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Wednesday, June 27, 2018

Warren Buffett gives up on newspapers

Warren Buffett became a multi-billionaire by buying stressed companies and turning them around. At one time, he was the richest man in the world. As his career and life wind down, he bought the local newspaper and a few others.

He could not turn them around. The money is just not there. He is bailing.

Bloomberg News was kind in its headline announcing this.

"Warren Buffett Chooses New Path for Newspapers After Lamenting Decline," the headline read.

His new path is to have his company, Berkshire Hathaway, pay another chain of newspapers -- Lee Enterprises -- to take over. The best CEO in the country is walking away from running his own newspaper business.

"Berkshire will pay Lee to manage the papers and work to transform the businesses in exchange for an annual fee of $5 million plus a percentage of profits above benchmarks over five years, Lee said Tuesday in a statement." Bloomberg reported.

The Omaha World-Herald and the other newspapers Buffett bought are not assets. Newspapers once were cash cows. Now they are white elephants. They survived radio, newsreels. and television, but they could not adapt to this new technology.

Craigslist decimated their classified ads, which were a major revenue stream. Then came Matt Drudge, online sites, and blogs.

Newspaper management was lethargic in response. They half-heartedly staked their claims online but were so stuck on local that they missed out on great opportunities. Even now, they see their content as so special that it deserves a paywall. The successful sites don't.

The London Daily Mail doesn't. Most of its traffic does not come from England but America as it can report U.S. politics and entertainment from the other side of the pond.

Ah, what might have been.

The reality is that the most successful and smartest businessmen in America sees no way to make a buck in newspaperland.

Count the newspaper boxes on your street, and you will see why.

###

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20 comments:

  1. Good point about the Daily Mail.

    During the election, I found if I wanted the straight story, they were one of the few outlets.

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  2. I miss sitting down in the morning with a newspaper and a pot of coffee. A good newspaper was a news aggregator, kind of the way the Drudge Report is. All kinds of different news items in one bundle. Turn the pages until your fingers become smudged with ink. Alas, most newspapers went from selling news to pushing increasingly one-sided opinion. Not many people want to pay for that. Coupled with spotty delivery due to a lack of young entrepreneurs (newspaper delivery boys - yes, I was one for a few years) and irresponsible delivery drivers and it just stopped being worthwhile to have the newspaper delivered. The passing of a tradition. Sad. - Elric

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    Replies
    1. I do too. The Omaha World Herald was once a great newspaper. I gave it up 30 years ago due to its "political shift".

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  3. Trying to get through to liberal not capitalist relatives, I would ask them “why does a publisher publish the paper”. They would respond “to inform” or “to employ people”. The correct answer is “to make money”. Everything else is secondary. Liberals will be very pissed at businessman Warren Buffet.

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    Replies
    1. To make money a newspaper has to have a certain amount of appeal and an unquestionable credibilty. They have lost both.

      Old newspaper paradigm:
      All the news that's fit to print.

      New newspaper paradigm:
      If you don't read the newspaper you're uninformed.

      If you do read the newspaper, you're misinformed.

      - Elric

      Delete
    2. Schlongy, you’re a man after my own heart. If I ever taught a high school finance class, I would give them a quiz on Day 1, as follows:

      Q: Why does a business exist?

      A) To provide jobs
      B) To provide health care
      C) To provide an inclusive, friendly space where people of all races, genders, and orientations can get along
      D) To make Kwan

      It’d be fun to see what the answers were.

      Delete
  4. kind of sad really. In my own home town of many years ago the local paper's owner, a family friend, owner sold to a bigger paper who then sold to conglomerate. With each sale the local content became more and more left wing until finally the LA Times was the end producer of all the hometown news. I cancelled it after 50 loyal years when The illegal alien seen running from the origin of one of our huge Santa Ana wind driven fires was memory holed and GW blamed instead for his evil brush clearing policies.
    So even though I am sorry for local papers dying out I see no real reason for them if they are just propaganda arms of larger Communist Telescreen driven properties.
    Everyday on my Android phone get a news feed full of propaganda I can't even turn off. Soon Emperor Bezos will control the news too like he will food. I hope Buffet sticks around awhile and doesn't sell to him. Buffet is a liberal but he has some compunction and is not too venal. This cannot be said for the Emperor.

    ReplyDelete
    Replies
    1. beer is delivered to your home still in Germany in refillable glass bottle

      Delete
    2. But they’re running out of CO2! Wait, I thought excessive carbon dioxide was the biggest problem on the planet...

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    3. Soon Emperor Bezos will control the news too like he will food. I hope Buffet sticks around awhile and doesn't sell to him. Buffet is a liberal but he has some compunction and is not too venal. This cannot be said for the Emperor.


      I dunno, seems like Kang vs. Kodos to me.

      Delete
  5. “Newspaper management [snip] but were so stuck on local that they missed out on great opportunities.”

    I beg to differ, at least with respect to my hometown newspaper. After it was acquired by a big chain, it virtually quit covering local news...which was the main reason I suscribed. The Metro section shrunk to 6 or 8 pages, half of that ads and paid obits. Sadly, the local alt-weekly did a much better job of local coverage, albeit from a highly slanted point of view.

    Then they started to trowel on the leftist claptrap and the main news pages all had stuff I'd read online the previous day.

    I just couldn't justify it any more, at any price.

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    Replies
    1. I think a lot of local news went away after papers laid off half of their staff to cut costs.

      Delete
  6. I get a laugh when I see the online papers like NYT telling me my monthly allotment of free articles is up, and now I have to pay .99 / month. NEVER. Not for their communist propaganda

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  7. The only part of newspapers I’ll miss is the NYT crossword puzzle. (But not Monday thru Wednesday; too easy.)

    ReplyDelete
    Replies
    1. After two days off, Wednesday’s puzzle is just fine.

      Delete
  8. I was born during the Eisenhower administration and I have converted almost entirely to e-reading. I don't like paper. Not newspapers, not books, not letters. Paper print is hard for old eyes to read and why bother when I can change the font size, format and color of digital media. Why struggle to balance a book when I can put my laptop on the arm of the chair? Why try to refold new pamphlets (few or full sized newspapers anymore) when I can read more on my phone?

    Newspapers have gone the way of clay cuniform, wax tablets and carving heirophlyphs in stone.

    Way2opinionated

    ReplyDelete