DIRECTV

Category: Business / Equity Investment

Origin of Relationship

DIRECTV was revealed as a major Berkshire holding in the 2012 Letter. It was notable as the first billion-dollar portfolio position that Warren Buffett did not select — the combined conviction of Todd Combs and Ted Weschler brought the position over the $1 billion mark, requiring SEC disclosure and making it the inaugural test of investment succession at scale.

Major Milestones

Year	Event
2012	Todd Combs and Ted Weschler jointly build a $1B+ position in DIRECTV — their first billion-dollar combined holding
2012	Disclosed publicly in the 2012 Annual Letter as proof that investment succession is operational
~2015	AT&T acquires DIRECTV for ~$49B; Berkshire's position exits via the transaction

Strategic Importance

The DIRECTV position is not primarily a story about DIRECTV the business — it is a story about proof of concept for Berkshire's investment succession model. By 2012, Combs and Weschler had each been managing multi-billion dollar portfolios for one to two years. DIRECTV — their first joint, billion-dollar conviction — demonstrated several things simultaneously:

They can act independently: A $1B+ position was taken without Buffett's involvement or direction.
They can collaborate: The position exceeded $1B only because both managers independently reached the same conclusion and combined their allocations — the 80/20 compensation structure made this cooperation rational.
The succession architecture functions: The Two T's were not just managing pre-selected portfolios. They were originating ideas at a scale that would shape Berkshire's reported holdings.

Buffett's brief mention of DIRECTV in the 2012 letter — "the first billion-dollar holding not chosen by me" — is understated. It marks the moment the investment succession project graduated from experiment to operational reality.

🔗 Connections

People: Todd Combs, Ted Weschler, Warren Buffett
Concepts: Succession Planning, Capital Allocation, Circle of Competence
Sources: 2012 Letter

📚 Historical Mentions & Citations (1)

Click a reference document below to expand and read the exact paragraph(s) containing this concept in the archive.

📜

2012 LetterExcerpt Available

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12/31/12 Shares Company Percentage of Company Owned Cost Market (in $ millions) 151,610,700 American Express Company 13.7 $ 1,287 $ 8,715 400,000,000 The Coca-Cola Company 8.9 1,299 14,500 24,123,911 ConocoPhillips 2.0 1,219 1,399 22,999,600 DIRECTV 3.8 1,057 1,154 68,115,484 International Business Machines Corp 6.0 11,680 13,048 28,415,250 Moody’s Corporation 12.7 287 1,430 20,060,390 Munich Re 11.3 2,990 3,599 20,668,118 Phillips 66 3.3 660 1,097 3,947,555 POSCO 5.1 768 1,295 52,477,678 The Procter & Gamble Company 1.9 336 3,563 25,848,838 Sanofi 2.0 2,073 2,438 415,510,889 Tesco plc 5.2 2,350 2,268 78,060,769 U.S. Bancorp 4.2 2,401 2,493 54,823,433 Wal-Mart Stores, Inc 1.6 2,837 3,741 456,170,061 Wells Fargo & Company 8.7 10,906 15,592 Others 7,646 11,330 Total Common Stocks Carried at Market $49,796 $87,662 One point about the composition of this list deserves mention. In Berkshire’s past annual reports, every stock itemized in this space has been bought by me, in the sense that I made the decision to buy it for Berkshire. But starting with this list, any investment made by Todd Combs or Ted Weschler — or a combined purchase by them — that meets the dollar threshold for the list ($1 billion this year) will be included. Above is the first such stock, DIRECTV, which both Todd and Ted hold in their portfolios and whose combined holdings at the end of 2012 were valued at the $1.15 billion shown.

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