Liberty Media: Braves lost money in 2016 despite revenue gain

Braves owner Liberty Media disclosed the team’s financial results for 2016 on Tuesday, showing a large operating loss despite an increase in revenue.

Liberty Media said the Braves brought in revenue of $262 million last year, up $19 million from the previous year. But the company said the Braves’ operating income before depreciation and amortization fell $23 million, from a profit of $3 million in 2015 to a loss of $20 million in 2016.

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On a conference call with Wall Street analysts Tuesday, Liberty Media CEO Greg Maffei said the operational highlights of the Braves’ year included their highly ranked minor-league organization and progress toward the “on time and on budget” opening of SunTrust Park.

He called the team’s receipt last week of a certificate of occupancy from Cobb County for the new stadium “a huge milestone” and noted a coming development on the playing field: “The sod goes in this week.”

The Braves’ revenue increase last year came primarily from changes in the team’s retail and concession operations and from broadcasting, Liberty Media said. The company noted that the Braves brought retail sales in-house and changed concession operators.

On the other hand, Liberty said the sharp decline in operating income before depreciation and amortization — the most common measure of a pro sports franchise’s economic performance — was in part attributable to the Braves’ aggressive signings of international prospects last year and the resulting MLB penalties for exceeding the team’s international bonus pool allotment.

The signings included, among others, Venezuelan shortstop Kevin Maitan for a $4.25 million bonus, Venezuelan catcher Abrahan Gutierrez for $3.5 million, Dominican shortstop Yunior Severino for $1.9 million, Dominican pitcher Juan Contreras for $1.2 million and Venezuelan shortstop Livan Soto for $1 million. All of those players were 16 years old when they signed last summer.

After tacking on depreciation and amortization expenses of $32 million and stock-based compensation of $9 million, the Braves’ operating loss became $61 million for the year, Liberty Media said.

On Tuesday’s conference call, Liberty chief financial officer Mark Carleton said that through 2016 approximately $618 million had been spent on SunTrust Park. Of that, he said, $373 million was provided by Cobb County and related entities and $245 million by the Braves.

In addition, $309 million had been spent on the mixed-use development adjacent to the ballpark, including $256 million from the Braves, $46 million from joint-venture partners and $7 million toward future development phases.

The Braves had debt of $338 million at year’s end, Carleton said.

Maffei was asked about recent reports of a possible sale of the Miami Marlins for $1.6 billion. He said he doesn’t know if the Marlins eventually will be sold for that price but added that, in any case, the Braves are worth more than the Miami team.

“I would posit as a proud owner that the Atlanta Braves … would be far more valuable than the Marlins,” Maffei said, citing the Braves’ fan base, new stadium, potential future TV revenue increases and breadth of radio coverage.

“We’ll see where the Marlins end up,” Carleton said, “but we were not surprised at some of the numbers that were being thrown around.”

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