Atlanta Braves Holdings, Inc. — 2023 Form 10-K
Reporting period: Fiscal year ended December 31, 2023. This is an annual report, not a standalone fourth-quarter report. The company was spun off from Liberty Media on July 18, 2023; the 2023 and 2022 results include pre-spin-off periods and may not reflect the costs or results of a standalone public company.
Business context and financial performance
The company’s principal businesses are the Atlanta Braves and Truist Park (Baseball) and The Battery Atlanta mixed-use development. The Braves won their division in 2023. Baseball revenue is seasonal, concentrated in the second and third quarters.
| Metric | 2023 | 2022 |
|---|---|---|
| Revenue | $640.7 million | $588.6 million |
| Operating loss | $46.4 million | $30.6 million |
| Net loss | $125.3 million | $34.2 million |
| Adjusted OIBDA (non-GAAP) | $38.3 million | $58.8 million |
| Cash from operating activities | $1.6 million | $53.3 million |
| Capital expenditures | $69.0 million | $17.7 million |
Revenue increased 8.9%, while operating and net losses widened and Adjusted OIBDA fell 34.8%. Operating margin was approximately negative 7.2%, versus negative 5.2% in 2022. The net loss includes an $83.2 million loss on intergroup interests, compared with $35.2 million in 2022; those interests were settled and extinguished in the spin-off. Cash from operations less capital expenditures was approximately negative $67.4 million in 2023.
Revenue and material changes
- Baseball revenue: $581.7 million, up $46.7 million. Baseball event revenue was $339.5 million, broadcasting $160.9 million, retail and licensing $51.5 million, and other revenue $29.7 million. Higher attendance, ticket demand, sponsorships, and contractual rate increases contributed to growth.
- Mixed-Use Development revenue: $59.0 million, up $5.4 million, mainly from rent, tenant recoveries, new leases, and sponsorships.
- Average regular-season home attendance increased to 32,542 from 31,725. Baseball operating costs rose $54.6 million, principally due to higher major-league player salaries and revenue sharing. Corporate and other costs also increased following the spin-off.
- Baseball Adjusted OIBDA declined to $21.2 million from $33.3 million; Mixed-Use Development Adjusted OIBDA rose to $39.5 million from $35.4 million. Corporate and other Adjusted OIBDA loss increased to $22.4 million from $9.9 million.
Liquidity, debt, and cash flow
At December 31, 2023, cash and cash equivalents were $125.1 million, with an additional $12.6 million of restricted cash. Current assets were $218.0 million and current liabilities $233.7 million. Total debt on the balance sheet was $569.3 million, including $42.2 million current and $527.1 million long-term. The company reported $83.9 million of floating-rate debt at a 7.1% weighted average rate and $489.1 million of fixed-rate debt at 4.4%. Interest expense increased to $37.7 million from $29.6 million, primarily due to higher rates on variable-rate debt.
Management said available liquidity, operating cash flow, cash on hand, and borrowings were expected to cover projected cash needs. Debt principal maturities include $42.2 million in 2024, $103.7 million in 2025, and $86.4 million in 2026. Contractual obligations also include $950.2 million under employment agreements and $176.6 million of lease obligations. The company was in compliance with financial debt covenants at year-end.
Outlook, risks, and unusual items
- No quantified revenue or earnings guidance is provided. Management expects cash needs for player, coach, and executive contracts, capital expenditures, real estate investments, and debt service. Phase III of The Battery Atlanta office development is under construction; the 250,000-square-foot building is expected to open in 2025.
- Diamond Sports Group, parent of the Braves’ regional broadcaster, is in Chapter 11. Scheduled payments had continued through the report date, but the Braves may have to repay up to $34.2 million received during the preference period. If the broadcasting agreement is rejected, approximately $34.6 million of receivables and contract assets could require write-down, and replacement broadcast revenue is uncertain.
- Results remain exposed to on-field performance, player availability and contract costs, MLB revenue-sharing and debt rules, labor disputes, discretionary consumer spending, lease occupancy, construction and financing risks, and cybersecurity or event disruption.
- The tax-sharing agreement could require an uncapped indemnity to Liberty under specified circumstances if the spin-off’s tax-free treatment is challenged or lost. Management does not expect the disclosed ordinary-course litigation contingencies to be material.
- The company has no present intention to pay cash dividends. Its multi-series stock structure includes ten-vote Series B shares and non-voting Series C shares; John C. Malone held approximately 47.5% of aggregate voting power.
Investor verification priorities
- Review the audited financial statements and cash-flow detail, especially the sharp decline in operating cash flow and the increase in capital expenditures.
- Assess debt maturities, variable-rate exposure, employment commitments, and the financing needs of ongoing Battery Atlanta construction.
- Monitor the Diamond Sports bankruptcy for payment recovery, possible preference claims, contract rejection, and replacement-broadcast arrangements.
- Distinguish recurring operating performance from the spin-off-related costs and noncash intergroup-interest losses; compare periods with the standalone cost base in mind.
- Check the tax-sharing indemnity provisions, voting structure, and MLB ownership and control restrictions when evaluating governance or change-of-control scenarios.