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The billionaire bailed on his newspapers
If one of the richest men on the planet has soured on newspapers, what chance do newspapers have?
That was the initial gut-punch reaction many had Wednesday when Warren Buffett’s Berkshire Hathaway announced that it was selling its 30 newspapers to Lee Enterprises for $140 million.
Buffett is a self-described lover of newspapers. He is on the shortlist of the smartest business minds to ever live. He has billions upon billions upon billions of dollars.
And yet even he appears to have thrown up his hands and turned his back on newspapers.
As Poynter media business analyst Rick Edmonds wrote, “I do take his exit as one more marker of big changes in the works and of falling investor confidence. One of my industry sources summarized the news as ‘take my newspapers … please.’”
Forget that Buffett is selling to a company with a good journalism track record. Forget that that company has been managing all but one of BH’s papers for the past couple of years. The fact that Buffett is getting out of the newspaper business feels like a white flag.
That’s the depressing part, that it’s Buffett getting out.
Whenever we would start feeling blue about the future of newspapers, we could at least point to Buffett as our savior. “Hey,” we’d say, “if Buffett thinks newspapers are good business, they must be, right?”
He had owned The Buffalo News since 1977. He started scooping up more papers less than 10 years ago. Even as the industry started to shift and ad sales plummeted, Buffett kept going. A billionaire with money to burn and a passion for news was the exact formula needed to keep newspapers alive.
But even Buffett has known for a while now that he couldn’t make it work. Less than a year ago, Buffett said that most papers were “toast.” He said a few had a chance to succeed — the big boys such as The New York Times, The Washington Post and The Wall Street Journal. But the rest?
“They’re going to disappear,” he told Yahoo Finance’s Andy Serwer.
Now he is disappearing from the newspaper scene and he’s taking a lot of optimism with him.
Anytime there’s a big newspaper chain sale, the first question always asks what happens next? Here’s another way to put it: “Will there be cuts?”
The BH Media Group sale includes The Buffalo News, Tulsa World, Richmond Times-Dispatch and Omaha World-Herald, which, by the way, is Buffett’s hometown paper.
In his piece about Berkshire Hathaway selling its papers to Lee Enterprises, Poynter business analyst Rick Edmonds wrote, “It would be conjecture to predict what Lee, a publicly traded chain with 50 other dailies, will do now with the properties beyond saving on operations by consolidating. My guess would be some newsroom cuts but not necessarily deep ones. Both companies have run lean.”
No-so-cheerio news from the U.K.
While the big media news in this country on Wednesday was Buffett selling off his newspapers, the stunning announcement across the pond was the BBC News’ plans to cut 450 jobs.
It’s all a part of the BBC News’ strategy to lop off about $104 million by 2022. The outlets expected to be most hit by the cuts are BBC Two’s “Newsnight,” “BBC Radio 5 Live” and “World Update.”
BBC News reports that it currently employs around 6,000 and will have an annual budget of about $625 million after the job cuts.
“The BBC has to face up to the changing way audiences are using us,” said Fran Unsworth, who runs BBC News. “We need to reshape BBC News for the next decade in a way which saves substantial amounts of money. We are spending too much of our resources on traditional linear broadcasting and not enough on digital.”
A move to digital. That sounds familiar.
There’s still quite a buzz — pardon the pun — about BuzzFeed News editor-in-chief Ben Smith leaving to become the media columnist at The New York Times. Vanity Fair’s Joe Pompeo has a short piece about how that came together, including how Times executive editor Dean Baquet started wooing Smith at a lunch last December, just a month after Smith wrote a juicy feature story about who might replace Baquet someday.
Baquet told Pompeo, “I was intrigued by the idea of Ben as someone who knew politics, was an elegant writer, a good source builder, and someone who had experienced firsthand the ups and downs of the media business.”
You can understand why the Times might be interested Smith, but why would Smith want to go to the Times? Well, yes, it’s The New York Times and it’s a high profile job. But does Smith’s departure say anything about what he thinks of BuzzFeed News’ future?
Smith insists that is not the case. He told Pompeo, “There’s not a ton between the lines here. I’d been starting to think about what I wanted, thinking I wanted to write and report more, and around that time, Dean reached out to me. … It was really about me wanting to go and be a reporter. That’s what I’d done most of my career. I really want to do some reporting now.”
Smith added that the media business is in constant turmoil, but that BuzzFeed News is “built to last.” Smith was just the head of the newsroom, but it is a newsroom full of talented journalists who remain.
Picking up the bar tab
Barstool Sports is a polarizing website. Some see it as a sharp sports and pop culture site perfectly in tune with its audience (like the Washington Examiner’s Tiana Lowe, who writes that Barstool refuses to “treat its audience like morons”). On the other hand, some claim it lives in the internet’s frat house with politically incorrect and misogynistic takes.
But there’s no debate about its popularity. Or its value. That was proven Wednesday when Penn National Gaming, a regional gambling operator, agreed to buy 36% stake in Barstool for $163 million in cash and stock. That will place the value of Barstool at $450 million. Three years from now, Penn National will pay another $62 million in order to have a 50% stake in the company. Then, it will have the ability to buy controlling ownership. Those details come from The Wall Street Journal’s Katherine Sayre and Benjamin Mullin.
There’s no question that Barstool has figured out the secret sauce. Recode’s Peter Kafka reports that the “company generated between $90 million and $100 million in revenue last year, with the majority coming from podcasts, merchandise sales, and gambling deals.”
On the scene
Fox is carrying this year’s Super Bowl and it feels as if the entire Fox News operation is moving to Miami for the game.
“Fox & Friends” will be in Miami on Friday, as well “America’s Newsroom” with Sandra Smith, “The Daily Briefing” with Dana Perino, “Bill Hemmer Reports,” “The Five” and “Hannity.” On Sunday, Chris Wallace will anchor “Fox News Sunday” from the site of the Super Bowl — Hard Rock Stadium.
And, as I mentioned earlier this week in the newsletter, Sean Hannity will interview President Donald Trump for the Super Bowl pregame show. That interview is being taped at the White House before the game. Look for it to air around 3:30 p.m. Eastern time on Sunday.
A giant gesture
Finally, today, something light. Back in 2008, the New York Giants were in Green Bay to take on the Packers in the NFC Championship Game. The night before the game, the local Fox affiliate in Green Bay, WLUK, decided to not show a scheduled rerun of “Seinfeld” and aired a Packers special instead. The station did not want to “aid and comfort the enemy” because “Seinfeld” was the favorite show of then-Giants quarterback Eli Manning.
Well, this weekend, WLUK is making it up to Manning and honoring his recent retirement by showing Manning’s favorite “Seinfeld” episode. The station will reveal later this week which episode that is. Gotta be “The Masseuse” — the episode where Kramer, Elaine and Elaine’s boyfriend, who has the same name as a serial killer, go to a Giants game, right?
Thanks to WLUK’s Brian Kerhin for the heads up on this story.
- Variety’s Brian Steinberg has a good Q&A with the “CBS This Morning” team of Gayle King, Anthony Mason and Tony Dokoupil.
- NPR’s Mary Louise Kelly pushes back against Secretary of State Mike Pompeo in this New York Times Opinion piece.
- A jailed man complained of being sick and was mocked by staff. Then he died. The Washington Post’s Katie Mettler and Adriana Usero with the troubling story.
Have feedback or a tip? Email Poynter senior media writer Tom Jones at firstname.lastname@example.org.
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