The news that Warren Buffett is buying his hometown paper, the Omaha World-Herald, got me digging through the archives to see what he’s said in the past about newspapers as investments. In 2009, he told Berkshire Hathaway shareholders that “for most newspapers in the United States, we would not buy them at any price” because “they have the possibility of going to just unending losses.” WSJ’s Scott Patterson reported:
The problem, he said, is that newspapers were once essential to the American public. As long as newspapers were essential to readers, they were essential to advertisers, But news is available in many other venues, such as the Internet, which means a dramatic drop in advertising revenue.
Washington Post columnist Steve Pearlstein then wrote an open letter to the billionaire, urging him to rethink his position:
From an investment standpoint, the better way to look at these properties is to think of buying all of them. In a single stroke, and with a relatively modest amount of money, a strategic buyer could assemble a national syndicate with millions of readers capable of achieving the economies of scale that have, for the most part, eluded our badly fragmented industry.
I asked Pearlstein what he thought of Buffett’s World-Herald purchase. “Don’t think it means anything,” he emailed. “It’s an emotional, personal buy.”