MLB must approve purchase by Liberty Media Corp.
By Mark Bowman / MLB.com
ATLANTA -- After a year of negotiations, it appears Liberty Media Corp. has agreed to terms on a deal to purchase the Braves from Time Warner Inc.
By Monday night, The Wall Street Journal and The Atlanta Journal-Constitution had both reported that they received confirmation of the deal.
When first reporting the transaction, The Wall Street Journal indicated that Time Warner would transfer the Braves, a selection of craft magazines and $1 billion in cash to Liberty Media in exchange for 60 million shares of Time Warner stock.
Major League Baseball must approve the transaction before it can become official.
"This is a very complicated deal that will take baseball some time to review and consider," Braves chairman and team president Terry McGuirk said in an interview Monday night with the Journal-Constitution. "Until we hear back from baseball, there is nothing further to do."
As negotiations went on for nearly an entire year, some got the feeling that the transaction wouldn't be completed. But in mid-January, one top Braves official indicated that a deal was imminent.
Because of a new federal tax law, Liberty Media wants to complete the deal by the middle of May. According to a Braves source, not doing so could cost Liberty hundreds of millions of dollars.
Bob DuPuy, MLB's president and chief operating officer, said on Tuesday that the deal hasn't even gone to the ownership committee yet, which must vet and approve the transaction before it is submitted for a final vote of the collective owners. The next quarterly owners meeting isn't until May.
"This is just the first step," DuPuy said.
According to the Journal-Constitution report, inclusion of an operating asset -- the Braves -- in the deal can make the transaction tax-free. This would allow Liberty to save hundreds of millions of dollars in capital gains tax on the appreciation of its Time Warner stock.
McGuirk and other Braves officials have indicated that this purchase won't cause major changes in the management structure.
"My enthusiasm for this deal is the transparent way in which it will affect current Braves management," McGuirk told the Journal-Constitution. "The expectation is that the entire structure of management will stay in place. [General manager] John Schuerholz and [manager] Bobby Cox and everyone else who operates the Atlanta Braves will operate no differently, and that'll be the magic in this deal."
Several sources have indicated that Major League Baseball won't approve the deal unless there is assurance that McGuirk will continue to run the club in the same capacity. According to The Wall Street Journal report, Liberty Media's decision to transfer 60 million shares would drop their stake in Time Warner from 4 percent to approximately 2.6 percent.
Time Warner announced its intentions to sell the Braves in December 2005. Within two months, it became apparent that Liberty Media had definite interest in obtaining ownership.
Mark Bowman is a reporter for MLB.com. MLB.com national reporter Barry M. Bloom contributed to this story. This story was not subject to the approval of Major League Baseball or its clubs.