Denali Investors July 2016 presentation on Liberty Braves Group (BATRA). Stay tuned for Denali Q2 letter

Get The Full Seth Klarman Series in PDF

Get the entire 10-part series on Seth Klarman in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues.

Also see.

Denali Investors 2015 Letter - A Rare Down Year

Denali Investors Updated Presentation: The Malone Complex


Allan Mecham’s Arlington Value Capital 2014 Annual Letter

Denali Investors Up 66 Percent In 2013, Brings Buffett’s 1950s Back

After 66% Return In 2013, Denali Investors Up 19% In 2014


LMCA spinoffs of LSXMA and BATRA

  • New LMCA (Liberty Media) holds LYV stake, other assets and liabilities
  • LSXMA (Liberty Sirius) holds Sirius stake, other assets and liabilities
  • BATRA (Liberty Braves) holds Atlanta Braves, real estate, other assets and liabilities
  • Separation to create pure play Sirius and Braves equities
  • Separation to highlight value of LSXMA and BATRA assets within LMCA
  • New LMCA, LSXMA, and BATRA will be structured as tracking stocks
  • Allow each entity to pursue appropriate value creation path

Liberty Media Pro Forma Structure

Denali Investors, Liberty Braves Group

Tracking Stocks 101

What are tracking stocks?

  • Tracking stocks allow investors to invest in the performance of a specific subset of Liberty Media’s assets and liabilities

Rationale for tracking stock restructuring

  • Aim to reduce trading discount to NAV at which Liberty Media Corporation stock traded prior to creation ofthe tracking stocks
  • Provide greater investor choice
  • Create specific transaction/compensation currencies for each tracker
  • Allows separate capitalization and fundraising in a more targeted way
  • Continue to provide advantages of doing business under common ownership
  • Provide greater ability to tailor management and employee incentives

Nothing has changed about the legal ownership or control of the Braves – Liberty Media Corporation remains the legal owner. Liberty Media has not spun-off, sold or otherwise monetized the Atlanta Braves

Liberty Braves Group (BATRA) Summary

Liberty Braves Group

  • BATRA will hold the Atlanta Braves Team, minor league teams, and other assets
  • SunTrust Park Stadium
  • Mixed-use associated real estate development projects
  • $200m rights offering (similar to that of LBRDA’s)
  • Net Cash of $96m
  • Debt (ex Mixed-use) of $347m
  • BATRA will be structured as a tracking stock

Indicative NAV for Liberty Braves Group

Denali Investors, Liberty Braves Group

Introducing the Liberty Braves Group

Denali Investors, Liberty Braves Group

What are we tracking?

  • Atlanta Braves baseball team
    • Liberty Media took ownership in 2007
      • Exchanged 68.5m shares of TWX for the Atlanta Braves, Leisure Artsand $960m in cash
      • Forbes value $458m at time of exchange; Liberty’s basis inherited from Time Warner Inc.

SunTrust Park

  • $672m ballpark to be built in Cobb County, GA

The Battery Atlanta

  • Mixed-Used Development Project to drive incremental traffic
  • $558m mixed-use complex featuring:
  • Up to 400,000 square feet of restaurant and retail space
  • 600 upscale residences
  • 265-room Omni hotel
  • Nine-story regional headquarters for Comcast that will employ more than 1,000 people

Tracking stocks distributed April 15th

  • Trading under ticker symbols BATRA/B/K
  • Each holder of Liberty Media Corporation common stock received 0.1 of a share of corresponding series of Liberty Braves Group

Planned $200m rights offering for BATRK common stock

Liberty Braves Group Summary Organizational Structure

Denali Investors, Liberty Braves Group

See full slides below.