Hello everyone from ice-covered Michigan!
I just saw this one come across the wire and wanted to make sure that you all saw it as well. According to Forbes, Liberty Media is apparently preparing to sell the Braves. This information is part of their annual “Business Of Baseball” report. You can read the entire article here.
As some of you may recall, I speculated that Liberty might be preparing to sell the Braves as part of my analysis of the short contract extension given Frank Wren. Rather than duplicating my rationale, those of you interested can browse here and read it at your leisure!
The three key things to remember, in my opinion, as these: 1) There is a very substantial tax benefit that accrues to Liberty if they sell the Braves by the end of 2012 2) Liberty has said on repeated occasions that the Braves are not a strategic asset for the corporation. For those of you who don’t own the big corporation secret decoder ring, this is code for “we actually got this asset because we had to and it doesn’t fit at all with what we are trying to accomplish”. The deluxe edition of the decoder ring also reveals that it means “sell me, sell me, sell me!!!”. 3) The Braves have been pumping up the value of the team, primarily by slashing costs. Even Forbes says that the Braves have cut payroll significantly for 2011, regardless of the protestations to the contrary and finally 4) It takes a long time to find the right buyer, agree on deal terms, draft a contract, get all the parties to agree, and get MLB sign-off that the new girl is pretty enough to join their fraternity (or is it sorority ?).
If this is true, don’t look for the Braves to be spending money to fill their holes. Don’t look for any significant mid-season trades, as they would likely involve the Braves taking on salary. And look for the Braves to deny that they are for sale, at least until the process is far enough along that it is impossible to keep it a secret.
I hope this is all smoke, but having been involved in merger and acquisitions for most of my career, I can tell you that I sense there is a lot of fire beneath the smoke.
What do you all think? If you have any questions about the process or its implications, fire away, as I’ll be happy to provide any insights I can from my “real job” perspective.