Buffett bucks trend by buying newspapers

Download

Unfazed by predictions of the death of newspapers, billionaire Warren Buffett is pumping more money into print.

In the past year, one of the world's richest men and sharpest investors has put some $300 million into an industry that some view as heading the way of the horse and buggy.

Buffett's Berkshire Hathaway holding company late last year bought his hometown newspaper, the Omaha World-Herald, along with related assets in a $200 million deal some analysts viewed as a sentimental move.

He followed with a $142 million deal last month to buy Media General, a chain of 63 newspapers. He added $2 million to Lee Enterprises, owner of the St. Louis Post Dispatch and Arizona Daily Sun. That is in addition to other holdings, including The Buffalo News and a stake in The Washington Post Co.

Buffet said in a message last month to his newspaper employees that he believes that newspapers that intensively cover their communities will have a good future.

He said Berkshire "will probably purchase more papers in the next few years" and that he will "favor towns and cities with a strong sense of community".

Still, the investment comes amid dire predictions for the newspaper industry, which has been battered by sharp drops in print circulation and advertising, and getting only modest revenues from online services.

A research note from the financial firm Moody's earlier this month gave the US newspaper industry a "negative" outlook, saying that digital initiatives are failing to make up for "significant secular pressures".

"Although newspaper companies seek to capitalize digital revenue through an array of channels, it's unlikely that these gains will be large enough to offset print losses," Moody's analyst John Puchalla wrote.

Analysts say Buffett, the world's third-richest individual with a net worth estimated at $44 billion, is doing what he does best: making a "contrarian" bet by investing in a company or sector beaten down by negative sentiment.

"Newspapers are one-tenth of the price they were a decade ago," said Ken Doctor, a media analyst with the research firm Outsell.

Doctor said Buffett is finding value in these companies because they often own hard assets, including real estate and broadcast properties, and have a strong brand name in their communities.

Questions:

1. How much did Warren Buffett pay to buy Media General?

2. What did Buffett say in his message to newspaper employees?

3. What do analysts say Buffet does best?

Answers:

1. $142 million.

2. That he believes that newspapers that intensively cover their communities will have a good future.

3. He is making a "contrarian" bet by investing in a company or sector beaten down by negative sentiment..

（中国日报网英语点津 Helen 编辑）

About the broadcaster:

Emily Cheng is an editor at China Daily. She was born in Sydney, Australia and graduated from the University of Sydney with a degree in Media, English Literature and Politics. She has worked in the media industry since starting university and this is the third time she has settled abroad - she interned with a magazine in Hong Kong 2007 and studied at the University of Leeds in 2009.