According to a number of reports in the media, the chairman and CEO of Berkshire Hathaway, Warren Buffett, recently announced that he is buying another newspaper by the name of the Tulsa World.
The newspaper has a daily sales volume of 95,000. Not a bad sales volume and it fits in with Buffett’s local newspaper strategy.
During the year 2009, Buffett mentioned that it wasn’t actually reasonable to continue owning companies in the newspaper industry. At that period, Buffett shared his dislike of the newspapers actually providing their content online for free, and then turned around and charged the same exact price for the print version. Buffett believed that online news postings were a major threat to the print medium.
But Warren Buffett changed his outlook during 2011, and recognized that there was one area of the newspaper industry that would still thrive. He purchased 63 daily and weekly newspapers from Media General, and bought them at a 100% premium to Media General’s at the time market capital.
During November 2011, Buffett also announced that he will purchase The Omaha World Herald Company, who was the principal publisher of Nebraska’s daily newspaper. Berkshire paid $200 million for the business. That deal added six other daily newspapers plus the World Herald, as well as several weekly newspapers to Berkshire Hathaway’s newspaper portfolio. The portfolio also includes The Washington Post and Business Wire.
When Buffett started buying up newspapers, it obviously showed that he saw optimism in the industry once again. Berkshire’s newspaper unit has 28 small and medium-size dailies. Plus, Berkshire Hathaway owns 40 other newspaper businesses that publish less frequently; they have regional magazines and monthly publications as well.
According to Warren Buffett, newspapers bring a strong sense of community to a region and they are an institution. They are currently facing stiff competition due to visualization, but if they focus on providing community news they should be able to prevent waning sales from happening.