How to Buy a Pro Sports Team If You're Not a Billionaire
Data source: Liberty Media
The Liberty Braves Group (NASDAQ: BATRA) (NASDAQ: BATRK) is the division tracking the Atlanta Braves and the organization's related assets.
Liberty SiriusXM Group (NASDAQ: LSXMA) (NASDAQ: LSXMB) (NASDAQ: LSXMK) tracks the company's roughly 60% stake in Sirius XM Holdings , the satellite radio company.
Liberty Media Group (NASDAQ: LMCA) (NASDAQ: LMCK) tracks the company's stakes in three publicly traded media companies: Live Nation Entertainment , Time Warner , and Viacom .
Since the restructuring, the Braves tracking stock has tanked, while the Liberty Media Group and Liberty SiriusXM Group tracking stocks have been stable.
Just because you can buy Braves stock, should you?
The Braves tracking stock is down about 40% since its first day on the Nasdaq. It's difficult to tell if that decline is driven by a fundamental problem with the franchise, an overly ambitious opening-day valuation, or perhaps even an investor revolt in response to the team's 7-23 start to the season. That's currently the worst record in all of Major League Baseball.
From a business perspective, the club's first quarter was uneventful. Revenue declined by $1 million, driven by a one-time payment from Major League Baseball last year. Operating income declined by about $15 million after the team released first baseman Nick Swisher in March. That move accelerated the recognition of his entire 2016 salary into the first quarter. Q1 is generally the worst financial quarter for baseball teams as expenses ramp up preparing for the season but ticket, stadium, and product revenues have yet to start rolling in.
Thinking even longer term, the Braves are preparing to move to a new stadium complete with the full run of corporate boxes, sponsorship opportunities, and a mixed used commercial property surrounding the stadium. That upgrade has the potential to drive significant new revenue in years to come.
On the valuation side, Liberty CEO Maffei pointed out to investors that the Seattle Mariners were just purchased for $1.4 billion earlier this year. That sale is not an unreasonable comparable for valuing the Braves, which at today's $16 tracking price has a market capitalization of only $700 million.
Of course, no one would blame any Braves fans out there for buying a few shares at this price or any other, if only to add an exclamation point to their complaints about the team's horrible start so far this season.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.