Warren Buffett doesn’t think much of newspapers as money makers these days, but he’s standing by The Buffalo News.
Buffett offered his most candid assessment to date of where he thinks The News and the industry are headed at the annual Berkshire Hathaway shareholders meeting in Omaha, Neb. this month.
Berkshire owns The News and has a stake in The Washington Post.
Most newspapers in the United States, we would not buy at any price,â€ he told reporters. They have the possibility of unending losses. Despite that dismal outlook, Buffett said Berkshire will hold on to The News, in part because the company buys businesses for the long term. Buffett made mention of the paper’s recent negotiations with the Buffalo Newspaper Guild and the savings they produced, but did not rule out more job cuts or even closing the paper down if it continues to lose money On an economic basis you should sell this business. I said I agree 100 percent but I am not going to do it,” he said. “The union has been cooperative in having an economic model that will at least give us a little bit of money.”
The Guild’s role in helping The News remain profitable also drew a response from Microsoft Corp. founder Bill Gates, a close Buffett friend. Gates, during an interview with Buffett on Fox News, said The News is well positioned to survive the current upheaval among newspapers. The Buffalo News, I think has handled the challenges, working with their unions, figuring out how to push forward as well as any newspaper company, he said Charlie Munger, Berkshire’s vice chairman, called the decline of the newspaper industry “a national tragedy.” “These monopoly daily newspapers have been an important sinew to our civilization, he said, They kept government more honest than they would otherwise be. Like Buffett, Munger said Berkshire will stick with The News, at least for now. We have some investments where we don’t discard them just because they’re declining, he said during an interview on Fox News. We aren’t perfect gin rummy type capitalists that are always discarding and always adding. We have some things we’re faithful to. We’re married, so to speak. And we’re married to these things and we’ll play out the hand.” Buffett said the problem with newspapers is that, as readership falls, so do advertisers. “Twenty, thirty years ago, they were a product that had pricing power that was essential,” Buffett said. “They have lost that essential nature.”