Thursday, May 26, 2016

Buffett Says Newspapers Haven’t ‘Cracked Code’

USA TODAY via Editor and Publisher
Rem Reider
When I talked to Warren Buffett three years ago, he confided that he had a forbidden passion.
"It's almost unnatural how much I love newspapers," he said.
And he was acting on that love. Four years after saying that he wouldn't buy newspapers "at any price," the financial guru had started snapping them up. In his 2013 letter to shareholders, he and right-hand man Charlie Munger declared that they "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." It was a powerful vote of confidence for a reeling industry totally disrupted by the digital revolution.

"We haven't cracked the code yet" as far as a viable business plan is concerned, he told me, speaking about his own holdings and the industry as a whole. "Circulation continues to decline at a significant pace, advertising at an even faster pace. The easy cutting has taken place. There's no indication that anyone besides the national papers has found a way."
Buffett reads five newspapers — actual newspapers, not web sites or apps — a day, and he says "you could sell me a sixth." But, he says, the continuing financial pressures have taken a toll on the objects of his affection.
"They don't tell me as much new as three years ago, let alone 10 years ago," he says. "They are a fair amount worse off, and not one is bucking that trend, even in prosperous communities. There's less and less in the newspaper."
Buffett, who has owned The Buffalo News since 1977, stresses that all of his newspapers are profitable. But the trendlines are discouraging. "If you have a problem in five years, you have a problem now," he says.
Despite the challenges, Buffett wants to make clear, "I love newspapers. I'm a guy looking for any robin."
And, he adds, "We would never sell a newspaper ... I want to be the last guy standing."

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