UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM
For the quarterly period ended
OR
For the transition period from to
Commission File Number
(Exact name of Registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
(Address of principal executive offices) | (Zip Code) |
Registrant's telephone number, including area code: (
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol | Name of each exchange on which registered |
The | ||
The |
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large Accelerated Filer ☐ | Accelerated Filer ☐ | Smaller Reporting Company | Emerging Growth Company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the Registrant is a shell company as defined in Rule 12b-2 of the Exchange Act. Yes
The number of outstanding shares of Atlanta Braves Holdings, Inc. common stock as of October 31, 2023 was:
Series A | Series B | Series C | |||||
Atlanta Braves Holdings, Inc. common stock | | | |
Table of Contents
I-2
ATLANTA BRAVES HOLDINGS, INC.
Condensed Consolidated Balance Sheets
(unaudited)
| September 30, |
| December 31, |
| ||
| 2023 |
| 2022 |
| ||
amounts in thousands |
| |||||
Assets |
|
|
|
| ||
Current assets: |
|
|
|
| ||
Cash and cash equivalents | $ | |
| | ||
Restricted cash |
| |
| | ||
Accounts receivable and contract assets, net of allowance for credit losses |
| |
| | ||
Other current assets |
| |
| | ||
Total current assets |
| |
| | ||
Property and equipment, at cost (note 3) |
| |
| | ||
Accumulated depreciation |
| ( |
| ( | ||
| |
| | |||
Investments in affiliates, accounted for using the equity method (note 4) |
| |
| | ||
Intangible assets not subject to amortization: |
|
|
|
| ||
Goodwill |
| |
| | ||
Franchise rights |
| |
| | ||
| |
| | |||
Other assets, net |
| |
| | ||
Total assets | $ | |
| |
See accompanying notes to condensed consolidated financial statements.
I-3
ATLANTA BRAVES HOLDINGS, INC.
Condensed Consolidated Balance Sheets (continued)
(unaudited)
| September 30, |
| December 31, |
| ||
| 2023 |
| 2022 |
| ||
amounts in thousands |
| |||||
except share amounts | ||||||
Liabilities and Equity |
|
|
|
| ||
Current liabilities: |
|
|
|
| ||
Accounts payable and accrued liabilities | $ | |
| | ||
Deferred revenue and refundable tickets |
| |
| | ||
Current portion of debt (note 5) |
| |
| | ||
Other current liabilities |
| |
| | ||
Total current liabilities |
| |
| | ||
Long-term debt (note 5) |
| |
| | ||
Redeemable intergroup interests | — | | ||||
Finance lease liabilities |
| |
| | ||
Deferred income tax liabilities |
| |
| | ||
Pension liability |
| |
| | ||
Other noncurrent liabilities |
| |
| | ||
Total liabilities |
| |
| | ||
Equity: |
|
|
|
| ||
Preferred stock, $ | ||||||
Series A common stock, $ | | — | ||||
Series B common stock, $ | | — | ||||
Series C common stock, $ | | — | ||||
Additional paid-in capital | | — | ||||
Former parent’s investment |
| — |
| | ||
Accumulated other comprehensive earnings (loss), net of taxes |
| ( |
| ( | ||
Retained earnings (deficit) |
| ( |
| ( | ||
Total stockholders' equity/former parent's investment |
| |
| | ||
Noncontrolling interests in equity of subsidiaries | | — | ||||
Total equity | | | ||||
Commitments and contingencies (note 7) |
|
| ||||
Total liabilities and equity | $ | |
| |
See accompanying notes to condensed consolidated financial statements.
I-4
ATLANTA BRAVES HOLDINGS, INC.
Condensed Consolidated Statements of Operations
(unaudited)
Three months ended | Nine months ended | ||||||||||
September 30, | September 30, | ||||||||||
| 2023 |
| 2022 |
| 2023 |
| 2022 | ||||
amounts in thousands, except per share amounts | |||||||||||
Revenue: |
|
|
|
|
|
|
| ||||
Baseball revenue | $ | |
| | $ | |
| | |||
Mixed-Use Development revenue |
| |
| |
| |
| | |||
Total revenue |
| |
| |
| |
| | |||
Operating costs and expenses: |
|
|
|
|
|
|
|
| |||
Baseball operating costs |
| |
| |
| |
| | |||
Mixed-Use Development costs |
| |
| |
| |
| | |||
Selling, general and administrative, including stock-based compensation | | | | | |||||||
Impairment of long-lived assets and other related costs | | | | | |||||||
Depreciation and amortization |
| |
| |
| |
| | |||
| |
| |
| |
| | ||||
Operating income (loss) |
| |
| ( |
| ( |
| ( | |||
Other income (expense): |
|
|
|
|
|
|
|
| |||
Interest expense |
| ( |
| ( |
| ( |
| ( | |||
Share of earnings (losses) of affiliates, net (note 4) |
| |
| |
| |
| | |||
Realized and unrealized gains (losses) on intergroup interests, net | ( | ( | ( | | |||||||
Realized and unrealized gains (losses) on financial instruments, net |
| |
| |
| |
| | |||
Gains (losses) on dispositions, net (note 1) | | | | | |||||||
Other, net |
| |
| |
| |
| | |||
Earnings (loss) before income taxes |
| |
| ( |
| ( |
| | |||
Income tax benefit (expense) |
| ( |
| ( |
| ( |
| ( | |||
Net earnings (loss) | $ | ( |
| ( | $ | ( |
| | |||
Basic net earnings (loss) attributable to Series A, Series B and Series C Atlanta Braves Holdings, Inc. shareholders per common share (note 2) | $ | ( |
| ( | $ | ( |
| | |||
Diluted net earnings (loss) attributable to Series A, Series B and Series C Atlanta Braves Holdings, Inc. shareholders per common share (note 2) | $ | ( |
| ( | $ | ( |
| |
See accompanying notes to condensed consolidated financial statements.
I-5
ATLANTA BRAVES HOLDINGS, INC.
Condensed Consolidated Statements of Comprehensive Earnings (Loss)
(unaudited)
Three months ended | Nine months ended | ||||||||||
| September 30, | September 30, | |||||||||
| 2023 |
| 2022 |
| 2023 |
| 2022 | ||||
amounts in thousands | |||||||||||
Net earnings (loss) | $ | ( |
| ( | $ | ( |
| | |||
Other comprehensive earnings (loss), net of tax: |
|
|
|
|
|
|
|
| |||
Unrealized holdings gains (losses) arising during the period | ( | | ( | ( | |||||||
Share of other comprehensive earnings (loss) of affiliates |
| |
| — |
| |
| — | |||
Other comprehensive earnings (loss), net of tax |
| |
| |
| |
| ( | |||
Comprehensive earnings (loss) | $ | ( |
| ( | $ | ( |
| |
See accompanying notes to condensed consolidated financial statements.
I-6
ATLANTA BRAVES HOLDINGS, INC.
Condensed Consolidated Statements of Cash Flows
(unaudited)
| Nine months ended | |||||
September 30, | ||||||
| 2023 |
| 2022 | |||
amounts in thousands | ||||||
Cash flows from operating activities: |
|
|
|
| ||
Net earnings (loss) | $ | ( |
| | ||
Adjustments to reconcile net earnings (loss) to net cash provided by (used in) operating activities: |
|
|
|
| ||
Depreciation and amortization |
| |
| | ||
Stock-based compensation |
| |
| | ||
Impairment of long-lived assets | — | | ||||
Share of (earnings) losses of affiliates, net |
| ( |
| ( | ||
Realized and unrealized (gains) losses on intergroup interests, net | | ( | ||||
Realized and unrealized (gains) losses on financial instruments, net |
| ( |
| ( | ||
(Gains) losses on dispositions, net | ( | ( | ||||
Deferred income tax expense (benefit) |
| ( |
| ( | ||
Cash receipts from returns on equity method investments | | | ||||
Other charges (credits), net |
| |
| | ||
Net change in operating assets and liabilities: |
|
|
|
| ||
Current and other assets |
| ( |
| ( | ||
Payables and other liabilities |
| |
| | ||
Net cash provided by (used in) operating activities |
| ( |
| | ||
Cash flows from investing activities: |
|
|
|
| ||
Capital expended for property and equipment |
| ( |
| ( | ||
Cash proceeds from dispositions | — | | ||||
Investments in equity method affiliates and equity securities | ( | ( | ||||
Other investing activities, net | | — | ||||
Net cash provided by (used in) investing activities |
| ( |
| | ||
Cash flows from financing activities: |
|
|
|
| ||
Borrowings of debt |
| |
| | ||
Repayments of debt |
| ( |
| ( | ||
Payments to settle intergroup interests | — | ( | ||||
Contribution from noncontrolling interest | | — | ||||
Other financing activities, net |
| ( |
| ( | ||
Net cash provided by (used in) financing activities |
| |
| ( | ||
Net increase (decrease) in cash, cash equivalents and restricted cash |
| ( |
| ( | ||
Cash, cash equivalents and restricted cash at beginning of period |
| |
| | ||
Cash, cash equivalents and restricted cash at end of period | $ | |
| | ||
Supplemental disclosure to the condensed consolidated statements of cash flows: |
|
|
|
| ||
Property and equipment expenditures incurred but not yet paid | $ | |
| |
I-7
The following table reconciles cash and cash equivalents and restricted cash reported in our condensed consolidated balance sheets to the total amount presented in our condensed consolidated statements of cash flows:
September 30, | December 31, | |||||
2023 | 2022 | |||||
Cash and cash equivalents |
| $ | |
| | |
Restricted cash |
| |
| | ||
Total cash, cash equivalents and restricted cash at end of period | $ | |
| |
See accompanying notes to condensed consolidated financial statements.
I-8
ATLANTA BRAVES HOLDINGS, INC.
Condensed Consolidated Statements of Equity
(unaudited)
| Accumulated |
|
| ||||||||||||||||||
other | Noncontrolling | ||||||||||||||||||||
Former | Additional | comprehensive | Retained | interests | |||||||||||||||||
Preferred | Common Stock | parent's | paid-in | earnings | earnings | in equity of | Total | ||||||||||||||
| Stock |
| Series A |
| Series B |
| Series C |
| investment |
| capital |
| (loss) |
| (deficit) |
| subsidiaries |
| equity | ||
amounts in thousands | |||||||||||||||||||||
Balance at January 1, 2023 | $ | — | — | — | — | | — | ( | ( |
| — | | |||||||||
Net earnings (loss) |
| — | — | — | — | — | — | — | ( |
| — | ( | |||||||||
Other comprehensive earnings (loss) | — | — | — | — | — | — | | — |
| — | | ||||||||||
Stock-based compensation |
| — | — | — | — | | | — | — |
| — | | |||||||||
Change in capitalization in connection with Atlanta Braves Holdings Split-Off | — | | | | ( | | — | — | — | — | |||||||||||
Tax sharing adjustment with Former parent | — | — | — | — | ( | — | — | — | — | ( | |||||||||||
Contribution from noncontrolling interest | — | — | — | — | — | — | — | — | | | |||||||||||
Settlement of intergroup interest | — | — | — | | — | | — | — | — | | |||||||||||
Other | — | — | — | — | ( | | — | — |
| — | ( | ||||||||||
Balance at September 30, 2023 | $ | — | | | | — | | ( | ( |
| | |
Accumulated | ||||||||||||||||||||||
other | Noncontrolling |
| ||||||||||||||||||||
Former | Additional | comprehensive | Retained | interests |
| |||||||||||||||||
Preferred | Common Stock | parent's | paid-in | earnings | earnings | in equity of | Total |
| ||||||||||||||
| Stock |
| Series A |
| Series B |
| Series C |
| investment |
| capital |
| (loss) |
| (deficit) |
| subsidiaries |
| equity |
| ||
amounts in thousands |
| |||||||||||||||||||||
Balance at June 30, 2023 | $ | — |
| — | — | — | | — | ( | ( |
| | | |||||||||
Net earnings (loss) | — | — | — | — | — | — | — | ( | — | ( | ||||||||||||
Other comprehensive earnings (loss) |
| — | — | — | — | — | — | | — | — | | |||||||||||
Stock-based compensation | — | — | — | — | — | | — | — | — | | ||||||||||||
Change in capitalization in connection with Atlanta Braves Holdings Split-Off | — | | | | ( | | — | — | — | — | ||||||||||||
Contribution from noncontrolling interest | — | — | — | — | — | — | — | — | | | ||||||||||||
Settlement of intergroup interest | — | — | — | | — | | — | — | — | | ||||||||||||
Other | — | — | — | — | ( | | — | — | — | ( | ||||||||||||
Balance at September 30, 2023 | $ | — |
| | | | — | | ( | ( |
| | |
See accompanying notes to condensed consolidated financial statements
I-9
ATLANTA BRAVES HOLDINGS, INC.
Condensed Consolidated Statements of Equity (continued)
(unaudited)
|
|
|
| Accumulated |
| |||||
other | ||||||||||
Former | Retained | comprehensive | ||||||||
parent's | earnings | earnings | Total | |||||||
| investment |
| (deficit) |
| (loss) |
| equity | |||
amounts in thousands | ||||||||||
Balance at January 1, 2022 | $ | |
| ( |
| ( |
| | ||
Net earnings (loss) | — |
| |
| — |
| | |||
Other comprehensive earnings (loss) | — | — | ( | ( | ||||||
Stock-based compensation |
| |
| — |
| — |
| | ||
Other | | ( | — | | ||||||
Balance at September 30, 2022 | $ | |
| ( |
| ( |
| |
|
|
|
| Accumulated |
| |||||
other | ||||||||||
Former | Retained | comprehensive | ||||||||
parent's | earnings | earnings | Total | |||||||
| investment |
| (deficit) |
| (loss) |
| equity | |||
amounts in thousands | ||||||||||
Balance at June 30, 2022 | $ | |
| ( |
| ( |
| | ||
Net earnings (loss) | — | ( | — |
| ( | |||||
Other comprehensive earnings (loss) | — | — | | | ||||||
Stock-based compensation |
| | — | — |
| | ||||
Other | | — | — | | ||||||
Balance at September 30, 2022 | $ | |
| ( |
| ( |
| |
See accompanying notes to condensed consolidated financial statements.
I-10
ATLANTA BRAVES HOLDINGS, INC.
Notes to Condensed Consolidated Financial Statements
(unaudited)
(1)Basis of Presentation
During November 2022, the board of directors of Liberty Media Corporation (“Liberty” or “Former parent”) authorized Liberty management to pursue a plan to redeem each outstanding share of its Liberty Braves common stock in exchange for
The accompanying condensed consolidated financial statements represent the combination of the historical financial information of the Braves Group until the date of the Split-Off. Although Atlanta Braves Holdings was reported as a combined company until the date of the Split-Off, all periods reported herein are referred to as consolidated. These financial statements refer to the consolidation of Braves Holdings, cash and intergroup interests in the Braves Group (prior to settlement/extinguishment) as "Atlanta Braves Holdings," "the Company," "us," "we" and "our" in the notes to the condensed consolidated financial statements. The Split-Off is accounted for at historical cost due to the pro rata nature of the distribution to holders of Liberty Braves common stock. All significant intercompany accounts and transactions have been eliminated in the condensed consolidated financial statements.
The accompanying (a) condensed consolidated balance sheet as of December 31, 2022, which has been derived from audited financial statements, and (b) the interim unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States ("GAAP") for interim financial information and Article 10 of Regulation S-X as promulgated by the Securities and Exchange Commission. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the results for such periods have been included. The results of operations for any interim period are not necessarily indicative of results for the full year. Additionally, certain prior period amounts have been reclassified for comparability with current period presentation. These condensed consolidated financial statements should be read in conjunction with the combined financial statements and notes thereto for the year ended December 31, 2022 as presented in Amendment No. 5 to the Registration Statement on Form S-4 (File No. 333-268922) filed on June 8, 2023.
The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. The Company considers (i) fair value measurements of non-financial instruments and (ii) accounting for income taxes to be its most significant estimates.
Description of Business
Braves Holdings indirectly owns the Atlanta Braves Major League Baseball Club (“ANLBC,” the “Atlanta Braves,” the “Braves,” the “club,” or the “team”). In addition, Braves Holdings indirectly owned and operated
I-11
ATLANTA BRAVES HOLDINGS, INC.
Notes to Condensed Consolidated Financial Statements (Continued)
(unaudited)
The Braves and
In January 2022, Braves Holdings sold the
Split-Off of Atlanta Braves Holdings from Liberty
Prior to the Split-Off, a portion of Liberty’s general and administrative expenses, including legal, tax, accounting, treasury and investor relations support was allocated to the Braves Group each reporting period based on an estimate of time spent. The Braves Group paid $
Prior to the Split-Off, the Liberty Formula One Group (the “Formula One Group”) and the Liberty SiriusXM Group held intergroup interests in the Braves Group. The intergroup interests represented quasi-equity interests which were not represented by outstanding shares of common stock; rather, the Formula One Group and Liberty SiriusXM Group had attributed interests in the Braves Group, which were generally stated in terms of a number of shares of Liberty Braves common stock. As of December 31, 2022,
The intergroup interests in the Braves Group remaining immediately prior to the Split-Off were settled and extinguished in connection with the Split-Off through the attribution, to the respective tracking stock group, of Atlanta Braves Holdings Series C common stock on a
Following the Split-Off, Liberty and Atlanta Braves Holdings operate as separate, publicly traded companies and Liberty owns
I-12
ATLANTA BRAVES HOLDINGS, INC.
Notes to Condensed Consolidated Financial Statements (Continued)
(unaudited)
Off, Liberty intends to either exchange the shares of Atlanta Braves Holdings Series C common stock with one or more third party lenders to satisfy certain of Liberty’s debt obligations or dispose of such shares in one or more public or private sale transactions. Following the exchange or disposal of such shares, neither Liberty nor Atlanta Braves Holdings is expected to have any continuing stock ownership, beneficial or otherwise, in the other.
In connection with the Split-Off, Liberty and Atlanta Braves Holdings entered into certain agreements in order to govern certain of the ongoing relationships between the two companies after the Split-Off and to provide for an orderly transition. These agreements include a reorganization agreement, a services agreement, aircraft time sharing agreements, a facilities sharing agreement, a tax sharing agreement and a registration rights agreement.
The reorganization agreement provides for, among other things, the principal corporate transactions (including the internal restructuring) required to effect the Split-Off, certain conditions to the Split-Off and provisions governing the relationship between Atlanta Braves Holdings and Liberty with respect to and resulting from the Split-Off. The tax sharing agreement provides for the allocation and indemnification of tax liabilities and benefits between Liberty and Atlanta Braves Holdings and other agreements related to tax matters. Pursuant to the services agreement, Liberty provides Atlanta Braves Holdings with general and administrative services including legal, tax, accounting, treasury and investor relations support. Atlanta Braves Holdings will reimburse Liberty for direct, out-of-pocket expenses and will pay a services fee to Liberty under the services agreement that is subject to adjustment quarterly, as necessary. Additionally, pursuant to the services agreement with Liberty, in connection with Liberty’s employment arrangement with Gregory B. Maffei, the Company’s Chairman, President and Chief Executive Officer, components of Mr. Maffei’s compensation will either be paid directly to him by each of the Company, Liberty TripAdvisor Holdings, Inc., Liberty Broadband Corporation and Qurate Retail, Inc. (collectively, the “Service Companies”) or reimbursed to Liberty, in each case, based on allocations among Liberty and the Service Companies set forth in the amended services agreement, currently set at
Under these various agreements, amounts reimbursable to Liberty aggregated $
Seasonality
Braves Holdings revenue is seasonal, with the majority of revenue recognized during the second and third quarters which aligns with the baseball season.
(2)Earnings Attributable to Atlanta Braves Holdings Stockholders Per Common Share
Basic earnings (loss) per common share (“EPS”) is computed by dividing net earnings (loss) attributable to Atlanta Braves Holdings shareholders by the weighted average number of common shares outstanding (“WASO”) for the period. Diluted EPS presents the dilutive effect on a per share basis of potential common shares as if they had been
I-13
ATLANTA BRAVES HOLDINGS, INC.
Notes to Condensed Consolidated Financial Statements (Continued)
(unaudited)
converted at the beginning of the periods presented. Excluded from diluted EPS for both the three and nine months ended September 30, 2023 are
The Company issued
Three months ended | Nine months ended |
| |||
September 30, | September 30, | ||||
| 2023 |
| 2023 |
| |
(numbers of shares in thousands) | |||||
Basic WASO |
| | | ||
Potentially dilutive shares (1) |
| | | ||
Diluted WASO |
| | |
(1) Potentially dilutive shares are excluded from the computation of diluted EPS during periods in which losses are reported since the result would be antidilutive.
(3) Property and Equipment
Property and equipment consisted of the following:
|
| September 30, 2023 |
| December 31, 2022 | |||||||||||
Owned | Owned | ||||||||||||||
Estimated | assets | assets | |||||||||||||
Useful | Owned | available to | Owned | available to | |||||||||||
| Life |
| assets |
| be leased |
| Total |
| assets |
| be leased |
| Total | ||
in years | amounts in thousands | ||||||||||||||
Land |
| NA | $ | | |
| |
| | |
| | |||
Buildings and improvements |
|
| | |
| |
| | |
| | ||||
Leasehold improvements |
|
| | |
| |
| | |
| | ||||
Furniture and equipment |
|
| | |
| |
| | |
| | ||||
Construction in progress |
| NA |
| | |
| |
| | |
| | |||
Property and equipment, at cost | $ | |
| |
| |
| |
| |
| |
Depreciation expense was $
I-14
ATLANTA BRAVES HOLDINGS, INC.
Notes to Condensed Consolidated Financial Statements (Continued)
(unaudited)
(4)Investments in Affiliates Accounted for Using the Equity Method
The following table includes the Company’s carrying amount and percentage ownership of its investments in affiliates:
September 30, 2023 | December 31, 2022 | ||||||
Percentage | Carrying | Carrying | |||||
| Ownership |
| amount |
| amount | ||
amounts in thousands | |||||||
MLBAM | % | $ | | | |||
BELP | % |
| | | |||
Other | % |
| | | |||
Total | $ | | |
The following table presents the Company’s share of earnings (losses) of affiliates: