Financial Performance and Revenue - The Braves generated net revenue from postseason play of approximately 2.0millionin2024,11.3 million in 2023, and 8.4millionin2022,withpostseasonappearancesin2outof18potentialgamesin2024and4outof18in2023[100].−Broadcastingrightsareasignificantrevenuesource,andanydecreaseinthisrevenuecouldnegativelyimpactfinancialresults[111].−TheMixed−UseDevelopmentisexpectedtoincreaserevenue,butthereisnoassurancethatattendancewillriseasanticipated[122].−ThecompanyfacedsignificantrevenueimpactsduetoextraordinaryeventslikeCOVID−19,withallMLBgamespostponedin2020andlimitationsonfanattendancein2021[130].−Economicuncertaintymayadverselyaffectconsumerdemandforthecompany′sproductsandservices,impactingrevenuederivedfromdiscretionaryspending[151].PlayerContractsandSalaries−TheBraves′AnnualPlayerSalaryBudgetimpactstheirabilitytoenterintonewplayercontracts,withflexibilityincreasingwhenexistingobligationsarebelowthebudgetlimit[51].−TheMLBCollectiveBargainingAgreement(CBA)mandatesaminimumMajorLeaguecontractsalaryof740,000 for the 2024 season, with annual increases[65]. - The Competitive Balance Tax thresholds are set at 241millionfor2025and244 million for 2026, with penalties for exceeding these limits[69]. - The Braves were required to pay the Competitive Balance Tax for the 2024 and 2023 seasons due to exceeding predetermined payroll thresholds[104]. - The Braves' long-term contracts payable amount to 221.1millionin2025,169.2 million in 2026, 120.9millionin2027,105.2 million in 2028, 63.1millionin2029,and83.2 million combined thereafter[103]. Stadium and Facilities - The total cost of Truist Park was approximately 722million,fundedby392 million from Cobb County and 330millionfromBravesHoldings[56].−TruistParkfeatures41,100seats,including63suitesand4,700premiumseats,andspansapproximately1.1millionsquarefeet[57].−TheBravesoperateanewspringtrainingfacilityinNorthPort,Florida,withan8,200capacitystadiumandvarioustrainingfacilities[59].−TheBatteryAtlantaisa2.25millionsquare−footmixed−usedevelopmentsurroundingTruistPark,featuringvariousentertainmentandcommercialfacilities[60].−TheStadiumOperatingAgreementobligatestheBravestoplayallhomegamesatTruistParkthroughthe2046season,witha5−yearextensionoption[117].DebtandFinancialObligations−BravesHoldingshadapproximately197.9 million in outstanding debt for stadium-related costs and 392.2millionforMixed−UseDevelopmentasofDecember31,2024[121].−BravesHoldingsissubjecttoaDebtServiceRulerequiringoutstandingindebtednesstobeatorbelow8.0xavailablecashflow,or12.0xforclubswithnewstadiums,withexcludableindebtednesssetat100 million for fiscal years 2024-2026[73]. - The company may face liquidity issues if unable to obtain debt financing, potentially leading to significant dilution for stockholders[114]. - The company’s ability to incur additional indebtedness is limited, which may negatively impact operations and financial flexibility[113]. - As of December 31, 2024, the company had 173.5millioninfloatingratedebtwithaweightedaverageinterestrateof6.2446.6 million in fixed rate debt with a weighted average interest rate of 4.4%[239]. 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 is working to replicate or replace critical services and systems previously provided by Liberty, which may involve additional costs and risks[89]. - The company is exposed to market risk due to changes in stock prices and interest rates, which could affect future earnings[237]. - The company's internal controls over financial reporting may not be adequate, which could lead to material misstatements and loss of investor confidence[157]. Employee and Talent Management - As of December 31, 2024, Braves Holdings had approximately 1,450 full-time, seasonal, and part-time employees, emphasizing a commitment to diverse and supportive workplaces[77]. - The company is focused on talent development, offering training and development programs to enhance employee skills and retention[79]. - Braves Holdings is committed to providing attractive compensation and benefits programs, including bonuses, healthcare, and retirement plans[81]. Regulatory and Compliance Issues - 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 exclusive forum provisions in the company's charter may limit stockholders' ability to bring claims in favorable judicial forums[156]. Market Competition and Audience Engagement - Braves Holdings is competing with various forms of entertainment and media for game day attendance and broadcasting revenue, which are critical for its financial performance[75]. - Viewership of professional baseball has experienced declines, with potential adverse effects on financial results if future declines occur[110]. - The Braves may face increased competition and diluted revenue from potential MLB expansion, which could impact player retention and fan interest[109]. - The company's ability to attract and retain key personnel is critical, with competition for qualified employees posing a risk to commercial success[105]. Ownership and Control - 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 may prevent changes in control, requiring MLB approval for any person or group seeking to acquire a controlling interest[144]. - The company has a multi-series voting structure, with BATRA shares having one vote per share, BATRB shares having ten votes per share, and BATRK shares having no voting rights[149]. - Dr. Malone owns approximately 48.3% of the aggregate voting power, which may lead to the company being deemed a "controlled company" under Nasdaq standards[147]. Miscellaneous Risks - Personal injuries at games could result in claims and increased expenses, despite existing insurance coverage[129]. - The company may face increased operational costs during periods of high inflation, affecting overall financial performance[152]. - Significant risks are associated with the Mixed-Use Development, including adverse market conditions and potential cost overruns[123]. - If the Stadium Operating Agreement is terminated, it could adversely impact the Braves' reputation and financial condition[120].
Atlanta Braves (BATRK)2025-03-03 13:13