NEWSMAX: Warren Buffett’s Berkshire Hathaway Inc is boosting its bet on the newspaper industry, with a deal to buy the majority of Media General Inc’s papers for $142 million in cash, making him one of the largest publishers in the United States…
Buffett is staking his claim in an industry dogged by plummeting advertising revenue and readers who are choosing digital formats over paper and ink. Newspapers, once the toast of investors looking for stable cash-generating companies to park their money, have lost favor in the past several years…
“Buffett sees the transition away from free content as an ultimate boost to profit margins. The companies are very undervalued if they attain even low single-digit earnings growth. I would compare this to his purchase of gas pipelines in the Enron fire sale in 2002,” said Bill Smead, chief investment officer of Smead Capital Management in Seattle… (more)
EDITOR: Readers may recall the Watchdog’s praise of the Lancaster Newspapers beginning to charge for access to www.LancasterOnLine.com . Newspapers are the ‘glue’ and hopefully the watchperson that holds communities together.
