The Braves enjoyed a $124-million increase in revenue last year, described as “astounding” by team owner Liberty Media, but are set to open this season with the player payroll lower than a year ago.
Braves Chairman Terry McGuirk was asked about that disconnect in a wide-ranging interview with three Atlanta Journal-Constitution reporters in a SunTrust Park conference room Tuesday.
He cited the increased costs associated with the new stadium complex, as well as the economies of a young roster, and vowed that higher payrolls will come in future seasons.
“There aren’t very many sports franchises that have had that kind of revenue growth in one year,” McGuirk said. “On the other side of the ledger, there is a lot of debt, there are a lot of new expenses.
“Just running this stadium is much, much more expensive. … At the end of the day, there’s not an awful lot more profitability at this point in time as we work through some of the debt repayment and figuring out what it costs to run this more expensive operation. That being said, it will (become) more profitable.”
He said the Braves will be in position to spend more freely next offseason, at which time they will have shed the contracts they took on to unload Matt Kemp and at which time the mixed-use development adjacent to SunTrust Park will be more established.
“There will be very few teams that have as much to spend in the marketplace next winter as the Atlanta Braves,” McGuirk said. “The opportunity to spend is there, but it’s going to be done judiciously and sequentially when (general manager Alex Anthopoulos) says it’s time. If we were to bring in a raft of veteran players and stick them in the position-player positions today, Alex would be blocked from bringing (young) guys along.
“We’re going to let these young players come up, but we’re going to supplement whenever it’s time to put the pedal to the metal. We feel like we have the capacity to do it.”
The Braves opened last season with a major-league player payroll of $126.1 million. They will open this season with a payroll of $116 million, according to calculations by the AJC. That includes only $79.75 million for players on the 25-man opening-day roster, $33 million in "dead money" to released players Adrian Gonzalez and Scott Kazmir and $3.29 million in salaries of players who open the season on the disabled list.
McGuirk didn’t reveal how high he sees the Braves’ payroll going in the future.
“I don’t have a number as to what that is,” he said. “We’re not where we’re going to be, but that’s not where we need to be right now because it’s not appropriate. There will come a time where it will be appropriate to spend.”
In certified financial filings with the U.S. Securities and Exchange Commission this month, Liberty Media disclosed that the Braves generated revenue of $386 million last year, a 47-percent increase from $262 million in 2016.
Liberty’s filing also reported sharply higher expenses for the Braves and showed the team with an operating profit last year of $7 million before depreciation, amortization and stock-based compensation.
Liberty said the Braves carried debt of $667 million as of Dec. 31, primarily loans for construction of the stadium, mixed-use development and new spring-training facility.
As one of the few pro sports teams with publicly traded stock, the Braves are required to make quarterly disclosures of their financial results.