case analysis of Buffett’s Bid for Media General’s Newspapers

Laura Finley states in her article “The Decline of Newspapers Is Bad for the US” that there has been quite a decline in newspapers in recent years. The cause of this decline is none other than our beloved internet. The biggest decline in newspapers was between October 2008 and March 2009. In this time period average newspaper sales decreased by 7.1 percent compared to the year prior. (14-15) Advertising revenues declined by an outstanding 30 percent in the first quarter of 2009! (15-16)

For newspapers they could partner with Google or Yahoo, sharing in the revenue or charging for premium news and opinions. One more option would be using Ebook technology and making their printed content readily available for quick downloads to Kindles and similar devices for a fee. Along with revenue earned by advertising the fees charged would help off set the costs of printing the news content in ink.

The media industry in the United States of America (US) is one such industry. As a powerful communication tool, the media has attracted many companies but only a handful has grown big. These media giants have dominated the local market and are currently seeking to conquer the global media industry in search of better profits.

estimated parameters (γ̂ ) from this first stage, we can then compute the Mills ratios λd(γ̂ Zn)

For decades, the Los Angeles Tribune was a driving force behind the news in Los Angeles. The emergence of the internet and of video news blogs and e-commerce have diminished the importance of printed media and greatly increased competition in the newspaper marketplace. Problems such as the rising cost of paper, and an aging customer based have affected the relevance of the Los Angeles Tribune. Also with the decreased advertising revenue, these have caused the paper to revise its goals.

Jerkiewicz, who worked in the newspaper business for 15 years, said the subscriptions have fallen drastically. In 1995 the newspaper has about 24,000 copies in circulation, but in 2010, only has 9,000 copies in circulation. The readers however, had not quit reading the news, but had turned to online sources. He adds that magazines and newspapers should have a strong digital marketing plan. He thinks that traditional printing will continue to decline, but will never die out. There will still be a market, but it will just be smaller than it is now. He says that Kindle had not run print books out of business, and it never will. He adds that printing is so cheap now that printers are going out of business because falling subscription levels are leading to

The early 1900’s could be called the consolidation era as technological changes and competition for advertising dollars increased the competitive drive for circulation numbers. In response to these changes, many newspaper chains grew as smaller newspapers were gobbled up and absorbed into the chains or became obsolete. Complementing the glitz of the roaring twenties, a new form of journalism emerged that appealed to a different type of reader with its illustrious smaller size. But, as economic conditions worsened into the 1930’s, circulation increased while revenues did not. This is mostly due to advertising dollars being split between radio and television as both gained in popularity. By 1945, newspapers had declined to their lowest and continued to drop further alongside continued consolidation efforts into the 1970’s. While daily circulation declined, chains and printing expenses grew. The closer we got to the turn of the century and the digital age, readership dropped significantly as young readers pursued other options for news (Dominick, 2013).

Problem Statement: The advent of internet brought about both challenges and opportunities for the newspaper industry. On one hand, it required redesigning a new product suited for online customers and on the other it was an opportunity to reach to 123 million potential customers in this category. Thus to keep up with the pace of emerging digitization in every field, like all newspapers, New York Times also added online reading in their product portfolio. However it only worsened the crisis the newspaper was already going through. The operating profit declined by more than 76% from 234Mn$ in 2010 to a mere 57Mn$ in 2011. The circulations were steadily declining and the new online advertising could not compensate for print advertising

The threat of bankruptcy has not subsided. First, even though digital advertising has been increasing, it is still failing to offset declining print advertising revenue. Print advertising has been decreasing since 2005. Reduced copies of the Times and a shift away from advertising budgets in print have been major causes of lost revenue. Second, competition from online media providers such as Huffington Post and BuzzFeed have been an obstacle the NYT has failed to overcome. Additionally, the use of mobile devices has decreased the need for print newspaper.

There are opportunities and challenges in today’s economy that have affected and still affecting USA Today. The internet has proving to be a challenge to the traditional newspaper. The Internet has introduced an interactive and accessible delivery platform than cannot be matched by a printed newspaper. Another challenge is Google and other non-conventional advertising businesses are tapping into the growing online advertising market. With such dramatic decreases in advertising revenue, newspapers have been forced to cut costs. And staffing was the first to go. “Of the top 25 newspapers in the United States, all posted declines in circulation except for The Wall Street Journal” (Arango, 2009). Readers want instant access to news. “Newspapers

This paper aims to answer the question “How can Fairfax continue to grow its news revenue in the digital age?”

The future of newsprint is no longer that of optimism as major media companies like Gannet, Tribune Company, and E. W. Scripps are getting rid of the newspapers and focusing much more on their expansions into television. Wall Street has been pressing newspaper companies for decades to increase and diversify their revenue. This has led to the major newspapers buying up competitors and moving to television and digital media, but with adjacent ad revenue lacking in the past few years, print media has become a weak link to these giants.

Over the last ten years there has been a significant reduction in the total number of newspaper copies circulated in the United States. The total number of newspaper copies circulated, both daily and Sunday in 2000 was 115,194,000. By 2008 this number had dipped significantly to 97,712,000. By the end of 2010 the total number of copies circulated was 43.4 million. Simultaneously, advertising revenues have also steadily declined over the years. Advertising revenues have dipped from $48,670 billion in 2000 to $24,821 billion in 2009. 2010 was relatively calm compared to the hair-raising dips in revenue of 2008 and 2009. Advertising revenues for 2010 dropped roughly 6.3 percent, to $22.8 billion. That was relatively low compared to the 26 percent drop in 2009. With the losses of the three previous years newspaper advertising is down roughly 48 percent, nearly half of what is was five years ago. Expenses continue to climb, especially for news print, where the price is running 20 to 30 percent higher than it was a year ago. Earlier rounds of staff cuts and savings from outsourcing have cycled

The following tables and data demonstrating the decline of print circulation and revenue of the newspaper industry

In the last 20 years the number of newspaper readers in developed countries, and accordingly circulation of the newspapers, is declining and public opinion about the future of the newspaper industry is pessimistic. However, the newspaper industry in Hong Kong is thriving with increased range offering of dailies and magazines.