Braves, Liberty Media execs field questions from investors

Braves chairman and CEO Terry McGuirk is bullish on the team’s rebuilding efforts. (File photo by HYOSUB SHIN / HSHIN@AJC.COM)
Braves chairman and CEO Terry McGuirk is bullish on the team’s rebuilding efforts. (File photo by HYOSUB SHIN / HSHIN@AJC.COM)

Credit: Hyosub Shin

Credit: Hyosub Shin

The Braves are “well ahead of schedule” on rebuilding the team and headed “nothing but up from here,” the club’s top executive told investors Tuesday.

Braves chairman and CEO Terry McGuirk also had bullish comments about SunTrust Park’s opening months, calling the stadium and adjacent mixed-use development “a model-breaking phenomenon.”

McGuirk spoke at an investor conference at SunTrust Park that was organized by Braves owner Liberty Media. Greg Maffei, Liberty’s president and CEO, also participated and described the Colorado-based company as “a fairly light-touch owner and very supportive of Braves management.”

McGuirk and Maffei fielded questions from investors about a range of issues, including the team’s valuation, its local TV deal and the possibility of an eventual spinoff of the Braves to shareholders.

Here are some takeaways from the conference, which was streamed on Liberty’s website:

On the rebuild

McGuirk cited the Braves’ improved record and highly regarded minor-league system as evidence of a successful and faster-than-normal rebuilding project.

“We feel that this is a sort of magical rebuild,” McGuirk said.

Maffei said Liberty expects the Braves’ investment in the farm system “will begin to pay off now.”

On the stadium

McGuirk told the investors that SunTrust Park and its adjacent development, The Battery Atlanta, have created the intended environment, with fans arriving early and staying late.

“The secret sauce of what’s going on here is the synergy between The Battery and SunTrust Park,” McGuirk said. “… We think it has succeeded brilliantly.”

He pointed out that through Monday, attendance was up 37 percent from the same number of games last season at Turner Field.

The Braves provided no new revenue figures, although Liberty is scheduled to report the team’s second-quarter financial results early next month.

Team valuation

Based on other teams’ sale prices, the Braves could be worth at least $1.5 billion, not including the real-estate development, Maffei suggested.

He said the Braves’ large geographic footprint enhances the value.

A spinoff?

A Braves tracking stock currently trades on Nasdaq, but the team remains under Liberty’s ownership umbrella. Maffei previously has mentioned the possibility that Liberty eventually could spin off the Braves to shareholders as a separate company, similar to what Liberty has done with other assets over the years.

“We have no plans to spin anything,” Maffei said Tuesday. “But obviously we have shown a willingness in the past at various times to create separate asset-backed securities when we thought there was an appropriate reason through valuation, operations or the like for the benefit of shareholders.”

Later, in discussing potential financial catalysts for the Braves, Maffei listed a number of factors: getting The Battery completed and fully leased; continued substantial improvement on the field; expiration of the current local TV deal with Fox Sports in 2027; and a possible spinoff “somewhere down the road.”

Local TV deal

McGuirk said the Braves' TV deal, improved when a portion was reworked before the 2013 season, probably ranks in "the top 15" among the 30 MLB teams. But Maffei made it clear the deal falls short of the Braves' potential programming value.

“One of the disadvantages (when Liberty bought the team) was a long-term television deal — some of which we have ameliorated and improved upon, but much of which is imperfect compared to where we think we can get,” Maffei said. “As 2027 approaches and we unleash that, there’s going to be some new opportunities to find value for those rights. … There will be changes along the way in how sports rights are valued, but 2027 is going to be a big valuation change for the Braves.

“That’s a ways out,” he acknowledged.

Impact on payroll

Maffei’s comments were cautious regarding how SunTrust Park will drive the Braves’ fiscal habits.

"We expect the Braves to continue to operate with the same financial discipline and prudence that they have historically, despite the upgraded new facilities," Maffei said. "2017 will begin to see the positive effects of The Battery's operations on the Braves' cash flows, and we expect them to increase annually with full impact in 2019.

“As we get more cash flows from The Battery and the new ballpark, we expect to deploy cash for normal business operations, potentially including paying down debt and investing in the team to enhance baseball operations.”

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