Braves Finances

[nsacpi]

This has been out a few days. Surprised no one has picked up on it.

http://www.myajc.com/sports/baseball...sfGUhUilyNmiL/

Don't agree with some of the interpretive aspects of the article, but the facts alone are of interest.

[Hawk]

It was discussed a bit in the Luis Robert thread in relation to a potential misallocation of resources.

[nsacpi]

The interpretive part that I take exception to is the claim by Liberty that the the international signings were part of the cause for the loss.

Why do I take exception with this? It seems to me that: 1) the budget at the outset of the fiscal year called for balance or a small profit and that 2) the money we used for the international signings was part of that budget.

To the extent it is meaningful to look for a "cause" for the loss, the focus has to be on areas where revenues or costs deviated from the plan. My guess is that the shortfall was mainly due to attendance, where they probably expected a bit more of "nostalgia bounce" from the last season at Turner Field. The team's poor first half undoubtedly contributed to the shortfall relative to projections.

Coming in $20 million short of plan is something that has consequences. I'm sure all of the senior management team took a hit on their bonuses. I'm equally sure it had an effect on budgeting for 2017. The loss in 2016 means everything in 2017 had to be calculated conservatively, with an obvious impact on the 2017 major league payroll.

[DirkPiggler]

The interpretive part that I take exception to is the claim by Liberty that the the international signings were part of the cause for the loss.

Why do I take exception with this? It seems to me that: 1) the budget at the outset of the fiscal year called for balance or a small profit and that 2) the money we used for the international signings was part of that budget.

To the extent it is meaningful to look for a "cause" for the loss, the focus has to be on areas where revenues or costs deviated from the plan. My guess is that the shortfall was mainly due to attendance, where they probably expected a bit more of "nostalgia bounce" from the last season at Turner Field. The team's poor first half undoubtedly contributed to the shortfall relative to projections.

Coming in $20 million short of plan is something that has consequences. I'm sure all of the senior management team took a hit on their bonuses. I'm equally sure it had an effect on budgeting for 2017. The loss in 2016 means everything in 2017 had to be calculated conservatively, with an obvious impact on the 2017 major league payroll.

Baseball is a dead end business. Liberty should sell as quickly as possible.

[striker42]

You don't make money through revenue streams when you own a baseball team. You actually tend to operate at a loss. You make money through having a rare asset that appreciates over time. It appreciates a lot.

[weso1]

You don't make money through revenue streams when you own a baseball team. You actually tend to operate at a loss. You make money through having a rare asset that appreciates over time. It appreciates a lot.

I appreciated this post.

[thethe]

The interpretive part that I take exception to is the claim by Liberty that the the international signings were part of the cause for the loss.

Why do I take exception with this? It seems to me that: 1) the budget at the outset of the fiscal year called for balance or a small profit and that 2) the money we used for the international signings was part of that budget.

To the extent it is meaningful to look for a "cause" for the loss, the focus has to be on areas where revenues or costs deviated from the plan. My guess is that the shortfall was mainly due to attendance, where they probably expected a bit more of "nostalgia bounce" from the last season at Turner Field. The team's poor first half undoubtedly contributed to the shortfall relative to projections.

Coming in $20 million short of plan is something that has consequences. I'm sure all of the senior management team took a hit on their bonuses. I'm equally sure it had an effect on budgeting for 2017. The loss in 2016 means everything in 2017 had to be calculated conservatively, with an obvious impact on the 2017 major league payroll.

I'm actually surprised that they took the full expense for the international signings in the current year. That sounds like a cost eligible for capitalization.

[thethe]

You don't make money through revenue streams when you own a baseball team. You actually tend to operate at a loss. You make money through having a rare asset that appreciates over time. It appreciates a lot.

That has no real value if there is not an intention to sell. Sure, you can leverage the value through debt but ultimately every owner still wants to have positive EBITDA.

[nsacpi]

You don't make money through revenue streams when you own a baseball team. You actually tend to operate at a loss. You make money through having a rare asset that appreciates over time. It appreciates a lot.

True. But I still think a 20M shortfall has some significant repercussions.

[cajunrevenge]

20 million lost is not a big deal. They can use that loss to lower their taxes over the next 2 years roughly the same amount. Profit and loss can be manipulated easily. I had a buisness go under many years ago and I was able to carry the loses over the next 2 years. Buisness do this a lot.

[clvclv]

You don't make money through revenue streams when you own a baseball team. You actually tend to operate at a loss. You make money through having a rare asset that appreciates over time. It appreciates a lot.

No better example than the Marlins.