Atlanta Braves financial report: once again, nobody reads the whole thing

Going Up or Going Down?

So revenue was up while the team was winning and there were more fannies in the seats… but why were the profit numbers trending downward?  For that, I’ll cite the report for an explanation… with emphasis added:

"Baseball revenue per home game grew in the third quarter of 2019 primarily due to increased ticket and concession sales. Development revenue was modestly lower in the third quarter of 2019 as a result of the sale of the residential development in October 2018 and therefore the loss of its revenue in the current quarter. Operating income and Adjusted OIBDA declined in the third quarter of 2019, as revenue growth was more than offset by elevated operating expenses. The increase in operating expenses was primarily driven by higher player salaries, and to a lesser extent elevated costs due to the opening of the new spring training facility, scouting expenses, increased obligations under MLB’s revenue sharing plan and stadium operation costs driven by concessions."

So for all of you demanding that the Braves increase the payroll… they did, and the bottom line for the Braves balance sheet reflects that… in addition to the other considerations.

The team did make money, though the profit – ah, the ‘Operating Income’ – level is quite a bit reduced from 2018 (off 79%).

In short, though, it’s apparent that there were multiple components of the business that were more expensive this year, and that’s going to matter a bit going forward.

There will likely be a slight revenue bump when the 4th quarter numbers come out thanks to the impact of 3 October home games, but it won’t be a big hitter to the balance sheet.

However, note that option buyouts were also paid in October to Julio Teheran, Tyler Flowers, and Nick Markakis.  So that slight bump?… that just got smoothed over significantly.

So… what now?

The Braves still have a choice to make, though making the choice for higher payroll may be the more difficult path to take.  Before this report, I had been believing that the road to a $150+ million salary might be quite reasonable to achieve.

After all, the point of the new stadium with Battery Atlanta plus Terry McGuirk’s persistent comments have all pointed toward an organization that has a Top 10 payroll.  That’s been the goal since this date 6 years ago… November 11, 2013 when the move to Cobb County was announced.

Now?  Not so certain.

The purpose of the move to shift monies on the books from 2020 to 2019 seems more clear now.  Perhaps there are offsets in the future that will help both the revenue and profit streams coming in 2020… changes that could allow the team to jump the payroll.

However… that’s looking more speculative right now.

We would love to be celebrating higher numbers… for revenue, for profit, all of it.  But right now the trends are not in a direction that would demand higher spending.