Buffett backs EW Scripps, ION deal

US syndication giant EW Scripps has acquired broadcast network ION Media for US$2.65bn in a deal backed by Warren Buffett’s Berkshire Hathaway.

Adam Symson

ION Media, based in Florida, operates a national television network featuring popular crime and justice procedural programming. It is being purchased from an entity controlled by Black Diamond Capital Management.

EW Scripps will combine the business with its own Katz networks and Newsy to create a national television networks business. ION reaches more than 100 million homes through over-the-air and pay TV platforms

Berkshire Hathaway will make a US$600m preferred equity investment in Scripps to finance the transaction. It represents a significant gamble on traditional TV from Buffett at a time the business has come under pressure from streaming platforms.

Today, ION distributes its programming through Federal Communications Commission-licensed TV stations it owns in 62 markets and 124 affiliated stations, reaching 96% of US homes.

Katz currently pays leasing fees to other broadcasters for multicast distribution. As Katz’s current distribution contracts expire, its programming will be migrated to ION stations’ digital subchannels. ION programming will remain on the primary channel.

To appease regulators, Scripps will divest itself off 23 ION stations. Scripps has agreed to a transaction with an unnamed buyer, who has agreed to maintain ION affiliations for the stations.

Scripps president and CEO Adam Symson said: “With its strong revenue growth, high margins and significant cashflow, ION will make Scripps a more powerful and durable media business with significant near-term benefit as well as long-term value.”

Scripps executive VP and chief financial officer Lisa Knutson said the company will capitalise on ION’s nationwide reach and operational excellence to drive growth, further enhance company cashflow and create significant synergies.

Knutson, who also leads Scripps’ strategic planning and will lead the integration of ION, said the addition of ION is a key milestone in Scripps’ continuing evolution as it anticipates consumers’ changing media habits.