Atlanta Braves Set To Lose Close To $60 Million Due To Shortened Season

The Atlanta Braves could have an operating loss (earnings before interest, taxes, depreciation and amortization) of around $60 million this year, according to a report today from John Tinker of G.research, LLC.

The report assumes the baseball season due to the Coronavirus would start on the July 4 weekend and is reduced to 80 regular season games (40 home games) and spectators for half the games, and, perhaps, an extended postseason.

Tinker reckons the Braves revenue would drops to $174 million from $438 million in 2019, as attendance drops to 630,000 from last year’s 2.65 million. The drop in attendance would cut revenue from gate and concessions to about $55 million in 2020 from $202 million the prior year, and halve the broadcast and sponsor revenue to $118 million from $236 million.

Player expenses, meanwhile, were only lowered by 50%, to $86 million, and operating expenses and SG&A costs by 40%, to $146 million. Bottom line: Tinker estimates the team will post an operating loss of $59 million versus an operating profit of $24M in 2019.

For the entire Liberty Braves Group, which includes the Battery Atlanta real estate, a 66 acre, mixed-use development which feeds off the stadium (completion expected in 2022) in addition to the team and its ballpark, the report estimates 2020 revenue of $206 million and and operating loss of $36 million this year. The comparable figures for 2019 were $476 million and an operating profit of $54 million.

The report assumes that the Battery real estate operating income drops to $12 million this year from $31 million in 2019, primarily due to the Omni Hotel occupancy dropping as wells as restaurants closing and retailers unable to pay the rent. Tinker projects a partial recovery in 2021 to $22 million. In addition, the new development may delay the proposed July 2020 Aloft hotel opening as part of a 174,000 square foot mixed development and completion of the 600,00 square foot office complex.

Although Tinker lowered his 2021 enterprise value by $240 million ($4 per share) for Liberty Braves Group today, he is still recommending the tracking stock. He believes the enterprise value will rebound to $3.18 billion in 2022 from $3.04 billion in 2021, as revenue accelerates to $504 million and operating income comes in at $70 million, or thereabouts.

Shares of Liberty Media rose 6% today versus a 7% gain for the S&P 500.