Warren Buffett buys large chunk of Haslam family business

Getty Images

Jimmy Haslam acquired the funds necessary to buy the Browns as a result of the tremendous success of the truck-stop company his father founded in the 1950s. Now, the Haslam family will be selling a large chunk of that company to one of the richest men in the world.

Berkshire Hathaway Inc., owned and operated by 87-year-old Warren Buffett, will buy 38.6 percent of Pilot Flying J. The Haslam family will continue to control the company, and Jimmy Haslam will continue to serve as CEO.

Come 2023, Buffett’s company will own 80 percent of the company, with the Haslam family keeping 20 percent.

“Jimmy Haslam and his team have created an industry leader and a key enabler of the nation’s economy,” Buffett said in the statement, via Bloomberg.com. “We look forward to a partnership that supports the trucking industry for years to come.”

“He truly wants us to run the company, wants us to maintain the culture, and of course, if there is an opportunity for us to grow the company substantially, he’s got plenty of capital,” Haslam said in an interview on CNBC, according to Bloomberg. “It’s just a marriage that we thought made a lot of sense.”

The transaction represents a public endorsement of the company by one of the most savvy investors in American history, and it confirms that an embarrassing fraud scandal from 2013 has subsided. Haslam was never personally accused of wrongdoing, but the company was rocked by what turned out to be a widespread effort to shortchange customers on rebate arrangements.

Buffett’s purchase in no way involves the Browns. Based on Buffett’s track record (and based on the Browns’), some fans may wish that it did.

31 responses to “Warren Buffett buys large chunk of Haslam family business

  1. Actually, it would be great if Buffett bought the Browns. He knows how to build a great business, and I’m sure he’d hire the right people to turn that franchise around quickly. I’m not at all sure that Jimmy Haslam has the same ability. So far we aren’t seeing much happening with the Cleveland franchise.

  2. I wish he bought the browns off of Haslam. I honestly and whole heartedly do. He might not be a football expert but I would expect a mind like Buffett would find the right people quickly. Since our return our problems have always started with know-nothings who inherited their fortunes at the top who don’t really know how to put high performance organizations together.

  3. Buffet probably stipulated the deal in no way involves the Browns lol
    =====

    I would think not.

    How many buisnesses are more successful than the NFL?

  4. Don’t forget the fact that Warren was at the 2017 HOF Gold Jacket dinner and he “sang” Sinatras’ My Way with Paul Anka.

  5. To the poster who asked “How many businesses are more successful than the NFL?”, the answer is a lot of businesses.
    A team will easily fetch well north of a billion dollars and unless a new stadium is included, the ROI isn’t extremely high. Look at TV contracts, local revenue and sponsorships. Then factor in overhead: payroll, insurance, staffing, etc.
    Return on revenue is likely to be around 5 to 6 percent net.
    The NFL is at the top of the food chain right now and it’s gonna fall. These crazy protests are gonna hurt it long term, imo.

  6. What is overlooked is the fact of the financial windfall that has to be in the billions of dollars Jimmy Haslam is going to get in this deal has to make him one of the richest, of not the richest owner in the NFL.

  7. Pilot were the worst truck stops I ever went too. Cheap fuel and nothing else. No drivers lounge, no real restaurants, just McDonalds and Subway. Every truck company they bought they cheapened. Trucking companies loved them because of their cheap fuel. If I had a nickel for every time I was told to fuel up at Pilot by my company and then drove down the road to a real truck stop and paid for a shower and bought a real meal I’d be a millionaire!

  8. The trailing 10 indicates that the NFL is king….right now. The trailing 10 revenue growth for the NFL is 112%, and for the Fortune 500, it’s roughly 39%. Not looking at EBITDA or any other metric, but the NFL is at it’s peak. But is anyone brave enough to short it?

  9. A team will easily fetch well north of a billion dollars and unless a new stadium is included, the ROI isn’t extremely high.
    =====

    That depends.

    Pat Bowlen bought the Broncos in 1984, and a handful of teams changed hands in the the late 80s-early 90s. Bowlen paid $71 million. The Broncos are worth an estimated $2.4 BILLION per another article posted this morning.

    That pretty much defines ‘retrun on investment’.

  10. I’m interested in the reason Haslam sold a chunk of the family business. Buffett buys low where he see’s an undervalued asset. So is he buying low on Flying J? Does Haslam have a cash flow problem with the Browns and is that why they don’t pay any players and have one of, if not the lowest payroll in football? These are the questions that should be asked.

  11. I believe the reason the Haslam Family is selling out a major portion of Pilot Flying j is because Jimmy Haslam is going to be federally indicted and this is a form of asset management. Many many people in the very upper ranks of his company have taken plea agreements involving the gas rebate scandal his company was running. The Feds don’t offer plea agreements without wanting something in return. I hope I’m wrong but I think Jimmy is going to be headed for court sooner rather ten later.

  12. aarons444 says:
    October 3, 2017 at 11:35 am

    That depends.

    Pat Bowlen bought the Broncos in 1984, and a handful of teams changed hands in the the late 80s-early 90s. Bowlen paid $71 million. The Broncos are worth an estimated $2.4 BILLION per another article posted this morning.

    That pretty much defines ‘retrun on investment’.
    ————————-

    It is far from the definition of ‘retrun on investment.’ If by ‘retrun’ you mean return then you do not understand how the term is defined and as a result you are confusing long term appreciation with standardized ROI which is viewed in terms of an annual return. Considering Forbes values the Browns at $2B and pegs annual profits of an NFL team between $55-$70M that’s an anticipated ROI of at best 3.5% and that’s without any substantial debt service. The admittedly outrageous appreciation seen over the 33 years of Bowlen’s ownership of the Broncos is reflective of the implementation of revenue sharing and the salary cap which pretty much guarantees NFL teams a profit. Counting on such unforeseeable historical sea change type events to somehow replicate themselves is far from a sound investment strategy, particularly in light of declining ratings and an aging demographic. Not to mention it is doubtful an 87 year old Buffett would anticipate cashing in 33 years from now.

  13. helicopterpilot13,

    Fair enough.

    The days of becoming a billionaire as an NFL owner may be over, but plenty have done it over the years. The overwhelming majority of NFL owners today, in fact.

  14. Considering Forbes values the Browns at $2B and pegs annual profits of an NFL team between $55-$70M that’s an anticipated ROI of at best 3.5% and that’s without any substantial debt service.
    =====

    The Packers cleared double that last year… with absurd investment $$ being put into construction around Lambeau Field.

    .. and that was just the public report of money generated from Revenue Sharing. I can’t begin to guess what they made off their team shop and their broadcasting deals in Wisconsin.

    Only the bottom feeders are netting less than $100mil.

  15. Overall Buffett has a stellar record, but he has also invested in some companies with less than clean reputations: Saloman Bros., 3G Capital, Pilot Flying J being some of the bigger names.

  16. haslam governor raised gas tax even though in black, now gets to collect increased taxes, stuff in bank for interest until tax payment due date!! Haslams make millions on gas tax!!

  17. aarons444 says:
    October 3, 2017 at 1:37 pm
    The Packers cleared double that last year… with absurd investment $$ being put into construction around Lambeau Field.

    .. and that was just the public report of money generated from Revenue Sharing. I can’t begin to guess what they made off their team shop and their broadcasting deals in Wisconsin.

    Only the bottom feeders are netting less than $100mil.
    ______________________________________________________________________

    How on Earth could Green Bay have ‘cleared double that’ when their operating income wasn’t even double that? Again, you aren’t very good at differentiating key terminology and therefore lack a proper understanding of what you are reading. Net operating income is not net profit. The Packers reported a net operating income of $91M from ALL revenue streams. That amount even includes their $27M share of the relocation fees that were not actually paid in the fiscal year but were allowed to be counted as though it were and total net ‘profit’ (technically they are a nonprofit)for 2016 of $73M. In spite of the Lambeau improvements the Pack have little by way of debt valuation (4%) compared to other teams, actually putting them on the high end of ‘profit’ earners. This is all public record and can be found in Green Bay’s annual report, which has to survive very close scrutiny. Earlier I cited Forbes, here I have cited the Packers annual report. If you want to continue the discussion please cite sources for your past and future claims and try to adhere to the terminology that goes with the numbers.

Leave a Reply

You must be logged in to leave a comment. Not a member? Register now!