City March 6, 2009 9:15 AM

Warren Buffett and The Buffalo News

Warren Buffett and The Buffalo News
2008 was a bad year for anyone with any connection to financial markets.  Even the greatest investor of his generation, Warren Buffett, experienced his worst year ever

Mr. Buffett released his annual shareholder letter late last week in which he discussed the outlook for the economy (the US economy will "in shambles in 2009"), the mortgage crisis ("beware of geeks bearing formulas"), and the insurance business.  Unlike past years, Buffett did not talk about the newspaper business and made no reference to The Buffalo News. 

While the economy is difficult for nearly every industry, media companies in general and newspapers in particular have been hit especially hard as subscriptions have fallen and advertising dollars have dried up.  In this context, both new and old media are trying to build new business models and revenue streams.  Old media, however, has the unenviable task of also having to make substantial cuts to their cost structures. 

Geoff Kelly at Artvoice has a piece on efforts at The News to make more cuts. As the News was unprofitable in November, December and January, management is eager to make cuts.  Not surprisingly, it appears many News employees blame management for the current condition.  From one staffer's letter:

As it is, our publisher is telling people the paper is going to close.

We called him on it. If he's not prepared to stop panicking, he needs to get out of the way. We need leadership, not just cuts.

The News is not going to be able to cut its way out of this to survive. It has to grow to survive. Now they're only in cut mode.

We mentioned to them today that Warren Buffett has made $550 million since he bought The News. This is the first time he's ran into turbulence.

Stan Lipsey's response is to start throwing women and children overboard. They need to recognize, that when this is done, there will still be a lot of people working for them, and those people have to feel like they're not next for the firing squad. The way they handle this is now affects the next chapter in how we handle this business.

We don't think (the problem) is Warren Buffett, and we don't think it is the department heads. We think a lot of this has to do with Stan Lipsey. We said (to management) you folks need to figure out how to deal with the publisher, because he's the most immediate problem we have. We have a bad recession, we have a bad industry, but we've got a publisher hitting the panic button like crazy.

We can't survive in a panic mode. Were prepared on our side to work through those panics.

Is it possible this one paper town could become a no paper (printed) town sometime soon?  










 
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From time to time, the Buffalo News has thorough multi-page articles, but most of it is already no more than a Pennysaver.


This problem is not unique to Buffalo. If the News closes, more creative non-print news sources will inevitably appear.

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The problem with the news is the quality of content.

The second biggest story at 11:33am is that Jim Kelly sold his house to Marshawn Lynch. It is written by By Sharon Linstedt from the business section. It is a weak attempt to tie back to the real estate market.

THAT IS WHY PEOPLE DO NOT BUY THE PAPER. Simply put there is not the quality of journalists at the news.


If I ran the news:

* I would invest in an Albany division. Try to team up with the D&C in Rochester and PS in Syracuse. There is PLENTY to write about...mostly bad news...but people would read it.

* I would focus on writing some substance for the local section. As PaulBuffalo said, the content AND the quality of writing in the local section is Pennysaver quality. Do some investigative journalism for Christ Sake. Why is it someone like WCP in Sacramento has a better grasp of development than someone at the news? Why is it that local bloggers, PART TIME BLOGGERS, have a better grasp and more content in regards to politics than the news?

* I would focus on building out the HS coverage in the Sports section. If you want local people to buy your paper, write about their kids. The coverage for HS sports is EASY and could be done by a 1st year reporter at a low wage, yet the news just likes to post box scores or rely on information from athletic directors.


Lastly, I would build out a new BuffaloNews.com. Allow for ever article to be published in blog format to allow for participation from the reader. Yes...even the race baiting posts by Rod Watson.


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The mediocre Buffalo News is no better or worse than other papers I read-- no worse than the Los Angeles Times, which given the population of that area, comes across as parochial. The NY Times is a bloated and often shabbily written paper, frantic to surf every stupid trend and fad in this attention-deficit culture.

And to what, in town, will we compare the Buffalo News? Artvoice? A few times a year a provocative article surfaces, but there is usually a thick lens in front of every substantial topic it writes about. Its coverage is hardly conducive to a regionalist vision. And Buffalo Rising? It's a pleasant Kiosk for keeping abreast of certain corners of the city. But the caliber of writing and thoughtfulness?...better not to go there.

Early media like newspapers face challenges and will have to be more protean to survive, but as public forum they will never disappear. They're just too useful, and nothing has yet matched their ability to fund and deliver sustained, probing investigation. I also don't think it long before web-fatigue sets in; we know that people skim when they "read" online articles of serious length, and this constant skimming, jumping, clicking and roving sands away at our attention and focus. The book, the newspaper, and the magazine are too concrete and vivid to fade away. They may contract for a while, but they'll endure.

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EricOak, I agree with much of what you said, but the Buffalo News is far worse than the LA Times even though the LA Times is in obvious decline, too. I would also take exception to your characterization of the NY Times as shabbily written. It's had editing issues, to be sure, but the NY Times can be counted on for thorough coverage of the five boroughs, the NYC/NJ/CT region and competent international coverage. Newspapers are not the equivalent of the New Yorker magazine and they have always covered fads and trends. That should never change.


You're right that people often skim articles online, but you're basing your conclusions regarding web fatigue as if electronic devices won't evolve in sophistication. Amazon's Kindle is an example of that progression. (I would gladly give up a library of books if I could access it all on one comfortable electronic device.) I've also seen prototypes of large flexible electronic sheets that mimic the feel of today's newspapers. The challenge is determining the types of devices that people will fully embrace.


There is a place for print media. The industry has to figure out that role and it will take a long time.

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I love the Buffalo News when in its editorial rants about the "cash strapped city" (3-6-09) it then advises the foolish politicians of the city to build and subsidize structures for private commercial businesses. Apparently the News editorial writers do not realize that when these entities do not pay their share of property taxes that it is the children and families of the city that do not receive the educational, cultural and recreational programs that they could have if the money was available. In Buffalo, our elected officials make sure that the free lunch goes only to those people who can afford it.

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It's ovahhh. The Seattle post-Intelligencer may go online -only, The Rocky Mountain News is shuttered, The San Francisco Examiner may disappear, The SF Chronicle is cutting half its staff, on and on. The News was a good paper for much of the last century but it's time to put it to bed and build an online media platform that does what any great paper used to do: tell it like it is, and sell ladies' undergarments.

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I don't know, Paul. I've been reading the NY Times for 30 years, and I think it's a lousy newspaper given its resources and setting.


Do you read the print Buffalo News every day? It's bad like all newspaper writing is bad, but really, I don't see where the great newspaper writing is anymore--once in a while in the Washington Post. We can't expect dailies in midsized cities to cover international news with any depth. They have no resources for that.


I couldn't disagree more about Kindle, for many reasons--I find it awful, and the thought of giving up a room lined with beautiful shelves of books all murmuring to eachother. Would you want to lose that? Books are small houses for great ideas. And all I have seen are studies about how badly we read when we read on electronic screens. Maybe that will change with this voracious technology, I dunno.

Maybe this just comes down to sensibility. Viva el libro.

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EricOak, the local NYC resident gets a better NY Times -- with more sections and local coverage -- than the paper they sell in the rest of the country. The Times contains lengthy articles in which sentence structure and context is important. For the price of admission, the NY Times provides a better value for the reader than any other paper in the country.


The typical article in the Buffalo News -- a Kevin Gaughan story in today's paper is a good example -- is one in which almost every sentence is its own paragraph. So much of what ends up in the Buffalo News seems to be no more than a reporter's unedited notes. I see little effort to construct a story except in those instances when the News does a multi-page story (like its series on the Peace Bridge, for example).


Management at the Buffalo News has exhibited no creative solutions to its problem: it cuts quality, raises prices, and cuts jobs to stay profitable. It depends too heavily on the elderly of western New York for its sales. That seems an odd fit for Mr. Buffett who invests in well-known brands with top talent and good product. The News acts like a severely wounded animal and I wonder whether Mr. Buffett will reconsider his investment in the Buffalo News.


Regarding electronic devices, there isn't one that would take the place of a book for me right now. The Kindle is a strong step in the right direction, but its pricing and proprietary structure turn me off. The cost of a library of physical books is high and poor/rural neighborhoods inevitably suffer. The right electronic device combined with fair access can further liberate poor/rural areas of this country as we all confront such an ominous future.

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I sure hope newspapers will survive the current trend underway. It's a shame that they have become under the control of centralized interests as corporations swallowed them up. Quality and interest disappeared along with local control.

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PaulB,

I lived in NYC for years, and there really is not much difference between the local and national versions. But it seems as if you and I are reading two different newspapers. Every time I read the NYT I am struck by the bland prose, the glib faux-sophistication, and the dreary self-consciousnes--all signs of provinciality. But I have always maintained that NY is the most provincial large city in America--self-important, uncurious about the rest of the country, and smug: all signs of a provincial mindset.


Aside from some of the political writing, the sensibility of the writing I see in the NYT is surprisingly middlebrow. The dull, predictable Paul Krugman exemplifies all that's so anemic in NYT-style writing. Or Thomas Friedman? Or Maureen Dowd? Middlebrow writers, all of them. But more importantly, how can one compare what a giant paper like the Times can do to what The Buffalo News can do? Of course the Times will have some longer articles, though I find nearly all the cultural writing in the Times to be faddish and cliche, and shockingly unsophisticated. The political writing will be superior to the BN, but how could it not be? Dailies in medium-sized cities have long since abandoned detailed national and international reporting, though I think the Sunday Buffalo News does a respectable job at this given its size and resources.


I am not persuaded that electronic books are part of the solution to poor neigborhoods'/regions' education crisis. Until I see evidence that people read online as well as they do from hard print, I remain skeptical. The individual, tangible autonomy of each book's covers and pages cannot ever be reproduced by a Kindle. But until this country wakes up from its ignorant nap, from its degraded obliviousness to thoughtful verbal culture, it doesn't matter how one reads.

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EricOak, NYC has always had a self-importance that has led to many of the qualities you mention. I laughed when you mentioned Paul Krugman's writing as dull. He's an economist and he presents his arguments as one would expect an economist to do. Maureen Dowd is snarky, to be sure, and she has many detractors; however, I find her creative use of language wonderful.


With that said, I'm not comparing resources or the ability to write political columns. I'm simply saying that the Buffalo News has a woeful ability to adequately execute sentence structure and grammar except when they're focused on an important lengthy story.


Finally, to beat a dead horse, once electronic devices match the experience of reading print media, habits will quickly shift. We'll have to wait and see how this all plays out.

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