A Letter from Warren E. Buffett ; to the Publishers and Editors of Berkshire Hathaway's Daily Newspapers:
Until recently, Berkshire has owned only one daily newspaper, The Buffalo News, purchased in 1977. In a month or so, we will own 26 dailies.
I've loved newspapers all of my life -- and always will. My dad, when attending the University of Nebraska, was editor of The Daily Nebraskan. (I have copies of the papers he edited in 1924.) He met my mother when she applied for a job as a reporter at the paper. Her father owned a small paper in West Point, Nebraska and my mother worked at various jobs at the paper in her teens, even mastering the operation of a linotype machine. From as early as I can remember, my two sisters and I devoured the contents of the World-Herald that my father brought home every night.
In Washington, D.C., I delivered about 500,000 papers over a four-year period for the Post, Times-Herald and Evening Star. While in college at Lincoln, I worked fifteen hours a week in country circulation for the Lincoln Journal (earning all of 75 cents an hour). Today, I read five newspapers daily. Call me an addict.
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 when half-way 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 non-political. 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 business 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. …