Rich guys and newspapers

By Laurie Bennett

August 6, 2013 at 6:42am

It used to be that newspaper barons got rich after they bought the papers.

Now, with readership and advertising in a seemingly endless plummet, would-be publishers make their fortunes first.

Despite the red ink, newspaper ownership is still alluring for some of the wealthiest Americans.

Amazon founder Jeff Bezos is buying the Washington Post. Red Sox owner John Henry is buying the Boston Globe.

To the concern of many on the left, the Koch brothers are said to be mulling (a newspaper headline word if ever there was one) acquisition of the Tribune Co. newspapers, which not so long ago were owned by real estate billionaire Sam Zell.

A more progressive billionaire, Warren Buffett, started the current trend. Berkshire Hathaway has long owned the Buffalo News and recently purchased other newspapers, including the Omaha World-Herald.

Last year Berkshire Hathaway acquired 42 daily and weekly newspapers from Media General, along with two other daily newspapers in Texas.

Berkshire’s stock in the Washington Post will bring about $46 million in the sale to Bezos. (Also see Fortune’s discussion of why Buffett didn’t buy the Post.)

Buffett is a self-proclaimed lover of newspapers. The Kochs, ardent libertarians who have become increasingly active in politics, are suspected of having different motives for eying the Chicago Tribune and the Los Angeles Times.

Bezos issued a statement Monday saying, “The values of The Post do not need changing. The paper’s duty will remain to its readers and not to the private interests of its owners.”

However, he added, there will be change.

“The Internet is transforming almost every element of the news business: shortening news cycles, eroding long-reliable revenue sources, and enabling new kinds of competition, some of which bear little or no news-gathering costs,” Bezos said. “There is no map, and charting a path ahead will not be easy.”

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