This is the most hopeful thing I’ve read about the business of newspapers in a long, long time:
I’ll quote at length from Warren Buffett’s letter to editors and publishers of his newly expanded portfolio of papers:
Berkshire buys for keeps. Our only exception to permanent ownership is when a business faces unending losses, a remote prospect for virtually all of our dailies. So let me express a few thoughts about what lies ahead as we join forces.
Though the economics of the business have drastically changed since our purchase of The Buffalo News, 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.
That will mean both 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 halfway through a story that was about them or their neighbors.
You should treat public policy issues just as you have in the past. I have some strong political views, but Berkshire owns the paper — I don’t. And Berkshire will always be nonpolitical. We have more than 600,000 shareholders of all stripes and I do not use Berkshire’s resources, directly or indirectly, to speak for them. I am 81, and many of you will outlive me as an employee of Berkshire. But I am sure my successors will follow the ideas I am laying out in this letter. (Indeed, letting them know of this hands-off principle is a secondary reason for my writing this letter.)
Your paper will operate from a position of financial strength. Berkshire will always maintain capital and liquidity second to none. We shun levels of debt that could ever impose problems. Therefore, you will determine your paper’s destiny; outsiders will never dictate it.
Our newspaper purchases are of smaller size, measured by dollar cost, than the businesses we normally consider buying. Nor will they move the needle in terms of Berkshire’s economic value, though I expect their contribution will likely be commensurate with our investment. But the papers are every bit as important to me — and, for that matter, to society — as other businesses we have purchased for many billions of dollars.
If Buffett of all people sees some economic value left in newspapers, maybe there really is some.
— Good thing I saw Buffett’s note, because this other corporate letter is one of the more dispiriting things I’ve read about the business of newspapers recently. Watch Newhouse spin its gutting of the Times-Picayune with a digital smokescreen:
A new company - the NOLA Media Group, which will include The Times-Picayune and its affiliated web site NOLA.com - was announced today by Ricky Mathews, who will become its president. The change is intended to reshape how the New Orleans area’s dominant news organization delivers its award-winning local news, sports and entertainment coverage in an increasingly digital age.
NOLA Media Group will significantly increase its online news-gathering efforts 24 hours a day, seven days a week, while offering enhanced printed newspapers on a schedule of three days a week. The newspaper will be home-delivered and sold in stores on Wednesdays, Fridays and Sundays only. A second new company, Advance Central Services, will print and deliver the newspaper. Both of the new companies are owned by Advance Publications.
Oh, yeah, down in the twelfth paragraph:
Mathews said details of the new digitally focused company are still being worked out, but the transition will be difficult. While many employees will have the opportunity to grow with the new organization, Mathews said, the need to reallocate resources to accelerate the digital growth of NOLA Media Group will result in a reduction in the size of the workforce.
The Times-Picayune is profitable, reports Jim Romenesko.
A major Democrat supporter buys newspapers in some swing states and CJR thinks that's good news?
#1 Posted by Dan Gainor, CJR on Fri 25 May 2012 at 10:53 AM
Aren't you supposed to be busy cracking the muppet conspiracy, Dan?
The fossil fuel industry is paying you to attack kermit the frog, not to make internet comments about a JAAAB Creator like Warren Buffet.
Hack.
#2 Posted by Thimbles, CJR on Fri 25 May 2012 at 11:44 AM
In other news, the socialist shakedown of the noble robo-signers seems to be helping homeowners.
JUST KIDDING!
"A couple days ago, Pro Publica basically took information compiled by housing groups and packaged in the New York Times on the raids by the states of hard-dollar funds from the foreclosure fraud settlement and did a deeper analysis. They now show that the raids have reached nearly $1 billion, out of a $2.5 billion commitment. This pencils out to about 40% of the funds going to fill budget holes rather than help homeowners. And as I’ve noted, even some of the “housing” purposes being funded with the settlement money are dubious – I don’t think giving free lodging to police officers in North Dakota’s boom areas constitutes the kind of help to homeowners that the settlement envisioned, to use but one example.
These are preliminary numbers, by the way. Only ten states have thus far finalized the process for dealing with the settlement funds; most of the rest will do so by the end of the fiscal year, which for the bulk of states is June 30. So this has the potential to get better or worse, though my money’s on the latter. The state-by-state breakdown from Pro Publica is here, Over $1 billion is unallocated, according to Pro Publica’s numbers."
The map in the propublica link is pretty dang informative. You know, we've been trying this "fix the underwater housing market by fixing the banks' balance sheets" approach for how many years now?
Could the many partitioned government of the US puh-lease try making the smallest attempt to fix the balance sheets of the homeowners? I mean Jesus, how long is the political/finance systems of the US going to push on a door labeled 'PULL'?
Oh yeah - I forgot, about the 'moral hazard' of pulling. No moral hazard in ignoring Repo 105 transactions! Just helping regular people fix their balance sheets = moral bloody hazard.
>:(
#3 Posted by Thimbles, CJR on Sat 26 May 2012 at 04:04 PM
I see the anonymous Thimbles is still afraid to show his real face and actually debate the good to journalism of newspapers being used for political ends.
#4 Posted by Dan Gainor, CJR on Sun 3 Jun 2012 at 01:43 PM