Atlanta Braves Shares Hit 52-Week High: Why Investors Should Know About Liberty Media's New Spinoffs

Zinger Key Points
  • Liberty Media is reclassifying its holding companies of sports and entertainment assets.
  • The move could lead to a higher valuation for the Atlanta Braves or a potential buyout.
Atlanta Braves Shares Hit 52-Week High: Why Investors Should Know About Liberty Media's New Spinoffs

A leading media holding company that owns several entertainment assets and sports-related companies is reclassifying its public companies, a move that could give investors a more direct way to own a professional sports team

What Happened: There are only a handful of sports teams that are publicly traded. One of them is the Atlanta Braves, a Major League Baseball team. Owned as part of the Liberty Media holding companies, the Braves will soon be more uniquely represented as one public company.

On Thursday, Liberty Media announced changes to its public companies including the split-off of the Atlanta Braves and its real estate assets into a newly tracked stock.

“We plan to split off the Atlanta Braves into an asset-backed stock to better highlight its strong value. Additional post-split-off, we plan to recapitalize all of Liberty Media’s remaining common stock into three tracking stock groups,” Liberty CEO Greg Maffei said.

The Braves are currently traded as Liberty Media Corporation BATRABATRK. The company will redeem common shares of Liberty Media in exchange for Atlanta Braves Holdings Inc. The new company will hold the assets of the Braves Group and Braves Holdings LLC, the owner of the MLB team. Liberty will redeem Series A, Series B and Series C shares of Liberty Media.

Along with the Atlanta Braves Holdings tracking stock, the two other companies will be called Liberty Live Group and Liberty Formula One.

Formula One Group FWONAFWONK is the current name of the tracking stock for the Formula One racing league. The company also currently operates the Liberty SiriusXM LSXMA holding company. 

The split-off and reclassification are expected to be completed in the first half of 2023.

Related Link: Atlanta Braves Win Their First World Series Title Since 1995: What Investors Should Know

Why It’s Important: The new reclassification will make the operating units more independent. Currently several of the Liberty units own pieces of the other Liberty companies.

“Upon the effectiveness of the reclassification, no group will initially have an intergroup interest in another group,” the company said.

The newly created Liberty Live Group is expected to include the company’s 31% ownership of Live Nation Entertainment LYV and 82.3% ownership of SiriusXM Holdings Inc SIRI.

“These actions will provide greater investor choice and enable targeted investment and capital-raising through more focused currencies while maintaining an optimal capital structure for Liberty Media and preserving optionality with respect to our subsidiary SiriusXM and our Live Nation stake,” Maffei said.

The company said it expected the new shares to trade on the Nasdaq, with the potential to be quoted on the OTC. Several of the company’s existing shares are not tradeable on certain exchanges, such as Robinhood, that limit OTC offerings.

The Atlanta Braves won the 2021 World Series and were valued as the 10th most valuable MBL team at $2.1 billion by Forbes earlier this year.

“You may have noticed there’s high demand out there for sports assets. Money is flowing into the ecosystem, with new players of all sorts driving demand,” Maffei said during a presentation Thursday.

The comments could suggest that the Braves could command a higher valuation than the existing holding company valued at $1.7 billion or lead to a buyout of the team and assets.

Liberty Media Price Action: Shares of Liberty Media Corporation were up 6.45% to $33.48 on Thursday at market close. Shares hit new 52-week highs of $34.54 during intraday trading.

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Photo: Clayton Malquist on Unsplash

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