Warren Buffett Pans Future of Newspapers
Hypergene MediaBlog has posted an excerpt from Warren Buffett’s Q&A at the annual shareholders meeting in Omaha. Read the newspaper stuff at Hypergene–below is the gist of it which they pulled from the longer and also very interesting transcript at bankstocks.com.
What multiple should you for a company that earns $100 million per year whose earnings are falling by 5% per year rather than rising by 5% per year? Newspapers face the prospect of seeing their earnings erode indefinitely. It’s unlikely that at most papers, circulation or ad pages will be larger in five years than they are now. That’s even true in cities that are growing.
But most owners don’t yet see this protracted decline for what it is.
Then Buffett takes a poke at media for the coverage of the tax structure, saying:
The tax breaks for the wealthy that have been enacted are extraordinary. Most members of the Forbes 400 pay a lower portion of their income in taxes than the receptionist on our office does. That wasn’t true 30 years ago–and it should not be true in a rich society. In 2004, my tax rate was the lowest of anyone among the 15 or 16 people who work in our office. And that wasn’t because of any tax shelters I invested in (I don’t own any tax shelters) or any special tax advice I got. It’s crazy.
The media hasn’t conveyed the extent to which the typical individual hasn’t shared in the prosperity of the past 10 years as much as the wealthy have.
