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

• Manager: Stanford Lipsey (Assumed lead role later)
• Concept: Moat
• Source: 1977 Letter, 1978 Letter, 1979 Letter