Proof of the tremendous possibilities resulting from the merger between Scripps and ION Media is the fact that Warren Buffett’s Berkshire Hathaway helped finance the takeover, Scripps CEO Adam Symson said at a virtual UBS conference, Business Insider reported.
"Think about why Berkshire is into this investment, it's because they see the same thing we do," Symson said, according to a transcript on financial-research site Sentieo. "Tremendous opportunity bringing these businesses together."
He emphasized that Buffett would not have helped fund Scripps' $2.7 billion takeover of ION Media if he did not expect to gain a substantial profit from the value created by the deal.
Berkshire Hathaway agreed in September to give $600 million to Scripps in return for preferred stock paying an 8% annual dividend, in addition to securing a warrant to buy 23.1 million of Scripps' common shares for $13 each, which it can exercise up until a year after the broadcaster redeems all of the preferred shares at a 5% premium.
Symson said he brought Buffett into the deal, “because we wanted to make sure that our traditional debt ratio was really similar to what is an industry standard of around five times."
According to Business Insider, Buffett also insisted on preferred stock and warrants as part of his investments in Goldman Sachs and General Electric, which resulted in impressive profits for Berkshire Hathaway by cashing in the warrants after the stock prices of the two companies recovered.
Brian Freeman ✉
Brian Freeman, a Newsmax writer based in Israel, has more than three decades writing and editing about culture and politics for newspapers, online and television.
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