As a diehard believer in the value of what good newspapers can bring to communities, I’m pleased that Warren Buffett’s Berkshire Hathaway has purchased its “hometown” newspaper. I very much doubt that this corporate owner, unlike many others, will manage the newspapers in ways mostly or solely designed to extract money from the community while providing the least amount of useful journalism.
Berkshire Hathaway already owns the Buffalo News, and is a major shareholder in the Washington Post Co. But Buffett has long been on the record as, to put it mildly, a newspaper-industry pessimist. He called this new purchase “a reasonable investment” — hardly the language he’s used with other deals.
So as a shareholder in Berkshire Hathaway, I’m a bit baffled. And for the first time since I bought this stock back in the 1980s, I have the feeling that Buffett — who has said again and again that he would treat his shareholders like the co-owners of the company that they are — has arranged for Berkshire to buy something for his own personal reasons, rather than his typically sterling business strategy for the parent company.
I hope I’m wrong. Maybe we’ve reached a bottom for newspapers and there’s happier times ahead. But I’ve seen nothing to suggest a serious long-term value proposition for newspapers like the Omaha World-Herald, especially ones run in traditional ways.
I’m fairly sure this is more about Buffet’s belief that quality newspapers matter and that his hometown needs one — I applaud that sentiment — or, as a source in the Bloomberg article suggests, ensuring a positive first draft of history for Buffett and his family. If either or both of those motives is true, Buffett should have spent his own money, not Berkshire’s.
The World-Herald purchase is a rounding error on Berkshire Hathaway’s balance sheet. But it’s still real money.