Newspaper Comforted by a Billionaire's Embrace ; Buffett's Commitment Heartens Journalists amid Industry Turmoil

By Haughney, Christine | International Herald Tribune, June 18, 2012 | Go to article overview

Newspaper Comforted by a Billionaire's Embrace ; Buffett's Commitment Heartens Journalists amid Industry Turmoil


Haughney, Christine, International Herald Tribune


In a time of declining print circulation, the investor Warren E. Buffett has proved to be the staunchest supporter of The Buffalo News and a number of small and midsize dailies.

Over the years, U.S. newspaper owners have built monuments to themselves in the form of giant buildings, statues and plaques commemorating their roles in their communities and the country at large. At the headquarters of The Buffalo News, a sand-colored office building across the river from a fragrant factory that makes Cheerios breakfast cereal, the only visible sign of the owner is a small photograph hanging in the office of the publisher, Stanford Lipsey, signed, "To the best in the business, Warren."

Warren is, of course, the billionaire Warren E. Buffett, but the modesty of his physical presence at the paper -- he has not visited the newsroom in the past eight years -- understates his interest in the paper, which his company, Berkshire Hathaway, bought in 1977.

Mr. Buffett's views on newspapers have been a hot topic of late. Three years after telling his shareholders that he would not buy a newspaper at any price, Mr. Buffett has moved aggressively into the business, buying 63 local papers and revealing a 3 percent stake in Lee Enterprises, a chain of mostly small dailies based in Iowa.

In a letter Mr. Buffett sent to the publishers and editors of all Berkshire Hathaway daily newspapers, he described himself as a newspaper "addict" who planned to buy more papers in the future. While he is less certain how he will make papers profitable in the digital age, he is confident that in certain cities, newspapers will thrive.

"I do not have any secret sauce," Mr. Buffett said by phone. "There are still 1,400 daily papers in the United States. The nice thing about it is that somebody can think about the best answer and we can copy him. Two or three years from now, you'll see a much better-defined pattern of operations online and in print by papers."

For his new employees, the best indicator of what Mr. Buffett may do is what he has done with The Buffalo News. Interviews with more than a dozen current and former editors paint a picture of a profitable paper that is run with little involvement from its owner. Some journalists say that the owners will hold out as long as they can to buy the latest printing presses and that they wish the paper dedicated more resources to the highly ambitious journalism that wins the biggest awards.

But many workers agree that the owners do not skimp on sending journalists to town meetings or on enterprising local journalism, which is in line with Mr. Buffett's belief about papers with intense local focus.

"In Grand Island, Nebraska, everyone is interested in how the football team does. They're interested in who got married. They're maybe even more interested in who got divorced," Mr. Buffett said, adding that he was not interested in sprawling markets like New York or Los Angeles. "If you live in South Central Los Angeles, you're not interested in who dies in Beverly Hills."

But being owned by Berkshire Hathaway has not shielded The News from the industry's slump. In 2011, the union said newspaper officials told them the paper had earned a profit of $9.3 million, the first time the paper's profits fell below $10 million in a quarter-century. To put that in perspective, Mr. Lipsey said The Buffalo News often reported annual profits in the 1980s of $55 million.

Since 2009, nearly 100 full-time jobs have been cut from the union -- which includes the newsroom and the classified, accounting, bookkeeping and circulation departments -- according to Henry L. Davis, the paper's health reporter and the president of the Buffalo Newspaper Guild. A stroll through the newsroom, which is dotted with potted plants, feels like a walk through a half-empty city park. The unionized staff members who remain have had a 1 percent raise since 2009.

The newsroom is now staffed by 140 people, down from 200 about a decade ago, with cuts made mainly through buyouts rather than layoffs. …

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