Bally's CorpBALY
Bally's Corp Fair Value Disclosure
FAIR VALUE MEASUREMENTS
Except for the assets and liabilities held for sale and the corresponding impairment described in Note 11, there were no assets and liabilities measured at fair value on a nonrecurring basis. The following tables summarize the Company’s assets and liabilities measured at fair value on a recurring basis. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement:
| December 31, 2024 | |||||||||||||||||||||||
| (in thousands) | Balance Sheet Location | Level 1 | Level 2 | Level 3 | |||||||||||||||||||
| Assets: | |||||||||||||||||||||||
| Cash and cash equivalents | Cash and cash equivalents | $ | 171,233 | $ | — | $ | — | ||||||||||||||||
| Restricted cash | Restricted cash | 60,021 | — | — | |||||||||||||||||||
| Investment in GLPI partnership | Other assets | — | 20,418 | — | |||||||||||||||||||
| Derivative assets not designated as hedging instruments: | |||||||||||||||||||||||
| Cross currency swaps | Prepaid expenses and other current assets | — | 4,871 | — | |||||||||||||||||||
| Cross currency swaps | Other assets | — | 615 | — | |||||||||||||||||||
| Derivative assets designated as hedging instruments: | |||||||||||||||||||||||
| Interest rate contracts | Prepaid expenses and other current assets | — | 340 | — | |||||||||||||||||||
| Interest rate contracts | Other assets | — | 336 | — | |||||||||||||||||||
| Cross currency swaps | Prepaid expenses and other current assets | — | 148 | — | |||||||||||||||||||
| Cross currency swaps | Other assets | — | 13,181 | — | |||||||||||||||||||
| Total derivative assets at fair value | — | 19,491 | — | ||||||||||||||||||||
| Total assets | $ | 231,254 | $ | 39,909 | $ | — | |||||||||||||||||
| Liabilities: | |||||||||||||||||||||||
| Contingent consideration | Other long-term liabilities | $ | — | $ | — | $ | 59,923 | ||||||||||||||||
| Derivative liabilities not designated as hedging instruments: | |||||||||||||||||||||||
| Sinclair Performance Warrants | Other long-term liabilities | — | — | 58,668 | |||||||||||||||||||
| Cross currency swaps | Other long-term liabilities | — | 11,174 | — | |||||||||||||||||||
| Derivative liabilities designated as hedging instruments: | |||||||||||||||||||||||
Interest rate contracts | Accrued and other current liabilities | — | 1,855 | — | |||||||||||||||||||
| Interest rate contracts | Other long-term liabilities | — | 13,372 | — | |||||||||||||||||||
| Accrued and other current liabilities | — | 1,189 | — | ||||||||||||||||||||
| Other long-term liabilities | — | 1,624 | — | ||||||||||||||||||||
| Total derivative liabilities at fair value | — | 29,214 | 58,668 | ||||||||||||||||||||
| Total liabilities | $ | — | $ | 29,214 | $ | 118,591 | |||||||||||||||||
| December 31, 2023 | |||||||||||||||||||||||
| (in thousands) | Balance Sheet Location | Level 1 | Level 2 | Level 3 | |||||||||||||||||||
| Assets: | |||||||||||||||||||||||
| Cash and cash equivalents | Cash and cash equivalents | $ | 163,194 | $ | — | $ | — | ||||||||||||||||
| Restricted cash | Restricted cash | 152,068 | — | — | |||||||||||||||||||
| Investment in GLPI partnership | Other assets | — | 14,146 | — | |||||||||||||||||||
| Derivative assets designated as hedging instruments: | |||||||||||||||||||||||
| Interest rate contracts | Prepaid expenses and other current assets | — | 5,356 | — | |||||||||||||||||||
| Cross currency swaps | Prepaid expenses and other current assets | — | 4,174 | — | |||||||||||||||||||
| Cross currency swaps | Other assets | — | 6,477 | — | |||||||||||||||||||
| Total derivative assets at fair value | — | 16,007 | — | ||||||||||||||||||||
| Total assets | $ | 315,262 | $ | 30,153 | $ | — | |||||||||||||||||
| Liabilities: | |||||||||||||||||||||||
| Contingent consideration | Other long-term liabilities | $ | — | $ | — | $ | 58,580 | ||||||||||||||||
| Derivatives not designated as hedging instruments: | |||||||||||||||||||||||
| Sinclair Performance Warrants | Other long-term liabilities | — | — | 44,703 | |||||||||||||||||||
| Derivative liabilities designated as hedging instruments: | |||||||||||||||||||||||
| Interest rate contracts | Other long-term liabilities | — | 21,492 | — | |||||||||||||||||||
| Cross currency swaps | Accrued and other current liabilities | — | 1,225 | — | |||||||||||||||||||
| Cross currency swaps | Other long-term liabilities | — | 29,376 | — | |||||||||||||||||||
| Total derivative liabilities at fair value | — | 52,093 | 44,703 | ||||||||||||||||||||
| Total liabilities | $ | — | $ | 52,093 | $ | 103,283 | |||||||||||||||||
There were no transfers made among the three levels in the fair value hierarchy for the years ended December 31, 2024 and 2023.
The following table summarizes the changes in fair value of the Company’s Level 3 assets and liabilities:
| ( in thousands) | Sinclair Performance Warrants | Contingent Consideration | |||||||||
| Balance as of December 31, 2022 | $ | 36,987 | $ | 8,220 | |||||||
| Additions in the period (acquisition fair value) | — | 58,580 | |||||||||
| Reductions in the period | — | (9,292) | |||||||||
| Change in fair value | 7,716 | 1,072 | |||||||||
| Balance as of December 31, 2023 | 44,703 | 58,580 | |||||||||
| Change in fair value | 13,965 | 1,343 | |||||||||
| Balance as of December 31, 2024 | $ | 58,668 | $ | 59,923 | |||||||
The gains (losses) recognized in the consolidated statements of operations for derivative instruments during the years ended December 31, 2024, 2023 and 2022 are as follows:
| Consolidated Statements of Operations Location | Year Ended December 31, | ||||||||||||||||||||||
| (in thousands) | 2024 | 2023 | 2022 | ||||||||||||||||||||
| Derivatives not designated as hedging instruments | |||||||||||||||||||||||
| Sinclair Performance Warrants | Other non-operating income (expense), net | $ | (13,965) | $ | (7,716) | $ | 32,577 | ||||||||||||||||
| Cross currency swaps | General and administrative(1) | (9,078) | — | — | |||||||||||||||||||
| Derivatives designated as hedging instruments | |||||||||||||||||||||||
| Interest rate contracts | Interest expense, net | $ | 11,031 | $ | 1,953 | $ | — | ||||||||||||||||
| Cross currency swaps | Interest expense, net | 3,658 | 1,350 | — | |||||||||||||||||||
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(1) Amounts included in General and administrative during during the year ended December 31, 2024 as a result of the Company’s dedesignation of its EUR-GBP cross currency swaps as net investment hedges. Subsequent changes in fair value will be reported within Other non-operating income (expense), net.
Interest Rate Contracts and Cross Currency Swaps
The fair values of interest rate contracts and cross currency swap assets and liabilities are classified within Level 2 of the fair value hierarchy as the valuation inputs are based on estimates using currency spot and forward rates and standard pricing models that consider the value of future cash flows as of the balance sheet date, discounted to a present value using discount factors that match both the time to maturity and currency of the underlying instruments. These standard pricing models utilize inputs that are derived from or corroborated by observable market data such as interest rate yield curves as well as currency spot and forward rates. When designated as hedging instruments, changes in the fair value of these contracts are reported as a component of other comprehensive income (loss). When not designated as hedging instruments, changes in fair value of these contracts are reported within Other non-operating income (expense), net in the consolidated statements of operations.
Sinclair Performance Warrants
Sinclair Performance Warrants are accounted for as a derivative instrument classified as a liability within Level 3 of the hierarchy as the warrants are not traded in active markets and are subject to certain assumptions and estimates made by management related to the probability of meeting performance milestones. These assumptions and the probability of meeting performance targets may have a significant impact on the value of the warrant. The Performance Warrants are valued using an option pricing model, considering the Company’s estimated probabilities of achieving the performance milestones for each tranche. Inputs to this valuation approach include volatility between 40% and 67%, risk free rates between 3.84% and 4.79%, the Company’s common stock price for each period and expected terms between 1.5 and 6.3 years. The fair value is recorded within “Other long-term liabilities” in the consolidated balance sheets.
Contingent consideration
Contingent consideration related to acquisitions is recorded at fair value as a liability on the acquisition date and subsequently remeasured at each reporting date, based on significant inputs not observable in the market, which represents a Level 3 measurement within the fair value hierarchy. The remeasurements are based primarily on the expected probability of achievement of the contingency targets which are subject to management’s estimates. These changes in fair value are recognized within “Other, non-operating expenses, net” in the consolidated statements of operations.
In connection with the acquisitions of SportCaller and Monkey Knife Fight (“MKF”) in the first quarter of 2021, the Company recorded contingent consideration of $58.7 million. During the second quarter of 2023, the Company, in satisfaction of contingencies related to the respective acquisition agreements, settled the remaining contingent consideration of $9.3 million, comprised of 386,926 immediately exercisable penny warrants, 103,656 shares of Bally’s Corporation common stock and a de minimis payment in cash.
In connection with the acquisition of Bally’s Golf Links on September 12, 2023, the Company recorded contingent consideration, which was valued at $59.9 million as of December 31, 2024. Refer to Note 7 “Business Combinations” for further information.
Investment in GLPI Partnership
The Company holds a limited partnership interest in GLP Capital, L.P., the operating partnership of GLPI. The investment is reported at fair value based on Level 2 inputs, with changes to fair value included within “Other non-operating income (expense), net” in the consolidated statements of operations.
Long-term debt
The fair value of the Company’s Term Loan Facility and unsecured notes are estimated based on quoted prices in active markets and are classified as Level 1 measurements. The fair value of the Revolving Credit Facility approximates its carrying amount as it is revolving, variable rate debt, and is also classified as a Level 1 measurement. In the table below, the carrying amounts of the Company’s long-term debt is net of debt issuance costs and debt discounts. Refer to Note 17 “Long-Term Debt” for further information.
| December 31, 2024 | December 31, 2023 | ||||||||||||||||||||||
| (in thousands) | Carrying Amount | Fair Value | Carrying Amount | Fair Value | |||||||||||||||||||
| Term Loan Facility | $ | 1,858,800 | $ | 1,792,804 | $ | 1,871,330 | $ | 1,888,100 | |||||||||||||||
5.625% Senior Notes due 2029 | 738,517 | 587,813 | 736,447 | 596,250 | |||||||||||||||||||
5.875% Senior Notes due 2031 | 721,456 | 535,631 | 719,858 | 570,544 | |||||||||||||||||||
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.