(First posted: 1:28 p.m.)
(Last updated: 4:50 p.m.)
If Liberty Media is preparing to put the Braves up for sale, as a report suggests, the team’s highest ranking executive doesn’t know about it.
“I speak with Liberty people fairly frequently and there’s absolutely nothing new here,” Braves chairman and CEO Terry McGuirk said. “The whole article looks pretty amateurish to me. Liberty has no interest in selling right now. Life is good. The team is good. I’m the person in position to know these things and that’s the most informed comment you’re going to get.”
McGuirk is upset because at a time when he would prefer people focus on a potential World Series contender, one week before the season opens, Forbes Magazine is reporting Liberty Media may be preparing to sell the team. In its annual valuation of major league baseball franchises, Forbes ranked the Braves 13th out of 30 teams with a value of $482 million and included this comment: “It appears as though Liberty Media is preparing to unload the Braves. The tax advantages to Liberty’s purchase of the Braves from Time Warner [in] 2007 expire after five years and ownership has slashed player payroll from $102 million to $84 million since 2008 despite higher revenue.”
That’s actually somewhat misleading. Liberty already has secured the tax advantages of its complicated May of 2007 purchase from Time Warner. The only time stamp related to ownership was an agreement between Liberty and MLB that they remain as owner for at least 4½ years — effectively, after the 2011 season.
There’s also a belief that a quick attempt to sell by Liberty, after tax benefits had been secured, would trigger problems with the IRS. But it might be past that point.
A phone call to Liberty Media’s headquarters in Colorado brought the expected response.
“We don’t comment on speculation like this,” said Courtnee Ulrich, vice president of investor relations.
I considered asking her where Kenshin Kawakami would be playing next week, but I passed.
Liberty Media generally has not been popular with the fan base. The company represents faceless ownership that is based far from Atlanta. The fact that the company allows McGuirk to run the franchise doesn’t matter for the simple reason he’s not the owner.
There’s also the matter of payroll having been reduced the past few years. McGuirk has long vehemently disputed the reported numbers, saying Braves’ payroll “has gone up.” But every team computes salaries differently, and various databases all show Braves’ payroll has dropped. Most show that total payroll was at, or close to, $102.3 million in 2008, $96.7 million in 2009 and $84.4 million in 2010. The fact general manager Frank Wren has rebuilt the club back into a playoff team is commendable, given the backdrop.
Is private ownership always better than corporate ownership? Hardly. The Atlanta Spirit is the only proof you need of that. But at least when something goes wrong, people know who to scream at. You can’t scream at an annual stock report.
The potential sale of the franchise makes sense. As the Denver Business Journal wrote: “Liberty Media has not announced any plans to unload the Atlanta team. But John Malone, Liberty Media chairman and founder, is famous for making use of tax advantages, and he has said Liberty Media doesn’t consider the baseball team a strategic asset.”
See, that’s the problem: Most people don’t want their sports teams known as a “strategic asset” — or worse, a non-strategic asset.
Four months ago, the Wall Street Journal’s list of highest paid CEO’s was topped by Liberty’s Gregory B. Maffei. His compensation: $87.1 million. The Braves’ 2010 reported payroll: $84.4 million. But Maffei kept stockholders happy. Forbes reported the franchise’s 2011 value at $482 million (up from $446 million in 2009) and operating income at $22.2 million (up from $5 million in ‘09 and $2 million in ‘10).
In Colorado, ownership is achieving its financial objectives.
In Atlanta, McGuirk would prefer the focus be elsewhere.
“This is not a subject that’s even in my thinking right now,” he said of a potential sale. “We’re getting ready for the current season.”
He need not worry about distractions. If anything happens, it won’t be until after the World Series.
By Jeff Schultz