Finance History | WPLG — A US$1.13 Billion Stock-for-Station Exchange

At WPLG's studios on West Hallandale Beach Boulevard in Pembroke Park, Berkshire Hathaway became owner of the Miami ABC affiliate through an exchange completed on June 30, 2014 that was far more intricate than a cash purchase of a television station. Berkshire surrendered 1,620,190 Graham Holdings Class B shares that it already owned, with an aggregate fair value reported by Berkshire at US$1.13 billion on the acquisition date. In return, Graham transferred a wholly owned subsidiary containing WPLG, US$327.7 million in cash, 2,107 Berkshire Class A shares, and 1,278 Berkshire Class B shares, effectively returning some of Berkshire's own stock while retiring a large block of Graham stock. Graham's filings valued WPLG itself at US$438 million and recorded a US$375 million gain on the station's disposition, while the completed structure qualified as a tax-free distribution under Sections 355 and 361 of the U.S. Internal Revenue Code. The exchange therefore solved several capital-allocation problems at once: Graham reduced its outstanding share count, disposed of a non-core station, and monetized appreciated Berkshire shares, while Berkshire exited most of a decades-old Graham investment and acquired a wholly owned operating business plus cash and treasury stock. This was not evidence that the television station alone cost US$1.13 billion, because that figure measured all of the Graham shares Berkshire handed over and must be compared with the cash and Berkshire shares bundled beside WPLG on the other side. The transaction is a compact lesson in corporate finance: when two long-term owners understand each other's assets and tax bases, a negotiated exchange can rearrange portfolios and share counts more efficiently than selling securities, paying tax, and then buying the desired business for cash. The cover photograph shows an interview set inside WPLG Channel 10, directly identifying the operating station acquired in the exchange; Kendrick Meek photographed it in 2010, and the image is reused under CC BY 2.0 via Wikimedia Commons.