(Bloomberg) — The Atlanta Braves are on a big winning streak. But the company that owns the team isn’t faring as well in the stock market as the baseball club is on the field.
With the global pandemic necessitating a shortened baseball season that saw fans outlawed from attending games in person, shares of Liberty Media Corp.’s baseball assets, commonly known as Liberty Braves, remain about 27% lower than their pre-pandemic high. Second-quarter revenue fell by 95% due to the loss of games and the restriction on fans.
Still a group of investors, spurred on by the recent sale of the New York Mets and the spread of legalized sports gambling, see the potential for a windfall profit.
Investors like Hawk Ridge Capital Management and Shapiro Capital Management were lapping up shares even while the fate of the baseball season was still up in the air.
“We don’t think there’s any permanent impairment to the value of sports franchises,” said Hawk Ridge founder David Brown. “That view is bolstered by the recent transaction with the Mets and the Red Sox rumor.”
The Mets are set to be sold to hedge fund titan Steve Cohen in a deal that values the franchise at a record $2.42 billion. Fenway Sports Group, which owns the Boston Red Sox, is reported to be in talks with RedBall Acquisition Corp. to go public through a merger that would value its holdings, which also include Liverpool Football Club, at a valuation of $8 billion, including debt.
Brown also cited the uptick in sports gambling and the opportunity for the Braves to strike a more lucrative television deal once their current agreement with Sinclair Broadcasting ends in 2027 as reasons for buying the stock.