Buffett A-Z

Buffett's complicated relationship with the newspaper business

Thu, Apr 5 2018 • 1:27 PM EDT

Warren Buffett delivered newspapers as a child. He reads five papers every day. He loves them—and for a large time he loved their reliable profits, too. Then the internet came along.

1995: Buffett is bullish on newspapers

In 1995, Buffett tells shareholders that despite some economic declines in the newspaper industry, there are still not many businesses he'd rather own "than a newspaper in a single-newspaper town." Charlie Munger, however, tempers Buffett's enthusiasm a notch.

2000: Newspapers will look "very, very different"

Five years later, the internet has revolutionized the way people get news and information. Berkshire owns The Buffalo News and has a large stake in The Washington Post, so technology's impact on newspapers hits close to home. Buffett tells shareholders he's thinking constantly about how to respond to threats and capitalize on opportunities posed by the internet.

2006: "We've got to believe our eyes"

By 2006, Buffett concedes the economic decline of newspapers has accelerated, and readership is going "in the wrong direction." He loves newspapers and views them as indispensable, fondly recalling a time 30 or 40 years ago when business was so good that one's "idiot nephew" could easily run a paper.

2009: "Unending losses" possible for some newspapers

Buffett tells shareholders in 2009 that even though the asking price for newspaper companies is falling, Berkshire won't be buying any. Based on Berkshire's principles, however, he won't sell The Buffalo News.

2013: Buffett takes the local route

Just three years later, Berkshire owns dozens of small daily and weekly newspapers, mostly through a $142 million deal with news conglomerate Media General.

On CNBC's "Squawk Box," Buffett explains why he now thinks the new acquisitions have a "much better future than the big metropolitan paper" and promises not to interfere with editorial decisions.

2013: Munger: "It's an exception and you like doing it"

Later that year, Buffett seemingly struggles to defend the newspaper purchases, telling shareholders he expects a "decent" rate of return. Charlie Munger, however, suggests there's a simpler explanation.

2017: Pessimistic about paying customers

As the internet was growing, many newspapers put their content on the web for free, hoping to attract online advertisers with lots of readers. By 2017, that strategy isn't working out very well. Buffett tells CNBC there are only two, maybe three, newspapers in the country that he's confident will survive, and Berkshire doesn't own any of them.