Douglas County – Liberty Media’s deal to acquire the Atlanta Braves from Time Warner went down to the wire Wednesday, with phone calls pulling chief executive Greg Maffei out of a morning meeting several times.
“We’re sitting here talking about last- minute concessions,” said Maffei, who was facing a midnight deadline to complete the deal because of a change in federal tax law that went into effect today that would have required the companies to renegotiate the sale.
Later Wednesday, Major League Baseball announced that its owners unanimously approved the transfer of the team from Time Warner to Liberty.
Maffei didn’t disclose what concessions were discussed, but the owners had previously said they were reviewing the company’s ownership of a website that sells sports-betting information.
Under terms of an agreement announced in February, Liberty will receive the Braves, the Leisure Arts craft publications and $1 billion in cash in exchange for 60 million of Liberty’s 170 million shares of Time Warner stock. The deal values the Braves at $450 million.
“I am pleased to welcome Liberty Media as the owner of the Atlanta Braves,” baseball commissioner Bud Selig said in a statement.
The management of the team won’t change, Selig said. That was one of the concessions Liberty made to get the deal done. Hank Aaron, a senior vice president with the team, will have an increased role, Selig said.
Cable pioneer John Malone is chairman of Liberty, which is based in Doug las County and has extensive holdings in media and entertainment properties.
Though Malone said in May 2006 he “would enjoy owning the Braves and watching them come to Denver and win,” the acquisition of the team was viewed generally as a way for him to unload Time Warner stock without having to pay hundreds of millions of dollars in capital-gains taxes.
As part of the so-called “cash- rich split-off,” Liberty will probably have to hold on to the Braves for at least two years to avoid paying the taxes, experts have said.
Liberty has pulled off such deals before, including the recent exchange of Liberty’s stock in News Corp. for satellite-TV operator DirecTV. Maffei, who joined Liberty in November 2005, was directly involved in that deal too.
The Braves deal raises Colorado’s profile in the sports industry, even if it may have been done for tax purposes, Denver sports business expert Dave Smrek said.
“The fact is it’s an elite franchise that is now under Colorado ownership,” Smrek said. “The Braves’ longtime presence on a (cable) superstation gives them a national footprint that not many teams enjoy.”
For years, Braves games have been broadcast on the Turner Broadcasting System.
Under a change in the federal tax law that went into effect today, the companies would have had to lower the amount of cash that was in the deal and raise the value of the hard assets, Maffei said.
If the deal hadn’t been completed Wednesday, “it would have to be revalued,” Maffei said. “It would kill everybody if we had to do it again. Deal fatigue has definitely set in.”
Liberty may try to incorporate the crafting publications into the company’s home shopping operation, QVC.
“We’ll try to make it fit,” Maffei said.
The Associated Press contributed to this report.
Staff writer Andy Vuong can be reached at 303-954-1209 or avuong@denverpost.com.
100% – Ownership of the Atlanta Braves
6.5% – Stake in the Denver Nuggets
6.5% – Stake in the Colorado Avalanche
The play: Englewood-based Liberty Media trades about one-third of its stake in Time Warner for the Braves, Leisure Arts craft magazines and $1 billion.
The strategy: Liberty adds to its sports-related assets. It is acquiring 39 percent of DirecTV, which sells the “NFL Sunday Ticket” package and owns a stake in the Major League Baseball channel starting in 2009, and three Fox sports channels including FSN Rocky Mountain.
