John Malone May Sell Atlanta Braves; Stock Could Rally 40%, Rosenblatt Says

Key Takeaway

• Rosenblatt analyst Barton Crockett sees a potential 40% upside for Atlanta Braves Holdings (BATRA) stock, raising the price target to $54.
• Despite John Malone's comments, Crockett believes a credible buyout offer could materialize post-July 18, after tax-seasoning.
• The Braves' Series C non-voting shares have declined by 1.5% in 2024, lagging behind the S&P 500's 12.2% gain.

Analyst's Optimism on Braves Sale

Investors can still anticipate a potential sale of Atlanta Braves Holdings, according to a recent report by Rosenblatt Securities. Despite Liberty Media chairman John Malone's recent comments that the Braves are "not for sale," Rosenblatt analyst Barton Crockett remains optimistic about a future buyout deal. Crockett raised his price target on the Braves by $1 to $54, implying an upside of nearly 40% from Wednesday's close. Liberty Media owns 17% of the Braves' Series C non-voting shares, while Malone holds another 6%, and Braves and Liberty Media CEO Gregory Maffei owns approximately 2.25%, according to FacSet data. Majority control of the Braves' voting stock remains with Malone and Liberty Media.

"Malone's talk, in our opinion, was more a cover-your-tax-backside missive, than a statement of no way, ain't gonna happen," Crockett wrote to clients. He believes that Malone's comments were likely aimed at tempering near-term legal concerns rather than dismissing buyer interest. Crockett added, "We believe the statements seeming to indicate no interest in a sale would melt away if a credible offer landed in the Braves' owners suite, after tax-seasoning is attained on July 18." This date marks the one-year anniversary of the Braves Holdings spinoff from Liberty Media in 2023.

Market for Sports Assets

Crockett emphasized the continuing active market for sports assets, particularly from billionaires seeking durable financial returns and the prestige of owning a team. "We are convinced that if a qualified buyer approached the Braves, a deal could happen," he said. However, he noted that Malone would likely prefer a buyer that Braves management is comfortable with, which he believes is "eminently doable."

The Braves are one of the few sports teams that everyday investors can buy into via the public market. The team has a strong track record, having won the 2021 World Series and reached the National League Division Series in both 2022 and 2023. As of Wednesday, the Braves have the seventh-best record in Major League Baseball, according to ESPN.

Stock Performance and Analyst Ratings

Despite the team's strong performance, the Series C non-voting shares have declined by 1.5% in 2024, missing out on the broader market's rally. The S&P 500 has gained 12.2% this year as of Wednesday's close. Only four analysts on Wall Street cover the Braves, with three rating it a buy. David Joyce at Seaport Global has an even higher price target of $58 on the Braves' Series C stock.

Crockett's optimism is shared by other analysts, who believe that the Braves' strong performance and the active market for sports assets make a buyout deal plausible. "Given a continuing active market for sports assets, particularly from billionaires pining for the durable financial returns, fun, and glory of owning a team," offers should roll in, Crockett said.

Street Views

• Barton Crockett, Rosenblatt Securities (Bullish on Atlanta Braves Holdings):

  "Malone’s talk, in our opinion, was more a cover-your-tax-backside missive, than a statement of no way, ain’t gonna happen. We believe the statements seeming to indicate no interest in a sale would melt away if a credible offer landed in the Braves’ owners suite, after tax-seasoning is attained on July 18."

"We are convinced that if a qualified buyer approached the Braves, a deal could happen. But also to be clear, Malone probably would want the buyer to be someone Braves management is comfortable with. That should be eminently doable."