The Braves started the year by posting an increase in revenue — and expenses — for the first quarter, according to financial results disclosed Wednesday by the team’s publicly traded parent company, Atlanta Braves Holdings Inc.
Braves Holdings, which consists of the baseball team and mixed-use development The Battery Atlanta, said it generated total revenue of $37 million in the January-through-March quarter, up 20% from the same period last year.
The increase in revenue was more than offset by an increase in expenses during the quarter.
Braves Holdings was split off from Liberty Media as a separate public company last year, although much overlap remains between the two entities.
While the first-quarter results included no regular-season home games, the Braves “have sold 93% of our ticket capacity season to date,” Greg Maffei, chairman and CEO of Atlanta Braves Holdings (and CEO of Liberty Media), said on a Wednesday conference call with investment analysts.
“The Braves are positioned for another great year on and off the field,” Maffei said.
The call also touched on the ongoing contract dispute between Diamond Sports Group, owner of the Bally Sports regional networks, and cable provider Comcast. That dispute has resulted in Braves telecasts on Bally Sports South and Southeast not being available to Comcast/Xfinity subscribers.
“Carriage disputes are sort of commonplace, unfortunately, and we don’t like the fact that this carriage dispute is going on,” Braves CEO Derek Schiller said. “We’re not a party to it, and we’re hoping that Comcast and Bally’s get together.
“We’re obviously monitoring the whole (Diamond Sports Group) bankruptcy proceedings and doing our part to protect our rights,” Schiller said. “At this point in time, Diamond/Bally’s is fulfilling their terms with us, including full payment. But if the (TV) rights come back to us, we are very optimistic because ... we have a very large territory, one of the largest in sports. There’s huge demand on the team, and we believe there’s more optimism than pessimism with the future of Braves television rights in that marketplace.”
Meanwhile, of Braves Holdings’ $37 million in first-quarter revenue, $22 million came from baseball-related streams (up 25% from the same quarter last year) and $15 million from The Battery (up 13%), the company said.
The increase in baseball-related revenue “primarily reflects higher broadcasting (fees)” due to more regular-season games (three, all on the road) being played in the first quarter this year vs. last year (one, also on the road), said Brian Wendling, chief accounting officer and principal financial officer of Atlanta Braves Holdings and Liberty Media. Higher attendance at spring training home games also boosted baseball revenue, he said.
At The Battery, the increase in revenue was attributed to more rental income and parking fees.
First-quarter financial results are the least impactful of the Braves’ four earnings reports each year. The team’s regular season opened March 29 in Philadelphia. The home opener was on April 5. The first quarter of 2023 also included no regular-season home games.
Because MLB teams generate the vast majority of their revenue and profits in the second and third quarters each year, the Braves typically show large operating losses for the first quarter, as was the case again this year.
The Braves had an operating loss before depreciation and amortization -- the most common metric, along with revenue, for measuring a pro sports franchise’s financial performance -- of $33.7 million in the January-March quarter, compared with a loss of $31.4 million in the same period last year.
After deducting $14.9 million in depreciation and amortization and $3.7 million in stock-based compensation, the Braves showed an operating loss of $52.3 million for the quarter, compared with an operating loss of $49.3 million in the corresponding three-month period last year.
Braves Holdings said baseball operating costs “increased primarily due to higher player salaries and minor league team and player expenses, as well as increased spring training-related expenses.”
“The Braves continue to invest in payroll, which is reflected in increased baseball operating costs,” Wendling said on Wednesday’s conference call.
Braves Holdings’ debt increased from $569.3 million on Dec. 31 to $579.9 million on March 31. The increase was “primarily due to borrowings on the mixed-use development credit facilities to support current capital projects,” the company said.
Capital expenditures on renovations inside Truist Park before the start of this season totaled approximately $15 million, Wendling said. “These projects are generating incremental revenue … for the Braves already,” he said.
The Braves are one of few sports franchises with publicly traded stock. That requires the disclosure of financial information that other teams keep secret.
The first-quarter report follows stellar 2023 results, reported by The Atlanta Journal-Constitution in February, that showed the Braves soared past $600 million in annual revenue for the first time, landing at $641 million. The Braves had an operating profit before depreciation and amortization of $38 million last year, according to the results disclosed in February.
A recent letter to shareholders – co-signed by Maffei and Braves chairman Terry McGuirk --– called this “an incredible time to be a Braves fan and an Atlanta Braves Holdings shareholder.”
The letter said the Braves last year grew concession sales by 9% and merchandise sales by 15% “despite shorter game times” and have “approximately 180 active sponsorship deals.”
But the letter, included in an April 25 filing with the U.S. Securities and Exchange Commission, also acknowledged the turbulence on the TV front.
“The evolving landscape of sports media rights is understandably a focal point for our leadership and shareholders,” the letter stated in part. “… There is undoubtedly change on the horizon, and we believe much will be settled before our contract (with Bally Sports) expires in 2027. Fellow MLB teams are experimenting with alternate distribution constructs across cable, broadcast and digital platforms.
“There is a benefit to time and revenue certainty under the Braves’ current Bally Sports South agreement. We are simultaneously preparing for the future state of live sports consumption and will leverage the strength of the Braves territory in optimizing distribution for both fan engagement and economic value.”
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