Today, Warren Buffett fielded a question from HamletHub about the local newspaper crisis. Buffett, a guest on CNBC’s Squawk Box, is a longtime proponent of local news and known for his savviness when it comes to recognizing solid businesses.
Squawk Box host Becky Quick asked Buffett the following question:
Do you believe the problem with local newspapers is a lack of demand or a lack of innovation and a new business model?
Buffett responded, “The problem is that every day, the print circulation of the papers goes down. The interesting thing about it is that the three survivors so far that are promising online are The New York Times and The Wall Street Journal, and The Washington Post - all three of those papers sold their small papers.” He added, “They all saw the handwriting on the wall before I did. They did not try to figure out the online solution, they got out of it.”
Buffett went on to say, “Unfortunately I bought some and we are still in it - we are financing Lee and we think Lee has by far the best opportunity to continue print and to find an online solution for these papers so we’ve put new money into the newspaper industry, or we’ve committed to [do so], it will close in a month or two.”
