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Written by The Staff   
Wednesday, 27 September 2006 01:11

BravesFor months, the sale of the Braves from Time Warner to Liberty Media has been delayed due to issues that involve the IRS and MLB. Now, it appears that the delay will continue.

The sale involves a unique tax dodge for both Time Warner and Liberty Media. As reported:

"Perhaps all things with Time Warner are complicated," Maffei said, "but things related to baseball teams and the like are particularly complicated because you throw in Major League Baseball rules on top of all the restrictions of what Time Warner wants and we want and the '355' restrictions."

('355' refers to the section of the tax code pertaining to "cash-rich split-offs," legalese for this type of transaction. The proposed deal would have Time Warner put the Braves and about $1.35 billion into a newly formed subsidiary, then exchange that subsidiary to Liberty Media for about 107 million shares of Time Warner stock long held by Liberty. If various requirements are met, Liberty could avoid tax on the stock sale and Time Warner could avoid tax on the team sale. The combined tax savings could be as high as $700 million.)

On MLB's side of the ledger is concern of the ownership structure. MLB often prefers "family ownership", but in this case, the Braves would be owned by a corporation (Liberty Media). Possible solutions to satisfy MLB might be, "entering into an agreement to have Braves chairman and president Terry McGuirk continue to run the team."

(The Atlanta Journal Constitution)

 
 
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