Buffalo News

Eric Kallgren    Boulder, Colorado USA

Posted at 10:56pm on Wednesday, April 29th, 2009

Warren Buffet predicted the crash of the newspaper business as long ago as 1992, Jack Shafer wrote at Slate on April 27, 2009. Shafer quotes a February 28, 1992 letter to Berkshire Hathaway shareholders written by Buffet:

"An economic franchise arises from a product or service that: (1) is needed or desired; (2) is thought by its customers to have no close substitute and; (3) is not subject to price regulation. The existence of all three conditions will be demonstrated by a company's ability to regularly price its product or service aggressively and thereby to earn high rates of return on capital. Moreover, franchises can tolerate mis-management. Inept managers may diminish a franchise's profitability, but they cannot inflict mortal damage.

Dollars are dollars whether they are derived from the operation of media properties or of steel mills. What in the past caused buyers to value a dollar of earnings from media far higher than a dollar from steel was that the earnings of a media property were expected to constantly grow (without the business requiring much additional capital), whereas steel earnings clearly fell in the bob-around category. Now, however, expectations for media have moved toward the bob-around model. And, as our simplified example illustrates, valuations must change dramatically when expectations are revised."

The full story:
http://www.slate.com/id/2217014/

Eric Kallgren    Boulder, Colorado USA

Posted at 6:22pm on Thursday, February 19th, 2009

February 18, 2009: The Star-Ledger will share content with four other newspapers in the region. From the press release:

"Five major newspapers in the northeast today announced an agreement to share editorial content. The New York Daily News, Albany Times Union, The Record (Bergen Co., NJ), The Buffalo News, and The Star-Ledger have formed the Northeast Consortium, a cooperative arrangement that will enhance each publication's coverage in the region by exchanging articles, photographs and graphics among the newspapers.

Editor and Vice President Margaret M. Sullivan of The Buffalo News said, "This venture, which arises out of hard times in the newspaper business, should result in a win for everybody. I'm excited about the possibilities."

The technical aspects of the agreement are being finalized and the members expect to be sharing their material in May, 2009."