BUFFET, THE ORACLE OF OMAHA, GIVES UP ON NEWSPAPERS

Several people have called my attention to Warren Buffet’s sale of his newspaper empire, the BH Media Group of his Berkshire Hathaway conglomerate. I’m not surprised at his action, which includes the Omaha World Herald, his home town publication.Despite a professed love for newspapers and newspaper people, Buffet is always a business man first, and a legendary one, too, noted for his astuteness.

The purchaser of the Oracle of Omaha’s 30 daily papers is Lee Enterprises, whose headquarters is just a few hundred miles to the east in Davenport, Iowa. The Lee company already prints 46 daily newspapers in 21 states, as well as 300 weeklies, classified and specialty publications. Besides Buffet’s dailies, Lee will pick up 100 weeklies Buffet owned in the Midwest and southeast.

Since 2018, Lee has managed Buffet’s papers in exchange for a $5 million annual fee and a cut of the profits above a set benchmark level.

As the Markets Insider said: the deal ends Buffet’s dalliance with being a news mogul. But a year ago, Buffet signaled his feelings when he claimed newspapers were “toast.”

Frankly, the sale of the Washington Post by the Graham family a few years ago to Jeff Bezos, the owner of Amazon, shook me more than this one. Buffet held a sizable minority interest in the Post. When he bought-in, he wrote a letter to Kathrine Graham, publisher of the Post, saying his stock buy was a business deal only and he would not interfere in any way with editorial operations. The two became close friends and bridge partners.

It was the same with papers Buffet’s BH Media Group owned, including the Winston-Salem Journal in North Carolina, the Waco Tribune-Herald in Texas, the Richmond Times-Dispatch in Virginia, and the Buffalo News in New York. His interest was always in the financial operations, where advertising and circulation revenues are rapidly declining in the new digital age.

So, Let’s look at his wizardry in the sale to Lee. It would seem on the surface that Buffet was a loser since his sale of his papers to Lee for $140 million was a fraction of at least $380 million he spent on acquisitions. At the same time, however, Buffet is loaning Lee $576 million at 9 per cent interest annually for 25 years. If Lee pays off the interest in full each year, Buffet could net close to $1.3 billion.

It’s problematic that Lee, as a newspaper corporation, will be around a quarter of a century from now given the increasing signs of demise of the industry. Buffet, 89 years old, certainly won’t.

So, it goes!

A Prediction

Recently, I gave a talk at the Deland, Florida, library on the state of the media in the United States. It’s the library’s custom to ask audiences to fill in questionnaires about the quality of the presentation and what they heard. One listener wrote “the last of his bred.” I’m sure that’s true since I’ll soon be 97 years old. I’m certainly in the twilight of my life and my career as a print journalist is behind me. But, I’m as curious as ever. I probe, I read, I research.

So, as we enter the new decade what do I see is ahead for my craft? Newspapers have had a rough go so far in the 21st century and it seems that their sustainability is no brighter in the new decade. It isn’t the fault of the industry. My heart, and my hopes, remains with it. But, people’s habits in seeking the news of the day are quickly changing in our new digital age. Sadly, the longtime business model of print media is no longer viable. Advertising and circulation are at new lows and are expected to continue downward.

What does this foresee to me? My prediction is that by 2030 print newspapers, and print magazines as well, will be gone from the streets and homes. So, mark that down on your calendars for December 31, 2029.

The past year, 2019, was not kind to journalists. Newsroom employment last year in the U.S. declined an historic 25 %, said the Columbia Journalism Review. The publication said some 3,l00 editors and newsroom staffers lost their jobs. Business Insider reports that total media layoffs (print and electronic) in 2019 topped out at about 7,700. Unfortunately, this included some online computer startups. And the jury is certainly still out on whether print readers will switch to digital editions where the competition for editorial content and ad revenues includes new on-line giants like Facebook and Google. Both are raking in the ad dollars. And there’s the upstart Apple News Plus.

“Facebook’s influence on journalism has been disastrous,” said Ryan Thomas, associate professor of journalism studies at the University of Missouri, in a quote on Daily Beast. “The idea that there are enough journalists out there to fact check all the false claims on Facebook is naïve.”

Sixty percent of the counties in the United States no long benefit from daily newspaper coverage. One example of this is the eastern side of San Francisco Bay stretching from Oakland inward were some 2.7 million people live and work. The venerable Oakland Tribune is gone as well as papers in the small towns beyond. The single paper left is said to be the East Bay Times in Walnut creek.

The big loser there and across the country, of course, is the in-depth coverage of local staffs that were in and out of government offices all day long. The watchdog role of local reporters is gone. Regional TV stations and big city stations just aren’t interested in day to day goings on in local city halls and county buildings in outlying communities. Research organizations have found that in locales that have lost newspapers, municipal costs increase and fewer people tend to run for public office. A vital communications pipeline between officeholders and their constituents also disappears, and voter turnout declines. There are no longer the stories about local garden clubs and the PTA.  When a local paper closes down a lot of Americana goes, too. So does institutional memory.

Now, this just in. The Richmond (Va.) News Dispatch has sold its long- time headquarters building to a hotel chain. Its newsroom will remain the building for the time being.

So, it goes!

Salt Lake-It’s Historic and Also Sad

It’s a first. It’s historic and also sad. In hopes to stay in business in our new digital age, the Salt Lake City Tribune in Utah has today become a public charity with the approval from the IRS to operate as a 501 (C ) (3) nonprofit entity.

In addition to paid subscriptions, tax deductible donations may now be made to the paper with donor’s names made public.

With the move, Paul Huntsman, owner and publisher, hopes to bolster the paper’s financial prospects. Going forward, an outside board of community directors will govern the paper’s finances with a strict firewall between the board and the newsroom.

Huntsman, a member of a rich and powerful Utah family, believes the current business model for local newspapers is beyond repair. He is not alone in this belief as subscribers turn increasingly to such venues as streaming, Facebook, Twitter and other social media and internet news outlets.

The Salt Lake City Tribune has a current daily circulation of 32,000, which represents a precipitous drop from just a few years ago. In 2015, the paper’s daily readership was 74,000.  Advertising revenues are down 40 per cent from a few years ago.

Already, the paper’s editorial staff has been reduced to 40 from 90 members, a drop that certainly inhibits news coverage. But, a daily paper with a reduced staff is still better than no paper at all.

Since federal law prohibits nonprofits from electioneering, the paper’s move means it may no longer endorse political candidates for public office. Op-ed opinion pieces remain allowable.

So, it goes!

THE BIGGER COFFIN

The merger of Gatehouse Media and Gannett is just a bigger coffin in the death of newspapers. Let’s be realistic. It is not an optimistic development but the opposite. It means more consolidation and fewer independent voices. There will be more newsroom layoffs.

Each company has grappled with sharp declines in circulation and ad revenues caused by Cable TV, online news, and social media. The merger is another sign that the stakes are high for the fate of for-profit print journalism, which hangs in the balance as the newspaper industry staggers from the blows of the new digital world of Google, Facebook and smartphones.

The combined operation hopes to cut costs by $275 to $300 million dollars in the next two years and have the time to build sustainable online digital operations for the papers it owns.  

Gatehouse brings 154 daily newspapers in small and medium markets to the new company while Gannett adds USA Today, which is distributed nationally, plus 100 or so more medium sized regional papers for a total of 260 daily papers. The two companies also own some 1,600 weeklies.  Gatehouse will own 50.5 per cent of the new company and Gannett 49.5 per cent but the combined company will take the Gannett name and the headquarters will be at the current Gannett offices in McLean, VA.

The new company will begin with a combined print circulation of 8.7 million readers, the largest by a single owner in the United States. Based on the histories of Gannett and Gatehouse, I would say that the new company will be slightly right of center in editorial policy.

The big question is digital operations. Can the combined company make a successful transformation to a mainly digital operations in the two-year window it is giving itself to do so?  Presently, Gannett papers have about 561,000 digital subscribers with the bulk of them, 504,000, at USA Today. The Gatehouse papers have 174,000 digital subscribers.

It seems to me that building a healthy digital base in two years will be a tough hill to climb.

So, it goes!

The “News Desert”

There is a tale told among news people about an editor of a weekly newspaper in the old west of frontier days who occasionally ran a blank column on his front page. Townspeople knew exactly what that meant. He had caught someone in an unsavory situation, and if the misdeed wasn’t corrected, he would run a story about it in the empty space.

The moral is that weekly papers play an important role in unearthing corruption. But a University of North Carolina study says that weekly newspapers are disappearing across America. UNC says the result is a developing “news desert,” since some 1,400 communities that once had a newspaper no longer have local coverage.

The readers can go to TV and the internet for national news but who is going to tell them about meetings of a village council or a zoning board. Or, cover local sports. When the 121 year old Warroad Pioneer went belly up last year, Reed Anfinson, president of the National Newspaper Foundation, told the Minneapolis StarTribune that rural communities are especially hard hit by closures. It is there that weeklies are important socially and civically.

The Pioneer was once the heartbeat of Warroad, Minnesota, a hockey town of 1,800 residents on the Canadian border.

The UNC study said that of nearly 1,800 newspapers whose voices have gone silent in the last 15 years, most of them are weeklies like the Warroad Pioneer.

Anfinson said that studies show that people in communities that no long have newspapers vote less and are less active in their communities. Even municipal revenue bonds become more expensive because lenders know there is no watchdog and corruption is more likely.

Is there a solution in the digital age for covering the news in communities without newspapers? Maybe some enterprising persons could create a local webpage to pass on the news. Better yet, if a high school has a weekly paper, widen its coverage to report town news and sports as well. It would be great training for emerging reporters who eventually want to join the media world.

So, it goes!

Chicago Defender goes all-digital

The 114 year old Chicago Defender, one of America’s most influential African American newspapers, will cease print publication July 10 and the next day it will go all-digital in another example of the trend among publishers to go exclusively online as print editions fade away because of declining readership and ad revenues.

Stacy M. Brown, NNPA Newswire correspondent, described the Defender as one of most important newspapers in the history of the black press in a story he wrote about the change. The paper is a longtime champion of civil rights and it has continually challenged segregation in the South. It editorialized for anti-lynching legislation and for integrated professional sports. But, one of its greatest causes was its support of the “great migration” of blacks from the South northward, especially to Chicago, in the early twentieth century for better paying jobs. The movement had its controversies, including race riots in Chicago in 1919. In addition, the southern whites objected to the movement since they were losing workers.

When southern newspapers, in one of the attempts to stop the migration, suggested that blacks were freezing to death in northern winters, the Defender retaliated that is was better to freeze to death in the North while free, than die in the South in slavery.

Langston Hughes, one of the most important writers and thinkers of the Harlem Renaissance, was a Defender columnist and the Defender also published the early works of the Pulitzer prize winning poet, Gwendolyn Brooks.

In 1923, the Defender introduced its Bud Billiken page, the first American newspaper section just for children. Several years later it held its first Bud Billiken day parade, now a Chicago institution, as a vehicle to showcase children. One year, as a Chicago Tribune city room reporter, I covered the parade, a fun and spirited affair.

Robert Channick, a Tribune business reporter, wrote in a story about the Defender’s changeover to all-digital that the paper began as a weekly in 1905 and in 1926 began publishing daily and then reverted back to a weekly in 2008. Its current weekly circulation is 16,000 while its website readers total around 460,000 monthly.

Hiram Jackson, CEO of Real Times Media, the Defender’s parent company, was quoted by Channick as saying the paper now will double down on its digital platform with the hope this concentration will quickly increase the number of digital readers.

So, it goes!

Another one is gone

Another daily newspaper is closing down. This one is THE VINDICATOR of Youngstown, Ohio. THE VINDICATOR has been publishing for 150 years. Its last edition will be at the end of August. The present owners sought other buyers but none stepped forward. The closure leaves several hundred thousand people in the city and surrounding Mahoning county without a daily paper. Youngstown does have a local TV station.

So, it goes!

East of the Alleghenies

A few days ago, I was reading The Week magazine, which bills itself as presenting the best of U.S. and international media. It occurred to me, as I turned its pages, that I was often seeing the same references for articles.

I decided to review the May issues for the sources quoted for content. Soon, it became clear that most of the sources were East Coast oriented, especially reflecting the New York City-Washington axis, where one in five journalists are now said to live and work.

The incestual nature of this coverage is disturbing to me. In four editions of The Week from May 3, 2019 to May 24, 2019, the New York Times was used 45 times for source material, The Washington Post 43 times, the Wall Street Journal 33 times and Bloomberg News 15 times. In addition, stories from 15 newspapers along the Atlantic coast from Boston to Miami where used for material.

These media outlets are all east of the Alleghenies. So, what does The Week report from publications in “fly over country” between the mountain chain and the West Coast? Not much. While there were 96 references from New York City news outlets alone, there were only 13 publications, beginning in Chicago and ending in Phoenix, cited for stories for the entire month. Material from west coast newspapers was used 11 times, nine of those from the Los Angeles Times.

The same pattern exists in news, cultural and opinion magazines, either in print or on line, used by The Week for material. To name a few – the New Yorker, The Atlantic, The Nation, The Federalist and the National Review. They are also written and published in the New York-Washington corridor, mainly New York. In May, the only general interest magazine published outside of New York or Washington that was used was Atlanta Magazine in the South.

Taking everything in, The Week reflects a concentration of media power and thought. But the same concentration of geographical power and thought extends into the cable news and over-the-air television networks, all of whom have their headquarters in New York and their broadcast studios in New York and Washington.

We are one country. But we are a big country with regional diversity. National news and political opinion outlets should reflect those differences in our character more than they do now and not be so provincial.

So, it goes!

Will iPads Save Newspapers?

As I write about in my book, newspapers are having a tough time of it in the digital age. It’s hard to make a profit in old established ways and publishers are scratching their heads over how to keep readers from drifting away into new technologies. The Arkansas Democrat-Gazette is the latest to come up with a plan to save itself as its circulation and advertising revenues decline. If readers will pay the current subscription rate of $36 a month, they will get a free iPad to view a digital version.

Walter Hussman, the paper’s publisher, explained it all to the Hope, Arkansas, Rotary Club, according to the Associated Press, where he said the paper’s daily pages will be available with “an easy-to-use” app than can be downloaded on the tablet.

The 200 year old paper, headquartered in Little Rock with 106 newsroom employees, has been running at a loss for the last two years. By the end of this year, only a Sunday edition will be circulated in print form. The iPad is a gamble, but in a test in Blytheville (population 14,000) 70 percent of the 200 subscribers there converted and even a new subscriber was picked up.

Two other publications have tried versions of tablets, according to the Poynter Institute for Media Studies. The Philadelphia Inquirer sold Android tablets to readers for $100 in 2011 if they would subscribe to the paper for two years at $9.99 a month. The Montreal, Canada, La Presse began a free tablet app in 2013 and eventually discontinued printing a daily edition. Since then, the paper has morphed into a nonprofit organization.

So, it goes!

May a newspaper become a nonprofit “community asset”?

Fighting for its survival, the Salt Lake City Tribune hopes to do just that by seeking federal approval from the IRS to become a nonprofit 501 (c)(3) organization sustained by tax free donations large and small. IT’S A FIRST. But, falling circulation and drastic drops in advertising revenues in the newspaper business in the digital age is forcing innovative thinking by private publishers. In this case, Paul Huntsman. If the move is successful, the 148 year old Salt Lake City Tribune would change from a privately owned business to one controlled by a public board. The Tribune would be designated a “community asset.”

This, of course, raises an interesting question about editorials, a long tradition in newspaper publishing. Editorials take a position, usually ones dictated by a private owner. Also, could an organization supported by tax free donations endorse candidates for public office as newspapers do presently? Like other newspapers, the staff of the Salt Lake City Tribune is dwindling. Currently, it numbers 60, down from 148 in 2011. There is another daily paper in Salt Lake City, The Deseret News, the oldest newspaper in Utah. So, if the Tribune went belly up, there still would be a daily newspaper in Salt Lake City. This could be a factor in any IRS decision. Let’s see what happens.