The media is a bad investment.
Warren Buffett is selling his newspaper business for $140 million — a fraction of the $344 million he spent acquiring 28 daily papers less than a decade ago.
Buying newspapers a decade ago was like buying buggy whips around the Motor T. Takes a lefty to think otherwise.
Buffett bought the Buffalo News for about $36 million in 1977, and added another 28 daily papers to Berkshire’s stable in the early 2010s. While he was wary of declining circulation and advertising revenues, he defended the papers as solid investments at the time.
“Charlie and I believe that papers delivering comprehensive and reliable information to tightly-bound communities and having a sensible Internet strategy will remain viable for a long time,” Buffett wrote in his 2012 letter to shareholders.
“Newspapers continue to reign supreme … in the delivery of local news,” he added. “I believe these papers will meet or exceed our economic test for acquisitions.”
Investing in the media is a terrible idea. The big papers and magazines are increasingly owned by dot com barons or are going non-profit. And the rest are being consolidated into more mega-monstrosities, with more cutbacks, before going out of business.