Berkshire Hathaway Group announced last week that it is in the process of buying more than 60 newspapers from Media General, the vast majority of them community weeklies and dailies. This week, in a memo to editors and publishers at those papers, CEO Warren Buffett promised to support the newspapers' decidedly local focus after the nearly $600 million deal is finalized.
"I believe newspapers that intensively cover their communities will have a good future. It’s your job to make your paper indispensable to anyone who cares about what is going on in your city or town," Buffett wrote in the memo. The previous week, when the deal was announced, Buffett said in a prepared statement, "In towns and cities where there is a strong sense of community, there is no more important institution than the local paper. . . . The many locales served by the newspapers we are acquiring fall firmly in this mold and we are delighted they have found a permanent home with Berkshire Hathaway."
Buffett wrote that Berkshire Hathaway may continue to buy newspapers that fit the same model as those acquired from Media General:
"I believe newspapers that intensively cover their communities will have a good future. It’s your job to make your paper indispensable to anyone who cares about what is going on in your city or town," Buffett wrote in the memo. The previous week, when the deal was announced, Buffett said in a prepared statement, "In towns and cities where there is a strong sense of community, there is no more important institution than the local paper. . . . The many locales served by the newspapers we are acquiring fall firmly in this mold and we are delighted they have found a permanent home with Berkshire Hathaway."
Buffett wrote that Berkshire Hathaway may continue to buy newspapers that fit the same model as those acquired from Media General:
Berkshire will probably purchase more papers in the next few years. We will favor towns and cities with a strong sense of community, comparable to the 26 in which we will soon operate. If a citizenry cares little about its community, it will eventually care little about its newspaper. In a very general way, strong interest in community affairs varies inversely with population size and directly with the number of years a community’s population has been in residence. Therefore, we will focus on small and mid-sized papers in long-established communities."Buffett also vowed that BH Media Group will take a relatively "hands off" approach -- for example, not dictating editorial positions of local newspapers, so long as those newspapers perform well. What is interesting in Buffett's memo is that, rather than cutting staff and centralizing operations (long the modus operandi of Media General), the "Oracle of Omaha" seems to be reading directly from the community-journalism playbook:
"I believe newspapers that intensively cover their communities will have a good future. It’s your job to make your paper indispensable to anyone who cares about what is going on in your city or town. That will mean both maintaining your news hole — a newspaper that reduces its coverage of the news important to its community is certain to reduce its readership as well and thoroughly covering all aspects of area life, particularly local sports. No one has ever stopped reading when half-way through a story that was about them or their neighbors."The memo also included this statement:
Your paper will operate from a position of financial strength. Berkshire will always maintain capital and liquidity second to none. We shun levels of debt that could ever impose problems. Therefore, you will determine your paper’s destiny; outsiders will never dictate it.Whether that statement is a promise of support, or a warning against lax performance, remains to be seen. Industry watchers will begin the monitoring in earnest in mid-June, when the ownership change is scheduled to take place.
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