When Warren Buffett invests, investors pay attention. So when the Oracle of Omaha recently put his Berkshire Hathaway money into newspapers, it was bound to cause others to take a second look at this neglected financial sector. And a good thing, too. Newspapers are too important to the health of communities for them to be allowed to wither and die. Among the newspapers Buffett rescued recently are his hometown Omaha World-Herald, the small-town Bryan-College Station Eagle in Texas and a flock of publications from the Media General and Lee Enterprises chains.
If tycoons ride to the rescue of struggling local papers that would be good for the press but not without its drawbacks. The situation in San Diego is a troubling case in point. The new ownership at the U-T San Diego seems to be clueless about its journalistic obligations to readers and the community. The New York Times reported recently how the paper flogs its critics and supports favored candidates in front-page editorials, without being bashful about touting positions that favor its business interests.
The Times quotes a new owner, John T. Lynch: “We are doing what newspapers ought to do, which is to take positions.” The Times quotes an alternative voice in town “There is a very real fear here that it will not be advocating for the public’s good, but for the owner’s good instead.”
Encouraged by Warren Buffett’s willingness to plow money into the newspaper business , a lot of new ownership types are likely headed for newspaper offices. But newspapers are not simply another way to make money, although newspaper company executives have neglected to explain why it’s a different kind of business. By taking their companies public, and listing them on stock exchanges, newspaper executives have made them into just another commodity in the marketplace subject to the bottom-line pressures common to all public companies.
Newspapers are a different kind of business because they serve a public purpose. If the new interest in investing in newspapers isn’t to boomerang, the new breed of owners will have to develop an understanding and commitment to journalism ethics. The nation’s journalism schools can help by offering courses in ethics for owners. If a newspaper changes hands, the new owners ought to announce to readers a determination to abide by strict ethical precepts. Who better to design and teach such a course than Warren Buffett?