Newspapers Are “Toast,” Says Owner of Virginia’s Biggest Newspaper Chain

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.

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26 responses to “Newspapers Are “Toast,” Says Owner of Virginia’s Biggest Newspaper Chain

  1. ironic – that we had this business model where ADs funded “news” and in that time – few folks really believed that Chevrolet or Proctor and Gamble or Kmart “bought” news they wanted or liked… that essentially their money “biased” what the papers (and magazines) reported…

    and Consumers Reports made a point of saying that THEY could be TRUSTED because they accepted no advertising.

    So one might say that Consumers Reports was way ahead of it’s time!

    😉

    Of course, one might also argue that Bezos is the liberal that SHOULD own the WaPo, eh?

    So…. now in the age of the internet – the venerable age of Knowledge – we all end up believing what we want to believe because we trust few sources to tell us the “truth” ?

    wow – what a conundrum!

    but still wondering if Conservatives can fund all these so-called “think” tanks that spew out all kinds of offal – why they can’t fund the media that their adherents want? They did it with FOX news so why not legitimate Conservative Media so some of the b_tching about the liberal MSM might get diverted!

  2. Something that puzzles me about the MSM is that, unlike most other businesses, the strategy, direction and reporting/editorial policies don’t seem to be set by the business owners and their representatives, the board of directors. Fox made a killing with Fox News in reaction to the general liberal trend of the rest of the MSM. As Larry notes, why aren’t there other conservative media outlets?

    Clearly, the ownership of the media isn’t all left wing. Yet the owners generally sit back and let the editors and reporters drive the direction of the reporting and editorializing from the left. What would have happened if Bezos would have told the management of the Post to drop its strong advocacy for the Democratic Party and become neutral? Neutral to the point where the Post pissed off virtually everybody on some stories while delighting the same people with other stories? Would the employees simply refused to follow the new company policy? And, if so, what does that say about the media? Is it the only big profession where employees don’t have to follow company policy?

    • Jeff Bezos, at a large Washington social event, shortly before Arlington won the HQ2 prize, announced that of all his acquisitions in his professional life, he was proudest, and he valued most highly, his purchase of the Washington Post.

      In short, the world’s more competent billionaire, a man who pays great attention to detail, must believe most of what he reads every day in the Washington Post!

      Now that is truly frightening for our future. What’s a good conservative to do?

    • If I were Buffett, had his billions and owned the WSJ, I would do exactly what Jeff Bezos is doing with the Washington Post, feed it whatever it needed.

      I would NOT do this; “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.”

      I would put those papers out of business before doing that.

  3. There used to be many newspapers in cities of any size, each with its own viewpoint. As newspapers gobbled each other up the remaining few declared, or pretended, that they were the unbiased voice of truth. The more sources of information, the better. Maybe people will try to make up their own minds instead of either parroting the mainstream media, or ignoring it.

    • And that’s exactly why the Citizens United case is so darn important to freedom. In an electronic world, there is no difference between the traditional media and any other entity. Bezos can speak as he wills through the Post (although I’m not convinced the staff would allow him to do this) and spend his money doing so. So should any other entity or person have the right to spend their money to influence the public debate. Otherwise, we’ve created an artificial distinction that no longer makes any sense. We don’t need the established media to inform us any more. The Internet is full of many sources of information, some better than others, from every political, social and economic perspective.

      The truth be told: America’s established media is no longer important for freedom. It’s just another voice in a loud environment.

  4. re: ” The more sources of information, the better. ”

    Totally agree and it’s your (our) responsibility, not the media and actually
    always was – some just were always a little lazy.

    And we’re seeing the fruits of folks who read ‘something’ on the internet and believe it – take the measles thing.

  5. I am puzzled by this conversation which we have add a number of times.About this blog, I wonder why Bufffett thinks newspapers are “toast” since he bought so many of them not that many years ago

    . I also really don’t like the idea that new owners, i.e. hedge funds, should buy a paper, wring it dry of its last profits and dump it. Tronc, now back to Tribune publishing, bought the New York Daily News for $1 in 2017 and laid off half the staff just days after the sale went through. The staff was cut by by maybe two thirds when the Denver Post, a many-times Pulitzer winner, was squandered by the hedge fund that bought it. It was so bad that the editorial section editors ran a multi-page story about how lousy the hedge fund is.
    Are you really advocating this hedge fund pirate approach? That’s horrible for the industry, professional journalists and the public at large.
    This situation is the result of ossified print media management that did not push hard into digital. That happened at BusinessWeek where I worked in the 1980s and 1990s. The 1-million circulation magazine was a cash cow but management at its owner at the time McGraw-Hill, beat up BizWeek’s top leaders for not moving to the Net faster. I will never forget the drama at a retreat outside of Philadelphia when the CEO of the mother company and castigated BizWeek’s editor at a dinner we all attended in the late 1990s
    Non profits might be the answer and the pretty decent Virginia Mercury is a good example.
    As for bias, gee that’s new. Yet the major dailies did a great job of investigating the incompetent and amoral presidency of Trump. I read the Mueller report, spending more time with Volume Two and say that most of the reporting was “vindicated.”

    • To be clear, I don’t advocate the hedge fund approach to newspapers. I prefaced my ruthless cost-cutting “advice” with the phrase, “If I were a heartless conglomerate”…. which I’m not. I was providing a description of what appears to be the logic driving the management of newspapers these days.

      From a purely business perspective, the economics are understandable. The economics of the business are terrible. Google and Facebook have figured out how to monetize newspaper content better than the newspapers themselves. Conglomerates and hedge funds are not in business to uphold community values, so none of their behavior should surprise us.

      We need to invent a new business model for community journalism — hopefully not as a nonprofit enterprise supported by foundations and special interests with their own ideological or business agendas.

  6. Contrary to some of the voices here, I mourn the death of newspapers. Professional journalists, the members of the established media, have standards. These standards call for establishing the authenticity and accuracy of the stories they are writing. Because of the existence of these standards, readers of newspapers know they can largely trust what they are reading. Reporters and editors being humans, personal perspectives will inevitably play a part in what is reported and how it is reported. But, readers will be aware of these human biases and keep them in mind. Sometimes, newspaper reporters violate the standards. When they do, they are held accountable by their own profession and employers.

    The Internet, on the other hand, has no standards. Anyone can “report” anything as fact, although it may be opinion, a lie, or a rumor. There is no accountability to anyone. Because of the multitude of sources of “information” on the Internet, one is overwhelmed with information. Like cable television, there are so many choices, so many sources, most of which is garbage, that one becomes exhausted trying to sort through the flood to separate the gold from the dross. Who to trust? Now we are finding out that a good portion of the offerings on the Internet are products of Russian bots.

    The many celebrants of “the more sources of information, the better” are overlooking an important value that newspapers add–depth. The “more” something becomes, the more diluted it often becomes.
    In the past, newspapers had the resources to put into stories that required a lot of time to investigate and develop. Probably the most obvious example is the Watergate story. But, there are many, smaller examples. One would be the newspaper in Southwest Virginia (Bristol, I think) that wrote the stories on how small landowners were being denied their deserved payments on mineral rights they had leased to large mining corporations. (The reporter won a Pulitzer Prize for his work on this story.) Another example would be recent reporting by NPR (granted, not a newspaper, but main street media, nevertheless) on how a federal agency had converted many teacher scholarship grants into loans, putting those unsuspecting teachers on the hook for tens of thousands of dollars. Because of that reporting, those new “loans” were converted back to the original grants. None of this reporting could be possible on the Internet.

    As Steve Haner and others on this blog have lamented, the coverage of state politics in Virginia is much less extensive than it used to be. I used to think that the Virginian Pilot had the best coverage of the General Assembly and state politics. That newspaper is just a shell of what it used to be. As Steve has noted, the press corps at the General Assembly is now much smaller. Although the coverage of state agencies was never as extensive as it should have been, it now is even thinner. For example, there has been a recent discussion on this blog about the Virginia Transportation Board and Steve pointed out that the RTD does not regularly cover it. Twenty years ago, when I attended the VTB meetings as part of my job, there was always a reporter in attendance. Many times, there was nothing newsworthy happening and no story resulted, but he was there, listening and talking to VDOT officials, getting background and learning about what was going on. Because of staff cutbacks, the newspaper cannot afford to do that anymore. And there is no one on the Internet doing it.

    The animosity toward Bezos on this blog is interesting. As TMT notes above, “unlike most other businesses, the strategy, direction and reporting/editorial policies [of newspapers] don’t seem to be set by the business owners.” As a longtime reader of the Post, I do not notice any discernible difference between the pre-Bezos Post and the post-Bezos Post, except that the Post now has the resources to strengthen its online presence.

    The continued existence of newspapers is, evidently, going to be dependent on people like Bezos, who have made their fortunes in other ventures and are willing to support newspapers, not because they want to profit from them, but because they think they are valuable to society. When Berkshire Hathaway bought the RTD, I remember reading that Warren Buffett was investing in small town (sorry, Richmond) newspapers, not because he thought he could make a profit, but because he had a soft spot in his heart for them and felt they were of value (he delivered newspapers when he was a kid). It looks like he has changed his mind. That is too bad, for all of us.

    • Again, to be clear: I, too, mourn the death of newspapers — and for the very reasons you spell out. I just have no confidence that they will survive. I fear that journalism increasingly will become agenda-driven journalism — propaganda packaged as news by agenda-driven ideologues and special interests. I have many criticisms of the “old” journalism. But it’s likely better than the “new” journalism.

    • Dick –

      Regarding “The animosity toward Bezos on this blog is interesting:” I am a big fan of Bezos, have been consistently so on this bog for good reason, just find frightful the fact that he saved the Washington Post from oblivion, and feeds it daily. And he’s surely one of the smartest guys alive on planet. That’s frightful.

  7. I am always surprised by the labor vs management angle on newspapers missing the digital / internet trend. The theory holds that hard working reporters were doing their jobs and seeing the rise of digital media while lazy and incompetent managements were insisting that paper copy would live forever. That all may be true. However, in most (all?) other industries a number of enterprising members of labor (i.e. reporters) would have spun off, raised funds for their own competing electronic news media companies and joined the internet revolution.

  8. I think the time has come to license journalists. Other presumed tellers of truth – like CPAs – are trained, tested and licensed. They also must complete ongoing education in order to maintain their CPA designation. There are plenty of jobs in finance where one doesn’t need a CPA. However, there are others – such as attesting to the audited financials of a public corporation – where a CPA is required.

    Anybody who wants to put forth “journalism” should be able to do so. I just would be far more interested in reading journalism from a licensed journalist who could lose his or her license for claiming that commentary was actually news. Lawyers who misbehave can be censured, sanctioned or disbarred. Why not journalists? In a world where anybody can publish anything at nearly no cost on the internet … shouldn’t there be standards for those who claim the mantle of “truth teller”?

    • Your proposal might have some merit except for one little obstacle–the First Amendment and freedom of the press.

      • No. Licensing would be voluntary. When I wrote, “Anybody who wants to put forth “journalism” should be able to do so.” I intended to make that point. In retrospect, my comments weren’t are clear as should have been the case.

        I used to hire network engineers for important and sometimes sensitive projects. There is no mandatory certification of licensing requirements for network engineers. However, I always preferred network engineers with various Cisco certifications. It meant they had undergone classroom and hands on training, passed serious tests and stayed current. I was willing to pay the premium that came with the certifications.

        If I am looking at a list of news articles on my Facebook feed or from a Google search or as a link from a BaconsRebellion article … I’m going to be a lot more interested if the author has something like (CIJ – Certified Independent Journalist) next to his or her name. More views, more ad revenue. Nobody has to get a CIJ. I just think it would be beneficial for real journalists and for consumers of real journalism.

  9. The alternative to some form of standards in journalism is social media companies deciding what is true vs what is not. Anybody who has had any contact with the actual managements of these companies would be scared to death of this outcome.

    Zuck: Yeah so if you ever need info about anyone at Harvard
    Zuck: Just ask
    Zuck: I have over 4,000 emails, pictures, addresses, SNS
    [Redacted Friend’s Name]: What? How’d you manage that one?
    Zuck: People just submitted it.
    Zuck: I don’t know why.
    Zuck: They “trust me”
    Zuck: Dumb (expletive deleted)
    Instant messages sent by Zuckerberg during Facebook’s early days, reported by Business Insider (May 13, 2010)

  10. For myself, I pay money to subscribe to WaPo, NYT, WSJ and the Free Lance Star as well as a token donation to BR here. I have NOT subscribed to RTD – it’s just one too many papers although they are pretty firm about reading their article for “free”.

    What I’d LIKE is to BUNDLE all the papers owned by BH Media (Buffet owned) – which include many of the major papers in Virginia and/or the ability to pay per article much like I do with the toll transponder in my car. I keep a balance , go through electronic tolls and then refresh the account. Something like that could work with newspapers.

    The problem is that the newspapers are like a lot of disrupted businesses like Kodak or Blockbuster which refused to evolve – as Peter says. Why they don’t is beyond me. It’s like they want to be stupid and die of obsolesence or from the Hedge Fund scum.

    I hear this also – that if I pay for news, I expect it to be News I like and believe.

    Not true in my case at all but I do read each article critically and note the author and his/her other reporting AND I seek out other authentic/credible sources for the subject at hand as I try to understand what’s true and what’s what some want to believe or not. I purposely seek out opposite viewpoints to understand the issues that are not agreed to and why.

    • The problem, Larry, is that you are an exception. Few people are willing to take that much time to understand what is going on.

    • Why not a micro-payment per article? I like the WSJ but 75% of what they write (at a minimum) is irrelevant to me. However, I’d happily pay 5 cents to unlock an article that was interesting. Once again, the MSM fails to understand “mass customization” and consumer choice.

    • Bundling subscriptions makes sense. I’d likely pay something for access to a number of papers or, as DJR suggests, a very small payment for a specific article. I’m most interested in local news or sometimes, a specific business or technology article.

      I’ve successfully been involved in local affairs in Fairfax County without subscribing to the Post since about 2005 or so. I skim some of the webpages daily but rarely find something that causes me to read the article online. The spin is always the need for more spending and taxes. Local TV and radio stations’ webpages generally hit all of the big stories. If something needs a deeper dig, I often use Fairfax County Public Library online services.

  11. Don the Ripper,
    I’m not in favor of “licensing” journalists, even voluntarily. Too much of a First Amendment threat. If a politician, bureaucrat or other powerful individual doesn’t like something you wrote, he or she can somehow maneuver to have your “license” taken away.
    I am also not sure that degrees in journalism are all that great an idea. My college, a pretty good one in New England, refused to offer formal journalism courses. They supported the field but said it isn’t a body of knowledge like medicine, law or engineering. They thought it would be better to major in physics or philosophy or whatever. The you could get a job and learn the field on the job or go to a graduate school. Columbia, Missouri and Northwestern are highly regarded. One of the problems at less known schools is that some of the journalism professors are former reporters or editors who never rose very highly in the field.
    On-the job is good but a big problems is, who is going to teach it? Older, experienced editors can do a great deal to push excellence and ethics. But the state of newspapers is such that these men and women have retired, been laid off or took buyouts.
    Another thing is that there are different writing styles. I have worked for newspapers where one style dominated. When I went to a news magazine I had to relearn the trade over again. There, a story had to have a point of view. It was called a story line. Call that bias if you want but the story should represent other viewpoints even if it is making argument. . The thinking is that magazine readers are generally more sophisticated than the average newspaper readers and can understand where the article is coming from.
    The Net has brought about more opinion and I think that is a good thing. I actually think Bacons Rebellion does a great job in laying out reporting and views that are not available in general. Bias has been around since printing began. The Spanish-American War was the creation of a newspaper chain. Another thing that blogs and social media do is bypass the somewhat restrictive views of some papers. When I was on an “investigative” team at the Richmond TImes-Dispatch about 35 years ago, I pitched a series on tobacco. That was a huge nonstarter.

    • Peter, very thoughtful comments.

      Everyone has some bias. Probably no one can eliminate all bias from one’s writing. But, at the same time, pretending that bias doesn’t exist seems extremely offensive. Yet we see the Media make this claim all the time despite overwhelming evidence to the contrary.

      “[T]he story should represent other viewpoints even if it is making argument.” If only the Media did this on a regular basis, I think readership would increase. Most of us understand there are at least two sides to every story. But ideologue journalists want to present just the side they support.

    • I think you’re living in the past. I assume everything you write is accurate and correct regarding how things used to be. But now things are different. As the main article describes, newspapers are dying. Journalists are retiring or just quitting. The vacuum is filled by a fragile Main Stream Media that does indeed seem to be very biased – in one way or another. Adding to that are an uncountable number of somewhat legitimate looking websites publishing what seems like news.

      Here’s an example … On my Facebook feed up pops a comment about Candace Owens going to the University of Pennsylvania to give a speech and being confronted by Antifa. The claim is that Antifa called her all kinds of racists things including N-word, black bitch and coon whore. No link is provided. I’m wondering – did this really happen. So, I use an internet search engine and enter Candace Owens University of Pennsylvania. A bevy of “articles” pops up. The only MSM article I see is from Fox News which says Ms. Owens is going to the University of Pennsylvania to give a speech. I want to know what happened immediately before, during and immediately after the speech. So, I click on this …

      https://www.powerlineblog.com/archives/2019/04/candace-owens-fights-the-new-kkk.php

      Now, I have no idea what the powerline blog is nor have I ever heard of the author – John Hinderaker. However, there is a video where Ms Owens is subject to some profanity laced chanting and some genius sounding a siren through a bull horn. For her part, Owens calls Antifa the neo-kkk in a subsequent tweet accompanying the video.

      I can only imagine that if a liberal African American woman walked through the campus of Liberty University to give a speech and was confronted by a pack of profanity shouting protesters it would be MSM news. But, apparently, Candace Owens at U Penn wasn’t newsworthy.

      So … given the lack of MSM coverage …

      Do I assume it never happened because Rachael Maddow never covered it? Assume it happened but was somehow not newsworthy? Assumed it did happen and John Hinderaker just happened to be one of the few journalists willing to make the matter public record?

      I’d sure feel better if John Hinderaker had that CIJ after his name.

      The old days are gone. Walter Cronkite is dead. You can’t depend on the MSM for much of anything other than biased reporting (or biased non-reporting). If you want to know what’s happening you have to rely on non-traditional media. I just want a way to separate the serious from the posers.

  12. Yeah, The old days were great when they actually had money.They’d fly you to London or Singapore. They treated you as if you were an intelligent adult. I am very nostalgic for them.But actually, I do not live in the past and haven’ for nearly 20 years. A couple of years after I left BW, the dot.com bubble, which they had helped create, burst and the magazine went through lots of bleeding and layoffs. Many of my friends lost their jobs.; I keep doing what I can by juggling several assignments at once.The current saying is “ride the wave” or keep going with an enjoyable gig for as long as you can and before the gig goes away.. I am doing most of my work in other locales via the Net since the pay in Richmond is so crappy. I also get annoyed with the “you’re lucky to have this job, Boy” local attitude which I don’t get in other places that are more sophisticated.

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