By: E&P Staff
In his yearly letter to Berkshire Hathaway investors, famed investor Warren Buffett wrote that “ownership of a city’s paper, like ownership of a sports team, still produces instant prominence … there’s no rule that says a newspaper’s revenues can’t fall below its expenses and that losses can’t mushroom.”
According to an article in the New York Post, Buffett’s letter pointed to the high fixed costs in the newspaper industry as a reason to be wary. As well, he noted that the newspaper’s business model is continuing to erode amid increase competition from TV and online.
Buffett’s firm owns the Buffalo News in Upstate New York, as well as an 18% stake in the Washington Post. He said that the company would stick with News “unless we face an irreversible cash drain.”