Rare Book Monthly

Articles - April - 2013 Issue

Someone Very Rich Still Believes in Newspapers

Newspile

Do you still believe in newspapers? Many have written them off, consigned them to virtual extinction over the next decade or so. However, one person who does still believe in newspapers is America's most successful investor. Warren Buffet has put his money where his mouth is. Well, let's not get too carried away. We'll say he sort of believes and has sort of put his money there. It is a somewhat tepid endorsement, but a welcome one nonetheless. What was once the major if not only way to deliver current news needs all the friends it can get.

Mr. Buffet devoted several pages of his annual letter to shareholders to newspapers. Even he was aware that this might seem an odd investment, beginning the section with the ironic heading, “We Buy Some Newspapers. . . Newspapers?” He goes on to write, “During the past fifteen months, we acquired 28 daily newspapers at a cost of $344 million. This may puzzle you for two reasons. First, I have long told you in these letters and at our annual meetings that the circulation, advertising and profits of the newspaper industry overall are certain to decline. That prediction still holds.”

Circulation, advertising, and most of all, profits falling doesn't sound like the basis for an investment. Not depressed enough? Buffet goes on to write about how “newspapers were the primary source for an incredible variety of news, a fact that made them indispensable to a very high percentage of the population.” International, national and local news, sports and stock quotes all arrived first through your newspaper. Additionally, the advertising was a form of “news,” providing job openings, movie listings, and supermarket specials to readers. That made the local newspaper “indispensable to advertisers.” In communities with just one newspaper, and most cities saw the field condense to one, “its profits were certain to be extraordinary.”

“Now the world has changed,” Mr. Buffet continues. Stock and sports news is out of date before “the presses begin to roll.” The internet has replaced classified advertising, national news flows quickly from the television set. “In one area of interest after another, newspapers have therefore lost their 'primacy.' And, as their audiences have fallen, so has advertising.” Buffet has really made a strong case for newspapers. Why on earth would anyone invest $344 million in such a dying business?

Here is Buffet's answer: “Newspapers continue to reign supreme, however, in the delivery of local news. If you want to know what’s going on in your town – whether the news is about the mayor or taxes or high school football – there is no substitute for a local newspaper that is doing its job... Wherever there is a pervasive sense of community, a paper that serves the special informational needs of that community will remain indispensable to a significant portion of its residents.”

Still, Mr. Buffet acknowledges that local newspapers face difficulties and uncertainties. They need an internet presence, and have traditionally offered their online content for free. “How could this lead to anything other than a sharp and steady drop in sales of the printed product?” he asks. He notes that some newspapers have begun charging for web content, and said these have seen their circulation hold up better than most. Charging, however, is only a relatively recent phenomenon and he remains uncertain as to whether it will resolve the issue of subscribers moving from a paid newspaper to a free website. Unstated is the issue that charging for online content may be difficult because people are used to web content being free, and TV stations and others, used to providing free content, compete online for local news. “Whatever works best – and the answer is not yet clear – will be copied widely,” he adds uncertainly.

Buffet, and his company, Berkshire Hathaway, have mostly limited themselves to smaller market daily newspapers. His largest are in Omaha and Buffalo, but he has owned them for a long time. Were it not for his own beginnings in the newspaper business and a personal fondness, it is questionable whether he would be invested at all. When he purchased a group of newspapers a year ago, he deliberately left out the largest group in the chain, the Tampa daily. The risk appears lower when staying out of the large cities.

And then there is the point about that $344 million invested. To you and I, that sounds like a lot of money. For Mr. Buffet, who is personally worth over $50 billion, it is not. Berkshire Hathaway maintains a market capitalization of over $250 billion. To this company, its investment in newspapers is barely more than one-tenth of one percent of its net worth. Recently, the company announced a $23.6 billion offer to purchase H.J. Heinz Co. That's $23 billion for ketchup and pickles versus $343 million for newspapers. Mr. Buffet may be toying with a business he loves more than making a serious investment. The space in his letter devoted to newspapers far outweighs the size of his investment. Nonetheless, we will take anything positive about print media these days, especially when it comes from a man with such a sterling reputation.

Rare Book Monthly

  • <b>Swann Auction Galleries Mar 21:</b> Princess Diana, group of 6 ALS to the editor of British Vogue, 1989-92. $5,000 to $7,500.
    <b>Swann Auction Galleries Mar 21:</b> Joseph Brant, Mohawk Chief, ALS, writing with news after pledging support to King George III against the American rebels, 1776. $20,000 to $30,000.
    <b>Swann Auction Galleries Mar 21:</b> Ulysses S. Grant, photograph dated & signed as President, portrait by Brady, 1875. $3,000 to $4,000.
    <b>Swann Auction Galleries Mar 21:</b> Alexander Graham Bell, ALS, accepting an invitation to tea during his only trip to Japan, 1898. $1,000 to $2,000.
    <b>Swann Auction Galleries Mar 21:</b> Nikola Tesla, signature & date on his monogrammed correspondence card, 1935. $3,500 to $5,000.
    <b>Swann Auction Galleries Mar 21:</b> Richard Wagner, ALS, concerning his opera Rienzi, 1869. $3,000 to $4,000.
    <b>Swann Auction Galleries Mar 21:</b> Henri Toulouse-Lautrec, autograph note signed, requesting the address of Yvette Guilbert, 1895. $2,000 to $3,000.
    <b>Swann Auction Galleries Mar 21:</b> Claude Monet, ALS, to painter Harry Lachman, complaining that his vision has not improved, 1920s. $2,500 to $3,500.
    <b>Swann Auction Galleries Mar 21:</b> Friedrich Hölderlin, autograph manuscript, unsigned, 7 lines quoting Michael Denis's <i>Ossians und Sineds Lieder.</i> $10,000 to $15,000.
    <b>Swann Auction Galleries Mar 21:</b> Guestbook for Lüchow's restaurant, over 400 signatures, including W.H. Auden, Grace Kelly & drawings by Charles Addams, NYC, 1950-56. $8,000 to $12,000.
    <b>Swann Auction Galleries Mar 21:</b> George Washington, lottery ticket, signed, 1768. $5,000 to $7,500.
    <b>Swann Auction Galleries Mar 21:</b> Vaslav Nijinsky, postcard dated & signed, showing a drawing of him in <i>Schéhérazade,</i> 1916. $2,500 to $3,500.
  • <b>Koller Auctions: Books & Autographs. March 26, 2019</b>
    <b>Koller Auctions, Mar 26:</b> Jacques Gamelin. <i>Nouveau recueil d'osteologie et de myologie, dessine d'apres nature...</i> 2 parts in 1 vol., large folio, 82 copper plates. CHF 12,000 to 18,000
    <b>Koller Auctions, Mar 26:</b> Melchior Pfintzing. <i>Die geverlicheiten und einsteils geschichten des loblichen streytparen...</i> 118 woodcut engravings, first edition. CHF 30,000 to 50,000
    <b>Koller Auctions, Mar 26:</b> Book of hours. Handwritten Latin text on vellum. With 17 large miniatures, Flanders, c.1460. CHF 70,000 to 90,000
    <b>Koller Auctions, Mar 26:</b> Maria Sibylla Merian. <i> Dissertatio de generatione et metamorphosibus insectorum Surinamensium,</i> 72 copper plates, Den Haag, 1726. CHF 60,000 to 90,000
  • <b>Bonhams, Mar 12:</b> Walt Whitman. <i>Leaves of Grass.</i> First edition, first issue, SIGNED in block letters by Whitman. 1855. $200,000 to $300,000
    <b>Bonhams, Mar 12:</b> Isaac Newton's copy of John Greave's <i>Pyramidographia,</i> London, 1646. $50,000 to $70,000
    <b>Bonhams, Mar 12:</b> Colonel John Mosby. Robert E. Lee's autograph letter to Samuel Cooper reporting on Mosby's exploits, with Cooper's autograph note ordering his appointment to Major.
    <b>Bonhams, Mar 12:</b> Gyula Halasz Brassai. Large archive of autograph and typed letters, over 260, to his family including his wife Gilberte, 1947-1978. $40,000 to $60,000
    <b>Bonhams, Mar 12:</b> Archive of drawings and letters from Harper Lee to Charles Carruth, including an inscribed first edition of <i>To Kill a Mockingbird.</i> $20,000 to $30,000
    <b>Bonhams, Mar 11:</b> VESALIUS, ANDREAS. 1514-1564. <i>De humani corporis fabrica libri septem.</i> Basel: Johannes Oporinus, June 1543. $300,000 to $500,000
    <b>Bonhams, Mar 11:</b> HARVEY, WILLIAM. 1578-1657. <i>De motu cordis & sanguinis in animalibus Anatomica Exercitatio.</i> Leiden: Joannis Maire, 1639. $25,000 to $35,000
    <b>Bonhams, Mar 11:</b> BERENGARIO DA CARPI, GIACOMO. 1460-1530. <i>Isagogae breves perlucide ac uberrimae in Anatomiam humani corporis.</i> Bologna: Benedictus Hectoris, 15 July 1523. $15,000 to $25,000
    <b>Bonhams NY, Mar 11:</b> FRANKLIN, BENJAMIN. 1706-1790. <i>Experiments and Observations on Electricity, made at Philadelphia in America…</i> London, 1769. $10,000 to $15,000
    <b>Bonhams NY, Mar 11:</b> BENIVIENI, ANTONIO. 1443-1502. <i>De abditis nonnullis ac mirandis morborum et sanationum causis.</i>Florence: Filippo Giunta, 1507. $8,000 to $12,000
  • <b>Forum Auctions: Fine Books, Manuscripts and Works on Paper. March 28, 2019</b>
    <b>Forum Auctions, Mar 28:</b> Greco (Gioachino). <i>Primo modo del gioco de Partito…</i> Manuscript, France, 1624 or 1625. A collection of partiti, or 'chess problems' by one of the most important figures in the history of chess. £20,000 to £30,000.
    <b>Forum Auctions, Mar 28:</b> Herodotus. <i>Historiae,</i> translated into Latin by Lorenzo Valla and edited by Antonio Mancinelli. Venice, 1494. £15,000 to £20,000.
    <b>Forum Auctions, Mar 28:</b> Darwin (Charles). Autograph Letter signed to his cousin Reginald Darwin, Down, Beckenham, Kent, 27th March 1879. £12,000 to £18,000.
    <b>Forum Auctions: Fine Books, Manuscripts and Works on Paper. March 28, 2019</b>
    <b>Forum Auctions, Mar 28:</b> Nicolay (Nicolas de). <i>The Navigations, peregrinations and voyages, made into Turkie,</i> first edition in English, Imprinted at London by Thomas Dawson, 1585. £10,000 to £15,000.
    <b>Forum Auctions, Mar 28:</b> Saint-Exupéry (Antoine de). <i>The Little Prince,</i> number 66 of 525 copies signed by the author, 1943. £8,000 to £12,000.
    <b>Forum Auctions, Mar 28:</b> Catlin (George, 1796-1872). Tuch-ee, A Celebrated War Chief of the Cherokees, watercolour, [circa 1834]. £6,000 to £8,000.
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    <b>Forum Auctions, Mar 28:</b> Genetics.- A collection of c.300 pamphlets on genetics comprising many of the major contributions from the first half of the 20th century. £5,000 to £7,000.
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