The Resilience of Local Newspapers: A New Investment Perspective
The newspaper industry has faced significant challenges in recent years, with many proclaiming its decline. Even Warren Buffett, the legendary investor known for his quirky annual meetings that sometimes feature a newspaper toss, has deemed the business “toast.” However, a different billionaire is making a surprising investment that suggests local newspapers may not be as dead as some believe. David Hoffmann, a Florida investor with a net worth of $1.6 billion, has acquired over 5 percent of Lee Enterprises, one of the largest newspaper companies in the United States, and is eager to secure a controlling interest.
At 72 years old, Mr. Hoffmann candidly admitted in a recent interview that investing in local newspapers in 2024 might seem like a somewhat idealistic endeavor. Nonetheless, he passionately argues that print newspapers are integral to the fabric of American society. He also contends that Lee Enterprises is undervalued in the stock market, presenting a compelling financial opportunity.
“These local newspapers are truly vital to their communities,” Mr. Hoffmann remarked. “The landscape is evolving rapidly due to the digital age and technological advancements. However, I believe there’s a place for both print and digital formats, and we aspire to be part of that transition.”
Mr. Hoffmann is relatively new to the struggling newspaper sector. As the founder of DHR Global, an executive search firm, he transformed his early achievements into a diverse portfolio that includes a variety of businesses such as 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 extensive family of companies, headquartered in Naples, Florida, also encompasses a media group that has accumulated several small newspapers, including the Mackinac Island Town Crier in Michigan and Northern California’s Napa Valley Register, a former Lee newspaper.
According to a recent securities filing, a trust connected to Mr. Hoffmann’s family invested approximately $4 million to acquire a 5.2 percent stake in Lee Enterprises. This company, headquartered in Davenport, Iowa, is the fourth-largest newspaper chain in the nation, owning around 75 newspapers across 26 states, including prominent publications such as The St. Louis Post-Dispatch and The Buffalo News. Notably, the latter was purchased from Mr. Buffett’s BH Media Group in 2020.