NEW YORK (CNN/Money) -
AOL Time Warner Inc. is weighing the possible sale of its three professional sports teams in Atlanta -- the Braves baseball team, the Hawks basketball team and the Thrashers hockey team -- although executives close to the teams described the sale as unlikely.
AOL Time Warner spokeswoman Tricia Primrose confirmed that company CEO Richard Parsons identified the three teams as an example of "non-core assets" that the company is considering selling in an effort to strengthen its balance sheet when he was asked to identify such assets by analysts during discussions on Friday.
"Strengthening the balance sheet has long been one of his priorities," said Primrose. "But no discussions are under way."
The teams are part of the Turner Broadcasting unit of AOL Time Warner, which also airs many of the three teams' games. Jamie Kellner, CEO of the TBS unit, also issued a statement saying that the sale of the teams is "highly unlikely."
"We are very proud of our teams," he said in the statement.
AOL Time Warner (AOL: down $0.42 to $11.70, Research, Estimates), which also owns CNN/Money, is not the only media conglomerate to weigh selling sports franchises. Walt Disney Co. (DIS: down $0.10 to $15.14, Research, Estimates) hired Lehman Brothers last week to explore the sale of its Anaheim Angels baseball team, which like the Braves is in this year's playoffs, as well as its Mighty Ducks hockey team. Executives with Rogers Communications Inc. (RG: down $0.19 to $6.28, Research, Estimates) also have vowed to analysts that the Canadian media company will not continue to support losses at the Toronto Blue Jays baseball team.
But Stan Kasten, president of the three AOL teams, told CNN/Money that AOL Time Warner gains much more from its teams than Disney or Rogers do from theirs, with the TBS cable network carrying Braves games nationwide and the Thrashers and Hawks playing in an arena owned by the company.
"It's very obvious we're a non-core asset. He [Parsons] is considering everything, but is anything going on? Nothing to the best of my knowledge," Kasten said. "It's business as usual here today. I was meeting with Kellner today to discuss baseball payroll for the next three years."
The three Atlanta teams are valued at a cumulative $777 million by Forbes magazine, which does an annual valuation of all teams in the four major U.S. sports leagues. But that estimate might be low. The Boston Celtics, which had been valued by Forbes at $218 million, was sold for $310 million to a group of investors Friday after accounting for debt that was not assumed by the buyers -- a premium of 42 percent over the Forbes estimate.
One analyst contacted Monday said he does not think AOL Time Warner has a pressing need to sell the teams, but that it might make financial sense for it to do so at this time.
"Of all the assets, they would be among the least core," said Gordon Hodge, analyst with Thomas Weisel Partners. "There seems to be a healthy market for teams, believe it or not. It depends on how much more vanity value could be realized in someone else's hands. But I don't think the company is in a position where it has to do anything."
The Braves are by far the most successful of the three franchises. Besides going to the playoffs for the 11th straight year this year, the team had revenue of $146.9 million in 2001, according to baseball's figures, placing it No. 7 among the 30 major league teams. But baseball's figures showed the Braves lost $23.8 million in 2001.
Comparable financial information for the Hawks and Thrashers was not available.
The Hawks and the Braves were brought into the company first by the purchase of Turner Broadcasting by Time Warner. The two teams and the expansion Thrashers then were included in America Online's purchase of Time Warner in 2001.
Turner founder Ted Turner used to be very active in the day-to-day running of the Braves and Hawks, and the Braves play in a new stadium named for him. He remains a member of the board of directors of AOL Time Warner as well as the company's largest single shareholder. But that might not be enough to stop the company from selling the teams, Hodge speculated.
"They wound down the Goodwill Games, which were also an interest of his," Hodge said, referring to the international sports competition Turner started during the time of Olympic boycotts by the United States and Russia. "That would indicate that at the end of the day, economics are ruling decisions. If they got an offer that was dramatically accretive to earnings, they would have to consider it. I don't think anyone would be standing in the way to that."