Q1 2020 Earnings Call
As Brian mentioned were actively engaged with lenders of a revolving credit facility to address potential issues related to our quarterly leverage Covenant. 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 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 identify locations where we can hold the race and determining how we transport all necessary parties and their equipment to that location for erase.
we're in discussion with all of our
Promoters the smallest and 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 is likely that cause we race the weekend of July eleventh and Twelfth in Austria as well. We're in in the advanced stages of putting together a schedule of additional European races through early September including races during the traditional August break. We will then plan to race in your Asia Asia and the Americas in September October November before finishing in the gulf and bought her aynen Abi Abi in December. We hope to have a Dodge Challenger 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 and procedures necessary to safely transport everyone to each Race location and to enable those individuals to operate be closed 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 off. The economics of races particularly ones with fans will clearly vary 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 among the team's and this was formally approved by the world Motorsport Council and Formula 1 month will allow for a stream process as we reshuffle the calendar and appreciate the team support.
With the post with the moment 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 former F1 drivers such as Jenson Button and Johnny Abraham 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 series, the series utilizes the official Formula 1 2019 PC video game developed by codemasters individuals or impresses. The race is to provide a great racing & entertainment value with Lively commentary.
Charles Will Clark what his debut race after receiving the game just three weeks earlier than anyone the next race as well. And we're exceeded to see new rivalry submerge. 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 reach 12.9 million and total viewership including TV estimates to reach 16.3 million the virtual game even trended number one on YouTube UK. We will continue with these virtual GPS until we return to racing.
You're also please.
With the response to the second season of drive to survive which debuted a Netflix at the end of February the season provided unprecedented access to the teams and drivers you saw the drama of the driver switch from Gastly to Alba a season of Red Bull behind-the-scenes action of the white race in Germany and learn more about Williams challenging season. We're in advanced discussions for season three and the team is ready to capture footage and 5:20 in news. It may have been overlooked due to covid-19. We welcomed aramco as a long-term Global partner to Formula One. We announce this agreement of March 10th and a ram kothur six Globe life partner alongside DHL Emirates Heineken Pirelli and Rolex. We look forward to sharing our expertise to identify opportunities for the advancement of sustainable fuels and here's engine efficiencies in emerging Mobility technology.
It's still includes 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 Pincus. Is there a new director of commercial Partnerships at the end of February then joins us from Heineken for a manage their worldwide sponsorship team and partnership with Formula 1 on the distribution front. We announced a multi-year media rights extension to Canada Bell. 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 crushing n n r d s / 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 partners have almost all been very supportive our conversations with them regarding the 2020 season. We're not as advanced as it was for promoters cuz we need to determine are modified calendar to have more substantive conversations a number of agreements that 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 Christ is turned everything on its head. We decided to put the Conqueror 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 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 the other no guarantees that we will have a 2020 Championship season fan club 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 contractual nature of formula want to help provide long-term stability at a time of uncertainty. We continue discussions for potential new races or race renewals 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, but 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.
I recognized everyone would like
Directions 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 significantly 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. I'll turn it back to Greg.
Thank you Chase. And thank you Brian to the listening audience. We appreciate your continued interest in Liberty Media and hope you all staying healthy and with an operator page up for questions.
Thank you, sir. And once again, if you'd like to ask a 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 examined obviously aggressively continue to aggressively return the shares and I wanted to focus on your 25% ownership cap and Charter would you correct me? If I'm wrong year sort of bumping up against when you hit that cap. Are you comfortable participating in Charter? She retirement age. You can work with Charter Management's potentially allow you to go over that cat and then Chase if you could provide more color broadly on racing without fans the effect on Race promoter feeds off and sponsorship and advertising season. Obviously, the race 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?
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 a soon-to-be up against the cap and then it's not clear with buckets are both counts counted. Secondly. There is some time on that repurchase until we come up against that third. We have had begun some 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 to Charter. We like Charter we certainly don't want 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 his first and foremost for you know, the the Broadcast Digital sponsorship side, the fans will all connect wage, um, you know, and you know through various platforms and in many ways actually when you watch race even at a live race many people watch it on television and television screens. Anyway, I think in terms of raising her 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 the city involved the track involved without fans that any of that it's clearly a couple different, you know, it's very different, you know copper Trinity. 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 took it to a number of races at
Hello what we'd have so we have some room there. Um, but but we feel we can deliver a quality event. You know for those we think we can make up great event, but live fans won't be there. And so again the impacts going to be significant significant on the pre-order, so
Next we'll get you to Brian Goldberg with Bank of America.
Thanks. I had a couple of Shades just a follow-up on the other side of F1, you know, just curious 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 one could potentially undertake to work with promoters to ensure know a good spectacle and do you expect any changes long-term changes to the race promoter Revenue contract model as a result of and then secondly just on sponsorship. I'm going to give us some more color, you know, a lot of marketers have been in triage mode 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 just update us to give us what color on the tone of the sponsorship market right now around
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 as we planned it in 2021. So that's our you know, 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 team wage 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 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 as 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 haven't made as much Headway in to some degree stuff to have those discussions cuz we can't you don't really get guidelines. But yet, you know, I think 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 spacing and otherwise to manage traffic flows if we had them, but you really not going to if you're trying to talk to the Dead
But what you can do in September October right now that right over 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 managing. The fan 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 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 some degree 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 wage are opening up an array of places, you know, public Gatherings. So, you know, I think we'll this is a situation where in terms of dealing with larger crowds you clearly no birth.
No more 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. I didn't get many ways sponsors. We've been in touch with them 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 wage. So, you know, there's what we've sort of mostly been keeping them up to speed again, we could not be feel better about the you know, the support we've got and the enthusiasm from them I think in many ways like wage ceiling with
Would you like global companies that 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 wage? It's small business reality. We don't that's not our core sponsorship. Our relationship are big Brands entities that you know, they have a future interest, you know look and figure out how do they get back 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, we know, you 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?
Hi, I have a few questions for Greg. I guess first. Is there a scenario where you consider them are empty of your life nation-state particularly. Now that the the value you have to make up to get to 50% court form of ownership is smaller than it's been in a few years or is that strategically critical to keep inside of the or underneath the Liberty with the umbrella? And then the second question is on Liberty serious. You mentioned that you suspect in a we discount narrow. Once you get to 80% is that because the taxes consolidation or relative trading liquidity wage in the chairs or that there might be a change in capital allocation that Sirius XM once you get to that 80% threshold and so on the first one Brian. Thank you for questions.
to do it
Our shareholders would need to end up with 51% ownership of this fund company. And you know, I don't think we would we would use our priority right now for the capital. We would use in l s XM is to capture the discount go after that. I don't think we would want to use that time to stock and I think over long term one of the reasons why we did this real tribution as we think it's strategic and there are things in ways that Live Nation and serious will be able to work together the benefit of both so I I don't think well she is not your rain mathematically easier. It's still a reach and we required to put up Capital that we have 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 sxm RLS XM.
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.
All right next we'll go to vjj out with evercore.
Thanks to fix a couple of questions. So obviously you're targeting to get a schedule for twenty twenty. But you know December 31st part of the end of the race calendar or you move to January and 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 on contract or commitments also month and 2nd. Obviously, there's been a lot more liquidity a Formula One supposed to react tribution and at the same time last some of the teams probably would know life or working capital, you know, maybe in trouble. Have you been approached on you know subsidizing these themes or sort of bankroll and then till till 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
Summer then the original plan. So sort of more like the 13th 14th of December. But we you know are evaluating it will consider so certainly finishing in January is an option we could do that. We can do that. I think if we can we'd like to finish in December we obviously have 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 there an 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 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 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 we're going to have a dog
Started to your 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 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 to 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 that off 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 when we get to 20 21, you know is I have this word, you know back on the you know on 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 off.
Just 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, 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 as we go along but I think the committee moving Parts just now it up don't really engage with any specificity on that.
Thank you.
No, take a question from Benson burn with Morgan Stanley.
Hi, good morning Chief. 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, 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 mentioned in 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 used the word potentially at the opto sort of the benefits liquidity at the hotel and potential, you know, if there's any restrictions on cash moving back and forth that we should be thinking about. Thanks.
So on on promotion, yeah, the promotion is probably more tied to sort of obligations.
Signage time on-screen, you know titles. So certainly we have that we've said before we have excess capacity, you know, material excess capacity off at the twenty-two race level. We are erasing it obviously is that the number of races goes down it puts some pressure on that capacity clearly there at the back into there some issues. We got to manage 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 toward. You know, I think our 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 from the sport this year. So so I think we bought we are working to achieve what we think would meet the expectations of of our sponsors. Yep.
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, we are past forward. We want them to feel good about what we do, Um, 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 its Partners. I think if you get off 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 that are raised that what's going to be held in the spring and it's moved to the fall that obviously, you know has implications in terms of selling tickets in the like, you know right now probably most of our promoters even though the schedule are are really selling tickets given the uncertainties and probably nobody's buying a lot of tickets given the uncertainties. So it's not you know with everything that exists out there wage.
It's not you know, sort of it's not business as usual. But I think to the degree we have races with fans. I guess you also get the question is it race with fans as you age 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 me on you know, but you know, I I think the way again we approached 20/20 is we you know, yes, we have agreements in place but these are long-term Partners. We expect the grade they've all been very supportive or 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 2020 looking like, you know, we expected it to them.
Four months ago and you know and have the same future we expected to have four months ago. So they 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 for fans are Partners, you know can enable us to get back there. Nothing there won't be some lasting impacts, but I think the strength of defense like ours I think fans will come back I think events like ours will continue to rise and rise and 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 wondered whether it's the teams or rotors or sponsors. We're not going to you know going to be handing out candy off.
Everybody, you know.
Maybe 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 four months ago.
Thank you Craig anything on that language?
I'm sorry. I'm not sure what language you're you're just about the up-and-down. Sorry, cuz yes, there are no restrictions on one. I'm pushing money down to the opco there are or can be restrictions under certain circumstances for the opco pushing money up to the whole God. Thank you.
All right. Next question comes from Zack silver with B Riley.
All right. Great. Thanks. Checking the question. The first one you talked about twenty Twenty-One potentially being a good year for broadcast renewals. And certainly the global paging system is not a new Tacoma. So I guess what I'm curious about is whether you can give us a help that sent to the health of some of those TV 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 people are navigating through the short-term is sort of gotten put, you know, I'm going up, you know, if be in a back burner, you know drinking or you know, everything sort of become, you know, very short-term. I think the pay-tv universe will come through Thursday. I mean we many ways you 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, you know, digital platforms and you know that are you know, being increased importance to increased value on, you know, great contents on you know, these oreya platforms. So, you know, we're continuing to have wage discussions 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, you know occurred it clearly. Everybody would like to have a little more, you know, a little more visibility or towards life. What's up 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 talked about value 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 a month, you know, 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, again small businesses, you know, we expect them, you know to come through this I think that subscriber side certainly the advertising world needs to be more impacted by the subscribers Side sports, you know dead.
generally as
Okay, sort of lean to the businesses that buy sports are probably lean more heavily on the subscriber subscriptions, 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 any advertising Sports I think are ones that you know are are looking, you know, if anything anxious to come back and support their product.
That's helpful. And then for for Brian in their religious and apology with you missed a couple weeks ago, but you guys just closed off your paying down the remaining revolver balance today there anything that we should read into that regarding your confidence and managing cash for and one that races are going on and off any implications for talks you're having with the Wonders.
Yeah, I'm happy to comment and then we have here as well. As soon as we have obviously a lot of confidence in our cash position at the formula one group and we certainly in the interim didn't need the extra money that we had drawn on the revolver prior to the reactivation. We don't need that money today. We draw on it in the surfeit of caution. And now we're not that neat. So rather than running negative spread on the borrowings. We paid that money down. We are in fruitful discussions with the lenders like would have covenants which are less or at least for some period of time based on to put on liquidity and I think it's a measure of our, that will be successful in general or would you anything?
Got it. Thanks, Greg.
Like next question comes from John Tinker with gabelli.
Could you talk about baseball? I think they've actually started playing games already in Korea and Taiwan and how do you see that might go and the impact not having speed as incessantly.
And development Revenue was up the battery because of retail. Could you talk a little about that's going now given that everything is closed out. Thanks.
On baseball I guess there are people now following the Korean Leagues 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 forward MLB.
You know, I think they're looking as I said at a range of opportunities, but most likely won't nothing's resolve. It appears most likely they'll be not the bubble Concepts which have their own things. But some you know late June spring training early July without the fans. There are still issues to be resolved about what the payments will be to the players their wage agreements about how pained 170 and then sort of looking at pro-rata with a credited for the 170. But some of these things were based on the fact that fans would be attending a fans or not attending in there or do some revenue streams are still need. These negotiations is about what the splits are obviously can't comment on any of that. It's it's Chase. I'd my line went dead. So I just called back in talking about 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 a pro-rata basis that we're on a table to have fans presence, which is certainly 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 a commentary you want to make an addition to that. I'm just saying well, 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 could be some some impacts to their businesses and and therefore how that translates through to us. Also, you know, we have parking Revenue in there which obviously would go down to the extent. We don't have a month showing up but none of these are overly material to Liberty Media as a whole and and not really material of the Braves either.
Thanks.
Right. Next question comes from David karnofsky with JPMorgan.
All right. Thanks for taking the questions just for for Chase on the Concorde agreement. It's something that has to be completed prior to the 2021 season record for me to check the vehicle interesting agreement even for a short period and then for Greg I think in the prepared remarks, you mentioned looking at images synergistic assets to take your formula one group. Just wondering if you could expand on a focus mainly on Motorsport or could of expanding some other sports or rather than categories.
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 email unilaterally just say these the you know, these are the rules of you know 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 to conclude it 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.
move on to your your end and Ross with
I'm sorry, go ahead just to make sure we got it.
Yeah, the question is can you hear me? I am I still on the line. Yeah, the question was just on the prepared remarks you mentioned looking at em, you just wanted to know if this would have been uh Assets in the motor sports package traded that we looked at and we'll continue to look at ones that are around that I don't want to you know, our goal is to create a focus F1 and if we saw some unbelievable opportunity that was Center just outside of Motorsports would be looking at church, you know, but our goal is to try and create things that are during the Formula One operating business the Formula 1 month Keiko system for things we have our own Formula One where we can provide synergistic value so that that would be our first priority.
Thank you.
Thanks. We'll get you Brandon Ross with life partners.
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 tracker structure influences what you can do operationally and then just for Chase is it reasonable now to assume that you you could be at twenty two races in 2021. Thanks. I just 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 to the Sirius XM Ford continued interactions continue to limit potential for further work together as in dog.
In the same tracker got it and and 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, but you know, we expect twenty-twenty. Our goal is to have 20 21 look like the 20 21, you know, we planned back in January and we have you know off multimate Lee we have renewals to put in place and we have some some ongoing discussions with a couple of potential new races that we think would be a positive went to the business for fans and as shareholders, but yeah, we expect twenty as I said, we ought to look like the 2020 one. We were looking at, you know in January and so certainly if we planned on 20 20 22 races then again wage.
The magic number but then 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 about the prize fund for this year. I think in normal course, it's usually variable pts. If it is the intention to keep it variable or are you intending to to maybe have to be able to hire some sort of 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 on that since it's a representative prophets and Prophets will be down, you know, 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 the system 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 ebitda and as we know what that is dead.
Don't think we you know, you know.
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 who's like that before we haven't settled the calendar month. We don't have any 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 if it's appropriate or right for us to do anything, you know, whether it's again, with the team or with you know, or with any of our other partners, but we expect to you know, we expect to be, you know, dealt with fairly and expect them 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 teams?
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 any respect the fact that there are you know, a number of teams has been significantly more than respect that you know, they will obviously have to you know manage through, you know challenges stuff off, 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 a healthier business for everybody in it the cap helped achieve that they've been different, you know, as I said all along their 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 came 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 again, 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 those broader 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.
So operator I think we're done 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 that does conclude today's conference. We thank everyone again for the participation.
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Thursday
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Thursday
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Yep.
and