Monte Burke has a nice article on the financial direction of the Braves in Forbes. In particular, he takes a look at how the new owner is managing the team.
However, by last year the organization that once called itself “America’s Team” seemed to be running on fumes. Time Warner (nyse: TWX – news – people ) had acquired it as part of Turner Broadcasting in 1996 and after 2003 had dramatically reduced player payroll. In 2007 the Braves missed the playoffs for the second season in a row, and their 31-year-old television contract with superstation TBS–which provided a nationwide fan base–ran out. Home game attendance, at 2.7 million, was below the National League average.
The biggest blow appeared to come in May last year, when Major League Baseball owners approved Time Warner’s sale of the team to Liberty Media (nasdaq: LCAPA – news – people ), a Colorado cable and telecom conglomerate run by noted dealmaker John Malone….
Some of the Braves’ players worried out loud that Malone would care more about the bottom line than about winning. Fans were plain angry. “It was frustrating because it went against MLB’s stated policies of local and personal ownership,” says Mac A. Thomason, who writes a Braves fan blog.
They were in for a surprise: Malone, 66, whose Liberty already owned a small piece of the team through a stake in Time Warner, is starting to look like just what the Braves needed. He’s moving ahead with an ambitious and expensive turnaround plan that the team launched five years ago, and he’s even pumped in some Liberty money to push it along.
The turnaround effort has already begun to bear fruit. This year, with a mix of young fielders like Mark Teixeira and Brian McCann and veteran pitchers like Tim Hudson and John Smoltz, the Braves are contenders again. Attendance still lags behind that of the glory days of the 1990s, but it was up from 2.5 million last season and could reach 3 million this year, after vast stadium renovations and improvements in parking, concessions and guest services.
Even without making the postseason last year, the Braves brought in $28.1 million in operating income. FORBES values the team at $497 million, seventh among baseball’s 30 teams.
Malone has given his baseball people all the money they need, upping the club payroll from $87 million to $102 million, the tenth highest in the majors. “I think the management, if anything, is reasonably more empowered now,” says Liberty’s chief executive, Gregory Maffei. “We’ve backed them and given them freedom to move.” At first there was fear Malone might flip the team for a quick profit, but he says he can see owning it for decades, even though he’s contractually obliged to hold on only until 2011. “Most of the assets we’re in we’ve owned for a long time,” he says, citing his involvement in Turner Broadcasting–since 1986–and QVC. “I like to think the Braves are an appreciating asset.”
I’ve never understood fan dislike of corporate owners. Because financial success is largely a product of winning, I think the incentives are aligned to promote success. Time Warner owned the Braves for the majority of the Braves playoff streak. Yes, Time Warner put the breaks on spending in 2003, and that was probably the right move considering that profits were down to zero and fans were losing interest in the team.
I’m more fearful of a fan-owner than a corporate-owner. George Steinbrenner and Ted Turner were loved when they were winning, but for most of my childhood these men were hated for ruining their teams. Remember this?