Berkshire Hathaway’s Annual Meeting Highlights
At the annual meeting of Berkshire Hathaway on Saturday, Warren Buffett caught shareholders off guard.
Abel, who has served as vice-chairman overseeing Berkshire’s non-insurance ventures since 2021, has been named as the successor to Buffett, who celebrated his 95th birthday in August.
Buffett, known as Omaha’s Oracle, is widely regarded as one of the most accomplished investors in history, with a net worth of $168 billion, even after donating about $62 billion to charity. Interestingly, he has stayed away from acquiring sports teams, an asset class that has performed remarkably well over the last three decades.
“If we hear that either of us is buying a sports team, it might be time to discuss successors,” Buffett remarked, referencing his and Charlie Munger’s views during the 2014 meeting. This was in response to a playful inquiry about Munger’s interest in buying the Los Angeles Clippers, which became available after Donald Sterling was banned from the NBA for racist remarks.
“Regardless of what Warren thinks about owning a sports team, I’m not really interested,” Munger added.
Indeed, sports franchises have experienced significant value appreciation over the years. On average, NBA and NFL teams have seen annual gains of around 13%, while MLB and NHL teams hover around 11.5%. In comparison, the S&P 500 has returned 8.8% to 10.8%, assuming dividends were reinvested.
Buffett is a firm believer in a value-based investment approach, concentrating on firms with robust fundamentals and steady cash flow. Historically, these have not been the characteristics associated with sports teams, which often operated at a loss until recent revenue surges and more favorable collective bargaining agreements allowed for profitability. For team owners, acquiring substantial assets has generally yielded cash flow.
“Owning a sports team carries a sort of mental income,” Buffett noted during a 2008 meeting when questioned about a prospective purchase of the Chicago Cubs. “It grants them fame. While it might not unfold as they envisioned, owning a team can provide immediate celebrity status and recognition. As long as there are wealthy individuals in society, we will see a segment of them having done remarkably well in life.”
Buffett has expressed that he wouldn’t consider purchasing the Cubs, even at a price of $700 million. In 2009, the Ricketts family acquired a 25% stake in Wrigley Field and the Cubs for $845 million during bankruptcy proceedings. As of March, the Cubs were valued at approximately $5.69 billion, making them the fourth most valuable team in Major League Baseball.
Throughout his career, Buffett has held minor stakes in sports franchises. In 1991, he invested in the Omaha Storm Chasers, a minor league baseball team affiliated with the Kansas City Royals, valuing the team at $5 million. He sold his shares in 2012.
In 2023, Buffett invested in shares of the Atlanta Braves. He has been a long-time owner of Liberty Media and its Formula 1 subsidiary, both publicly listed. He acquired shares in the Braves through non-cash dividends from Formula 1 stakeholders.
Berkshire Hathaway’s current equity portfolio stands at $277 billion, with Apple being the largest position at $62 billion. The Formula 1 shares are valued at $622 million, while the Braves represent the second-smallest holding at $9 million.
