Warren Buffett’s Berkshire Hathaway added a television station to its media holdings with the acquisition of WPLG-TV Miami from Graham Holdings Co. The roughly $1.1 billion share-swap deal, which was announced in March, closed 7/1 after securing approval from the FCC.
Although the outlines of the transaction were laid out in previous regulatory filings, the exact number of shares exchanging hands was established only at the deal’s closing. In addition to WPLG, an ABC affiliate, Berkshire got back 2,107 of its own Class A shares, 1,278 of its own Class B shares and about $328 million in cash from Graham Holdings. In exchange, Omaha, Neb.-based Berkshire handed over 1.62 million common shares of Graham Holdings, reported The Wall Street Journal.
The Berkshire shares are valued at about $400 million based on their Monday closing price. The TV station is valued at $364 million.
The deal winds down Mr. Buffett’s long association with Graham Holdings. Formerly known as the Washington Post Co., the company changed its name to Graham Holdings after selling its flagship newspaper to Jeff Bezos last year. Mr. Buffett first bought shares of the media company in 1973 and was a personal friend of CEO Katharine Graham, who dies in 2001. He also served on the company’s board.
Berkshire owns 31 daily newspapers including the Tulsa World and the Omaha World-Herald. In the 1980s, it also owned a big stake in television company Capital Cities, which merged with ABC. A unit of Walt Disney Co. later bought the merged entity, handing Berkshire a big profit on its investment.
“Warren Buffett’s 40-year association with our company has been extremely good for our shareholders. Naturally, the deal that we have put together is one that will be good for both companies,” said Donald Graham, chairman-CEO of Graham Holdings. “We thank our longtime colleagues at WPLG for their enormous contributions and congratulate them on the opportunity to join one of the greatest companies in America.”
See the Wall Street Journal story here.
RBR-TVBR observation: While reports have said Graham isn’t planning any sale of its other Post-Newsweek stations, you never know. Obviously Buffett believes the medium could be a good investment to add to his BH Media division. He may get the TV bug and then look out—he could go on a spree. This buy is a vote of confidence and great news for the television broadcast industry—along with the recent SCOTUS decision on Aereo.
