Liberty Media, the corporation which owns the Braves, is a publicly traded company. As a result, they’re one of two teams (the Blue Jays being the other) whose books are opened to the public. This morning, Liberty Media released 2022 financials. The full report is available courtesy of Investors Observer and chronicled by Doug Roberson of the Atlanta Journal-Constitution.
According to the report, Liberty Media collected a franchise-record $588MM in Braves-related revenue last year. That’s a $20MM jump over 2021’s previous franchise-record figure, which the corporation attributed to increased ticket demand and additional retail on the heels of Atlanta’s World Series championship.
The franchise’s operating income before debt and amortization (OIBDA), on the other hand, was down relative to last season. Its $71MM OIBDA was down from last year’s $104MM figure. The corporation reported an operating loss of $15MM after reporting $20MM in operating income during the prior season. However, those figures do not include revenue from the Battery Atlanta, a mixed-use development complex adjacent to Truist Park and owned by Liberty Media. Liberty Media reported $28MM in additional net operating income and $53MM in total revenues related to that project.
Regarding the related figures to the Braves franchise specifically, Liberty Media attributed the comparatively lower OIBDA and operating income to loftier revenue sharing expenses and a higher player payroll. Indeed, Atlanta’s Opening Day payroll checked in around a franchise-record $178MM in 2022 after sitting at approximately $131MM in 2021, according to Cot’s Baseball Contracts.
However, another significant change for the organization between 2021 and ’22 was the club’s postseason fortune. The Braves, of course, won the championship in the former season and benefited from eight playoff home games. Their defeat in last year’s NL Division Series kept them to two postseason home contests. As a result, Liberty Media reported significantly lower fourth quarter revenues in 2022 than they had the prior season. Barring a repeat World Series run, the franchise’s playoff-related income always seemed likely to regress.
The Braves are coming off a very quiet offseason, at least from a free agent perspective. Atlanta acquired catcher Sean Murphy and promptly signed him to a six-year, $73MM extension. That was their only notable investment of the offseason. The club’s only other major league acquisitions were relievers Joe Jiménez and Lucas Luetge (combined $4.315MM in arbitration salaries), low-cost free agent deals for outfielder Jordan Luplow ($1.4MM) and reliever Nick Anderson ($875K if in the majors) and trades for pre-arbitration players like Eli White and Sam Hilliard.
Atlanta saw a top free agent depart for the second consecutive offseason, watching Dansby Swanson sign with the Cubs a year after Freddie Freeman went to the Dodgers. Despite the fairly quiet winter, they’re easily on track to again set a franchise high in player spending. The Braves will go into 2023 with a payroll in the $199MM range, as calculated by Roster Resource. Their projected luxury tax number sits a little under $240MM, which will exceed this year’s $233MM base threshold. The franchise looks set to pay the luxury tax for the first time in Liberty Media’s ownership tenure.
That’s a reflection of the staggering number of contracts already on the books, many of them early-career extensions. No other organization has had the same kind of success signing key players to long-term deals shortly after their MLB debuts. Those kinds of pacts tend to be backloaded to roughly mirror how a player’s earnings would have progressed via arbitration. Not coincidentally, Atlanta already has upwards of $90MM on the books through the 2028 campaign.
“The Braves will go into 2023 with a payroll in the $199MM range, as calculated by Roster Resource. They look set to pay the luxury tax for the first time in Liberty Media’s ownership tenure.”
I thought the first tax tier was $233MM?
$199MM is their actual, bottom-line payroll. The number of dollars they’ll pay in 2023 salaries. But the luxury tax is calculated based on the average annual values of the team’s contracts; all of the backloaded extensions they signed create a lower present-day payroll, but the luxury tax hits are larger than their current salaries.
Spencer Strider will only be paid a $1MM salary in 2023, for instance, but his six-year, $75MM contract still has a $12.5MM luxury hit.
I beat you Steve. You just used your gold token and the fact you work here to jump me lol. It said two comments and then here comes you flying over the top… Sad. I’m 11,000% joking
The other smart thing about these long extensions is that in later years the tax hit is LOWER than the payroll – so if someone bombs and gets cut, or gets hurt, there is tax space available for new roster additions.
So the Braves had $588 million in revenue but still had “an operating loss of $15 million?”
Now I know that companies are allowed to reinvest in themselves tax free as long as it keeps growing the company because that will eventually make more money and tax dollars later. You’re telling me the Braves lost $15 million? And in their World Series season they only made $20 million? So in 2 years, 2 division championships and a world championship they only made $5 million in take home cash? The whole ownership? I thought baseball was supposed to be more profitable than that in cash on an annual basis.
It is if you don’t spend. If you spend, it’s not a hugely profitable business and losses aren’t uncommon.
It is. It should’ve been noted that the way the extensions count against the tax is the average annual value of the contract not how much they’re actually paying the player that year. I’m not going to look it up but pretty sure Strider is getting $1m and Harris is getting less than $5m but counting as like $10m a piece when it comes to figuring out what amount of tax is owed.
Sorry, not the clearest transition. I updated the post to clarify the distinction between their raw payroll and the CBT number.
The 199M is actual salaries for the players on the team currently this does not include the benefits which i think is roughly 17M nor the bonuses for the arbitration awards these are all the same costs for all the teams in the league i think 2M. There is also another 10M that is part of the odrizzi trade. T
they probably build in a small amount for bonus incentives that are easily attainable as well that is the small difference remaining.
breakdown per roster resource link above
player salary $201,969,167
odrizzi trade $10,000,000
player benefits $16,500,000
pre arb pool $1,666,667
est for pre-arb and non 40 man roster players $9,700,000
Total CBT $239,835,834
if you need the salary breakdown its:
AAVs for players with guaranteed contracts $177,066,667
Salaries for players eligible for arbitration $24,902,500
Thank you everyone for the additional knowledge and clarification, much appreciated!
The Atlanta ball club spends on money on player salaries very wisely. Could easily see them best the Mets and Phillies in a tight three way race. But it is so close injuries will likely be the difference.
This might be a stupid question, if so I’m sorry. But from reading all of this I understand it to mean they lost money ($15 million) on the baseball portion of the business, but made $28 million off the mixed-use complex, resulting in a total profit of $13 million dollars. Is that correct? Or is it not this straightforward?
It’s not close to that straightforward. They didn’t lose money at all. But creative accounting terms certainly make it look that way.
They report revenue of $588 mm, no way a corporation like Liberty is not making at least 9-12% profit ,otherwise they would put there money and resources in a different investment. Their”loss” is on paper only. This is like when a Billionaire pays non taxes but lives in a mansion and lives the good life. The tax system is broken.
Man, you conspiracy theorists crack me up. If a publicly traded company did that openly and maliciously they could face serious fines.
Why not just admit that you don’t know the whole picture, nor do I. You are acting on the same maturity level as players who come out saying nonsense like “the team made $558m but are only spending ~$233m on salaries for the players, which is not fair. They should be spending the whole $588m on the players” (it took years for the last couple of MLBPA knuckleheads to understand the revenue % for players).
MLB revenue is typically paying off leases on minor league team deficits, scouting and player development, team medical doctors and procedures, stadiums, property, concessions leases, internal staff salary (which can be a whole lot), and dozens of other things that I could never imagine. One could argue they could spend more wisely(like not moving into a new stadium every 20 years), but that’s a different argument.
Companies lose money some years, that is all there is to it. If not, all businesses would continue to thrive and a company would never close it’s doors or be taken over. The above two posts make one think companies never lose money, which is just ridiculous conspiracy. Where money is made in sports for owners is not generally year to year income, but in franchise valuations over longer periods which means they can sale for significant profit. That’s about it.
ROTFLMAO! I’ve worked for $10B+ companies n the past. The accounting is fastidious. When I pushed numbers around, it would be on very marginal items, and then I’d have to brawl with the auditors to justify it. And the state and federal tax bunnies would come in and brawl with our tax bunnies.
1-Auditors generally don’t lie.
2-The state and federal IRS are voracious. They are literally paid to say no to everything they are allowed to say no to.
And as you mentioned, companies occasionally lose money. If they didn’t, companies would never go bankrupt, the S&P would never decline, and Bambi’s mother would still be alive and kicking.
I have friends and relatives that are CPA’s. I dealt a lot with businesses’ financial people working with computer systems. Sooner or later the governments representatives investigate….and the larger the business the more they hang around.
40 years ago I realized that sports writers and commentators know next to nothing about finances. And most fans follow suit (particularly the young ones). Reading here for years it’s constant demagoguery – the players are wonderful; they worked so hard at their craft as the teams providing them equipment, uni’s, coaching, experience, and paying their medical bills when they got injured were in fact exploiting them (did you go to college and get paid for it? have your medical bills paid for?, etc.? I and no one I know did); the owners are making money hand-over-fist not doing anything at all. We’re allowed to bash the owners as a group, but don’t ever say anything bad about a player (it might hurt their widdow feewings….want me to write the things that have been said about me as I often had to fight people I was working with to get things done…..as happens to most people I know) unless they are in an accident driving drunk or attack a woman…..everything else can be explained away.
It’s why I’ve cut back on posting here, and will continue to. I came to discuss baseball on the field, and not argue over numbers on a spreadsheet and how they’ll translate to a players next contract.
….and the larger the business the more they hang around.
40 years ago I realized that sports writers and commentators know next to nothing about finances.
The larger companies have IRS on-site. They don’t come in every April 15th. They live there full-time. They have an office. Often times, we will discuss tax issues with them prior to making any moves.
And most writers have a cheerful disdain for business in general, not just in sports. Most people, myself included, wouldn’t survive 5 minutes without Corporate America.
IRT to cutting back, you shouldn’t. The world needs more educated people posting, not less.
The report is public. Download it.
The Braves spent $16.3 million on minor league expenses including player salaries, coaching, player development, and training staff, housing (a new expense in 2022) and travel. MLB teams don’t pay lease costs for minor league teams. The owners of those teams do.
The Braves spent $142 million on all non MLB player payroll and benefits expenses. That includes coaches, trainers, scouting, analytics, executives, doctors, ushers, ticket takers,
security, sales, groundskeeping, police, and everything else it takes to put on a game. It does not include debt service. It does include $3.1 million for rent and $11.4 million for operating expenses (maintenence, repairs, etc…) for the stadium.
MLB players should recieve about 50% of gross revenue in salaries and benefits like the players in the NFL, NHL, NBA, and MLS do. Last season they were at 42%.
The Braves paid $178 million in salaries plus another $28 million total in benefits and per diem last season. That’s 35% of revenue.
The way it works is that corporations don’t pay much tax as long as they are reinvesting their profits into the company. The goal is to make the company as valuable as possible before they start counting real profits and paying dividends. It’s ideally a good thing because it allows companies to get bigger and bigger and employ more people before the real taxes get paid. You can’t get taxed when you are just reinvesting in your company with your profits. That’s what Liberty media is doing. They are just taking their “would-be profits” and pouring it back into the company. In terms of cash, the Braves owners spent all the profits ( and then $15 million more) back into the team and other assets. The owners actually have less cash now than they did before the season started but… They have also gained more assets and paid off a lot of debt which is also valuable. The assets are related to the company though so they don’t count in terms of “money in the pocket.”
In my opinion fans should really like this kind of thing. Yes, they get more money than the players but unlike the players they actually reinvest that money back into the organization. Isn’t that good for baseball?
From my experience, the OIBDA number, $71 mm is a better reflection of profit. Which was down from prior year due to a shorter playoff run.
I very much doubt the decision makers at Liberty Media count the profits from The Battery as Braves profits. Even though they are primarily a result of the 81+ home games the Braves play at Truist Park. It would be foolish for fans to expect LM to use those profits to pay for additional player salaries.
The profits from the Battery are not Braves profits. Those are condos, apartments, businesses, restaurants, bars and nightclubs that people live in and work at. It’s close to the stadium but that money is made from services or property, not the baseball team. When homeowners living next to Wrigley Field sell their houses at an extremely high markup because it is near the stadium do they give a portion of that to the Cubs payroll? Of course not. The Battery is no different and we can’t make new rules based on who the property owner is.
And who owns the buildings those businesses, restaurants, bars and nightclubs are in? The Braves.
I am an accountant. It is indeed that straightforward. Whether or not the complex should be categorically included as “baseball profit” is up for debate and I’m not clear on the details of what goes on there.
My personal take is that since a) the facilities are financed through the team and b) a hypothetical new owner buying the Braves would also acquire this piece of revenue, I would personally include anything that happens at those facilities. It would be similar to a stadium being rented out for other purposes like concerts. Or a retailer leasing out store space or warehouse space (which happens a lot).
So it’s imo fair to say the overall Braves net income is $13 mil
Another comparison would be a restaurant that also sells food in grocery stores under the restaurant’s brand. Something like Marie Callender’s. They have restaurants and also sell frozen dinners in grocery stores. The restaurants lose money, the frozen food makes money, hypothetically.
Either way, a 2.5% profit off of almost $600 M in revenue isn’t great.
I think some folks get confused because the deductions for interest and depreciation are so high. But that’s just part of owning a business.
Read the report. Its public. The facilities are not financed through the corporation. The taxpayers paid to build it. Someone buying the team would take on the lease, not acquire the asset.
Why are the “accountants” on here getting so many things wrong about this situation?
The Battery Atlanta, which is what is being discussed here when “the facilities” is talked about, not the stadium, was financed entirely by the team/company and is owned by them. The county paid for about 68% of the stadium using tax monies, the rest paid for by the team and is owned by the county,
Why are the idiots saying the accountants are getting things wrong when they themselves get so many things wrong.
Liberty didn’t pay 32% of the cost of building the stadium.
Revenue bonds paid 100% of the $672 million. Raises in property tax, TOT, and other taxes and fees being paid in the special tax zone Cobb Country created will in theory pay off the bonds issued.
Liberty, or now Atlanta Braves Holdings, took on $372 million in debt service to be paid over the 30 year lease instead of paying a market rate rent. That way they could say that the stadium was not paid for 100% by taxpayers.
Try getting the basics right.
The stadium was constructed in a public–private partnership with a project budget of $622 million. Cobb-Marietta Coliseum & Exhibit Hall Authority issued up to $397 million in bonds for the project. The county raised an additional $14 million from transportation taxes and $10 million cash from businesses in the Cumberland Community Improvement District The Braves contributed the remaining money for the park.
$397 M in bonds. $14 M in transportation taxes. $10 M from businesses. That’s $421 M of the $622 M. That’s 68%.
Your numbers are wrong according to the Cobb County website. Try reading that first.
According to that website, the Braves paid MORE than I cited. Over half, in fact. You further weakened your argument that “the taxpayers paid for it.”
Did YOU read that website first? Are you really this DUMB?
Obviously you didn’t read it.
The bonds paid 100% of the costs upfront and the rest pay those bonds off over 30 years.
Every number I used is quoted directly from their website.
That you don’t realize the $372 million I quoted as the Braves taking on in debt service is more than half of $672 million just shows how incapable you are of understanding even the most basic of facts.
Please continue to bury yourself further.
Right from that site that you claim to have read and say I didnt:
The total budget for the new SunTrust Park is $672 million. This includes the SunTrust Park, parking and other related infrastructure. Atlanta Braves will be responsible for $372 million and the remaining $300 million will be contributed by Cobb County and the Cumberland Community Improvement District.
ATLANTA BRAVES WILL BE RESPONSIBLE FOR $372 MILLION AND THE REMAING $300 WILL BE CONTRIBUTED BY COBB COUNTY.
What part of that say the County is paying for the entire thing? Again, are you really this stupid? I’m thinking, yes, you ARE really that stupid.
The only thing buried is your head. Up your butt.
That is exactly what I said. You said the Braves paid 32%.
You were wrong. I was correct.
100% was paid upfront by bonds that were issued. The Braves are responsible for $372 million that is being paid over 30 years. It’s called debt service. They did not pay that money upfront.
In exchange for taking on that debt they are paying just $3.1 million in rent instead of the market rate of $15.7 million. Do. The. Math. All that is also in documents available on that very website. A website you had obviously never read before now.
That you are so inebriated or stupid that you don’t even know what was said is ample evidence of where your head is stuck.
I have now given you far more time than you deserve.
You said “The facilities are not financed through the corporation.” And that is just flat-out wrong. You are a moron. Pure and simple. You mother drank when she was carrying you and after giving birth dropped you on your head multiple time.
deGrom Texas Ranger
This company should just invest in bonds instead. They would make more money. Owning an MLB team is risky, a minefield for bad PR, and not lucrative. Just look at the small margin they made even when they were profitable last year.
My goodness. Why would you buy an MLB team.
No owner buys a team expecting to lose money. The massive increase in franchise values has been a great long-term investment.
Will that continue? Who knows? The lack of a sale of the Angels could be an indicator of those increases slowing, but it’s only a single data point.
Steve Cohen Owns You
Any issue with Anaheim and Washington selling has more to do with their poor ownership than a slowing of valuation growth.
Manfred Rob's Earth Band
What do you base this off of?
They are basing it on what they feel, not any facts.
I mean they had good OIBDA. They’re likely investing heavy now to build the franchises national image which could lead to greater popularity and revenues then cut back payroll and other operating expenses while remaining fairly competitive. Operating income can be very volatile and rather cyclical depending on the teams current direction but some years they can pull in boat loads on the bottom line. Still not the easiest money by any means and there are way better investments you could make given the current costs of the franchises but nothing is more fun to own and builds prestige like owning a sports team.
The team valuations have been rising rapidly. Bill DeWitt bought the Cardinals for $150 million in 1995. He immediately sold two parking garages and some land owned by the team for $101 million. The team is now worth $2.45 billion. That’s a very nice return on a $50 million dollar investment.
I worked for a company that once did that in the opposite. Sold a subsidiary that immediately sold/leased back its own property, so that its basis in the investment was relatively tiny.
Just win baby!!!!!!! Let’s go 2023 Braves!!!! If they win the money will come to the ballpark and the Battery. Hell, I will be there the home opener home stand and will surely spend some bread.
That’s the scary part. Those numbers are for the year after a World Series win.
Question for fans. How much money should ownership be allowed to make each season and put in their pockets before being subjected to criticism? If you owned a billion dollar asset – what is a fair number? $30 million per year? $50 million? $100 million?
Subject to criticism? That amount is 0. U don’t have to be making money at all. But if u got – haters gonna hate
Steve Cohen Owns You
Eleventy Billion Dollars
In the long-run, I’d guess 10%. The 7% l/t market return, plus 3% to account for risk.
The correct answer is zero. Owners may have job function with in a corp they own for which they take a salary but money cannot be taken out of the business if operated properly. Monetizing a business is more of a function of a long term plan or eventual exit plan for a business. Now distributions can be used when needed for tax payments or partners in/out transactions but zero money taken out of a business is how good businesses run.
Let me understand you. If someone owns a business and it makes money, they shouldn’t take any of the profits for themselves? That is literally one of the stupidest things ever posted here.
Please don’t tell me they teach students this in college. If so, our country is screwed.
Let me ask you, do you believe the Bill & Melinda Gates Foundation is doing any good work? The money funding this charitable foundation is primarily the profit Bill has made from owning Microsoft. Under your “no profits allowed” policy, how would charitable activities like this be funded?
So Braves could have easily kept Swanson and Freeman. They just chose not to bc extending players outside of pre-Arb is not in their business model. Doesn’t matter the non sense leaked through media- This is the way they operate
So a team that makes a $13 M profit could easily have signed a player to a contract that paid $25 M a year? Stick to ditch digging.
Any team can easily keep any player. The player has to want to be there and the team has to value the player at an offer they’re comfortable with. With Swanson, I loved what he did for the Braves and wanted him back. Atlanta was smart not to come anywhere close to that Cubs contract because it is terrible. He also wanted to be wherever his wife was. Freeman simply lied about wanting to be in Atlanta his entire career. The Braves offered a higher AAV than LA with only a yr difference in contract length. He made the choice to go.
Steve Cohen Owns You
Funny how Braves fans can rationalize every L their team takes!
EVERYTHING ! Most brainwashed fan base ever. I’m jealous how good the Braves are until I hear from their fans. Then my jaw drops when every one repeats in verbatim exactly what the franchise tells media to tell the fans what to think.
588 mil in revenue yet they pay less in taxes than many players do. Then the fans take ridiculous stance to defend the teams financials. Amazing !
You don’t pay taxes on revenue, or else every company in America would be bankrupt. You pay taxes on profits.
I’m no Braves fan but I agree with them about the ownership being smart and successful. They are among the best run teams in the league. They are now set up for long term sustainable success.
Yeah, let’s blame them for Congress setting up a tax system that is designed primarily to benefit Congressmen/women.
How else do you think someone like Bernie Sanders has become a multimillionaire?
You want to blame someone? Blame Reagan and the Republicans.
Tax code and politicians getting abnormally wealthy goes a lot farther back than the 1980’s.
But it wouldn’t matter if Saint Ronnie hadn’t cut the top tax rate from 73% to 28%.
All I’m reading is MLB needs real revenue sharing and a salary cap/floor.
Braves are one of 14 teams that will have their tv revenue defaulted on by Ballys this month. At this junction they are looking at a massive 2023 loss and with this payroll and they will pay the luxury tax. Not sustainable.
They’ll just get a new TV deal with someone else. It’s a temporary set back.
The industry you’re seeking deals with is dying. Too many cable and satellite companies have said no to paying high fees for sports. The media companies have decided they lose less money without the RSN than they lose with them. Big media contracts are going to be harder to find.
MLB needs to rework their entire media model. The modle they’ve been using is obsolete.
Steve Cohen Owns You
Nailed it, Jeremy. The Braves model is NOT SUSTAINABLE.
What people are missing from the profit side is the amount the team is worth. For example Seidler group that bought the padres less than a decade ago for 800m is now being reported worth more than 2b. This is where the real money comes from as an investment. The more you can continue to raise revenue the more your team will be worth. Plus winning which creates additional revenue also creates a better image which increases the desire for some other billionaire wanting to own it. To the point they maybe willing to overpay.
The reports going around that the padres are using a hedge fund group to finance the cash used to play for all these stars. They are or can use the current value of the team vs what they paid for it to receive this cash. Which they will payback in cash or in equity. The padres revenue continues to grow and they are in the process of seeing just how high it can get. Once there is a leveling off they will know what their top budget can be. Then it’s at matter of sustaining that revenue with the product on the field. Winning a championship would add increase these earnings as well though like the braves that can’t be counted on every year. If you put a high quality team on the field you should be able to make the playoffs specially in todays playoff format like the braves did and may get at a couple of home games most years. Having superstars that the mlb will want to market along with winning which drives tv ratings. It may take a decade or longer to see just how high the revenue can get.
For example the padres viewership is up, when their current tv deal expires and they have a high viewership even if it’s not in a market with as many potential viewers will they land a much better tv deal. Will the stadium name rights increase as well. These are some the questions the padres are in the middle of finding out and have the money backing to do so for the next 10 years. So when everyone says they can’t afford all these stars they are right but also wrong.
Just takes an owner with a vision to pull their franchise out of the dumps (where the padres have been for pretty much forever before hand) and invest into your club to raise revenue. At some point there will be a slowing of that revenue which will need to be balanced with a payroll that fits.
No one is missing what the team is worth. The article notes it.
You rent out a house that’s going up in value. You’re making a little profit each year. The house needs maintenance which the revenue coming in doesn’t cover. You take a loan out on your equality. That’s the sort of thing you say some teams are doing – which in slang is referred to as leveraging.
That’s all well and good until the market pulls back – as we’re currently seeing in real estate. Now the amount of equity shrinks (or the rate of growth of the equity pulls back) – yet the loans still have to be paid at their negotiated amount.
We may have seen the results of the above happen with both the projected sales of the Angels and Nationals this past year. We don’t know the specifics, but both franchises had extremely high payrolls for years, and we know the Nationals have a large amount of deferred payments to players on the books. When the owners went to sell it appears they weren’t being offered anywhere near the amount they felt they should have received so the Angels took their franchise off the market and the Nationals are stuck in neutral.
Think about this – according to the filings which are done under penalty of law the Braves had a net operating loss, and perhaps by adding in revenue from Battery Atlanta (which Liberty Mutual invested in highly) the Braves may have shown a overall profit of around $15m. Now, think about the Nationals having to pay Stephen Strasburg $35m not to pitch, and will be paying him the same amount in 2023 not to pitch. If you think they have insurance on him – please understand the following…insurance on players is hard to find and quite expensive. If the Nationals did have any on him based on his history previous to his last contract, rest assured that the premiums were quite high. Granted Strasburg is an extreme case, but most teams have non-performing salaries on their books like his.
Anyone in any business can play with the money. But at some point it comes home to roost.
There’s a saying in investing – “Don’t count the profit until you sell”.
Agreed. Ask Arte Moreno how he went cashing in his profit.
There needs to be a time when fans start believing what multiple owners are saying.
You rent out a house that’s going up in value. You’re making a little profit each year. The house needs maintenance which the revenue coming in doesn’t cover.
That’s exactly how it works.
You buy a rental property. You receive x$ per year. Out of that x$, you pay interest, insurance, and property maintenance. You deduct those costs from your revenue, and also deduct depreciation (~3%). Those are your profits for the year.
Your cash flow is often negative in the beginning since you are paying down your mortgage. You rely on increasing the rents every year until you are cash positive. In addition, your property value should rise by inflation.
Accounting losses translate into tax benefits, as does inestments in facilities, i.e, new stadiums. So the operating slde of the ledger is only one side of the profut question. Debt and amortization drive tax reporting strategies, and are a hidden aspect of franchise margins. It would be fascinating to learn how things like losses on servicing injured player contracts, insurance premiums,cetc… affects expenses and taxation. I have a hunch if the public understood all the tax tricks available we would be surprised, to put it mildly. I do not fear MLB ownership group is thin on margins.
Baseball can be a very good business, especially because of tax treatments and public subsidies. John Malone of Liberty is one of the smartest investors out there, and wouldn’t allocate capital without having a strong sense of what increases asset values and cash flows.
It’s not realised until you sell it.
I can’t imagine the work that must go into running a MLB franchise. Owners are an under appreciated group of people.
Steve Cohen Owns You
Those are the Braves earnings the year AFTER a WS win? Yikes.
The Braves have done a great job with signing their core to well-below market deals. And while that benefits Liberty’s long-range planning by giving them substantial operating cost certainty, we now see the downside of all those early career extensions as the AAV is utilized for their luxury tax calculation.
Furthermore, those extensions aren’t looking so good from the player’s side. All they have to do is look around and see how much money they left on the table (assuming general health and continued productivity in-line with their career norms).
Their peers are going to keep getting bigger and bigger contracts. Hard to ignore if you’re Acuña, Albies, Harris. At least Riley got $200M+, dude’s a stud.
Unfortunately, Freeman and Swanson jumping ship for a fair payday should signal to even the most optimistic fan that not everyone in the org is going to accept significantly below-market deals moving forward.
Fried will be the next to explore his options too.
With the release of Liberty’s earnings report, it’s fair to wonder if AA has any more proverbial rabbits to pull out of his hat?
That Acuna deal is the worst deal in baseball history. Shame on the Braves !
Acuna is an excellent talent, but don’t ignore he has missed a ton of games each season from shortened ’20 thru ’22. Braves overcoming his absence (even winning WS) is a testament to paying many players well in a sport where paying crazy $ to a few is foolish. ATL and HOU are playing it smart.
He wouldn’t be rolling in the dough. So far, the contract has only covered his control years. He’s getting paid $17M this year, which I doubt he’d have gotten had he been arbitration eligible.
@big how is acuna’s deal the worst in bb history, i’ll give you that he is getting paid less for his production than others, but it takes 2 to tango and he chose security over trying to get max dollars.
Interesting of less playoff games but no comment on All Star game not being there the year before which would have been 3 days of parking and concessions and other revenue