Warren Buffett's Sept. 14 meeting in Omaha with editors and publishers from Berkshire-owned newspapers prompted articles in two of those publications, the Winston-Salem (N.C.) Journal and the Richmond (Va.) Times-Dispatch.
The papers were among those acquired earlier this year by Berkshire Hathaway Inc., the Omaha-based investment company Buffett heads.
Journal President and Publisher Jeff Green wrote, “Buffett does not see a future for large metropolitan papers because they can't build a sense of community. For markets our size, newspapers can thrive if they are intensely local.
“He challenged us to figure out how to make our papers ‘indispensable to readers' and to ‘do what's best for our communities.' ”
Newspapering isn't as profitable or simple as it once was, Buffett said. “Thirty years ago if you had an idiot nephew, you bought him a newspaper to run, but it's not that easy anymore.”
Even so, he told the publishers, he's puzzled by some newspapers' decisions to print three days a week, pledging that Berkshire's dailies in good-sized communities would continue to publish seven days a week.
“Buffett conceded that as an industry we are still working on the best way to price and deliver news and advertising on the Internet, but felt certain that the successful approach would involve a paid digital subscription component like we have instituted here at the Journal,” Green wrote. “He believes, as I do, that giving away your content for free on the Web while asking print subscribers to pay is not a viable business model.”
Naysayers of the newspaper business create cheaper prices so he will be able to buy more newspapers, Buffett said, urging the publishers, “Make the paper so good that I get the shakes if I don't have it.”
Tom Silvestri, president and publisher of the Times-Dispatch, wrote an open letter to Buffett, saying he agrees with Buffett that newspapers will be an enduring product but that the industry must work to keep its information in demand by its audiences.
Buffett's discussion about the importance of integrity and ethics alone made the trip to Omaha worthwhile, Silvestri wrote. Buffett told the publishers: “My reputation is in your hands. Make decisions and do everything as if a smart, unfriendly reporter is going to write a front-page story about it.”
Buffett was a “blatant bull” on the U.S. economy, Silvestri wrote, telling the group, “Don't bet against the U.S. We win.”
Also last week, Buffett exercised Berkshire's right to purchase 17 percent of Media General, the company that owned most of the new Berkshire newspapers. That gives Berkshire a big stake in a TV-oriented business as well as in print journalism.
Berkshire acquired the purchasing rights, or warrants, last summer as part of the purchase of the newspapers and a $445 million loan to Media General. Berkshire bought 4.6 million shares, worth $22.7 million in trading last week on the stock market, for a penny apiece, or $46,000.
‘Dazzled' by bridge players
Buffett watched the recent bridge tournament that bears his name, but only online rather than at the Hilton Omaha, where teams from the U.S. and Europe battled at card tables for four days.
“I'm really disappointed that I have been unable to attend the Buffett Cup matches or the closing ceremony,” Buffett said in a message to the tournament participants and organizers. “I've been following the action on Bridge Base and have been dazzled by the level of play.
“Bridge is the world's premier game, and Omaha has been honored by having the best of the best gather here. Everyone is a winner when bridge is played and congratulations to all.”
The U.S. team narrowly won the Buffett Cup tournament, which is played every two years and patterned after professional golf's U.S-vs.-Europe Ryder Cup.
The 2014 Ryder Cup will be played at the PGA Centenary Golf Course at Gleneagles, Scotland, Sept. 26-28, so the Buffett Cup competition likely will migrate to Scotland in 2014 as well.
A giving ‘fever'
Nearly all the signers of the Giving Pledge already had plans to give away most of their wealth before being asked to make that pledge, originated by Buffett and fellow billionaires Bill and Melinda Gates.
But the pledge also wants to inspire other people to support charitable activities, even if they aren't billionaires. Gordon Pitts of the Globe and Mail of Toronto reported that's happening in Canada.
Recent pledges by Canadian billionaire Charles Bronfman and others have prompted “a bit of a fever” among owners of small to medium-sized businesses to form charitable family foundations, said Calgary portfolio manager Jerry Koonar.
“More and more people are talking about it and are doing it,” said Marvi Ricker, managing director of philanthropic services for BMO Harris Private Banking.
Charitable giving has been stagnant in Canada since the 2008 recession. Now business owners who don't have heirs to carry on the family business are looking at setting up foundations for the proceeds from selling their businesses.
“I hear a lot of people say they don't want to give it all to their kids because they are not doing them a favor by leaving them so much money,” Ricker said. That's a Buffett-style idea, too: Children, he has said, should have enough money to feel like they can do anything, but not so much that they feel like doing nothing.
Seymour Schulich, a Toronto financier, donates to educational institutions but doesn't see a lot of wealthy Canadians making their donation plans public.
“I don't think this is a Canadian thing to do,” he said. In Canada, “self-praise is no honor.”
Buffett fan fined
World-Herald readers first met Sandar Biglari in 2004, when he was a 26-year-old money manager from San Antonio in town for Berkshire Hathaway's annual shareholders meeting.
He had heard of Buffett in a book he read as a 19-year-old college student, and said he wanted to pattern his investing principles after Buffett's. His investment group owns pieces of several restaurant chains, including Friendly Ice Cream, Steak 'n' Shake and Western Sizzlin'.
But it was his 18 percent stake in the Cracker Barrel chain that led to an $850,000 civil penalty and allegations by the Justice Department that he violated investment reporting rules, the Wall Street Journal reported.
Biglari pushed Cracker Barrel to replace its CEO, appoint new board members and improve its profits but didn't notify the government of his involvement with the company, violating the investment rules from June 8 through Sept. 22, 2011, the Journal reported.
The Journal in 2011 had called Biglari the Warren Buffett of restaurants but said in a recent blog on the Justice Department fine: “If you want to be like Warren Buffett, the first step might be learning the rules to investing.”
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