среда, 12 сентября 2012 г.

AOL Time Warner latest media giant seeking to shed its sports teams - AP Worldstream

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Dateline: ATLANTAFor news and entertainment companies, owning a sports franchise can help build interest in other divisions, particularly fledgling cable channels. Once achieved, analysts say, there's not much reason to hold on to the teams.

Such is the case for AOL Time Warner Inc., the latest industry giant to seek a buyer for its sports teams. The company says it wants to sell the Atlanta Braves, Hawks and Thrashers to help pay down its $25.8 billion debt.

"Owning a team is a very effective way to gain ratings, gain coverage, but I think it's mission accomplished," said Merrill Lynch entertainment analyst Jessica Reif Cohen.

A handful of individuals and investment groups have expressed interest in buying the teams in the past two months. The interest has been described as serious, but there is no specific timetable for a deal, according to two people familiar with the discussions who spoke on condition of anonymity.

The company won't reveal the names of those interested in the teams or how much it wants, but analysts say the teams together are worth about $750 million. Selling them individually could raise more cash, analysts say. The price tag could go even higher if the buyer takes over the company's operating agreements for Philips Arena and Turner Field.

Among those mentioned as possible suitors are the teams' former owner, Ted Turner, and former New York sports executive David Checketts.

The possible sale of the Atlanta sports teams is part of a trend at large media and entertainment companies. Rupert Murdoch's News Corp. has expressed interest in selling the Los Angeles Dodgers and The Walt Disney Co., which owns ABC and ESPN, wants to sell the Anaheim Angels and Mighty Ducks.

"They're properties. They're businesses," said Tom Wolzien, a media analyst at Sanford C. Bernstein & Co. "Either it's core to your operations or it provides you with some strategic rationale or it's a good financial investment. As the other needs get resolved, then it's something that you sort of move on from."

In AOL Time Warner's case, owning the Atlanta sports teams has helped it boost its cable stations that carry many of the teams' games, including TNT, TBS and Turner South. Fewer local games have appeared on the channels in the last couple of years, and the stations carry some more popular dramatic shows and movies.

"When Ted Turner bought the teams originally, the reason was they provided content for the then fledgling Superstation TBS," Wolzien said. "He was basically in a position where he bought teams that helped fill out his television schedule. As the needs of the cable networks change, the reason to own the sports teams are not as compelling."

Analysts say many sports teams are not as profitable these days because of higher player salaries and less television revenue to go around. The Braves have one of the highest payrolls in baseball _ it is expected to be about $90 million this season.

The Dodgers claim they have lost nearly $100 million over the last two years, and, despite the fact that Anaheim won the World Series last year, Disney says it loses $16 million annually on the Angels and $9 million on the Mighty Ducks, analysts say.

Profitability is especially important for AOL Time Warner because it has said it wants to focus on paying down its debt.

The company reported a staggering $44.9 billion loss in the fourth quarter. Following the news, the management shakeup at the company intensified, with Turner resigning as vice chairman and Jamie Kellner stepping down as chief of Turner Broadcasting.

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On the Net:

http://www.aoltimewarner.com

http://www.turner.com