Buffett steals page from odd playbook: Murdoch’s
By Jeffrey Goldfarb
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
Warren Buffett and Rupert Murdoch don’t often come up in the same context. But both these octogenarian billionaires can’t shake a soft spot for newspapers. Buffett proved as much by agreeing on Wednesday to buy his local publisher, the Omaha World-Herald Co, in defiance of his own investment advice.
It’s less surprising that media mogul Murdoch has clung to his money-losing newsprint empire over the objections of investors since long before his British tabloid scandal erupted. Value investor Buffett, though, has aired his own doubts about the suitability of the industry’s business model, predicting “nearly unending losses.” Yet he has owned the Buffalo News since 1977, remains a big shareholder of the Washington Post Co and only this year resigned from its board after serving on it for about a quarter-century.
Buffett can’t really need more influence in his own backyard, or crave it the way Murdoch does. After all, he already owns Nebraska-based furniture and jewelry businesses, frequents local eateries as a celebrity and is one of the biggest annual Omaha tourist draws. But like Murdoch and other fogeys, including hi-fi pioneer Sidney Harman who bought Newsweek last year shortly before he died at 92, Buffett realizes that old media’s clout endures.
After all, instead of blogging or tweeting, Buffett routinely pops up on old-tech TV when he has something to say or announce. He also invites print scribes to pepper him with questions each year at Berkshire Hathaway’s annual shareholder meeting.
It won’t have hurt that the publisher he’s buying delivers “solid profits.” Buffett told the World-Herald that the $200 million transaction is a “reasonable investment.” But like Murdoch, who inherited his passion for newspapers from his father, it’s as much personal as it is business for Buffett. The Oracle told World-Herald staffers about how his parents met at the Daily Nebraskan student rag and that the money he earned delivering newspapers was the foundation for building Berkshire.
But even the quaint Midwest can’t sidestep the transition to the digital age. Ink-stained readers like Buffett won’t be around forever. But his deep pockets should help ease the transition.