Editor’s note: This article was first published in July 2013; the announced purchase from Abarta was news at the time, and the circulation and monthly unique visitor figures are 2013 data. Berkshire later sold its newspaper business, BH Media, to Lee Enterprises in 2020.
Warren Buffett is betting on another small newspaper, The Press of Atlantic City, according to the Omaha World-Herald, another paper that was acquired by Berkshire Hathaway.
The seller will be Abarta, a Pittsburgh-based family holding company that has owned the newspaper since 1951. The price of the deal has not been disclosed so far.
I am trying to understand why Warren Buffett is buying these small regional newspapers. Although Buffett is known for his charitable spirit, he never puts Berkshire into investments unless they are going to be profitable for its investors in the long term. And so far, Berkshire has already acquired several papers in recent years, such as a small newspaper in Virginia and another in Oklahoma.
Buffett himself acknowledged in an interview that he does not expect to earn a 10% annual return on his investment in these newspapers, but there is something that gives you pause.
This latest newspaper has a daily circulation of 67,000 copies sold, rising to 77,000 on Sundays, its biggest day. Its website receives 700,000 unique visitors a month. But there is something that sets these newspapers apart: the information they offer in print is not available in their online editions.
Buffett is not betting on particular newspapers but on newspapers with a different business model. Although many investors think Buffett is making a mistake, there is a minority who believe this kind of paper can be more profitable than digital outlets that give their content away online, a model that has been shown to be destroying the media and journalists themselves.
Only time will tell.
See also: Warren Buffett’s best investing tips
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