Buffett bucks the trend by buying newspapers
11 Jun 2012 2:34 AM GMT
Unfazed by predictions of the death of newspapers, billionaire Warren Buffett is pumping more money into print.
In the past year, one of the world's richest men and sharpest investors has put some $300 million into an industry that some view as heading the way of the horse and buggy.
Buffett's Berkshire Hathaway holding company late last year bought his hometown newspaper, the Omaha World-Herald, along with related assets in a $200 million deal some analysts viewed as a sentimental move.
He followed with a $142 million deal last month to buy Media General, a chain of 63 newspapers.
He added $2 million to Lee Enterprises, owner of the St. Louis Post Dispatch and Arizona Daily Sun. That is in addition to other holdings, including The Buffalo News and a stake in The Washington Post Company.
‘I believe newspapers that intensively cover their communities will have a good future,’ Buffett said in a message last month to his newspaper employees.
He said Berkshire ‘will probably purchase more papers in the next few years’ and that he will ‘favor towns and cities with a strong sense of community.’
Still, the investment comes amid dire predictions for the newspaper industry, which has been battered by sharp drops in print circulation and advertising, and getting only modest revenues from online services.
A research note from the financial firm Moody's earlier this month gave the US newspaper industry a ‘negative’ outlook, saying that digital initiatives are failing to make up for ‘significant secular pressures.’
‘Although newspaper companies seek to capitalize digital revenue through an array of channels, it's unlikely that these gains will be large enough to offset print losses,’ Moody's analyst John Puchalla wrote.
In the past year, one of the world's richest men and sharpest investors has put some $300 million into an industry that some view as heading the way of the horse and buggy.
Buffett's Berkshire Hathaway holding company late last year bought his hometown newspaper, the Omaha World-Herald, along with related assets in a $200 million deal some analysts viewed as a sentimental move.
He followed with a $142 million deal last month to buy Media General, a chain of 63 newspapers.
He added $2 million to Lee Enterprises, owner of the St. Louis Post Dispatch and Arizona Daily Sun. That is in addition to other holdings, including The Buffalo News and a stake in The Washington Post Company.
‘I believe newspapers that intensively cover their communities will have a good future,’ Buffett said in a message last month to his newspaper employees.
He said Berkshire ‘will probably purchase more papers in the next few years’ and that he will ‘favor towns and cities with a strong sense of community.’
Still, the investment comes amid dire predictions for the newspaper industry, which has been battered by sharp drops in print circulation and advertising, and getting only modest revenues from online services.
A research note from the financial firm Moody's earlier this month gave the US newspaper industry a ‘negative’ outlook, saying that digital initiatives are failing to make up for ‘significant secular pressures.’
‘Although newspaper companies seek to capitalize digital revenue through an array of channels, it's unlikely that these gains will be large enough to offset print losses,’ Moody's analyst John Puchalla wrote.
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