The Braves’ ownership structure will change as a result of a vote Monday by Liberty Media stockholders to split off the team as an independent publicly traded company.
The Braves and their real-estate development project, The Battery Atlanta, no longer will be a branch of Liberty Media Corp., but instead will comprise Atlanta Braves Holdings Inc., the new stand-alone public company being split off to Liberty stockholders.
Plans for the separation were announced last fall and were approved Monday in a 10-minute special meeting of stockholders, held virtually.
Despite the split-off, the Braves will remain very much intertwined with Liberty, as a 664-page filing with the Securities and Exchange Commission spells out in voluminous detail.
John Malone, Liberty’s billionaire chairman, will own shares of Braves Holdings stock representing about 47.5% of the aggregate voting power. Greg Maffei, Liberty’s CEO, will be chairman of a new five-person board of directors overseeing Braves Holdings. And several current Liberty executives will double as officers of the split-off holding company.
“Upon completion of the Split-Off, (Braves Holdings) and Liberty Media will operate independently, and following (related transactions) neither will have any ownership interests in the other,” Liberty’s SEC filing states. “In connection with the Split-Off, however, (Braves Holdings) and Liberty Media … are entering into certain agreements in order to govern the ongoing relationships between (them) after the Split-Off and to provide for an orderly transition.”
The split-off is widely seen by investors as a potential precursor of a later transaction in which the Braves could be sold to a private buyer at an enhanced valuation. The separation makes an outright sale at some point more attractive and feasible from a tax perspective.
The split-off is scheduled to be completed Tuesday after the close of the stock market. Each outstanding share of the current Liberty Braves Group tracking stock will be exchanged for one share of asset-backed stock in Braves Holdings. The tracking stock was basically an investment in a division of Liberty Media, while the new stock will represent ownership in the Braves as a separate company.
After the separation, Braves Holdings “will be the owner of the Atlanta Braves Major League Baseball Club and its associated real estate development project,” Liberty Media said.
Liberty said in its SEC filing that the company believes the split-off “will benefit Liberty Media and its businesses in the creation of stockholder value” and will provide the Braves “with an independent equity currency that it will be able to use to raise capital to fund its financial needs.”
Liberty’s filing stated that Braves Holdings “expects that all matters relating to the management and oversight of the day-to-day business operations of the Braves will remain as they presently exist and generally will not change, including matters related to the Braves’ MLB Control Person.”
“Control person” is the title MLB attaches to the individual having ultimate authority over each club under MLB rules. Terry McGuirk has long held that position for the Braves, including throughout Liberty’s 16-year ownership of the team.
But there will be a new board of directors overseeing Braves Holdings.
According to Liberty’s filing, McGuirk, 71, will be one of the five members of the board. The document stated that the other board members – in addition to chairman Maffei, 63 – are expected to be: Brian Deevy, 68, a Liberty Media director since 2015 and the former chairman and CEO of financial services firm RBC Daniels; Wonya Lucas, 62, the president and CEO of Hallmark Media and a former executive with Public Broadcasting Atlanta, The Weather Channel and Turner Broadcasting; and Diana Murphy, 66, managing director of private equity firm Rocksolid Holdings and a former president of the United States Golf Association.
Lucas is the daughter of former Braves general manager Bill Lucas and the niece of baseball icon Hank Aaron.
Despite his large stake, Malone, 82, won’t be a director or officer of the Braves. But he may “be in a position to influence significant corporate actions … such as mergers, business combinations or disposition of assets,” Liberty Media stated.
In addition to Maffei, these Liberty executives will double as initial officers of the split-off Braves Holdings: Albert Rosenthaler as the holding company’s chief corporate development officer, Brian Wendling as principal financial officer and Renee Wilm as chief legal and administrative officer. Their roles will be similar to their previous level of involvement with the Braves.
Under a series of agreements, Liberty will provide Braves Holdings with various services, including in the areas of insurance, legal, investor relations, tax, accounting and internal audit, for a monthly fee.
Liberty Media acquired the Braves in 2007 as part of a complex transaction in which Liberty swapped 68.5 million shares of stock it held in Time Warner (a stake valued at about $1.5 billion at the time) for the Braves (valued at $450 million at the time), a group of crafts magazines and about $960 million in cash. The structure of the deal was estimated to have generated tax savings of as much as $300 million for Liberty.
With the split-off, about 62 million shares across three series of new Braves Holdings stock will be issued, replacing the three series of Liberty Braves Group tracking stock that Liberty first offered in 2016.
The Series A and C shares are expected to trade on the Nasdaq exchange under the symbols BATRA and BATRK, and the thinly traded Series B shares will be quoted on the OTC market under the symbol BATRB. The series carry different levels of stockholder voting power: one vote per share of BATRA, 10 votes per share of BATRB and no vote in most matters for BATRK owners. (The trading symbols are the same as for the previous Braves Group tracking stock.)
Liberty disclosed the individuals or entities that will own more than 5% of any series of the new Braves Holdings stock (based on April 30 records): Malone (96.4% of BATRB, 6% of BATRK and 1.1% of BATRA) and investment firms GAMCO Investors (33.5% of BATRA and 2.7% of BATRK), Vanguard Group (8.5% of BATRA and 5% of BATRK) and BlackRock (6.3% of BATRA and 5.8% of BATRK).
Despite being publicly traded, the Braves would be subject to the same detailed MLB process as any other team for an outright sale. Any person or entity seeking to acquire a controlling interest would have to receive approval from MLB.
Also, an agreement with MLB stipulates that no person may own more than 10% of outstanding shares in the Braves unless expressly approved by MLB or “exempt” from the 10% cap (exempt parties are listed as Malone, Maffei and the Braves’ MLB-approved “control person.”)
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