Less than two months from issuing stock in the Braves, team owner Liberty Media told investment analysts Friday about the team’s rich minor-league system, poor local TV deal and progress in building a new stadium.
Liberty Media CEO Greg Maffei, on the company’s quarterly conference call with analysts, said a Liberty shareholders vote is set for April 11 on the plan to issue a “tracking stock” tied to the Braves. The stock should begin trading on the Nasdaq exchange “within a few days thereafter,” Liberty’s chief financial officer, Chris Shean, added.
The stock plan, which was announced late last year, generated more interest in the Braves than usual from the Wall Street analysts, who more closely follow other parts of Liberty's business.
Maffei said SunTrust Park, the team’s new stadium slated to open in 2017, is 50 percent built and the adjacent mixed-use development approximately 75 percent “leased or committed.”
He described the Braves’ farm system as “dramatically strengthened” and “generally ranked No. 1 by most pundits.”
And he conceded the Braves have a subpar local TV deal that runs until 2027.
“We have relatively unattractive (local TV) contracts we inherited when we bought the team that were very long-lived,” Maffei said. “They have been made more attractive (through a partial renegotiation in 2013) but are still not what I would consider a market rate.”
Also Friday, Liberty disclosed that the Braves’ revenue declined approximately $7 million to $243 million last year because of lower attendance and concessions sales as the team posted its worst record in a quarter-century. Yet, the company said the Braves’ operating income before depreciation and amortization improved by $9 million last year because of cuts in expenses, including player payroll.
One analyst asked Maffei how investors should go about valuing the team, which Forbes magazine last year estimated to be worth $1.15 billion.
“These are like almost mystical questions, evaluating baseball teams,” said Maffei, adding that Liberty looked at sales prices of other teams when it acquired the Braves in 2007.
“Remembering that we paid something like just under $450 million, (it) looks like a pretty attractive transaction on the surface,” he said. “But when you dig a little deeper, remembering we had something like $300 million in tax savings on how we executed the transaction, it looks a lot more attractive.”
He said teams often are valued at three to five times annual revenue. But he didn’t suggest a current valuation for the Braves, saying: “That’s what the market is going to get to do itself.”
“Most people think this is one of the better run teams, one of the more financially tightly run teams,” Maffei said. “And there are quite a lot of other assets that baseball teams own, like proportionate shares of MLBAM,” baseball’s successful Internet operation.
“So there are a lot of ways to think about it, but we’ll see how it trades.”
