Atlanta Braves Holdings, Inc. Q4 FY2025 earnings call

• Spring Training progress: Chairman, President and CEO Terry McGuirk is pleased with the team's progress at spring training, with new manager Walt Weiss working hard. The team has strong roster and organizational depth. Alex Anthopoulos added key free agents like Robert Suarez, Jorge Mateo, Mauricio Dubón, Tyler Kinley, Joel Payamps, and Chris Sale. Catcher Sean Murphy is recovering. - Local media broadcast: Braves have local TV rights back and launched BravesVision, a multimedia platform. Gray Media will broadcast 15 spring training games (50% increase) and simulcast some regular season games. The team will also appear in nationally televised games. - Ticketing and sponsorship: Record-breaking regular season ticket sales and sponsorship revenue in 2025. Strong ticket demand for 2026 with over 1.9 million tickets sold. Premium clubs sold out. - Battery Atlanta: Over 380 events in 2025, including concerts and community events. Hosting Savannah Bananas for three games and Braves Country Fest, with Noah Kahan performing at Truist Park.

Baseball revenue in 2025 was $635 million, up from $595 million in 2024. It was driven by increased event, broadcasting, and other revenue. Event revenue was $358 million, up from $348 million. Broadcasting revenue was $189 million, up from $166 million. Other revenue was $42 million, up from $34 million. Mixed-use development revenue was $97 million in 2025, a $30 million increase from $67 million in 2024, driven by rental income from new leases and acquisitions. Adjusted OIBDA was $108 million in 2025, up from $40 million in 2024, with increases in both baseball and mixed-use development adjusted OIBDA.

• Focus on executing with BravesVision, optimizing outcomes across subscriber reach, distribution, advertising, and streaming while ensuring fan access. - Confident in delivering to fans across Atlanta and Southeast, focusing on improving fan experience at ballpark and campus. - Mention of 2026 being a year to compete for a World Series title with the current roster and additions.

• Uncertainties related to forward-looking statements as actual results may differ from expectations due to various factors like those in the Risk Factors section of annual and quarterly reports. - Potential impacts of changes in tax laws related to deductibility of high salary employees, though discussions are ongoing.

Q: Congratulations on standing up BravesVision. I was wondering what sort of OpEx or CapEx was reflected in your financials before sort of getting that up and running? Or is it more going to be reflected here in the first quarter? And then secondly, if you could remind us, please, on the blackout rules for the local TV and streaming opportunities. I know that your press release mentioned that there was some no blackout issues. But just remind us of that, please.

A: Jill Robinson said historically, they haven't shared OpEx and CapEx at that level in financial statements and will see more detail about BravesVision's financial results starting in Q2. Derek Schiller said the blackout rules pertain primarily to the streaming platform. If a subscriber of Braves.TV, they can watch anywhere inside the territory. If an MLB.TV subscriber, they can watch both inside and outside the territory.

Q: Appreciate it. And if I could kind of follow on to the media rights aspect. Obviously, with the CBA coming up later this year and other leagues looking to redo their national rights deals. What are your updated thoughts on how things are evolving? And what's the probability that Major League Baseball would want to perhaps negotiate back these local media rights from you later on since they are handling a number of other teams?

A: Terry McGuirk said the next national media opportunity is 1/1/29. Rob Manfred has talked about aggregating rights like other leagues. The commissioner will lead negotiation and strategy discussion among owners, and they'll keep shareholders and analysts updated when it happens.

Q: Let me see, one of the things that I -- just stepping back, I'm just kind of curious about in terms of the financial cash flow profile of the Braves this year versus years past. In this year, you just reported, you -- the free cash flow was, I guess, a negative $25 million or so, if I've got that right. And when you look ahead to '26, there's $100 million-ish or so of local broadcast revenue that might be somewhat less as you go through this transition, maybe, maybe not. And then you've got some incremental tax impacts that could be coming up from the tax laws that limit kind of deductibility of salaries to high-paid employees like your star baseball players. And so I was just wondering if you could talk a little bit about how you see free cash flow trending going forward? And if there's a deficit, how you see kind of financing that? And given your position as kind of a public company versus others where you've got the pockets of billionaires to kind of finance it, does this put any pressure on you guys competitively, do you think?

A: Jill Robinson said they think about cash flows in terms of baseball and real estate businesses. Goal is to reinvest profits from team into the team. Over past years, they've launched master planning projects. As for free cash flow trending, without disclosing too much, you'll see difference in cash flow with running the business now. Derek Schiller said they're aware of the 162(m) issue but it's not appropriate to comment further as discussions are ongoing.