A decade ago, Warren Buffett expressed his pessimism regarding the future of newspapers, including The Buffalo News, a local U.S. daily owned by his Berkshire Hathaway group, reports the Financial Times.
“Newspapers have a terrible future,” he told CNBC at the time. “We own The Buffalo News and we hope to be the last man standing. I would say we might very well be.”
Now, we see that newspapers’ traditional sources of revenue have been hacked on by online competition. However, several of the world’s super-wealthy have stepped in to fill the financing gap.
Among the most prominent funders are Marc Benioff, co-chief executive of US software company Salesforce, and his wife Lynne; Laurene Powell Jobs, widow of Apple co-founder Steve Jobs; and Jeff Bezos, founder and chief executive of Amazon. They have bought stakes in, respectively, Time magazine, The Atlantic magazine and The Washington Post newspaper.
Even among high-profile publications, the billionaire owners have much to do to shore up the traditional media’s collapsing finances. When John and Linda Henry, owners of the Boston Red Sox baseball team and Liverpool football club, acquired the venerable Boston Globe from The New York Times for $70m in 2013, they paid about a 20th of the $1.1bn the Times had spent to acquire the newspaper in 1993.
Another early super-rich backer of the media in the online age was Australian internet entrepreneur Graeme Wood, who in 2013 supported UK newsgroup The Guardian’s digital expansion into Australia with a $20m loan. His move was an attempt to unshackle his country’s news cycle from the dominance of the Rupert Murdoch-controlled News Corporation and of Fairfax Media, then owned by mining magnate Gina Rinehart. “I think he was doing that out of completely philanthropic aims because he believes in diverse media,” says Alan Rusbridger, then editor of The Guardian and now chair of the Reuters Institute for the Study of Journalism.
“There are a few people who can make themselves rich by buying newspaper titles and cutting costs, milking the analog version of it, but I don’t think there are many who have made themselves rich through a full digital transformation,” says Rusbridger.
However, problems still exist and one way to avoid potential problems, some argue, is through non-profit institutions that collect donations and distribute them independently.
“I really hope someone is hard at work at fixing the revenue model so news can become self-sustaining again,” says Lakshmanan. “But in the meantime, we can’t just sit back and watch it die.”