House That Hank Built
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Atlanta Braves Spring Chop: the money isn’t always that green

By Alan Carpenter

NEW YORK, NY - FEBRUARY 08: (L-R) Olympic hopefuls Jocelyne Lamoureux, Monique Lamoureux, Meghan Duggan and Hilary Knight pose for a photo at the NASDAQ Stock Market on February 8, 2017 in New York City. Team USA celebrates the one-year countdown to the Olympic Winter Games PyeongChang 2018. (Photo by Mike Stobe/Getty Images for the USOC)
NEW YORK, NY - FEBRUARY 08: (L-R) Olympic hopefuls Jocelyne Lamoureux, Monique Lamoureux, Meghan Duggan and Hilary Knight pose for a photo at the NASDAQ Stock Market on February 8, 2017 in New York City. Team USA celebrates the one-year countdown to the Olympic Winter Games PyeongChang 2018. (Photo by Mike Stobe/Getty Images for the USOC) /
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SUN VALLEY, ID – JULY 08: Greg Maffei, president and chief executive officer of Liberty Media Corporation, attends the Allen & Company Sun Valley Conference on July 8, 2015 in Sun Valley, Idaho. (Photo by Scott Olson/Getty Images)
SUN VALLEY, ID – JULY 08: Greg Maffei, president and chief executive officer of Liberty Media Corporation, attends the Allen & Company Sun Valley Conference on July 8, 2015 in Sun Valley, Idaho. (Photo by Scott Olson/Getty Images) /

The Corporation Knows a Few Things

On page i-46 of the Liberty Media Annual Report to the SEC, they list the ‘Risks’ related to revenue being generated by the ‘Braves Group’.  Quoting that document…

  • The financial success of the Braves Group will depend, in large part, on the Major League Baseball club, the Braves, achieving on-field success.
  • The success of the Braves will depend largely on their ability to develop, obtain and retain talented players.

In other words, the Corporation recognizes that the Braves need to win more to achieve better financial success.  Better players… better results… etc.

In other-other words, they know they need to spend some money to do that.

Then there’s this risk point:

  • The organizational structure of MLB and its rules and regulations impose substantial restrictions on the operations of Braves Holdings and its subsidiaries.

What does this mean?  Well, among other things cited, it can mean debt control:

"For example, the Braves were not in compliance with the rule governing the amount of debt that is permitted to be issued by an MLB club in 2015 and 2016 and are now subject to certain remedial measures, including the repayment of outstanding indebtedness. However, the Braves project to be in compliance with this rule in 2017."

To summarize that:  the team was under MLB scrutiny to repay some of the debt incurred for the stadium/Battery Atlanta project.

As a result, let’s get to the bottom lines… that nobody seems to be reporting.

Despite the $386 million in revenue during 2017 for the Braves’ group (up from $262 million in 2016), the report lists a net Operating loss of $113 million for 2017… tacked onto losses of $61 million in 2016 and $38 million in 2015.

It does appear from this report that the sale of MLB’s BAMTech company will net the Braves an addition $69 million… that’s in reference to Jim Bowden’s tweet from earlier.  That is added to the report as a 2017 income item.

The Too Long; Didn’t Read part

The Braves are still in significant debt.  It’s being managed, but extra revenue, such as the BAMTech windfall, doesn’t offset the operating loss incurred due to the construction projects done ad still on-going.

More from Tomahawk Take

But for this club… there’s a good start:  the new revenue IS what they wanted and it WILL provide better funding for the club overall.  It is not a panacea for an instant $50 million extra to the payroll… but by 2019, the club should be in a better position to spend more – especially now that the MLB debt-ratio rules are no longer an issue.

Some other clubs may be in a different position – the Braves are unique because we actually get to see the figures.  But you’d better be digging deep to see what’s really going on… and I am of the opinion that many of the media reports hardly scratched the surface.

For that matter, this treatment is almost certainly still barely below that (and there are definitely topics I left out, believing they were over my head and beyond the scope of this post) – but it should be enough to suggest that there’s a lot more to this story that just a simple headline.

So when you feel like this guy:

… just…*sigh* do at least some of the homework first.  Please?

Next: Enough of that... go watch the homer

So let’s just call this revenue report what it is, though:  a step in the right direction and a validation of why the team thought that building Battery Atlanta would be a good idea.

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