Unrelenting pressures will cause the Buffalo News's profit margins to slide.

Test: the Buffalo News's profit margin (pretax earnings divided by revenues), or its pretax earnings where margins are not reported, over roughly the five years after 2006, as described in Berkshire's shareholder letters and annual reports or in credible press coverage. True: margins clearly declined from the 2006 level over that period. Mostly true: margins declined overall, with brief interruptions. Mixed: margins fell and then recovered to about the 2006 level. Mostly false: margins were roughly flat. False: margins rose.

Set before the research began.

1. E1 Case 5 - Buffet Investment in Newspaper Scribd (uploaded case study; original author and publisher not identified on the page) · March 2014

   “Berkshire could not stop slumping profits at the News. In 2011, the paper earned a profit of only $9.3 million, the first time profit had fallen below $10 million in 25 years. During the 1980s, annual profit had averaged $55 million.”

2. E2 Case 5 - Buffet Investment in Newspaper Scribd (uploaded case study; original author and publisher not identified on the page) · March 2014

   “the managers of these newspapers will find a way to stay competitive and maintain reasonable margins, though below their historical level near 30%.”

E1, an uploaded case study, says the Buffalo News earned a profit of only $9.3 million in 2011, the first time in 25 years that profit had fallen below $10 million. That means 2011 profit was below the 2006 level, which fits the predicted slide in earnings. However, E1 gives no margin figures, does not say whether the profit was pretax, and does not describe the year-by-year path from 2006. It is also a single source whose author is not identified. E2 is only a commentator's forecast and does not measure the Buffalo News's margins.