美國
證券交易委員會
華盛頓特區，郵編20549
表格
截至2024年6月30日季度結束
或
轉變期從 到
委員會檔案編號
（依照公司章程規定指定的登記證券名稱）
(依據所在地或其他管轄區) 的註冊地或組織地點) | (國稅局雇主 識別號碼) | |
(總部辦公地址) | (郵遞區號) |
註冊人電話號碼，含區號： (
根據法案第12(b)條規定註冊的證券：
每種類別的名稱 | 交易符號 | 每個註冊交易所的名稱 |
The | ||
The |
請勾選確認註冊人（1）在過去12個月（或註冊人要求提交此類報告的較短期間）內是否已提交根據1934年證券交易法第13條或第15(d)條所要求提交的所有報告，及（2）在過去90天內是否受到此類提交要求的約束。
請以勾選標記表示，登記者在過去12個月內（或登記者被要求提交這類文件的縮短期間）按照424條的規定提交了每一個應提交的互動數據文件。
請勾選登記人是否為大型加速報告公司、加速報告公司、非加速報告公司、小型報告公司或新興成長公司。詳情請見《交易所法》第120億2條對於「大型加速報告公司」、「加速報告公司」、「小型報告公司」及「新興成長公司」的定義。
大型加速檔案櫃☐ | 加速報告人☐ | 較小的報告公司 | 新興成長公司 |
如果該企業為新興成長型企業，請在是否選擇不使用證交法第13(a)條所提供之符合任何新的或修訂財務會計標準的延長過渡期的方格中打勾。
請以勾選標記指出登記人是否為交易法第120億2條所定義的空殼公司。是
截至2024年10月31日，亞特蘭大勇士控股公司的普通股已發行股份數為：
A輪系列 | B輪 | C系列 | |||||
亞特蘭大勇士控股公司普通股 | | | |
亞特蘭大勇士控股有限公司。
簡明合併資產負債表
（未經審核）
| 九月三十日， |
| 十二月三十一日， |
| ||
| 2024 |
| 2023 |
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金額以千計 |
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資產 |
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流動資產: |
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現金及現金等價物 | $ | |
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受限現金 |
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應收賬款和合同資產，扣除信用損失備抵 |
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其他流動資產 |
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流動資產總額 |
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資產及設備，按成本衡量（附註3） |
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累計折舊 |
| ( |
| ( | ||
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對關聯企業的投資，以股權法核算（附註4） |
| |
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無形資產不受攤提影響: |
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商譽 |
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特許經營權 |
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其他資產，淨額 |
| |
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總資產 | $ | |
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請參閱簡明合併基本報表附註。
I-3
ATLANTA BRAVES HOLDINGS, INC.
Condensed Consolidated Balance Sheets (continued)
(unaudited)
| September 30, |
| December 31, |
| ||
| 2024 |
| 2023 |
| ||
amounts in thousands, |
| |||||
except share amounts | ||||||
Liabilities and Equity |
|
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| ||
Current liabilities: |
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|
| ||
Accounts payable and accrued liabilities | $ | |
| | ||
Deferred revenue and refundable tickets |
| |
| | ||
Current portion of debt (note 5) |
| |
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Other current liabilities |
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Total current liabilities |
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Long-term debt (note 5) |
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Finance lease liabilities |
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Deferred income tax liabilities |
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Pension liability |
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Other noncurrent liabilities |
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Total liabilities |
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Equity: |
|
|
|
| ||
Preferred stock, $ | ||||||
Series A common stock, $ | | | ||||
Series B common stock, $ | | | ||||
Series C common stock, $ | | | ||||
Additional paid-in capital | | | ||||
Accumulated other comprehensive earnings (loss), net of taxes |
| ( |
| ( | ||
Retained earnings (deficit) |
| ( |
| ( | ||
Total stockholders' equity |
| |
| | ||
Noncontrolling interests in equity of subsidiaries | | | ||||
Total equity | | | ||||
Commitments and contingencies (note 7) |
|
| ||||
Total liabilities and equity | $ | |
| | ||
See accompanying notes to condensed consolidated financial statements.
I-4
ATLANTA BRAVES HOLDINGS, INC.
Condensed Consolidated Statements of Operations
(unaudited)
Three months ended | Nine months ended | |||||||||
September 30, | September 30, | |||||||||
| 2024 |
| 2023 |
| 2024 |
| 2023 |
| ||
amounts in thousands, |
| |||||||||
except per share amounts | ||||||||||
Revenue: |
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|
|
|
|
| |||
Baseball revenue | $ | |
| | |
| | |||
Mixed-Use Development revenue |
| |
| | |
| | |||
Total revenue |
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| | |
| | |||
Operating costs and expenses: |
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Baseball operating costs |
| |
| | |
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Mixed-Use Development costs |
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| | |
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Selling, general and administrative, including stock-based compensation | | | | | ||||||
Depreciation and amortization |
| |
| | |
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| |
| | |
| | ||||
Operating income (loss) |
| |
| | ( |
| ( | |||
Other income (expense): |
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Interest expense |
| ( |
| ( | ( |
| ( | |||
Share of earnings (losses) of affiliates, net (note 4) |
| |
| | |
| | |||
Realized and unrealized gains (losses) on intergroup interests, net | — | ( | — | ( | ||||||
Realized and unrealized gains (losses) on financial instruments, net |
| ( |
| | |
| | |||
Other, net |
| |
| | |
| | |||
Earnings (loss) before income taxes |
| |
| | ( |
| ( | |||
Income tax benefit (expense) |
| |
| ( | |
| ( | |||
Net earnings (loss) | $ | |
| ( | ( |
| ( | |||
Basic net earnings (loss) attributable to Series A, Series B and Series C Atlanta Braves Holdings, Inc. shareholders per common share (note 2) | $ | |
| ( | ( |
| ( | |||
Diluted net earnings (loss) attributable to Series A, Series B and Series C Atlanta Braves Holdings, Inc. shareholders per common share (note 2) | $ | |
| ( | ( |
| ( | |||
See accompanying notes to condensed consolidated financial statements.
I-5
ATLANTA BRAVES HOLDINGS, INC.
Condensed Consolidated Statements of Comprehensive Earnings (Loss)
(unaudited)
Three months ended | Nine months ended | |||||||||
| September 30, | September 30, |
| |||||||
| 2024 |
| 2023 |
| 2024 |
| 2023 |
| ||
amounts in thousands |
| |||||||||
Net earnings (loss) | $ | |
| ( | ( |
| ( | |||
Other comprehensive earnings (loss), net of tax: |
|
|
|
|
|
|
| |||
Unrealized holdings gains (loss) arising during the period | ( | ( | ( | ( | ||||||
Share of other comprehensive earnings (loss) of affiliates |
| — |
| | ( |
| | |||
Other comprehensive earnings (loss), net of tax |
| ( |
| | ( |
| | |||
Comprehensive earnings (loss) | $ | |
| ( | ( |
| ( | |||
See accompanying notes to condensed consolidated financial statements.
I-6
ATLANTA BRAVES HOLDINGS, INC.
Condensed Consolidated Statements of Cash Flows
(unaudited)
| Nine months ended | |||||
September 30, | ||||||
| 2024 |
| 2023 | |||
amounts in thousands | ||||||
Cash flows from operating activities: |
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Net earnings (loss) | $ | ( |
| ( | ||
Adjustments to reconcile net earnings (loss) to net cash provided by (used in) operating activities: |
|
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| ||
Depreciation and amortization |
| |
| | ||
Stock-based compensation |
| |
| | ||
Share of (earnings) losses of affiliates, net |
| ( |
| ( | ||
Realized and unrealized (gains) losses on intergroup interests, net | — | | ||||
Realized and unrealized (gains) losses on financial instruments, net |
| ( |
| ( | ||
Deferred income tax expense (benefit) |
| ( |
| ( | ||
Cash receipts from returns on equity method investments | | | ||||
Net cash received (paid) for interest rate swaps | | | ||||
Other charges (credits), net |
| |
| ( | ||
Net change in operating assets and liabilities: |
|
|
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| ||
Current and other assets |
| ( |
| ( | ||
Payables and other liabilities |
| ( |
| | ||
Net cash provided by (used in) operating activities |
| ( |
| ( | ||
Cash flows from investing activities: |
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|
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Capital expended for property and equipment |
| ( |
| ( | ||
Other investing activities, net | ( | ( | ||||
Net cash provided by (used in) investing activities |
| ( |
| ( | ||
Cash flows from financing activities: |
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| ||
Borrowings of debt |
| |
| | ||
Repayments of debt |
| ( |
| ( | ||
Contribution from noncontrolling interest | — | | ||||
Other financing activities, net |
| ( |
| ( | ||
Net cash provided by (used in) financing activities |
| |
| | ||
Net increase (decrease) in cash, cash equivalents and restricted cash |
| ( |
| ( | ||
Cash, cash equivalents and restricted cash at beginning of period |
| |
| | ||
Cash, cash equivalents and restricted cash at end of period | $ | |
| | ||
Supplemental disclosure to the condensed consolidated statements of cash flows: | ||||||
Property and equipment expenditures incurred but not yet paid | $ | | | |||
The following table reconciles cash and cash equivalents and restricted cash reported in our condensed consolidated balance sheets to the total amount presented in our condensed consolidated statements of cash flows:
September 30, | December 31, | |||||
2024 | 2023 | |||||
amounts in thousands | ||||||
Cash and cash equivalents |
| $ | |
| | |
Restricted cash |
| |
| | ||
Total cash, cash equivalents and restricted cash at end of period | $ | |
| | ||
See accompanying notes to condensed consolidated financial statements.
I-7
ATLANTA BRAVES HOLDINGS, INC.
Condensed Consolidated Statements of Equity
(unaudited)
| Accumulated |
|
|
| ||||||||||||||||
other | Noncontrolling |
| ||||||||||||||||||
Additional | comprehensive | Retained | interests |
| ||||||||||||||||
Preferred | Common Stock | paid-in | earnings | earnings | in equity of | Total |
| |||||||||||||
| Stock |
| Series A |
| Series B |
| Series C |
| capital |
| (loss) |
| (deficit) |
| subsidiaries |
| equity |
| ||
amounts in thousands |
| |||||||||||||||||||
Balance at January 1, 2024 | $ | — | | | | | ( | ( |
| | | |||||||||
Net earnings (loss) |
| — | — | — | — | — | — | ( |
| — | ( | |||||||||
Other comprehensive earnings (loss) | — | — | — | — | — | ( | — |
| — | ( | ||||||||||
Stock-based compensation |
| — | — | — | — | | — | — |
| — | | |||||||||
Other | — | — | — | | | — | — |
| — | | ||||||||||
Balance at September 30, 2024 | $ | — | | | | | ( | ( |
| | | |||||||||
Accumulated | ||||||||||||||||||||
other | Noncontrolling |
| ||||||||||||||||||
Additional | comprehensive | Retained | interests |
| ||||||||||||||||
Preferred | Common Stock | paid-in | earnings | earnings | in equity of | Total |
| |||||||||||||
| Stock |
| Series A |
| Series B |
| Series C |
| capital |
| (loss) |
| (deficit) |
| subsidiaries |
| equity |
| ||
amounts in thousands |
| |||||||||||||||||||
Balance at June 30, 2024 | $ | — | | | | | ( | ( | | | ||||||||||
Net earnings (loss) | — | — | — | — | — | — | | — | | |||||||||||
Other comprehensive earnings (loss) |
| — | — | — | — | — | ( | — | — | ( | ||||||||||
Stock-based compensation | — | — | — | — | | — | — | — | | |||||||||||
Other | — | — | — | | | — | — | — | | |||||||||||
Balance at September 30, 2024 | $ | — |
| | | | | ( | ( |
| | | ||||||||
See accompanying notes to condensed consolidated financial statements
I-8
ATLANTA BRAVES HOLDINGS, INC.
Condensed Consolidated Statements of Equity (continued)
(unaudited)
Accumulated |
|
| ||||||||||||||||||||
other | Noncontrolling | |||||||||||||||||||||
Former | Additional | comprehensive | Retained | interests | ||||||||||||||||||
Preferred | Common Stock | parent's | paid-in | earnings | earnings | in equity of | Total | |||||||||||||||
Stock |
| Series A |
| Series B |
| Series C |
| investment |
| capital |
| (loss) |
| (deficit) |
| subsidiaries |
| equity | ||||
amounts in thousands | ||||||||||||||||||||||
Balance at January 1, 2023 | $ | — | — | — | — | | — | ( | ( |
| — | | ||||||||||
Net earnings (loss) |
| — | — | — | — | — | — | — | ( |
| — | ( | ||||||||||
Other comprehensive earnings (loss) | — | — | — | — | — | — | | — |
| — | | |||||||||||
Stock-based compensation |
| — | — | — | — | | | — | — |
| — | | ||||||||||
Change in capitalization in connection with Atlanta Braves Holdings Split-Off | — | | | | ( | | — | — | — | — | ||||||||||||
Tax sharing adjustment with Former parent | — | — | — | — | ( | — | — | — | — | ( | ||||||||||||
Contribution from noncontrolling interest | — | — | — | — | — | — | — | — | | | ||||||||||||
Settlement of intergroup interest | — | — | — | | — | | — | — | — | | ||||||||||||
Other | — | — | — | — | ( | | — | — |
| — | ( | |||||||||||
Balance at September 30, 2023 | $ | — | | | | — | | ( | ( |
| | | ||||||||||
| Accumulated |
|
| |||||||||||||||||||
other | Noncontrolling | |||||||||||||||||||||
Former | Additional | comprehensive | Retained | interests | ||||||||||||||||||
Preferred | Common Stock | parent's | paid-in | earnings | earnings | in equity of | Total | |||||||||||||||
| Stock |
| Series A |
| Series B |
| Series C |
| investment |
| capital |
| (loss) |
| (deficit) |
| subsidiaries |
| equity | |||
amounts in thousands | ||||||||||||||||||||||
Balance at June 30, 2023 | $ | — | — | — | — | | — | ( | ( |
| | | ||||||||||
Net earnings (loss) |
| — | — | — | — | — | — | — | ( |
| — | ( | ||||||||||
Other comprehensive earnings (loss) | — | — | — | — | — | — | | — |
| — | | |||||||||||
Stock-based compensation |
| — | — | — | — | — | | — | — |
| — | | ||||||||||
Change in capitalization in connection with Atlanta Braves Holdings Split-Off | — | | | | ( | | — | — | — | — | ||||||||||||
Contribution from noncontrolling interest | — | — | — | — | — | — | — | — | | | ||||||||||||
Settlement of intergroup interest | — | — | — | | — | | — | — | — | | ||||||||||||
Other | — | — | — | — | ( | | — | — |
| — | ( | |||||||||||
Balance at September 30, 2023 | $ | — | | | | — | | ( | ( |
| | | ||||||||||
See accompanying notes to condensed consolidated financial statements.
I-9
ATLANTA BRAVES HOLDINGS, INC.
Notes to Condensed Consolidated Financial Statements
(unaudited)
(1)Basis of Presentation
During November 2022, the board of directors of Liberty Media Corporation (“Liberty” or “Former parent”) authorized Liberty management to pursue a plan to redeem each outstanding share of its Liberty Braves common stock in exchange for
The accompanying condensed consolidated financial statements represent the combination of the historical financial information of the Braves Group until the date of the Split-Off. Although Atlanta Braves Holdings was reported as a combined company until the date of the Split-Off, all periods reported herein are referred to as consolidated. These financial statements refer to the consolidation of Braves Holdings, cash and intergroup interests in the Braves Group (prior to settlement/extinguishment) as "Atlanta Braves Holdings," "the Company," "us," "we" and "our" in the notes to the condensed consolidated financial statements. The Split-Off was accounted for at historical cost due to the pro rata nature of the distribution to holders of Liberty Braves common stock. All significant intercompany accounts and transactions have been eliminated in the condensed consolidated financial statements.
The accompanying (a) condensed consolidated balance sheet as of December 31, 2023, which has been derived from audited financial statements, and (b) the interim unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States ("GAAP") for interim financial information and Article 10 of Regulation S-X as promulgated by the Securities and Exchange Commission. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the results for such periods have been included. The results of operations for any interim period are not necessarily indicative of results for the full year. Additionally, certain prior period amounts have been reclassified for comparability with current period presentation. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in Atlanta Braves Holdings’ Annual Report on Form 10-K for the year ended December 31, 2023.
The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. The Company considers (i) fair value measurements of non-financial instruments and (ii) accounting for income taxes to be its most significant estimates.
Description of Business
Braves Holdings indirectly owns the Atlanta Braves Major League Baseball Club (“ANLBC,” the “Atlanta Braves,” the “Braves,” the “club,” or the “team”). ANLBC’s ballpark (“Truist Park” or the “Stadium”), is located in Cobb County, a suburb of Atlanta, and is leased from Cobb County, Cobb-Marietta Coliseum and Exhibit Hall Authority. Braves Holdings, through affiliated entities and third party development partners, has developed a significant portion of the land around Truist Park for a mixed-use development that features retail, office, hotel and entertainment opportunities (the “Mixed-Use Development”).
I-10
ATLANTA BRAVES HOLDINGS, INC.
Notes to Condensed Consolidated Financial Statements (Continued)
(unaudited)
The Braves and
Split-Off of Atlanta Braves Holdings from Liberty
Prior to the Split-Off, a portion of Liberty’s general and administrative expenses, including legal, tax, accounting, treasury, information technology, cybersecurity and investor relations support was allocated to the Braves Group each reporting period based on an estimate of time spent. The Braves Group paid $
Prior to the Split-Off, the Liberty Formula One Group (the “Formula One Group”) and the Liberty SiriusXM Group held intergroup interests in the Braves Group. The intergroup interests represented quasi-equity interests which were not represented by outstanding shares of common stock; rather, the Formula One Group and Liberty SiriusXM Group had attributed interests in the Braves Group, which were generally stated in terms of a number of shares of Liberty Braves common stock. As of December 31, 2022,
The intergroup interests in the Braves Group remaining immediately prior to the Split-Off were settled and extinguished in connection with the Split-Off through the attribution, to the respective tracking stock group, of Atlanta Braves Holdings Series C common stock on a
Following the Split-Off and subsequent Liberty Media Exchange (as defined below), Liberty and Atlanta Braves Holdings operate as separate, publicly traded companies and neither has any continuing stock ownership, beneficial or otherwise, in the other. Liberty owned
I-11
ATLANTA BRAVES HOLDINGS, INC.
Notes to Condensed Consolidated Financial Statements (Continued)
(unaudited)
In connection with the Split-Off, Liberty and Atlanta Braves Holdings entered into certain agreements in order to govern certain of the ongoing relationships between the two companies after the Split-Off and to provide for an orderly transition. These agreements included a reorganization agreement, a services agreement, aircraft time sharing agreements, a facilities sharing agreement, a tax sharing agreement and a registration rights agreement. The facilities sharing agreement and aircraft time sharing agreements were terminated as part of the Corporate Governance Transition (as defined below).
The reorganization agreement provides for, among other things, the principal corporate transactions (including the internal restructuring) required to effect the Split-Off, certain conditions to the Split-Off and provisions governing the relationship between Atlanta Braves Holdings and Liberty with respect to and resulting from the Split-Off. The tax sharing agreement provides for the allocation and indemnification of tax liabilities and benefits between Liberty and Atlanta Braves Holdings and other agreements related to tax matters. Pursuant to the services agreement, Liberty provides Atlanta Braves Holdings with general and administrative services including legal, tax, accounting, treasury, information technology, cybersecurity and investor relations support. Atlanta Braves Holdings will reimburse Liberty for direct, out-of-pocket expenses and will pay a services fee to Liberty under the services agreement that is subject to adjustment quarterly, as necessary. Additionally, pursuant to the services agreement with Liberty and prior to the Corporate Governance Transition (as defined below), components of Liberty Chief Executive Officer’s compensation were either paid directly to him or reimbursed to Liberty, in each case, based on allocations set forth in the services agreement. The allocation percentage was
Pursuant to the registration rights agreement with Liberty, Atlanta Braves Holdings registered the shares of Atlanta Braves Holdings’ Series C common stock that were issued to Liberty in settlement and extinguishment of the intergroup interest in the Braves Group attributed to the Liberty SiriusXM Group and then exchanged by Liberty with a third party in satisfaction of certain debt obligations.
Under these various agreements, amounts reimbursable to Liberty aggregated $
Related Party Transactions and Change in Corporate Governance
On August 21, 2024, Terence F. McGuirk (“McGuirk”), Chairman and CEO of Braves Holdings, LLC, entered into certain shareholder arrangements with Dr. John Malone (“Malone”), pursuant to which Malone has granted McGuirk a proxy (the “Malone Voting Agreement”) to vote
The execution of the Malone Voting Agreement constituted a “Change in Control” of the Company as defined in Gregory B. Maffei’s Executive Employment Agreement, dated effective as of December 13, 2019, by and between Mr. Maffei and Liberty. As a result, on August 21, 2024, Mr. Maffei notified the Company of his resignation as President, Chief Executive Officer, Chairman of the Board and a director of the Company effective August 31, 2024. Mr. Maffei’s separation from employment with the Company was for “Good Reason” within the meaning of his Executive Employment Agreement. Additionally, Atlanta Braves Holdings and Liberty have begun transitioning various general and administrative services currently provided by Liberty to the management of Atlanta Braves Holdings, including legal, tax, accounting, treasury, information technology, cybersecurity and investor relations support. As part of that transition, the
I-12
ATLANTA BRAVES HOLDINGS, INC.
Notes to Condensed Consolidated Financial Statements (Continued)
(unaudited)
then-current officers of the Company (with limited exceptions) stepped down from their officer positions, effective August 31, 2024, and members of the Braves operating team assumed these roles effective September 1, 2024 (the “Corporate Governance Transition”).
Seasonality
Braves Holdings revenue is seasonal, with the majority of revenue recognized during the second and third quarters which aligns with the baseball season.
(2)Earnings Attributable to Atlanta Braves Holdings Stockholders Per Common Share
Basic earnings (loss) per common share (“EPS”) is computed by dividing net earnings (loss) attributable to Atlanta Braves Holdings shareholders by the weighted average number of common shares outstanding (“WASO”) for the period. Diluted EPS presents the dilutive effect on a per share basis of potential common shares as if they had been converted at the beginning of the periods presented. There were
Three months ended | Three months ended | Nine months ended | Nine months ended | ||||||
| September 30, 2024 |
| September 30, 2023 |
| September 30, 2024 | September 30, 2023 | |||
(numbers of shares in thousands) | |||||||||
Basic WASO |
| | | | | ||||
Potentially dilutive shares (1) |
| | | | | ||||
Diluted WASO |
| | | | | ||||
(1) Potentially dilutive shares are excluded from the computation of diluted EPS during periods in which losses are reported since the result would be antidilutive.
I-13
ATLANTA BRAVES HOLDINGS, INC.
Notes to Condensed Consolidated Financial Statements (Continued)
(unaudited)
(3) Property and Equipment
Property and equipment consisted of the following:
|
| September 30, 2024 |
| December 31, 2023 |
| |||||||||||
Owned | Owned |
| ||||||||||||||
Estimated | assets | assets |
| |||||||||||||
Useful | Owned | available to | Owned | available to | ||||||||||||
| Life |
| assets |
| be leased |
| Total |
| assets |
| be leased |
| Total |
| ||
in years | amounts in thousands |
| ||||||||||||||
Land |
| NA | $ | | |
| |
| | |
| | ||||
Buildings and improvements |
|
| | |
| |
| | |
| | |||||
Leasehold improvements |
|
| | |
| |
| | |
| | |||||
Furniture and equipment |
|
| | |
| |
| | |
| | |||||
Construction in progress |
| NA |
| | |
| |
| | |
| | ||||
Property and equipment, at cost | $ | |
| |
| |
| |
| |
| | ||||
Depreciation expense was $
(4)Investments in Affiliates Accounted for Using the Equity Method
The following table includes the Company’s carrying amount and percentage ownership of its investments in affiliates:
September 30, 2024 | December 31, 2023 | |||||||
Percentage | Carrying | Carrying | ||||||
| Ownership |
| amount |
| amount | |||
amounts in thousands | ||||||||
MLBAM | % | $ | | | ||||
BELP | % |
| | | ||||
Other | % |
| | | ||||
Total | $ | | | |||||
The following table presents the Company’s share of earnings (losses) of affiliates:
| Three months ended | Nine months ended |
| |||||||
September 30, | September 30, | |||||||||
| 2024 |
| 2023 |
| 2024 |
| 2023 |
| ||
amounts in thousands |
| |||||||||
MLBAM | $ | |
| | | | ||||
BELP |
| |
| | | | ||||
Other |
| |
| | | | ||||
Total | $ | |
| | |
| | |||
I-14
ATLANTA BRAVES HOLDINGS, INC.
Notes to Condensed Consolidated Financial Statements (Continued)
(unaudited)
MLBAM
MLB Advanced Media, L.P. (“MLBAM”) was formed in January 2000 pursuant to a vote of the
At the time of the acquisition of ANLBC by a predecessor of Liberty in 2007, the fair value of the MLBAM investment exceeded ANLBC’s proportionate share of MLBAM’s net assets, resulting in excess basis in the investment in MLBAM. The excess basis as of September 30, 2024 and December 31, 2023 was indefinite lived and aggregated approximately $
BELP
Baseball Endowment, L.P. (“BELP”) is an investment fund formed by the Clubs principally for the purpose of investing, on a long-term basis, assets on their behalf intended to provide a competitive market rate investment return while minimizing investment volatility. The Company’s investment in BELP is considered an equity method investment as the investment is in a limited partnership where significant influence is generally presumed to exist. The Company records its share of BELP’s earnings (losses) on a
Other Affiliates
Braves Holdings has
(5)Debt
Debt is summarized as follows:
| September 30, | December 31, | ||||
| 2024 |
| 2023 | |||
amounts in thousands | ||||||
Baseball | ||||||
League wide credit facility | $ | — |
| — | ||
MLB facility fund – term |
| |
| | ||
MLB facility fund – revolver |
| |
| | ||
TeamCo revolver |
| |
| — | ||
Term debt | | | ||||
Mixed-Use Development | ||||||
Credit facilities |
| |
| | ||
Term debt |
| |
| | ||
Deferred financing costs |
| ( |
| ( | ||
Total debt |
| |
| | ||
Debt classified as current |
| ( |
| ( | ||
Total long-term debt | $ | |
| | ||
I-15
ATLANTA BRAVES HOLDINGS, INC.
Notes to Condensed Consolidated Financial Statements (Continued)
(unaudited)
League Wide Credit Facility
In December 2013, a subsidiary of Braves Holdings executed various agreements to enter into MLB’s League Wide Credit Facility (the “LWCF”). Braves Holdings also established a special purpose Delaware statutory trust, the Braves Club Trust (the “Club Trust”), and transferred, among other things, to the Club Trust its rights to receive distributions of revenue from the National Broadcasting Contracts, which secure borrowings under the LWCF. Pursuant to the terms of a revolving credit agreement, Major League Baseball Trust may borrow from certain lenders, with Bank of America, N.A. acting as the administrative agent. Major League Baseball Trust then uses the proceeds of such borrowings to provide loans to the club trusts of the participating Clubs. Major League Baseball Trust has granted Wells Fargo Bank, National Association, the collateral agent in respect of the LWCF, a first priority lien to secure the borrowings under the LWCF. The maximum amount available to the Club Trust under the LWCF was $
Under the LWCF, the Club Trust can request a revolving credit advance in the form of a Eurodollar or Base Rate loan. Each loan bears interest on the unpaid principal amount from the date made through maturity at a rate determined by the Eurodollar or Base Rate, plus an applicable margin. The interest rate of a Eurodollar loan was
MLB Facility Fund
In December 2017, a subsidiary of Braves Holdings executed various agreements to enter into the MLB Facility Fund (the “MLBFF”). Braves Holdings also established a special purpose Delaware limited liability company, Braves Facility Fund LLC (“Braves Facility Fund”), and transferred to Braves Facility Fund its rights to receive distributions from the Club Trust, which secure borrowings under the MLBFF. Pursuant to the terms of an indenture, a credit agreement and certain note purchase agreements, Major League Baseball Facility Fund, LLC may borrow from certain lenders. Major League Baseball Facility Fund, LLC then uses the proceeds of such borrowings to provide loans to each of the participating Clubs. Amounts advanced pursuant to the MLBFF are available to fund ballpark and other baseball-related real property improvements, renovations and/or new construction.
Term
In June 2020, Braves Facility Fund converted previous borrowings under a revolving credit advance to a $
Revolver
In May 2021, Braves Facility Fund established a revolving credit commitment with Major League Baseball Facility Fund, LLC (the “MLB facility fund – revolver”). The maximum amount available to Braves Facility Fund under
I-16
ATLANTA BRAVES HOLDINGS, INC.
Notes to Condensed Consolidated Financial Statements (Continued)
(unaudited)
the MLB facility fund – revolver was $
Under a credit agreement, Braves Facility Fund can request a revolving credit advance in the form of a Eurodollar or Base Rate loan. Each loan bears interest on the unpaid principal amount from the date made through maturity at a rate determined by a Eurodollar or Base Rate, plus an applicable margin. The interest rate of a Eurodollar loan was
TeamCo Revolver
In September 2016, a subsidiary of Braves Holdings amended a revolving credit agreement (the “TeamCo Revolver”) that provided for revolving commitments of $
Baseball Term Debt
In August 2016, a subsidiary of Braves Holdings entered into a senior secured permanent placement note purchase agreement for $
Mixed-Use Development Credit Facilities
In August 2016, a subsidiary of Braves Holdings entered into a $
In December 2022, a subsidiary of Braves Holdings entered into a $
I-17
ATLANTA BRAVES HOLDINGS, INC.
Notes to Condensed Consolidated Financial Statements (Continued)
(unaudited)
the construction costs of an office building adjacent to the Stadium. Loans under the construction loan bear interest at
Under the construction loans, Braves Holdings must maintain certain financial covenants, including a debt yield ratio.
Mixed-Use Development Term Debt
In May 2018, a subsidiary of Braves Holdings refinanced a construction loan with a $
In June 2022, subsidiaries of Braves Holdings refinanced a construction loan agreement that was used to construct an office building within the Mixed-Use Development with a new term loan facility with $
In May 2023, a subsidiary of Braves Holdings refinanced an $
Fair Value of Debt
The Company believes that the carrying amount of its debt with variable rates approximates fair value at September 30, 2024. Other fixed rate debt is considered to be carried at approximate fair value with the exception of the senior secured permanent placement notes, which was estimated to be approximately $
Interest Rate Swaps (Level 2)
In May 2018, a subsidiary of Braves Holdings entered into an interest rate swap agreement with Truist Bank for a notional amount of $
I-18
ATLANTA BRAVES HOLDINGS, INC.
Notes to Condensed Consolidated Financial Statements (Continued)
(unaudited)
In August 2019, a subsidiary of Braves Holdings entered into an interest rate swap agreement with Truist Bank for a notional amount of $
In May 2022, a subsidiary of Braves Holdings entered into an interest rate swap agreement with Truist Bank for a notional amount of $
In June 2023, a subsidiary of Braves Holdings entered into an interest rate swap agreement with Truist Bank for a notional amount of $
are included within other current assets and other noncurrent liabilities as of September 30, 2024 and other assets and other noncurrent liabilities as of in the condensed consolidated balance sheets and changes in the fair value of the interest rate swaps are recorded to realized and unrealized gains (losses) on financial instruments, net in the condensed consolidated statements of operations.
(6)Stock-Based Compensation
The Company recorded stock-based compensation expense of $
Incentive Plans
Prior to the Split-Off and pursuant to the Liberty Media Corporation 2022 Omnibus Incentive Plan, Liberty granted to certain of its directors, employees and employees of its subsidiaries, restricted stock (“RSAs”), restricted stock units (“RSUs”) and stock options to purchase shares of Liberty Braves common stock (collectively, “Awards”). At the time of the Split-Off, the Awards were exchanged into RSAs, RSUs and stock options to purchase shares of Atlanta Braves Holdings common stock.
Subsequent to the Split-Off, the Company can grant, to certain of its directors, employees and employees of its subsidiaries, RSAs, RSUs and stock options to purchase shares of its common stock, under the Atlanta Braves Holdings 2023 Omnibus Incentive Plan (the “2023 Plan”) and may grant Awards in respect of a maximum of
Awards generally vest over
I-19
ATLANTA BRAVES HOLDINGS, INC.
Notes to Condensed Consolidated Financial Statements (Continued)
(unaudited)
Grants of Awards
The Company did not grant any options to purchase shares of Series A or Series B Atlanta Braves Holdings common stock during the nine months ended September 30, 2024.
In connection with the Liberty Chief Executive Officer’s employment agreement, Liberty granted
The Company has calculated the GDFV for all of its equity classified Awards using the Black-Scholes valuation model. The Company estimates the expected term of the options based on historical exercise and forfeiture data. The volatility used in the calculation for Awards is based on the historical volatility of Atlanta Braves Holdings common stock (and previously, Liberty Braves common stock). The Company uses a
Outstanding Awards
The following table presents the number and weighted average exercise price (“WAEP”) of options to purchase Atlanta Braves Holdings common stock granted to certain officers, employees and directors, as well as the weighted average remaining life and aggregate intrinsic value of the options.
Series C | ||||||||||||
|
|
|
| Weighted |
| Aggregate |
| |||||
average | intrinsic |
| ||||||||||
Atlanta Braves Holdings | remaining | value |
| |||||||||
| options (000's) |
| WAEP |
| life |
| (in millions) | |||||
Outstanding at January 1, 2024 |
| |
| $ | | |||||||
Granted |
| — |
| $ | — | |||||||
Exercised |
| ( |
| $ | | |||||||
Forfeited/Cancelled |
| — |
| $ | — | |||||||
Outstanding at September 30, 2024 |
| |
| $ | |
| years |
| $ | | ||
Exercisable at September 30, 2024 |
| |
| $ | |
| years |
| $ | | ||
As of September 30, 2024, there were
As of September 30, 2024, the total unrecognized compensation cost related to unvested Atlanta Braves Holdings Awards was approximately $
As of September 30, 2024,
Exercises
The aggregate intrinsic value of all Atlanta Braves Holdings Series C common stock options exercised during the nine months ended September 30, 2024 and 2023 was $
I-20
ATLANTA BRAVES HOLDINGS, INC.
Notes to Condensed Consolidated Financial Statements (Continued)
(unaudited)
RSAs and RSUs
The Company had approximately
The aggregate fair value of all RSAs and RSUs of Atlanta Braves Holdings common stock that vested during the nine months ended September 30, 2024 and 2023 was $
(7)Commitments and Contingencies
Collective Bargaining Agreement
In March 2022, the Major League Baseball Players Association (“MLBPA”) and the Clubs entered into a new collective bargaining agreement that covers the 2022-2026 MLB seasons (“CBA”). The CBA contains provisions surrounding revenue sharing among the Clubs, a competitive balance tax on Club payrolls that exceed specified thresholds, minimum player salary levels, an expanded postseason schedule and other provisions impacting Braves Holdings’ operations and its relationships with members of the MLBPA. Braves Holdings’ minor league players are also parties to a collective bargaining agreement. Less than
There are
During the nine months ended September 30, 2024 and 2023, Braves Holdings incurred $
Employment Contracts
Long-term employment contracts provide for, among other items, annual compensation for certain players (current and former) and other employees. As of September 30, 2024, amounts payable annually under such contracts aggregated $
Subsequent to September 30, 2024, Braves Holdings entered into certain assignment agreements with long-term employment contracts which increased amounts payable by approximately $
I-21
ATLANTA BRAVES HOLDINGS, INC.
Notes to Condensed Consolidated Financial Statements (Continued)
(unaudited)
Diamond Sports Group, LLC (“Diamond Sports Group”) Bankruptcy
ANLBC has a long-term local broadcasting agreement with Sportsouth Network II, LLC, a subsidiary of Diamond Sports Group, granting its regional cable networks the right to broadcast substantially all of the Braves games not otherwise selected for broadcast within the home television territory of the Braves (“Braves Broadcast Agreement”). In March 2023, Diamond Sports Group along with certain affiliates (collectively, the “Debtors”) filed voluntary petitions for relief under Chapter 11 (“Chapter 11 Proceeding”) in the United States Bankruptcy Court for the Southern District of Texas (the “Bankruptcy Court”).
On February 12, 2024, the Bankruptcy Court entered an agreed order among the Debtors, ANLBC and certain other MLB Clubs who have broadcast agreements with Diamond Sports Group or its affiliates, and the BOC, whereby the Debtors agreed not to reject or cause the termination of various club broadcasting agreements, including the Braves Broadcast Agreement, before the end of the 2024 MLB Season (“Agreed Order”). The Agreed Order provides other protections to ANLBC, MLB and the other covered Clubs to give some assurance that the Debtors will pay all required fees under the various club broadcasting agreements, including the Braves Broadcast Agreement, until the earlier to occur of (i) a plan of reorganization is confirmed by the Bankruptcy Court and the Debtors exit bankruptcy and (ii) the final payment for the 2024 MLB season is paid.
The Debtors filed their Disclosure Statement (“Disclosure Statement”) and Joint Plan of Reorganization (“Joint Plan of Reorganization”) on April 17, 2024. The Bankruptcy Court approved the Disclosure Statement and originally scheduled a hearing to consider confirmation of the Joint Plan of Reorganization for June 18, 2024 (“Confirmation Hearing”). The Confirmation Hearing was originally adjourned to July 29-30, 2024, but on July 24, 2024, the Confirmation Hearing was further adjourned indefinitely. On September 3, 2024, the Debtors announced their intention to further amend the Disclosure Statement and Joint Plan of Reorganization in hopes of setting the Confirmation Hearing for some time in November. On October 2, 2024, the Debtors filed their First Amended Joint Chapter 11 Plan of Reorganization (“Amended Plan”) as well as their Disclosure Statement Supplement for the Debtors’ First Amended Joint Chapter 11 Plan of Reorganization (“Disclosure Statement Supplement”). The Debtors filed a further revised version of the Amended Plan (“Revised Amended Plan”) on October 9, 2024. On October 9, 2024, the Court approved the Disclosure Statement Supplement and scheduled the Confirmation Hearing to consider the Revised Amended Plan for November 14-15, 2024. Such dates are subject to further change.
The Debtors have indicated that their preference and intention is to proceed with a reorganization, but the Revised Amended Plan includes a feature that would allow the Debtors to pivot from a reorganization to a liquidation. The treatment of the Braves Broadcast Agreement is likely to be very different if the Debtors elect to pivot to a liquidation scenario under the Revised Amended Plan. If the Debtors proceed with a reorganization, the Debtors have indicated they intend to seek assumption of the obligations under the Braves Broadcast Agreement. If the Revised Amended Plan is confirmed and the Bankruptcy Court allows the Debtors to assume the Braves Broadcast Agreement, both ANLBC and Sportsouth Network II, LLC will continue to be responsible for their respective obligations under the Braves Broadcast Agreement. Alternatively, in the event the Debtors pivot to a liquidation, the Revised Amended Plan provides that the Debtors will seek to reject the Braves Broadcast Agreement thereby relieving the Debtors of any further performance obligations. The Revised Amended Plan currently provides that the Debtors have until December 16, 2024 to elect to pivot to a liquidation. Such date is subject to further change, including pursuant to a further amendment to the Revised Amended Plan or a court order.
In the event Diamond Sports Group is unsuccessful in its efforts to confirm the Revised Amended Plan or other plan of reorganization, it is possible that the respective bankruptcy cases of the Debtors could be converted to cases under Chapter 7 of the bankruptcy code. In such event, a trustee will be appointed to liquidate the remaining assets of the Debtors and ANLBC may be required to repay up to $
I-22
ATLANTA BRAVES HOLDINGS, INC.
Notes to Condensed Consolidated Financial Statements (Continued)
(unaudited)
period preceding the filing. In addition, if the broadcasting agreement is rejected in the bankruptcy proceeding, ANLBC will not receive any revenue from Sportsouth Network II, LLC during the remaining contract term and ANLBC would be required to write-down accounts receivable and contract assets of approximately $
To date and throughout the Chapter 11 Proceeding, ANLBC has received all scheduled payments in accordance with the Braves Broadcast Agreement.
Litigation
Braves Holdings, along with the BOC and other MLB affiliates, has been named in a number of lawsuits arising in the normal course of business. Although it is reasonably possible the Company may incur losses upon conclusion of such matters, an estimate of any loss or range of loss cannot be made. In the opinion of management, it is expected that amounts, if any, which may be required to satisfy such contingencies will not be material in relation to the accompanying condensed consolidated financial statements.
(8)Segment Information
The Company, through its ownership of Braves Holdings, is primarily engaged in the entertainment and real estate industries. The Company identifies its reportable segments as those operating segments that represent 10% or more of its consolidated annual revenue, annual Adjusted OIBDA (as defined below) or total assets.
The Company evaluates performance and makes decisions about allocating resources to its operating segments based on financial measures such as revenue and Adjusted OIBDA (as defined below). In addition, the Company reviews nonfinancial measures such as attendance, viewership and social media.
The Company has identified the following as its reportable segments:
| ● | Baseball – operations relating to Braves baseball and Truist Park and includes ticket sales, concessions, advertising sponsorships, suites and premium seat fees, broadcasting rights, retail and licensing. |
| ● | Mixed-Use Development – includes retail, office, hotel and entertainment operations primarily within The Battery Atlanta. |
The Company’s reportable segments are strategic business units that offer different products and services. They are managed separately because each segment requires different technologies, differing revenue sources and marketing strategies.
I-23
ATLANTA BRAVES HOLDINGS, INC.
Notes to Condensed Consolidated Financial Statements (Continued)
(unaudited)
Performance Measures
The following table disaggregates revenue by segment and by source:
| Three months ended | Nine months ended | ||||||||
September 30, | September 30, | |||||||||
| 2024 |
| 2023 | 2024 |
| 2023 | ||||
amounts in thousands | ||||||||||
Baseball: |
|
|
|
| ||||||
Baseball event |
| $ | | | | |||||
Broadcasting |
|
| | | | | ||||
Retail and licensing |
|
| | | | | ||||
Other |
|
| | | | | ||||
Total Baseball |
|
| | | | | ||||
Mixed-Use Development |
|
| | | | | ||||
Total revenue |
| $ | | | | | ||||
When consideration is received from a customer prior to transferring services to the customer under the terms of a contract, deferred revenue is recorded. The primary source of the Company’s deferred revenue relates to suite and season ticket arrangements, as well as certain sponsorship arrangements. Deferred revenue is recognized as revenue when, or as, control of the products or services are transferred to the customer and all revenue recognition criteria have been met. The Company had long-term deferred revenue of $
Significant portions of the transaction prices for Braves Holdings are related to undelivered performance obligations that are under contractual arrangements that extend beyond one year. The Company anticipates recognizing revenue from the delivery of such performance obligations of approximately $
For segment reporting purposes, the Company defines Adjusted OIBDA as revenue less operating expenses, and selling, general and administrative expenses excluding all stock-based compensation, separately reported litigation settlements and restructuring, acquisition and impairment charges. The Company believes this measure 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. This measure of performance excludes depreciation and amortization, stock-based compensation, separately reported litigation settlements, restructuring, acquisition and impairment charges that are included in the measurement of operating income pursuant to GAAP. Accordingly, Adjusted OIBDA should be considered in addition to, but not as a substitute for, operating income (loss), net earnings (loss), cash flows provided by (used in) operating activities and other measures of financial performance prepared in accordance with GAAP.
I-24
ATLANTA BRAVES HOLDINGS, INC.
Notes to Condensed Consolidated Financial Statements (Continued)
(unaudited)
Adjusted OIBDA is summarized as follows:
Three months ended | Nine months ended | |||||||||
September 30, | September 30, | |||||||||
2024 | 2023 |
| 2024 |
| 2023 | |||||
amounts in thousands | ||||||||||
Baseball |
| $ | |
| | |
| | ||
Mixed-Use Development | |
| | |
| | ||||
Corporate and Other | ( |
| ( | ( |
| ( | ||||
Total |
| $ | |
| | |
| | ||
Other Information
September 30, 2024 | December 31, 2023 |
| ||||||||||||
| Total |
| Investments |
| Capital |
| Total |
| Investments |
| Capital |
| ||
assets | in affiliates | expenditures | assets | in affiliates | expenditures |
| ||||||||
| amounts in thousands | |||||||||||||
Baseball |
| $ |
| | |
| | | ||||||
Mixed-Use Development |
| | |
| | | ||||||||
Corporate and other |
| — |
| — |
| |
| — |
| — | ||||
Elimination (1) | ( | — | — | ( | — | — | ||||||||
Total |
| $ | |
| |
| |
| |
| |
| | |
| (1) | This amount relates to income taxes payable that partially offsets income taxes receivable in the condensed consolidated balance sheets. |
The following table provides a reconciliation of Adjusted OIBDA to Operating income (loss) and Earnings (loss) before income taxes:
Three months ended | Nine months ended | |||||||||
September 30, | September 30, | |||||||||
| 2024 |
| 2023 |
| 2024 |
| 2023 | |||
amounts in thousands | ||||||||||
Adjusted OIBDA |
| $ | |
| | |
| | ||
Stock-based compensation | ( |
| ( | ( |
| ( | ||||
Depreciation and amortization | ( |
| ( | ( |
| ( | ||||
Operating income (loss) | |
| | ( |
| ( | ||||
Interest expense | ( |
| ( | ( |
| ( | ||||
Share of earnings (losses) of affiliates, net | |
| | |
| | ||||
Realized and unrealized gains (losses) on intergroup interests, net | — | ( | — | ( | ||||||
Realized and unrealized gains (losses) on financial instruments, net | ( |
| | |
| | ||||
Other, net | |
| | |
| | ||||
Earnings (loss) before income taxes |
| $ | |
| | ( |
| ( | ||
I-25
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Certain statements in this Quarterly Report on Form 10-Q constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding our business, product and marketing strategies; new service offerings; the status of our broadcasting agreement and potential outcome of the Diamond Sports Group bankruptcy; the recoverability of our goodwill and other long-lived assets; our projected sources and uses of cash; and the anticipated impact of certain contingent liabilities related to legal and tax proceedings and other matters arising in the ordinary course of business. The words "believe," "estimate," "expect," "anticipate," "intend," "plan," "strategy," "continue," "seek," "may," "could" and similar expressions or statements regarding future periods are intended to identify forward-looking statements, although not all forward-looking statements may contain such words. Where, in any forward-looking statement, we express an expectation or belief as to future results or events, such expectation or belief is expressed in good faith and believed to have a reasonable basis, but such statements necessarily involve risks and uncertainties and there can be no assurance that the expectation or belief will result or be achieved or accomplished. Given these uncertainties, we caution you not to place undue reliance on these forward-looking statements. The following include some but not all of the factors that could cause actual results or events to differ materially from those anticipated:
| ● | Atlanta Braves Holdings, Inc.’s (“Atlanta Braves Holdings,” “the Company,” “us,” “we,” or “our”) historical financial information is not necessarily representative of its future financial position, future results of operations or future cash flows; |
| ● | the Company’s ability to recognize anticipated benefits from the Split-Off (defined below); |
| ● | the incurrence of costs as a standalone public company following the Split-Off; |
| ● | the ability of the Company to successfully transition responsibilities for various matters from Liberty Media Corporation (“Liberty”) to in-house or third party personnel; |
| ● | the Company’s ability to obtain additional financing on acceptable terms and cash in amounts sufficient to service debt and other financial obligations; |
| ● | the Company’s indebtedness could adversely affect operations and could limit its ability to react to changes in the economy or its industry; |
| ● | the Company’s ability to realize the benefits of acquisitions or other strategic investments; |
| ● | the impact of inflation and weak economic conditions on consumer demand for products, services and events offered by the Company; |
| ● | the outcome of pending or future litigation or investigations; |
| ● | the operational risks of the Company and its business affiliates with operations outside of the United States; |
| ● | the Company’s ability to use net operating loss and disallowed business interest carryforwards to reduce future tax payments; |
| ● | the ability of the Company and its affiliates to comply with government regulations, including, without limitation, consumer protection laws and competition laws, and adverse outcomes from regulatory proceedings; |
| ● | the regulatory and competitive environment of the industries in which the Company operates; |
| ● | changes in the nature of key strategic relationships with partners, vendors and joint venturers; |
| ● | the achievement of on-field success; |
| ● | the Company’s ability to develop, obtain and retain talented players; |
| ● | the impact of organized labor on the Company; |
| ● | the impact of the structure or an expansion of Major League Baseball (“MLB”); |
I-26
| ● | the level of broadcasting revenue that Braves Holdings, LLC (“Braves Holdings”) receives, including an impact as a result of the outcome of the Diamond Sports Group bankruptcy; |
| ● | the impact of the Mixed-Use Development (defined below) on the Company and its ability to manage the project; |
| ● | the impact of data loss or breaches or disruptions of the Company’s information systems and information system security; |
| ● | the Company’s processing, storage, sharing, use, disclosure and protection of personal data could give rise to liabilities; |
| ● | the Company’s stock price has and may continue to fluctuate; |
| ● | the Company’s common stock and organizational structure; and |
| ● | geopolitical incidents, accidents, terrorist acts, pandemics or epidemics, natural disasters, including the effects of climate change, or other events that cause one or more events to be cancelled or postponed, are not covered by insurance, or cause reputational damage to the Company and its affiliates. |
The above list of risks and uncertainties is only a summary of some of the most important factors and is not intended to be exhaustive. For additional risk factors, please see Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2023 and Part II, Item 1A in this Quarterly Report, as such may be updated by us from time to time in Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other filings that we make with the SEC. These forward-looking statements and such risks, uncertainties and other factors speak only as of the date of this Quarterly Report, and we expressly disclaim any obligation or undertaking to disseminate any updates or revisions to any forward-looking statement contained herein, to reflect any change in our expectations with regard thereto, or any other change in events, conditions or circumstances on which any such statement is based, except to the extent required by law.
The following discussion and analysis provides information concerning our results of operations and financial condition. This discussion should be read in conjunction with our accompanying condensed consolidated financial statements and the notes thereto and our Annual Report on Form 10-K for the year ended December 31, 2023.
Explanatory Note
During November 2022, the board of directors of Liberty authorized Liberty management to pursue a plan to redeem each outstanding share of its Liberty Braves common stock in exchange for one share of the corresponding series of common stock of a newly formed entity, Atlanta Braves Holdings (the “Split-Off”). The Split-Off was completed on July 18, 2023 and was intended to be tax-free to holders of Liberty Braves common stock. In September 2024, the Internal Revenue Service completed its review of the Split-Off and notified Liberty that it agreed with the non-taxable characterization of the transaction. Atlanta Braves Holdings is comprised of the businesses, assets and liabilities previously attributed to the Liberty Braves Group (“Braves Group”), which, as of September 30, 2024, included Atlanta Braves Holdings’ wholly-owned subsidiary Braves Holdings and corporate cash. Although Atlanta Braves Holdings was reported as a combined company until the date of the Split-Off, all periods reported herein are referred to as consolidated.
The intergroup interests in the Braves Group held by the Liberty Formula One Group (the “Formula One Group”) and the Liberty SiriusXM Group immediately prior to the Split-Off were settled and extinguished in connection with the Split-Off through the attribution, to the respective tracking stock group, of Atlanta Braves Holdings Series C common stock on a one-for-one basis equal to the number of notional shares representing the intergroup interest.
On August 21, 2024, Terence F. McGuirk (“McGuirk”), Chairman and CEO of Braves Holdings, LLC, entered into certain shareholder arrangements with Dr. John Malone (“Malone”), pursuant to which Malone has granted McGuirk a proxy (the “Malone Voting Agreement”) to vote 887,079 shares of the Company’s Series B Common Stock owned by Malone, representing 44% of the Company’s outstanding voting power, on director elections, the approval or authorization of executive compensation and other routine matters. Malone has also granted McGuirk a right of first refusal with respect
I-27
to future transfers of the Company shares beneficially owned by Malone as well as certain appreciation rights with respect to the value of Malone’s shares of Series B Common Stock.
The execution of the Malone Voting Agreement constituted a “Change in Control” of the Company as defined in Gregory B. Maffei’s Executive Employment Agreement, dated effective as of December 13, 2019, by and between Mr. Maffei and Liberty. As a result, on August 21, 2024, Mr. Maffei notified the Company of his resignation as President, Chief Executive Officer, Chairman of the Board and a director of the Company effective August 31, 2024. Mr. Maffei’s separation from employment with the Company was for “Good Reason” within the meaning of his Executive Employment Agreement. Additionally, Atlanta Braves Holdings and Liberty have begun transitioning various general and administrative services currently provided by Liberty to the management of Atlanta Braves Holdings, including legal, tax, accounting, treasury, information technology, cybersecurity and investor relations support. As part of that transition, the then-current officers of the Company (with limited exceptions) stepped down from their officer positions, effective August 31, 2024, and members of the Braves operating team assumed these roles effective September 1, 2024. (the “Corporate Governance Transition”).
Overview
The Company manages its business based on the following reportable segments: baseball and mixed-use development.
The baseball segment includes operations relating to the Atlanta Braves Major League Baseball Club (“ANLBC,” the “Atlanta Braves,” the “Braves,” the “club,” or the “team”) and the Braves’ ballpark (“Truist Park” or the “Stadium”) and includes revenue generated from ticket sales, concessions, local broadcasting rights, advertising sponsorships, suites and premium seat fees, retail and licensing revenue, shared MLB revenue streams, including national broadcasting rights and licensing, and other sources. Ticket sales, concessions, broadcasting rights and advertising sponsorship sales are the baseball segment’s primary revenue drivers.
The Braves have a long-term local television broadcasting agreement with Sportsouth Network II, LLC. Diamond Sports Group, the parent company of Sportsouth Network II, LLC, is in financial distress and has filed for Chapter 11 protection. Refer to note 7 in the accompanying notes to the condensed consolidated financial statements and the Liquidity and Capital Resources section below for more information.
The mixed-use development segment includes retail, office, hotel and entertainment operations primarily within The Battery Atlanta (the “Mixed-Use Development”). The Mixed-Use Development derives revenue primarily from office and retail rental income (including overage rent and tenant reimbursements) and, to a lesser extent, parking and advertising sponsorships throughout the year.
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Results of Operations –September 30, 2024 and 2023
General. Provided in the tables below is information regarding the historical Condensed Consolidated Operating Results and Other Income and Expense of Atlanta Braves Holdings, as well as information regarding the contribution to those items from our reportable segments. The “corporate and other” category consists of those assets that do not qualify as a separate reportable segment.
Three months ended | Nine months ended | ||||||||
September 30, | September 30, | ||||||||
2024 |
| 2023 |
| 2024 |
| 2023 |
| ||
dollar amounts in thousands |
| ||||||||
Baseball revenue | $ | 273,262 |
| 256,266 | 561,233 |
| 528,762 | ||
Mixed-Use Development revenue |
| 17,412 |
| 15,558 | 49,397 |
| 44,157 | ||
Total revenue |
| 290,674 |
| 271,824 | 610,630 |
| 572,919 | ||
Operating costs and expenses: |
|
|
|
|
|
|
| ||
Baseball operating costs |
| (225,973) |
| (198,195) | (476,250) |
| (430,424) | ||
Mixed-Use Development costs |
| (2,499) |
| (2,247) | (7,162) |
| (6,451) | ||
Selling, general and administrative, excluding stock-based compensation | (30,757) | (31,071) | (83,777) | (85,250) | |||||
Stock-based compensation | (6,365) | (3,309) | (13,789) | (9,653) | |||||
Depreciation and amortization |
| (18,678) |
| (21,286) | (50,669) |
| (55,215) | ||
Operating income (loss) |
| 6,402 |
| 15,716 | (21,017) |
| (14,074) | ||
Other income (expense): |
|
|
|
|
|
|
| ||
Interest expense |
| (9,561) |
| (9,657) | (28,717) |
| (28,017) | ||
Share of earnings (losses) of affiliates, net |
| 13,702 |
| 12,725 | 26,951 |
| 23,384 | ||
Realized and unrealized gains (losses) on intergroup interests, net | — | (20,392) | — | (83,178) | |||||
Realized and unrealized gains (losses) on financial instruments, net |
| (2,476) |
| 2,593 | 1,429 |
| 5,672 | ||
Other, net |
| 1,838 |
| 1,224 | 5,824 |
| 5,381 | ||
Earnings (loss) before income taxes |
| 9,905 |
| 2,209 | (15,530) |
| (90,832) | ||
Income tax benefit (expense) |
| 115 |
| (8,256) | 3,387 |
| (2,104) | ||
Net earnings (loss) | $ | 10,020 |
| (6,047) | (12,143) |
| (92,936) | ||
Adjusted OIBDA | 31,445 | 40,311 | 43,441 | 50,794 | |||||
Regular season home games | 41 | 37 | 81 | 80 | |||||
Average number of attendees per regular season home game | 26,159 | 32,481 | 28,469 | 32,521 | |||||
Baseball revenue. Baseball revenue is derived from two primary sources: baseball event revenue (ticket sales, concessions, advertising sponsorships, suites and premium seat fees) and broadcasting revenue. The following table disaggregates baseball revenue by source:
| Three months ended | Nine months ended | ||||||||
September 30, | September 30, | |||||||||
| 2024 |
| 2023 | 2024 |
| 2023 | ||||
amounts in thousands | ||||||||||
Baseball event |
| $ | 172,800 | 160,794 | 345,318 | 324,280 | ||||
Broadcasting |
|
| 70,992 | 69,337 | 144,043 | 138,786 | ||||
Retail and licensing |
|
| 16,512 | 20,904 | 41,789 | 45,026 | ||||
Other |
|
| 12,958 | 5,231 | 30,083 | 20,670 | ||||
Total Baseball |
| $ | 273,262 | 256,266 | 561,233 | 528,762 | ||||
Baseball event revenue increased $12.0 million and $21.0 million during the three and nine months ended September 30, 2024, as compared to the corresponding periods in the prior year, primarily due to new sponsorship
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agreements and contractual rate increases on season tickets and existing sponsorship contracts, partially offset by reduced attendance at regular season home games. Broadcasting revenue increased $1.7 million and $5.3 million during the three and nine months ended September 30, 2024, respectively, as compared to the corresponding periods in the prior year, primarily due to an increase in the number of regular season games, as well as contractual rate increases. Retail and licensing revenue decreased $4.4 million and $3.2 million during the three and nine months ended September 30, 2024, respectively, as compared to the corresponding periods in the prior year, primarily due to a reduction in local revenue due to the decrease in regular season home game attendance and demand for City Connect and other apparel, partially offset by higher league-wide revenue. Other revenue, a component of baseball revenue, increased $7.7 million and $9.4 million during the three and nine months ended September 30, 2024, respectively, as compared to the corresponding periods in the prior year. The increase for the three and nine month periods was primarily due to additional concerts at the Stadium. Additionally, the increase to the nine month period was due to spring training related revenue (ticket sales, concession revenue and other gameday related revenue) driven by increased attendance at spring training home games.
Mixed-Use Development revenue. Mixed-Use Development revenue is derived from the mixed-use facilities and primarily includes rental income and to a lesser extent, parking revenue and sponsorships. For the three and nine months ended September 30, 2024, Mixed-Use Development revenue increased $1.9 million and $5.2 million, respectively, as compared to the corresponding periods in the prior year, primarily due to $0.9 million and $2.5 million increases in parking revenue, respectively, and $0.7 million and $2.3 million increases in rental income, respectively. Increases in rental income for the three and nine months ended September 30, 2024, were primarily driven by increases in tenant recoveries.
Baseball operating costs. Baseball operating costs primarily include costs associated with baseball and stadium operations. For the three and nine months ended September 30, 2024, baseball operating expenses increased $27.8 million and $45.8 million, respectively, as compared to the corresponding periods in the prior year, primarily due to $16.8 million and $26.3 million increases in major league player salaries, respectively, $6.9 million and $11.4 million increases in MLB’s revenue sharing plan, as well as other shared expenses, respectively, $2.5 million and $2.4 million increases in concert related expenses, respectively, and $2.1 million and $6.1 million increases in minor league team and player expenses, respectively, partially offset by $1.7 million and $4.6 million decreases in variable concession and retail operating expenses due to reduced attendance at regular season home games during 2024.
Mixed-Use Development costs. Mixed-Use Development costs primarily include costs associated with maintaining and operating the mixed-use facilities. During the three and nine months ended September 30, 2024, Mixed-Use Development costs increased $0.3 million and $0.7 million, respectively, as compared to the corresponding periods in the prior year, due to general repair expenses and other various operating increases.
Selling, general and administrative, excluding stock-based compensation. Selling, general and administrative expense includes costs of marketing, advertising, finance and related personnel costs. Selling, general and administrative expense decreased $0.3 million and $1.5 million for the three and nine months ended September 30, 2024, respectively, as compared to the corresponding periods in the prior year, primarily due to reduced transaction costs related to the Split-Off, partly offset by increased personnel, insurance, information technology and professional fees.
Stock-based compensation. Stock-based compensation increased $3.1 million and $4.1 million for the three and nine months ended September 30, 2024, respectively, as compared to the corresponding periods in the prior year, mainly due to accelerated vesting for various awards in connection with the Corporate Governance Transition.
Depreciation and amortization. Depreciation and amortization decreased $2.6 million and $4.5 million during the three and nine months ended September 30, 2024, respectively, as compared to the corresponding periods in the prior year, primarily due to various assets becoming fully depreciated.
Operating income (loss). Operating income (loss) declined $9.3 million and $6.9 million during the three and nine months ended September 30, 2024, respectively, as compared to the corresponding periods in the prior year, due to the above explanations.
Adjusted OIBDA. To provide investors with additional information regarding our financial results, we also disclose Adjusted OIBDA, which is a non-GAAP financial measure. We define Adjusted OIBDA as operating income
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(loss) plus depreciation and amortization, stock-based compensation, separately reported litigation settlements, restructuring, acquisition and impairment charges. Our chief operating decision maker and management team use this measure of performance in conjunction with other measures to evaluate our businesses and make decisions about allocating resources among our businesses. We believe this is an important indicator of the operational strength and performance of our 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 us to view operating results, perform analytical comparisons and benchmarking between businesses and identify strategies to improve performance. Adjusted OIBDA should be considered in addition to, but not as a substitute for, operating income (loss), net earnings (loss), cash flow provided by (used in) operating activities and other measures of financial performance prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). The following table provides a reconciliation of Operating income (loss) to Adjusted OIBDA:
Three months ended | Nine months ended | |||||||||
September 30, | September 30, | |||||||||
| 2024 |
| 2023 |
| 2024 |
| 2023 | |||
amounts in thousands | ||||||||||
Operating income (loss) | $ | 6,402 |
| 15,716 | (21,017) |
| (14,074) | |||
Stock-based compensation | 6,365 |
| 3,309 | 13,789 |
| 9,653 | ||||
Depreciation and amortization | 18,678 |
| 21,286 | 50,669 |
| 55,215 | ||||
Adjusted OIBDA |
| $ | 31,445 |
| 40,311 | 43,441 |
| 50,794 | ||
Adjusted OIBDA is summarized as follows:
Three months ended | Nine months ended | |||||||||
September 30, | September 30, | |||||||||
2024 | 2023 |
| 2024 |
| 2023 | |||||
amounts in thousands | ||||||||||
Baseball |
| $ | 24,397 |
| 36,884 | 20,072 |
| 38,232 | ||
Mixed-Use Development | 12,173 |
| 10,661 | 33,615 |
| 29,980 | ||||
Corporate and Other | (5,125) |
| (7,234) | (10,246) |
| (17,418) | ||||
Total |
| $ | 31,445 |
| 40,311 | 43,441 |
| 50,794 | ||
Consolidated Adjusted OIBDA decreased $8.9 million and $7.4 million during the three and nine months ended September 30, 2024, respectively, as compared to the corresponding periods in the prior year.
Baseball Adjusted OIBDA was decreased $12.5 million and $18.2 million during the three and nine months ended September 30, 2024, respectively, as compared to the corresponding periods in the prior year, primarily due to the fluctuations in baseball revenue and operating costs, as described above.
Mixed-Use Development Adjusted OIBDA increased $1.5 million and $3.6 million during the three and nine months ended September 30, 2024, respectively, as compared to the corresponding periods in the prior year, primarily due to the fluctuations in Mixed-Use Development revenue and costs, as described above.
Corporate and Other Adjusted OIBDA loss decreased $2.1 million and $7.2 million during the three and nine months ended September 30, 2024, respectively, as compared to the corresponding periods in the prior year, primarily due to decreased costs related to the Split-Off.
Interest Expense. Interest expense was relatively flat and increased $0.7 million during the three and nine months ended September 30, 2024, respectively, as compared to the corresponding periods in the prior year, primarily due to increased interest rates on the Company’s variable rate debt.
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Share of earnings (losses) of affiliates. The following table presents our share of earnings (losses) of affiliates:
| Three months ended | Nine months ended |
| |||||||
September 30, | September 30, | |||||||||
| 2024 |
| 2023 |
| 2024 |
| 2023 |
| ||
amounts in thousands |
| |||||||||
MLB Advanced Media, L.P. | $ | 10,592 |
| 9,797 | 19,283 |
| 19,131 | |||
Baseball Endowment, L.P. |
| 1,195 |
| 739 | 4,364 |
| 1,450 | |||
Other |
| 1,915 |
| 2,189 | 3,304 |
| 2,803 | |||
Total | $ | 13,702 |
| 12,725 | 26,951 |
| 23,384 | |||
Realized and unrealized gains (losses) on intergroup interests, net. As the notional shares underlying the intergroup interests were not represented by outstanding shares of common stock, such shares had not been officially designated Series A, B or C Liberty Braves common stock. However, Liberty historically assumed that the notional shares (if and when issued) related to the Formula One Group interest in the Braves Group would be comprised of Series C Liberty Braves common stock and the notional shares (if and when issued) related to the Liberty SiriusXM Group interest in the Braves Group would be comprised of Series A Liberty Braves common stock. Therefore, the market prices of Series C Liberty Braves and Series A Liberty Braves common stock were used for the mark-to-market adjustment for the intergroup interests held by Formula One Group and Liberty SiriusXM Group, respectively, through the condensed consolidated statements of operations. During the second quarter of 2023, Liberty determined that, in connection with the Split-Off, shares of Atlanta Braves Holdings Series C common stock would be used to settle and extinguish the intergroup interest in the Braves Group attributed to the Liberty SiriusXM Group. Accordingly, effective as of June 30, 2023 and through the Split-Off date, the market price of Series C Liberty Braves common stock was used for the mark-to-market adjustment for the intergroup interest held by the Liberty SiriusXM Group. Realized and unrealized gains (losses) on intergroup interests, net were driven by changes in the market prices of Liberty Braves common stock. As disclosed above, the intergroup interests were settled and extinguished in connection with the Split-Off.
Realized and unrealized gains (losses) on financial instruments, net. Realized and unrealized gains (losses) on financial instruments, net are comprised of changes in the fair value of the Company’s interest rate swaps driven by changes in interest rates.
Other, net. Other, net income increased $0.6 million and $0.4 million during the three and nine months ended September 30, 2024, respectively, as compared to the corresponding periods in the prior year, due to increases in dividend and interest income, partly offset by decreased gains on dispositions for the nine month period.
Income taxes. The Company’s tax provision or benefit from income taxes for interim periods is determined using an estimate of our annual effective tax rate, adjusted for discrete items, if any, that are taken into account in the relevant period. Each quarter, we update our estimate of the annual effective tax rate, and if our estimated tax rate changes, we make a cumulative adjustment.
In 2024, our effective tax rate will be affected by state income taxes and the adverse effect of certain non-deductible expenses for which we may not realize a tax benefit.
In 2023, our effective tax rate was significantly affected by the unfavorable impact of intergroup interest losses that were not deductible for tax purposes and the effect of state income taxes.
Net earnings (loss). The Company had net earnings of $10.0 million and net losses of $6.0 million during the three months ended September 30, 2024 and 2023, respectively, and net losses of $12.1 million and $92.9 million during the nine months ended September 30, 2024 and 2023, respectively. The change in net earnings (loss) was the result of the above-described fluctuations in our revenue, expenses and other gains and losses.
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Liquidity and Capital Resources
As of September 30, 2024, the Company had $100.9 million of cash and cash equivalents. Substantially all of our cash and cash equivalents are invested in U.S. Treasury securities, other government securities or government guaranteed funds, AAA rated money market funds and other highly rated financial and corporate debt instruments.
Braves Holdings is in compliance with all financial debt covenants as of September 30, 2024.
During the nine months ended September 30, 2024, the Company’s primary uses of cash were capital expenditures and debt service, funded primarily by cash from operations and new borrowings on construction loans.
During the nine months ended September 30, 2023, the Company’s primary uses of cash were capital expenditures and debt service, funded primarily by cash from operations and new borrowings on construction loans.
The Company’s uses of cash are expected to be payments to certain players, coaches and executives pursuant to long-term employment agreements, capital expenditures, investments in real estate ventures and debt service payments. The Company expects to fund its projected uses of cash with cash on hand, cash provided by operations and through borrowings under construction loans and revolvers. We believe that the available sources of liquidity are sufficient to cover our projected future uses of cash.
The Braves have a long-term local television broadcasting agreement with Sportsouth Network II, LLC. Diamond Sports Group, LLC, the parent company of Sportsouth Network II, LLC, is in financial distress and has filed for Chapter 11 protection. While the pending bankruptcy proceeding of Diamond Sports Group, LLC has not previously had a material unfavorable impact on the Company’s revenue and the Company has received scheduled payments to date, we cannot currently predict whether such bankruptcy proceeding is reasonably likely to have a material unfavorable impact on our revenue and liquidity in the future.
Sources of Liquidity
The following are potential sources of liquidity: available cash balances, cash generated by Braves Holdings’ operating activities (to the extent such cash exceeds Braves Holdings’ working capital needs and is not otherwise restricted), net proceeds from asset sales, debt borrowings under the LWCF, the MLBFF and the TeamCo Revolver (each as defined below) and dividend and interest receipts.
League Wide Credit Facility
In December 2013, a subsidiary of Braves Holdings executed various agreements to enter into MLB’s League Wide Credit Facility (the “LWCF”). Pursuant to the terms of a revolving credit agreement, Major League Baseball Trust may borrow from certain lenders, with Bank of America, N.A. acting as the administrative agent. Major League Baseball Trust then uses the proceeds of such borrowings to provide loans to the club trusts of the participating Clubs, including the Braves Club Trust (the “Club Trust”). The maximum amount available to the Club Trust under the LWCF was $125.0 million as of September 30, 2024, which remains undrawn. The commitment termination date of the revolving credit facility under the LWCF, which is the repayment date for all amounts borrowed under such revolving credit facility, is July 10, 2026.
MLB Facility Fund Revolver
In December 2017, a subsidiary of Braves Holdings executed various agreements to enter into the MLB Facility Fund (the “MLBFF”). Pursuant to the terms of an indenture, a credit agreement and certain note purchase agreements, Major League Baseball Facility Fund, LLC may borrow from certain lenders. Major League Baseball Facility Fund, LLC then uses the proceeds of such borrowings to provide loans to each of the participating Clubs. Amounts advanced pursuant to the MLBFF are available to fund ballpark and other baseball-related real property improvements, renovations and/or new construction. In May 2021, Braves Facility Fund LLC established a revolving credit commitment with Major League Baseball Facility Fund, LLC (the “MLB facility fund — revolver”). The commitment termination date, which is the
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repayment date for all amounts borrowed under the MLB facility fund — revolver, is July 10, 2026. The maximum amount available to Braves Facility Fund LLC under the MLB facility fund — revolver was $39.7 million and was fully drawn as of September 30, 2024.
TeamCo Revolver
A subsidiary of Braves Holdings is party to a Revolving Credit Agreement (the “TeamCo Revolver”), which provides revolving commitments of $150 million and matures in August 2029. The availability under the TeamCo Revolver as of September 30, 2024 was $120.0 million, net of $30 million drawn as of September 30, 2024.
See note 5 to the accompanying condensed consolidated financial statements for a description of all indebtedness obligations.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
We are exposed to market risk in the normal course of business due to our ongoing investing and financial activities and the conduct of operations. Market risk refers to the risk of loss arising from adverse changes in stock prices and interest rates. The risk of loss can be assessed from the perspective of adverse changes in fair values, cash flows and future earnings. We have established policies, procedures and internal processes governing our management of market risks and the use of financial instruments to manage our exposure to such risks.
We are exposed to changes in interest rates primarily as a result of our borrowing activities, which include fixed and floating rate debt instruments and borrowings used to maintain liquidity and to fund business operations. The nature and amount of our long-term and short-term debt are expected to vary as a result of future requirements, market conditions and other factors. We manage our exposure to interest rates by maintaining what we believe is an appropriate mix of fixed and variable rate debt. We believe this best protects us from interest rate risk. We have achieved this mix by (i) issuing fixed rate debt that we believe has a low stated interest rate and significant term to maturity, (ii) issuing variable rate debt with appropriate maturities and interest rates and (iii) entering into interest rate swap arrangements when we deem appropriate.
As of September 30, 2024, we had $161.9 million aggregate principal amount of floating rate debt with a weighted average interest rate of 6.6% and $481.2 million aggregate principal amount of fixed rate debt with a weighted average interest rate of 4.4%.
Item 4. Controls and Procedures
In accordance with Rules 13a-15 and 15d-15 under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), the Company carried out an evaluation, under the supervision and with the participation of management, including its chief executive officer and chief financial officer (the "Executives"), and under the oversight of its board of directors, of the effectiveness of its disclosure controls and procedures as of the end of the period covered by this Quarterly Report. Based on that evaluation, the Executives concluded that the Company's disclosure controls and procedures were effective as of September 30, 2024 to provide reasonable assurance that information required to be disclosed in its reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms.
Effective September 1, 2024, as described in footnote 1 of this quarterly report, Liberty began transitioning certain general and administrative services previously provided by Liberty to the new members of management of Atlanta Braves Holdings, including legal, tax, accounting, treasury, information technology, cybersecurity, internal audit and investor relations support. As part of that transition, the then-current officers of the Company (with limited exceptions) stepped down from their officer positions, effective August 31, 2024, and certain members of the Braves operating team assumed these roles effective September 1, 2024. As a result of the transition, internal controls over financial reporting are materially changing as executive oversight transitions to the new Atlanta Braves Holdings officers and the new members of management of Atlanta Braves Holdings begin to perform certain accounting, financial reporting, treasury, tax and entity level internal controls over financial reporting previously performed by members of Liberty management. We expect the
I-34
impacted processes to remain generally consistent through the transition to the new control operators, and other than the transition of these internal controls over financial reporting to new process and control operators, the existing control environment is not materially changing. The transition of the internal controls over financial reporting has begun and should generally be completed with the 10-K filing for the year ended December 31, 2024.
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PART II—OTHER INFORMATION
Item 1. Legal Proceedings
Refer to note 7 in the accompanying notes to the condensed consolidated financial statements.
Item 1A. Risk Factors
Except as discussed below, there have been no material changes in the Company’s risk factors from those disclosed in Part 1, Item 1A. Risk Factors of its Annual Report on Form 10-K for the year ended December 31, 2023.
As we begin transitioning away from services previously provided by Liberty, we may fail to replicate or replace certain functions, systems and infrastructure in a timely fashion, or at all, and may lose benefits from Liberty’s global contracts.
Historically, we have received services from Liberty, including through shared services contracts with various third-party service providers. Under the Services Agreement, Liberty has agreed to continue to provide us with certain services and support that were historically provided to us by or through Liberty prior to the Split-Off. The Services Agreement does not continue indefinitely and services provided under the Services Agreement generally terminate at various times specified in the agreement and the schedules thereto. We have begun transitioning away from certain services previously provided under the Services Agreement. For instance, Liberty previously provided some of its executive officers to serve as executive officers of the Company. As previously disclosed, as part of the transition of various general and administrative services provided by Liberty under the Services Agreement, on August 31, 2024, all of the officers of the Company previously provided by Liberty (with limited exceptions) stepped down from their officer positions, and members of the Braves operating team assumed these roles effective as of September 1, 2024. These transitions included appointing a new chief executive officer, chief financial officer, chief legal officer, chief culture officer and executive vice presidents of the Company.
We are working to replicate or replace the services, and associated systems and data, and information security and cybersecurity procedures and systems, that we will continue to need in the operation of our business that have been provided by or through Liberty, including those we receive through shared service contracts Liberty has with various third-party providers or through the Services Agreement for applicable transitional periods. As a result, when Liberty ceases to provide these services to us, either as a result of the termination of the Services Agreement or individual services thereunder, our costs of performing or procuring these services or comparable replacement services could increase. In addition, we have historically received certain informal support from Liberty, including communications, technical support, market intelligence and market data, which may not be addressed in our transition plans. The level of this informal support may be eliminated following the termination of the Services Agreement.
Furthermore, in connection with our efforts to replicate or replace these services, certain third-party systems we are using may have imbedded risks such as cybersecurity susceptibility that we may not be able to resolve effectively or efficiently. As a result, we may need to purchase comparable replacement services on less favorable commercial and legal terms, and the cessation of such services could result in service interruptions and divert management attention from other aspects of our operations, including ongoing efforts to implement technological developments and innovations.
We are also making infrastructure investments and hiring additional employees to operate without the same access to Liberty’s existing operational and administrative infrastructure. We have established or expanded our own tax, treasury, internal audit, accounting, investor relations, cybersecurity, corporate governance and listed company compliance and other corporate functions. Due to the scope and complexity of the underlying projects relative to these efforts, we have been incurring and expect to continue to incur one-time costs to replicate, or outsource from other providers, these corporate functions to replace the corporate services that Liberty historically provided us prior to the Split-Off and under the Services Agreement. The amount of total costs could be materially higher than our estimate, and the timing of the incurrence of these costs may be subject to change.
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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
There were no repurchases of our common stock during the three months ended September 30, 2024.
During the three months ended September 30, 2024, zero shares of Atlanta Braves Holdings Series A common stock, zero shares of Atlanta Braves Holdings Series B common stock and 269 shares of Atlanta Braves Holdings Series C common stock were surrendered by our officers and employees to pay withholding taxes and other deductions in connection with the vesting or exercise of restricted stock.
Item 5. Other Information
During the fiscal quarter ended September 30, 2024, the following Section 16 officers adopted, modified, or
| ● |
| ● |
| ● |
There were
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Item 6. Exhibits
(a) Exhibits
Listed below are the exhibits which are filed as a part of this Quarterly Report (according to the number assigned to them in Item 601 of Regulation S-K):
Exhibit No. |
| Name |
31.1 | ||
31.2 | ||
32 | ||
101.INS | Inline XBRL Instance Document* - The instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document. | |
101.SCH | Inline XBRL Taxonomy Extension Schema Document* | |
101.CAL | Inline XBRL Taxonomy Calculation Linkbase Document* | |
101.LAB | Inline XBRL Taxonomy Label Linkbase Document* | |
101.PRE | Inline XBRL Taxonomy Presentation Linkbase Document* | |
101.DEF | Inline XBRL Taxonomy Definition Document* | |
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
* Filed herewith
** Furnished herewith
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
ATLANTA BRAVES HOLDINGS, INC. | |||
Date: | November 6, 2024 | By: | /s/ TERENCE F. MCGUIRK |
Terence F. McGuirk | |||
President and Chief Executive Officer (Principal Executive Officer) | |||
Date: | November 6, 2024 | By: | /s/ JILL L. ROBINSON |
Jill L. Robinson | |||
Executive Vice President, Chief Financial Officer and Treasurer (Principal Financial Officer) | |||
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