Warren Buffett speaking to a group of students from the Kansas University School of Business. - Photo by Mark Hirschey ( Creative Commons Attribution ShareAlike 2.0 License)

Buffett started his business career as a paper boy delivering newspapers and “snowballed” into leading a successful company in Berkshire Hathaway. He used to have an affinity for newspapers earlier, when his Omaha newspaper Sun Newspapers won a Pulitzer Prize in 1973. He then went on to purchase Buffalo News in the 1970s and he still owns it. He also has a substantial investment in Washington Post Co. But now he doesn’t seem to have the same opinion about the industry. He responded to a question on whether he plans to invest in newspapers in the future. Buffett said no. He replied with the following statement:

For most newspapers in the United States, we would not buy them at any price...They have the possibility of going to just unending losses.

He said newspapers were essential once, so they were essential to advertisers; but now the same news is available on the Internet, so as a result there is a considerable drop in advertising revenues for the industry. Buffett’s company, however, is holding on to Washington Post Co. because of their cable division, which is doing well; but their newspaper division is in trouble. Buffett’s long time business associate, Charlie Munger also gave a similar opinion. He said:

“It’s really a national tragedy...These monopoly daily newspapers have been an important sinew to our civilization, they kept government more honest than they would otherwise be.”

Is this the end of newspapers?