The answer to the title of this article is yes . . . sort of. Liberty Media Corporation (“Liberty Media”), the owner of the 2021 World Champion Atlanta Braves, recently announced that it would break the team up (and I am not talking about the potential non-resigning of star shortstop, and home-grown talent, Dansby Swanson this offseason after letting Freddie Freeman walk in the previous offseason). Liberty Media announced that the legal ownership of the Atlanta Braves would be bifurcated – a new company, Atlanta Braves Holdings, Inc., would own the team itself and The Battery Atlanta (“The Battery”), as well as certain assets and liabilities associated with the stadium and The Battery while Liberty Media would retain ownership of, essentially, everything else. This restructuring is nothing new in professional sports as the New York Knicks and New York Rangers are owned by Madison Square Garden Sports Corp and several major European football clubs employ a similar ownership structure. Not to mention the most well-known example of all: the Green Bay Packers, which is a publicly owned company that has allowed fans in the past to purchase stock in the company (which gives the company funds and lets fans feel like they have a stake in the team).
What does the restructuring look like in practice? As part of a larger effort by Liberty Media to shift control of its assets, the corporation will redeem its existing common stock in exchange for shares of Atlanta Braves Holdings, Inc. and then recapitalize the remaining common stock into three tracking-stock groups. After the split, Liberty Media Corporation and Atlanta Braves Holdings, Inc. would be two separate, although related, publicly traded companies. Look for stock in the Atlanta Braves to be available on the Nasdaq Global Select Market in 2023. But what does that actually mean for fans looking to buy into their favorite team, or invest in a professional team, and why exactly is Liberty Media restructuring at this point?
Per Liberty Media’s press release announcing the restructuring, the goal is to “split off the Atlanta Braves into an asset-backed stock to better highlight its strong value.” Liberty Media clearly believes that the Atlanta Braves as a business has value that is being left on the table by not listing it on the Nasdaq Global Select Market, and the restructuring allows for Liberty Media to still own and control the source of that value while creating a distinct entity to realize on that value. The restructuring also allows Liberty Media to shift its debt and equity ratio to improve its own finances. To an extent, Liberty Media is hoping that this move will allow them to take advantage of what they perceive is significant value in the brand of the Atlanta Braves while also improving financial conditions for it as a parent company: two financially strong companies are better than one. By restructuring, Liberty Media is likely hoping to offload certain debts in order to better protect the parent company. And by having a separate company encompassing the Atlanta Braves brand, Liberty Media is hoping that it can attract new sources of funding in the form of investors looking to purchase an ownership share in a Major League Baseball club. In a possible early sign that the move is paying off, Liberty Media stock was up nearly 10% after the announcement.
There is also speculation that splitting the companies up might be the first step toward selling the team… Needless to say, the restructuring of the Atlanta Braves has a lot of significant implications, and Conduct Detrimental will seek to highlight just a few of those over the next few days.
Grant Williamson is a graduate of the University of Tennessee College of Law - J.D., Class of 2019. He can be found on Twitter @GrantWilli33