Source: https://youtu.be/A6JUH_YF3gA?si=xCqYtxrq-Kk7Tb98

you want to get started right at six
uh on behalf of the omaha press club
education committee
uh who include wendy callahan hugh
cowden warren frankie
ellen gast steve murphy eileen worth and
myself chris olsen
i'd like to welcome you to this first in
a series of education seminars for the
1992-93 year
this evening's format for the most part
will be question and answer
between you and our guest panelists this
evening mr warren buffett
our subject will be dealing with the
news media
we ask that questions focus on our
guests dealings
or lack thereof perhaps with the news
media
in particular situations that brought
him into the news front
one journalist who has covered our guest
going back now nearly three decades
is robert door of the omaha world herald
who will introduce our speaker this
evening
thank you can you hear me
um i don't exactly know what to say
introducing
warren buffett before this group is like
introducing garth brooks at a country
music concert
in addition to dealing with the news
media i think most of you know that he's
an owner of news organizations
and has large holdings in the washington
post
capital cities abc and owns the buffalo
news
as a reporter who has dealt with warren
on a number of occasions i can tell you
what that's like
he is invariably accessible courteous
and straightforward but generally
non-talkative
you generally have to assemble your news
stories by
talking to other people and from the
public record
it's not that that keeps him out of the
press
i checked our computer today and since
1983
he has been in been mentioned in 862
stories in our newspaper
warren says he'll speak for about 90
seconds and then
turn to questions so
[Applause]
i feel fine
one of the comments that howard simons
used to make at the washington post
howard simons was the managing editor at
the time of watergate under ben bradley
later went on to run the neiman program
and uh
when people people constantly complain
to you and the news business know that
you know how can you write about
business when you haven't been in
business and
how can you write about sports when you
haven't been a football player yourself
and his retort to that was you don't
have to be dead to write obituaries
now the topic of dealing with the news
media seems to me that
probably the best advice i can give to
you who have to do that is that
it's really very much like the old
advice about making love to a porcupine
that you should be done very
uh but nevertheless i have
i have very fond memories
of the media because i wouldn't i
wouldn't be here if it weren't for the
newspaper business
my grandfather in 1905
bought the coming county democrat in
west point nebraska
believe it or not at west point which
was probably two thousand people in
those days
there were two newspapers the west point
republic common county democrat
his grandson learned something about
what it's like to operate into this
paper town from my grandfather but the
uh
these two newspapers existed and my my
grandfather had his family and my mother
and her sisters and brother they lived
over the uh
the newspaper and a little uh stringer
rooms on the second floor
and when my mother was 11
she literally could uh run a line of
type as a matter of fact the inner type
people who made light attacks in those
days
wanted her to travel to des moines to
exhibit
the operation of a linotype to prove
their statement that
such a simple machine is even 11 year
old could operate
and she would go down to the
train station where twice a day the
train would come through
and she would get on the train wanted to
stop because news was a little
sparse in west point she interviewed
people write stories
uh for the paper she sold labs for the
paper
it was all during high school years she
started the west point
uh high school paper and
when she got out of high school she was
16 but
she worked three years in the newspaper
to get the money
to go to a school to universe nebraska
when she got the university of nebraska
well the first thing she did was to go
to the daily nebraskan
and apply for a job and the fellow that
uh
interviewed her was my dad who was the
editor of the day of nebraska
now six months a few months later after
the first semester my granddad lost his
foreman who bought a paper and
used this nebraska himself and so he
called my mom and
asked her she'd come back to help out
with the paper uh
which she did so she took off semester
then came back to nebraska and
a year or so later married my dad but
uh the fact that two sides of the family
had a strong interest in the newspaper
business
coupled with a stock market crash i must
admit because my dad
actually wanted to go in the newspaper
but back in those days
um and he had an offer from greg from
private i think it was that uh
house where i probably told him bank of
his mind uh
and my dad was a blind editor in a small
town nebraska was going to go to work
for
but he had that idea at the time which
was long passed out of
favor that he would let his father who
paid for his education
called the shots on his first job and my
grandfather on that side
had different ideas okay omaha became a
stock salesman
and i was born in 1930 but i was
conceived
right around november 30.
those of you that put together one of
the life selling stocks in the fall of
1979
my perception will understand what
happened
so that's that's uh that's the story of
how i got here
and i spent the rest of my life trying
to figure out how to
how to avoid having the media and my
life and
i guess that's the subject of our
seminar uh this evening and i i think
the best way to do this is just
throw it open for questions i've been
around newspapers uh
a long time i worked for the lincoln
journal and college i worked
i delivered five newspaper routes when i
was in washington i had two tenths of
one percent of all the washington post
circulation
44 and i had this marvelous system
because i
delivered both the post and its
competitor the times herald so what
my service was a little sloppy and
people change famously
i found my smiling face there
there was a there was a publisher in in
alabama many years ago the city owed
he owed his prosperity to two fine
american institutions
monopoly and nepotism
i guess back when i was one of those
papers i forgot the monopoly aspect of
it
let's uh let's start in with some
questions and and uh
the tougher the better yeah i never
thought i'd
have a chance to ask you a question like
this but
i take the washington post national
weekly edition
and several years ago hobor hobart
rowan had in his column on the
second page i guess it is that
the real national deficit
that national debt was something in the
matter of
in the form of about 14 trillion dollars
now that was three or four years ago and
i was shocked by the statements
nobody ever seemed to pick it up and i'm
just wondering
was there nothing to it because i
ordered him
oh it's a good figure don't stop
i mean we've got 128 tax increases in
arkansas
the um apart was probably referring to
um
bart was probably referring to the uh
to the actual debt which may have been
three and a half trillion then yeah
plus he may have been taking
the present value of actuarial promises
to people in the social security system
and
when you have promised virtually
everyone
a retirement income which is geared to
inflation and you present value that you
get a huge sum
now on the other hand the federal
government obviously has the power
to tax people in those future years to
in effect make transfer payments
social security really isn't an
insurance uh
fund or or an insurance operation
started out with sort of that idea in
mind but it's
it's accepted as what they call an
intergenerational transfer payment now
and
and uh as long as the federal government
has the power to tax it may have to tax
more and more because it's under taxing
now in relation to its actual actuarial
costs
but it has enormous assets too
the value of all american corporations
is 4 trillion
the government gets 34 of their profits
the stockholders get 66
i'm leaving out state income taxes you
can say the government owns
34 of those corporations in terms of
their earning power
and it has the right to increase its
ownership merely by passing a bill that
they're going to get 40
of the profits or 50 of the profits so
it has enormous assets it has enormous
liabilities and
you can play around with either side of
the equation but
essentially uh the the country has more
taxing power than it's used which is why
people
don't get too upset about the 400
billion national debt they
they know there is untapped taxi power
now and maybe the
politicians don't have the will to
deliver the ability to do it
and that that keeps uh that keeps
government bonds
selling as as the same as roughly the
safest investments in the world
okay how about a media question here
well
yeah uh the buffalo news will does the
buffalo news enforce
canada and will you be participating in
that
endorsement uh the buffalo news
endorsers candidates that's a
uh i think they had that policy when i
went there but i know
that they would have that policy uh uh
under our ownership which began in 1977
uh murray light the editor of the
buffalo which just brought caught on
that's just a few weeks ago it's a
column every week and
by and large they determine their own
endorsements it's interesting
we had five congressional candidates
some years back
from from buffalo
they may not have that many of the
current census i'm not sure
but these are people one way or another
touched it the smsa up there's about
a million three so we made five
endorsements
i was 82 or so i think jack kemp was
still uh
even the congressman then but in any
event
we endorsed i think he was a congressman
because we endorsed barbara connell
jack camp hank knock and who else and
if you looked at these five fellows
voting records you could see no
similarity whatsoever so i
i discerned that essentially our policy
was at that time was to endorse
incumbents but
uh they uh
but we do have a policy of endorsing we
we think that
to give opinions on every other subject
in the world uh
daily uh that if we if we
back off getting an opinion on that it
doesn't seem to make sense i don't think
people pay much attention when you get
to presidential races i think
that the less the public is interested
in the race the more newspaper
endorsement means
probably doesn't mean the presidential
race i would guess the endorsement means
virtually nothing
but i still think we ought to do it
yeah what stories do you think the media
is really missing the boat on these days
i'm thinking particularly along the
lines of
business stories but feel free to take
it beyond that that
you think maybe they're blowing out of
proportion beyond their significance
or just ignoring a story that's maybe
right for exposure right now
right well the the the media
and i've got this question over the last
20 years and when i attend the
washington post they have what they call
a pug wash summer they always
i always ask about what are the big
stories and
and then you tell them and then they've
grown
the trouble is the big stories are
are are not the ones that happen like
hurricane andrew they're the ones that
happen over time
and they get very boring and there's and
there's never a news take
that really grabs you where you can say
it's dramatic i mean
no one has ever run a story on the fact
that you know i gained three ounces
today because i
ate 500 calories more than i burned up i
mean it's not
but if 20 years later i weigh 200 pounds
more than my weight coming in all of a
sudden that that because
might become a story but it's very hard
on anything that has a
a a very uh
slow glacial-like almost uh impact on
society
to write about those things it's also
difficult the legislative item
you know they they say that the problem
is that the
very often on the important questions
the policy cycle is longer than the
electoral cycle
policy cycle is also longer than the
news cycle and
it it's much it's easy to write about
them after they happen whether it's the
sml debacle or whatever
but uh writing about them while they're
happening
because they're happening one inch at a
time and
it you know it isn't that much different
today than yesterday it's very difficult
to cover them i mean obviously the the
the big story is is uh the fiscal
imbalance we have
at the national level but uh but it's
been around so long
what move can you say on it how much
different is it if the
deficit is going to be 378 billion to
377 million or something this year
very tough to write about those subjects
second thing is that sometimes they get
intricate
at the sun many many years ago 20 years
ago plus
uh i talked to paul win a marvel
marvel's editor
about the thrift uh
not the the industrial loan
scandal that you could see was going to
come in nebraska i mean if you looked at
the balance sheets uh of the which were
sketchy of the
industrial loans and you saw the
regulation and you knew there was going
to be a
very significant problem but we didn't
have anyone
at the sun really that could write that
we debated bringing in somebody from the
outside to hiring
somebody who knew a lot about accounting
and
and banking and so on to work on a
special assignment for it
because the old problem that's
demoralizing to your staff but the truth
is the sun i don't know how many reports
she had but
we just we didn't have it kind of depth
of
manpower or specialization that could
actually write that story it's easy to
write after it happened i mean when
commonwealth sightings happen or
something it's a cinch
but that is that is the tough problem
it's take the population problem over
time you know you know
uh malcolm started writing about it he's
taking a lot of reviews for a couple of
hundred years
and uh you know it's no fun to be a
hero 50 years after you die and
to come on the news some night you know
say we have this terrible problem
got 28 000 more people in the country
that we had yesterday you know
five billion and uh you know
run for uh planned parenthood whatever
it's a little difficult
and uh i think that the
better news organizations uh
depends on resources but but probably
the best attacks something like that
fight occasionally doing something in
the way of a special work
you know the long story i think the
philadelphia choir has done
two or three of them in the last five or
six years had an enormous
request for refunds uh and
those probably have some impact uh
but it's the undiscovered fraud or
something like that
you know we wouldn't it was just i knew
about it
i'd be shorting the stock or doing
something at the moment it's uh
it's hard to uh it's hard to come up
with a blockbuster
story that also has reader impact or
viewer impact and
uh there's there's not a great answer
for that
i'm talking to uh about
the business pages and one particular
story recently that which
uh berkshire hathaway has been involved
in the new personal
connection with wells fargo have you
lost your confidence in wells fargo
oh i i won't comment on the shots i'm
gonna let off the box
uh introduction on that sort of thing i
i never get into recommending uh
uh or or even commenting on on
individual companies
yeah if you were limited in your reading
to
two financial publications which two
would you buy
well i've answered that different
differently five or ten years ago i
i
i would probably go and i would probably
assuming i'd split it up between daily
and i'd probably go with the new york
times and
and
probably fortunate i'm i'm assuming i
could get all the things from value-like
and all that
statistics but in terms of news
publications probably be the case
i'll tell you an interesting story on
that about four years ago
five years ago to get the new york times
annual report
up in the lead paragraph of salzburger's
letter maybe the second paragraph
he said the new york times was
distributed on the same day basis to
virtually every important
metropolitan city in the united states
that time it wasn't distributed at all
and so i wrote a letter and i said dear
punch i said you know it's a shame you
have a qualifier
in there and i said uh what really i
find calling
is that i have a friend in des moines
which has a population half that long
and they are getting he is getting in
this case the
paper delivered daily and i said here we
are all mom we can't get it
and i sent a copy of my friend in des
moines a friend of mine who did not know
salzburger
joe rosenfield wrote him a letter and
said dear mr salzburg
he says i understand you're hearing
different not at all
he said it's true of course that
statistically
uh des moines is smaller than omaha
and and he said of course he said those
people spelled the name of their state
backwards
but he said he said i've considered his
request and he said
he said you probably should do it
because if you look at it as part of
your outreach program
and he said he said at first i'll only
read the horoscope but he said you know
later who knows what will happen so
anyway we started the new york times was
my letter of joe's but uh
the same day yeah bob
would you comment on your uh your
attitude or your policy i guess on
interviews you particularly do not
give interviews as i understand for
anyone who wants to write a
profile type interview i'm wondering how
long
ago you started that and why did you
start it and you think it's a good idea
well i would say i'd probably spend
i may be right i'm sure there's somebody
spending more but
i probably have spent more time
over the last 10 years if i probably
spent more time and even or over the
last year
with immediate people i mean reporters
uh
than any other ceo i know now you know
they think
each one takes up a lot of time i've had
five
profiles in the last four years by
some form of national media linda graham
in the la times
lj davis and new york times uh
i can't think of the gal's name for them
so
on top of that i get all kinds of people
calling me on special aspects of certain
things now
i don't know whether i average uh
two hours a week or something like that
but if i didn't control it it would be
it'd be 80 hours a week i mean the
number that want to talk
individually is you know is astronomical
and
i try to interviews i never knew lj
davis
or linda graham or those people before
but in terms of specific stories
somebody's calling about the snl's or
accounting or banks or
i try as much as possible to talk to
people that know a fair amount about the
subject because
otherwise you can spend 45 minutes or an
hour and you're basically giving a
course in insurance 101 or something of
a sort and in the end
they don't know if they're ready to
start i mean it's not knocking them for
it but they just don't i mean
some of the issues get pretty
complicated and i i'm willing to spend
45 minutes or an hour with somebody
that knows a lot about it already but is
is looking for the nuances and
that sort of thing so i spend a fair
amount of
time but uh oh i would say on some of
the stories that broke
we might have had a hundred calls or
something i mean if you take
10 minutes we've never had a public
relations function now solemn and they
have a dozen people are so in public
relations and when
when the scandal broke they took out all
kinds of temporary
help i don't know what the maximum
number of people they would have had at
one time
there but 12 was the normal compliment
in that department
and i wouldn't be surprised they got to
30 or 40 people
and they were answering calls all the
time and and essentially
we're not equipped to do it we don't
need to do it i find it interesting to
talk
to some journalists sometime but i don't
find it productive
or interesting to do it and
and that's you know the guideline is
if i know they're good you're going to
you want to spend more time with them
than if you aren't if they are and of
course i know some that are good but now
and i'm not inclined to do a lot of
experimenting i mean i don't go to a lot
of
restaurants either
we have a question over here yeah sure
here's a quote from the book freedom
feeding frenzy public officials and many
other observers see journalists as rude
arrogant and cynical given to
exaggeration
harassment sensationalism and gross
insensitivity how do you comment on that
well
i'm going to be wrong on this but
there's 1600 newspapers in the country
and uh the only one i can think of that
really has a media critic
that writes recordly is the l.a times
with david shaw and david writes some
very good stuff
in fact maybe they've done it i would
think it'd be a good idea to put some of
this together in a book
uh uh and david back
a few years back frank's a very good
company you know those only time stories
going forever so you could
cover a lot of ground and he uh he
interviewed 40 editors
uh all probably all of them with names
you recognized plus broke on a few
people like that
and asked them about the stories that
had been written about them
and of course they came up with all
those adjectives they uh
he found that the biggest problem that
they had was with inaccuracy and the
second biggest problem they had
was uh with a predetermined
uh conclusion that's the problem another
problem in talking to
anybody that calls so often you'll have
somebody who's already written a story
in their mind
they know what they want they're looking
for one sentence they can get from you
in a 45 minute interview
that they can use to butters the point
they've already arrived at so they are
really not interested
in going through a logical development
of the subject
but they're really quotation shopping
and and they can afford to spend 45
minutes with you and
uh to get the one sentence that they'll
stick in and
these editors in the char interview tom
winship of the global all the people you
know
and uh they that was their second
biggest beef and they all said
once they had it done to them and made
them a little more sensitive in fact one
guy said that
he thought he tried subsequently to
write every story and when he got all
through
the substitute either his brother or his
son or his mother depending on
what was appropriate in terms of age
bracket as the person in the story that
was being written about
and both to in terms of the spin he was
putting on it as well as
as well as the uh checking for accuracy
and all that sort of thing and that
uh well i think you get frankly i think
you get
people under deadline which creates a
certain pressure that you don't get will
say the magazine field or something of
the sort
you get sort of a bell-shaped curve of
human behavior
and and of talent which you get if you
look in the military or you look at
in a religious organization or business
or any place else you get
some people are very talented some
people that are
are not talented at all and you get a
lot in the middle
uh you get a lot of mediocrity uh you
get
overwhelmingly people but you get some
people that are super ethical you get
a great many that great majority that
are
reasonably ethical but if the story is
big enough they might you know forget to
mention the reporter for just a few
minutes into the interview
and then you get some that are a few
that are happily unethical
it's a it's it's not an
unusual selection
uh of people compared to uh other
activities and
and if you deal with a lot of people
over a lot of times you're gonna have a
lot of different experiences i mean i
forget that number bob had i'm sure i
didn't talk to all 832 times
but the uh you know overwhelmingly
the people are just as you would expect
the people the nebraska furniture mart
or their national independent or any
other place to be most of them are
trying to do their job well
and they've achieved various levels of
confidence partly related to their
talents partly related to their
experience
and you're going to have mostly good
experiences but we're going to have some
people at the mark
who have a bad experience when buying
something or you know
we will have the root sales person i
mean it's not
way different i don't think in the in
the press
if you have a lot of experiences you'll
have you'll have a few bad ones now but
the tough part about it is is that
essentially
there is no one uh
virtually with the exception of an
assassin
that can do you as much damage as
somebody can and the press if they do it
something the wrong way uh there are
many hearts
there are other people out there that
and that may be innocent or maybe it may
be intentional depends on the
circumstances
there may be doctors out there who reach
as much harm that you initiate the
transaction
you you uh you'll go see the guy and
then you may design the consent form on
what he knows you there may
you but by and large you have the
ability
to opt in or opt out of the transaction
you walk in the furniture market you get
a bad experience
most of the time you get a good
experience but and and
and you do not have the you do not have
the option
uh in the news business of opting out of
the story you can you can decide how
you're going to behave in relationship
to it
but you can't opt out so if if you do
get
the worst of either human nature or
reporting skills or something
there's no way that you won't be a
participant and that that's an unusual
arrangement society
one of the one person has a similar
power
but again largely involves
somebody else initiating a federal
prosecutor or any kind of prosecutor has
a decision to
prosecute or not prosecute the very fact
that process
is a semi i mean it has done a lot of
damage whether you're innocent or
or not finally and and so that person
has the power
simply by initiating something to cause
you all kinds of trouble
uh no matter how innocent you may be or
anything else
but that isn't used that extensively but
the news business has that part it's the
nature of educated away from it but
it is the nature of it and the other
unusual aspect of course the news
business
the newspaper business particularly is
that
i'm liking my grandfather's day there
are
1600 plus daily papers in the united
states
and essentially with exceptions you can
almost count on one hand
uh there are no competing
papers and the reason of course is is
that
the essential economics of the business
drive it toward one newspaper per
city or town or metropolitan area uh
nothing evil about it or you know
anything sort of it's just
it's what tom winston used to call
survival of the fast
and eventually there is no red ribbon in
in in the newspaper race there's a huge
blue ribbon which makes it enormously
valuable
and if you come in seconds you don't
come in and there's virtually no
business like that in the country
if you had sixteen hundred towns each
with one hamburger stand
each with one bank each with one woman's
shoe store
now each with whatever it may be
there would be competition that would
come in against them the guy that runs
the best shoe store in the country or
the best
hamburgers in the country would look at
the one the town were the worst and he
would come in on top of it
but it doesn't happen in this paper
business i mean ten years ago everybody
talked about how terrible the manchester
union leader was
running it and they said the worst
newspaper in the country is shane bragg
etc but all these great news
organizations with enormous resources
money coming out of their ears
would be directly putting another paper
in manchester new hampshire because they
would have gotten their ears been back
and they knew it so they they said we
can put out a wonderful newspaper bill
opens up a terrible newspaper
but they don't want to try and compete
with because it doesn't lend itself to
competition
and therefore you essentially have a
business
that will make a lot of money if you're
terrific it'll make a lot of money if
you're lousy
and there's no difference i mean the the
you pick a paper that you tell me you
think is lousy and i will show you one
with thirty percent profit margins and
and uh people always used to laugh at
roy thompson and he never what they
never saw the council post mount parole
his lifetime i met him over in london i
asked him one month in the council plus
that was in there but he knew he knew
the figures as he said
and uh i don't have any feelings about
that at all but a lot of people knock
towns and newspapers in those years but
they have the highest profit margins and
uh and all these people that wanted to
say
excellence comes or excellence produces
profitability and we're very
rich because we're very good it doesn't
hold water because
on that basis thompson was the best of
them all and
there is no correlation between problems
and excellence
so that means that how good a newspaper
is
depends entirely on the wishes of its
owner it's very interesting fun there's
really nothing
quite like that in american business i
mean if you set up a hamburger and you
turn out lousy hamburgers
you know mcdonald's is going to be next
to you or whoever and you won't be
around a year later i mean
competition but if you get terrible
service in a business or
prices are too high or anything else you
will be put out of business by somebody
else
unless you have a regulated monopoly but
then your profits are limited
if you have a uh provided company or
phone company or something
newspaper business you are as good as
you want to be and you're as bad as you
want to be
and there are 16 other characters and
there's a wide variety of
excellence among those papers but there
is no correlation
between excellence and profitability
that's something that publishers hate to
talk about
uh and maybe it's not a good idea not to
talk about it because if you can whip up
the
troops all the time tell me the only way
we're going to stay alive is if you guys
are terrific
probably a good perpetuator
it does it's not worn out yeah
would you apply that same those same
thoughts to
television journalism when will the
essential economics of the business
create one television
station what television the interesting
thing about
television you take 100 top markets in
the country and i have
and you look at who leads and then in
the nightly news broadcast
the network family news broadcast you
will find that
not so many years ago it was 100 out of
100 but i will bet it's 95 out of 100
but whoever leads
whether it's broke law or rather or
jennings will be whoever leads the
local news before that and in other
words it's defeating
the couch abc and new york in
philadelphia we had
as great a an audience for jennings
probably still do but i know we did in
the past
as rather and broke off combined but we
had this terrific feeding for multiple
moving forward
single most important factor tough on
the anchorman's ego
but it happens to be true now what's the
biggest factor
in what local news is watching it's the
beat in before that's why you want to
have oprah i mean it's
it's dynamite to have the the feed in
from
us uh you know a 40 share or something
like that coming from oprah
uh it you gotta say well this is all
circular you know you're gonna have
trouble at somebody incidentally good
morning
america and the morning show on nbc used
to get a benefit from the feed in from
people leaving the dials on carson from
the previous evening and it
it's it's amazing somebody must have sit
there dial up time where they wanted it
and just
kept running around the clock but uh
abc camp cities abc
is number one in local news
in every market they're in and they're
in new york chicago
l.a san francisco philadelphia houston
uh fresno raleigh durham to go down the
line
and uh you know it's hard for me to
figure out exactly what it is except
those guys are terribly smart
programmers i mean they are really
they're dynamite and uh
they also in buffalo there's a
i thought i've earned one that's been on
on the abc affiliate there for
30 years that people do build up real
following that's why anchor people
that's why an anchor person
who is drawing particularly in a larger
city a
a huge uh audience is worth a lot more
than
anybody in the newspaper it's kind of
sad for those of us who like newspapers
but but
you you can't you can you could be the
world's greatest
big barker owner or maybe the world's
greatest
uh newspaper writer and you can't make a
fraction
of what an anchor person can make that
draws an extra sharepoint or two
uh on the news in l.a here new york
uh when i watch those local news shows
in those
bigger cities i i have trouble seeing
the difference myself but uh
you know whether it's and i know during
this week's period that you know we jazz
them up
and obviously i've seen it done and uh
so you have to come to the conclusion
that the jazzing them up works
it doesn't have any effect on newspapers
out and newspaper television business
are two fundamentally different
businesses because basically people only
want to read one newspaper a day
whereas the television is and you can't
attract it by offering it for 20 cents
instead of 25 cents or 15 cents i mean
when you've gone through a paper you
nine people out of ten don't want to
read the second paper
but with the television station of
course you can jump from station to
station
now if the television set had developed
like the dcr so you had to make a
decision between vhs and beta
we literally had to go with one format
or another let's say when you bought
your television set let's say technology
forced you
to only buy one channel now would you
have 12 television sets around it you
know
a thousand bucks each you know to go
from certain
if the world would develop that way you
would have had one
network become preeminent and really
drive the others
out of business because you would have
gotten again a survival of the fattest
type thing where
once as it happened in dcrs where the
vhs format got
far enough out of the beta it puts the
other out of business but
essentially with television you can roam
among newspapers
and you can do it very easily and
they're just sitting there you don't
have to move you don't have to buy
another product or anything else and
that creates a whole different dynamic
it's an awfully good business but it's a
different dynamic
question yeah
you comment on another branch of
journalism i'm thinking now of the
journalistic
books such as michael lewis's liars
poker the deal with wall street and
related subjects
do you read them what do you think of
them no i i read them i read everything
i spent about seven hours a day reading
herself
and my family thinks it's more but the
uh
uh you know
the novel of the the the journalistic
book just like the doctor drama on
on television i just got into reading
the screenplay for barbarians at the
game
i know a lot of the characters in it i
read the book
and i'll tell you i mean what
10 20 30 million people are going to
form an opinion of henry kravis
ross johnson and all those based
entirely on how some screenwriter
wrote that and screenwriter sticks to
some extent the facts but
but even he makes it interesting he made
some caricatures to some degree and
uh i know the guy by the kind of bought
that racetrack brought that
screen to the brother of the screen
right to that for 25 000 bucks
he's trying to get henry kravis to uh
cooperate with him and he
said henry you know he said if you
cooperate on arnold schwarzenegger play
and if you don't cooperate about danny's
a veto plan
i don't know whether he cooperated or
not but he's getting the danny devito
treatment and
and and everybody that does i mean it is
it
so it having no one
the real facts about a number of books
uh you know i would say that
that you get very suspicious about
what you read in them but i still find
them interesting and i read them you
comment on wireless poker
well i i can i can say that i know some
things are
dramatically inaccurate but i but i i
mean
for example just the lead part of it
lewis
was never in new york and i know john
murray weather pretty
well and i think that it's very unlikely
that that took place but it's a good
story
and there's nothing you can do about it
once it's written
you know millions of people are going to
believe it's true and there's nothing
that john mary whether or not a good
friend or anybody else
can do about that i i personally would
get a lot of money that it isn't true
but i can't prove it either i mean i
wasn't standing on the trading floor
every minute of the day and
uh but it makes a better book
and there's an enormous temptation in
fact i mean i know
authors that are working on books where
the publisher is pushing the jazz up the
book it's just
you know they want to sell books and
after you've given somebody a half a
million or a million dollars i've had
big advances offered to me and
and uh i would never take an advance on
a book i might write a book but i
wouldn't i wouldn't take an advance on
it because i wouldn't want
uh i wouldn't want to feel indebted to
any publisher but i decided what i want
to do when i got all through but
but if somebody's giving you a half a
million dollars a million dollars
and uh they're going to expect a book
that's gonna sell
it's it's it's i i feel very sympathetic
to anybody particularly on a document i
mean
what you can do to somebody on that is
just it's terrible
it doesn't mean everyone that's done
this terrible anything like that but the
potential
to be taken and put on a screen you know
i don't know whether
nixon was down on his knees praying with
kissinger out in the during watergate or
anything
but it doesn't make any difference i
mean once you once you
put it on the screen that's what tens of
millions of people
will think that's what i personally hate
about a jfk i mean i
i think the odds of that being an
accurate rendition of history
are extraordinarily low but 20 years
from now more people
may believe that than any other
rendition
screen is really powerful i mean the
books are powerful too but
the screen is is incredibly powerful
yeah
what's your response to the criticism
that you use the media in handling the
solomon in the bottle well no there are
no question we had
we had to talk to people in some way
they're going to write something every
day and and
the first day i went in there we'd call
the press conference it was
a day in a sunday in august and
you know all the journalists a
couple hundred of them showed up in
shorts and
they find something out there and but
i had to tell them what i'd learned in
the previous 48 hours
to the best of my knowledge as to what
the situation was because
i couldn't be sure that every fact was
right and i told them that at a time but
i could tell them exactly what i
knew at that time i didn't have any
problem doing that and at least then
they had the opportunity of starting
from the same fact base
that i did and i had a further
opportunity in talking before congress
because we made these 50 or 60 paid
submissions which laid out every fact
that we knew
and we told them to be updated every
time we do additional facts but
there's no question that if you have a
scandal on your hands that
the best thing to do in my view is to
is to lay out everything you know
and never lie under any circumstances
don't pay any attention to the lawyers
people participate in half the audience
but
i'll get to the other half later but
if you start letting lawyers get into
the picture you know
they'll uh they'll basically tell you
don't say anything and
uh you know the world is out there
making a judgment about some very fast
story they don't quite understand anyway
you know if i know the names of these
people yet
you remember watergate originally i mean
it uh uh
after a while you started getting
getting the people located but it almost
took the urban committee to you know to
get things done
straight down for you and get these
characters coming and going and
people making self-serving statements
and the press getting it wrong sometimes
it's on
a lot of things and you've got to do the
best you can to get into your fact base
the biggest problem of course is if you
get surprised
and you find out something you have told
them is wrong and something major and
i think that is to just lay it out and i
think it'll be obvious that you probably
didn't
know earlier but right straight through
i just figured that that
if we told everything we knew we we gave
we weighed attorney client privilege we
gave all our material to the government
that
uh a lot of that you know became
publicly available
immediately we ran into people obviously
that were using the president otherwise
we had short sellers in the stock
that would call senate committees or
subcommittees
called the press told me how many times
tell me about
what told the press guy solomon about
same voice calling him with you know
four or five different rumors
to start that foreign exchange problems
or all these kind of things and
it's uh you know it's a it's a
multi-dimensional fire for
for a while and you can't do it
perfectly but you'll never get tangled
up if you just
basically lay it out as you see it i
do i mean it's very fortunate when you
aren't implicated in any way yourself
it must be a different thing if you're
john dean or something
[Music]
but incidentally i uh my friend jim
burke
had a problem with tylenol and he
ignored basically ignored the lawyers
and he told his product liability and
everything out there but
jim uh uh basically just kept playing
out as he saw
and he uh you know he's up 18 hours a
day and all that doing it for
only lasted about five or six weeks and
it's not a bad example
the problem your problem is you get into
what everybody is called
um lowest common denominator journalism
i mean somebody is going to write it
and then once they write it it kind of
moves along the food chain
and uh the uh
uh and arthur ashe you know i personally
uh
uh i would write that story myself
now if i'm editor or some major paper
and every other paper in the country's
carrying it or i'm the i'm the news
director
at the network uh you know i
i i think that the momentum tends to
push it along once it starts
and but i i don't think it really
uh you know i i don't i i'm not that
concerned there's nothing in the
constitution about the people's right to
know i mean you know
we trot that out occasionally when we
want to justify something we've done
that we
feel like we really shouldn't have but
the uh but there is
there's absolutely nothing in there
about people's rights nothing i mean
it's a but you've got to
god is the right to say something but
but i don't have any right to know
as far as i'm concerned about
constitutionally or anything in any
other way about
arthur ash's uh uh uh hell
and he's not playing tennis he's not
taking my daughter out i mean oh yeah
that's just not
not a concern to me but it it will keep
coming
i mean it is it's not going to stop
yeah is the media a good investment
today
and if not what general areas might be
without many
specific companies well i uh i wrote a
section in the 91 annual report of
berkshire which we'll be glad to send
you a bob media investment and what i
say is it's still
it's it's terrific but not quite as
terrific as it used to be
it's a great business compared to other
business i mean the return earned on
capital actually employment it's a very
great business
but it is not quite as great as it used
to be
and uh you know that's one of the
reasons that the new
american newspaper publishers
association is fighting the telephone
companies for example
they uh they uh are not wild about the
idea of
freedom of speech for the fellow
companies but they uh
uh the you know nobody is one otherwise
competitive
but i was my friend tom murphy uh
watching a uh
monday night football game like my
sister's house terrific
45-inch picture or something in this
game i said to murph
i said you know and this was abc of
course i said
what a terrific job they're going to
further pictures and i could better
learn
eight inches black and white of course
when there were only three of us using
it and when anheuser wanted to solve
they've aimed us you know
when general motors want to sell buicks
they came to us and every year we just
raised their prices and it was a great
business uh that business has gotten
diluted there were three electronic
highways in the united states 30 years
ago three electronic highways
pumped into virtually every household in
the united states think of that
the short qua the short uh
factor in the in distribution
were these highways there were lots of
there's lots of talent lots and lots of
heavyweight fighters out there
lots of people watching at the other end
only three highways
the highway by the way makes all the
money then now
there are all kinds of highways so mike
tyson makes all the money or
hollywood or whoever because talent is
the short
uh commodity now and we're just another
electronic highway
and that diminishes it's still pretty
good incidentally but but it's
it's not like it was the newspaper is
terrific but of course
the u.s postal service is the biggest
threat to the newspaper business
you know i used to say to the washington
post they would terribly worry about the
washington
you know once they got doomsbury or
whatever you know
you know let the washington star have
top draft pick of
a hundred journalists any place in the
united states all i gotta do is just
name the names they all come over the
washington star
it's not worth an eighth of a point on
the washington post stock
but add though i mean let me let the us
postal service
drop its third class rates 20
and you can have a very appreciable
effect on the paper as
as you can if the bells get into the
classifying zone
that's where the competition comes okay
the second part of the question yeah
what are we by tomorrow morning right
okay what are general areas
yeah i uh i say all i want to say about
that in the
in the angry quarterback virtually
uh you've written pretty extensively
about the impact the emotions have on
the market
uh to what extent can the media
influence those emotions
on a macro basis and then would you
comment on
some specific and you don't have to
comment on ps group but
um there was an article that drove it up
and then there was some comments by
somebody in
usa today that shorted it and drove it
down so
what extent does the media have uh
influence on the market well media
generally is on a very short time cycle
so they
it's hard for them to say anything of
any important i mean what i really want
to know is
what's going to be i mean if you bought
coca-cola in 1990
and you paid 40 dollars you got a
million eight you know for that forty
dollars now
i wanna know what the next coca-cola is
but but that that is
that's a little slow and unfolding for
the uh for newspapers so you're not
going to get a lot out of that
but there is this interesting aspect
let's think about this on the way down
uh
you know basically news people and i
are in the same business i mean i go out
and i try
to report essentially on a company
i try to evaluate favorite values
management i try to value its
competition
it's product it's service prices it's
cost everything
i'm trying to do a repertorial job on
that business i never heard of it before
and that is my job i assign myself a
story
and every morning when i come to work
and it made me triggered by some event
but i assigned myself a story
a story always happens to me what is x
worth
but that's the story and in 1973 when we
were buying the washington post company
with a total valuation of 80 million
dollars
and woodward was working on watergate
let's say water
let's say the woodward was assigned and
tell the story just exactly like bradley
come in and said woodward
i want you to spend the next week doing
a story on what is the washington post
company worth
now if woodward had that assignment and
he got out for the week
he didn't come in with a pretty damn
good story at the end of the week he
would have come in with a story that
would have said the washington post
company is worth about 400 million
and it was selling for 80 million now if
he'd assigned himself
that story he would have made a ton of
money it's assigning yourself the right
story
and i i said this to him i said why
don't you just sign yourself a story to
work on between six and seven in the
morning everyone always they always want
me to tell them what stocks to buy i
always
i would say well i'll let you assign
yourself the story and work on it from
six to seven or
one hour a day on your own assignment
and the other eight or ten hours you
work for bradley
and essentially that's a lot easier
story than
the stories he's trying to get he's
trying to get the story of what casey's
thinking at the cia or something you
know or
what he's mumbling up in this hospital
room and uh
it is a hell of a lot easier to figure
out what the washington post companies
were
they had at that time four big tv
stations you go interview some tv
brokers you find out what other sales
were i mean
it is not it is not a tough story and
the interesting to me is that all of the
journalists
that have covered you know berkshire
over 25 years they come in they write
about berkshire
i mean but virtually none of them have
bought the stock
and it's usually not against the code of
ethics i mean as long as they as long as
they tell
in most publications certainly all the
big magazines and all that all they have
to do is
give the information to their their
editors to what they're doing and
not buy right before an article and all
that sort of thing in a whole long time
but here are all these people they're
doing all this work on berkshire
you know they're trying to figure out
what i'm thinking and what we're doing
and they look at the record but they
never do anything about it they just
they write a story and then they
they go on to something else and uh i
just say that you know somehow they
their brain isn't quite connected their
eyeballs sometimes
they can't do a thing
90 of investing is assigning yourself
the right story the reporting of it is
fairly easy
time for one more question okay
well you know i've sat in all these
things every four years where
for rooney since that we always go
through all this and it's
you know it is very tough because people
do love the horse race aspect of it and
journalists
love the horse race aspect of it that's
why you know the journalists all
basically were you know or
orgasmic when pros and i mean that
really made it interesting
everything was good for the country or
anything like that but it was delicious
and there's a lot having you you know
you grab the paper every day and you
and
i see a number of papers that are making
uh
real i think very tough television
except on the news shows i mean i think
frankly in those shows are very good i
watch them every week but i think
i think in the network news it's very
tough and i don't think i don't even get
very much about the campaign on the
network news
i think some papers do a particularly
good i'd say the new york times and the
post do a very good job on
on covering uh what the candidates do if
you get that washington post weekly that
was referred to which i get
uh there's a lot in there and then they
make a real attempt to do it whether
people
but the readership is of that compared
to jennifer flowers i don't know
but uh but they the the the column
inches are there and
some quality reporters are working on it
and
uh it's available
you won't get it on network news
otherwise just
22 minutes doesn't doesn't really do it
[Applause]
uh many of you this evening we'll be
joining mr bucket for dinner up at the
club i ask you all not to crowd into one
elevator
and there will be plenty of time to get
up there um we're adjourned
i thank you again mr buff thanks