Atlanta Braves Holdings, Inc. (“Atlanta Braves Holdings”)
(Nasdaq: BATRA, BATRK) today reported second quarter 2023
results.
Headlines include(1):
- Atlanta Braves Holdings began trading July 19th following
split-off of Braves and associated mixed-use development from
Liberty Media Corporation
- Total revenue grew 8% to $270 million in second quarter
- Baseball revenue up 8% to $255 million
- Mixed-use development revenue up 13% to $15 million
- Mixed-use development generated $10 million of Adjusted
OIBDA(2) in second quarter
“Atlanta Braves Holdings is the first MLB team to trade publicly
in 25 years. We believe our new structure will better highlight the
value of the Braves and the associated mixed-use development for
the benefit of our team, fans, employees and shareholders,” said
Greg Maffei, Chairman, President and CEO of Atlanta Braves
Holdings. “The Braves are an iconic franchise with demonstrated
on-field and financial success, and the Battery Atlanta development
has become a model embraced and emulated by professional sports
teams. Our leadership team will continue to support the Braves
executives in Atlanta in their successful management of the
club.”
Corporate Updates
On July 18, 2023, Liberty Media Corporation (“Liberty Media”)
completed the split-off of the Braves and its associated mixed-use
development (the “Split-Off”) into the separate public company
Atlanta Braves Holdings. The businesses and assets at Atlanta
Braves Holdings consist of Braves Holdings, LLC, the owner and
operator of the Atlanta Braves Major League Baseball Club, and
certain assets and liabilities associated with the Braves’ ballpark
and mixed-use development, called The Battery Atlanta, which were
previously attributed to the Braves Group tracking stock of Liberty
Media. For purposes of this presentation, Atlanta Braves Holdings
standalone results, assets and liabilities are shown for the three
and six months ended June 30, 2023 and the prior year periods as
though the Split-Off had occurred prior to such date, as well as
certain historical financial information of the Braves Group
tracking stock of Liberty Media, where applicable, including the
financial impact of the Braves Group intergroup interests that were
settled subsequent to quarter end. Atlanta Braves Holdings
financial results for the three and six months ended June 30, 2022
include immaterial adjustments compared to results previously
reported by the Braves Group tracking stock of Liberty Media for
the corresponding periods. The outstanding basic share count of
Atlanta Braves Holdings as of July 31, 2023 is 62 million
shares.
Discussion of
Results
Three months ended
Six months ended
June 30,
June 30,
2022
2023
% Change
2022
2023
% Change
amounts in thousands
amounts in thousands
Baseball revenue
$
236,918
$
254,935
8
%
$
246,758
$
272,496
10
%
Mixed-use development revenue
13,407
15,188
13
%
25,097
28,599
14
%
Total revenue
250,325
270,123
8
%
271,855
301,095
11
%
Operating costs and expenses:
Baseball operating costs
(169,585
)
(195,458
)
(15
)%
(195,811
)
(232,229
)
(19
)%
Mixed-use development costs
(2,567
)
(2,273
)
11
%
(4,310
)
(4,204
)
2
%
Selling, general and administrative,
excluding stock-based compensation
(29,932
)
(30,290
)
(1
)%
(48,893
)
(53,649
)
(10
)%
Adjusted OIBDA
$
48,241
$
42,102
(13
)%
$
22,841
$
11,013
(52
)%
Operating income (loss)
$
27,561
$
19,467
(29
)%
$
(18,679
)
$
(29,790
)
(59
)%
Regular season home games in period
41
43
41
43
Unless otherwise noted, the following discussion compares
financial information for the three months ended June 30, 2023 to
the same period in 2022.
Baseball revenue is derived from two primary sources on an
annual basis: (i) baseball event revenue (ticket sales,
concessions, advertising sponsorships, suites and premium seat
fees) and (ii) broadcasting revenue (national and local broadcast
rights). Mixed-use development revenue is derived from the Battery
Atlanta mixed-use facilities and primarily includes rental
income.
The following table disaggregates revenue by segment and by
source:
Three months ended
Six months ended
June 30,
June 30,
2022
2023
% Change
2022
2023
% Change
amounts in thousands
amounts in thousands
Baseball:
Baseball event
$
145,116
$
162,368
12
%
$
146,203
$
163,486
12
%
Broadcasting
63,745
68,558
8
%
63,745
69,449
9
%
Retail and licensing
17,755
19,747
11
%
21,610
24,122
12
%
Other
10,302
4,262
(59
)%
15,200
15,439
2
%
Baseball revenue
236,918
254,935
8
%
246,758
272,496
10
%
Mixed-use development
13,407
15,188
13
%
25,097
28,599
14
%
Total revenue
$
250,325
$
270,123
8
%
$
271,855
$
301,095
11
%
There were 43 home games played in the second quarter of 2023
compared to 41 home games in the prior year period.
Baseball revenue increased 8% in the second quarter. Baseball
event and retail and licensing revenue grew primarily due to the
increased number of regular season home games as well as increased
ticket demand and attendance at games. Broadcasting revenue
increased due to the increased number of games as well as
contractual rate increases. Retail and licensing revenue also
benefited from demand for City Connect apparel, partially offset by
a reduction in demand for World Series Champions apparel compared
to the prior season. Other revenue declined due to fewer concerts
at the stadium compared to the prior year period. Mixed-use
development revenue increased 13% during the second quarter due to
increases in rental income related to tenant recoveries and various
new lease agreements.
Operating income and Adjusted OIBDA decreased in the second
quarter. Revenue growth was more than offset by increased baseball
operating costs due to higher player salaries, increases under
MLB’s revenue sharing plan and variable concession and retail
operating costs attributable to more games held with increased
ticket demand and attendance. Selling, general and administrative
expense was relatively flat.
FOOTNOTES
1)
Atlanta Braves Holdings will be available
to answer questions related to these headlines and other matters on
Liberty Media Corporation’s earnings conference call that will
begin at 10:00 a.m. (E.T.) on August 4, 2023. For information
regarding how to access the call, please see “Important Notice”
later in this document.
2)
For a definition of Adjusted OIBDA (as
defined by Atlanta Braves Holdings) and the applicable
reconciliation, see the accompanying schedule.
Important Notice: Atlanta Braves Holdings (Nasdaq: BATRA,
BATRK) will be available to answer questions on Liberty Media
Corporation’s second quarter earnings conference call which will
begin at 10:00 a.m. (E.T.) on August 4, 2023. The call can be
accessed by dialing (877) 704-2829 or (215) 268-9864, passcode
13736985 at least 10 minutes prior to the start time. The call will
also be broadcast live across the Internet and archived on our
website. To access the webcast go to
https://www.bravesholdings.com/investors/news-events/ir-calendar.
Links to this press release will also be available on the Atlanta
Braves Holdings website.
This press release includes certain forward-looking statements
within the meaning of the Private Securities Litigation Reform Act
of 1995, including statements about business strategies, product
and marketing strategies, future financial performance and
prospects, the split-off of Atlanta Braves Holdings from Liberty
Media, and other matters that are not historical facts. These
forward-looking statements involve many risks and uncertainties
that could cause actual results to differ materially from those
expressed or implied by such statements, including, without
limitation, Atlanta Braves Holdings’ ability to recognize
anticipated benefits from the split-off, possible changes in the
regulatory and competitive environment in which Atlanta Braves
Holdings operates (including an expansion of MLB), the unfavorable
outcome of pending or future litigation, operational risks of
Atlanta Braves Holdings and its business affiliates, including
operations outside of the U.S., Atlanta Braves Holdings’
indebtedness and its ability to obtain additional financing on
acceptable terms and cash in amounts sufficient to service debt and
other financial obligations, tax matters, compliance with
government regulations and potential adverse outcomes of regulatory
proceedings, changes in the nature of key strategic relationships
with broadcasters, partners, vendors and joint venturers, the
impact of organized labor, the performance and management of the
mixed-use development and the impact of inflation and weak economic
conditions on consumer demand. These forward-looking statements
speak only as of the date of this press release, and Atlanta Braves
Holdings expressly disclaims any obligation or undertaking to
disseminate any updates or revisions to any forward-looking
statement contained herein to reflect any change in Atlanta Braves
Holdings’ expectations with regard thereto or any change in events,
conditions or circumstances on which any such statement is based.
Please refer to the publicly filed documents of Atlanta Braves
Holdings, including Amendment No. 5 to the Registration Statement
on Form S-4 filed by Atlanta Braves Holdings with the Securities
and Exchange Commission on June 8, 2023 and the most recent Form
10-Q, for additional information about Atlanta Braves Holdings and
about the risks and uncertainties related to Atlanta Braves
Holdings’ business which may affect the statements made in this
press release.
NON-GAAP FINANCIAL MEASURES AND SUPPLEMENTAL
DISCLOSURES
SCHEDULE 1: Reconciliation of Adjusted OIBDA to Operating Income
(Loss)
To provide investors with additional information regarding our
financial results, this press release includes a presentation of
Adjusted OIBDA, which is a non-GAAP financial measure, for Atlanta
Braves Holdings together with reconciliations to operating income,
as determined under GAAP. Atlanta Braves Holdings defines Adjusted
OIBDA as operating income (loss) plus depreciation and
amortization, stock-based compensation, separately reported
litigation settlements, restructuring, acquisition and impairment
charges.
Atlanta Braves Holdings believes Adjusted OIBDA is an important
indicator of the operational strength and performance of its
businesses by identifying those items that are not directly a
reflection of each business’ performance or indicative of ongoing
business trends. In addition, this measure allows management to
view operating results and perform analytical comparisons and
benchmarking between businesses and identify strategies to improve
performance. Because Adjusted OIBDA is used as a measure of
operating performance, Atlanta Braves Holdings views operating
income as the most directly comparable GAAP measure. Adjusted OIBDA
is not meant to replace or supersede operating income or any other
GAAP measure, but rather to supplement such GAAP measures in order
to present investors with the same information that Atlanta Braves
Holdings’ management considers in assessing the results of
operations and performance of its assets.
The following table provides a reconciliation of Adjusted OIBDA
for Atlanta Braves Holdings to operating income (loss) calculated
in accordance with GAAP for the three and six months ended June 30,
2022 and June 30, 2023.
Three months ended
Six months ended
June 30,
June 30,
(amounts in thousands)
2022
2023
2022
2023
Operating income (loss)
$
27,561
$
19,467
$
(18,679
)
$
(29,790
)
Impairment of long-lived assets and other
related costs
—
232
—
530
Stock-based compensation
3,063
3,153
6,126
6,344
Depreciation and amortization
17,617
19,250
35,394
33,929
Adjusted OIBDA
$
48,241
$
42,102
$
22,841
$
11,013
Baseball
$
41,685
$
37,415
$
10,581
$
1,878
Mixed-use development
8,480
10,166
16,397
19,319
Corporate and other
(1,924
)
(5,479
)
(4,137
)
(10,184
)
SCHEDULE 2: Cash and Debt
The following presentation is provided to separately identify
cash and debt information. Atlanta Braves Holdings cash decreased
$85 million during the second quarter due to cash used in
operations primarily due to seasonal working capital changes,
increases in restricted cash and capital expenditures. Atlanta
Braves Holdings debt was flat in the second quarter. In May 2023, a
subsidiary of Braves Holdings, LLC refinanced an $80 million
construction loan agreement that was used to construct the retail
portion of the mixed-use development with a new term loan with $80
million in commitments.
(amounts in thousands)
March 31, 2023
June 30, 2023
Atlanta Braves Holdings Cash
(GAAP)(a)
$
215,515
$
130,537
Debt:
Baseball
League wide credit facility
$
—
$
—
MLB facility fund - term
30,000
30,000
MLB facility fund - revolver
43,125
43,125
TeamCo revolver
—
—
Term debt
168,562
168,561
Mixed-use development
300,313
301,127
Total Atlanta Braves Holdings
Debt
$
542,000
$
542,813
Deferred financing costs
(3,704
)
(4,118
)
Total Atlanta Braves Holdings Debt
(GAAP)
$
538,296
$
538,695
a)
Excludes restricted cash held in reserves
pursuant to the terms of various financial obligations of $30
million and $52 million as of March 31, 2023 and June 30, 2023,
respectively.
ATLANTA BRAVES
HOLDINGS
CONDENSED COMBINED BALANCE
SHEET INFORMATION
June 30, 2023
(unaudited)
June 30,
December 31,
2023
2022
amounts in thousands
Assets
Current assets:
Cash and cash equivalents
$
130,537
150,664
Restricted cash
52,033
22,149
Accounts receivable and contract assets,
net of allowance for credit losses
54,491
70,234
Other current assets
27,068
24,331
Total current assets
264,129
267,378
Property and equipment, at cost
1,037,399
1,007,776
Accumulated depreciation
(298,542
)
(277,979
)
738,857
729,797
Investments in affiliates, accounted for
using the equity method
98,890
94,564
Intangible assets not subject to
amortization:
Goodwill
175,764
175,764
Franchise rights
123,703
123,703
299,467
299,467
Other assets, net
107,759
99,455
Total assets
$
1,509,102
1,490,661
Liabilities and Equity
Current liabilities:
Accounts payable and accrued
liabilities
$
65,426
54,748
Deferred revenue and refundable
tickets
142,010
104,996
Current portion of debt
7,205
74,806
Other current liabilities
5,524
6,361
Total current liabilities
220,165
240,911
Long-term debt
531,490
467,160
Redeemable intergroup interests
340,889
278,103
Finance lease liabilities
106,014
107,220
Deferred income tax liabilities
46,965
54,099
Pension liability
10,450
15,405
Other noncurrent liabilities
31,247
28,253
Total liabilities
1,287,220
1,191,151
Equity:
Parent’s investment
730,620
732,350
Retained earnings (deficit)
(515,971
)
(429,082
)
Accumulated other comprehensive earnings
(loss), net of taxes
(4,056
)
(3,758
)
Total parent's investment
210,593
299,510
Noncontrolling interests in equity of
subsidiaries
11,289
—
Total equity
221,882
299,510
Commitments and contingencies
Total liabilities and equity
$
1,509,102
1,490,661
ATLANTA BRAVES
HOLDINGS
CONDENSED COMBINED STATEMENT
OF OPERATIONS INFORMATION
June 30, 2023
(unaudited)
Three months ended June
30,
Six months ended June
30,
2023
2022
2023
2022
amounts in thousands, except
per share amounts
Revenue:
Baseball revenue
$
254,935
236,918
$
272,496
246,758
Mixed-use development revenue
15,188
13,407
28,599
25,097
Total revenue
270,123
250,325
301,095
271,855
Operating costs and expenses:
Baseball operating costs
195,458
169,585
232,229
195,811
Mixed-use development costs
2,273
2,567
4,204
4,310
Selling, general and administrative,
including stock-based compensation
33,443
32,995
59,993
55,019
Impairment of long-lived assets and other
related costs
232
—
530
—
Depreciation and amortization
19,250
17,617
33,929
35,394
250,656
222,764
330,885
290,534
Operating income (loss)
19,467
27,561
(29,790
)
(18,679
)
Other income (expense):
Interest expense
(9,448
)
(6,402
)
(18,360
)
(12,529
)
Share of earnings (losses) of affiliates,
net
11,462
15,022
10,659
12,143
Unrealized gains (losses) on intergroup
interests
(49,409
)
34,881
(62,786
)
36,103
Realized and unrealized gains (losses) on
financial instruments, net
3,840
1,659
3,079
6,460
Gains (losses) on dispositions, net
2,503
28
2,503
20,215
Other, net
813
143
1,654
168
Earnings (loss) before income taxes
(20,772
)
72,892
(93,041
)
43,881
Income tax benefit (expense)
(8,141
)
(9,193
)
6,152
(3,217
)
Net earnings (loss)
$
(28,913
)
63,699
$
(86,889
)
40,664
ATLANTA BRAVES
HOLDINGS
CONDENSED COMBINED STATEMENT
OF CASH FLOWS INFORMATION
June 30, 2023
(unaudited)
Six months ended June
30,
2023
2022
amounts in thousands
Cash flows from operating activities:
Net earnings (loss)
$
(86,889
)
40,664
Adjustments to reconcile net earnings
(loss) to net cash provided by (used in) operating activities:
Depreciation and amortization
33,929
35,394
Stock-based compensation
6,344
6,126
Share of (earnings) losses of affiliates,
net
(10,659
)
(12,143
)
Unrealized (gains) losses on intergroup
interests, net
62,786
(36,103
)
Realized and unrealized (gains) losses on
financial instruments, net
(3,079
)
(6,460
)
(Gains) losses on dispositions, net
(2,503
)
(20,215
)
Deferred income tax expense (benefit)
(7,014
)
(9,454
)
Cash receipts from returns on equity
method investments
6,225
7,550
Other charges (credits), net
949
1,687
Net change in operating assets and
liabilities:
Current and other assets
(14,338
)
21,184
Payables and other liabilities
50,141
69,798
Net cash provided by (used in) operating
activities
35,892
98,028
Cash flows from investing activities:
Capital expended for property and
equipment
(29,700
)
(7,638
)
Cash proceeds from dispositions
—
47,175
Investments in equity method affiliates
and equity securities
—
(5,273
)
Other investing activities, net
110
—
Net cash provided by (used in) investing
activities
(29,590
)
34,264
Cash flows from financing activities:
Borrowings of debt
15,815
39,753
Repayments of debt
(18,893
)
(138,113
)
Contribution from noncontrolling
interest
11,289
—
Other financing activities, net
(4,756
)
(6,074
)
Net cash provided by (used in) financing
activities
3,455
(104,434
)
Net increase (decrease) in cash, cash
equivalents and restricted cash
9,757
27,858
Cash, cash equivalents and restricted cash
at beginning of period
172,813
244,113
Cash, cash equivalents and restricted cash
at end of period
$
182,570
271,971
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Shane Kleinstein (720) 875-5432
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