Posts
Proof in Volatility
Post 4: The 2025 Down Year
The Hidden Engine Series
By Randy Gipe | February 2026
Now comes the real test: Does the model work when baseball doesn’t?
The 2025 Atlanta Braves finished 76-86. Fourth place in the NL East. Missed the playoffs for the first time in years. Home attendance dropped. The on-field product disappointed.
If the team were the only asset, 2025 would have been a financial disaster.
Instead, it was the most profitable year in Atlanta Braves Holdings history.
This is the proof. The Battery doesn’t just supplement baseball revenue. It stabilizes it. Protects it. Makes owner wealth independent of wins and losses.
Let’s see exactly how.
The On-Field Reality: A Losing Season
There's no sugarcoating it. The 2025 Braves were bad.
📉 THE 2025 BASEBALL SEASON
Final Record: 76-86 (.469 winning percentage)
Division Standing: 4th place, NL East (19 games back)
Playoff Result: Did not qualify
Home Attendance:
- 2025: 26,633 average per game (81 home games)
- 2024: ~28,469 average per game
- Change: -6.5% drop (~1,836 fewer fans per game)
- Total 2025 home attendance: ~2.16 million
Context:
- The Braves had made the playoffs 6 consecutive years (2018-2024 except COVID-shortened 2020)
- 2021 World Series champions
- Expectations were high coming into 2025
- Key injuries, underperformance, tough division
What a "typical" team would expect financially:
- Ticket revenue down (fewer fans, fewer premium seats sold)
- Concessions/merchandise down (fewer bodies in stadium)
- Playoff revenue: $0 (no postseason home games)
- Sponsorship pressure (brands want playoffs, national TV exposure)
- Season ticket renewals at risk (2026 sales impacted)
Bottom line: This should have hurt. A lot.
What Actually Happened: Record Revenue, Exploding Profit
Here are the full-year 2025 results (released Feb 25, 2026):
| Metric | 2024 | 2025 | Change |
|---|---|---|---|
| Total Revenue | $670M | $732M | +9% / +$62M |
| Baseball Revenue | $595M | $626M | +5% / +$31M |
| Mixed-Use Revenue | $67M | $98M | +45% / +$31M |
| Total Adj. OIBDA | $40M | $108M | +172% / +$68M |
| Operating Loss | -$40M | -$14M | Narrowed by $26M |
Wait. The team finished 76-86, attendance dropped, no playoffs... and revenue was up 9%? Profit nearly tripled?
Yes. That's the model.
Breaking Down the Baseball Resilience
Baseball revenue held up surprisingly well despite the losing record. Here's why:
⚾ WHY BASEBALL REVENUE GREW +5%
1. Contractual Revenue Locked In
- Local media rights: Multi-year contract with Bally Sports South (though Braves are transitioning to BravesVision, team-owned platform launched Feb 2026)
- Rights fees paid annually regardless of record
- 2025 was final year of old RSN deal (~$60-80M estimated)
2. National Media Revenue (MLB Central Pool)
- All 30 teams share equally: ~$90-100M per team from national TV (ESPN, Fox, TBS, etc.)
- Unaffected by individual team performance
- Distributed regardless of wins/losses
3. Sponsorship Contracts Multi-Year
- Truist (naming rights): Reported $10M/year, 10-year deal (through 2027+)
- Jersey patch, in-stadium signage: Most are multi-year deals locked in
- Some sponsors might renegotiate lower if losing continues, but 2025 was protected
4. Ticket Pricing Held / Premium Mix
- Despite 6.5% attendance drop, per-cap revenue likely rose
- Season ticket holders (who pay upfront) make up significant base
- Premium seating (suites, club seats) mostly sold annually, not per-game
- Dynamic pricing on single-game tickets captures demand for marquee matchups (Yankees, Mets, Phillies visits)
5. Concessions/Merchandise Baseline
- Even 2.16M fans (down from 2.3M) is still massive foot traffic
- Per-fan spending relatively stable
- Battery retail (team store, surrounding shops) supplements game-day merch
Result: Baseball revenue grew modestly (+5%, +$31M) despite the bad season. Contractual protections + multi-year deals + premium seating locked in most of the downside.
But this alone doesn't explain the profit explosion. Baseball OIBDA was actually down or flat (Q4 was negative due to off-season, no games). The profit surge came from the other side.
The Battery: Explosion in a Down Year
Mixed-Use revenue grew +45% in 2025. From $67M to $98M. Added $31M in revenue — the same dollar amount as the baseball increase, but from a much smaller base.
And because margins are ~71%, that $31M in Mixed-Use revenue added ~$22M in owner cash (vs. baseball's $31M revenue adding maybe $2-3M after costs/sharing).
🏢 WHY MIXED-USE EXPLODED +45%
1. Pennant Park Acquisition (April 2025)
- $93.7M cash purchase of 6-building office complex
- In-place leases = immediate rental income (no construction delay, no lease-up risk)
- Effective 9 months of 2025 (April-December)
- Contributed estimated $15-20M of the $31M revenue increase
- High margins (~70-75% on office rent) = ~$12-15M OIBDA contribution
2. Organic Growth in Existing Battery
- New lease commencements: Additional office tenants, retail expansions
- Rent escalations: Most leases have annual 2-3% increases built in
- Overage rent: Retail tenants pay percentage of sales above thresholds — if restaurants/shops perform well, Braves get extra
- Occupancy improving: Phase III office buildings (completed 2023-2024) reaching stabilized occupancy
3. Parking Revenue Growth
- Game-day parking: Even with 6.5% attendance drop, parking revenue resilient (closer fans still drive, dynamic pricing)
- Non-game-day parking: Office workers, hotel guests, Battery restaurant/entertainment visitors
- Year-round revenue stream: 365 days of parking fees vs. 81 game days
4. Hotel Performance Stable
- Live! by Loews hotel (264 rooms)
- Braves earn ground lease + revenue share
- Business travel, regional visitors (not just Braves fans)
- Concerts, events at Battery plaza keep rooms filled year-round
5. Sponsorship/Advertising (Battery-Specific)
- Signage throughout Battery (not stadium, so not "team sponsorships")
- Plaza naming rights, building naming, event sponsorships
- These are real estate deals, not baseball deals — separate sales process
The key insight: None of this was affected by the 76-86 record. Office leases to Comcast, Google, SunTrust? They don't care if the Braves win or lose. Hotel bookings in January (off-season)? Unrelated. Parking for Battery restaurants on a Tuesday night? Independent of baseball.
The Battery operated at full capacity while the team struggled.
The Profit Math: Why OIBDA Tripled
Here's the consolidated Adjusted OIBDA breakdown:
| Segment | 2024 OIBDA | 2025 OIBDA | Change |
|---|---|---|---|
| Baseball | ~$33M | ~$39M | +$6M (modest) |
| Mixed-Use | $45M | $69M | +$24M (massive) |
| Total | $40M* | $108M | +$68M (+172%) |
*2024 total includes some corporate overhead allocation and adjustments. Full-year segment breakouts approximated from 10-K/10-Q disclosures.
The story in the numbers:
- Baseball OIBDA grew slightly despite down year (locked-in contracts helped)
- Mixed-Use OIBDA grew 53% — high margins + Pennant Park
- Mixed-Use went from 61% of total OIBDA (2024) to 64% of total OIBDA (2025)
- The Battery is now generating nearly 2/3 of company-wide profit
💰 THE STABILIZATION EFFECT
Without The Battery (hypothetical):
- 2025 would be baseball-only: $626M revenue, ~$39M OIBDA
- Down from strong playoff years (2023-2024 playoffs generated extra revenue)
- Likely negative headline: "Braves profits plunge as team misses playoffs"
- Pressure on ownership to cut payroll (vicious cycle)
With The Battery (actual):
- Total revenue $732M (up 9%)
- Total OIBDA $108M (up 172%)
- Headline: "Braves Holdings profit nearly triples despite losing season"
- No pressure to cut payroll — real estate subsidizes baseball flexibility
The moat in action: The Battery makes the Braves financially independent of on-field results. Owners can afford to invest in talent even in down years, knowing the development cash flow covers shortfalls.
Comparing to "Traditional" Baseball Revenue Models
Let's contrast the Braves (Battery model) with teams that rely more heavily on baseball-only revenue:
⚖️ BRAVES vs. TRADITIONAL MODEL
Traditional Model (Small/Mid-Market Team):
- Revenue ~80-90% from baseball operations (tickets, local TV, concessions)
- Profit margins 5-15% (good years with playoffs)
- Down year = profit collapse (no playoffs = -20% to -40% OIBDA)
- Owner response: Cut payroll to stabilize finances
- Fan anger: "Ownership won't spend to win"
- Vicious cycle: Less talent → worse record → lower revenue → more cuts
Braves Model (Battery-Subsidized):
- Revenue ~14% from Mixed-Use (2025: $98M / $732M)
- But that 14% generates ~64% of profit (high margins)
- Down year = Mixed-Use stabilizes (2025: +45% growth offsets baseball weakness)
- Owner response: No need to panic-cut payroll (real estate covers)
- Flexibility maintained: Can invest in free agents for 2026 bounceback
- Virtuous cycle: Stable finances → patient ownership → competitive roster
Example: Oakland Athletics (no development, revenue-sharing dependent, small market)
- Down years = immediate payroll cuts, fire sales
- Owner profits from revenue-sharing but doesn't reinvest
- Fans alienated, attendance craters further
Contrast Braves 2025:
- Down year, but ownership can afford patience
- 2026 payroll not slashed — competitive roster maintained
- Battery cash flow gives runway to rebuild
The Fan Experience Paradox
There's an interesting wrinkle here: Does the Battery make ownership too comfortable with losing?
The argument for concern:
- If owners make $69M from Mixed-Use regardless of wins/losses, where's the incentive to spend on payroll?
- Fans pay for tickets to watch winning baseball, but Battery revenue comes from office workers who don't care about the team
- Could lead to "Tampa Bay model" — smart front office, low payroll, competitive but cheap
The counter-argument (what Braves have done):
- Braves payroll 2025: ~$220M (8th-highest in MLB, above CBT threshold)
- They're spending aggressively despite Battery cushion
- Battery cash flow enables spending, not replaces it
- Long-term: Winning drives Battery traffic too (more fans = more Battery restaurant/retail visits)
Verdict: So far, Braves ownership is using Battery profits to subsidize baseball competitiveness, not pocket them at fans' expense. But this could change with future ownership or if losing persists.
What 2025 Proves
The 2025 season was the ultimate stress test of the Battery model.
✅ VALIDATED
The thesis from Post 0: Stadium real estate is a high-margin, year-round cash engine independent of on-field performance.
The 2025 proof:
- 76-86 record (worst since Battery opened)
- Attendance down 6.5%
- No playoffs (first time since 2017)
- Yet: Revenue up 9%, profit up 172%, operating loss narrowed
Why it worked:
- Baseball revenue resilient (locked-in contracts)
- Mixed-Use revenue exploded (+45%, Pennant Park + organic growth)
- High margins (71%) mean incremental Battery revenue drops nearly pure profit
- Ring-fence protection (Post 3) kept all Mixed-Use cash owner-controlled
The model doesn't just work in good times. It works especially well in bad times. That's the definition of a moat.
Looking Ahead: 2026 and Beyond
The 2025 results set up an interesting 2026:
Baseball side:
- Braves have payroll flexibility to add talent (Battery cash flow + 2025 profitability)
- 2026 season expectations reset (lower than 2025, easier to exceed)
- BravesVision launch (Feb 2026) — team-owned local TV platform gives more control over media revenue
Battery side:
- Pennant Park full-year contribution (was only 9 months in 2025)
- Potential new lease commencements (ongoing)
- Residential phases under construction (more rental income streams)
- Could approach $110-120M Mixed-Use revenue in 2026
If Braves bounce back to 90+ wins and playoffs in 2026:
- Baseball revenue up 10-15% (playoff gates, higher attendance, buzz)
- Mixed-Use continues compounding (+20-25% organic growth possible)
- Total OIBDA could exceed $140-160M
- This would make Atlanta Braves Holdings one of the most profitable franchises in MLB despite mid-market geography
The compounding effect: Battery profits can fund baseball payroll increases, which improve on-field results, which drive more Battery traffic (fans visit restaurants before/after games), which generates more Battery profit. Virtuous cycle.
The Broader Lesson for Sports Economics
The 2025 Braves season is a case study for every sports franchise:
📚 WHAT OTHER TEAMS SHOULD LEARN
1. On-Field Volatility Is Inevitable
- Injuries happen. Prospects bust. Divisions get tougher. Records fluctuate.
- Teams that depend 100% on baseball revenue suffer in down years
- Financial instability forces bad decisions (panic trades, payroll cuts)
2. Real Estate Stabilizes Cash Flow
- Office leases don't care about wins/losses
- Hotel bookings continue year-round
- Retail/restaurant traffic has baseline (local residents, business travelers)
- This creates financial runway during rebuilds
3. The Battery Model Is Replicable
- Requires: Blank-slate land, public infrastructure support, ownership control
- But: Every new stadium should include integrated development now
- Braves proved it works — others are copying (Phillies, Rangers, Rams)
4. Players Should Worry
- If owners have $70M+ in ring-fenced real estate cash, their "need" for baseball revenue decreases
- In labor negotiations, this shifts leverage toward owners
- Post-2026 CBA talks will be influenced by how many teams have Battery-style models
Next: The Phillies Parallel
The Braves built the template. The 2025 season proved it works. Now we look at who's copying it.
Post 5 examines the Philadelphia Phillies' $2.5 billion South Philadelphia Sports Complex redevelopment — including "Phillies Plaza" and massive mixed-use anchored by Citizens Bank Park. Same playbook, private ownership structure (vs. Braves public), but same economic logic.
The Battery blueprint is spreading. Fast.
SOURCES
2025 Season Data:
- Final record, standings: MLB.com official standings (2025 season)
- Attendance figures: ESPN.com attendance database, Braves official releases
Financial Results:
- Atlanta Braves Holdings earnings release: Q4 & FY 2025 (Feb 25, 2026)
- 10-Q filings (Q1-Q3 2025): Segment revenue/OIBDA breakdowns
- 10-K 2024 (filed March 2025): Prior-year comparative baselines
Revenue Resilience Analysis:
- Local media contracts: Sports Business Journal reports, Braves announcements on BravesVision launch
- National media pool: MLB official distributions (~$90-100M per team estimates, widely reported)
- Sponsorship deals: Truist naming rights (public announcements), jersey patch deals (MLB.com)
Pennant Park Impact:
- Acquisition details: 10-Q Q2 2025, Note 3 (Business Combinations)
- Revenue contribution: Calculated from 9-month and Q4 segment trends
Comparative Analysis:
- Small-market team struggles: Public reporting on Oakland A's, Tampa Bay Rays economics (Forbes, Athletic)
- Payroll data: MLB luxury tax tracker (Cot's Contracts, Spotrac)
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