In Berkshire Hathaway’s annual report for 2006, Warrent Buffett provides his thoughts on the daily newspaper business in his discussion of one of their operating companies, the Buffalo News. Below are some of the highlights of Buffett’s comments:
“When an industry’s underlying economics are crumbling, talented management may slow the rate of decline. Eventually though, eroding fundamentals will overwhelm managerial brilliance…..And fundamentals are definitely eroding in the newspaper industry. The skid will almost certainly continue.”
“As one not-too-bright publisher famously said, ‘I owe my fortune to two great American institutions: monopoly and nepotism.’ No paper in a one-paper city, however bad the product or however inept the management, could avoid gushing profits.”
“Many intelligent newspaper executives who regularly chronicled and analyzed important worldwide events were either blind or indifferent to what was going on under their noses.”
“The economic potential of a newspaper internet site ……is at best a small fraction of that existing in the past for a print newspaper facing no competition.”
“We are likely to see non-economic individual buyers of newspapers emerge.”
“The days of lush profits from our newspapers are over.”
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