That old coot in Omaha is buying newspapers, after swearing a few years back he wouldn’t. For Berkshire Hathaway (BRK.A) (BRK.B) holders, this is at worst a small diversion, given the amounts involved, and at best a reminder that Warren Buffett can find the gems in a pile of junk.
But don’t try this at home. No-one advertises in newspapers anymore, and digital advertising doesn’t pay the bills. Rupert Murdoch’s News Corp. (NWS) is finally sending its papers off to a separate company, and young readers are used to getting news for free.
The New York Times’ David Carr offers one more warning: news companies have majorly underfunded pension plans. Gannett’s (GCI) pension is $942 million underfunded. McClatchy’s (MNI) is $383 million short. The New York Times’ (NYT) is $522 million.
If you’re still holding onto these stocks, consider donating to a non-profit news organization like ProPublica instead. At least you’ll get a tax deduction.