The Atlanta Journal-Constitution Knight Ridder/Tribune Business News
Oct. 1--A passing reference by AOL Time Warner chief executive Richard Parsons has raised speculation again about whether the company would sell its Atlanta sports teams.
But the company said Monday that it is 'highly unlikely' the Atlanta Braves, Hawks or Thrashers will be sold.
'There has been no analysis, nor have there been discussions, regarding the sale of our sports franchises,' Turner Broadcasting System Chairman Jamie Kellner said in a prepared statement issued Monday. Turner Broadcasting is the division of AOL Time Warner that operates the sports franchises.
At a meeting with investors last week, Parsons said if the company needs to reduce debt it has several options, one of which could include the media and online company selling 'non-core assets.' Those assets, he said, could include the sports teams.
Company spokeswoman Tricia Primrose said Monday no discussions are under way about selling the teams, but she would not rule out the possibility.
This isn't the first time questions have been raised about who will own the teams.
The Braves, in particular, were crucial to Ted Turner's strategy for providing relatively inexpensive programming to build his cable TV empire. The games attract a loyal fan base, which cable operators want from the networks they carry. Prime-time Braves games pulled in an average of 1.7 million viewers for TBS so far this season.
But industry watchers say ownership of the Braves is no longer so crucial to the networks, which now can rely on other programming. And Turner's power has been diminished through the company's mergers with Time Warner, and then America Online.
While those mergers have made the Atlanta sports teams less important to the much bigger parent company, they also have reduced the relative benefit of selling the teams.
Paul Kim, an analyst who follows AOL Time Warner for Kaufman Bros., said he doesn't think the company needs to reduce its $28 billion in debt. But even if it decided to make a noticeable cut of $5 billion to $10 billion, it couldn't come close to that by selling the Atlanta sports franchises, Kim said. Together the teams are worth about $760 million, according to Forbes magazine estimates.
'I don't know if they want to waste their energy trying to auction off these assets for not that much benefit,' Kim said.
There has been more speculation on Wall Street about the potential for the company to sell its 50 percent stake in Court TV and in Comedy Central --- other 'non-core assets.'
The company's core assets include other cable networks, cable systems, magazines, music companies and movie and TV production.
AOL Time Warner recently confirmed it has had 'preliminary discussions' about selling its interests in Court TV and Comedy Central. Analysts say it could get $2 billion to $3 billion for them. But some analysts, including Kim, question whether selling the networks now would provide enough short-term benefit to sacrifice their long-term potential.
Meanwhile, Turner Broadcasting's Kellner went out of his way to talk up the company's ownership of its sports teams.
'The Braves define consistent excellence in baseball, the Hawks will be this year's surprise team in the NBA, and anyone who understands hockey knows that the Thrashers are a diamond in the rough,' Kellner said Monday. 'As you can see, I'm a big fan.'
But the company says none of the teams makes a profit.
In an interview last month, Stan Kasten, the president of the three teams, said the Braves are having their third consecutive year of 'serious cash losses' and their second in excess of $20 million. He said Monday the Hawks and Thrashers also have lost money for the past three years, but declined to say how much.
Even if AOL Time Warner wanted to sell the teams, it might not be easy. The Walt Disney Co. has been interested in selling baseball's Anaheim Angels and hockey's Anaheim Mighty Ducks for years. Disney recently retained Lehman Brothers to help find buyers.
By Matt Kempner and Tim Tucker
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(c) 2002, The Atlanta Journal-Constitution. Distributed by Knight Ridder/Tribune Business News.
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