• Revenue Growth: Increased in the second quarter despite three fewer home games compared to last year.
• Baseball Event Revenue: Growth driven by new sponsorship agreements and contractual increases on season tickets and existing sponsorship contracts.
• Broadcasting Revenue: Grew due to more total games played in the second quarter.
• Baseball Operating Costs: Increased primarily due to higher player payroll, increased payments under MLB's revenue sharing plan, and higher minor league team and player expenses.
• The Battery Revenue: Up 11% in the second quarter.
• The Battery Adjusted EBITDA: Increased by 13% in the second quarter.
• Capital Improvement Projects: Approximately $15 million to be spent on projects completed ahead of the 2024 season, with an additional $20 million expected for projects ahead of the 2025 season.

• Warning! GuruFocus has detected 3 Warning Sign with BATRA.

Release Date: August 08, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Atlanta Braves Holdings Inc (NASDAQ:BATRA) reported strong performance from key players, with notable statistics such as leading the National League in RBIs and impressive ERA rankings.
• Fan demand remains robust, with ticketing and concessions per capita up year-over-year and a 90% renewal rate on season tickets for 2025.
• The company completed several master planning projects that have enhanced the fan experience, including new bar concessions with double-digit growth.
• The Braves announced further upgrades ahead of the 2025 season, including new seating products and an extension of existing seating areas.
• The Battery, the mixed-use development adjacent to the ballpark, continues to perform well with revenue up 11% and adjusted EBITDA up 13% in the second quarter.

Negative Points

• Broadcasting revenue growth was offset by higher player payroll and increased payments under the revenue-sharing plan, impacting overall profitability.
• The company faced challenges with broadcasting rights, as seen with the temporary loss of Comcast carriage, which affected ratings.
• Higher baseball operating costs were reported due to increased minor league team and player expenses.
• Despite strong fan demand, the company faces ongoing challenges in managing and optimizing streaming rights, which are held at the league level.
• Capital improvement projects around the ballpark require significant investment, with approximately $35 million expected to be spent across 2023 to 2025.

Q & A Highlights

Q: What are Formula One and its promoters seeing in terms of ticket sales, pricing, and on-site spending? Has there been any moderation in demand, particularly since the Vegas tickets went on sale? A: Stefano Domenicali, Formula One Group's President and CEO, stated that they have not observed any significant drop in interest. Events are sold out, and demand remains very high. Renee Wilm, CEO of Las Vegas Grand Prix Inc, noted that ticket sale trends for Vegas are consistent with expectations for a second-year event, with marketing efforts focused on the months leading up to the event.

Q: Why was promotion revenue at F1 relatively flat year-over-year despite two additional races? Can you provide more color on the event mix and how it might affect 2024? A: Brian Wendling, Liberty Media Corp's Principal Financial Officer, explained that the mix of races affects revenue, as each race has different fees. For 2024, the quarters are expected to be comparable, with some races dropping out and others being added.

Q: Is there any appetite from Liberty Media to consider a breakup of Live Nation due to the DOJ overhang? A: Gregory Maffei, Liberty Media Corp's President and CEO, stated that they believe the DOJ charges are without merit and that a breakup would not benefit consumers or Live Nation. The company plans to continue operating as it is.

Q: How does the acquisition of Quint affect revenue, expenses, and EBITDA, particularly at F1 events? A: Renee Wilm explained that Quint was previously a third-party vendor, acquiring inventory directly from promoters. Now, as a subsidiary of Liberty Media, Quint's business is integrated more closely, with a commission-based arrangement with Formula One. Brian Wendling added that eliminations between Quint and Formula One are reflected in the financials.

Q: How has the Braves' business been impacted by being off Comcast due to the dispute with Diamond? A: Derek Schiller, President and CEO of Atlanta National League Baseball Club, noted that there was no material impact on the business. Ratings were reduced during the dispute but are expected to recover now that the issue is resolved.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.