Warren Buffett, whose Berkshire Hathaway Inc. struck a deal this month to acquire 63 newspapers, said he may buy more publications as the industry rethinks whether to offer free content on the Internet.
“This is an unsustainable model and certain of our papers are already making progress in moving to something that makes more sense,” Buffett wrote in a letter to editors and publishers of Berkshire’s daily newspapers. “We want your best thinking as we work out the blend of digital and print that will attract both the audience and the revenue we need.”
Buffett is adding to Berkshire’s newspaper holdings with the $142 million deal announced May 17 for Media General Inc. publications including the Winston-Salem, N.C. Journal and the Richmond Times-Dispatch of Virginia. The billionaire, who bought the Buffalo News in 1977 and said in 2009 that papers have the potential for unending losses, is now betting that papers with a community focus can profit as they change their models.
While circulation may slip, papers only fail when there are dailies competing in the same town, a publication forfeits its position as the primary source of locally important information or the market doesn’t have a sense of identity, he said.
“We don’t face those problems,” Buffett wrote in the letter dated yesterday and posted on the website of Berkshire’s Omaha World-Herald, which is in the Nebraska town where Buffett’s company is based. “Berkshire will probably purchase more papers in the next few years. We will favor towns and cities with a strong sense of community.”