Buffett’s Newspaper Man, Stanford Lipsey
Another native Omahan who has achieved great things is Stanford Lipsey. This publishing scion has enjoyed a full career in journalism. A good deal of his newspapering life has been associated with billionaire investor Warren Buffett. The two men are good friends. Lipsey retains strong ties to Omaha, where Buffett and Berkshire Hathaway are based. This story appeared in The Reader (www.thereader.com) on the eve of the annual Berkshire shareholders meeting, which draws tens of thousands to Omaha for what’s been described as a Wooodstock for capitalists. Lispey and Buffett made journalistic history back in the early 1970s with the Omaha Sun Newspapers, when an investigative report into Boys Town’s vast financial holdings and wealth ended up winning the paper and its publishing team a Pulitzer Prize. Buffett later hired Lipsey as publisher of the Buffalo News, a position he continues in today.
NOTE: See my new story on this blog about the Omaha Sun’s Pulitzer winning report on Boys Town during Lipsey’s reign as publisher. The story is titled “Sun Reflection.” Lipsey is back in Omaha for the 2011 Berkshire Hathaway confab and for an exhibition of his photography at KANEKO. He’s also participating in a panel discussion at KANEKO about a life of creativity in business. For more on KANEKO, see my story titled “Open Minds.”
Of course, Warren Buffett and Berkshire are much in the news these days because of the scandal involving David Sokol, the once heir apparent to Buffett as head of Berkshire.
Buffett’s Newspaper Man, Stanford Lipsey
©by Leo Adam Biga
Originally published in The Reader (www.thereader.com)
Omaha native and veteran newspaper publisher Stanford Lipsey has seen and done it all in a six-decade journalism career that’s closely allied him to Berkshire Hathaway CEO Warren Buffett.
Lipsey climbed the ranks at the now defunct Sun Newspapers in Omaha to become owner-publisher. In 1969 he sold the Sun to Buffett, but remained as publisher. In 1972 Lipsey was at the helm when the Sun, acting on a lead from Buffett, poked into the finances of Boys Town. The Sun’s probing led to sweeping changes at the charitable organization and earned the paper a Pulitzer Prize.
Buffett later appointed Lipsey publisher of the Buffalo (N.Y.) News. Lipsey is still its publisher today. In 1988 he was named a Berkshire vice president. The old friends, inducted in the Omaha Press Club Hall of Fame in 2008, may or may not get together this weekend at Berkshire’s annual shareholders’ meeting in Omaha.
Lipsey, who got his start as a photojournalist, came out with a photography book, Affinity of Form (2009, powerHouse Books), that can be purchased at the Qwest Center exhibition hall during the May 1 meeting or at the Bookworm. He still shoots, only with digital equipment, not the Brownie or Speed Graphic he began with. Instead of snapping news pics, he makes fine art images for galleries and books.
His life as a news hound has spanned hot type, clattering typewriters, digital off-set presses, computerized newsrooms and newspaper web sites. His training began at Omaha Central High and the University of Michigan. While in the U.S. Air Force he served as editor of the Offutt Air Force Base publication Air Pulse.
He began working at the Sun in 1952, learning the business inside and out. Lipsey said the Sun “was small enough so I could do it all.” He considers a well-rounded newspapering experience an “invaluable” education most publishers “don’t have” today. “In the large daily business hardly anybody has it. They come from one field. They were either an editor or an advertising manager or a business manager, but they don’t have the crossover background between news and advertising,” he said.
Buffett said, “He’s a real journalist but he understands every aspect of the business, and that was one of the considerations why we wanted him up in Buffalo.”
Under Lipsey’s watch, managing editor Paul Williams guided the Sun expose of Boys Town when the still single-campus, dormitory-style, boys-only home used weepy mass mail appeals to portray itself as destitute. The Sun revealed Boys Town sat on a $162 million endowment dwarfing that of many national institutions. Property and building assets created a total net value in excess of $200 million.
“We knew there was a story there, but we didn’t know how to get it,” said Buffett. “I was sitting at home doing the tax return for my own tiny little foundation and there was something in the instructions that said my tax return would be public. All of a sudden it dawned on me if a tax-free institution such as this foundation of mine had to make the return public, Boys Town probably did.”
The story goes Buffett called on a well-placed source who sat on the Boys Town board to verify Sun suspicions the nonprofit had accumulated a fortune. Public records confirmed the rest. Public indignation was strong.
“It’s a helluva story,” Lipsey said by phone. “It was so well done.”
He said breaking the exclusive, which major news outlets picked up, was what the Sun needed to do to stay relevant opposite the Omaha World-Herald.
In Buffett, the paper had deep pockets and considerable clout. In Williams, who went on to help found Investigative Reporters and Editors, Inc., a solid newsman. In Lipsey, a crusading publisher.
“See, we didn’t have the advantage of being a daily, so when we came out we had to have something fresh, so we did investigative reports, enterprise reports,” said Lipsey. “Warren, Paul Williams and I would sit down and brainstorm — what’s the story, what should we go after, and then this thing came along — it actually came along on a tip from Warren. It made for a great story.”
Like Lipsey, Buffett still feels a sense of pride about what they did.
“That was a watershed. It didn’t do us any good commercially as a paper, but that was probably as interesting a month or two of my life as has ever occurred,” said Buffett.
The report upset the Catholic community. Defensive Boys Town officials attacked the Sun as “a yellow rag.” The gutsy coverage earned the Sun the first Pulitzer given to a weekly for Local Investigative Specialized Reporting. It’s the last Pulitzer, period, won by any Nebraska newspaper. The award also recognized the reforms the story instigated. A chastened, more transparent Boys Town embarked on a course serving at-risk youth in new, home-like environs across the nation. Boys Town also built the first of its major research facilities.
When Buffett acquired the Buffalo News in 1977 he asked Lipsey for help. “When I was in trouble up in Buffalo with the paper I called him,” said Buffett. At first Lipsey served as a consultant, commuting between Omaha and Buffalo, before accepting the role of publisher in 1983. The two men share an abiding mutual respect. “I admire Warren. I would say he’s someone who has taught me a lot. He’s a steady hand. He makes decisions that are totally moral, totally wise, and for the right reasons, and they’re not always necessarily for profit,” said Lipsey. “He won’t buy a company where the management isn’t in place. The only exception to that is me.”
The book The Warren Buffett CEO, Secrets from the Berkshire Hathaway Managers, devotes a chapter to “the turnaround” Lipsey engineered in Buffalo.
“You see a newspaper doesn’t really match what Warren buys in companies because this paper was losing money when he bought it but he always had enormous respect and love for newspapers. But then he was short — we had a very good editor but we didn’t have a good publisher here. He had to get one to come in, and he tapped me,” said Lipsey. “There was a daily newspaper here in competition called the Courier Express. It became one of these fights to the death type thing. I got very interested in that. That was an enormous challenge, and I wanted to make sure we survived.”
Buffett said Lipsey was well qualified coming from a small paper to oversee a big paper because he knew all phases of newspaper operations: “Stan knew the press room, he knew circulation, he knew ad sales, he knew the newsroom. Stan’’s been a terrific friend and business associate. He’s over 80 now and he goes to work every day with the same zest as always. There’s no one I trust more.”
With the dynamic pair behind it, the Buffalo News won out. Lipsey’s still in charge, but the shrinking place of printed newspapers in this digital age concerns him
“Certainly right now the newspaper business is challenging. We’re doing better than most papers, but we’re not doing well. All our numbers are way down. Circulation, advertising, profit, volume, everything, and I think you’ve seen the same thing with the World-Herald, and they were enormously profitable. The trouble with newspapers is they’re extraordinarily costly, so when you have a sharp fall off in revenue it’s hard to cut as much as you’re losing, because you have to so many people in the newsroom, so many people running the presses, so many people driving the delivery trucks. That’s the problem.”
- New Book on Berkshire Hathaway by Ronald Chan; Behind the Berkshire Hathaway Curtain: Lessons from Warren Buffett’s Top Business Leaders (eon.businesswire.com)
- The 15 Best Things Warren Buffett Has Ever Said About Investing (businessinsider.com)
- Sun Reflection, Revisiting the Omaha Sun’s Pulitzer-Prize Winning Expose on Boys Town (leoadambiga.wordpress.com)
- Berkshire Hathaway Board Responds to David Sokol Controversy (blogs.wsj.com)
- How Warren Buffett Protégé David Sokol Lost His Way (businessweek.com)