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News Analysis
Why Does Warren Buffett Like DIRECTV, But Not Dish?
By Swanni


Washington, D.C. (February 18, 2014) - Iconic investor Warren Buffett has sold all of his company's holdings in Dish, according to regulatory filings, as reported by The Hollywood Reporter. 

Buffett's Berkshire Hathaway owned 547,000 shares of Dish last summer, the publication reports, but its year-end report no longer showed the Dish holdings, which were valued at around $24 million.

There was no reason cited in The Hollywood Reporter article as to why Buffett would sell Dish, but Berkshire still holds more than 20 million shares of DIRECTV, which is valued at approximately $2.5 billion. Buffett is one of DIRECTV's 10 largest shareholders. Buffett increased Berkshire's stake in DIRECTV from 4.2 million shares to 20.3 million shares in early 2012.

Despite the dumping of Dish, Berkshire still holds shares in Starz, Viacom and John Malone's Liberty Global, the international arm for Liberty Media.

There could be many causes behind Berkshire's decision to sell Dish. For instance, the nation's second largest satcaster could face a more difficult time negotiating programming agreements if the Comcast-Time Warner Cable merger goes through. While Buffett didn't know that Comcast would buy TWC last year -- or, at least, we don't think he knew -- the investor certainly knew which way the winds were blowing. There had been talk of consolidation in the cable industry, which could weaken the position of its satellite rivals.



However, with more than 20 million subscribers, DIRECTV appears to have more resources to respond to the Comcast deal than Dish, which has just 14 million subscribers and is engaged in lawsuits with the networks over its ad-skipping Hopper HD DVR.

Buffett's decision to sell Dish and keep DIRECTV could also signal he does not think a merger between the two is likely anytime soon. The Comcast-Time Warner Cable deal could change his position on that, but again, he probably had some inkling that a major cable consolidation was coming.

The Nebraska-born billionaire is regarded as one of the world's wealthiest individuals and one of the business world's shrewdest investors. He might see DIRECTV as a more solid investment because the company is a more likely acquisition target. Or, Buffett could simply view DIRECTV as a company that has been building profits and subscribers despite a recovering economy, unlike its cable rivals which have lost video subscribers over the last several years.


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Phillip Swann is president and publisher of TVPredictions.com. He has been quoted in dozens of publications and broadcast outlets, including CNN, Fox News, Inside Edition, The New York Times, The Washington Post, The Chicago Tribune, The Financial Times, The Associated Press and The Hollywood Reporter. He can be reached at
swann@tvpredictions.com or at 703-505-3064.



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