Billionaire wants to buy parent company of Buffalo News

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Reporting, analysis and commentary
by Jim Heaney, editor of Investigative Post

A Florida billionaire is making noises about buying Lee Enterprises, and with it, The Buffalo News.

The New York Times reported last week that David Hoffmann, worth $1.6 billion, has bought 5.2 percent of Lee’s stock and wants to obtain majority interest. Hoffman told The Times that while he recognizes the newspaper industry’s trend to digital, he believes print still has a future. And he believes in local news.

As The Times wrote: “He wants to preserve community news — including more local sports coverage.” 

The Times provided this background on the 72-year-old investor:

Mr. Hoffmann is a relative newcomer to the struggling newspaper industry. The founder of DHR Global, an executive search firm, Mr. Hoffmann parlayed his early success into a sprawling hodgepodge of companies including Mitch’s Cookies, Oberweis Dairy, the Florida Everblades minor-league hockey team and Linstol, a manufacturer of in-flight airline amenities like blankets and headsets. His family of companies, based in Naples, Fla., also includes a media group that has accumulated a handful of small newspapers, including the Mackinac Island Town Crier on Mackinac Island in Michigan and Northern California’s Napa Valley Register, a former Lee newspaper.

The Times went on to quote Hoffman as saying he’s not looking for a hostile takeover.

“We want it to be friendly,” Mr. Hoffmann said. “They have called us, as you would expect, and said, ‘What are you guys doing?’ And we’re going to sit down with them and tell them our story.”

Lee owns some 75 daily newspapers, many of them, including The News, purchased four years ago from Warren Buffett. The chain is nearly $500 million in debt to him and losing money – $3.7 million last quarter. 

I suppose it’s possible Hoffman gets his wish, but I think it unlikely.

Lee’s response to its financial struggles has followed the playbook used by other chains: cut staff, raise revenue through the sale of real estate owned by the newspapers and seizure of pension assets, and outsource printing, most recently in St. Louis. That’s the way it’s playing out in Buffalo.

As I recently reported, The News cut its newsroom staff again, down to 45 jobs. That’s reduced from a high of over 200 in the 1980s. Circulation has tumbled over the years, from a high of more than 300,000 daily and 400,000 on Sundays, to about 80,000 print and online today.

I’m sticking with coverage of the news media for the balance of this post, starting with commentary from former News Editor Margaret Sullivan on Buffett’s sale of The News to Lee.

To his credit, Buffett never interfered in the editorial policy of the paper; he certainly never killed an editorial, as billionaire owners did this week at the Los Angeles Times and the Washington Post.

But Buffett did betray us eventually, by selling The News to a chain owner, Lee Enterprises, a few years ago. The News had served him well for decades; it had more than 30 percent profit margins for many years, and effectively sent a million dollars a week to Omaha … 

Since then, Lee has pretty much wrecked a community treasure by — for example — moving its printing to Cleveland.

Sullivan went on to lament the decision by the owners of The Washington Post and Los Angeles Times to kill their papers’ planned endorsements of Kamala Harris for president. She termed it “an appalling display of cowardice and a dereliction of public duty.”

She is not alone.

Marty Baron, whose tenure as Post editor included Donald Trump’s time in office, characterized the decision as “disturbing spinelessness at an institution famed for courage.”

Bob Woodward and Carl Bernstein, the Post’s most celebrated journalists for their work uncovering the Watergate scandal, told CNN: “We respect the traditional independence of the editorial page, but this decision 11 days out from the 2024 presidential election ignores the Washington Post’s own overwhelming reportorial evidence on the threat Donald Trump poses to democracy.”

Former U.N. Ambassador Susan Rice said: “So much for ‘Democracy Dies in Darkness.’ This is the most hypocritical, chicken shit move from a publication that is supposed to hold people in power to account.”

And this from conservative commentator Bill Kristol: “It’s about the most consequential American entrepreneur of his generation signaling his submission to Trump—and the message that sends: If Jeff Bezos has to be nice to Trump, then so do you. Keep your nose clean, bub.”

The Guardian has produced a number of good stories and commentaries – not behind a paywall – on the situation. Check out this, this and this, another take from Margaret Sullivan.

Then, on Sunday, the Guardian was among the news outlets to report that hours after The Post announced its non-endorsement, executives from the space company owned by Jeff Bezos, the newspaper’s owner, met with Trump. The Guardian noted: “Amazon and the space exploration company Blue Origin are among Bezos-owned businesses that still compete for lucrative federal government contracts.”

Not all newspapers are shirking: The New York Times endorsed Harris last month, as did the Philadelphia Inquirer last week.

Trump, of course, has been menacing the press since he first ran for president. Enemy of the people, etc. He’s attacked newspapers and broadcasters alike.

Last week, CNN reported:

In the past two years, Trump has called for every major American TV news network to be punished, according to a CNN review of his speeches and social media posts.

He has imprecisely but repeatedly invoked the government’s licensing of broadcast TV airwaves and has said on at least 15 occasions that certain licenses should be revoked. His anti-broadcasting broadsides – against CBS, ABC, NBC, and even Fox – are almost always in reaction to interview questions he dislikes or programming he detests.

Trump’s threats against CBS have been particularly intense in recent weeks. He has railed against “60 Minutes” for editing the news magazine’s interview with Vice President Kamala Harris. The venerable program said Sunday that his claims are false, but on Monday he continued to bring it up on the campaign trail, and his legal team sent a threatening letter to CBS.

“It’s so bad they should lose their license, and they should take ’60 Minutes’ off the air,” Trump told right-wing podcaster Dan Bongino last week.

Elsewhere, NPR speculates on what awaits the press if Trump is elected. The headline says it all: Jailed reporters, silenced networks: What Trump says he’d do to the media if elected.

In other media-related news:

• A growing and substantial number of Americans say they avoid the news. So much for an informed electorate.
• The Medill journalism school at Northwestern University just released a comprehensive and sobering report on the state of local news.

Finally, I just finished reading The Times: How the Newspaper of Record Survived Scandal, Scorn, and the Transformation of Journalism, by Adam Nagourney. A lively read that chronicles the evolution of The New York Times over the past four decades from the Grey Lady of the print era to the world’s most successful digital news publisher.

The Sulzberger family emerge as all-too-human heroes who navigated The Times past the inertia that has paralyzed most others in the newspaper industry while maintaining high editorial standards. 

The moral of the story: leadership matters, which helps to explain why most of the legacy media – including, of late, the Washington Post and L.A. Times – finds itself in trouble.

Jim Heaney