Buffett questions New Orleans newspaper changes
Saturday, June 2, 2012
OMAHA, Neb. (AP) — Billionaire Warren Buffett is questioning the wisdom of changes the New Orleans Times-Picayune newspaper plans to make this fall.
Last week the Times-Picayune and three major Alabama dailies owned by the Newhouse family's Advance Publications announced plans to cut back to three printed issues a week. The newspapers will shift their focus to online news.
Buffett, whose Berkshire Hathaway just bought 63 newspapers from Media General for $142 million, said he was surprised by the New Orleans announcement.
"It seems to me that three days a week is simply unsustainable over the longer term. Either a publication is a newspaper or a periodical and I think three days a week crosses the line," Buffett said in his letter.
Buffett said he's puzzled about why the economics of publishing the Times-Picayune seven days a week don't make sense, because he thought the newspaper had a high penetration rate in New Orleans — a strongly defined community.
New Orleans musician Evan Christopher says Buffett's reaction is in response to an open letter he wrote to Buffett about the changes at the Times-Picayune. Advance Publications plans to make similar changes at The Birmingham News, the Press-Register in Mobile and The Huntsville Times.
In recent years newspapers have struggled to make up for sharp declines in print advertising revenue with online advertising at a time when printing costs have been rising.
Buffett has recommended that newspapers charge for access to their stories online, so they won't be giving away their product. Advance plans to continue offering free access to its papers' news.
Buffett told Berkshire's newspaper editors last week that he believes newspapers will do well if they remain the primary source of information about their community and charge for online news.
"It's your job to make your paper indispensable to anyone who cares about what is going on in your city or town," he said.
Buffett didn't say whether Berkshire would have any interest in buying the Times-Picayune, but he noted that the newspaper's owners don't have a history of selling papers. Buffett said someone in the New Orleans community should explore whether Newhouse would sell to a local group.
Buffett has said that Berkshire may buy additional newspapers, and he favors small to mid-sized newspapers in cities with a strong sense of community. He turned down the opportunity to buy the Tampa Tribune as part of the Media General deal.
Berkshire's other newspapers include the Omaha World-Herald Co. and the Buffalo News.
Besides newspapers, the company Buffett leads owns more than 80 subsidiaries including insurance, furniture, clothing, jewelry and candy companies, restaurants and natural gas and corporate jet firms. Berkshire also has major investments in companies like Coca-Cola Co., IBM, Washington Post Co. and Wells Fargo & Co.
Buffett's letter: http://bit.ly/KRZbRx
Berkshire Hathaway Inc.: www.berkshirehathaway.com
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