Declining Cable Trends And MLB Audience Shrinkage Will Impair Returns

AN
AnalystLowTarget
AnalystLowTarget
Not Invested
Consensus Narrative from 5 Analysts
Published
07 Aug 25
Updated
07 Aug 25
AnalystLowTarget's Fair Value
US$45.00
2.8% undervalued intrinsic discount
07 Aug
US$43.76
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1Y
4.0%
7D
-1.8%

Author's Valuation

US$45.0

2.8% undervalued intrinsic discount

AnalystLowTarget Fair Value

Key Takeaways

  • Declining cable subscriptions and shifting demographics risk future revenue, eroding pricing power and audience size for broadcasting, attendance, and merchandising.
  • Heavy real estate spending, rising player costs, and dependence on team performance increase financial risk and threaten long-term profitability.
  • Diverse and growing revenue streams from real estate, media, ticketing, and events, supported by sustained fan demand and management's investment in team competitiveness, drive financial stability.

Catalysts

About Atlanta Braves Holdings
    Through its subsidiary, Braves Holdings, LLC, owns and operates the Atlanta Braves Major League Baseball Club in the United States.
What are the underlying business or industry changes driving this perspective?
  • The shift away from traditional cable television continues to erode the value of regional broadcast rights. Despite current streaming growth, further declines in cable subscriptions could significantly pressure future broadcasting revenue and reduce the company's pricing power as existing contracts come up for renewal.
  • Ongoing demographic changes with younger generations displaying decreasing interest in Major League Baseball create the risk of a shrinking future audience, which could drive lower long-term attendance, merchandising, and sponsorship revenue for the Atlanta Braves franchise.
  • High levels of new capital expenditures for real estate development, like those for Pennant Park and The Battery Atlanta, increase leverage and financial risk. If macroeconomic conditions worsen or tenant demand slows, net margins and earnings could be compressed by rising debt service costs and uncertain project returns.
  • The business relies heavily on sustained on-field team success to drive recurring revenues. Extended periods of competitive underperformance or player injuries could trigger material revenue declines from tickets, hospitality, sponsorship, and media, undermining earnings stability.
  • Escalating player payroll requirements combined with collective bargaining pressures in MLB threaten to sharply increase annual operating costs, eroding overall profitability and compressing net margins over the long term even if revenue expansion continues to moderate.

Atlanta Braves Holdings Earnings and Revenue Growth

Atlanta Braves Holdings Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?
  • This narrative explores a more pessimistic perspective on Atlanta Braves Holdings compared to the consensus, based on a Fair Value that aligns with the bearish cohort of analysts.
  • The bearish analysts are assuming Atlanta Braves Holdings's revenue will decrease by 0.2% annually over the next 3 years.
  • The bearish analysts are not forecasting that Atlanta Braves Holdings will become profitable in next 3 years. To represent the Analyst Price Target as a Future PE Valuation we will estimate Atlanta Braves Holdings's profit margin will increase from -3.2% to the average US Entertainment industry of 8.6% in 3 years.
  • If Atlanta Braves Holdings's profit margin were to converge on the industry average, you could expect earnings to reach $58.1 million (and earnings per share of $0.91) by about August 2028, up from $-21.4 million today. The analysts are largely in agreement about this estimate.
  • In order for the above numbers to justify the price target of the more bearish analyst cohort, the company would need to trade at a PE ratio of 65.8x on those 2028 earnings, up from -130.9x today. This future PE is greater than the current PE for the US Entertainment industry at 30.3x.
  • Analysts expect the number of shares outstanding to grow by 1.0% per year for the next 3 years.
  • To value all of this in today's terms, we will use a discount rate of 9.91%, as per the Simply Wall St company report.

Atlanta Braves Holdings Future Earnings Per Share Growth

Atlanta Braves Holdings Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?
  • The Battery Atlanta's mixed-use development continues to expand, with strong tenant demand, new lease activity, and the successful integration of recent acquisitions like Pennant Park, which is likely to drive higher recurring rental and sponsorship revenue, boosting overall top-line and earnings stability.
  • The company's robust local and streaming media rights agreements with FanDuel and Gray Media have expanded the Braves' reach to one of the largest MLB territories, with strong evidence of high streaming engagement and incremental broadcast audiences, which can increase media revenue and improve margins.
  • Premium and regular season tickets, as well as hospitality offerings, are sold out for the remainder of the year, and the organization reports consistently strong fan demand and high season ticket renewal rates, supporting reliable ticketing revenue and resilient cash flow.
  • Broadly positive trends in experiential spending and live event attendance, especially with the Braves hosting major events like the MLB All-Star Game and breaking attendance records at neutral-site games, suggest enduring demand that can lift merchandise, concessions, and event revenue.
  • Management indicates confidence in returning to strong on-field performance as injured key players are expected back, alongside a willingness to invest further in player payroll, which could restore or enhance competitive stature and maintain or grow sponsorship, ticketing, and related revenues.

Valuation

How have all the factors above been brought together to estimate a fair value?

  • The assumed bearish price target for Atlanta Braves Holdings is $45.0, which represents the lowest price target estimate amongst analysts. This valuation is based on what can be assumed as the expectations of Atlanta Braves Holdings's future earnings growth, profit margins and other risk factors from analysts on the more bearish end of the spectrum.
  • However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $69.0, and the most bearish reporting a price target of just $45.0.
  • In order for you to agree with the bearish analysts, you'd need to believe that by 2028, revenues will be $676.7 million, earnings will come to $58.1 million, and it would be trading on a PE ratio of 65.8x, assuming you use a discount rate of 9.9%.
  • Given the current share price of $44.72, the bearish analyst price target of $45.0 is 0.6% higher. The relatively low difference between the current share price and the analyst bearish price target indicates that they believe on average, the company is fairly priced.
  • We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

How well do narratives help inform your perspective?

Disclaimer

AnalystLowTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystLowTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystLowTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

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