Monday, March 12, 2018

Why do Billionaires Keep Buying US Newspapers despite their “Terrible Future,” as Buffett Said?

From Wolf Street: 

Buffett’s own newspaper conglomerate announced the 2nd round of layoffs in 10 months.
Today, BH Media announced that it is laying off 148 employees and will not fill 101 vacant positions, for a total of 249 jobs, representing about 6% of the workforce. These cuts include 43 jobs at the Omaha World-Herald.

The drop in advertising revenue is a “harsh reality” in the industry, explained BH Media CEO and publisher of the Omaha World-Herald, Terry Kroeger, echoing what Buffett already knew in 2009, well before he bought the outfit, and all the other outfits.

Kroeger blamed e-commerce which has caused a large number of their regional and national clients to cut back on their advertising spend because their brick-and-mortar businesses are being disrupted by online retail.
This is the second round of job cuts in 10 months: In April 2017, BH Media announced 289 job cuts, including 108 vacant positions. At the time, it employed 4,450 people. The World-Herald:
Kroeger said the company is experiencing a “critical moment” as print newspapers have “suffered from the growing popularity of the digital environment.” Regional and national advertisers are being hurt by online retailers, he said, causing them to reduce their print advertising.
Buffett is number 3 on the Bloomberg Billionaires Index ($82 billion). If newspapers have such a “terrible future,” why do billionaires – who’re supposed to have brilliant business minds – keep buying them?
Billionaires have been all over print newspapers...