margate and Ventnor.
Without the critical government oversight facilitated by local news orgs, city municipalities are wasting millions of taxpayer dollars. They become less efficient.
Scott Cronick, an entertainment writer for the struggling Press of Atlantic City says he’s not worried. He should be. The new owners of his paper include ALDEN GLOBAL, a private equity firm well-known for draconian cuts to staffing and resources.
Cronick readily admits that people complain about newspapers all the time. Without a newspaper, who will keep politicians honest? A Philadelphia-based TV station? Nope. Not the radio station (Cronick) works for. (WOND 1400am) The staff just isn’t there.
Newspapers are watchdogs for the community. Without them, governments get away with more questionable moves.
Lately, local newspapers have reduced their investigative reporting. No longer likely to print uncomfortable news about the local economy and elected leadership.