Berkshire Hathaway CEO Warren Buffett has pledged a hands-off policy in a new letter to the publishers and editors of his suddenly growing newspaper empire, written after his announced purchase of 63 daily and weekly newspapers from Media General.
Buffett, 81, is known for delegating decisions to managers of his conglomerate's subsidiaries, so his promise to defer to local publishers and editors isn't all that surprising.
He's no novice in the newspaper business. Berkshire Hathaway has owned New York's Buffalo News since 1977. Plus, in addition to the Media General papers, Buffett says Berkshire will "probably purchase more papers in the next few years."
The entire three-page letter, released yesterday, is worth reading. But I especially recommend these two paragraphs, given Gannett's ongoing cuts in news.
"Though the economics of the business have drastically changed since our purchase of the Buffalo News," Buffett says, "I believe newspapers that intensively cover their communities will have a good future. It's your job to make your paper indispensable to anyone who cares about what is going on in your city or town."
He continues: "That will mean maintaining your news hole -- a newspaper that reduces its coverage of the news important to its community is certain to reduce its readership as well -- and thoroughly covering all aspects of area life, particularly local sports. No one has ever stopped reading when half-way through a story that was about them or their neighbors."
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| Buffett |
He's no novice in the newspaper business. Berkshire Hathaway has owned New York's Buffalo News since 1977. Plus, in addition to the Media General papers, Buffett says Berkshire will "probably purchase more papers in the next few years."
The entire three-page letter, released yesterday, is worth reading. But I especially recommend these two paragraphs, given Gannett's ongoing cuts in news.
"Though the economics of the business have drastically changed since our purchase of the Buffalo News," Buffett says, "I believe newspapers that intensively cover their communities will have a good future. It's your job to make your paper indispensable to anyone who cares about what is going on in your city or town."
He continues: "That will mean maintaining your news hole -- a newspaper that reduces its coverage of the news important to its community is certain to reduce its readership as well -- and thoroughly covering all aspects of area life, particularly local sports. No one has ever stopped reading when half-way through a story that was about them or their neighbors."
No doubt most of his fellow octogenarians agree.
ReplyDeleteI like his advice about not cutting coverage, but the problem he does not address is the "local coverage by amateurs" option being adopted by most newspapers -- so-called 'citizen journalists" who are untrained, sometimes have agendas, and definitely aren't professional.
ReplyDeleteOn the other hand, maybe the resulting anarchy will drive more demands for professionalism, even if it does raise costs.
Or maybe not. We shall see.
One doesn't have to be an octogenarian or even a septuagenarian to recognize the business value of newspapers in towns and mid-sized cities. Buffett understands that owners can't serve paying audiences by cutting content and news holes. Much of Gannett papers' circulation declines owes to insufficient and awful content. Gannett employees should apply for jobs at Buffett papers, like the Omaha World or the Richmond T-D. There you stand a greater chance of not being treated as a bookkeeping liability.
ReplyDeleteGood points 3:50. Gannettoids could only dream about having an enlightened CEO who talks about covering communities rather than raping emmployees and shareholders.
ReplyDeleteat one point, buffett had gannett in the portfolio - wonder when that changed?
ReplyDeleteLOL. The capacity of "journalists" for self-delusion seemingly knows no bounds.
ReplyDelete@ deluded 4:54... Good journalism IS the product, regardless of platform and regardless of what your corporate overseers tell you. Now go collect your $20 for such an insightful post.
ReplyDeleteHate to break it to you, Fury, but even back in newspapers' heyday, the amount of revenue directly or indirectly attributable to "good journalism" wouldn't have paid the phone bill — unless your definition of journalism includes the obits, horoscopes, and garage sale listings.
ReplyDeleteGreat point, 11:03.
ReplyDeleteLooks like the self-important but mediocre writers are trying to swagger through here again. They usually get smacked down consistently, but they keep coming back.
11:03 - With your mindset, it's no wonder Gannett is going down the toilet.
ReplyDeleteThe corporate conspiracy theorists are back. As always, they have no other argument.
ReplyDeleteNewspapers are low-cost perveyors of mass advertising. Any "journalism" that comes along with that is merely a talking point.
ReplyDeleteThink your local supermarkets care if Bin Laden is dead or the local pols are crooked? They care about the local sports team to the extent that they can use it for an ad campaign. They DO care that you get that Wednesday ad out to as many people as possible.
Buffett is selling a romantic vision. But HIS PAPERS sell advertising. He's buying cheap, so cost of operations isn't an immediate problem.
Lee Enterprises, with the iconic St. Louis Post Dispatch, can be had for A SONG. Its market cap is a whopping $55 million. Heck, Dubow could buy a controlling interest and STILL have enough left over to keep mainlining Doan's pills.
To all of you that down good journalism it is simple in single copy when a good local story is in the paper there would always be close to twice as many papers sold. When there is nothing on the front page that peaks peoples curiosity there are lots of returns. Papers are not just about the ads.
ReplyDelete10:29 AM - You're talking about a fraction of a fraction of a fraction — immaterial to the basic economics.
ReplyDelete11:29 You really don't understand the business at all. Ask any advertiser or advertising expert and they'll tell you it's all about credible, quality content. Advertisers want to be in an environment with information that will draw and hold readers. I
ReplyDelete12:19 PM - May we respectfully suggest it is you who does not seem to grasp the collapse of the local newspaper business. Most of the advertisers who made up the bulk of a local daily newspaper's revenue base were there for one reason: they had no choice.
ReplyDeleteAs for "credible, quality content," a local advertiser would define that as whatever furthers his and his cronies' interests. As for the "information that [historically would] draw and hold readers," most of it is now abundantly available at everyone's fingertips—and never had much to do with "journalism" in the first place.
1:41 p.m. We'll see who makes the most money off of his/her views of what journalism is worth. You or Warren Buffett. I think I'll bet on the latter.
ReplyDelete12:19 Hear, Hear!
ReplyDelete2:43, given that many of today's journalists can't even spell Buffett correctly, I'll bet against you.
ReplyDeleteToo many lazy writers! They need to be unemployed -- today.