Warren Buffett is fond of newspapers -- he reads five a day -- but the billionaire investor warned shareholders of his Berkshire Hathaway Inc
At Saturday's annual meeting of Berkshire, which owns the Buffalo News and has a big stake in Washington Post Co
For most newspapers in the United States, we would not buy them at any price, Buffett said. They have the possibility of nearly unending losses. ... I do not see anything on the horizon that sees that erosion coming to an end.
Many U.S. newspapers have lost 20 percent or more of their advertising revenue as changes in technology and reading habits shrink circulation and more readers to get their news online.
Several newspapers in large U.S. cities have closed in recent months, and the future of the money-losing Boston Globe, owned by The New York Times Co
Twenty, thirty years ago, they were a product that had pricing power that was essential, said Buffett. They have lost that essential nature.
Buffett said Berkshire would hold on to the Buffalo News, a daily newspaper in the New York state city of the same name, if only because Berkshire buys businesses for the long term and does not sell simply because the companies hit a rough patch.
He did not rule out having to squeeze out excess costs, including possible job cuts, or eventually shuttering the paper if it goes too deeply into the red.
On an economic basis you should sell this business. I said I agree 100 percent but I am not going to do it, he said. The union has been cooperative in having an economic model that will at least give us a little bit of money.
Charlie Munger, Berkshire's vice chairman, called the decline of the newspaper industry a national tragedy.
What replaces it will not be as desirable as what we are losing, he said.
(Reporting by Lilla Zuill and Jonathan Stempel; Editing by Xavier Briand)