Thanks, Warren Buffett – for nothing.
Buffett announced last week he is getting out of the newspaper business with his company BH Media, owner of 30 dailies and 49 weeklies in 10 states.
In Texas he owns the Eagle in Bryan-College Station and the Waco Tribune.
For many years he has also owned the Buffalo Evening News in New York and his hometown paper, The Omaha World-Herald. Those are included in the sale.
He is selling his company to Lee Enterprises and is even financing the deal at 9% interest. Lee is based in Iowa and has managed to withstand much of the disruption in the newspaper business
“Thanks for nothing” means this. When Buffett began buying newspapers around 2012 many thought it would strengthen the appetite for investors, but it did not. If a person was raising money for newspapers it was natural to point out that the world’s most famous investor was jumping in with both feet.
Bankers and potential investors were not impressed. Trust me.
So, now he is leaving and the tables will turn. Now, those same bankers and investors will cite Buffett’s exit as a reason not to back current and new ventures.
At home in Fort Worth, unfortunately, the worst example of what is happening to local, daily newspapers is the Star-Telegram. It diminishes in size and importance every day. We are not being petty or relishing the demise of the Star-Telegram. It has been burdened by its corporate ownership, McClatchy, which has been burdened by too much debt.
Locally there are examples of the strength and viability of publishing in the area of niche publications. We have just adjusted our print schedule to every other week, and we believe this will help our business. Both Fort Worth Magazine and 360 West have been nimble and innovative and appear to be solid businesses.
There is a local group of businessmen and women who continue to study the nonprofit news model. We have the framework of a nonprofit called The Fort Worth Press. Our efforts are stalled, and by design. My estimate is that it takes a minimum of $1 million a year to sustain a local nonprofit news site that is minimally staffed. Raising that million a year is daunting and perhaps even impossible here.
As daily newspapers decline many opt for paywalls where you have to pay to access all of the paper’s news. They do not work economically. At least not locally. They work in cities such as New York and Washington. Again, trust me.
There is a serious danger lurking as daily newspapers fail and folks such as Buffett abandon the news space. Democracy suffers.
The role of the press as a watchdog on government has never been more important and it is weakened with every layoff of a reporter or editor.
The New Yorker magazine is running a series on threats to democracy. It described the mission of the series:
“Our democracy is in crisis. Many institutions of our government are dysfunctional and getting worse. Our electoral system has produced, in a single generation, two Presidents who received fewer votes than their opponents. A changed media landscape has – with the shrewd assistance of malicious actors at home and abroad – loosened our collective grasp on reality. Our politics have become alarmingly acrimonious; one of the potential disasters of the 2020 election is a result that is widely considered illegitimate. Technology is enriching some and leaving many others behind. Meanwhile, as the country’s demography shifts, a nativist far-right is resurgent.”
Where this all ends no one knows. Let’s not forget that fewer people also watch the TV networks’ evening newscasts, which once were important sources of news for many Americans.
Clearly, one day we will look back at the incredible advances in technology and wonder if what we have gained is worth what we have lost. It’s not just in the news business. Our privacy has been compromised and our election systems have been invaded and manipulated.
We are a resourceful nation and free enterprise still rewards innovation and ambition. The hope we can find in all this calamity is that there are people who are not giving up on trying to find a way to keep local news relevant and available.
Down in Austin there is a company, Community Impact Newspapers, that will add at least eight new weekly newspapers this year. The company has done so well it bought its own press in the last few years. No one buys a press anymore, but this company did.
The Warren Buffett investor types of the world are driven by profit and money. Did I forget “lots of profit and money?” Did I forget “greed?”
There is still profit in niche publications and in weekly newspapers. No one knows what to do about daily newspapers but someone will figure it out. Trying is what matters.
The New Yorker recently told the story of a 300-resident town in Jones County, North Carolina, where local government is virtually unaccountable to the public because there is no newspaper to report its actions.
The story included some sobering statistics about the state of newspapers in our country:
“According to one estimate, the U.S. has lost one in four of its newspapers in the last fifteen years. The vast majority of those that have folded are weekly papers and other non-dailies. Around fifteen hundred American counties have just one paper, usually a weekly; another two hundred counties are without a newspaper altogether. These latter areas are what researchers call news deserts, and Jones County ... is a classic example.”
In the absence of a local Jones County newspaper, journalists have tried websites and newsletters to inform the public but they cannot sustain them because no one will pay for the news.
Richard Connor is president and publisher of the Fort Worth Business Press. Contact him at email@example.com