Atlanta Braves Holdings, Inc.

Greetings. Welcome to the Atlanta Braves Holdings second quarter 2026 earnings conference call. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star 1 to raise your hand. To withdraw your question, press star 1 again. As a reminder, this call is being recorded. At this time, I would like to turn the call over to Cameron Rudd, Vice President of Investor Relations.

Before we begin, we'd like to remind everyone that on today's call, management's prepared remarks may contain forward-looking statements that represent our beliefs or expectations about future events. Forward-looking statements address matters that are subject to risks and uncertainties that may cause actual results to differ from those discussed today. A number of factors could cause actual results to differ materially from those anticipated, including those set forth in the risk factors section of our annual and quarterly reports filed with the SEC. Forward-looking statements are based on current expectations, assumptions, and beliefs, as well as information available to us at this time, and speak only as of the date they are made, and management undertakes no obligation to update publicly any of them in light of new information or future events. During this call, we will discuss certain non-GAAP financial measures, including adjusted orbita. The full definition of adjusted orbita and the reconciliations to the comparable GAAP financial measures are contained in the Form 10-Q and earnings press release available on the company's website. Now, I'd like to turn the call over to Terry McGuirk, Chairman, President, and CEO of Atlanta Braves Holdings.

Good morning. Thank you for joining us. Joining me today are Derek Schiller, President and CEO of the Atlanta Braves, Mike Plant, President and CEO of Braves Development Company, and Jill Robinson, our CFO. With only 49 games left in the season, our team continues to play well. Currently, we sit in first place in the National League East with Fangraphs giving the Braves an 89% chance of winning the division and a 99% chance Chris Hale, Matt Olsen and Ozzie Alves have continued to provide production and veteran leadership. Drake Baldwin has built on his rookie of the year season, and Rizal Iglesias has been outstanding at the back end of our bullpen. Michael Harris has returned to form and has been exceptional both at the plate and in center field. As we move through the second half of the season, we are encouraged by the progress of several key players who are making their way back from injuries. 23-year-old A.J. Smith-Jarver is back from Tommy John surgery and throwing 100 miles an hour and looking like his old self. Five-time All-Star Ronald Acuna Jr. only recently rejoined the team, and his presence makes everyone better. In addition, Sean Murphy and Ha-Sung Kim were on rehabilitation assignments returned to the team yesterday. The depth of this team has been on full display in the past few months, and we are excited to be playing at near full strength going into the back half of the season. Our objective remains the same every year, to compete for and win a World Series championship. We have great confidence in Alex Anthopoulos, our president of baseball operations, and Walt Weiss, our field manager, two of the finest leaders in baseball. Part of the strength of this organization has been our ability to draft successfully and cultivate young players, which has helped the Braves develop a premier minor league system. With the expiration of the trade deadline earlier this week, we added some valuable talent for the stretch, starting with talented outfielder Lane Thomas, as well as multiple players to bolster our pitching depth, including Bailey Falter, Brent Suter, Tyler Uberstein, and Tyler Molley. We approach the trade deadline the same way we have in the past, with a mentality of making our team better without sacrificing the next wave of talent. This is a deep and talented organization, and we believe this team is positioned to compete deep in October. We were extremely proud to have had five Braves selected to represent the National League in the All-Star Game. Chris Sale, Matt Olson, Ozzie Alves, Drake Baldwin, and Ryzel Iglesias. Chris Sale was selected for the 10th time in his outstanding career. Having five representatives tied for the most among National League teams reflects the talent and depth of this club. I also want to recognize Braves legend Andrew Jones, who was inducted into the National Baseball Hall of Fame on July 26. Andrew became the 12th player to enter the Hall as a Brave, capping a remarkable career that included 10 consecutive Gold Glove Awards, five All-Star selections, and 434 home runs. His impact on our franchise and the city of Atlanta has been extraordinary. and finally, I'd like to thank Braves Country. Attendance and fan engagement have remained very strong with 17 sellouts this season through July and the energy our fans bring to Truist Park makes a real difference to our players and the entire organization. We never take their passion or loyalty for granted. With that, I'll turn the call over to Derek.

Thank you, Terry. I want to echo Terry's appreciation for Braves country and the continued support our fans show throughout the season. Providing them with the best possible experience both at Truist Park and wherever they follow the team remains one of our highest priorities. That commitment was central to the launch of Braves Vision, our owned and operated multimedia platform and the official local television home of the Braves. Braves Vision gives us a more direct relationship with our viewers and greater ability to shape how fans experience and engage with the team throughout the season. In a short period of time, we've built the capabilities needed to manage distribution, advertising sales, production, and programming directly while working with the experienced third-party partners. Our focus remains on delivering a high-quality viewing experience, bringing fans closer to the team, and building a durable platform that can grow over time. We continue to receive high praise from fans and the media for the superior quality of Braves Vision. Work has also begun to expand content on the network, including live batting practice at home games, in addition to our pre- and post-game shows for those fans who want to tune in and see the action ahead of the game. Our entire team continues to work to expand the reach of Braves Vision and develop programming and content that strengthens the connection between the team and our fans. We remain encouraged by the early success of Braves Vision and are confident that we will replicate our seed revenue from our prior third-party local rights partner on an annualized basis. Overall, the legacy cable model continues to decline with some distributors seeing subscriber numbers decrease even more so than previously forecasted, putting pressure on our business. This is not unique to the Braves. That pressure is being felt across sports, However, our unique ability to manage our business means that we have been insulated from those impacts more than most teams. One example is our incredibly strong direct-to-consumer business, which is outpacing our early projections and positions as well for the future. As you can see in our published financials, we have renamed the revenue line associated with our broadcasting operations to reflect the impact of Braves Vision. What was formerly broadcasting has been changed to media-related revenue, given the various items in this line stemming from the launch of Braves Vision. Jill will go into more detail on this change in a moment. The enthusiasm of our fans has been evident across Truist Park in the first half of the season. While our second quarter comparison reflects six fewer regular season home games than last year, underlying fan demand remains strong. Through the first six months of the year, average attendance per home game increased, season ticket demand remained strong, and baseball event revenue grew despite one fewer regular season home game than the first six months of the 2025 season. We believe that performance reflects the enduring strength of Braves country and the value fans place on experienced Braves baseball in person. We remain focused on making every visit to Truist Park memorable, from the atmosphere inside the ballpark to the broader experience surrounding each game. In fact, just a few weeks ago, the Information Display and Entertainment Association held its annual Idea Conference, in which it awards its Golden Matrix Awards to recognize superior achievement throughout the event presentation industry. Our incredibly talented fan experience team received three awards, including Best Overall Production across all sports, honoring overall operational and live entertainment excellence, Best Overall in Baseball, recognizing the top game presentation in the sport, and Best Tribute Video, awarded for the team's special feature production, Hank Aaron Tribute Video. We also continue to identify opportunities to utilize the ballpark beyond our regular season home game schedule, introducing the venue to new audiences while generating additional activity across the broader campus. During the second quarter, we hosted three Savannah Bananas games as well as an additional concert in May. These events attracted fans and visitors to Truist Park outside of traditional Braves games and contributed to strong growth in our other revenue. We hosted the first ever Braves Country Music Fest presented by Truist in June, which saw over 100,000 visitors attend a variety of concerts held in the stadium as well as out in the battery. This was in addition to the NOAA Concert held in late July and the upcoming Guns N' Roses Concert in September. We continue to work around the clock to make the most of our campus and ballpark and bring as many fans and visitors as we can. Beyond the ballpark, we're also seeing strong engagement with our fans, including demand for our new City Connect apparel. Taken together, the early response to Braves vision, continued support at Truist Park, and engagement with the Braves brand reinforce our confidence in the strength and reach of our fan base. We will continue investing in the experiences that bring fans closer to the team, whether they are watching from home, joining us at Truist Park, or engaging with the Braves throughout the community. With that, I'll turn the call over to Mike. Thank you, Derek.

It has now been just over one year since we acquired Pennant Park, and this quarter represents our first full year-over-year comparison with Pennant Park Reflected. We pursued the acquisition because in addition to the strategic and financial benefits, we believed it was a natural extension of our existing mixed-use portfolio and one that would create additional opportunities to drive long-term value. With a full year of Penn and Park operations, we are proud of the progress made and very much consider this to be a strategic piece of our total campus. Inclusive of Penn and Park, occupancy for our entire mixed-use portfolio remains above 93%, a substantial feat for a development of our size. We continue to see very strong engagement with tenants and in May of this year hit a new record high for our monthly tenant sales. That relationship and engagement allow our team to operate this portfolio with effective consistency. We are also uniquely positioned to work across our campus on tenant improvements and year to date have seen 130% increase in replacement tenant sales, reinforcing our ability to maximize the opportunities across the campus. In the second quarter, we saw three new grand openings for tenants and currently have 64,000 square feet Leasable space under redevelopment across a variety of tenants signifying the growth we continue to see. All of this reflects our continued commitment to developing a diverse and durable revenue base that complements our baseball operations. We remain focused on strengthening the tenant mix, leasing available space, and creating an environment where people want to work, live, visit, and spend time. Battery Atlanta saw 4.7 million visitors through the first half of 2026, a 6.5% increase from last year as our expanded offerings continue to drive visitors from across the southeast. Yet another example of our ability to utilize our campus throughout the year was the success of our World Cup viewing parties out on the plaza. Throughout the tournament, we welcomed more than 35,000 fans to the Battery to enjoy watching the games on our large outdoor screen in the plaza as we continue to look for new and innovative ways to maximize our campus. Our objective is not simply to add events or assets, but to pursue opportunities that fit within our broader ecosystem, enhance the experience for visitors, and make productive use of our facilities throughout the year. Taken together, the contribution from Penn and Park, the continued development of the Battery Atlanta, and the growing calendar of events at Truist Park demonstrate how we are building a more balanced and resilient business around our core baseball operations. We will continue to evaluate opportunities thoughtfully and invest in areas that we believe can create sustainable, long-term value for the organization. With that, I'll turn the call over to Jill.

Thanks, Mike. Before I begin, I want to remind everyone that a majority of our revenue is seasonal and aligned with the baseball season. During the second quarter of 2026, we played 34 regular season home games compared with 40 home games in the second quarter of 2025. In the second quarter, total revenue was $305 million compared with $312 million in the second quarter of 2025. As a reminder, the company manages its business through two reportable segments. Baseball, and Mixed Use Development. Our new Braves Vision business that we launched in Q2 is included within our baseball segment. Baseball revenue was $276 million in the second quarter of 2026, compared with $287 million in the second quarter of 2025. Baseball event revenue was $161 million, a decrease of $19 million from the prior year period primarily due to playing six fewer regular season home games during the quarter. Importantly, through the first six months of the year, baseball event revenue increased approximately $4 million despite one fewer home game. This reflects increased average attendance per regular season home game, contractual rate increases on season tickets, and favorable single game ticket sales. As Derek mentioned, we have updated our presentation of revenue from broadcast into a new media-related line. This is similar to how other peers in the media space report revenue. This revenue line includes not only the various revenue-generating pieces of Braves vision, but also national media, radio, and other smaller media-related items. This is consistent with how we have presented historically, as well as how we view the business model. Media-related revenue was $73 million in the second quarter, compared with $81 million in the prior year period. The decrease primarily reflects the timing of revenue recognition under Braves Vision's linear distribution agreements compared with our previous long-term local broadcasting agreement. As Derek stated earlier, we remain very encouraged by the early success of Braves Vision and are confident that we will replicate or exceed revenue from our prior third-party local rights partner on an annualized basis. Revenue from linear distribution agreements and other aspects of Braves vision should be viewed on an annualized basis because revenue recognition under these year-round distribution agreements differs from that of our previous local broadcasting agreement, which was largely aligned with the MLB season. In the case of Braves vision, our distribution agreements commenced at the time we signed our contracts with our various distribution partners at the start of the season. Distribution revenue payments will come in on a slower cadence and our traditional rights fee model payments were received, creating a sizable shift in the timing of cash receipts. Advertising revenue will be paid following the month when the ad airs. Direct-to-consumer payments will also be paid monthly. Since Braves Vision effectively launched on April 1st, the 2026 fiscal year will not reflect a full year of distribution revenue. However, most of the other revenue streams will be fully recognized in 2026. Retail and licensing revenue increased approximately $3 million to $22 million, primarily due to strong demand for the new City Connect apparel launched in April. Other baseball revenue increased approximately $13 million to $21 million, primarily due to the greater number of special events held at Truist Park, including three Savannah Bananas games and an additional concert during the quarter. Turning to our mixed-use development segment, revenue was $29 million in the second quarter up from $25 million in the prior year period. The increase was primarily driven by higher rental income and parking revenue, including increased tenant recoveries and new lease agreements. As Mike discussed, the quarter also represents our first full year-over-year comparison with Pennant Park included in both periods. Adjusted EBITDA was approximately $12 million in the second quarter of 2026, compared with $66 million in the second quarter of 2025. The decrease primarily reflects lower baseball revenue as well as an increase in baseball operating costs and SG&A expenses. Baseball operating costs increased due to higher major league player salaries, Braves vision production and administrative expenses, costs associated with special events at Truist Park, and increased revenue sharing and other shared MLB expenses. These factors were partially offset by improved mixed-use development performance. Our operating loss was $19 million in the second quarter of 2026, compared with operating income of $42 million in the second quarter of 2025, primarily due to the revenue and expense factors previously discussed. As of June 30, 2026, the company had $116 million of cash and cash equivalents. substantially all of our cash and cash equivalents are invested in U.S. Treasury securities, other government securities or government guaranteed funds, AAA-rated money market funds, and other highly rated financial and corporate debt instruments. Because of our borrowing capacity, we were able to offset the timing impact of the Braves Vision cash flow and still have approximately $205 million of available borrowing capacity under our league-wide credit facility and the team co-revolver as of June 30th. We remain in compliance with all financial debt covenants and believe our available sources of liquidity provide us with flexibility to support our operating needs and future priorities. And with that, operator, let's open the line for questions.

We will now begin the question and answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you're muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of David Joyce with Seaport Research Partners. Your line is open. Please go ahead.

Thank you. You've got your obvious on-field success showing through again. and you also have had a nice reception to the Braves Vision launch, but these have come with investments. Just wondering, is there some sort of cadence we should think about for this elevated baseball expense this quarter? Meaning, is there kind of a spike in the Braves Vision expenses for the launch and there could be a little bit less going forward? And then any other thoughts on the player salary trends would also be helpful. Thanks.

I'll talk about the expense trend, David. A Braves vision aside, you do typically see a spike in expense during Q2 and Q3 when the season is in full motion, we're paying the players, we're operating the stadium, et cetera. That trend is fairly consistent year over year, although you'd expect to see a spike each year as salaries continue to rise. As it relates to Braves Vision expenses, that is a new set of expenses that we have on our books this year that we haven't had before, as the previous model had revenue all coming in under our rights to the agreements.

So will there be elevated Braves Vision expenses going forward, or is this kind of like the level to expect it at?

Yeah, it's going to be an ongoing expense with expenses being slightly elevated during the season and some expenses in the off-season quarters as well. But you can expect this to be a go-forward trend.

Understood. Thanks.

Your next question comes from the line of Cameron Manson Perrone with Morgan Stanley. Your line is open. Please go ahead.

Thank you. Morning. I wanted to ask about your latest expectations on the salary tax deduction limitations that are expected to be implemented. And in particular, I'm curious, do you see the battery and that cash flow generation as being critical in that new framework in terms of supporting your ability to cover that incremental obligation? Or what other avenues might you have in terms of financing those changes? Thanks.

Mike Plant Hey, Cameron. This is Mike Plant. I think you're specifically asking about 162M. And look, we continue to have very positive and active conversations around the issue. The strong consensus of everyone is that it was unintended consequence, and we're very confident we'll have a legislative or a regulatory solution. So as we get that, we'll certainly share that information with you.

Got it. Thank you.

Your next question comes from the line of Barton Crockett with Rosenblatt. Your line is open. Please go ahead.

Okay, thanks for taking the question. I was wondering really about two things. First, as you look at kind of the future of the league-wide kind of media rights negotiations and reset that, you know, is coming up in probably a couple of years, you know, you guys have just launched Braves Vision. You know, one of the talking points is what's going to happen with local and the new kind of league set up. I was just wondering if you could give us a sense of what you guys would advocate for. I mean, do you think out of the gate it makes sense for your rights to be included in whatever the league does, or is that off the table now that you're starting Braves Vision and having such success? And in general, how do you expect the league to kind of accommodate the range of clubs that, you know, some of them don't have anything and some of them have really large business operations like yours? That's one question. And then the other question is I was just kind of curious about

So are you going to come up with a second question, or do you want me to answer first? This is Terry McGuirk. I'm sorry.

Go ahead.

Okay. I'll respond to your comments about the media business. I would say, on a general basis, we remain incredibly bullish on both our local and our national media. I think we've shown through Braves Vision the vitality of the local product, and while there is no firm plan by MLB at this point for any aggregation or change to how we exploit local rights, We are open to that, and that will be led by MLB. And in all likelihood, it will only happen if it's accretive to the entire business. On a national basis, as you know, these are long-term deals. The NBA just concluded one and went from approximately $2.7 billion a year to $7.7 billion a year, midpoint to midpoint of deals. baseball has been under a long-term agreement that ends 1-1-29. I think that will be a long-term deal well into the 30s, late 30s possibly. And obviously those negotiations are led by the commissioner. And I think he would also agree that There is a lot of untapped growth in the popularity of baseball, and we're looking to achieve that growth when we get to that deal.

Okay. I mean, if I could just follow up on that. I mean, with the Dodgers and the New York kind of sports networks being so formidable, do you see a potential for those to be included as part of a league deal or any thoughts around the importance of those to a league deal or whether they can continue to exist as their own separate entities as this evolves?

Well, I would say the status quo is just exactly as you just described, very strong local media offerings in the major markets. I would say suggest that should there be changes to where we all are at the present, it would be a 30-team activity and all 30 teams would be involved. As far as the present, until there are changes, we remain very bullish on what we've created and the success has been demonstrated.

Okay. All right. I'll leave it there. Thank you.

Your next question comes from the line of Matthew Harrigan with StoneX. Your line is open. Please go ahead.

Thank you. Clearly, your stock doesn't trade off quarterly earnings, but how much delta is there in the financials, if you could remind us, if you do have an extended playoff run, if you defy the Dodgers and the Brewers? And then secondly, At the MLB level, it feels like the international monetization of baseball is not nearly commensurate with the NFL or NBA. What constructive steps do you think the league can take in that direction, or do you think it's just a pretty heavy lift? I mean, clearly the NBA is in a different position, but just any thoughts in that regard? Thank you.

I'll answer the second question first on international, and I I would just parrot the Commissioner's comments publicly and to the owners in that he's very bullish on the prospects for international growth. I think the World Baseball Classic just begins to get at that growth and there will be a potential participation in the Olympics coming up in LA. So I think baseball is very mindful of international growth and is making an emphasis on that in the future. The first question was, again, postseason economics.

Is that your question?

How much? I mean, if you do have an extended playoff run, is that something that really will flow through the financials? And again, I know the financials are not terribly important in a certain sense, but just kind of what's the upside if you work through the Dodgers and the Brewers and you really have a nice run?

Well, if we get that far and we all hope and believe that we can, there will definitely be some upside. That all flows through the baseball event revenue segment in Q4. I certainly don't want to speculate on how much that will be. Don't want to jinx us that way. But if you were to go back and look at prior years in Q4, you know, what we did in those periods relative to how far we went in the series, that should give you a baseline. Of course, we think we're better at doing this now than we were back then. So hopefully we would perform even better than those years.

Great. Thank you.

We have reached the end of the Q&A session. I will now turn the call back to management for closing remarks.

Thank you. It's Derek. And just on behalf of everybody at the Braves organization, I want to thank you for joining today's call and look forward to seeing you on the next one. Thank you.

This concludes today's call. Thank you for attending. You may now disconnect.