May 26, 2012

Warren Buffet Buys 26 Local Papers

The Verge has a brief piece on Buffet's latest acquisition.

Local papers are a unique source of news too minor for anyone else to report. Too often, though, they bolster their coverage with reprints from the Associated Press and other broader coverage sources, giving readers something they can get elsewhere free. Such content reduces the value of a local paper where the budget is better spent on a local beat reporter or two.

Investing in printed newspapers is a contrarian act. Most papers are struggling against the onslaught of the Internet. Buffet has a long history of picking sleepers that pay off over the long haul, though. He's the self-acknowledged prophet of the buy-and-hold strategy, which makes his latest investment noteworthy. His bet here is that local papers will not only survive, but thrive.

I doubt he'll make much money from these newspapers. The communities they serve, though, will benefit from their assured financing.