Sale of the Braves Fuels the Corporate vs. Family Ownership Debateby Maury Brown
May 22, 2006
They say that the only sure thing in life is death and taxes. They didn’t say that the sale of the Braves would be involved, but that may well be the case.
Bear with me.
While the sale of the Nationals has garnered the spotlight over the course of the last six months, the sale of the Braves has been a large and looming deal that has brought the discussion of corporate ownership versus family ownership, with corporate tax breaks as the steady undercurrent in the deal.
Basically, Time Warner (a corporate entity) seems likely to sell the club to Colorado-based Liberty Media (another corporate entity). This has kicked the “corporate entity as owners” discussion into high gear, with the premise being that local “family” ownership would be more concerned about the health and well-being of the franchise, while a corporation will view the Braves as no more than a business holding and an entry on a corporate ledger.
When Chipper Jones was asked about whether corporate or family ownership mattered, his reply to the Associated Press was, “Yeah, it matters. If a company is buying us for investment purposes, then it doesn't benefit us at all."
So, where do the other bidders for the Braves—namely Falcons owner Arthur Blank—fit in? They’re on the sidelines while the deal seems wired in for the two corporate behemoths.
And here’s where MLB and tax breaks fit in.
Both Time Warner and Liberty Media stand to save considerably on the deal by structuring the deal around tax breaks. Time Warner will sell the club without having to pay taxes on the deal, and Liberty Media will divest itself of a large part of Time Warner stock—another tax break.
Through this process, many have pondered—some out loud in the media—how the Nationals deal emphasized family ownership so strongly, while the Braves deal has headed in the polar opposite direction. After all, when asked about the makeup of the Lerner group and their place in the history of the ownership dynamic in MLB, Bud Selig responded by saying, "In the end, I determined that family ownership, and major investment by a central person has served baseball well in the past and will continue to serve it well and in the future," said Selig. "I believe the Lerners will be another excellent example."
So, is it any wonder that many just shake their head and say, “Huh?” when during the same stretch of time, the Braves deal appears headed for corporate ownership with local “family” bidders left of the sideline?
In a conversation with one highly placed MLB executive on placing a franchise in Northern New Jersey, I framed the question of “how can one deal be so inherently different from another” in that way.
“Every deal is unique,” said the executive. “If Bud wants it to happen, he’ll make it happen.” So, looking at the sale of the Nationals and tying it to the Braves deal is an effort in futility when looking at it through the prism that is Bud Selig and MLB.
But, these two deals do bring up the question: Which is better? Corporate or family ownership?
It should be noted that Liberty Media is not based in Atlanta. Arthur Blank is from Atlanta, and therefore the consensus by many in the media and fans is that he will take more pride in the franchise should he own it. If he has more of an interest in it as someone with local ties, he’ll be more directly involved and invest in the club accordingly.
But, is that really the case? The jury is out on the matter.
Going back over the history of the “corporate vs. family owned” structures, there is no clear pattern as to whether one works better than the other. As Tim Lemke of the Washington Times reported:
For every family like the O'Malleys that brought stability and championships for more than 40 years with the Dodgers franchise, there have been controversial and oft-criticized owners like Peter Angelos in Baltimore, the Pohlad family in Minnesota and Marge Schott in Cincinnati. Meanwhile, corporate-owned teams like the Atlanta Braves and Seattle Mariners have enjoyed great on-field success, and many partnership-owned teams like the St. Louis Cardinals and Boston Red Sox also have thrived.
But, did Fox or Disney exemplify “good ownership” with the Dodgers and the Angels? How about the Tribune Company and the Cubs? It’s hard to say.
Certainly, they didn’t fly the plane into the side of the mountain. The Angels team that won the World Series in 2002 was built during the Disney ownership tenure, and the Cubs were a Steve Bartman fly ball from going to the World Series in 2003.
Maybe it's the case that local ownerships don't guarantee championships any more than money doesn't guarantee success. It is not necessarily a case of the type of ownership, but rather the ownership philosophies, willingness to invest in the club, and most importantly, viewing ownership of a club as a priority from not only an investment perspective, but as a sports perspective, one that emphasizes winning and the long term stability that comes with it.
To tie this all back to the sale of the Braves, John Malone, the chairman of Liberty Media, had made mention that nothing would make him happier than bringing Ted Turner back into the Braves ownership fold. This wasn’t some idea hatched on a whim, as Malone has known Turner for years. The key question is, was the idea of bringing in Turner an attempt to placate those who want to see some type of local attachment to the club. Certainly, Turner would have been a connection to the club’s resurgent past.
Unfortunately for Malone and Liberty Media, Turner has said he’s not interested, although clearly, Turner’s inclusion in the group is not a make or break part of the sale process.
So, for you Braves fans, maybe the way to close this story is to look at the moving parts in the sale of your beloved franchise. It’s shaping up to be heavily weighted toward the “business side” of the deal. You can look at the glass as being half-full or half-empty, depending on your point of view—there’s nothing that says corporate ownership is good or bad. It all depends on who winds up running the show. And finally, I think most all of the Braves fans will agree: If the terms of the Braves sale are heavily dependent on tax breaks, it’s enough to make any diehard fan want to tomahawk chop the process into pieces. Somehow, that aspect should not be what will be remembered as the driving factor in moving from one owner to another.
Maury Brown is the editor of BusinessOfBaseball.com, co-chair of SABR's Business of Baseball committee, and covers the business of baseball at his blog, The Baseball Journals. His analysis and commentary has been published in the Boston Globe, CNN/Money, Toronto Globe and Mail, Los Angeles Times, Pittsburgh Post Gazette, San Jose Mercury News, and Oregonian. The opinions expressed here are solely those of the author and do not represent the opinion of the Society for American Baseball Research or its Business of Baseball committee. Maury can be contacted through the miracle of e-mail.