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Berkshire Buys Waco Herald-Tribune


Parsad
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I've looked at the financials for some of Buffett's recent newspaper acquistions. I just don't get it. As Buffett himself has said, "if the internet was invented first, would someone come along and invent the newspaper?" I don't think so.

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That might be Buffett last cigar butt... There is still cash to be extracted, the conversion rate from newspaper to internet news is probably really low in the 40 and plus group of age. Below that age nobody has newspapers so there is no conversion to lose.

 

BeerBaron

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I've looked at the financials for some of Buffett's recent newspaper acquistions. I just don't get it. As Buffett himself has said, "if the internet was invented first, would someone come along and invent the newspaper?" I don't think so.

 

I can't help but think it's kind of a nostalgic / "greater good" investment for WB. The size of the investment is completely irrelevant and returns might be adequate but it probably is not the next Coca Cola. But he can preserve some nice (I assume, haven't read them) local newspapers and it creates goodwill for Berkshire. He was a newspaper delivery boy and still reads a few newspapers daily, right?

 

The Waco deal was something less than 5 times EBITDA.

 

That sounds reasonably cheap though.

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It won't generate returns, but I don't expect it to lose money over time.  There is still going to be value in local news reporting, boots on the ground as it were; just not as much as there once was.

 

A lot of people are up in arms about paywalls, and I do think that for the public good many news articles about world events and political watchdogging should be free (we already have this capability, in libraries--we need to be careful not to neuter this functionality electronically), however, I see no reason not to charge for the great variety of other local reporting.

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