Q1 2020 Earnings Call

resilient payment adds $69,000 to nearly thirty four point eight million subscribers

and the very strong liquidity and cash flow of Sirius XM has shown through we still have 1.75 billion of available on a revolving credit facility.

I have the braised. We are working closely Major League Baseball to see how we can put it together. We appreciate how the commissioner teams and players are working towards that solution everyone in need to be baseball returned. The Braves players are easier to they've been doing Zoom sessions with the trainers medical staff and manager Brian snitker mobile also been in celebration of twenty-five years since the Braves Nineteen Ninety Four. I will be retitled the 95 players joined a zoom reunion while watching the final game 6 on Fox Sports Southeast bands and were able to watch the zoom Live on YouTube as well.

Returning to formula one group. I'm sure you have all missed F One racing. Hopefully you've got a little taste by watching or re-watching postseason of drive to survive on Netflix off and we expect you all of you. Watch the virtual GP this past weekend. There was an epic battle between Alex and Charlie Clark, they pass and repass each other several times with finally taking the win the final results highlighted the next generation of F1 drivers album Russell and the clerical exciting and going to be growing up. Do you have one team it's done a great job navigating the price.

So with that I'm going to turn off the Bryan for more on our financial results. Thank you, Greg and good morning. Everyone. Your name is Heather cash and that balance is my tracker as of March 31st this week Thursday in April is Greg discussed and repave the Martians of the F1 revolver today. I'll walk through the quickest and get it ready SiriusXM and the formula one group. That's March 31st on a pro-forma basis with these two transactions. Somebody made a Serious XM formula formula one and the Braves are in compliance with all that government as of March 31st have any uncertain impact of covid-19 have one in Gray and the Braves are monitoring their ability to comply with her debt covenants future. And we were in positive discussions with their respective lenders.

On a pro-forma basis Liberty SiriusXM group had attributed cash restricted cash and Investments $139, excluding $52 million of cash from strict attached directly at Sirius XM and we have eight hundred seventy million of undrawn margin lung capacity.

Value of the serious examination stock held at Liberty SiriusXM as it makes six twenty 1 billion which excludes the value of Live Nation Falls red velvet formula one group, which is valued at 165 million at the time of the retribution and will be March marked accordingly. We have two point 1 billion and principal amount of debt again, please hold.

total Liberty SiriusXM group. Is 11.1 billion which is which includes 7.9 billion updated SiriusXM the step balance excludes 750Li inhibitor blown over to the formula one group, which is expected to pay with proceeds from the lights offering between time we watch on May

today and pay the balance under its revolving credit facility. You can cash on the story is full capacity of 594 this repayment for middle one group had attributed cash and liquid 1.4 billion at the corporate level this excludes 536 million in cash all directly at 911 group attributed principal amount of debt is 3.6 billion month, which includes two point nine billion leaving 688 million.

On the ratio as to find it up once credit facility for Covenant calculations the six times at the end of the quarter as compared to the maximum allowable leverage ratio of 8.25. It's about the term loan and the revolving credit. Please note these eleventh ratios over Formula One operating business number formula.

Okay.

Traveling Financial covenants incorrect space, not me.

We are having positive discussions with the RCF lenders to temporarily move this Covenant from an even a base.

Payment of the RCF and bottom of the ocean is this more flexibility in reading and renegotiating the maintenance Covenant on the remote?

Lastly to the Braves and quarter-end the Red Roof had attributed cash liquid Investments and restricted cash of $343 and attributed principal amount of debt. 698

With that, I'll turn it over to chase discuss, Formula One.

Thank you Brian. We entered 2019 with great momentum and we're ready for our biggest season yet was twenty two races. We were ready to race in Australia, but it was necessary to cancel the event at the last minute for reasons related to covid-19 This Global pandemic. Is that a significant impact of Formula One where adjusting and responding in numerous ways that are in the best interests of our fans wage employees partners and constituents while focusing on the Formula One business for the long-term. Let's walk through all the actions we've taken

One of the first actions we took is a sport was to move the team summer break up the March and April is we wanted to have ultimate flexibility to race during the normal summer break in August on Tuesday, June 30th of March the world Motorsport Council approved the further expansion the shutdown. From 35 to 63 days to be taken during the month of March April May and June.

During this break in the season. We were inspired to see several uk-based Formula One teams come together for project pit Lane. This is part of a larger UK industry-wide Focus to manufacture and deliver respiratory devices to support the national need formula one has the unique ability to rapidly respond to engineering and technological challenges and is focused on its core skills of graphic design prototype manufacture test and skilled assembly these efforts have proven fruitful and the go-ahead has been given for two of the project pit Lanes initiatives including ventilators that are produced being produced by several teams month plus a breathing Aid being manufactured by Mercedes. We're grateful for the team's efforts and supporting the national need.

Further actions F1 the FIA and all Ten teams unanimously agreed to delay the introduction of the 20 21 technical regulations until 2022 and to keep the majority of their existing 20 20 cars into the 2021 season. This will reduce costs for all teams at this time when they would usually be investing in working on the cars for the 2021 season a further been working with the FBI and teams to strengthen the long-term future of Formula One with an array of new technical sporting and financial regulations will improve the competition in action on the track and make it a healthier business all involved particularly as we work through the issues created by covid-19. One of the key areas of focus has been the cost cap on team expenses previously into landed a cap of $175 million for twenty Twenty-One, but now expect to move forward with a significantly lower cap.

Just like our teams.

Formula one has been evaluating our cost structure made some difficult decisions and furloughed over 50% of our Workforce on April 1st with senior Executives taking a voluntary cut in pay we froze all hire and pay review plans and also deferred a number of initiatives. We plan to pursue this year. We recognize we may lose a bit of time and implementing some of these plans that we we felt the current uncertainties warranted the app as Brian mentioned were actively engaged with lenders of a revolving credit facility to address potential issues related to our quarterly leverage governance. They've been very supportive as we work together to identify potential changes to the Covenant to enable us to navigate through the possible scenarios, including the remote possibility of no racing in 2020, and we expect to agree to a very changes in due course, we've been working tirelessly since Australia, and we're actively engaged with our promoters and putting together a potential 2020 race calendar.

We have two primary challenges identifying locations where we can hold the race and determining how we transport all necessary parties in their equipment to that location for erase. We're in discussions with all of our promoters as well as some tracks that are not currently on our 2020 calendar to ensure we explore all options. Our goal is to launch the season on the weekend of July 4th and 5th and Austria and its life that we race the weekend of July eleventh and Twelfth in Austria as well. We rented in the advanced stages of putting together a schedule of additional European races through early September including races during traditional August break. We will then plan the race in your Asia Asia and the Americas in September October November before finishing in the Gulf in Bahrain in Abu Dhabi in December.

We hope to have a calendar with 15 to 18 races. We expect the early part of the calendar to be racist without fans, but we hope to be able to allow fans to attend in the latter part of the year. We are working with the FIA local authorities and other experts to determine the steps of procedures necessary to safely transport everyone to each Race location and to enable those individuals to operate would be housed in a safe and secure manner.

You feel increasingly positive about the number of locations that would be able and want to hold the race. This year are working to travel and other logistical issues related to each country or a work-in-progress home economics of races particularly ones with fans will clearly Barry from existing agreements and we're actively engaged on this front too.

We've been working closely with the FIA with the consent of all the teams to change the calendar without a formal vote amongst the teams and this was formally approved by the world Motorsport Council and Formula One bank will allow for a stream process as we reshuffle the calendar and appreciate the team support.

With the postmark with the parts department of the Season we are pleased that our teams quickly pivoted and launched a new Formula One Esports virtual Grand Prix series featuring a number of current Formula One drivers and celebrities month-to-date Charles Leclerc George Russell Antonio. Venezie Lando Norris Alex album, Carlos Sainz Jr. Nicholas latifi all been on the grid along with farmer. F one drivers such as Jenson Button and Johnny a bear and Nico hulkenberg. They've been joined by England Cricket World Cup winner Ben Stokes musician Liam Payne professional golfer Ian Poulter and 60 month with the gold medalist sir. Chris Hoy to name a few these races run in place of every postpone Grand Prix series, the series utilizes the official Formula 1 2019 PC video game developed by codemasters individuals are impressive. The race is to provide a great racing & entertainment value with Lively commentary.

Charles Leclerc what his debut race after receiving the game. Just three weeks earlier than you want the next race as well. And we're exceeded to see new rivalry submerge the broadcast is available on the official form on YouTube.

Which and Facebook channels as well as Marky TV broadcasters such a Sky Sports in the UK and ESPN in the US and we've experienced strong engagement through the first three races digital cumulative use reach 12.9 million and total viewership including TV estimates reach 16.3 million the virtual Grand Prix even took the number one on YouTube UK. We will continue with these virtual GPS until we return to racing.

You're also pleased with the response to the second season of drive to survive which debuted the Netflix at the end of February the season provided unprecedented access to the teams and drivers. We saw the drama of the dryer switch from the athlete album midseason at Red Bull behind-the-scenes action of the wet rates in Germany and learn more about Williams challenging season. We are in advanced discussions for season three and the team is rep capture footage in 2020 in news that may have been overlooked due to covid-19. We welcomed aramco as a long-term Global partner to Formula One. We announce this agreement on March 10th Ram kothur six Global partner alongside DHL Emirates Heineken Pirelli and Rolex. We look forward to sharing our expertise to identify opportunities for the advancement of the same fuels Advanced engine efficiencies and emerging Mobility technology.

Just feel included Trackside branding it most races and title rights to three grand prix's and twenty-twenty and exposure on our digital platforms further in this area. We welcome them pink us as our new director of commercial Partnerships at the end of February then joins us from Heineken where you manage their worldwide sponsorship team in partnership with Formula 1 on the distribution front. We announced the multi-year media rights deal of tension to Canada for sale. Media's TSN and RDS, which goes through the end of the 2024 season. Our fan base continues to grow in Canada. The 2019 season audience is crushed tiene already asked for 90% 19% year-over-year and coverage across the two networks reached nearly five point three million Canadian viewers.

We've been in regular contact with our commercial Partners broadcasters sponsors and other partners these Partners if almost all been very supportive our conversations with them regarding the 2020 season, they're not as advanced as far as promoters as we need to determine are modified calendar to have more substantive conversations. A number of agreements have Provisions related to the number of races. Although that number of races as well below are originally planned 22. These are all valued long-term partners, and we expect to resolve any potential potential contractual issues in a fair and straightforward manner.

We had been in the final stage just to completing the Concorde agreement when the coronavirus crisis turned everything on its head. We decided to put the Concorde on the back burner for the short-term and prioritize addressing issues related to the 21st as we move forward with the 2020 calendar and finalize regular regulatory changes with the teams. We will once again returned to completing the Concorde agreement in the immediate future.

obviously

We're still dealing with a lot of uncertainty regarding the short-term and the coronavirus we're increasingly confident of other no guarantees that we will have a 2020 Championship season fan support has been great job there seems to be an incredible pent-up enthusiasm for racing to begin the same time. We're also looking Beyond this year to a 2021 season the long-term contractual nature of the ones help provide long-term stability at a time of uncertainty. We continue discussions for potential new races or race removals for 21 and are going well. We also continue discussions with other new-age existing commercial Partners. We expect the impact of the coronavirus crisis on the broader world will extend into the future that we feel we're well positioned to return to the growth curve. We were on a few months ago and I look forward to the better future for all of us.

I recognized everyone with like revised projections for 2020 at this point all we have our sensitivities where the range of potential results based on many variables, but it's clear as the 2020 results will be significant wage original expectations what we believe it is equally clear that we can manage through 2020 weather without racing and more importantly that our business can quickly returned to our prior expectations about twenty Twenty-One and Beyond and I'll turn it back to Greg.

Thank you, and thank you for calling to the listening audience. We appreciate your continued interest in Liberty Media and hope you all staying with an operator and life up for questions.

Thank you, sir. And once again, if you'd like to ask the question, it is star one at this time. We'll take our first question from Jeff Walter check with pivotal research group.

Good morning, guys. I had one for Greg and went to chase after you got a a very strong visual that Charter yet again, and obviously aggressively continuing aggressive retire the shares and I wanted to focus on your 25% ownership camping Charter, which you have wrong year sort of bumping up against when you hit that cap. Are you comfortable participating in Charter see retirement or do you feel like you can work with Charter Management's potentially allow you to go over that cap. And then Chase if you could provide more color broadly on racing without fans the effect on Race promoter fishing in sponsorship and advertising fees. And obviously the rates fees are going to decline materially but all their benefits to racing on tracks to where the promoter see is subsidized are paid by the government.

I'll go first Jeff. Thanks for the question first. There's since our Holdings are really two buckets. It's not clear that we are assumed to be up against the cap and then it's not clear with buckets or both counts counted. Secondly. There is some time on that repurchase until we come up against that third. We have had begun to discussions about how to adjust off cuz it's not necessarily in the interest of the shareholders of Charter or Charter to have us selling so we'll see how that goes. We are long-term holders a charter. We like Charter we certainly don't walk in a position of being required to sell Charter stock.

And I guess on my front, you know, I think clearly raises without fans have a you know, you know more much more significant impact on the promoter side than the broadcasting and sponsorship side in many ways. You know, I think racing without fans, you know his first and foremost for um, you know, the the Broadcast Digital sponsorship side, the fans will connect, you know in the you know, the various platforms and in many ways actually when you watch raise even at a library as many people watch it on television and television screens. Anyway, I think in terms of the radio promoter side club easier very different events without fans and that'll be reflected. I mean, you know, we've talked about these being week-long spectacles multi-day events facility involved the track involved without fans that any of that it's clearly a very different life. Yeah. It's very different, you know opportunity. It's a very different event and we recognize that so, you know, I think these are unprecedented situations and so I think with the promoters there's a more significant.

Can you link with the with the broadcasters the sponsors? You know, they do look at it as the season as a whole they said, you know there there are contracts that, you know have Provisions tied to a number of races about what we'd have. So we have some room there, but but we feel we can deliver a quality event. You know for those we we can make up great event, but live fans won't be there. And so again the impacts going to be significant having on the promoter. So, thanks.

Thanks. I'll go to Brian Goldberg with Bank of America.

Thanks. I had a couple of her Shades just a follow-up on the other side of F1. You know, I'm just curious. Do you have it all the complexities involved for promoters off either without fans or even when fans start to return? What are some of the measures you know, that's one could potentially undertake to work with promoters to ensure know a good spectacle and do you expect any changes long-term changes for the race promoter Revenue contract model as a result and then secondly just on sponsorship. I'm going to give us some more color and you know, a lot of marketers have been in triage mode the last several weeks, but the world starts to reopen and sports content with what's to be more in demand than ever. Just wondering if you could update us you give us what color on the phone and the stock market right now around such as yours. Thanks God.

So, you know, I mean first on the long-term impact, I mean, you know, whether Schroeder's responses, you know, we were planning to be business home business as we planned it in 2021. So that's our that's our expectation in terms of managing, you know through these events office right now. We expect the European events to largely be without fans. So that's how we're planning it without fans. We're obviously dealing with different, you know issues. We still have to deal with how do we get the team there? Yeah, we get the necessary personnel there and secure. They're safe. We're working with the Country Host Regulators. We're working with the appropriate authorities. We need testing procedures Transportation laws and procedures actually had a fairly long conference call this morning with an array of parties putting that in place, you know focusing first on Austria cuz it's the first race by talking through all dead.

pattern of European

And races, so I think we'd feel you know, we're making good Headway on having uh a races that can be secure and safe for everybody without fans. Which again is is what we expect in Europe. I think if you get to events with fans, that's probably we we probably made cuz it's a little further down on the schedule. You know, we have it made as much Headway in to some degree. It's tough to have those discussions cuz we can't you don't really get guidelines yet. You know, I think about this issue has so little visibility and you know in his so fluid it's difficult to have discussions with authorities. I mean, we can sort of start to work through what we think may be possible in terms of birth spacing and otherwise manage traffic flows if we had them, but you really not going to if you're trying to talk to people about what you can do in September 9th.

Uber right now that sometime October November those are more difficult discussions cuz they're still they're trying to figure out what to do in June and July so I think the the issues wage in terms of how we'd how we'd manage the fan part of it are probably ones will have in the going as we get closer to that, you know races where that issue, you know, a realistic possibility, but since they're not in the you know, again, they're not in sort of the july-august. I think we're planning races that are you know races without fans and making sure we can we can go forward with those and sunscreen nobody who knows what the landscape you know is in, you know, you pick up a different different stories and different places as you know, you look at China that either opening up an array of places, you know public Gatherings. So, you know, I think we'll this is a situation where Interfaith

Dealing with larger crowds you clearly know, you know more, you know week-to-week as you go forward. And so it's it's very much managing up a real-time process in terms of the sponsors. They've okay in many ways sponsors. We've been in touch with them all until we know what the calendar is. It's tough to have a substantive conversation about you know, how do we modify? You know, they're you know, what races they have title race is that wage, you know, they all have components to their agreements. So, you know what we've sort of mostly been keeping them up to speed again. We could not be feel better about them, you know the support we've gotten the enthusiasm from them. I think in many ways like we're dealing with

Would you like global company, but I think will you know will clearly our big sponsors are you know, they're not, you know, when you think first and foremost whereas, you know, where's the real impact? Everybody talks about in the coronavirus Thursday. It's small business from reality. We don't does not our core sponsorship. Our relationship are big Brands entities that you know know they have a future interest, you know, looking figure out how do they get them to get back to business as you know, as it was so our our sponsors are quite enthusiastic quite supportive and you know again, you know, we look forward to advancing discussions with them as we you know, cuz we know no more about the specifics of our 2020 calendar.

Thank you very much.

All right. What's the next question from Brian Kraft with Deutsche Bank?

All right questions for Greg, I guess first scenario where you consider them are empty of your nation state particularly. Now that the the value you have to make up to get to 50% perform ownership is smaller than it's been a few years. What was that strategically critical to keep inside of the or underneath the Liberty Media umbrella and then the second question is on a liberty serious. He mentioned that you suspect the nav discount narrow. Once you get to 80% is that because the tax consolidation or relative trading liquidity off the chairs or that there might be a change in capital allocation that Sirius XM once you get to that 80% threshold next.

On the first one Brian thank you for the questions to do and our shareholders would need to end up with 51% ownership of this fund company wage. And uh, you know, I don't think we would we would use our priority right now for the capital. We would use an LS XM is to capture the Disco go after that. I don't think we would want to use that darn to the stock and I think over long term one of the reasons why we did this real tribution, we thinking strategically and there are things in ways that life will be able to work together the benefit of both so I I don't think well on our empty is not your right mathematically easier. It's still a reach an age which requires to put up Capital that we have other ideas for what we want to do with it.

On white 80% Yeah, I think you'll see a lot of potential for all of the things you mentioned to drive the factor including free flow of capital up to the ls exam will probably on the March and make us more willing to consider dividends and push for dividends at serious particularly image the Gap since where it is today and you can look at the relative value of which stock is more attractive to purchase fxm RLS Xs.

Great, maybe just one follow-up you can you quantify what the tax rate would be on the dividends today, you know with the dividends received exclusion that you're getting home Albert. Are you on the line?

I was going to say that but I want to get the authority to verify. Thank you. Thank you. Thanks.

All right, excellent. You with evercore?

Thanks a couple of questions. So obviously you're targeting to get a schedule for twenty twenty. But you know it is it's December 31st for the end of the race calendar. Could you move to January another the new season starts in March? So we sort of looking at basically December Thirty One to try and meet all your requirements on contractual commitments home and and 2nd. Obviously, there's been a lot more liquidity as popular one goes the reactivation and the same time last couple of Team probably would know our price band or or working capital, you know, maybe in trouble. Have you been approached on you know, subsidizing these things or sort of bankrolling them to feel starts? And is that something that would be the one to say Thank you. So on the on the first, you know, I think we right now our our current targeted plan has those finishing.

In December later in December, then the original plan. So sort of more like the Thirteenth Fourteenth of December but we you know are evaluating it will consider certain age finishing a January is an option we could do that. We can do that. I think if we can we'd like to finish in December obviously, it's take a fairly long break through the holidays. You're not going to race in the holiday, but it is an option available to us that we'd again have to work through with our promoters and you know, we're through the array of parties to get there but it is something we've talked and talked about but I'd say at this point our goal is again 2 to finish a couple of weeks later than our original date, but the finish in sort of December ahead of the holidays, you know, I think in terms of the you know, the teams obviously, you know, as I said 20-20, you know for us and the team's who's not going to be you know, what we're not going to have the results, you know, we dead.

We're going to have written when we started here are expected to have when we started the year and you know, like everybody you know is doing what they can to shore it up. And you know, we got the cost-cutting initiatives as we move forward and can let if I what we are doing right now. There's too many moving parts. So, you know, we're not going to you know, there's so many what-ifs wage, you know, I don't think you can you know, it's it's constructive to try them, you know address parts of it. I think we need to get far enough along in these plans to know where we're at home, you know, we expect that, you know the team step to be taking the right initiative to get them through it. I think all of us recognize you know, many ways Priority One in many ways is to home when we got the 20 21, you know is to have the sport, you know back on the you know on the track and was on at the beginning of the year for twenty Twenty-One and that's our goal and you know that's were committed to get to, Georgia.

It certainly managed through this year as best as possible. You know what we need. There's been speculation at this point on to what degree we need to.

Help support select teams, you know we care about the teams but you know, those are discussions, you know, we've not we've not had to date. I think we'll see where things are dead we go along but I think too many moving parts right now, you know that really engage with any specificity on that.

Thank you.

No, take a question from Benson burn with Morgan Stanley.

Hi, good morning, Chase. Just continuing this discussion. Can you give us any sense for what the sponsorship revenues will look like this year with a 15-18 race calendar at least wage, you know relative to your original expectations. I assume it's slower, but I just wondering if there's any way to dimensional eyes that and entrees promotion. If you have races with fans later this year as you mentioned Faith goal. Would there be any impact on Race promotion fees for Liberty would seem like that's pretty close to what we used to consider normal, and then I just wanted to ask Greg Greg you made a comment on the call a couple of weeks ago about the cash Liberty Formula One. I think you used the word potentially at the opco through the benefits liquidity had the whole Co and potentially the upgrading of there's any restrictions on cash moving back and forth that we should be thinking about. Thanks.

So on on promotion, you know, but the promotion is probably more tied to sort of obligations whether it's signage time on screen off, you know titles. So certainly we have we've said before we have excess capacity, you know, material excess capacity at the at the twenty-two race level were erasing it obviously is that the number of races goes down it puts some pressure on that capacity clearly there at the margin to there's some issues. We've got to manage through whether it's dead, you know without races Hospitality that won't exist at some but I think and its core we feel we can you know, we can go a long way towards, you know, I think our plans are to go a long way towards meeting what you know, what our what our sponsors would want to, you know want to be gaining through the sport this year. So so I think we we are working to achieve what we thought.

Would meet the the expectations of of our sponsors, um, you know, but at the end of the day, I mean, these are relationships. These are long and he's a long-term relationships. Most of our sponsors are long-term, you know, we'll sit down as partners and find a fair, you know, figure our path forward. We want them to feel good about what we do but equally, you know, we have an obligation to a certain value if we deliver it we expect them to you know, receive fair value for it. But you know, we will approach you as partners. I think you should get if you get to promoters with faith, you know, certainly that does get much closer to the business at Norm, you know, they're different cases. Is it a race that was going to be held in the spring and has moved to the fall off that obviously, you know has implications in terms of selling tickets from the like, you know right now probably most of our promoters even the ones that schedule aren't aren't really selling tickets game.

The uncertainties and probably nobody.

Calling a lot of tickets given the uncertainties. So it's not with everything that exists out there. It's not you know sort of it's not business as usual. But I think to the degree we have races with fans had to guess you also get the question. Is it erased with fans as you know it or is it race with fans with certain conditions around those fans? So I think those things you know, we have to you know, we have to engage you on you know, but yeah, I think the way again we approach 20/20 is you know, we bought yeah. Yes, we have agreements in place. But these are long-term Partners. We expect the great they've all been very supportive. We want to be fair and addressing this we want to get fair value, but be fair to them and first and foremost make sure in 20 21, we've got the business in 2010 and looking like, you know, we expected it to look.

Four months ago, right and and have the same future we expected to have four months ago. So really what we're managing through, you know is a short one time event for us. I think the strength in this sport the interest in the support the support and interest we've got whether it's from fans are Partners, you know can able if they get back there something there won't be some lasting impacts, but I took the strength of events like ours I think fans will come back. I think events like ours will continue to rise and rise in strength and I think the type of Partners we have seemed to be more supportive than ever even if even if you have a degree of a shake out in the economy, so so we will we will certainly expect to get fair value this year. But again, we're not going to we're not going to play hardball, you know, we're going to deal with things as partners but you know with a priority to making sure so I kind of giveaways whether whether it's the teams or rotors or sponsors, we're not going to, you know want to be handing out candy dead.

Everybody come you know, we're going to be expect to be treated fairly but we're going to deal with it as adults and with the expectation the 2021 is going to again look like the business, you know, we all knew each other for months ago.

Thank you Greg anything on that language?

I'm sorry, you're you're just about the up-and-down. Sorry, cuz there are no restrictions on 1 month pushing money down to the opco there are or can be restrictions under certain circumstances for the opco pushing money up to the whole got it. Thank you.

All right. Next question comes from Zack silver with B Riley.

All right, great. Thank you. Hear the question. The first one you talked about twenty Thirty One potentially being a big year for broadcaster roads, and certainly the global paging system is not a music open. So I guess what I'm curious about is whether you can give us to help the sense of the health of some of those could be partners in their ability to remove deals with a guy that attractive terms for both partners.

Yeah, I mean we're you know, obviously a lot of discussions is is people are navigating through the short-term is sort of gotten put, you know a bit on a, you know, a theater in the back burner, you know, or you know, everything sort of become, you know, very short-term. I think the pay-tv universe will come through this. I mean in many ways you talk about, you know pay TV, which is real life of a wider Digital Universe, you know, one of the few winners in this. You know, it seems to be digital platforms and you know that are dead, you know, being increased importance to increased value on, you know, great content on you know, these right platforms. So, you know, we're continuing to have discussions with them. We feel good about that space But I think everybody's you know, I think in the very short-term which really means the last month, you know, whatever wage

This week since this really, you know occurred it clearly. Everybody would like to have a little more, you know, a little more visibility going towards. You know, what what things are going to look like in life, you know, three months six months, you know, what have you but I think discussions and interest, you know, the themes we've had about the value of unique Sports contract unique event content Sports content, like ours of a global nature, you know is seems to be you know, realistically, you know as strong as ever, you know, what is the impact of the Platte thousands we deal with, you know, you know varies a bit, you know around the world, but they're mostly big entities. We're not dealing with you know, against small businesses, you know, we expect them to come through this I think that subscribers I certainly the advertising world needs to be more impacted by the subscribers Side sports, you know, you know generally as you age,

Get sort of leaned the businesses that buy sports are probably lean more heavily on the subscriber scription, you know to be supporting it than the ads the ads matter but I think advertising and sports will come back cuz I think again the type of entity Saddam is in sports. I think are ones that you know are are looking, you know, if there's if anything anxious to come back up and support their product.

That's helpful. And then for Brian in the religious and apology that we missed a couple weeks ago, but you guys disclosed you're paying down the remaining revolver balance today. Is there anything that you should read into that regarding your confidence and managing cash for and when our relations are going on and that song any applications for talks? You're having the same numbers?

Yeah, I'm happy to comment and then we have horrible here as well. As for that look we have obviously a lot of confidence in our cash position at the formula one group and we certainly in the Inner Room didn't need the extra money that we had drawn on the revolver prior to the reactor bution. We don't need that money today. We draw on in the circuit of caution. And now we're not that neat. So rather than running negative spread on the borrowings. We paid that money down. We bring in proof of discussions with the lenders likely to have covenants which are less or at least for some period of time based not on to put on liquidity and took the measure of our confidence that will be successful with the revolver or would you anything?

got it

gabelli

Could you talk a little about baseball? I think they've actually started playing games already in Korea and Taiwan and how you see that might go and the impact not having said he does incessantly and development revenue is up the battery because of the retail. Could you talk a little about that's going now given that everything is closed down. Thanks.

my next question comes from John Tinker with

On baseball I guess there are people now following the Korean leaves with new interest. There are primers on who to watch and how to watch the Korean language have not embraced it yet fully. I'm still waiting for our domestically to come forward MLV.

No, I think they're looking as I said at a range of opportunities, but most likely won't nothing's resolved. It appears most likely they'll be not the bubble Concepts which have their own things. But some odd way to start spring training early July without saying there are still issues to be resolved about what the payments will be to the players wage. And then we're agreement about 170 and then sort of looking at pro-rata with a credited for the 170. But some of these things were based on the idea that fans would be attending the fans are not attending in there are two revenue streams are still negotiations. So what the splits are obviously Thursday, it's it's Trace like my line went dead. So, I'm sorry. I just called back in talking about baseball and then

So I think that's to be determined John and work through but I think there's a positive attitude on all parties to try and get some positive resolution. But that will obviously impact, you know, impact profitability. Even on a pro-rata basis that we're on we're not able to have fans per month, which is totally the expectation. You're only games will not have fans.

I obviously had you know, a major drop in activity at the battery. I don't know Brian is any commentary you want to make an addition to that I am trying to work with our tenants there and you can't comment on specifics but we're trying to work with them where where appropriate to the extent we're having games, but we don't have fans or Thursday some some impact to their businesses and and their work how that translates through us. Also, you know, we have parking Revenue in there which obviously would go down that we don't offer up but none of these are overly material delivery media as a whole and and not related to your deliberations.

All right.

David karnofsky with JPMorgan

All right. Thanks for taking the questions just heard for Chase on the Concorde agreement. It's something that has to be completed prior to the 2021 season. I could Formula One Booth to The Exchange leasing agreement even for a short period and then for Greg I think it would prepare the marks you mentioned looking at images synergistic assets that they perform it one group. Just wondering if you could expand a m b Focus mainly on Motorsport or could of expanding some other sports or rather than category, right?

I guess on the Concorde agreement, you know, the reality is once you get the 20 20 20 21, I mean, I'm sorry, you know, we can I am actually on the concrete we can just you know, unilaterally just say these the you know, these are the rules of you know rules of the road or this is the structure that exists so we don't need to extend anything we can essentially, you know Implement and say that's if you're racing that's the you know, that's the terms in which you're you're racing. Obviously that's not we're looking at, you know pick included with the with the teams, but the Concorde agreement when we put it forth will be the Concorde agreement that goes into effect in 2021 and you know be able to unilaterally do that.

All right. We'll move on to your your engine Ross with.

I'm sorry.

Yeah, the question is can you hear me on my cell on the line? Yeah. Yeah. The question was just prepared remarks. You mentioned Faith. He's just wanted to know if it would have been Assets in the motor sports package to trade it. And we looked at will continue to look at ones that are around that I don't want it to you know, our goal was to create a focus F1 and if we saw some unbelievable opportunity that was synergistic outside of motor sports would be looking at sure, you know, but our goal is to try and create things that are during the Formula One operating business the Formula 1 month. He'd go system for things. We have our own Formula One where we can provide synergistic values so that that would be our first priority.

Thank you.

Okay, excellent. You Brandon Ross with Lightship burgers?

Thanks. Good morning. For Greg. One of the rationales for putting Live Nation in the LSN tracker. Is it opens up opportunities for Syria a nation to work more closely together. Can you just explain what you could do now that they're under the same umbrella that you couldn't do before and why the track of structure influences what you can do operationally and then just for Chase is it reasonable now to assume that you could be at twenty two races in 2021.

Thank you know the answer that question that there's something structurally that was prohibited before that is now permitted, but I do think that putting them together and doing things like bringing my dog has the SiriusXM Ford continued interactions continued alignment potential for further. We're working together is enhanced by being on the same tractor.

Got it simple answer to you know, twenty Twenty-One. Maybe we don't have a magic number but the answer is yes. I mean realistically again, you know, we expect twenty-twenty. Our goal is to age Twenty-One look like the 2021, you know, we planned back in January and we have ultimately we have renewals to walk in place and we have some some ongoing discussions with a couple of potential new races that we think would be a positive enhancement, you know to own the business for fans and as shareholders, but yeah, we expect twenty as I said, we've got twenty Twenty-One to look like the 2020 one. We were looking at, you know in January and um, so certainly if we plant on 20 20 22 races then again, we don't have a magic number but dead.

We'd be planning on 22. We still be planning on 22 races.

Thank you back.

All right, and we'll take our last question from us with Goldman Sachs. Thank you. Had a couple of questions for Chase firstly I want to ask the price on for this year. I think in a normal course, it's usually variable 2 pts Eva. Is the intention to keep it variable or are you intending to to maybe have a deal with some sort of fixed component? Cuz it would seem like PTSD likely to be a lot lower. That's the first question.

So again, the price one is you know is a contractual formula. So, you know, the price Monday is what it is. We you know, realistically, you know, we can't we couldn't, you know unilateral change it if we you know chose so I think the you know the question which I guess is you know was a part of the question earlier is would we do something and and I guess to expand that since it's a representative prophets and Prophets will be down. It means the prize fund, you know, we'll be down. You know question is would we do something to support certain teams again, we're not the issue of handouts. But you know, you know, we want to you know, put that being said we you know, I think we'll engage with all our partners and figure out how do we go forward in a way that makes sense for everybody else. But but the price when itself is, you know, you just you know is defined by a contract that is a percentage of of of he but and as we know what that is dead.

Don't think we you know, you know, I don't think we you know, really move to the next level until you know, we know what that even is.

Obviously, we still have a lot of moving Parts because they thought before we haven't settled the calendar. We don't know how many fees fans have races. So at this point, you know, we'd have you know, we have a wide range of potential outcomes on the ultimate prize fund. I think when we have a better handle on that, we'll see where we are and see if it's if it's appropriate or right for us to do anything, you know, whether it's again with interfere with the team or with you know, or with any of our other partners, but we expect that, you know, we expect to be, you know, dealt with fairly and expect them to deal with this really

And then you mentioned earlier about the budget cap. Probably coming down a little bit more beyond the 175 is the idea that that's just a sort of a one-time reduction or is that something you think will be kind of the new permanent on a go-forward basis and if it is permanent, is that creating some new some new tension between the big and the small team?

I mean, I mean certainly what we're putting in place is the cost cap call. It is a long-term construct. So it's not it's not to bring it down right back up. It's it's a construct that you know is for the long-term and you know, and I you know, I don't think it creates tension. It creates thoughts respect the fact that there are you know a number of teams, they spend significantly more than respect that you know, they will obviously have to you know manage through challenges to life, you know to you know to get to the cap, you know, you know, I think we all Ten teams have agreed the intent of the cap was to improve the goals that were driven the drove the cap which were improved competition that are action.

And healthier business for everybody in it the cap helps achieve that they've been different, you know, as I said all along there a different thoughts about the specifics. It's a much more complicated sport to put a cap into then, you know, then sort of the team sports and us, you know, well where you just add up salaries so you've got all you know here you've got all sorts of the you know movies that come out of the technology of the sport and the engineering of the you know the sport and so how you implement that cap is probably more the discussion then does the cat make sense and I'm I'm sure they'll be pressures on teams that have you know to make significant changes to get to the cap. But I think just been unanimous agreement that the goal of the cap and then a solid base goals are goals we all share and that we have you know that it will help make the sport better for fans and everybody in it.

Thank you very much.

The listening audience and for your continued interest in Liberty Media and look forward to speaking with you again next quarter of not sooner. Thanks very much.

Thanks a lot.

And I just include today's conference. We thank you everyone again for the participation.

So operator I think we're done with our question today. Thank you.

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