Inside the Local Daily: A Lot of Worry

Warren Buffett: Loving papers to death?

Talk is trickling out from behind the battlements at the local daily that owner BH Media’s recent hiring of Lee Enterprises to manage The Roanoke Times probably is not a good thing.

Lee Enterprises is being called “a slash-and-burn outfit that has ruined scores of good newspapers. Think of it as, ‘The Dollar Store of Journalism.”’

Inside the paper, estimates are that Lee will “reduce the news staff by one-third, and by that I mean all the older and more expensive fogies” will be terminated.” One wag cracked, “I wonder if they assumed potential BH liabilities, too, such as the costs of age discrimination lawsuits.”

The loss of corporate memory over the past 20 or so years has had a demonstrative effect on the product.

One BH employee related, “Lee in 2005 made the single worst business decision in the history of American journalism when it acquired Pultizer, Inc., for $1.46 [billion] that [Lee] financed with debt. [Lee] had to¬†ruin all [its] far-flung papers just to make the debt service payments on debacle. And even that couldn’t keep [Lee] out of Chapter 11.

“[Lee] ‘sold’ Berkshire Hathaway [BH Media corporate] on the idea of taking over business management of its newspaper with the promise that [Lee would] increase EBITDA [essentially net income with interest, taxes, depreciation and amortization added back to it] by nearly 50 percent.”

My take: The Times has been running with a skeleton news and advertising crew for years, and despite it managing to keep some very good journalists employed there–with no pay increases for at least the past nine years–the quality of the product has deteriorated significantly.

The newspaper professionals at The Times remain in place for two good reasons: they love what they do, there is nowhere else for most of them to go if they are to stay in journalism. Corporate empty suits don’t care about either of those realities. The reporters, editors, designers and ad people are not human beings to corporate. They are a drain on the bottom line.

Remember one sad, underlying fact here: Warren Buffett–the billionaire liberal–owns Berkshire Hathaway and says he loves newspapers. He has yet to prove that last little bit. I’m not sure how much more of Buffett’s “love” Roanoke can take.

And let’s emphasize one more small fact that, in itself, could be the death knell for papers the size of Roanoke’s: Donald Trump’s administration has added a 30 percent tariff to the cost of newsprint from Canada (U.S. newspapers’ primary source) and is looking at upping that to 50 percent. Trump hates newspapers, but his effect may not be any worse than Buffett’s.

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