The Atlanta Braves’ parent company, Liberty Media, released some financials today which show that the Braves are raking in cash, have seen profitability soar and have watched their debt go down. None of that is going into baseball, however. It’s going into real estate.
Via the Atlanta Journal-Constitution we learn:
- Braves’ revenue increased to $442 million in 2018. That’s up 14.5 percent from 2017 ($386 million) and is up 69 percent from 2016 ($262 million);
- $404 million of that revenue is from baseball; $38 million of is from real estate in The Battery development that surrounds the park;
- Operating income (i.e. profit) before interest and depreciation surged from $7 million 2017 to $94 million in 2018;
- Debt went down substantially in the final quarter of last year –from $626 million to $494 million — but Liberty says the Braves will take on more debt to fund the next phase of construction at The Battery; and
- As noted many times in this space, baseball payroll is actually lower now than it was last year.
It’s pretty clear what all that means: baseball is subsidizing the Braves’ real estate interests. Said real estate interests — run by the Braves Development Company, which is a part of the baseball team’s organization structure, not standing outside of it — are the priority for the team.
When the Braves say they’d spend more if it was not for their debt, remember that the debt is going to build office buildings and that the debt will be serviced by, primarily, baseball revenue. At the same time, when they begin raking in more in rents from their office building tenants, one can safely assume it will not be used to pay player salaries.
This is Baseball in 2019. Does that excite you as a fan? Does that make you want to invest your money and your time in supporting this or other teams that operate like this? Before you answer, remember that it’s not just the Braves. The Rangers will soon look very much like this. Other teams already have or soon will have development surrounding the ballpark play increasingly larger roles in their business portfolio.