Warren Buffett Dismissed Newspapers in '09, Has Since Bought Dozens

During the 2009 meeting of Berkshire Hathaway shareholders, famed financier Warren Buffett disparaged the idea of investing in newspapers saying that such investment would only result in “unending losses.” But since 2009 Buffett has bought up dozens of papers despite his earlier negativity.

As USA Today recently reported, Buffett was very negative on the whole newspaper industry during the shareholders meeting. Print media was dead, he insisted.

“For most newspapers in the United States,” Buffett then said, “we would not buy them at any price. They face the potential of unending losses.”

Strictly speaking as a financial transaction, Buffett was perfectly correct. Newspapers have been failing all across the country and those not utterly failed already are hanging on by a thread.

Yet, since 2009, Warren Buffett has bought up quite a few small newspaper properties. 63 newspapers, to be exact.

Certainly he got these properties at bargain basement prices. But his exhortations from 2009 still seem to contradict even buying newspapers at a bargain. “Unending losses” would certainly negate even a cheap purchase, one would think.

In 2013, the Pew Research Center’s Project for Excellence in Journalism touted Buffett’s purchases as a positive sign for the industry.

“Buffett and other investors have decided that print editions have legs, particularly at small and mid-sized papers, and that the organizations can stay profitable,” Pew wrote last July.

But even Pew noted that all the positives it could report on the industry were based mostly on “promise rather than performance.”

Still, the great investor had an excuse for going against his own advice by buying so many newspaper properties.

As Dan Ritter reports, “If you want to know what’s going on in your town–whether the news is about the mayor or taxes or high school football–there is no substitute for a local newspaper that is doing its job. A reader’s eyes may glaze over after they take in a couple of paragraphs about Canadian tariffs or political developments in Pakistan; a story about the reader himself or his neighbors will be read to the end. Wherever there is a pervasive sense of community, a paper that serves the special informational needs of that community will remain indispensable to a significant portion of its residents.”

It is an interesting point. Local news reported by local reporters knowledgeable about the community may just keep it niche filled and, perhaps, profitably.

The premise has not been assured. However, if it does, Buffett is well positioned to make a profit–quite despite what he said four years ago.