Warren Buffett’s Berkshire Hathaway Inc., may be one of the nation’s largest owners of newspapers in the country, but the multi-billionaire investor has largely written them off. Repeating observations he has made previously, he told Yahoo News that other than the New York Times, Washington Post, and Wall Street Journal, newspapers in the U.S. are “toast.”
In the golden age of print, Buffett said, it was “survival of the fattest.” He with the fattest newspapers — packed with the most ads — won. But the rise of digital media eviscerated newspapers’ most profitable revenue stream, classified ads. (He didn’t say so specifically in the brief interview clip, but digital media also are eroding newspapers’ remaining revenue streams, display ads and subscriptions.) Newspapers, he says, are “disappearing.”
The Sage of Omaha appears to have made his peace with the passing of a great American institution. BH Media no longer manages its newspapers, which include the Richmond times-Dispatch, the Roanoke Times, and franchises in Charlottesville, Lynchburg, Danville, and Bristol. The conglomerate has outsourced that job to Lee Enterprises, owner of the St. Louis Post-Dispatch.
If I were a heartless conglomerate that owned a bunch of newspapers and believed they are living on borrowed time, how would I manage them? I would treat them as cash cows, wringing whatever profits from them I could before they met their inevitable demise. That would mean ruthlessly cutting costs to preserve profit margins as revenues declined. I would not squander capital “investing” in their future. And that appears to be exactly what Buffett is doing.
Inevitably, Virginia newsroom staffs will shrink and the yawning gaps in political and government coverage here in the Old Dominion will only grow. As commercial journalism wastes away, what will replace it? Nonprofit journalism, most likely. If you think news coverage is slanted today, just wait until all your state and local news comes from outfits funded by foundations, political parties, or special interests.
