|Wednesday, April 30
McDavid given negotiating period to finish sale
ATLANTA -- AOL Time Warner's Turner Broadcasting division has entered exclusive talks with Dallas businessman David McDavid about the sale of the NBA's Atlanta Hawks and the NHL's Atlanta Thrashers, closing the multimillion-dollar bidding for an unspecified time.
The arrangement means that Turner will negotiate only with McDavid to reach a deal on the sale of the teams and rights to their home arena, likely by the end of June, officials said.
"As of today, Turner Broadcasting has entered into a letter of intent providing an exlusive negotiating period with David McDavid for the purpose of his possible purchase of the Atlanta Hawks, Atlanta Thrashers and the operating rights to Philips Arena," Turner spokesman Greg Hughes said Wednesday night.
No price for the teams was discussed.
The wording of the statement indicated that AOL-Time Warner, which owns Turner, expects to sell the teams to McDavid before the start of next season. A sale would ultimately be subject to approval by the NBA and NHL. The statement did not mention AOL's plans to sell its Atlanta Braves baseball team.
The company has said it wants to sell the three teams to pay down its $25.8 billion in debt.
"I am thrilled about the prospect of owning such an esteemed collection of sports and entertainment properties as the Atlanta Hawks, Atlanta Thrashers and the operating rights to Philips Arena," McDavid said in a statement.
He added, "This is one big step in a long process and there still remains a lot of work to do before the deal is completed. However, I remain confident that the acquisition will come to fruition."
McDavid is a former minority owner of the Dallas Mavericks who has owned a chain of automobile dealerships. He has attempted before to buy an NBA team, including the Charlotte Hornets, Orlando Magic and Vancouver Grizzlies. Earlier this year he also had discussions about buying the NHL's Dallas Stars.
AOL-Time Warner said as recently as Tuesday that there were several candidates to buy the two teams.
McDavid and former Utah and New York sports executive Dave Checketts have been the closest contenders.
Analysts say the three Atlanta teams are worth about $750 million.
A person close to the negotiations said a deal for the Braves has not moved as quickly because it is considered the most valuable of the three teams. Its high payroll -- about $91.2 million this year -- also is a factor, the source said.
Turner continues to negotiate with several interested parties about the Braves, the source said, speaking on condition of anonymity.
"It's a different kind of business," the source said of the Braves. "They're in season. I think it helps that the winter teams are not in season."
The possible sale of the Atlanta's sports teams is part of a trend at large media and entertainment companies. Rupert Murdoch's News Corp. has expressed interest in selling the Los Angeles Dodgers and the Walt Disney Co., which owns ABC, has said it wants to sell the Anaheim Angels and Mighty Ducks.
In AOL Time Warner's case, it needs the cash.
The company reported a staggering $44.9 billion loss in the fourth quarter of last year. Following the news, the management shake-up at the company intensified, with Turner resigning as vice chairman and Jamie Kellner stepping down as chief of Turner Broadcasting.
In trading Tuesday afternoon on the New York Stock Exchange, shares of AOL Time Warner were up 27 cents at $12.43.