"I got no money, honey"

The good is that as long as the Braves show they are following a plan that is making things better, they likely won’t be penalized in any way.

The bad news is that we have likely seen the highest payroll the Braves will carry for a while at around $120M.
 
Liberty has more finance people, accountants, etc. than Carter has liver pills. They will be masters of showing what they want to show and when. The interesting things about this article to me are operating expense and SGA.

OPEX: What is 'Operating Expense'
An operating expense is an expense a business incurs through its normal business operations. Often abbreviated as OPEX, operating expenses include rent, equipment, inventory costs, marketing, payroll, insurance, and funds allocated for research and development. One of the typical responsibilities that management must contend with is determining how to reduce operating expenses without significantly affecting a firm's ability to compete with its competitors.

SGA: SG&A includes all non-production expenses incurred by a company in any given period. This includes expenses such as rent, advertising, marketing, accounting, litigation, travel, meals, management salaries, bonuses, and more. On occasion, it may also include depreciation expense, depending on what it’s related to.

In an income statement, gross profit less SG&A (and depreciation expense) equals the operating profit, also known as earnings before interest and tax (EBIT).

Looking at 2017FY EBITDA - OPEX was $281M and S,G&A was $98M

Through 6mo 2018FY EBITDA - OPEX was $135M and S,G&A was $44M

So, even with a higher payroll in 2018, the Braves appear to annualize at $270M or $11M less than 2018. S,G&A annualizes at $88M in 2018 or $10M less than 2017. The big differences are in stock based comp and "affiliate" earnings. You could argue that the stock based comp will come later in the year, but I think you have to really look at the affiliate earnings more closely $78M in 2017 when most of the Battery wasn't open or occupied for most of the year and $6M in 2018.

In reality, this is a fault in looking at A FY vs a six month snapshot. The stock based comp probably hasn't happened yet and doesn't need to be accounted for and the affiliate earnings probably don't have to be accounted for yet either, likely because of contract structure.

In other words, the work shown doesn't necessarily really mean what the author think it means.
 
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having never read this theory anywhere else, my guess is that these rather intelligent fan site writers maybe haven’t quite got it right.
 
Just pulling information from the quarterly reports:


It looks likes the Braves revenue from gate, concessions, gameday operations for the quarter ending June 30, was pretty flat. It was 172m in 2018 as opposed to 173 in 2017.

Braves are finally beginning to see revenue from the Battery as they reported 10 m for the quarter as opposed to 3m in 2017.

So in sum, Braves revenues were up about 6 million this quarter over last season.

Braves claim profits of 37 million for the quarter as opposed to a loss of 1 million last season.

......

Now it does appear that they may have accounted the salary buyouts in the preceding quarter, which might be inflating the quarterly figures somewhat.

Perhaps it is better to look at the 6 month figures, which show a loss of 12 million in 2018 as opposed to loss of 33 million in 2017.

Sounds scary, but if we look at income before depreciation and amortization, we see Braves showing a profit of 31 million for the six month period before the Braves get to add in the big increased stadium write-off. Braves showed a loss before D/A over same period last season.

It would appear the Braves are a good bit more profitable in 2018 than they were in 2017.

.........

For the record, Braves are back up to being up about 3% on attendance this season. We'll see what the last few gates look like, but probably going to be between 2-4% increase.

The next quarter should have bigger payroll costs, so might not be quite as rosy. Then again, they should have less cost from the draft and international signings, so maybe not. One thing pushing their costs down, accordingly to Liberty, was the decrease in international salaries. Not sure what they are referring to there, though.

.....

What it means -- Braves probably have plenty of ability to keep their payroll north of 115 million. Shouldn't worry about any austerity there.
 
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