Newspaper work, with Buffett as boss

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Warren Buffett, who once claimed he would never buy another newspaper publisher again, has recently bought up numerous newspapers

Courtesy of the New York Times

BUFFALO — Over the years, newspaper owners have built monuments to themselves in the form of giant buildings, statues and plaques commemorating their roles in their communities and the country at large. At the headquarters of The Buffalo News here, a sand-colored office building across the river from a fragrant Cheerios factory, the only visible sign of the owner is a small photograph hanging in the office of the publisher, Stanford Lipsey, signed, “To the best in the business, Warren.”

Warren is, of course, the billionaire Warren E. Buffett, but the modesty of his physical presence at the paper — he has not visited the paper in the last eight years — understates his interest in the paper, which a unit of his company, Berkshire Hathaway, bought in 1977.

Mr. Buffett’s views on newspapers have been a hot topic of late. Three years after telling his shareholders that he would not buy a newspaper at any price, Mr. Buffett has moved aggressively into the business, buying 63 papers and revealing a 3 percent stake in Lee Enterprises, a chain of mostly small dailies based in Iowa.

In a letter Mr. Buffett sent to the publishers and editors of all Berkshire Hathaway daily newspapers, he described himself as a newspaper “addict” who planned to buy more papers in the future. While he is less certain how he will make papers profitable in the digital age, he is confident that in certain cities, newspapers will thrive.

“I do not have any secret sauce,” Mr. Buffett said in a phone interview. “There are still 1,400 daily papers in the United States. The nice thing about it is that somebody can think about the best answer and we can copy him. Two or three years from now, you’ll see a much better-defined pattern of operations online and in print by papers.”

For his new employees, the best indicator of what Mr. Buffett may do is what he has done with The Buffalo News. Interviews with more than a dozen current and former editors paint a picture of a profitable paper that is run with little involvement from its owner. Some journalists say that the owner will hold out as long as possible to buy the latest printing presses and that they wish the paper dedicated more resources to the highly ambitious journalism that wins the biggest awards.

But many workers agree that the owner does not skimp on sending reporters to town meetings or on enterprising local journalism, which is in line with Mr. Buffett’s belief in an intense local focus for papers.

“In Grand Island, Nebraska, everyone is interested in how the football team does. They’re interested in who got married. They’re maybe even more interested in who got divorced,” Mr. Buffett said, adding that he was not interested in sprawling markets like New York or Los Angeles. “If you live in South Central Los Angeles, you’re not interested in who dies in Beverly Hills.”

But being owned by Berkshire Hathaway has not shielded The News from the industry’s slump. In 2011, the union said newspaper officials had told them the paper earned a profit of $9.3 million, the first time the paper’s profit fell below $10 million in a quarter-century.

To put this in perspective, Mr. Lipsey said The Buffalo News often reported annual profit in the 1980s of $55 million. Since 2009, nearly 100 full-time jobs were cut from the union — which includes the newsroom and the classified, accounting, bookkeeping and circulation departments — according to Henry L. Davis, the paper’s health reporter and the president of Buffalo Newspaper Guild.

A stroll through the newsroom, which is dotted with potted plants, feels like a walk through a half-empty city park. Since 2009, the unionized staff members who remain have had a 1 percent raise.

The newsroom staff is now 140, from 200 about a decade ago, with cuts made mainly through buyouts rather than layoffs. Retirees have few complaints about the pension managed by Berkshire Hathaway especially since the maximum retirement payouts have been raised. So while union negotiations have been heated, highlighted by debates over who should pay for employee parking, newsroom employees still have their health benefits fully covered.

“We do kind of consider ourselves lucky,” said Gene Warner, a reporter with the paper for 32 years who retired in 2010 and now works part time. “We’re not bleeding red ink.”

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