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FreeRepublic , LLC
PO BOX 9771
FRESNO, CA 93794
Posted on 09/30/2002 9:22:03 AM PDT by GeneD
NEW YORK (CBS.MW) -- AOL Time Warner, the world's largest media and Internet company, may sell its three sports franchises to bolster its financial position, its chief executive officer said.
AOL spokeswoman Tricia Primrose confirmed Monday that CEO Richard Parsons had told securities analysts Friday the company is searching for ways to strengthen its balance sheet, and offered up the sports teams "as an example of a non-core asset."
However, Primrose stressed that "no discussions" are under way for such a sale.
AOL, whose stock has fallen 63 percent in the past year, is under pressure to boost revenue and improve its financial standing. Parsons is eager to show Wall Street that he's willing to make significant moves toward this goal.
AOL's shares fell 47 cents, or 3.9 percent, in recent trading Monday to $11.65.
AOL owns the Atlanta Braves baseball team, basketball's Atlanta Hawks, and hockey team the Atlanta Thrashers.
Walt Disney, which owns the Anaheim Angels baseball team and hockey team the Mighty Ducks, is also considering the sale of its sports franchises.
The prospect of AOL and Disney both putting their sports franchises on the block is a sign of the times. Once, major media companies eagerly acquired sports teams as a way of obtaining programming for their cable television operations. But ever-increasing costs have made the properties unattractive in rough economic periods.
"These businesses don't contribute to the bottom line," UBS Warburg analyst Christopher Dixon said in an interview Monday. Their value is diminished at a time when the media companies are now operating under "intense scrutiny" from Wall Street.
There is speculation AOL might want to keep the Braves, a perennial championship contender and once a linchpin to Ted Turner's cable empire.
The team is widely viewed as the pride of Turner, who sold his company to Time Warner in the mid-1990s and continues to be a huge shareholder in AOL Time Warner. The Braves play in Atlanta in Turner Field, named in his honor.
Dixon, however, said AOL would sell "all three of them," referring to the sports franchises under its control. "The escalation of sports salaries [has] made it very difficult to make money," the analyst said.
"These are clearly not core assets," said Youssef Squali, an analyst with First Albany. He noted that AOL is also considering a sale of its ownership in the Comedy Central cable channel.
Jon Friedman is media editor for CBS.MarketWatch.com in New York.
Ha! AOL is a "non-core 'asset'!
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