This week, both billionaire Berkshire Hathaway chairman Warren Buffet and White House press secretary Robert Gibbs made clear that the newspaper industry shouldn’t expect the government or the country’s most influential investor to alleviate its financial woes.
At Monday’s White House press briefing, CNN correspondent Ed Henry asked Gibbs if the Obama administration would consider a bailout for newpapers. Henry cited the precarious situation at the Boston Globe as evidence that “there are a lot of jobs at stake” due to the financial problems in the newspaper industry.
Though Gibbs said he hadn’t “specifically” asked the President about a newspaper bailout he called providing assistance to news businesses a “tricky area” for the White House, due to “differing roles” of the government and the press. The President “obviously… believes there has to be a strong free press,” Gibbs acknowledged, adding that “there’s a certain concern and a certain sadness when you see cities losing their newspapers or regions of the country losing their newspapers.” However, don’t expect much intervention from Obama’s administration when it comes to print media’s plight: “I don’t know what, in all honesty, government can do about it,” Gibbs concluded.
Meanwhile in Omaha at the annual Berkshire Hathaway shareholder’s meeting, Buffet said his company wouldn’t buy “most newspapers in the United States… at any price” since “they have the possibility of unending losses.” Buffett has recently shown his support for other industries that have been hit by the recession, investing heavily in the financial services sector last fall. Apparently, this approach doesn’t extend to newspapers. Buffett explained his grim view of the industry, saying that newspapers are growing less essential to readers and that he can’t “see anything on the horizon that’s changing.” One of the directors of the Washington Post Company, Buffett is widely considered to be one of the country’s best, most influential investors. In short, his condemnation of newspapers carries plenty of weight.
Last year, was the worst on record for the newspaper industry. Recently released figures from the Newspaper Association of America show that total print and online advertising revenues declined 16.6 percent, or $7.5 billion in 2008. This drop included a 1.8 percent decrease in online revenue, which many see as the only potential salvation for newspaper companies. According to the latest Audit Bureau of Circulations reports, daily newspaper circulation has been down 7 percent in the past six months.
Of course, all that plummeting revenue and diminished readership has resulted in job losses, as well: Last month, the American Society of News Editors published the results of their latest census, which showed that newsroom employment declined 11.3 percent with 5,900 newspaper employees losing their jobs. That’s more than double the number of newsroom workers who lost jobs in 2007.