AOL may be selling sports teams

Looks like the Braves aren't the money makers everybody once thought...

http://www.bettorstalk.com/news/archives/00000094.shtml

NEW YORK (CBS.MW) -- AOL Time Warner, the world's largest media and Internet company, may sell its three sports franchises to bolster its financial position, its chief executive officer said.

AOL spokeswoman Tricia Primrose confirmed Monday that CEO Richard Parsons told securities analysts on Friday the company is searching for ways to strengthen its balance sheet, and offered up the sports teams "as an example of a non-core asset."

However, Primrose stressed that "no discussions" are under way for such a sale. Forbes has estimated AOL could raise about $760 million if it sold the three teams.

AOL (AOL: news, chart), whose stock has fallen 63 percent in the past year, is under pressure to boost revenue and improve its financial standing. Parsons is eager to show Wall Street that he's willing to make significant moves toward this goal.

AOL's shares fell 59 cents, or nearly 5 percent, in recent trading to $11.53.

AOL owns the Atlanta Braves baseball team, basketball's Atlanta Hawks, and the Atlanta Thrashers hockey team.

Walt Disney (DIS: news, chart), which owns the Anaheim Angels baseball and Mighty Ducks hockey franchises, is also considering the sale of its sports teams.

Drain on the bottom line

The prospect of AOL and Disney both putting their sports franchises on the block is a sign of the times.

Not too many years ago, major media companies eagerly acquired sports teams as a way of obtaining programming for their cable television operations. But ever-increasing costs have made the properties unattractive in rough economic times.

"These businesses don't contribute to the bottom line," UBS Warburg analyst Christopher Dixon said in an interview Monday. Their value is diminished at a time when the media companies are now operating under "intense scrutiny" from Wall Street.

There is speculation that AOL might want to keep the Braves, a perennial championship contender and once a linchpin to Ted Turner's cable empire.

The team is widely viewed as the pride of Turner, who sold his company to Time Warner in the mid-1990s and continues to be a huge shareholder in AOL Time Warner. The Braves play in Atlanta in Turner Field, named in his honor.

Dixon, however, said AOL would sell "all three of them," referring to the sports franchises under its control. "The escalation of sports salaries [has] made it very difficult to make money," the analyst said.

"These are clearly not core assets," said Youssef Squali, an analyst with First Albany. He noted that AOL is also considering a sale of its ownership in the Comedy Central cable channel. See story.

Squali said he doesn't think the sale would be significant in itself because AOL is so large. However, it would show Wall Street that Parsons is able to put his stamp on the company, which analysts and investors now regard as bloated.



Bob Lanza, an attorney with Sonnenschein Nash & Rosenthal, said he's surprised that AOL might sell the teams, particularly the Braves.

"There would be a distinct advantage in forming a broadcast network because there is a real compatibility," Lanza said. "I think that (Dallas Mavericks owner) Mark Cuban and the Yankees have shown that there is a tremendous profitability in sports franchises.

Some analysts have estimated that the three teams could be worth about $750 million. Lanza, former chief counsel for the National Basketball Association's players union, said he regards the projection as "low."

Andrew Zimbalest, a professor at Smith College who follows sports business closely, said a sale of the Thrashers would make sense because AOL has "no synergy" with the hockey team.

Regarding the Braves, he said, "maybe AOL thinks it has gotten everything out of the franchise that it can."

 

How the hell does that relate in any way to what I posted? The Braves have excellent attendance. If they were making money then AOL wouldn't be seeking to sell them...it's that simple.

 

And sanctioned the use of the trademark mouse ears in their advertising and whatnot.

 

Do you have the foggiest clue of the economics of baseball? If you did you'd know that attendance is a small piece of the pie when compared to TV deals. The Braves have a nationwide Superstation. That has been an absolute cash cow for them.

BTW...the Braves ranked 13th in attendance. That's better than 2/3 of the teams...yup I guess that's crappy fan support.

 

Would you have preferred 60%? Damn...I think you get the point.

As for the Hawks...they have sucked FOR YEARS. Take any NBA team in any city with that degree of hopelessness and they won't draw either.

 

Actually...no. I've never even been to ATL. With you it's ALWAYS the same old tired song. Either the fans are fair weather or the owner is cheap. It couldn't possibly be that in this day and age that pro sports is simply not a money making venture.

I'm intent on proving you wrong...because you are wrong. It's really that simple.

 

This just makes it strange that you feel the need to:
1) Blame the financial losses on fans, and
2) Call out owners who refuse to lose huge sums of money as being cheap.

 

It's really easy to say that in 2002 when the team was purchased in 1993 at a time when you could become one of the top payrolls in MLB and still break even.

Hell in 1996 the revenues we currently have would have allowed the Astros to have had the highest payroll in baseball and still broken even. Things change.

You can say sell the team...but nine figures worth of money losing venture takes quite a while to sell.

 

As with anything, the truth is likely somewhere in the middle. I think the owners are losing money, but not at quite the rate they claim.

I can say this...even by Forbes' numbers, there will be several teams that may go insolvent within the next 5 years. This is not a good situation. Further payroll proliferation will merely compound the problem.