Q1 2020 Earnings Call

Immediate expectations with regard thereto or any change in events conditions or circumstances on which any such statement is made today is all we will discuss certain non-gaap Financial measures including adjusted oil change before I definitions and reconciliations for Liberty Media and Sirius XM scheduled one and two can be found at the end of the earnings press release issued today, which is available on our website. Now, I'm returning the call over to Greg Maffei Liberties president and CEO. Thank you and good morning. We will have one of the 1-month accounting officer Brian first. Let me say

Ladies and gentlemen, thank you for standing by welcome to the Liberty Media Corporation 2020 q1 earnings call during the presentation. All participants will be in a listen-only mode afterwards. We will conduct the questions and answers faith during that time. If you have a question, please press star one on your telephone as a reminder. This conference is being recorded today May 7th. I would now like to turn the conference over to miss Courtney Channon port phone. No officer and Senior vice president of investor relations, please go ahead ma'am. Thank you forward again be like to remind everyone.

Second I'd like to thank and salute our employees and management impressive job.

Now I have the Liberty Media and other assets and liabilities between the formula one group and somebody SiriusXM on April 27th. We spoke with the many of you sent this announced and obviously we had a conference call right after that so I won't go into detail, but I'd like to reiterate why this would benefit for the Formula One the first month free computer play provided additional liquidity and use debt and the Liberty SiriusXM requiring Formula One race Live Nation interests with a complimentary visit with M367 tracker that a compelling price. We still have ample clearly. We are pleased with the stock market reaction since all of them.

Trying to let me Sirius XM.

Including the ls XM shares that we acquired as part of the real tribution Liberty SiriusXM. We purchased $98 in stock from February 1st through April 4th.

And effectively bought the Sirius XM shares at a 373 look through Chrysler.

Are always open SiriusXM as of April 24th stood at 72.2%

I know that we have stopped are we purchased as part of the reactivation but I expect those clothes of the planned rights offering an early June. We will look to start refocusing I left XM stock again.

and now you can discount anybody is an opportunity and one we will continue to take advantage of

SiriusXM continue to report the stock and we approached 80% ownership of Sirius XM. I expect the opportunity to make money.

Now looking at Sirius XM itself and continues to operate very well during the week. It is launched Innovative new program including a 24/7 covid-19 focus on a hotline nine new limited run Channels with iconic honest artists, including the prince channel with music and exclusive content like a never-before-heard off of a conceptual radio show Prince created for the Sirius XM channel back in 2005.

Howard Stern

Great Innovative interviews including a 2 hour plus session with Tom Brady from Derek Jeter's house in Florida.

Subscription-based business model we have in Sirius XM has proved resilient some paying that adds $69,000 to nearly three hundred 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 our revolving credit facility, which is not

Turn the formula one group. I'm sure you have all missed the vine F One racing. Hopefully you've got a little taste by watching or re-watching both seasons of drive to survive on Mondays. And we expect you all of you. Watch the virtual GP this past weekend. There was an epic battle between Alex album and Charles Leclerc. They pass and repass each other several times with album finally taking the win the final results highlighted the next generation of F1 drivers album Russell of Leclerc exciting in going to be. Do you have one team has done a great job navigating the crisis and working on the 2020 calendar. They are planning an early July start in Austria and Chase. We'll talk more about

We continue to value of the business, but definitely want to be opportunities to confined synergistic assets that we can add and we think we're well-positioned to do so.

Trying to Live Nation does not report until after the market today. So obviously won't comment on results, but I want to say we are pleased with the announced actions. They have taken to build the queen.

Out of the braised. We are working close to the Major League Baseball to see how we can put a seat in together. We appreciate how the commissioner teams and players are working together towards that everyone is even based on the chart.

Braves players are either too. They've been doing Zoom sessions with the trainers medical staff and manager Brian.

They're both in in celebration of twenty-five years since the Braves 1994 World Series titles the 95 players joined a zoo reunion while watching the final game 6 a.m. Fox Sports Southeast Vans and were able to watch the zoom Live on YouTube as well. So with that I'm going to turn off your Brian for more on our financial results. Thank you Greg and good morning. Everyone. You earnings release have our cash and that balance is my tracker as of March 31st, since we completed the attribution in April is Greg discussed and repave the Martians of the F1 revolver today Thursday through the quantity and got it already SiriusXM and the formula one group doesn't March 31st on a pro-forma basis for these two transactions.

Liberty Media Sirius XM formula formula 1 and the Braves are in compliance with all that government as of March 31st have any uncertain impacts of covid-19 F1 and break. The Braves are monitoring their ability to comply with her debt covenants future. And we are in positive discussions with their respective lenders.

On a pro-forma basis Liberty SiriusXM group had attributed cash restricted cash investment of $139, excluding $52 million of cash restricted cash off SiriusXM and we have eight hundred seventy Million drawing March is lung capacity.

The value of materials like them and like Nation stock held at least. Text them as of May 6th with $21 billion, which excludes the value of the Live Nation all spread that formula one group, which is valued at 116th at the time of the retribution and we'll be much more importantly. We have two point 1 billion and principal amount of debt again, please hold.

Sirius XM rude is 11.1 billion which includes 7.9 billion updated SiriusXM the step balance excludes $750 million home alone. Go to the formula one group is expected to pay the proceeds from the lights offering between time we watch on a

Today at 1 had a balance under its revolving credit facility using cash on that story is full capacity of 500 million pro forma for this repayment formula one group had offered in cash and like with investment of 1.4 billion at the corporate level this excludes 536 million of cash out directly at the normal one.

total formula one group attributed principal amount of debt is 3.6 billion which includes two point nine billion of debt leaving 688.

F one where the ratio is defined it up ones credit facility for Covenant calculations six times at the end of the quarter as compared to the maximum allowable leverage ratio of 8.5 times for the term loan and the revolving credit, please note. These shows are for the Formula One operating business number.

Term Loan financial covenants incorrect States, not me

you're having positive discussions with the RCF lenders to temporarily move this Covenant from even a base.

Payment of the RCs combined with the real tribution is this more flexibility in and renegotiating the maintenance Covenant?

Lastly to the Braves the quarter-end the Red Roof had a tribute cash liquid Investments and restricted cash and 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 with 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 and we're adjusting and responding in numerous ways that are in the best interests of our fans life. He's Partners in 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 to March and April as we wanted to have ultimate flexibility to race during the normal summer break in August on Tuesday, June 8th of March the world Motorsport Council approved further extension and the shutdown. From 35 to 63 days to be taken during the month of March April May and June.

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 support. The national need formula one has the unique ability to rapidly respond to engineering and technological challenges and is focused on its core scales of Rapid design prototype manufacturer ten-month-old assembly these efforts have proven fruitful and the go-ahead has been given for two of the project. It lands initiatives including ventilators that are produced being produced by several teams Place breathing Aid being manufactured by Mercedes. We're grateful for the team's efforts and supporting the national need.

And 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 and working on the cars for the 2021 season.

Further been working with the FBI and teams to strengthen the long-term future Formula One with an array of new technical sporting and financial regulations will improve the competition and 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. We previously infected a cap of $175 million for twenty Twenty-One, but now expect to move forward with a significantly lower cut.

Just like our teams formula one has been evaluating our cost structure made some difficult decisions for a load over 50% of our Workforce on April 1st with senior Executives taking a voluntary cutting pay off. We froze all hiring and peer 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 felt the current concern is warranted the actions as Brian mentioned were actively engaged with lenders of our revolving credit facility to address potential issues related to our quarterly leverage government. They were 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 2028. We expect to agree to necessary 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 location Thursday. We can hold the race and determining how we transport all necessary parties and their equipment to that location for arrays. We're in discussion with all of our promoters as well as some tracks that are not currently on our 2018 calendar to ensure we explore all options.

Our goal is to launch the season on the weekend of July 4th and 5th in Austria. And it's likely that we raise the weekend of July eleventh and Twelfth in Austria as well. Bring in the advanced stages of life together a schedule of additional European races through early September including races during the traditional August break. We will then plan the race in your Asia Asia and the Americas in September October and November 3rd before finishing in the gulf and bought her aynen Abi Abi 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. We hope to be able to allow fans to attend in the latter part of the year.

We are working with the FAA.

Local authorities and other experts to determine the steps or procedures necessary to safely transport everyone to each Race location and to enable those individuals to operate and be housed in a safe and secure wage.

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 are 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.

You've been working closely with the FIA with the consent of all the teams to change the calendar without a formal vote among the team's and this was formally approved by the world Motorsport Council and formula one wage will allow for a stream process as we reshuffle the calendar and appreciate the team support.

With the postman 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 g o m e z 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 Johnnie guilbert and Nico hulkenberg. They've been joined by England Cricket World Cup winner Ben Stokes musician Liam Payne professional golfer Ian Poulter and 6,000 gold medalist sir. Chris Hoy to name a few these races run in place of every postpone Grand Prix. 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 the one the next race as well and we're excited to see new rivalries emerge the broadcast is available on the official form on YouTube twitch and Facebook channels as well as Marky TV broadcasters such as Sky Sports in the UK and ESPN in the US and we've experienced strong engagement off through the first three races digital cumulative use reached 12.9 million and total viewership including TV estimates reach 16.3 million the virtual Grand Prix even trended 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 driveway which one to actually two album midseason at Red Bull behind-the-scenes action of the wet rates in Germany and learn more about Williams challenging season. We're in advanced discussions for season three and the team that's rep capture footage in 2020.

And 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 and a 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 sustainable fuels Advanced engine efficiencies in emerging Mobility technology is still includes Trackside branding at most races and title rights to three grand prix's and twenty-twenty and exposure on our digital platforms.

further in this area we will

Condemn think this is our new director of commercial Partnerships at the end of February then joins us from Heineken where you manage their worldwide sponsorship team and partnership with Formula 1 on the distribution front office announced the multi-year media rights deal extension to Canada to spell 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 audiences crust tienen and already asked for 90% And 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 have almost all been very supportive our conversations with them regarding the 2020 season, they're not as advanced as far as promoters cuz 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 21st, as we move forward with the 2020 calendar and finalize regular regulatory changes with teams. We will once again return 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 and 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 contracts to nature of formula want 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 or 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 look forward to the better future for all of us.

Iraq connects everything went to like revised projections for 2020 at this point all we have our sensitivities where the range of potential results based on many variables. What is clear is the 2020 results will be practically below 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 in 2021 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 woke up the 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 result of Charter yet again, and obviously aggressively continuing to aggressively return the shares and I wanted to focus on your 25% ownership Tap & Trotter. Would you currently have wrong year sort of bumping up against when you hit that cap? Are you comfortable participating in Charter share retirement age? 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 motor feeds off and sponsorship and advertising fees. And obviously the rates fees are going to decline materially but are there benefits to racing on tracks to where the promoter fee is subsidized are paid by the government?

Thanks.

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're as soon to be up against the cap and then it's not clear with buckets or both counts account. And secondly, there is some time on that reproaches until we come up against that third. We have had begun to discussions about how to adjust with not necessarily in the interests of the shareholders of Charter or Charter to have us selling so we'll see how that goes. We are long-term hold of the charter. We like Charter. We certainly don't get 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 as much more significant impact on the promoter side than the broadcasting a sponsorship side, you know in many ways, you know, I think racing without fans, you know at first and foremost for you know, the the Broadcast Digital sponsorship side, the fans will all connect with um, you know, and you know through 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, you know, I think in terms of the rate of our side clearly, he's a 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 at any of that. It's clearly a birth different from you know, 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 a promoter

There's a more significant change. I think with the 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 a guide to a number of races. It's below 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 can make a great event, but live fans won't be there and suck the impacts going to be significant more significant on the promoter. So, thanks.

Next Friday and kohlberg was thanks.

America

thanks had a couple of kids just a follow-up on the promoter side of F1, you know, just curious give it all the complexities involved for promoters off either without fans or even when fans start to return what if some of the measures, you know, the second one could potentially undertake to work with promoters to ensure know a good spectacle take advantage 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. I mean, you know, a lot of markers have been in triage mode the last several weeks, but as 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 to give us what color on the tone of the sponsorship 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 it's rotors responses, you know, we we're we're planning to be business home business that we planted in 2021. So that's our that's our expectation in terms of managing, you know through these events 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 teams are 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 but talking through all dead.

Tentative European races. So I think we'd feel you know, we're making good Headway on having a races that can be secure and safe for everybody without faith. 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 off cuz it's a little further 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. Yep, you know, I think this 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 maybe a possible in terms of spacing and otherwise to manage traffic flows if we had them, but you really not going to you're trying to talk to people

What you can do in September October 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 in terms of how we'd how we'd manage and part of it are probably ones will have in the going as we get closer to that, you know races where that would be, you know, a realistic possibility, but I'm 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 today the opening up an array of places that you know public Gatherings. So, you know, I think well, this is a situation where in terms of dealing with larger crowds you clearly no way Jose.

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 been great. Okay, they can many ways sponsors. We've been in touch with them all off 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 races at, you know, they all have components to their agreements off. So, you know, that's why 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 got and the enthusiasm from them. I think in many ways like we're dealing with

Would you like global companies 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 that's not our core sponsorship. Our relationship are big Brands entities that you know know they have a future interest, you know looking for and 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, as 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 to questions for Greg, I guess first scenario where you consider an rmt of your life nation-state particularly. Now that the the value you have to make up to get to 50% perform ownership is smaller than a sending a few years or is that strategically critical to keep inside of the door underneath the Liberty Media umbrella and then the second question is on a liberty. He mentioned that you suspect the nav discounts narrow. Once you get to 80% is that because the tax consolidation or relative trading liquidity chairs or that there might be a change in capital allocation that Sirius XM once you get to that 80% threshold next.

The first one Brian thank you for the questions to do an rmt. Our shareholders would need to end up with 51% ownership of this fund company and walk, 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 discount go after that. I don't think we would want to use that time to the stock and I think over the long term one of the reasons why we did this we attribute as we think it's for teaching and there are things in ways that Live Nation and serious will be able to work two jobs. And so I I don't think well on our empty is not your right mathematically easier. It's still a reach and which requires to put up Capital other ideas for what we want to do with it.

On why the 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 XM will probably on the March and make us more willing to consider dividends and push for dividends at serious particularly if off the Gap since where it is today, and you can look at the relative value of which stock is more attractive to purchase fxm or LSM.

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 off 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. Thank goodness. Thanks for thanks Albert.

All right next we'll go to vjo with evercore.

Thanks to speak a couple of questions. So obviously you're targeting to get a schedule for twenty twenty. But you know, it's December 31st part of the end of the race calendar or you move to January end of the the new students typically starts in March. So we sort of looking at basically December Thirty One to try and meet all your requirements on contract or commitments also month and 2nd. Obviously, there's been a lot more liquidity as popular one for the reacquisition and the same time last time you seen probably with no money or working capital, you know, maybe in trouble. Have you been approached on you know subsidizing these things or sort of bankrolling them to the season starts? And is that something that popular ones. Thank you. So on the on the first, you know, I think we right now our our current targeted plan has his finishing off.

in December later in the

December then you original plan. So sort of more like the Thirteenth Fourteenth of December but we you know are evaluating it will consider certainly finishing a January is an option that we couldn't do that we can do that. I think if we can we'd like to finish in December we obviously it to take a fairly long break through the holidays. You're not going to race in the holiday weeks, but it is not an option available to us that we'd again have to work through with our promoters and you know, we're through with the array of parties to get there but it is something we've considered 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 insert of mid-December ahead of the holidays, you know, I think in terms of you know the teams obviously, you know, as I said 20-20, you know for outside of the teams, it's not going to be you know, what we're not going to have the results, you know, we we're going to have written off.

Started the year are expected to have when we started the year and you know, everybody you know is doing what they can to shore it up. And you know, we I talked about the cost-cutting initiatives long 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. You know, I don't think you can walk, 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. You know, we expect off the team step. If you taking the right initiative to get them through it. I think all of us recognized, you know, many ways Priority One in many ways is to when we get to 20 21, you know is Thursday is more you know it back on the you know in the track it 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 and certainly managed through this year wage.

Fast as possible. You know what we need. There's been speculation at this point on to what degree do we need to help support select teams? Who 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 as we go along but I think the committee moving Palm right now don't don't really engage with any specificity on that.

Thank you.

No, take a question from Ben swinburne 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 the 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 that you mention a 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 he uses the word potentially at the opco sort of benefits liquidity at the whole Co and potentially, you know, 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 obligated.

Whether it's signage time on-screen, you know titles. So certainly we have that we've said before we have excess capacity, you know material like this Thursday at the twenty-two race level. We were racing it obviously is that the number of races goes down it puts some pressure on that capacity clearly off at the margin to there's some issues. We got a managed through whether it's you know, without races, you know, their Hospitality that won't exist at some but I think and its core we feel we can we can go a long way towards, you know, 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 Thursday, we we are working to achieve what we think would meet the expectations of of our sponsors dead.

You know, but at the end of the day, I mean these are relationships. These are long-term 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 our path forward. We want them to feel good about what we met. But equally, you know, we have an obligation to deliver certain value if we deliver it we expect to receive fair value for it. But you know, we will approach as partners. I think you should get if you get the promoters with fans, 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 it is moved to the fall that obviously, you know has implications in terms of selling tickets from the like, you know right now probably most often even the ones that schedule are aren't really selling tickets given the uncertainties and probably nobody's buying a lot of tickets given the uncertainties. So it's not with everything that exists God.

Up there. It's not you know sort of it's not business as usual. But I think the degree we have races with fans. Uh, I guess you also get the question is it erased my contacts you know it or is it race with fans with certain conditions around those fans? So I think all those things, you know, we have to you know, we have to engage with you know, but yeah, yeah, I think the way again we approach 20/20 is we you know, 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 to twenty Twenty-One. We've got the business in 2010 and looking like, you know wage did 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, but I think the strength in this sport the interest in the support the support and interest we've got whether it's for 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 wage.

Everybody, 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 that 2021 is going to again look like the business, you know, we all knew about four 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 for Chase you talked about twenty Thirty One potentially being a good year for broadcaster roads, and certainly the global paging system is not immune to Coban. So I guess what I'm curious about is whether you can give us a help the sense of the health of some of those. Can be partners in their ability to renew deals with a guy that attractive terms for both parties.

Yeah, I mean we're you know, obviously a lot of discussions is is people are navigating through the short-term and sort of gotten put, you know a bit on a month, you know the back burner, you know, or you know, everything sort of become, you know, very short term. I take the TV universe will come through this. I mean in many ways talk about, you know pay TV, which is really part of a wider Digital Universe, you know, one of the few winners in this. You know, it seems to be digital platforms wage and you know that are you know, being increased important to increased value on, you know, great content on you know, these right platforms. So, you know, we're continuing to have wage concessions with them. I think 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 it is six weeks since this really occurred it clearly everybody would like to have a little more, you know, a little more visibility or towards, you know, what the dead what things are going to look like in 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 foul you of unique Sports content 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 see, what is the impact of the platforms 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 wage, you know, we expect them, you know to come through this I think that subscriber so I'd certainly the advertising world needs to be more impacted by the subscribers Side sports, you know, you know, generally birth

Okay, sort of.

Like lean to the businesses that buy sports are probably lean more heavily on the subscribers descriptions, 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 said advertising Sports I think are ones that you know are looking, you know, if anything anxious to come back and support their product.

That's helpful. And then you know for for Brian in their religious and apologies if you missed a couple weeks ago, but you guys disclosed you're paying down the remaining revolver balance today there anything that you should read into that regarding your confidence in the managing cash buyer and one that relations are going on and that's off any implications for talks you're having with the lenders.

Yeah, I'm happy to comment and then we have more lonely here as well. As for that 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 brought under the revolver prior to the reactivation. We don't need that money today. We draw on it in a surfeit of caution. And now we're not that neat. So rather than running negative spread on the borrowings. You paid that money down. We bring in proof of discussions with the lenders likely to have confidence which are less or at least for some period of time based not on negative but on liquidity and uh took the measure of our confidence that will be successful in finding out a revolver or would you anything?

My next question comes from John Tinker with gabelli.

Could you stop all 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 speed as incessantly and development revenue is up the battery because it's tail and could you talk a little about that's going now given that everything is closed down. Thanks.

On baseball get there are people now following the Korean leaves with new interests. There are primers on who to watch how to watch the Korean language have not embraced it yet fully. I'm still waiting for our our domestically become for the MLB.

You know, I think they're looking as I said at a range of opportunities, but most likely well nothing's resolve. It appears most likely they'll be not the bubble Concepts which have their own things. But so, you know late June 4th training early July without the van. There are still issues to be resolved about what the payments will be to the players they're dead and then we're agreements about 170 and then sort of looking at pro-rata with a credit for the 170. But some of these things were based on the the fans would be attending the fans are not attending in there are two revenue streams are still need to negotiations. So what the splits are obviously can't comment on any of that. It's it's Chase 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 worked 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 present which is totally the expectation. The early 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 page. We're 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 wage could be some some impact to their businesses and and therefore work how that translates through us. Also, you know, we have parking Revenue in there which obviously would go down to see if we don't have them showing up but none of these are overly material delivery media as a whole and and not related to your home of the brave.

All right. Next question comes from David karnofsky with JPMorgan.

All right. Thanks for taking the questions just go through Chase on the Concorde agreement. It's something that has to be completed prior to the 2021 season. I could Formula One boot to The Exchange leasing agreement even for a short period and then for Greg I think it would prepare the marks. He mentioned looking at images synergistic after particular formula 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 categories, 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 talk with you up actually on the concrete we can just you know, unilaterally just say these are the you know, these are the rules of Uno rules of the road where 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 back, 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 this.

All right move on to your your end and I'm sorry, go ahead.

Yeah. No, that's the question is can you hear me on my cell on the line? Yeah. Yeah. The question was just under prepared for the fact. He's just wanted to know if it would have been Assets in the motor sports package to trade it that we looked at will continue to look at ones that are around that I don't want to you know, our goal was to create a focus F1 and if we saw some unbelievable opportunity wage that was outside of Motorsports. Were you looking at sure, you know, but our goal is to try and create things that are towards the Formula One operating business the Formula 1 month. He goes 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. Thanks will get you Brandon Ross with Lightship burgers.

Thanks, good morning for Greg one of the rationales for putting Live Nation in the ls xn 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 what you can do operationally, and then just for Chase is it reasonable now to assume that you could be at 22 races in 2021. Thanks.

Brandon I think you know the answer that question that there's nothing structurally that was prohibited before that is now permitted but I do think that putting them together and doing things like bringing Michael rapino on the SiriusXM Ford continued interactions continued alignment potential for further work together is enhanced by being on the same track dead.

Got it and simple answer to you know, twenty Twenty-One. Maybe we don't have a magic number, but the answer's yes. I mean realistically again, you know, we expect 2012. Our goal of twenty Twenty-One look like the 20 21, you know, we planned back in January and we have you know, ultimately we have renewal to be put 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 2012 one. We're 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 wage

I mean, we'd be planning on 22. We still be planning on 22 races.

Thank you. Bye.

All right. We'll take our last question from June 4th with Goldman Sachs. Thank you. Had a couple of questions for Chase firstly I want to ask about the price on for this year. I think in a normal course, it's usually variable 2 pts if it is the intention to keep it variable or are you intending to to maybe have to be hired 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 use unilateral change it if we you know chose so I think the you know the question which I guess is you know with a part of the question earlier is what we do something and and I guess to expand to 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 in some 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 and as we know what that is.

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 is.

But is obviously we still have a lot of moving Parts. It was like that 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 inappropriate appropriate or right for us to to do anything, you know, whether it's again with interfere with a team or with you know, or with any of our other partners, but we expect it, you know, we expect to be, you know, dealt with fairly and expect them to deal with this fairly.

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 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 to go right back up. It's it's a construct that you know is for the long-term and you know, and I I don't think it creates tension. It creates life 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 but you know challenges to them, 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 in the US, you know, well where you just add up salaries, you've got all you know here you've got all sorts of the you know, moving parts 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 than 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 there's 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.

With our question today. Thank you for listening audience and for your continued interest in Liberty Media and look forward to speaking with you again next quarter if 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.

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