Atlanta Braves now officially a “real estate business,” because they’re sure not a baseball team

Bloomberg Businessweek has a long article up this week on the Atlanta Braves‘ success at getting half a billion dollars in public subsidies for stadiums for their entire major- and minor-league chain of teams, which includes these memorable lines:

Says Joel Maxcy, a sports economist at Drexel University: “If there’s one thing the Braves know how to do, it’s how to get money out of taxpayers.”…

“The whole deal was very much behind closed doors,” says Michael Hotchkiss, a Pearl native, then an editor at the Clarion-Ledger [of the team’s deal for $28 million in public funds for a Double-A ballpark in Pearl, Mississippi]. “By the time it was public, the whole thing was done.”…

“There was no transparency,” says Lisa Cupid, one of [Cobb] county’s five commissioners [of the Atlanta Braves stadium deal]. By the time the commission got the chance to see the documents, the details had already been negotiated. Her fellow commissioners, she says, “were all just excited to be asked to the dance.”

Sense a theme here? The Braves owners may be spectacularly bad at putting together a winning baseball team (though you can make an argument that they’re following the model set by the bust-to-boom Houston Astros, though the Astros are currently in last place now as well), but they’re expert in getting stadium money approved before anyone can notice what’s going on. That’s a real skill, especially in a subsidy world where public attention only gets lawmakers thinking about what they’re doing before voting on it, and you don’t want that.

All of which leads up to the article’s impeccable last paragraph:

During a question-and-answer with shareholders in April, [team owner John] Malone shrugged off the Braves’ slow start. “Keep in mind,” he said, “the Braves now are a fairly major real estate business as opposed to just a baseball club.”

And it’s way easier and more predictable to run a baseball club as a real estate business. Plots of land never blow out their elbows.


11 comments on “Atlanta Braves now officially a “real estate business,” because they’re sure not a baseball team

  1. Yep. Its like a lot of things these days.

    I always say Kohl’s is an abusive credit card company that also sells clothing, shoes, and housewares.

  2. McDonalds is similar. The hamburgers are just a convenient way to get folks to lease land from them. They wind up loosing less on the burgers then they make on the land so it’s a win!

    • That’s not remotely correct. McDonalds does make a substantial profit leasing land to franchisees, but it’s only about a fifth of total revenue for the company. They do not lose money on restaurant operations.

      • The total property that McDonalds owns has been estimated at $42 billion, which is more than they report as their total assets ($37 billion). If anything the burger business is reducing the value of their property.

        Also, if you don’t think it’s core to McDonalds business model you’re mistaken. Yes, leasing is only 1/5 of their revenue, but it’s all of their profit and they spend next to nothing on keeping up the properties since that is the responsibility of the franchisee, not McDonalds parent company.

        They breakeven on the burgers and it’d look even worse for them if the franchisees were on book instead of off and this doesn’t even get to how they use real estate to control the franchises.

  3. It’s also easier to run a real estate business when all/most of your competitors have to pay for their land and you don’t.

    Maybe Braves “fans” understand this all better than we do… it would explain why the mostly haven’t bothered to watch the team (at least in person) since Ted sold his company.

  4. My conspiracy theory is that the owners of the Braves are intentionally tanking this season so when they move into their new home in the suburbs, they can show instant improvement, which will be good for marketing and remove some of the bitterness amongst the locals about the price they’ve had to pay to get the club in their backyard. The city versus suburb dynamic is pretty strong in metro Atlanta and especially between Cobb County and the City of Atlanta. Being able to say the team instantly improved once they moved to Cobb would be a bit of bragging rights.

    It’s also interesting to note how having two new stadiums under construction in two nearby jurisdictions have also allowed both to hand wave away accusations of plundering the public treasury by pointing to the other stadium and claiming it was a worse deal.

    • The ITP vs OTP “dynamic” is mostly one-sided, and digital; I live in Cobb and I don’t know of a real life person that is constantly outraged at what’s going on in Atlanta. Liberals in the city who frequent urban online forums make up the wildest accusations about suburbs that couldn’t be further from the truth.

      I do agree in that local media has done a wonderful job at pushing the superficial narrative of stadiums being an “urban” things and the Braves move being “bad” for the city while completely ignoring that billions have been fleeced from taxpayers my Malone and Blank, while being perplexed that we don’t have enough money to fund infrastructure improvements.

    • The Braves are tanking now because they have a terrible team, and if you’re going to lose 90 games, you might as well lose 100.

      There is no chance they’re going to show instant improvement when they move to the suburbs. Maybe in 2018 or 2019 when the bridge to the parking lot is finally built.

  5. Neil,
    Your headline for this article is prescient.

    Please see “Braves accidentally call up ineligible player” posted at http://www.thescore.com/mlb/news/1018979?utm_source=dlvr.it&utm_medium=twitter

  6. Now I am confused… I thought that the American Way was that “Those With Money Buy Things” but now you are saying that they just use their money to get even more money from those of us without nearly as much of it???
    S H O C K I N G!!!!