Atlanta Braves Holdings, Inc. Q3 FY2024 earnings call

• Voting and governance arrangements approved by Major League Baseball have empowered the Atlanta-based management team. - The team had its seventh consecutive trip to the postseason in 2024, though it fell short of winning another World Series. - The team welcomed more than 3 million fans to the ballpark for the third consecutive year, and was ranked #1 in overall guest experience in an MLB fan survey. - Plans are in place to commence further upgrades to the ballpark ahead of the 2025 season, including a new seating product called The Bullpen and an extension of the Coors Light Chop House seating area. - The Battery Atlanta continues to be a top live, work, and play destination. - The team will host the 2025 Major League Baseball All-Star game. - The company continues its community work through the Atlanta Braves Foundation and Henry Louis Aaron Fund.

The company's reportable segments are baseball and mixed-use development. In the third quarter of 2024, baseball revenue amounted to $273 million, up from $256 million in the prior year period. This growth was primarily driven by new sponsorship agreements and contractual rate increases on season tickets and existing sponsorship contracts, though it was partially offset by reduced attendance at regular home season games. For the mixed-use development segment, revenue in the third quarter of 2024 was $17 million, an increase from $16 million in the prior year period, mainly due to rises in parking and rental income. However, baseball operating costs saw an increase, primarily because of higher Major League player salaries, MLB's revenue sharing payments, and Minor League team and player expenses.

• The company believes there is still significant upside in both the ballpark and Battery Atlanta segments, with investments in projects being studied for their return on investment, and a focus on initiatives that benefit fans. - On the Battery Atlanta side, there remains room for growth, with ongoing reinvestment, lease upgrades to bring in higher-performing tenants, and evaluation of new opportunities. - The key is that investments should be fan-friendly, as what is good for fans will ultimately be good for the business.

• The pending bankruptcy proceeding of Diamond Sports Group LLC has not previously had a material unfavorable impact on the company's revenue, but currently, it cannot be predicted whether such a proceeding will have a material unfavorable impact on future revenue.

Q: Ben Swinburne asked about the biggest growth opportunities for the business over the next several years and about the conversion of EBITDA to free cash flow.

A: Derek Schiller stated that the company is continuing to invest in both the ballpark and the Battery, with each project studied for its return on investment and a focus on what is good for fans. Jill Robinson addressed that baseball OIBDA declined year-over-year due to increasing expenses.

Q: Barton Crockett inquired about how the company creates value, if there are plans to roll up other sports teams into a public structure, and about the Diamond Sports Group LLC bankruptcy.

A: Terry McGuirk said winning is the ultimate goal for value creation. Derek Schiller mentioned the company is laser-focused on internal growth opportunities. Terry McGuirk discussed the uncertainty surrounding Diamond Sports Group LLC's bankruptcy and the company's preparedness for any outcome.

Q: David Joyce asked about the opportunity to expand concert activity and about further real estate development plans.

A: Derek Schiller said the company is studying opportunities to expand concerts and special events at Truist Park, and is also looking at undeveloped real estate associated with the Battery and upgrading leases there.

Q: Matthew Harrigan asked about sports betting in Georgia and about media opportunities including AR and VR.

A: Derek Schiller expressed frustration with Georgia not legalizing sports betting yet and said the company is exploring new media opportunities including AR/VR but has no specific announcements at this time.