Warren Buffett's Cut-Price Community Spirit for Newspapers

Wealthy investors including Sam Zell and Philip Falcone have swooped into the troubled newspaper industry in recent years, trying to call the bottom. Few have seen success. Now Warren Buffett is diving into print. Has he waited long enough to get real value?

On June 22, the Omaha World-Herald, a division of Buffett's Berkshire Hathaway, agreed to buy the Waco Tribune-Herald, which sells 34,000 copies daily. Earlier this month, it snapped up another Texan newspaper. This comes after Berkshire's purchase of 63 small-market papers from Media General in May and December's acquisition of the World-Herald, adding to longtime holding the Buffalo News. While Buffett has been vocal about the secular deterioration of the newspaper business, he has expressed a belief that small, local papers have a strong future. And as an ultra-long-term investor, he likely has the stomach to navigate all of the digital turmoil before they get there. While metropolitan dailies have been crushed by declining advertising and falling circulation, small-market papers have found some protection. Coverage of community events, local sports and local politics remains tough and expensive to replicate. And Buffett appears to have chosen papers with monopoly local positions.