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Buffalo Evening News

The Buffalo Evening News is a major daily newspaper in Buffalo, New York, acquired by Berkshire Hathaway in April 1977 for approximately $33 million.

📝 Acquisition and Early Challenges

  • Dominance: At the time of purchase, it was the dominant evening newspaper in a one-newspaper market during the week, but faced a competitor on Sundays.
  • The Sunday Edition: Shortly after acquisition, the News launched a Sunday edition to compete more effectively.
  • Litigation: This move triggered a major anti-trust lawsuit from the rival Buffalo Courier-Express. Buffett stood by the decision, famously stating that the Courier-Express was trying to "enjoin competition."
  • Economics: This was a classic "moat" acquisition, where Buffett recognized the powerful economics of a city's dominant newspaper.

🏆 Victory and Rebranding (1982-1983)

  • The Shutdown: In September 1982, the rival Buffalo Courier-Express ceased publication, leaving the News as the sole daily paper in Buffalo.
  • Rebranding: The paper was renamed The Buffalo News.
  • The Result: By 1983, the paper had turned from heavy losses to significant profitability. It achieved the #1 weekday penetration ratio in the United States.
  • Leadership Transition: Long-time publisher Henry Urban retired in 1983 and was succeeded by Stanford Lipsey. Murray Light served as Editor.

🧠 Strategic Lessons

  • The News Hole: Buffett insisted on maintaining high editorial content even during the "dark days" of competition, ensuring the paper's long-term franchise value.
  • Permanent Capital: Berkshire's ability to withstand years of losses allowed it to outlast its competitor.

🔗 Connections

📚 Historical Mentions & Citations (3)

Click a reference document below to expand and read the exact paragraph(s) containing this concept in the archive.

📜
1977 LetterReference Only
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Mentioned in this document.

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📜
1983 LetterExcerpt Available
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| Earnings Before Income Taxes | Net EarningsAfter Tax | Total | Berkshire Share | | | | | :--- | :---: | :---: | :---: | :---: | :---: | :---: | | Berkshire Share | 1983 | 1982 | 1983 | 1982 | 1983 | 1982 | | | Operating Earnings: | | | | | | | Insurance Group: | Underwriting | $(33,872) | $(21,558) | $(33,872) | $(21,558) | $(18,400) | | | $(11,345) | Net Investment Income | 43,810 | 41,620 | 43,810 | 41,620 | | | 39,114 | 35,270 | | | | | | Berkshire-Waumbec Textiles | (100) | (1,545) | (100) | (1,545) | (63) | (862) | | Associated Retail Stores | 697 | 914 | 697 | 914 | 355 | 446 | | Nebraska Furniture Mart(1) | 3,812 | -- | 3,049 | -- | 1,521 | -- | | See’s Candies | 27,411 | 23,884 | 24,526 | 14,235 | 12,212 | 6,914 | | Buffalo Evening News | 19,352 | (1,215) | 16,547 | (724) | 8,832 | (226) | | Blue Chip Stamps(2) | (1,422) | 4,182 | (1,876) | 2,492 | (353) | 2,472 | | Wesco Financial — Parent | 7,493 | 6,156 | 4,844 | 2,937 | 3,448 | 2,210 | | Mutual Savings and Loan | (798) (6) | (467) (2) | 1,917 | 1,524 | | | | Precision Steel | 3,241 | 1,035 | 2,102 | 493 | 1,136 | 265 | | Interest on Debt | (15,104) | (14,996) | (13,844) | (12,977) | (7,346) | (6,951) | | Special GEICO Distribution | 21,000 | -- | 21,000 | -- | 19,551 | -- | | Shareholder-Designated Contributions | (3,066) | (891) | (3,066) | (891) | (1,656) | (481) | | Amortization of Goodwill | (532) | 151 | (563) | 90 | (563) | 90 | | Other | 10,121 | 3,371 | 9,623 | 2,658 | 8,490 | 2,171 | | | Operating Earnings | 82,043 | 41,102 | 72,410 | 27,742 | 68,195 | | | 31,497 | | | | | | | Sales of securities and unusual sales of assets | 67,260 | 36,651 | 65,089 | 21,875 | 45,298 | 14,877 | | Total Earnings | $149,303 | $ 77,753 | $137,499 | $ 49,617 | $113,493 | $ 46,374 | In addition to the figures already supplied, information regarding the businesses we control appears in Management’s Discussion on pages 40-44. The most significant of these are Buffalo Evening News, See’s, and the Insurance Group, to which we will give some special attention here.
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📜
1984 LetterExcerpt Available
▼
In addition to the figures supplied at the beginning of this section, information regarding the businesses we own appears in Management’s Discussion on pages 42-47. An amplified discussion of Wesco’s businesses appears in Charlie Munger’s report on pages 50-59. You will find particularly interesting his comments about conditions in the thrift industry. Our other major controlled businesses are Nebraska Furniture Mart, See’s, Buffalo Evening News, and the Insurance Group, to which we will give some special attention here. Buffalo Evening News
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