Warren Buffett will keep the Buffalo News and a stake in the Washington Post Company (NYSE: WPO)but won't play white knight for the newspaper industry. The billionaire financier told shareholders at the Berkshire Hathaway annual meeting taking place today in Omaha, Neb., that newspapers face possible "unending losses" and that the company would not buy most U.S. newspaper "at any price," according to MarketWatch and WSJ.
Buffett also spoke of how newspapers once had been essential to readersand thus to advertisersbut that was no longer the case. But what of Berkshire's current holdings?
Buffalo News: He said the paper is working with unions on a new business model.
WaPoCo: Buffett, who is on the Washington Post board, spoke of its attractive businessessingling out cablebut said "does not have answers to the problems of the newspaper business."
Twittering from the stage: The NYT's Andrew Ross Sorkin, one of the journalists participating in the Q&A at the meeting, twittered live from the stage via BlackBerry, with the feed running in a widget on the DealBook blog. His take on the newspaper discussion: "Buffett says newspaper biz is no longer "essential" sigh. tho he's not selling washpo or buffalo news."
Update: Fox Business News anchor Liz Claman has this exchange with Buffett and his business partner Charlie Munger:
Question: At what price does it become compelling to invest in newspaper business or is there no price in today's environment?
Buffett: The current environment is accentuating problem in newspapers -but it's not the basic cause. Charlie and I read 5 a day. We'll never give them up. We would not buy them at any price. They have the possibility of going to unending losses. They were essential to the public 20 years ago. Their pricing power was essential with customer. They lost the essential nature. The erosion has accelerated dramatically. They were only essential to advertiser as long as essential to reader. No one liked buying ads in the paper - it's just that they worked. I don't see anything on the horizon that causes that erosion to end.
Munger: It's really a national tragedy. As they disappear - I think what replaces them won't be as desirable as what we're losing.
By Staci D. Kramer