Investor Warren Buffett has always been portrayed as a billionaire who also had a way with words. One of his most-quoted aphorisms offers this memorable bit of advice:
“When you find yourself in a hole, stop digging.”
Much to the surprise of thousands of Buffett groupies, he ignored his own advice when it came to his admiration and affection for newspapers. He ignored that sage comment. He kept digging his hole, seemingly unaware that newspapers of every description, from small weeklies to major metropolitan dailies were faced with declining circulation and advertising.
Conditions were far different in 1977 when his company, Berkshire Hathaway, bought what was then the Buffalo Evening News, his first major acquisition. It was dominant in the Western New York market, with a daily circulation of over 290,000 and pages filled with display advertising as well as a huge classified ad section. It was a reliable money-maker and had enriched generations of the founding family of Butlers.
The News became a morning paper, soon added a Sunday edition and in 1982 its competition, the Courier-Express, collapsed after a long decline, leaving the News with sole possession of the print market. But change was coming.
In addition to the electronic media, radio and television, a new monstrous competitor was in the early stages of development. Few people realized it; the word “Internet” had not yet been coined. Eventually computers changed the world of news-gathering and publishing.
The results have become apparent everywhere, most recently when Buffett sold all the newspapers he had acquired over the years, 39 dailies and 41 weeklies. The sale price for the entire lot was $140 million. In the good times a prospective buyer would expect to pay that much or more for just the News alone. The buyer was Lee Enterprises, already the owner of over 50 publications. While newspapers are a small part of the Berkshire Hathaway conglomerate, it nonetheless remains an emotional surrender for Buffett, who had a sentimental attachment to them since he delivered papers as a teenager. The time for nostalgia was over: among the papers sold were the Buffalo News and the paper he once delivered, the Omaha World-Herald.
The News made a valiant effort to sustain itself, an effort that must continue under the new ownership. It didn’t require any journalistic or business expertise to recognize a frail operation. It seems unlikely that circulation will improve. The paper has been promoting its digital edition, hoping to build larger paid audience of subscribers to the Internet edition.
Other publishers have been confronted with the same situation. Two nearby examples that come immediately to mind are in Cleveland and Syracuse. The local newspapers there have reduced their publishing schedules; they no longer have daily print editions. Much has been said about the past and future of newspapers including the observation that the only constant is change.