Q4 2019 Earnings Call
Ladies and gentlemen, thank you for standing by welcome to the Liberty Media Corporation 2018, Q4 earnings call. During the presentation. All participants will be in listen only mode. Afterwards, we will conduct a question answer session at the time. If you have a question. Please press star one on your telephone as a reminder, this conference.
As being recorded February 26 I.
I would now like to turn the conference over to Courtney Charvet Chief portfolio off for certain senior Vice President of Investor Relations. Please go ahead.
Thank you before we begin to remind everyone that this call include certain forward looking.
Securities Litigation Reform Act.
Actual events or results could differ materially due to a number of risks and uncertainties.
As mentioned in our most recent form 10-K filed.
These forward looking statements speak only as of today this call and the really gotten liberty tripadvisor expressly disclaim any obligation or undertaking disseminate any updates or revisions to any forward looking statement contained herein drugs like any change in liberty media or Liberty, Tripadvisor and expectations with regard to or any change my best conditions are circuit.
Yes on which any such statements based on today's call.
Non-GAAP financial measures, including adjusted OIBDA, and adjusted even though the required definitions and reconciliations for Liberty media Sirius XM schedules why didn't you can be found at the end of the earnings press release issued today, which is available.
Now I'd like to turn the call over to Liberty, President and CEO break Msas.
Good morning, welcome to all of you on the call.
Hey, speaking besides myself will have watched chairman and CEO Chase Carey.
Liberty, Chief Accounting Officer, and principal financial Officer, Brian winning.
During the June I will also be available to answer questions related to Liberty trip advisor.
Getting Liberty Sirius XM.
We continue our purchase just off the stock.
And bought an additional $55 million from the period up number for us to January 31st calling buying both our section eight electronics encase years.
Hi, I wouldn't notice the first time, we bought ph years. In addition to case and we just look out in the marketplace. What is a more attractive value in determining our repurchases.
If you look through the underlying Sirius XM shares our look through price was $5 an 11 cents over this period price, we find pretty attractive for them to watch to restock.
As I said before it'll continue to say, we continue to take advantage of the discount target ebay.
And as of January 31st our ownership injury, such almost 71.6%.
Looking at your underlying curious extra myself and strong finished the year.
Record financial performance in both jurisdiction and Pandora.
This was the 10th consecutive year of 1 billion plus self paying that adds.
Jurisdiction returned about $2.4 billion a capital during the year.
And they continue to focus on innovation.
First the three six yellow nexgen platform, which will be distributed across six all the absent searching up their underlying brands. We anticipate 2 million vehicles will be an operation by the end of 2020.
Innovation on the content.
[laughter] quadrupled the number of podcasts available in the platform last year was solid growth and monthly listening.
Yeah, very creative programming agreements with great Marvel.
Uninterrupted any too.
We're pleased with the integration of Pandora to remind you the deal close just over a year ago.
Especially the combination of our Gulf opinion, the Iraq check resources.
75% to restrict stem cell research resources are now being spent in ways that benefit all of the brands proportion.
[noise] Pandora is a positive contribution to EBITDA today.
Turning to Formula One group.
We had strong financial results and you'll hear more about that from chase for a moment and leverage is already down to 5.1 times.
As we discussed at our Investor meeting in November we'd be done we're purchasing Liberty Sirius XM stock I, just want to catch ourselves against some of the underlying exposure we have with our conversion.
And then a period of but that's going to January 31st we bought back $52 million.
We very much from four to start of the Formula One season March 15th in Melbourne.
Well I've nations not get reported so I'm going to defer commentary on that.
And looking at the Braves very solid revenue growth.
Third consecutive year of attendance at Truest Park, our newest name hot or the ballpark.
We opened the embraced academy adjacent to our spring training.
Apart.
Alpha Sarasota, Florida, and we held the first game last Saturday first three season or spring training James Werent King Felix had a strong alley.
We have filled out our 40 ban roster.
Extended contracts with Alex I'm, probably surprised that for us.
So that's how did you stuff and we're excited far on field prospects in 2020.
I'd also note we've seen a very good advance on sales lift tickets.
Turning over to Liberty Tripadvisor.
Sometimes difficult year.
But we believe it's focused on writing areas continues to drive revenue growth outside of the hotel auction into faster growing areas of experiences in restaurants.
Maybe just as our cost structure to support strong adjusted EBITDA and free cash flow growth in 2020, and they were trying to 540 million of capital to shareholders in 29 team.
With that I'll turn it over to Brian for more on our financial results. Thanks, Craig and good morning, everyone.
As you ran Liberty Sirius XM group had attributed cash restricted cash and liquid investments of 387 million.
Excluding honor 20 million of cash unrestricted cash held at Sirius XM.
Valuing the Sirius XM common stock held at Liberty Sirius XM as of yesterday to close was 22 billion. We have approximately 1.4 billion debt against these holdings.
Well Liberty Sirius XM group attributed principal amount of debt was 9.3 billion, which include 7.9 billion of debt that's held directly into Sirius XM level.
Well, one group had attributed cash and liquid investments of 195 million, which excludes four on 402 million of cash held up one.
Let me one group had attributed public market securities, where the market value of approximately 4.9 billion as of yesterday's close.
Which includes intergroup interest in the price group you ever centrist and Liberty Sirius XM group of course for second line nation.
Total Formula One group Trued appreciable amount that was 5.1 billion, which includes 2.9 billion of that held it up one leading 2.2 billion.
That's a corporate level.
For me once told them that that's a covenant OIBDA ratio as defined enough wants credit facilities was 5.1 times as of yearend.
Fair to a maximum allowable leverage from 8.25.
We have set a target total net leverage ratio formula one of five to five and a half times bank covenant.
Please note these leverage ratios are for the Formula one business not the Formula One group.
At the branch group, we have targeted cash liquid investments and restricted cash of 212 million.
<unk> principal amount of debt a 559.
With that I'll turn it over to chase to talk about that.
Thanks, Brian.
So how to 19, what's your growth for both fans and the business a formula one from a fan perspective.
Instead, our races, again exceeded 4 million up 1.75%, even with the Saturday cancellation of the shopping East Grand Prix do that due to the Tyson.
The average attendance per race was over 200 in 2000.
Three exceeded crowds.
I'd crowds of over 200000 over the weekend with five tracks hosting over 100000 spectators on race day.
The scale of these events is truly unmatched in sports we continued to be impressed with our promoters in the world class If I'd say orchestrate.
Even more engaged at home with a total global cumulative audience at 1.9 to 2 billion the highest since 2012 in an increase of 9% over 2018.
The third consecutive year of gross.
19 to 21 ground freeze and higher cumulative audiences in 2018.
Across Formula one social media platforms, we saw followers increased significantly at almost 33%.
Page views and our core digital platform, surpassing 1 billion.
We continue to expand or digital initiatives recently launching F. One TV on Roque, who in North America.
One TV, there's a large screen formats for the first time.
We also encourage you to listen to our podcast beyond the grid now it's 43 episodes and reached up to 15 million listings in 2019.
Well business perspective.
That was 19, so lets begin to reap the benefits of our foundation built in 2017 at two fascinating.
2019 revenue grew over 10% in EBITDA grew over 25%.
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Up to over 20%.
For me want also distributed continued to be a cash machine with 2019 net operating cash flow exceeding.
Solid growth in cat and strong cash conversion.
We finished 2019 with a leverage ratio of about 5.1 times near the low end of a recently reached 80 range.
We expect this momentum to continue went to 2020 to 2020 teaching marks the seventh anniversary the Formula One World Championships and we recently debuted especially logo for this milestone to celebrate this cheap make throughout the year.
All car liberates for this year have been repealed.
I'm, a dramatic fashion and we saw the potential of each new cars winter castings Barcelona.
We look forward to first race in Melbourne and March 15th.
Announced earlier after ongoing discussions with authorities promoter in China.
Decided to postpone the Chinese grown pre which was scheduled to be held.
Thanks.
On the virus.
We'll continue to monitor the situation, we're working to reschedule the late rates later in the season.
No you have questions about how potential cancellation rates.
The impact our financials.
Hence the race is not help me, we're not received the publishing revenue.
Given the early notice and dispose bone and we're working hard to mitigate the effects, but yet the getting back to adjusted EBITDA to be relatively minimal.
In anticipation of your next question in General Broadcasting sponsorship deals are not dependent away scale.
We're excited to welcome to new races to the 2020 calendar.
Non Grand Prix will take place on April 15 in Hawaii and to anticipate another question.
Do you plan to proceed with the race.
I talked to our Vietnam talk Vietnamese partners yesterday, and Atlanta, stopping the noise in April.
Right.
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March 16th and my way back to London from Australia, and all systems are though.
Equally excited about our second race and getting the Netherlands Grand Prix It stands for come later.
As we previously it hasn't even absent mentioned previously dynamic new locations like the spring wonderful fresh energy to Formula One and we look forward to welcoming new fans in Vietnam, while engaging the Orange Army in Holland.
Sponsorship, we announced 188 bed.
Actual F one sponsor in Asia.
This is part of our previously announced deal with intra regional sports group well see the bookmaker effect feature exclusively throughout the Asian broadcast market through 2024.
Spect announced an exciting new additions to our sponsor lined up in the coming weeks before our season launch in Australia.
The driver lineup for the 2020 season has the promise of some great racing and dramatic story lines.
With Hamilton will be chasing get seven World Championship, which equaled the record set by Michael Schumacher.
His team they fell three BOP. This followed up in a strong 2019, showing like exciting competition.
The battle for Ari between that a little of clerk can get to fly drama and do team has adopted a weapon race policy.
Who can forget their rates sending to listen in Brazil.
Red Bull powered by Honda is hoping to challenge, both Mercedes and Ferrari even more this season with Max for snapping one of the rising stars a formula one leading the way.
Mclaren looks to build them that progress from last year really exciting do have led to more as Carlos science behind the wheel.
No.
Okay. John will make has returned to the grid, well like AG likely or something to foods.
And then the only driver for the year, we walk in Nicolas let teaching to the Williams team.
Equally exciting Nixon bettering World Championship drivers going to head to head with one of the most talented groups of young drivers.
It is seen in a generation.
Instead of kind of drama in storytelling, that's been telling part of the Netflix series to drive to survive.
See await season, two which will debut on February 28.
Management clamoring for season, too and it does not disappoint, especially with the addition of Ferrari Mercedes.
This series, he's been instrumental and bringing new fans and building our base and other penetrated markets, especially in North America, we're pleased with our relationship with Netflix.
In other areas. If you can't outreach 2019 F. One new balance you sports Pro series B Carter's its largest audience ever at 5.8 million.
This represents an uplift of 76% year over year.
Your demonstration of how we're reaching a new younger and more digitally minded audience.
79% Division were used to anyone were below the age of 34.
It was followed by our inaugural or F. One E Sports China Championship held in Chang.
Qualification spans across six major cities into over 6 million viewers for the finals.
This year will host three fans festivals Johannesburg in March Lund getting by New York in October.
This will be further celebration of our Seventyth anniversary.
And expose formula one can do audiences.
We're excited to have to W. Series joined the 20, Twond Counter center Austin in Mexico City races, further efforts of promoting diversity and inclusion in motor sports.
Off the track we were thrilled to share ambitious sustainability plan to have a net zero carbon footprint by 23.
Throughout our history Formula was going at the forefront of technological innovation.
And many of our innovation has it been adopted I wrote cars and other industries.
Our current F. One hybrid power unit is the most efficient entered in the world delivering more power using less fuel than any other color.
I mentioned presents an opportunity to be net zero carbon.
Through advanced sustainable fuels and energy recovery systems.
Over 1 billion of the 1.1 billion vehicles in the World are powered by Hana Trail combustion engines.
So the impact here can be tremendous.
Electrification of road transport the personal solution, but still requires generation at the energy to power the car manufacturer. The battery then disposal.
2025, we will also I'm sure all of our bets are sustainable.
Using sustainable materials.
In addition to single use plastics and always being.
Recycled or composting, while offering our fans greater options to reach the race.
Corporate level, we will move to ultra efficient logistics and travel 100% renewable power offices facilities in factories.
These plants are the result of over a year of work between the I fly sustainability experts teams and promoters intercept. The example for sustainability in the world of sports.
Well the 2020 season hasn't gone, we're already working looking for 2021 and beyond that and we're thrilled with the progress in the last few weeks in Miami as we come closer to finalize thing that potential tent pole offense on future calendars.
We're excited to partner with the Miami Dolphins to bring a world class events of the reaching and our second race to be less.
Falling on the ratification of new regulations for the 2021 season.
We're making progress in a new Concord agreement, which will include a new governance and price when structure.
He's discussions around advanced stages with teams will strengthen the business model for loan growth in the sport.
Financially. We also expect 2020 to be another year of strong across the board growth for Formula one with each of our three primary revenue categories race promotion media and sponsorship contributing to the gross.
You also we're also expecting growth in other important segments of our business like hospitality and are excited to see business segments like licensing and digital advertising.
Thanks hardly existed a couple of years ago become exciting new growth areas.
We further expect or do you keep platform to continue to be important source of growth as we stabilize the platform the second half of last year.
And we now begin to launch new features like our recently expanded coverage which are testing.
The cost side, we continue to add new initiatives to engage niche sites fans.
Organization, it's clearly a more mature one today that will enable us to limit cost increases.
Rugs, and some areas like hospitality your freight that's cost increases tied to revenue growth.
Emerging areas like deal to de platform are still in an investment phase, but the foundation for our business and sport is largely place.
The contractual nature of our business.
Many of the key drivers over 2021 2020 results are largely in place in fact much of our current efforts are focused on initiatives.
In fact, 2021 and beyond in areas like median race promotion.
We're excited about the engagement of arrange a third parties in these areas as many react to the renewed energy and excitement around the sport.
Activity further reinforces our conviction formula one is uniquely position for the diet for dynamic growth in next few years.
Well I feel like the thanks, Sean projects for the contribution you made the formula one over the past three years. He was instrumental in transforming the commercial side of the business.
Making formula one a fan centric sport with growing popularity and set us up for continued success.
You bet, a strong leader of the organization personally great partner.
I will turn call back over to Greg.
[noise] that's chase.
Let me Echo chases comments about the we will Miss shot my friend and thanks for all your hard work.
Thanks also to chase and Brian as I said for their comments here at all in all its great year for Liberty media.
We set a date per investor meeting in New York.
These halt Thursday November 19th.
We do appreciate your continued instant Liberty media and look forward to speaking with you on next quarter's call a thought before and with that operator I'd like to open the line for questions.
Thank you.
The question. Please take note by pressing star one on your telephone keypad.
Speakerphone. Please make sure you I mean function is turned off till you're saying not to reach our equipment.
Again press star one to ask the question.
Just a moment hello, everyone an opportunity to say no further questions. Thank you.
[noise] well take our first question from Benjamin Swinburne Morgan Stanley. Please go ahead.
Thanks, Good good morning Chase could you I know.
The virus situation is quite fluid and then sort of hard to pin down exactly where this is going to end up but.
What are the things that factor into the decision to move forward with races, or not and you know, what's what's sort of level of confidence around some of the races. In Asia that Youve highlighted you guys are going to continue to you're planning on having sitting here today, just trying to get a sense for you know sort of what the range of outcomes are as we think about at least.
The early part of the season and then I was wondering if one of the things we've all been hoping for I think you as well on the new conquered agreement is greater team parity long term and I'm wondering if you could tell us today, given where you are in the process of negotiating these feel agreements. If you think you're going to achieve that and if the sports is seek.
Greater parity as we move into 2021 and beyond.
Sure.
I just first on the Corona virus minutes it.
As you said upfront probably.
The obvious state [noise].
So its difficult up you know really after the mall, where the where this plays out obviously your country like easily wasn't really on the radar screen a few days ago and now it is.
We.
Hi largest process what we're doing is we're actively engaged with all you know all the events upcoming I guess, particularly the more current ones to get perspective from in countries that I had a conversation yesterday.
Yeah, I know a partner.
And they're uptake with I think they said, they're around 15 cases and actually all of them themselves.
So I don't think they had to have recovered.
Yeah, we are continuing to talk to others about it.
And we are in London.
Through our own channels connecting with experts who had been sites to this you know I didnt, mostly what we need to do is continuing to recognize it would be on top of the issue to try to get the right advice to try to plants, if somebody's logistics because that's trail travel planning is merging them in Bahrain just.
And at a number of cities that.
Travel restrictions are coming from them cities. So you know I think part of what we can plan is to make sure we have flexibility and options in place to the threed or logistical issues like getting to win from races.
Yeah.
In China.
Yeah, I guess that came with a particular focus on.
Since the beginning of the year, they're all going so I'm certainly you know we're heading to the Melbourne.
Alright, heading to what I'm heading to handling.
Although the state the obvious yeah, we got to see what evolves in the coming coming days.
And we are working actively.
To see if there are ways to mitigate the China postponement.
So I know it at this point and long in the short if it is you know we're connecting with sort of in country experts our own experts I'm trying to stay on top of logistical issues on getting to went from long distance places and stuff.
Feel we've got as good handle on it as you can on the conquered agreements.
I guess the journal packets again don't Wanna get too far into things you know I mean, I think preferred so practice to be comedy when things are done I guess, what I would say that wasn't like we we feel we're achieving the goals we set out to make a sport healthier I think that's their distribution the funds.
Just one of the cornerstones, we've identified as being important for healthier sports. So yeah. I think you know it's not.
All the things we're doing that will launch in 2021 beyond again, I think there a significant step they're not up you know you know, it's not sort of declare victory go home and everything's done.
But I think we are making significant steps to achieve the goals.
We set out for the business to make it a healthier a better sport.
In a better business for everybody common that deals in the dressing cost revenue distribution and the others. So I think you know we we do believe you know I'm on a path to it.
He directionally achieving the goals, we set out at the beginning the process.
Thank you so much.
Sure.
Hi next call anyway.
David Karnovsky from JP Morgan. Please go ahead.
Hi, Thank you just could change that you know in France. It looks like you lowered the price of the F. One TV product and then she does the monthly option as well just wondering if you can elaborate on the strategy there and how this may have played into your recent broadcast renewal and then for Brian would it be possible to get the operating free cash flow number for formula one.
29 team thanks.
I guess, what I'd say on F. One TV.
It is.
As we launch definitely TV.
There are different issues in different countries based on what agreements existed in place and clearly we need to work with our traditional television partners.
It's really and so we had.
Different if she's digital places I mean, you pay for example, it still no not available due to the agreements we have you places so.
Like during in the U.S. is more widely available.
France, Yeah, we had at <unk> distributor.
Basis that.
That's consistent with agreements we reach for their local partners.
I think what we've done in France is trying to move it there you look through it.
The public as a market private and there's not a single market prices, obviously varies do want to write issues in country, but there's generally a range of sites that we've targeted for this and Ah.
Hi, Good friend Springs, and for instance, like priced.
Above the high end of what we would have we think it'd be appropriate price at this point in time for F. One TV and I think this brings more into what we think it sort of though where we'd like them market price you for this study.
But I think.
Pricing, it's all part of how do we navigate through the distribution and existing television partnerships.
And on the worked down the free cash flow per Formula one as you can see in the release for 82 of adjusted OIBDA for Formula One for the year really good cash conversion this year with some positive working capital movements.
So just over 500 million of operating free cash there.
Okay. Thank you.
Our next question comes from Bryan Kraft from Deutsche Bank. Please go ahead.
Hi, Good morning, I want to see if you could quantify for us the impact of the Japanese cramp free cancellation, and which revenue lines. It impacted so we can take that into account and forecast in 2020, and then separately wanted to ask you reserve or perhaps related was there a particular driver for the flat year over year trend.
In advertising and sponsorship in the fourth quarter.
It's a much stronger for your growth was that Japan.
Is there any read through from that into the growth outlook for 2020 and advertising sponsorship. Thank you.
So the first question you said on shipping what was the question on Japan, So I'm not sure if all of it.
In Japan, the Grand Pizza did typhoon impact on the Grand Prix.
Financially.
All out there wasn't on it there's not a financial I mean, there was not a financial impact a formula one.
The.
There was a financial probably a financial impacts the local promoter give it ticket sales but.
It wasn't material.
Financial impact.
There was an attendance and accidentally said or if you're looking at attendance figures. So certainly that the intact. We're on track for actually quite a nice growth attendance.
And then.
Trapping show Saturday that Didnt, it didn't manifest as I didnt occur, but the financial impact was was limited.
So.
Okay.
And.
The the other.
In fact, you asked about.
The other than the other thanks for that and the other question was I think in your release you called out a decline in advertising and sponsorship revenue. So this one year over year.
Yeah, I don't I.
I don't know that actually up and there was anything particularly material I mean, we can have local pump local sponsors a local partners cancer, there was nothing sort of.
On a large deals sort of global partner level. So I wouldn't you know actually just I'm, assuming so I don't actually know specifically, but it would be more you know variance within that.
Probably the local partnership level or one off partnership levels that up that can occur race to race or when you get.
It's why sometimes comparisons on quarters, where race this fall.
I don't know what race felt falling from either side of say a corridor and.
Promotion fees are sponsorship you could have large promotion deals.
When you get down to quarters, they can swing just on race scheduling.
And that seems like that.
Great. Thank you trust.
Our next question comes from China from Evercore. Please go ahead.
Thanks out one potato you know, obviously, you're talking about potentially a new U.S. raised 2021, well so talk about maybe or Saudi Arabia me can help us understand how fast can you scale does leases up from 22 this year.
I got the act to make sure you, even though he's going to be like one one basically the time.
Just sort of understand suits are these promotions and then probably for Greg, but you know as you started buying some formula one started buying from at least your stock.
This quarter it would be so can you help us understand how do you think about how much they're pretty soon it's got to buy well. So you know how much could you potentially buy something one given a knowledge lumina, you're talking unlevered and things like you.
Yeah, I think in general Yeah. She said I think we feel we can increase yeah. You know we're going to limited basis increased number races. I think we tried to take our goal would be to do it in a disciplined basis disciplined way yeah clearly the teams we recognized there.
Yes, it logistical and organizational issues for the teams to accommodate that yeah. We you know they directionally. They know what we're going but I think we want to in fairness.
And to make it a management process to try and do it in a disciplined way so I wouldn't see us all of sudden adding to races. In one year. So I think it's probably more stepping up to level in it and again, we only step up if we ever issues that we really think or.
Bringing something yeah, bringing other convention sport sort of for beneficial to us what those for fans and business.
But I'd expect us to be.
Well, we just do it in a disciplined.
BJ I think what we at Investor Day, we talked about the fact, we used 3 billion of free cash flow.
Capable assets and leverage capability.
Over the four year period, a 2020 to 2023 and you know I think that gives us ample opportunity to buyback LSAG. So the amount we will actually buyback is somewhat related to where they'll OS x. I may trade.
And how much or potential liability is but.
I can't even if you look at the total it's likely to be less than a third of that over the period. So we'll see where that comes out.
We have ample free cash flow to do that which we need on hello sex have a and anything else related to.
Flexibilities de leveraging share repurchase other for walks of returning capital.
Got it.
Thank you.
Our next question comes from John Tinker from Gabelli. Please go ahead.
Hi.
Or genteel pace baseball thing could.
[noise] they are.
I understand that said the the teams can now so that streaming rights for the N. I'll be giving them given them back.
Do you, where you stand on those rights, particularly piece would be on TV deal.
And just secondly, five some crops going through some changes.
Does that have any impact on the timing of Bob.
I mean, you elevate a building by that I think some are 2021.
So John Thanks on on that first point I don't think that testing.
Financial issues will impact the timing or no construction cycle with all were very good shape on that and this is the.
Jewel in the <unk> crown in terms of its business. So.
We feel very secure about whatever happens it's incredible we're in good shape financially et cetera.
Oh Onstream right, it's complicated because the contracts are a with the Rs and provider say, they're not utilizing a certain way. They go back to a they go to them. So I would say we don't have any current plans.
Our current large revenue streams are going to explore where we go with that and we'll see you know what happens to that or send provider and what their capabilities over the next couple of years.
Thanks.
Thank you.
Well take our next question from Bryan Goldberg from Bank of America Merrill Lynch. Please go ahead.
Thanks, I had a couple of questions on F. One.
First on your comments about your direct to consumer growth plans.
In 2020.
Just curious I think you characterize this year is another year of like investment phase and I'm just curious.
When we talk about investment or you are we talking more about programming a rodney bench themselves or the acquisition of non live programming or is this more a function of a rising subscriber acquisition costs and then my and my second question is Chase I think he talked about it.
2020, your expectation for all three of your revenue categories to be up and 2020 and I guess the calendar stands today you should have a higher bank account, which is an obvious driver of growth, but outside of that how should we think about the same store growth potential across race promotion broadcasting sponsorship is this a year that's gonna be dictated.
More by rent escalators and existing contracts or are there significant contractual renewal opportunities, but or add or greater sponsorship sell through opportunities.
Thanks.
So I guess only Oh TT.
Investment.
I mean.
We're not investing significantly I guess, probably more I say, it's early stage growth, so it's probably a bit stuff.
Yeah, a bit of all of those things.
They didn't content, but you know you know marginal into context, if our or overall business.
Yes, the marketing as you push it out particularly into still.
For at least age in some markets Rumsey relaunching the price points in France.
Yeah, you know engines that we only really take lots platform second half of last year. So.
It's not the investment size, it's probably worth saying almost maybe a better price would have been early stage growth, but chip in it scale. At this point you know we are you know we're more focused one on the gross.
Subscriber base and the growth for that business then on it as being a significant profit contributor in the short term I think as we've said all along I think there certain areas that you know.
The opportunity inherent in it whether it's against the U.S. in China for Teekay.
Claire.
[noise] payoffs down the road not you know not 12 months. So it's not an investment in terms of.
Larks resources for us, but it is probably you know testing in growing quite early stage, but early stage business that we think we increasingly important as we go forward over the years.
I think in terms of revenue you did you know we do expect revenue from each area. Yeah. There you know there's some places for media, it's not up enough because you're in media.
It's sort of 2021.
We did have some renewals so but the renewals work.
Dollar show, which.
You know it is a combination of.
Some you know some new deals.
And just some.
Your your increases.
I think and ER.
And the sponsorship side.
Again, we do expect DSIC as I said we're.
Looking forward to adding some sponsors in the short term. So we think theres opportunity continue to we certainly have the room and capacity and we expect.
I will take some steps.
Getting sponsorships to where we think it ultimately should be.
So you know get it's probably a bit offensive.
Okay incremental incremental growth and some.
New deals and.
When they promote or side the opportunity is probably.
Yeah, we've got Jude races, we've talked about them. So clearly there are getting treated races as well, that's what would be the incremental growth I'm. So.
Yeah, Tom in Vietnam in.
Amsterdam coming in you know, replacing Germany that clearly is positive for us and that we've got the ordinary course that extends beyond that so there's a mixed bag of incremental growth and do it varies by each of those big segments. The other areas like hospitality and licensing it's anything since I've got a probably again more bungling.
They're not factoring in the three good categories that are so.
It was a bit of mix.
Thanks, actually if I could have just a quick follow up on your efforts in Miami.
I think you got to a favorable vote for the Miami Dade County Commission I think last week.
But now there's there's I think there's some sort of legal challenge to that and I was just wondering how should we think about next steps premiere in Miami before you know that can better that can really really be solidified on the calendar. Yeah. I can't I mean were positive steps. The last couple of weeks Yeah. We're actively engaged with them I think we've got.
Meetings over the next week or two that continue to nail things down.
And yeah, we feel good about where we are without rates. Obviously for 2021, I think first and foremost I'm willing to share. The great race racial will live up to what that the potential of what that races, which is a real tent pole race.
Well not just in the U.S., but around the world encourage that capture the world's matchmaking said, we want to make sure we do the race [noise].
And I'm going to work.
Focusing on trying to get things place for 2021, obviously time continues.
Yeah, I get shorter, but yeah, we are actively working on it and engage with it and Ah.
You know I get making good headway we feel.
At least are complicated so there's.
Nothing do we've been there through this before so the steps and processes. We go through ultimately to finalize the race you always have degrees of complications to them.
But I think we feel good about the path. We're on we feel good about the opportunity to make racing no Miami.
Reality and short term.
Thanks, a lot.
<unk>.
Well take our next question from Zack Silver from B. Riley SBR, Inc. Please go ahead.
Okay, great. Thanks, you're going to question. The first one for charity side half while I'm just I think you provided us an update on the sponsorship pipeline back in November I. Just wondering if you get a set up they got you know whether that has changed gotten more healthy or perhaps dissipate as a spot checking trust.
No I guess I don't think it too dramatically different story again I think we.
I think we are excited about deal would be.
The level of answers to the breadth of interest to be engagement in the sport.
Yeah, certainly you know we are actively pursuing.
Many conversations I guess is as we've said sponsorship since probably over is that yes. That's three years, we'd been involved in Spain.
In that area.
That is probably had you know.
Headwinds than we thought I think whether it was telling the degree to which the wasn't the pipeline. There. So building the story building, providing an understanding building the capabilities to create more tailored offerings that I think you really need to be competitive well in that world today.
Hi, good headway it up and I think we are excited about you know it's a great. We're certainly.
I think the last three months two months now since this season ended in this period, we probably got more active than ever and the Brett.
And and that's number and variety of conversations you know where it.
And we look forward to close in the field for it from.
Got it. Thank you and then one I forgot to follow up on the Braves, obviously, maybe not for the Braves just given the length of time between your last deal and the real and 2027, but ever most seems a good chunk of revenues are coming from broadcast deals infant healthy growth in the value of the sports rights, but.
Given some of the headwinds that's it.
Yeah, I need to pay TV ecosystem, and you know distributor some distributor drops I you know maybe that makes the you're right or not economical for some of the traditional our San players. So more curious just to get your sort of high level thoughts on how you think that evolved a you know over the next couple of years.
I think it's a good question.
If you were.
You know the.
Team and the West coast that had a relatively small territory and had gotten a massive rs and contract.
Do you think about you know what would happen to be ended that.
Renewal.
An open question, whether you're gonna see incremental value or decline.
Oh, we have a good contract not an amazing what it was a very low on it then when we bought it from time Warner <unk> same renegotiated it was the longest.
And exists is at the time, it's still among the longest.
Never been written.
Because of that when it's relatively low even its adjusted value against the size of our territory, which is 12 million broadband households, the largest territory of any baseball team.
And the popularity of the Braves I feel pretty good [noise].
The right to point out those headwinds as you may recall, we spend a lot of I look at the are said to know the risks of the RSM business very well and you can see the cartilage.
That is Sinclair at the moment.
So all balance, but when you look at the factors that are favorite the Braves you look at our territory you look at our contract I'm not I'm.
I'm not worried compared to where a lot of teams are.
Alright, Thanks, Greg.
Thank you.
Next question comes from Jason Bazinet from Citi. Please go ahead.
Got a question.
Other than Opportunistically working on Alex and married discount with liquidity that you alluded to.
What are the other brought options you concur at your disposal like if you're going to come up with an exhaustive.
Lists of options what.
What would be either three or four options that you have.
I'm not really sure I can come up with an infinite number of options and what to do that most them or not financially attractive because the tried to discount I think the right thing to do is to go out of your way to capture the discount there are several ways. We can do that we have sufficient liquidity between want and need.
Between quantum the hedging side and LSAG sounds capabilities on inside both with the dividends and the financial power. We've raised take advantage of that so we think this is the optimal way there are ways, which we can accelerate that.
And you know, perhaps raised more capital fine to holder to split the difference with us do things like that but we believe attacking it systematically with our available resources, which are sufficient is the right way.
Do you see M&A goes one way to sort of closing.
I'm not sure what you mean by M&A.
I don't want to use the stock because.
That issuing stock at a discount seems like a fool's errand to me and I'm not sure what M&A do I want someone else to buy into it because they're getting the benefit of that discount I'm not really sure how that plays to our shareholders benefits, which is Michael.
Well I would say use your liquidity was a buy something that's cash triggered it could give you more firepower to shrink the discount.
So why not just go directly to use my gosh divide the discount itself.
Why pay a premium.
Good morning.
Well because the market will look through the quantum of liquidity that you have which is very different than having them masterful generates cash flow your and your route.
I want I disagreed because I'd have to utilize my cash flow to do that and I assume you know the combination of what capital we have and where are we think we might get with Sirius XM as a more attractive option.
Understood. Thank you.
Our next question comes from Matthew Harrigan kind of benchmark. Please go ahead.
Oh, thank you.
You have a very hard and Dallas Alan Tse. If you go back to 2008 2009, there were number.
Pretty loud created a lot about the TV dislocations.
For the bad economic downturn off the Corona virus and the level of debt because the global economy right. Now do you think you're gonna have really good feel prospects across the board as you do.
Five years ago, or do you think that.
Oh, there are people who are more responsible so it can be is.
If we can reduce it was there are two girls may 2009, I know that's easily by question I apologize.
That's because we were drawn also incur some thoughts in the macro and deal environment.
I think you'd look and say tend to agree we have strong franchises, which I believe we do.
We will suffer less and that kind of a downturn than.
Many other kinds of businesses.
Which are maybe equally strong but are not.
You know being a strong don't have other pieces in place like a management team or something so you know that could create opportunity. It also means you know that we may have to have nerve at a time when having nerve.
Isn't readily apparent or you know you may be fearful what's the bucket line about you know be bold, where others are beautiful and that's not always easy so look I I certainly don't wishing for recession.
I would note we've noted before it's hard to buy things unless you either have synergies today.
Or a particular story both of which are hard to market, where things are writing put aside corona.
And.
So that may create opportunities.
But you're speculating beyond that Matthew is hard to you know.
Will we be well, we find the things in this bases we like.
Well will they be willing to sell off in time whichever real problem is even if it's trading at a discount people don't want to move it takes a while for the sellers to a want it you know to come to that realization. They look at the high watermark before it takes a while to break.
So you know we.
Great opportunity, but it's no assurance.
Thank you.
Thank you they got where that was our last question for this call.
Thank you again.
Well, we joined and also participated.
The two again next quarter, if not before and thank you for your interest in Liberty media.
It here.
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