Print media is dying, they say. You’re reading this right now on a digital screen. Times are hard for journalists and reporters. So why on Earth is legendary investor Warren Buffett buying up newspapers?
The Oracle of Omaha’s latest addition to his stable on Friday was the Waco Tribune-Herald. This marks Berkshire Hathaway’s (NYSE: BRK.A) second Texan newspaper purchase (the first being the Bryan-College Station Eagle). The paper employs 124 people.
According to the Washington Post, president of Berkshire’s BH Media Group and CEO of the Omaha World-Herald Company Terry Kroeger commented:
“This is a very strong, growing market with terrific assets including Baylor University and the new research park.”
What’s interesting about all this is the sheer rapidity of Buffett’s recent grabs. Remember that as of last December, Berkshire owned just two newspapers—The Buffalo News and the Omaha World-Herald.
Back in May, Berkshire made news when Buffett bought out 63 newspapers. So within just half a year or so, Berkshire increased these two to more than 65 newspapers, and the buying spree looks to continue.
This isn’t unexpected, however. Forbes reports that in a letter written to the editors of various newspapers, Buffett said:
“Berkshire will probably purchase more papers in the next few years. We will favor towns and cities with a strong sense of community, comparable to the 26 in which we will soon operate. If a citizenry cares little about its community, it will eventually care little about its newspaper. In a very general way, strong interest in community affairs varies inversely with population size and directly with the number of years a community’s population has been in residence. Therefore, we will focus on small and mid-sized papers in long-established communities.”
If there can be said to be a pattern to Buffett’s apparently counter-intuitive steps into a ‘dying’ market, it is that he is targeting local markets with dedicated reader bases, and within those markets, he is going for the good papers.
Despite Buffett’s clear faith in the future of newspapers, however, it will be interesting to see just what Berkshire Hathaway makes of their investments. After all, there doesn’t seem to be any magic formula to turn things around for print media in general.
When heavy hitters like the New York Times and Village Voice lay off people, just how long can the small papers Buffett has bought limp along?