If there is a holy grail in sports business, it’s unearthing verifiable financial information for leagues and their clubs. Held onto like grim death, these multi-billion dollar leagues hide details given their private business nature. On rare occasions, one will fall under publicly traded ownership and the veil is lifted. Today, one club in Major League Baseball had that information revealed.
The open question during the pandemic has been, how hard have sports teams been hit financially, and how long will it take for them to bounce back? Last year MLB commissioner Rob Manfred said the league saw approx. $3 billion in operating losses for 2020 due to fans being unable to attend games and a 60-game shortened season. Without Manfred opening the books, the amount is unverifiable.
With Liberty Media
On Thursday, Liberty Media posted their 2021 Q3 earnings report. Since it is Q3 it does not account for what will certainly be an even rosier outlook for Q4 for the Braves after winning the World Series.
What the financials show is how fast the club has bounced back from the pandemic.
For Q3 2020, the Braves showed revenues of $110 million with an operating loss of -$16 million. For Q3 2021 revenues jumped to $234 million with operating income of $30 million, an increase of 288% year-over-year.
Operating income is a measure of profit.
Not all of what the Braves own is derived exclusively from baseball-related revenue streams. When breaking down the financial figures the clubs posted baseball-related revenues of $222 million (+118% YOY) and $12 million in business-related revenues (+50% YOY) for Q3 of 2021.
Baseball-related revenues are comprised of both local and MLB’s national revenues which are centralized. Overall, baseball-related revenues are comprised of ballpark operations (ticket sales, concessions, corporate sales, retail, suites, premium seat fees, and postseason), local broadcast rights, and shared Major League Baseball revenue streams, including national broadcast rights and licensing.
The business development revenue for the Braves is derived from the Battery Atlanta mixed-use facilities and primarily includes rental income.
In total, adjusted Operating Income Before Depreciation and Amortization (OIBDA) for the Atlanta Braves jumped a staggering 867% for Q3 2021. OIBDA is operating income before depreciation and amortization. It is a measure of financial performance used by companies to show profitability in their core business activities. OIBDA excludes the effects of capital spending on fixed assets, such as equipment, and the interest expense of carrying debt.
It should be noted that there is a slight difference in how MLB’s schedule in 2020 and 2021 affects the financials for the Braves. In Q3 2020, the club hosted 30 home games compared to 34 for Q3 2021.
Not all clubs will see numbers turn around this fast. It is near certain that some clubs may report losses. But, if the Liberty Media Q3 numbers show, clubs are certain to bounce back faster than anticipated. That will be a critical component of discussions between MLB and the MLB Players Association as they enter the home stretch to reach a new labor deal. The current collective bargaining agreement expires on Dec 1st at midnight.