How the Braves Were Acquired
The first thing anyone needs to know about this whole situation is that Liberty Media did NOT buy the Atlanta Braves. The team instead acquired via a crafty trade, and only because it created a financially advantageous situation for Liberty Media.
Some ten years ago, Liberty media owned approximately 170 million shares of Time Warner, and they wanted to sell a portion of these shares back to Time Warner. However, at the time of the sale, corporate capital gains were taxed at ordinary income rates, which at the time would have been roughly 39 percent for Liberty Media, according to the Wall Street Journal.
(Important note: This article was released a year before the sale of the Braves, and numbers were tweaked to adhere to new laws).
The final deal involved Liberty Media selling Time Warner 68.5 million shares of Time Warner stock, worth about $1.48 billion, and the 39 percent tax would have been just under $600 million ($577,200,000, by my calculations).
Because the deal was structured as a “cash-rich split-off,” as long as roughly one-third of the deal consisted of an active business (such as the Atlanta Braves), the transaction was completely tax-free, including the cash portion. The deal had the Braves valued at $460 million, which is just under one-third of the $1.48 billion, so Time Warner threw a bunch of small magazines into the deal to make up for the rest.
The only reason Liberty Media owns the Braves is that doing so enabled them to save hundreds of millions of dollars in a stock sale.