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Warren Buffett is investing $600 million in EW Scripps deal to buy ION Media

Y2kTheNewOldies

Y2kTheNewOldies

https://markets.businessinsider.com...w-scripps-to-buy-ion-media-2020-9-1029619184#


Berkshire Hathaway, owned by billionaire investor Warren Buffett, will invest $600 million in media group EW Scripps to help finance the purchase of US broadcasting company ION Media, according to the Wall Street Journal, citing people with knowledge of the matter, on Thursday.
Berkshire will make a preferred-equity investment and will also receive a warrant to buy as many as 23.1 million Class A EW Scripps shares at $13 apiece, the WSJ said. Scripps stock was trading up by more than 70% in premarket trading at $17.10 a share, compared with $10.47 at the close on Wednesday.
Under the deal, which is set to be announced on Thursday, EW Scripps will buy ION Media for $2.65 billion. This will significantly expand the American TV station company by doubling its television station footprint and increasing distribution of its programming, WSJ quoted the sources as saying. The Journal added that $500 million in synergies is expected to come from this deal in the space of six years.
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If this deal is waiting for FCC and SEC approval then Scripps would have to Divest in some parts of the country where ION and Scripps have duopolies for the deal to be approved. Or Scripps can shut down some of the ION Stations in some parts of the country and move it to a subchannel though.


https://uk.reuters.com/article/ion-...shire-backed-deal-for-ion-media-idUKL3N2GL2J6


Reuters) - E.W. Scripps Co SSP.O said on Thursday it has agreed to buy broadcaster ION Media for $2.65 billion as the TV station owner, backed by Warren Buffett's Berkshire Hathaway Inc BRKa.N, scales up operations to counter a rise in online streaming.

Shares of Scripps jumped nearly 23%, with analysts saying that bringing Berkshire into the deal is being seen as the “best seal of approval” in the equity market.

Berkshire will make a $600 million preferred equity investment in Scripps to finance the deal and will receive a warrant to buy up to 23.1 million shares of Scripps.
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Divestitures would be needed in Detroit, Phoenix, Cleveland, Indianapolis, Kansas City, West Palm Beach and Norfolk.
 
mvcg66b3r said:
Which 23 stations?
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It doesn't say, although the markets you mentioned have to be in the list. Phoenix definitely is, since Scripps already owns KNXV/15 and KASW/61 (its transmitter is currently used for ATSC 3.0 testing) here.
 
KeithE4 said:
It doesn't say, although the markets you mentioned have to be in the list. Phoenix definitely is, since Scripps already owns KNXV/15 and KASW/61 (its transmitter is currently used for ATSC 3.0 testing) here.
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Detroit would have to be another one because they own WMYD and WXYZ-TV. Who they divest is anybody's guess here. But I understand why the Ion/Scripps deals is at play here it's all about Scripps going after their competitors such as Gray, Nexstar and Sinclair for audiences, retrans deal and median demos for news.
 
The ones that can be changed are IONSHOP,QVC,HSN,Jewelry TV and one can become a News Channel like Newsy but local news 24/7 and he 3 others one ESCAPE TV back,another Sports and the other Movies.
Just got to get NEWSY,KPXE Ion Life,Qubo,38.4 on CCI.
 
They could sell WPLG-TV back to Graham Media. Since BH and EW Scripps are purchasing ION networks, will BH take over ION 23 stations to meet the FCC ownership because of EW Scripps have duolopy in 7 markets?
 
WZPX will be sold since Scripps owns WXMI Fox17 for a year that they got from Nexstar & Tribune merger even know WZPX isn't top 4 in the west Michigan TV market. And since West Michigan doesn't have 7 voices Nexstar, Sinclair, TEGNA, Scripps those are the big media companies in West Michigan.
 
Less than $3B for most of ION TV stations is a pretty good deal. That said; Buffet's interest in getting involved in this arrangement to reduce the influx from TV to streaming (as mentioned in the article) is just weird. Warren is a smart guy, obviously, but I don't see how adding a news component to what amounts to continuous Law and Order SVU reruns, will stem the migration from traditional TV to OTT/streaming.
 
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