[News Inside] This Time TV Network Investment... Omaha Sage Who Reversed Principles

Warren Buffett Buys ION Media for 3 Trillion Won
Unusual Investment in Traditional Media... Synergy Expected with Existing Broadcasting Companies

▲Warren Buffett, Chairman of Berkshire Hathaway

[Asia Economy Reporter Kwon Jae-hee] The market was once again surprised by the investment moves of Warren Buffett, chairman of Berkshire Hathaway. This was because his actions contradicted the investment principles he had previously disclosed.

Recently, the U.S. media company E.W. Scripps announced that it had agreed to acquire ION Media for $2.65 billion (approximately 3.1 trillion KRW) with investment support from Berkshire Hathaway, led by Buffett. Berkshire Hathaway is reported to have provided about $600 million of this amount.

Upon hearing this news, the market reacted with surprise. This is because the outlook for old media is generally considered bleak with the emergence of new platforms like Netflix. Additionally, in January, Buffett expressed doubts about the sustainability of the domestic newspaper industry owned by Berkshire and sold off those assets.

Nevertheless, Buffett’s investment in old media is attributed to the strength of regional platforms. ION Media is a U.S. TV network based in Florida, known for airing crime dramas such as "Law & Order" and "NCIS: Los Angeles." E.W. Scripps, which operates regional TV stations, can now provide viewers with Court TV, Bounce, and multiplatform news without paying rent by utilizing ION Media’s network.

The Wall Street Journal analyzed, "Even as traditional media is being shunned by consumers, the influence of regional networks remains significant," adding, "The ability to consistently generate high profitability through cable package fees is also attractive."

This acquisition agreement is expected to generate $500 million in synergies over the next six years.

This is not the first time Buffett has broken his investment principles. Previously, his investment in the tech startup Snowflake’s IPO was considered an unusual move. Buffett had consistently expressed that IPO investments were not good opportunities, but he reversed this stance. His investment in an IPO was the first since Ford’s IPO in 1956. He had been skeptical about purchasing newly listed stocks. When Uber’s IPO was a hot topic, he firmly stated, "Berkshire Hathaway will not buy shares of newly listed companies."

While Buffett has generally avoided tech stocks, it is also unusual that 40% of his current portfolio consists of Apple shares. Especially, Apple shares have become a foundation of Buffett’s support base by generating profits during the economic downturn caused by COVID-19.

He has held Apple shares for over four years, which aligns with his investment principle and has attracted attention. This holding period surpasses the average holding period of Apple investors, which is six months (25 weeks). Buffett’s principle is "long-term investment," as he built 90% of his wealth after the age of 65.

Buffett’s biographer Alice Schroeder said, "He understood time differently from others since childhood," adding, "At age 10, he grasped the concept of compound interest and realized that investment capital could grow like a snowball over time."

As of the 26th (local time), according to the Bloomberg Billionaires Index, Warren Buffett’s net worth is $79.4 billion (approximately 93 trillion KRW), ranking 7th among billionaires.