Financial Performance and Revenue - The Braves generated net revenue from postseason play of approximately $2.0 million in 2024, $11.3 million in 2023, and $8.4 million in 2022, with postseason appearances in 2 out of 18 potential games in 2024 and 4 out of 18 in 2023[100]. - The company faced significant revenue impacts due to extraordinary events like COVID-19, with all MLB games postponed in 2020 and limitations on fan attendance in 2021[130]. - The company's revenue is significantly derived from discretionary spending, which may decline during economic downturns, impacting overall financial performance[151]. - The Mixed-Use Development is expected to result in a material increase in revenue, but there is no assurance that attendance will increase as anticipated[122]. Player Contracts and Salaries - The Braves' Annual Player Salary Budget impacts their ability to enter into new player contracts, with flexibility increasing when existing obligations are below the budget limit[51]. - The MLB Collective Bargaining Agreement (CBA) mandates a minimum Major League contract salary of $740,000 for the 2024 season, with annual increases[65]. - The Competitive Balance Tax thresholds are set at $241 million for 2025 and $244 million for 2026, with penalties for exceeding these thresholds[69]. - The Braves were required to pay the Competitive Balance Tax for the 2024 and 2023 seasons due to exceeding payroll thresholds[104]. - The Braves' long-term contracts require annual payments aggregating to $221.1 million in 2025, $169.2 million in 2026, $120.9 million in 2027, $105.2 million in 2028, and $63.1 million in 2029[103]. Facilities and Infrastructure - The total cost of Truist Park was approximately $722 million, with $392 million funded by Cobb County and $330 million by Braves Holdings[56]. - Truist Park features 41,100 seats, including 63 suites and 4,700 premium seats, and spans approximately 1.1 million square feet[57]. - The Braves operate a new spring training facility in North Port, Florida, which includes an 8,200 capacity stadium and various training facilities[59]. - The Battery Atlanta is a 2.25 million square-foot mixed-use development surrounding Truist Park, featuring various entertainment and commercial facilities[60]. - The Stadium Operating Agreement obligates the Braves to play all home games in Truist Park through the 2046 season, with a 5-year extension option to 2051[117]. Operational Challenges and Risks - The company is transitioning away from services previously provided by Liberty Media, which may lead to increased costs and operational challenges[88]. - Braves Holdings has incurred and expects to continue incurring material costs related to its separation from Liberty Media, impacting financial reporting and compliance[93]. - The company faces risks related to its historical financial information, which may not accurately reflect future performance due to its previous status as a subsidiary of Liberty Media[87]. - The organization faces risks related to injuries, which could significantly impact financial results and team performance, especially if key players are affected[103]. - The company is competing with various forms of entertainment and other MLB clubs for talent, impacting its competitiveness and revenue generation[75]. Debt and Financial Obligations - Braves Holdings is subject to a Debt Service Rule requiring outstanding indebtedness to be at or below 8.0x available cash flow, or 12.0x for clubs with new stadiums, with excludable indebtedness set at $100 million for fiscal years 2024-2026[73]. - Braves Holdings has a combined borrowing capacity of $275.0 million under two credit facilities, with no amounts outstanding as of December 31, 2024[113]. - Braves Holdings had approximately $197.9 million outstanding under various debt instruments for construction and other stadium-related costs as of December 31, 2024[121]. - As of December 31, 2024, the company had $173.5 million in floating rate debt with a weighted average interest rate of 6.2% and $446.6 million in fixed rate debt with a weighted average interest rate of 4.4%[239]. - If cash flows become insufficient, Braves Holdings may be required to take on additional indebtedness, but applicable CBA rules limit the aggregate amount of indebtedness[113]. Governance and Ownership - John C. Malone owns approximately 48.3% of the aggregate voting power, which may influence significant corporate actions and discourage potential change of control transactions[99]. - The company has restrictions on share ownership that could limit potential changes in control, requiring MLB approval for any person or group seeking to acquire a controlling interest[144]. - The company’s multi-series share structure may lead to a lower or more volatile market price for its common stock, as certain index providers exclude such companies from their indices[141]. - The board of directors may prioritize interests other than those of common stockholders, which could lead to disparate impacts on different series of common stock[150]. Compliance and Regulatory Risks - The company is subject to various privacy regulations, including the California Consumer Privacy Act, which became effective on January 1, 2020, and the California Privacy Rights Act, effective January 1, 2023[138]. - The company operates in international markets, including the Dominican Republic, which exposes it to operational risks and compliance challenges with local regulations[139]. - The company is subject to various operational risks associated with compliance with privacy and data security laws, which may increase costs and liabilities[137]. - The company's internal controls over financial reporting may not be adequate, potentially leading to material misstatements and loss of investor confidence[157]. Market and Economic Conditions - Economic uncertainty may adversely affect consumer demand for the company's products and services, particularly during times of economic instability[151]. - Viewership of professional baseball has experienced declines in recent years, which could adversely affect financial results if future declines occur[110]. - The potential for MLB expansion could dilute revenue from national broadcasting agreements and increase competition for talented players[109]. - Significant risks associated with the Mixed-Use Development include adverse changes in national market conditions and increases in interest rates[123]. Employee Development and Corporate Culture - As of December 31, 2024, Braves Holdings had approximately 1,450 full-time, seasonal, and part-time employees, emphasizing a commitment to diverse and inclusive workplaces[77]. - The company is investing in employee development through training programs and initiatives to enhance talent retention and growth[79]. - The company is working to replicate or replace critical services and systems previously provided by Liberty, which may lead to service interruptions and increased management focus on operational challenges[91].
Atlanta Braves (BATRA) - 2024 Q4 - Annual Report