The Braves are chalking up one more loss to pitcher Derek Lowe.
Team owner Liberty Media, in a financial report filed this week, said the Braves finished $6 million in the red last year — a loss the company attributed to the October trade of Lowe, a 17-game loser last season, to Cleveland.
The Braves sent $10 million to the Indians in the trade, an expenditure that counted against the Braves’ 2011 financial results even though Cleveland will use the money toward Lowe’s 2012 salary.
“This one transaction had the impact of swinging [the Braves’] adjusted OIBDA from earnings to a loss,” Liberty stated in its annual report.
OIBDA stands for “operating income before depreciation and amortization.” Adjusted OIBDA also excludes certain one-time charges, and Liberty says it is “an important indicator of the operational strength and performance of our businesses.”
Liberty’s filing disclosed that the Braves had revenue of $208 million last year, up 2.5 percent from $203 million in 2010. The Braves posted revenue of $206 million in 2009.
Liberty reported the Braves’ adjusted OIBDA in the black for 2009 and 2010 — profits of $8 million and $6 million, respectively. If not for the Lowe trade, the 2011 results would have shown a profit of $4 million.
However, Liberty noted that the trade “will free up additional salary in 2012 to be utilized in the acquisition of additional player talent.”
Since Lowe’s contract calls for a $15 million salary this year, the Braves gained $5 million in payroll flexibility by trading the 15-year veteran for a minor-league pitcher. Lowe was 9-17 with a 5.05 ERA for the Braves last season.
The Braves have made no major acquisitions since the end of last season. Terry McGuirk, the Braves’ chairman and CEO, recently said the team has set a player payroll budget of $94 million, leaving about $4 million still to spend on acquisitions before or during the season.
The $94 million includes the $10 million that went to the Indians toward Lowe’s salary. While Liberty officially accounted for it as a 2011 expense, the Braves unofficially are viewing it as a part of their 2012 payroll. So in terms of players actually on the team, the Braves effectively will have an $84 million payroll budget.
Liberty avoided using Lowe’s name in the financial disclosures regarding the Braves, referring to him as “one of their pitchers,” but provided details of the trade that left no doubt who the company was referring to.
Liberty offered no insight into how long the Colorado-based conglomerate intends to own the team, which it acquired from Time Warner in 2007 as part of a larger transaction driven by tax benefits.
In a conference call that Liberty executives held with investment analysts Thursday, the Braves were mentioned once. That was in the context of a discussion about taxes.
Liberty CEO Greg Maffei cited the Braves and a stake in satellite radio company Sirius XM as examples of situations where Liberty would owe capital-gains taxes if the assets were sold. But Maffei offered no signal of an impending sale, saying, “We will be able to decide when to choose, if ever, to [trigger the capital-gains taxes].”
Maffei’s comment does signal that Liberty believes the Braves have increased in value since 2007.
Liberty, chaired by John Malone, has a wide range of holdings in the media, communications and entertainment businesses.
The Braves are a tiny piece of the conglomerate. Liberty Media, which includes premium cable network Starz, reported overall revenue of $3 billion last year and adjusted operating income before depreciation and amortization of $1.1 billion, while corporate sibling Liberty Interactive, which includes shopping network QVC, reported $9.6 billion in revenue and $1.8 billion in OIBDA.
