Q4 2020 Liberty Media Corp Earnings Call

Yeah.

[music].

Ladies and gentlemen, thank you for standing by.

Welcome to the Liberty Media Corporation 2020 year end earnings call.

During the presentation, all participants will be in a listen only mode. Afterwards, we will conduct a question and answer session at that time. If you have a question. Please press star one on your telephone keypad.

As a reminder, this conference is being recorded today February 26th.

I'd now like to turn the conference over to Courtney Chun Chief portfolio Officer. Please go ahead.

Thank you and good morning, before we begin we'd like to remind everyone that this call includes certain forward looking statements within the meaning of the private Securities Litigation Reform Act from 1995 actual events or results could differ materially due to a number of risks and uncertainties, including those mentioned in Liberty media and the most recent form 10-K Liberty media acquisition for them.

The registration statement filed with the SEC. These forward looking statements speak only as of the date of this call and Liberty Media and Liberty Media acquisition expressly disclaims any obligation or undertaking is that any any updates or revisions anymore.

It contained herein to reflect any change in Liberty media or Liberty media acquisition corporations expectations with regard there to or any change in events conditions or circumstances on which any such statement is based on today's call. We will discuss certain non-GAAP financial measures from Liberty media and Sirius XM.

Adjusted OIBDA and adjusted EBITDA, the required definitions and reconciliations for Liberty media and Sirius XM schedules, one and two can be found at the end of the earnings press release issued today, which is available on.

Now I'd like to turn the call over to Brexit day, and Liberty's President and CEO.

Courtney and good morning to all of you.

Today speaking on the call. We'll also have formula one's new President and CEO Stefano Domenicali.

Liberty, Chief Accounting Officer, and principal financial Officer, Brian Wendling.

I'd once again like to recognize and thank our management team and employees for the tremendous job they've done moving from Covid in difficult circumstances.

Beginning with Liberty Liberty, Sirius XM and I know, we've continued our share repurchases repurchasing.

$9 million across all aspects of NK chairs in the November to January time frame.

As you know the discount persists and we repurchased at a look through price of CRE of about $3 70 per share. We do expect to continue to take advantage of the discount opportunity in part driven by some recent balance sheet improvements we had at L. S ex out.

In November we raised $929 million a day live exchangeable bonds at 50 bps to repairing or.

<unk> exchange that were maturing later this year and from the call spread.

Between Olympics ebb and flow that originated when we did the reattribution.

In tandem we amended amended the line margin loan and unencumbered a substantial portion of our lives equity.

Also after quarter end, we amended our siri margin loan increasing our borrowing capacity from $1 35 billion to $1 75 billion.

Accordingly, we have generated substantial incremental borrowing capacity to go after that discount from continued to take advantage of it.

Our ownership of series six volume as it.

January 29 stood at 76, 4% we.

We do expect to get to 80% ownership in this year and we recently announced a tax sharing agreement between Sirius XM and Liberty Sirius XM.

The Siri Board of directors evaluates capital return strategy every quarter and we'll continue to do so if liberty get to the 80% ownership level as we expect later this year.

So looking at Sirius itself, we welcomed Jennifer Witz, who assumed her new CEO role in January.

The new car penetration at Siri had 80% in the fourth quarter and we have line of sight to get to 82% in 2021.

Sirius XM hardware Who's now one out of every two cars on the road and the number continues to climb.

Ethics himself paint households, listening in a digital environment out of the car grew 40% in 2020.

And stitcher has the largest share of U S podcast listening audience available to advertisers.

We do make sure you listened to the podcast of the year Office Lady.

Those of you have been to our Investor day as you know how much we loved the office.

Turning to live nation, we continue to have great demand for concerts, perhaps notably the weekend sold over 1 million tickets worldwide for its 2022 tour just one week after announcing mature clearly there is robust demand as we noted for live music.

<unk> also acquired a majority stake in beats, a ticketed livestream platform I encourage you to check out the series they have on Rufus Wainwright.

Terminator turning to the Formula One group.

As I mentioned, we have a new CEO there Stefano.

Stefano Timna colleagues from whom you will hear in a minute.

We are planning for a record 23 races. This year.

Notably the Orange Army is ready to welcome the Dutch G P and local hero Max per stop it in September in Denmark.

2020 showed we have ample demand for hosting races, even on short notice from both new and historic tracks.

And not from any of you haven't seen everything you want to see streamed online this year get ready to tune in for season three of drive to survive, which dropped on Netflix on March 19th.

In January we introduced Almac this back.

We raised $575 million, that's the largest corporates back to date.

According to banks, who are involved from maybe their bias oversubscribed stack of all time in the first trade at 13 20 was the highest initial trade for earnings back to day Star.

<unk> has continued to trade well, but admittedly underpin volume.

We are actively in discussions with a number of targets in the TMT space.

The 20% interest in <unk>.

Is attributed to the Formula One group.

And I would remind you that the formula One group has committed.

Two Ford purchased $250 million at $10 per unit in connection with the initial business combination when it occurs.

Turning to Braves.

We sadly lost some icons of the brands in this off season.

And we'd like to start by paying tribute to them, notably fill Negro and of course. Thank you.

Yeah.

We started a fund named after Hank guaranteed it with $1 million from the brands plus $1 million.

Major League baseball and the Major League Baseball players Association to help grow diversity in baseball.

We are excited about our enhanced 2021 roster of coming off of winning at least for our third straight season.

As you May recall, we came within one year, one win rather from going to last year's World series. So our guidance are ready to go ready free freemen coming off of 2020, NFL MVP Kuhnian lbs, and more are hungry and ready.

Spring training did start recently.

Tuesday, and our first strength spring training game.

Is this Sunday, we expect fans to be attendants at 25% capacity.

Turning back to the home front, the three ballpark office tower.

Near completion and 70% leased.

Both kitchen, Cook and Papa John's will fully occupy their space by the summer of 2021.

97% of the batteries tenants are operational which speaks to the relative openness of Georgia.

And we believe bodes well for fans of true it this year.

We do expect to have fans in the standard, but theyre not yet sure of the seating capacity restrictions.

And we do have significant demand for both tickets.

A true it and spring training as I noted, we look forward to a great 2021 season.

Including hosting the MLB all star game on July 13th.

So with that let me turn it over to Brian for some more financial results.

Thanks, Greg and good morning, everyone.

Liberty Siriusxm group has taken a number of steps to boost liquidity and strengthen the balance sheet.

The fourth quarter, we issued $920 million of live nation exchangeable bonds and amended our line nation margin line unencumbered substantial live nation equity value.

Decreasing the shares underlying the loans from $53 7 million to $9 million.

Subsequent to quarter end, we amended our siri margin loan increasing borrowing capacity to $1 75 billion up from $1 35 billion at year end and borrowing an additional $125 million.

Inclusive of this additional margin loan draw Liberty Siriusxm group had attributed cash restricted cash and liquid investments of $1 1 billion, excluding $83 million of cash and restricted cash held directly at Sirius XM.

We also have $1 1 billion of Undrawn margin loan capacity at the parent level.

Note that approximately $850 million of our cash will be used in 2021 to settle the call spread between the Formula One group and the Liberty Sirius XM group and to repay our $2 two 5% live nation exchangeable bonds.

This value is based on estimates of the fair value or from a fair value book liabilities at year end.

As of February 25th the value of the Siriusxm stock held at Liberty Sirius XM group was $19 billion and the value of our live nation stock was 6 billion, excluding valuable ambition call spread held at Formula one.

Value added 370 $471 million a year round we.

We have $3 2 billion in principal amount of debt against these holdings total Liberty Siriusxm group attributed principal amount of debt was $4 8 billion, which includes $8 6 billion of debt.

Sirius XM directly.

Formula One group had attributed cash and liquid investments of $1 4 billion, which excludes 265 million of cash held at Formula one.

Total Formula One group attributed principal amount of debt was $3 6 billion, which includes $2 9 billion.

<unk> between 727 line of the corporate level.

At year end Formula Formula one $500 million revolver remains undrawn.

At quarter end brace group had attributed cash and liquid investments and restricted cash of $185 million and attributed principal amount of debt of 674 million.

We are currently in compliance on all debt covenants across the portfolio.

With that I'll turn it over to Stefano to discuss Formula one.

Thank you Brian.

First of all day, none of it to the former one.

Thank you to Liberty the FAA the teams in all of our partners for the World Welcome.

Before I start there I want to thank James for his tireless work over the past four years and building an organization that gives us a very strong foundation for the growth in the case of head.

It was a challenge for everyone around the globe and everybody's on the sport felt the impact of that from them.

<unk> delivered what many thought was impossible I said that the race calendar delivered safely and with huge enthusiasm from our expense.

72% ex one does improve over the past two years, 68% believed that one is in good hands under Liberty media.

71% rate their satisfaction with being in that one.

Eight or higher.

Furthermore, funds believe Puma, one hand book, it's safely very very well during the global from Dennis with 90%, believing the symptom measures put in place to allow races to go ahead and have been handled well, 81% believed in F. One that's communicated well with hence during the shut down from 73%, believing in F. One.

As handbook, the absence of fans of the race as well and 88% feeling positive about the commander in 2000.

We all continue to navigate the challenges of COVID-19. This year, however that would not preclude us.

These and opportunities we see in front of US which are number one moving the drivers of the centralized one.

They represent the soul and all the possibilities of sport.

The talent, we have today and the grade is one of the highest F. One history and we should celebrate that.

Number two.

Delivering an incredible product that things in its competition and action on the track, including plenty of three races. This year.

A free enhancing the long term prospect of sport and shooting as attractive business model for all participants and attracting new participants and number four remaining committed to our action to our release us from platform focused on sustainability diversity and inclusion and community.

So we reflect on 2020, we were they swimming crowd to complete the successful 17 race season.

The last few races brought some new places to podium include <unk> with so central bet is claiming they supposedly win alongside that's about a corner last tool at the same time and at the same rates. We were relieved to see Roma grows young book away from a theory crash.

Into a man.

Support teams on the track and improve safety measure in the sport.

The stop and secured the window of our last ramping up with Abbvie, which capped a very successful season per rep Booth, who placed second in the constructor spending.

On the financial flows clearly we were impacted by COVID-19, but working in collaboration with our partners to mitigate these impacts.

Due to the reduced number of races duration of the season that almost no pan attendance Unsurprisingly primary revenue declined in all categories.

We worked with outlook from what would cause the extent complex. We have mutually agreed to work with certain sponsor to the SaaS selected Reits into future years. We approach. These agreements with the spirit of partnership and largely lies related the old contract to impact 2020 discrete from collaborations together with the ongoing Tim was all accounts.

Leave us well positioned with all of our material commercial partners.

Entering 2021.

For the full season, we are pleased with the reaction from our fans across multiple platforms. We made significant gains the growing social platforms, making us the second fastest growing major sports league until those call over across the four major social platform ahead of major sports such as NFL NBA P. G E. Two MW.

Absolutely we.

We have seen the fastest growth in the digital engagement compared to all other major support within the 99 per cent decrease from 2020.

On television our average orders per Grumphie was $87 4 million very marginally down on 2019, but still higher than the average of 2018.

Compared to February two other major sports with an international footprint, that's excreta speeds decline it doesn't 'twenty due to the pandemic.

We plan to engage more fans in 2021, and we have to support an exciting 22 races. Coloring book. These include the addition of Saudi Arabia and much anticipated race in net doesn't that defense.

We will navigate the challenges of that from them, but I'm pleased with how we have already been working with our partners. We were able to the stable Australia Nathan per year and announced they would sort of be more than 40 miles to the scheduled holdco.

All compensation with promoters have been positive since the start of the year and every one of them has made it clear that day events should be going that had the scheduled with.

We'd love to welcome back from the track and we'll be working with the local organizers and governments on that approach.

We are also grateful for the of course made by the government to allow formula one to continue to travel throughout what events do it in a time of global current time, our highly robust safety procedures have proven we can travel and rates safely. Furthermore, we are evaluating the race weekend with a proposal to try a new.

Subtleties between trades per month up some races. In 2021, the result of which would remind the grades for the main events on Sunday.

Supported by the teams and principles at the meeting a few weeks ago, and we will work with them and the FAA to finalize the details before the start of the season.

The sporting side, we are expecting an exciting season with loose some of the limits say despite them for a unique and historic April championship, we hope to see Ferrari, we that old, but he's doing the sport.

They have played back and I'm excited for all the new faces and lines up on the grid.

Well most of the season, we were wondering what essential patents would find the driver's seat and we can't wait to see him pent up with Max with stopping the.

The cloud web spectacular 2020 season finishes for the construction of standard we'll see that every key outdoor London noted line up together.

We welcome Aston Martin and iconic brand with a seasonally champion sebastien value beyond the wheel. We also welcomed the retold off but nonetheless, so to rename alpine team he's doing well by the way. He following these recent accidents and looking forward to see him of the start of the season in Bahrain and of course, the world will be watching them.

May the seasonal mix you might get a pass.

Last year was momentous fulfillment of one signing the new Concorde agreement and reaching agreement on the introduction of a coast GAAP taking effect this year in 2021 net.

You made you were able to cover relates to them to the power unit per engine.

Demonstration of our collaborations the SBA formula one and the teams devoted to free it's probably was developed from the start of 2022 are.

A high level. The working group has been established we think who's probably use a manufacturer and supplier.

As we look to the next generation of the public units for 2025, the key objective of our carbon neutrality.

Fully sustainable to us hybrid power unit significant cost reduction and of course atherectomy device to the new power unit manufacturers, we believe that the sustainable hybrid engine will be a very attracted all per for the Oems and their portfolios and provides another solution to the automobile book.

<unk> drive across the world.

Feel very positive about this probably in this area and have already had very productive conversations with existing and potential Oems about the direction forward one is moving.

Continuing on this topic, we confirm that we erased as one platform will become viable official ESG platform with the three core pillars of sustainability diversity and inclusion and community. We are proud of the input. This platform as last year and will continue without what action to push forward average score.

In the coming weeks I will meet with all the drivers to discuss with them. Our weird. He says we're on plans for this year. The deal included the rollout of our apprenticeship internship and scholarship day that will support for underrepresented groups and very important our heroes role models and champions of progress in our sport.

Despite fans around the world.

We are looking forward to seize them free of drive to survive hidden message from March 19, the true.

Once again captured all the DRAM and storylines from 2020 and Theres No question that she has continued to bring new parts of this force.

I can't express enough my excitement for all the opportunities approval one has in front of us and I look forward to update you on our progress, but please be sure to watch the season opening ramping Bahrain on March 28, and with that once again. Thank you. So much I will turn it over to you Greg. Thank you.

Thanks, Brian Thanks Stefano.

Our listening audience. We appreciate your continued interest in Liberty media and hope you, all staying safe and healthy and.

And operator with that I'd like to open the floor to questions.

Thank you as a reminder, ladies and gentlemen, please press star one to ask a question.

Our first question today comes from Vijay Jayant Evercore.

Thanks, I have two first.

Greg obviously, the tax sharing agreement with Sirius.

That's sort of kicks in the 80%.

Obviously, you mentioned that the board will decide how capital allocation works, both that moment, but.

Given the flow through will be pretty small.

I think that dividends will be tax free both that is there an expectation that we should assume that will shift more towards dividends over buybacks.

Well definitely on a path to sort of taking the company private and are there any obstacles sort of on that that is there like a squeeze that refinement at 90% anything you can share on sort of what happens to the capital equity capital structure post.

The 80% level and second bullets ethanol welcome.

Wanted to sort of get your perspective.

Mentioned in the press, suggesting that you're looking for more quality over quantity in terms of wafers and so you're talking about expenses, you really think you'd need to change the format of the race weekend uniquely.

Pay practices and making it a bigger spectacle can you just talk about what you think is the opportunity to make day weekend event book It. Thank you.

So I'll go first and chat a little bit about dividends capital allocation and the like.

First of all it really is a decision of the full board.

You would know correctly that on the margin.

We would probably have a slight tilt towards dividend, we at Liberty media Liberty Siri compared to where we once were but it's really not that they can tell what we're looking at that.

Net.

No the discount.

Running about just under 28% substantially tightened from the 45% when the G M E Luo.

We were running more like in the mid to low 30, so we have tightened it.

But that's still quite large compared to even the 7% rate we would normally pay with the D. R D.

Exclusion. So you know I don't think huge from on the scale for Liberty, we are marginally more.

Or is it towards dividends, but not massively but that decision really will be driven by management and the board.

As far as triggers.

That might involve.

I'd say the independent board will have to make their organizations, but one thing that I think will likely be in the back of their minds as we get to 90% we could do a short form squeeze out merger of the remaining 10%. So some directors might think about the pace at which we would get to that kind of a number.

But again those decisions really will be made by the full board and.

At some point.

Directors will have voice about ensuring that the minority is price.

Lately protected.

Okay. That's my go to to answer to the question with regard to the format on the on what we are thinking and to improve until up show first of all have you say that that would have objected to supply to offer to the people that come into the event to the people that are watching TV. So the people that are really sounds approval I'm from.

Somebody that he's excited so the idea that we have share then I think that we have received great feedback from everyone. In the sport is that that we will try to figure out something that would give us a qualified on Friday Saturday print twice that we determined that the grid order for the Sunday race. So though it gives the thrill of agree we can't that would be.

Beneficial to all day parts in boats and this is something that we have let's say then with that with the themes in the play in the next weeks in order to present the final four months before the top of the seasoning of the range, but that's the aim of what we have worked with try to do this year in that respect.

Okay. Thanks, so much book.

Our next question comes from David Karnofsky of J P. Morgan.

Alright, thanks for taking the question welcomes Toronto.

Can you discuss the.

Free Zone engine development and how you think this might impact on track competition and then just maybe expand a bit on your view of F. One long term engine goals in light of some of the Oems like GM and Jaguar moving toward the all electric vehicles.

Well. Thank you David for the question I think that what is important to say that that these ideal prison one year in advance is connected to the new business sustainable approach. Therefore, one has taken you know we will have taken up this year with the cash cats that is related to a certain part of the cost of mentioned the theme. The other part of it was a non.

Margin about very important was how we can capture the controllable investment of course as in the normal business.

Therefore by Associates is the fact that we would anticipate that the end of spending new money for a new engine, we will see how we can capture the attention of potentially manufacture, but also making sure that the ones that we book today I think the that's in the future. So we do believe by being the eyebrows.

In the future is the exact position that will allow all the manufacturers who have an access to at least from portfolio Latoya certification for their normal business. So therefore, I think that what we're putting in place in that respect hadn't carbon neutrality fully sustainable fuels of the center and beat I gave.

As a really great position in terms of packaging from a bean always at the pinnacle of the technology of advanced research and Puma line, and making sure that everyone could benefit from visa activity also to have a a sort of a road relevancy extra activities that can be beneficial to all the automotive manufacturers and by doing that we're gonna have a win.

Well situation.

Attention are probably the only thing a different way of OLED and electric are having the cost control under under under control and of course being a light with our value will be sustainable for the future. So these are the basic thinking that we're taking when we decided to go and follow this path.

Okay, and then I believe there's a number of weighted promotion contracts expiring at the end of this year, I think Singapore and U S.

Wondering how you're thinking about F. One step into these regions versus.

Adding new races. Another flyway markets I think you've mentioned in South Africa recently, and then with regards to the Vietnam. GP is there any update you can provide on whether we might see that break at some point in the future.

Well, yeah, I mean for sure we're in a great moment because.

Despite the pandemic, we are receiving an incredible number of requests bye bye bye that shows that the F. One of the Central basin, it's not totally from the organized over there all around the world, but also from the motorsport community, but for our strategic plan is that to the side first of all what is the right they mentioned it.

The races in the year. The comfort that you are mentioning are expiring, but there are discussions ongoing because they weren't that'd be weather.

See them that are really important and there is a lot of interest to progress in and keep them.

Also in the future we confirm.

As you know that's a U S. A is very important and strategic market for us and we.

We have a be able to add another race in the U S. A we have already great partner and the last thing, but we are looking at for other solution.

It would be very important for us.

What I can see with Vietnam for whatever reason to happen do you see we didn't have the race, but for sure that is an adder far east in general, but is very important for the strategic growth of our business in the future and for sure. That's an area, where we're going to explore other opportunities for the future.

And if I could just add stefanos comments, which I agree with you know we do not have an unusual number of promoter contracts expiring. This year are pretty much in any year, we have a portfolio or certain number get renewed every year just like we have a certain number of broadcast contracts that get renewed every year and in general because.

We think demand will rise for our sport.

Don't fear that we actually appreciate that because we think theres more opportunity it had been behind.

Okay.

Our next question comes from Ben Swinburne of Morgan Stanley.

Yeah.

Thanks, Good morning, guys.

I wanted to ask both Stefano and Greg just a question around sports rights and sort of the state of the market right now maybe Europe and U S.

You guys had a very successful at least based on the press reports renewal in Germany with Sky last year, but we've seen you know some of the some of the other deals.

That have happened are happening have gone backwards, you know EPL the Bundesliga and at least the press suggests Syria may.

It may roll back.

And even in the U S. There's been you know so it's probably more tension unusual and Greg obviously with Sinclair and what's going on there and Fox sports is clearly tricky with cord cutting. So maybe can you guys just give us sort of a sense as you as you move through 'twenty, one and 'twenty two how you're feeling about your position both with F. One and the Braves.

The market has gotten you know either more complicated or more challenging than it was a couple of years ago.

That's why you aren't taking kind of a happy too.

Okay I mean in my opinion. This is the way we're living today is for shorter interest from one side, but very very good about the other I mean, what we can see that as you know on our business model the broadcaster partners out a hugely important for us, but we can see a very good opportunity to do X.

Standard and explored beat from the models to as I said to be complementary platforms and provide the direct connection to their fan base. Both in the OTT world, but these are still an.

Our net Adobe will for sure give and I am very important for the future but to be honest I do believe that if you are able to attack that is we are doing.

This port you know the commercial accounts because they thought if he's there and we need to make sure that the this book we are shaping up for the future give the context to make sure that is deliverable to defense and that's why we have a lot of activity connected to make sure that first of all of course, we don't lose the traditional and am very religious fans, but we need to speak.

The language the new support that the new fans. The young generation. So we have a lot of programs to make sure that these has that been already this year. So I'm positive on that for the items.

I agree with Stephane I was comments, but I had a couple more if I could benefit from.

You know we've done a lot over the last few years. Thank you Chase and now thank Stefano to try and build fan interest in fan excitement and that's better on track competition, that's more balanced field that we as we go into 'twenty. Two that's a lot of ancillary things like fan festivals like programming like drive us.

All of those building fan interest.

Obviously esports component as well.

As an important component when you obviously go for renewal how much fan interest how much excitement there is.

Probably the most important component is how much competition. There is amount of potential bidders distributors of your product and candidly. The best deal, we have probably as our UK deal and it was largely because there were several bidders highly interested in getting a product I do feel as Stefano notes, we have a relative value you have seen.

And some of the other higher cost European alternatives, but if you look on any kind of basis about what cost per eyeball cost per hour et cetera.

If one looks like a relative value and I think a side note then which I'm sure you can appreciate with the rising cost of alternatives like scripted content as that gets more expensive in some ways. It provides a floor on what the value of some of the live sports can be historically live sports book, So expenses, maybe not quite as much when scripted continuing to rise.

So I'm excited about <unk> prospects, but above all we would benefit from increased competition, which is potentially some of the new digital players entering an estimate and we'll see if we can get them excited I do believe ultimately they will be competitors and that will be to our benefit.

As far as looking back at U S Reits and embrace.

Obviously, we've had a world where the bundle.

It's caused a lot of overbuy, whether it'd be for support of all kinds of sports programming, including the RSM and.

And is that bundle breaks there is risk around.

What's the total amount paid two teams will be including the Braves I feel relatively good about the Braves.

Our contracts from <unk> 27.

First and secondly, we have a good contract from far and away not the highest.

Well below somebody like the Dodgers, but in contracts, we have the largest broadband household audience. So the brands have the largest territory with 12 million broadband households, sort of degree you look at digital alternatives from alike. We are probably in the best shape.

Compared to many to benefit as new alternatives.

Alternatives arrived in the bundled potentially a weekend.

So tell me if I could look in the middle East is a seasoned. Thank you. Thanks.

Yeah.

Our next question comes from Bryan Kraft of Deutsche Bank.

Hi, good morning.

A couple of questions first can you Greg can you talk about your current expectations for what I'll call. The path to normalcy for your live event businesses looking out over 'twenty, one and 'twenty two.

There's obviously a lot of.

Focus in the market by investors on how quickly.

Businesses like these are going to be able to bounce back and weather.

Half of 'twenty, one looks normal R 22 looks normal so would just love to get your thoughts on what Formula One live nation, the Braves, what that what that path looks like for them.

And then just quickly on the leverage target for Formula. One can you just remind us what your target leverage ratio is and is there any thought to running that balance sheet more conservatively in the future just given the experience with the pandemic or are you still comfortable with that thank you.

So I'll start on that.

The opening is certainly not binary and it's not binary in a lot of ways because F. One and the Braves.

Multiple sources of revenue.

<unk> got three big pillars, right broadcast, which was impeded, but probably will be needed less.

In 'twenty, one regardless of the pandemic sponsorship and advertising, which was impeded less in 2020 than than certainly the fan component the promotion component, but again, probably less in 'twenty and 'twenty, one and then fans and we're gonna have a variety of alternatives where fans will be to some degree.

Are you there and I don't think again it'll be binary we're not necessarily going to see zero to 100, it will be somewhere potentially in between so I'm more optimistic as we go to the end of the year, we're going to get to a 100 per cent of capacity.

And the same thing with the Braves multiple revenue streams, both television and.

On site, but we don't really have is we do have sponsorship is not as large a component of the visit formula one.

I think again not binary.

The expectation is we'll probably start out at 25%.

I mentioned already the majority is relatively open.

We will be in far better shape from.

The fan attendance than if you were in New York, or California, or some other locales.

And it will be decided not by baseball, but by the local rules and authorities.

So the expectation is we will have increasing numbers there.

But again not binary I don't think we're going to go from 25 to 100 in the space of a flip of a switch.

Obviously live nation.

It doesn't have has obviously advertising and sponsorship doesn't have the broadcast elements of what's the most.

Sponsor of our vulnerable or affected by shutdowns.

Yeah.

Offset to that is global business really with the potential for very different responses, depending on where you are in the world.

Ah I think formula one in particular is preparing for.

A.

Our balance sheet that is.

Vegetable whenever it comes and we're fully supportive of that.

I do think they will have fans at events this year, but certainly you've already seen some of that and it will grow they announced earnings slightly ahead of expectations I think just yesterday.

But meaningful efforts there will still be up definitely work to be done throughout 'twenty one.

So that's kind of a you know that's probably somewhat of a non answer Brian because we certainly aren't in a crystal ball business exactly but we are in the business of trying to prepare to make sure we benefit when it does open and they were prepared if that doesn't happen at the rate of pay or change your pace that we would like and I think all three of those businesses are well prepared.

And that sort of trying to balance sheet question.

Thank God.

One of the things about being part of the Liberty group as you can we have the ability to.

Hopefully looking ahead and be thoughtful from the benefit of our operating companies.

The Formula one balance sheet is very very strong I think the operating levels that we have in our agreements are fine and I. Obviously, they have a strong growth of the F. One operating level and then when you look at the cash the flawed level.

It's quite strong so I'm not really worried about the balance sheet.

Great. Thanks for the interest to answer your question real real quick on the leverage target our stated leverage target on Formula One is five to five five times.

And as you recall, we have a our eight five Max leverage has been waived through March 31, 2022, and when we bought the business. It had that approaching at eight times leverage and we substantially deleveraged at not only true cash operations generated but we did have a primary equity issuance as well so both of those.

<unk> reduced the leverage even prior to the pandemic.

Got it okay. Thank you I appreciate it.

Thanks.

Our next question comes from David Beckel of Fernberg capital.

Hey, Thanks, a lot for the question.

Sort of piggybacking on your commentary about reopening I was wondering if you could help.

Help us think about revenue recognition for the promotion side really older revenue streams under a variety of different scenarios. It seems as if the vaccine rollout.

For the most part is going better than expected in many parts of the world should we be thinking about wage promotion revenue.

In materially affected and each one or is that somewhat protected given the concessions you made last year.

Then.

Sort of as a follow up to that but love to hear your thoughts to the extent you're willing to share on how the team payment structure.

<unk> earnings or EBITDA. This year, specifically, maybe if you could frame it in reference of 2019 levels at.

EBITDA level pre teen EBITDA exceeds 2019 should we expect marginal upside.

And the per year.

So.

I think promotion will be.

Bill reduced in 'twenty, one certainly versus what we would have in a non pandemic here, we will have to restricted audiences.

Cricket fan at some of our events. So I do expect that we're not gonna.

To make a forecast in part because some of this is still up in the air.

Floating around but also because that's where it can.

We liked it unless you do.

So how much will be it'll definitely be impacted the amount to which we'll see and Ah.

Going forward.

We have the new Concord agreement, we have a structure, which as we.

Increased profitability, we have the opportunity to take back some of what.

Historically F. One earned comparatively over the years the rates get a little more attractive for us whether we'll hit that in 'twenty, one given the risks around pandemic I'm not as confident but in the years going forward as we continue to have a fully healthy business I do believe are our share of the margin will slightly increase Stefano would you add anything.

I Couldnt agree more and I think that from what is important that with the new government. So with the new Concorde agreement with the new you know.

Cost control measure you know, it's given the sustainability of proof that allow us to think bigger and this is something that I do believe that these are really.

The right fundamentals that drives it that way both from a commercial point of view and also from the <unk> perspective to be part of this incredible championship.

Alright, Thanks, a lot.

Thank you.

The next question today comes from David Joyce with vaccines.

Thank you very much.

Couple of questions one on the broadcast side of the Formula one business for for this year would there be any lingering COVID-19 related impacts or should we think about it as being.

Sort of comparable to 2019 and grossing up for step ups escalators and number of events.

And then secondly on the briefs with the.

Sinclair our ascend agreements.

And this was already touched on a little bit earlier in the call.

Where do you stand with the with them moving towards having a hybrid over the top model how does that play into your.

Economics, and what Covid do for further fan engagement.

And even those that could tie into sports betting once that becomes.

Something on the horizon in Georgia. Thank you.

Thank you.

So we expect a fairly normal broadcast revenue stream.

And in light of our 23 races now.

<unk>.

Crystal ball about exactly how COVID-19 plays out, but our goal was to try and take.

Take the pain in 'twenty to a degree.

Free that we rightly had to make concessions to what some of our broadcasters are in total as much as possible, but to make that a 'twenty event and bring 21 back to normal so that is our open our expectation.

But COVID-19 could change that interest.

And on the.

Thinking about the R. S ends.

As I said, we have our contract runs to the end of 2007.

I know Sinclair is trying to do some different things, it's not clear to me exactly what rights Sinclair has to do some of the things that they can.

They can do or want to do I know there've been some discussions with baseball about new alternatives, but I do not expect a major change assuming we can run a full 162 games schedule on a normal pace I would expect we would have normal revenue streams from Sinclair in.

Certainly in 'twenty, one and through the rest of the contract and I.

Whether they're new engagement models that help us with Sinclair that can be on it we'll see.

I'm not exactly sure what songs Sinclair thinks their rights are to do some of those things but.

That's a.

Terrific job.

And just.

Finally on the Covid impact for <unk>.

Formula one and.

In broad strokes, how should we think about those promotion and sponsorship contracts.

The mix between fixed and variable components is there is there.

General algorithm, that's baked into the contracts or how should we think about that.

What I should think you'd look most of them are probably do not have triggers.

Any triggers that they do have we will likely be able to meet on the other hand.

Take.

Our partner, who has a large international airline doing who basically gets shut down for all foreign travel you can decide when you're going to be a good partner with them or not from a long term and that's been our goal. So we will work with them in the way that we appreciate that they have worked with us during the difficult time.

Yeah.

Alright, thank you.

Thank you.

And our next question comes from Jason Bazinet.

Okay.

Thanks, so much.

Having extra liquidity is always a good thing, but I was wondering if there's any color that you might add in terms of these amendments that you did the unencumbered from the passive equity Stakes.

Was there something specific that you were that you were looking to do.

Suddenly you have tourism from more just general Optionality.

Well, you know we're into Optionality, and Jason, but I'll, let ann or in a relatively new treasurer answer.

Sure.

With respect to the Siri margin loan, we did upsize, but we kept it because it's a billion shares collateralized in that loan as we had previously under the 135. So we're just maximizing our ability to access dollars.

With respect to y.

It's really a function of what happened in the previous margin loan.

We repaid it and we had a substantial number of share throughout your line net secured debt.

Lateral pool, and so when we rightsize the loans of $200 million.

Appropriately took the amount of shares underlying that.

Something that's closer to a realistic LTV per module.

Okay I understand thank you.

The next question comes from John Tinker of Gabelli.

Thank you.

Terrific numbers and the battery I'm afraid.

Unfortunately things get a little lost giving those people focus from Amy do you have any.

Have you ever considered in any way highlighting there that that valuation is but let's see.

Profit in a different way.

John when we have great analysts like you writing up the value for it we don't need to do with our commodity.

You know I think you're right there is value in the battery is impressive.

And it's a function both of Georgia being a relatively open places we've noted and I think really the great job that the phrase management team has done to create a secure environment.

One where people are willing to come in and it's open and that's going well.

We I'm you know I'm not sure we're going to create a tracker or do something different around that but we'll try and make sure. We highlight appropriately that there is value in the battery and our real estate development. Thank you.

Thanks.

From the final question today comes from Matthew Harrigan benchmark.

Oh, thank you.

Even though our formula one probably generates more data from any other sport.

Concert with AWS, and Intel and Qualcomm It was really under default under the answer on a machine with Bernie you had a loss expenses Universal ground pretty now I think you've got a lot of loud too maybe happy more.

Look angles, and all that and cameras in the races.

But could you talk about the potential there and how you see that developing it feels like you've made some strides, but theres still a lot of headroom in terms of what you could do on the TV side and the video game side. Thank you.

Yeah, No I think that's a great point, Matt if you think about.

The net.

Bombing world.

Where we have increased starting on the broadcast side, where we have potential for increased digital players.

Number of cameras, we have the angles, we have your ability to dial up what angle you won that really plays perfectly to strength of those kind of games to players and different administrative linear.

So I think we are a sport.

We'll benefit from that increased attention on the digital side in terms of viewing.

Different experience and one that the fan can Taylor I think you can see that opportunity and it will be great.

The other point is that all of that data proprietary data.

We have begun we began to take advantage of true.

Contract with ISG that did not turn out as well as we'd like but as we go forward and look at it.

Opportunities around that I do believe there is quite a lot around gambling around spanning formation that is valuable and that we are in a very strong place relative to most sports because of the amount of data and the amount of which is proprietary so I think on both sides. That's a huge asset.

Thanks, Greg.

Thank you.

So with that operator, I think we're done thank you to our listening audience for your continued interest in Liberty media and we look forward to speaking with you again next quarter if not sooner.

Okay.

Ladies and gentlemen that concludes today's conference call. We thank you for your participation you may now disconnect.

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Ladies and gentlemen, thank you for standing by.

Welcome to the Liberty Media Corporation 2020 year end earnings call.

During the presentation, all participants will be in a listen only mode.

Afterwards, we will conduct a question and answer session at.

At that time, if you have a question. Please press star one on your telephone keypad.

As a reminder, this conference is being recorded today February 26th.

I would now like to turn conference over to coffee Cheung Chief portfolio Officer. Please go ahead.

Thank you and good morning, before we begin we'd like to remind everyone that this call includes certain forward looking statements within the meaning of the private Securities Litigation Reform Act of 1995 actual events or results could differ materially due to a number of risks and uncertainties, including those mentioned in Liberty media and the most recent form 10-K, our Liberty media acquisitions warm.

S. One registration statement filed with the SEC. These forward looking statements speak only as of the date of this call and the reach media from the premium media acquisition expressly disclaims any obligation or undertaking.

Any updates or revisions to any forward when he isn't contained herein to reflect any change in the reading media or Liberty media acquisition corporations expectations with regard thereto or any change in events conditions or circumstances on which any such statement is based on today's call. We will discuss certain non-GAAP financial measures from Liberty media and serious ex.

Hum.

Adjusted OIBDA, and adjusted EBITDA and required definitions and reconciliations from Liberty media and Siriusxm scheduled one and two can be found in the earnings.

<unk> press release issued today, which is available.

Now I'd like to turn the call over to Greg Lefever to these permanent CEO. Thank you Courtney and good morning to all of you.

<unk> began the call. We'll also have formula one's new president and CEO Stefano Domenicali.

And Liberty, Chief Accounting Officer, and principal financial Officer, Brian Wendling.

I'd once again like to recognize and thank our management team and employees for the tremendous job they have done moving from Covid in difficult circumstances.

Beginning with Liberty Sirius XM and I know, we continued our share repurchase as repurchasing $99 million across <unk> and K shares and the November to January time frame.

As you know if the discount persists and we repurchased at a look through price of CRE of about $3 70 per share.

Do expect to continue to take advantage of the discount opportunity in part driven by some recent balance sheet impairments, we had at analyst day cab.

In November we raised $929 million of a line exchangeable bond at 50 bps to repeat or.

Live exchangeable maturing later.

Right.

Between our seven one that originated when we did the reattribution.

In tandem we amended amended the line margin loan and unencumbered a substantial portion of our line equity.

Also after quarter end, we amended our siri margin loan increasing our borrowing capacity from $1 35 billion to $1 75 billion.

Accordingly, we have generated substantial incremental borrowing capacity to go after that discount to continue to take advantage of it.

Our ownership of series six.

As of January 2000, 1976, 4%.

We do expect to get to 80% ownership in this year and we recently announced a tax sharing agreement between Sirius XM and Liberty Sirius XM.

The Siri Board of directors evaluates capital return strategy every quarter and we'll continue to do so you have liberty to get to the 80% ownership level as we expect later this year.

So looking at Sirius itself, we welcome to Jennifer Witz, who will assume.

Our new CEO role in January.

The new car penetration at Siri had 80% in the fourth quarter and we have line of sight to get to 82% in 2021.

Sirius XM hardware is now one out of every two cars on the road and the number continues to climb.

FX net self pay households listening in a digital environment out of the car grew 40% in 2020.

And stitcher has the largest share of U S podcast listening audience available to advertisers.

Please make sure you listened to the podcast of the year Office Lady.

Relative to that you have been to our Investor day, you know how much we loved it.

Turning to live nation, we continue to have great demand for concerts, perhaps notably the weekend sold over 1 million tickets worldwide for its 2022 tour just one week after announcing mature clearly there is robust demand as we noted for live music.

<unk> also acquired a majority stake in beats a ticketing livestream platform.

Current you to check out the series they have on Rufus Wainwright.

Turning to turning to the Formula One group.

As I mentioned, we have a new CEO there.

Timna colleague from whom you will hear in a minute.

We are planning for a record 23 races. This year.

Notably the Orange Army is ready to welcome the Dutch GP and local hero Max per stop it in September at that one.

2020 show, we have ample demand for Alstom races, EBITDA chart motors from both new and historic tracks.

And not from any of you haven't seen everything you want to see screened in Hawaii.

Get ready to tune and proceeds and three of drive to survive, which dropped on Netflix on March 19th.

In January we introduced <unk> back.

We raised $575 million, that's the largest corporates back to date.

According to <unk>, who are involved from maybe their bias.

Oversubscribed stack of all time in the first trade at 13 20 was the highest initial trade for earnings back to day Star.

Stock has continued to trade well, but admittedly offtake volume.

We are actively in discussion with a number of targets in the TMT space.

The 20% interest in <unk>.

Is attributed to the Formula One group.

And I would remind you that the formula One group has committed.

To purchase $250 million and $10 per unit in connection with the initial business combination when it occurs.

Turning to the brands.

We sadly lost some icons of the brands in this off season.

And we'd like to start by paying tribute, notably fill Negro and of course thanks.

Sure.

We started the fund named after Hank guarantee with $1 million from the brands plus $1 million from.

Major League baseball and the Major League Baseball players Association to help grow diversity in baseball.

We are excited about our enhanced 2021 roster coming off of winning at least for our third straight season.

We did resign Marcellus net to a four year deal.

As you May recall, we came within one year, one win rather from going to last year's World series. So our guidance are ready to go right.

We had a great framework coming off of 2020, NFL MVP Cooney lbs, and more are hungry and ready.

Spring training good start.

<unk>.

On Tuesday, our first strength spring training game is this Sunday, we expect <unk> to be a cabinets at 25% capacity.

Turning back to our home at three ballpark office tower.

We are near completion at 70% leased.

Both kitchen, Cook and Papa John's will fully occupy their space by the summer of 2021.

97% of the batteries tenants are operational which speaks to the relative openness of Georgia and.

And we believe bodes well for fans and true it each year we.

We do expect to have Phantom advanced, but not yet share of the peak heating capacity restrictions.

And we do have significant demand for both tickets.

A true it and spring training.

As I noted, we look forward to a great 2021 season.

Including hosting the MLB all star game on July 13th so.

So with that let me turn it over to Brian for some more financial results.

Thanks, Greg and good morning, everyone.

At Liberty Siriusxm group, we've taken a number of steps to boost liquidity and strengthen the balance sheet.

In the fourth quarter, we issued $920 million of live nation exchangeable bonds and amended our one nation margin volume unencumbered substantial live nation equity value as part of amendment.

Decreasing the shares underlying the loan from $53 7 million to $9 million.

Subsequent to quarter end, we amended our Siri margin loan income.

Leasing borrowing capacity to $1 75 billion up from 135 billion at year end and borrowing an additional $125 million.

Inclusive of this additional margin loan draw Liberty Siriusxm group had attributed cash restricted cash and.

Liquid investments of $1 1 billion, excluding $83 million of cash and restricted cash held directly at Sirius XM.

We also had $1 1 billion of Undrawn margin loan capacity at the parent level.

Note that approximately $150 million of our cash will be used in 2021 to settle the call spread between the Formula One group and the Liberty Sirius XM group and to repay our $2 two 5% live nation exchangeable bonds.

This value is based on estimates of the fair value or from the fair value of liabilities in Europe.

As of February 25th the value of the Siriusxm stock held at Liberty Sirius XM group was $19 billion and the value of our live nation stock was 6 billion, excluding valuable operation cost per upheld at Formula one.

370 $471 million at year end.

We have $3 2 billion in principal amount of debt against these holdings total Liberty Siriusxm group attributed principal amount of debt was $12 8 billion, which includes.

Okay.

At Sirius XM directly.

One group had attributed cash and liquid investments of $1 4 billion, which excludes $265 million of cash held at Formula one and the total.

Total Formula One group attributed principal amount of debt was $3 6 billion, which includes $2 9 billion of debt at <unk>.

One the new 727 line at the corporate level.

At year end Formula Formula alone $500 million revolver remains undrawn.

At quarter end branch group had attributed cash and liquid investments and restricted cash of $185 million and attributed principal amount of debt from $674 million.

We are currently in compliance all debt covenants across the portfolio.

With that I'll turn it over to Stefano to discuss Formula one.

Thank you Brian.

First of all day, none of it to the former one.

Thank you to Liberty the FAA the teams in all of our partners for the World Welcome.

Before I start I want to thank Jay for his tireless work over the past four years and building an organization that gives us a very strong foundation for the built into the tape that.

Last year was a challenge for everyone around the globe and everybody in the sport.

The impact of the per day.

From a one delivered what many thought was impossible instead that the Lakers callender delivered safely and with huge enthusiasm from our clients.

72% zinc one has improved over the past two years.

The 8% bogey. That's one is in good hands under Liberty media.

71% rate they have satisfaction with being a net one fan at eight or higher.

The more funds believe Puma one handled safely.

Well during the global from damage with 90%, believing the measures put in place to allow rates as people I had have been.

Andrew well, 81% believed in F. One thats communicate well with hence moving to shut down from 73% believed in F. One is handbook the absence of fans of the rates as well and 88% feeling positive about the commander in 2000.

We all continue to navigate the challenges of COVID-19. This year, however that would not preclude us.

Alright, and opportunities we see in front of US, which are number one book and the drivers of the center the last one.

They represent the soul and I'll be impossible to support the level of talent. We have today in the range is one of the highest F. One history and we should celebrate that.

Number two.

Delivering an incredible product.

Maintenance competition and action on the track, including plenty of three weighted this year.

Number three enhancing the long term prospect of sport and shooting as attractive business model for all participants and attracting new participant number for remaining committed to our action to our release of <unk> platform focused on sustainability diversity and inclusion and community.

So we reflect on 2020, we were extremely proud to complete a successful 17 race season than last few races brought some new places to podium, including the <unk>. We saw sales you bet is mainly is supposedly win alongside that's about a corner last tool at the same time in the same rates, we were relieved to see.

No John book away from a theory crash.

Into a man the support teams on the track and improve safety measure in the sport.

From a stop and secured the win of our last where I'm, putting Abu Dhabi, which capped a very successful season cold weather boot, who placed second in the constructor standard.

On the financial flows clearly we live in.

Impacted by COVID-19, but working in collaboration with our partners to mitigate these impacts.

Due to the reduced number of races duration of the season that almost no pan attendance.

Surprisingly primary revenue decline in <unk>. However, we work with outlook from one to the extent complex. We have mutually agreed that worked with certain sponsor to defense selected right into future years, Yeah. Bruce These agreements with the spirit of partnership and allowed you guys related to old contract impact 2020 discrete.

Collaborations together with the ongoing jumbos, all accounts leave us well positioned with all of our material commercial department, we entered in 2021.

For the full season, we are pleased with the reaction from our fans across multiple platforms. We made significant gains the growing social platforms, making us the second fastest growing major sports league until the fall over across the four major social platform ahead of major sports such as NFL NBA PGA tour <unk>.

<unk>.

We have seen the fastest growth in the digital engagement compared to all other major support within the 19, 9% decrease in 2020.

LTV, our average oldest grumphie was $87 4 million very marginally down on 2019, but still higher than the average of 2018.

Compared 72, other major sports with an international footprint, that's excreta speeds decline it doesn't 'twenty due to the pandemic.

We plan to engage more sales in 2021, and we have to support an exciting 22 races calendar. This includes the addition of Saudi Arabia and much anticipated race in net doesn't that didn't.

We live up to the challenge of the from then but I'm pleased with how we have already been working with our partners. We were able to this day, Australia Nathan D E F and announced the return of the more than 40 miles to the schedule.

All compensation with from both doesn't have been positive since the start of the year and every one of them has made it clear that day events should be going that had the scheduled.

We'd love to welcome back from the track and we'll be working with the local organizers on governments on that approach.

We're also grateful for the of course made by the government to allow formula one to continue to travel throughout what events do it in a time of global quarantine.

Our highly robust safety procedures have proven we can travel and rates safely. Furthermore, we added by the weighted the race weekend with a proposal to try a new type of these clean trades per month up some races. In 2021, the result of which will remain the great pulled the main event from something he's supposed supported by the teams in place.

You pulled out the meeting a few weeks ago, and we will work with them and the FAA to finalize the details before discussing this season.

On the sporting side, we are expecting an exciting season with loose that means the limit say despite the rather unique and he started April championship, we hope to see Ferrari, we that old that he's putting the sport.

They have played back and I'm excited portals, and new places and lines up on degree from.

This season, we were wondering what central patents would find the driver's seat.

Wait from seeking pad up with Max with top line.

The cloud web spectacular 2020 season finished authority construct and Stephanie will see that every key outdoor London noted non up together.

We welcome Aston Martin and iconic brand, we did look seasonally champions the best embedded behind the wheel.

We also welcomed and we told them, but nonetheless, so to rename alpine team he's doing well by the way. Following these rates from the accident and looking forward to see him of the start of the season and buy rate and of course, the world will be watching the maintenance season, those mix you might get a pass.

Last year was momentous fulfillment of one signing the new Concorde agreement and reaching agreement on the introduction of a coast GAAP taking effect this year in 2021 net.

You made you were able to COVID-19 related to the power units per engine.

Demonstration of our collaboration the SBA Formula one and the teams devoted to fleets probably was developed from the start of 2022.

A high level. The working group has been established we think who's probably income manufacturer and supplier.

As we look to the next generation of the public units for 2025, the key objective of our cargo mutuality.

Fully sustainable to us hybrid power unit significant cost reduction and of course, our attractiveness to the new power unit manufacturers, we believe that the sustainable hybrid engine will be a very attractive per for the Oems and their portfolio and provides another solution to be able to mostly they've got.

<unk> drive across the world.

Feel very positive about this probably can do better and have already had very productive conversations with existing and potential Oems about the direction for one is moving.

Continuing on this topic, we confirm that we erased as one platform will be count level official ESG platform with the three core pillars of sustainability diversity and inclusion and community. We are proud of the impact these platinum as last year.

We'll continue without what action to push forward average port in.

In the coming weeks I will meet with all the drivers to discuss with them. Our weird. He says we're on plans for the theater deal it could be the rollout of our apprenticeship eastern the shipments Congress who'd been able support for underrepresented groups and very importantly that heroes role models and champions of progress in our sport that is price.

Fans around the world.

We are looking forward to seize them free of drive to survive hidden message from March 19.

Once again captured all the DRAM and storylines from 2020 and Theres No question Betsy This computer NUPLAZID this fourth.

I can't Express my excitement with all the opportunities approval one has in front of us and I look forward to update you on our progress, but please be sure to watch the season opening grumpy, but range on March 28, and with that once again. Thank you. So much I will turn it over to you Greg. Thank you.

Thanks, Brian Thanks Stefano.

Our listening audience. We appreciate your continued interest in Liberty media and hope you all staying safe and healthy.

And operator with that I'd like to open the floor to questions.

Thank you as a reminder, ladies and gentlemen, please press star one to ask a question.

Our first question today comes from Vijay Jayant Evercore.

Thanks, I have two first.

Greg obviously, the tax sharing agreement with Sirius.

That sort of kicks in the 80%.

Obviously, you mentioned that the board will define how capital allocation works both that enrollment.

Given the flow through will be pretty small.

I think that dividends will be tax free both that is there an expectation that we should assume that we will shift more towards dividends or buybacks or what.

That would be on a path to sort of taking the company private.

And are there any obstacles setup on that that we've done like the squeeze that requirement of 90% anything you can share on sort of what happens to the capital equity capital structure post.

The 80% level.

Second book Stefano welcome.

I just wanted to sort of.

Get your perspective.

Amy.

You mentioned in the press, suggesting that you're looking for more quality over quantity in terms of wafers and so you're talking about it's been great, but you really think you'd need to change the format of the race weekend as uniquely.

Pay practices and making it the biggest technical can you just talk about what we really think of it.

So basically we can think of event booklet. Thank you.

So I'll go first and chat a little bit about dividends capital allocation and the like.

First of all it really is a decision of the <unk>.

Full board.

You would know correctly that on the margin.

We would probably have a slight tilt towards dividend, we at Liberty media Liberty Siri compared to where we once were but it's really not that they can tell while we're looking at that.

<unk>.

So the discount to.

Running about just under 28% substantially tightened from the 45% when the <unk> Luo.

We were running more like in the mid to low 30, so we have tightened it.

But that's still quite large compared to even the 7% rate we would normally pay with the D. R D.

Exclusion so I don't think the huge from on the scale for Liberty, we are marginally more.

Oriented towards dividends, but not massively but that decision really will be driven by management and the board.

As far as triggers are.

That might involve I would say the independent board will have to make their organizations, but one thing that I think will likely be in the back of their minds as we get to 90%.

We could do a short form squeeze out merger of the remaining 10%. So some directors might think about the pace at which we would get to that kind of a number.

But again those decisions really will be made by the full board and.

At some point.

Directors will have voice about maturing debt the minorities price appropriately protected.

Okay. That's my go to to answer to the question with regard to the format on the on what we are thinking and to improve income up show first of all let me say that that would've objective is try to offer.

So the people that have come into the event to the people that are watching TV. So the people that are really sounds a fool them from somebody that he's excited so the idea that we have share then I think that we have received great feedback from everyone. In the sport is that that we will try to figure out something that would give us a quantified on Friday Saturday print twice.

We determined that the grid order for the Sunday rates, so that would give the thrill of a great. We can't that would be beneficial to older parking votes and this is something that we have let's say then with that with the with the themes that play in the next weeks in order to present the final four months before the top of the seasoning, but range, but that's the aim of what we have worked with them.

To do this year in that respect.

Okay. Thanks, so much book.

Our next question comes from David Karnofsky of J P. Morgan.

Alright, Thanks for taking the question welcome Toronto.

Can you discuss the free.

Zone engine development and how you think this might impact on track competition and then just maybe expand a bit on your deal with F. One long term income goals in line of some of the Oems like GM and Jaguar moving toward the all electric vehicles.

Well. Thank you David for the question I think that what is important to say that that these ideal pleasing one year in advance is connected to the new business sustainable approach. Therefore, one has to say.

We will have taken up this year with the cash cost that is related to a certain part of the cost of mentioned that the other part of it was not margin, but very important was how we can capture the controlled investment at cost as in the normal business.

About the Florida by Associates is the fact that day.

Anticipate that the end of spending you might need for a new engine, we will see how we can capture the attention of potentially manufacture, but also making sure that the ones that we book today I think that that's in the future. So we do believe by being the I bridge in the future is the exact position does.

Will allow all the manufacturers who have an access to at least from the portfolio, but only a dedication.

To that normal business. So therefore, I think that what we're putting in place in that respect hadn't carbon neutrality fully sustainable fuels of the center and beat up but gave US a really great positioning from a package in terms of being always at the pinnacle of the technology of advanced research and Puma line and making sure that the everyone kids.

Relative from visa activity also to have a a sort of a road relevancy extra activities that can be beneficial to all deal to multi manufacturer and by doing that we're going to have a win win situation a lot of attention will probably the only thing a different way of OLED and electric are having the cost control under.

There are under control and of course being a light with our value will be sustainable for the future. So these are the basic thinking that we're taking when we decided to go and follow this path.

Okay, and then I believe there's a number of great promotion contracts expiring at the end of this year I think Singapore and was wondering how you're thinking about Epsilon and today's region versus maybe adding new races. Another flyway markets I think you've mentioned in South Africa recently, and then with regards to the Vietnam GP is there any update you can provide on.

And whether we might see that range at some point in the future.

Well, yeah, I mean for sure we're in a great moment because of the.

Despite the pandemic, we are receiving an incredible number of requests bye bye bye that shows that the F. One of the central thesis not totally from the organized over there over all around the world, but also from the Motorsport community.

Our strategic plan is that to the side first of all what is the right they mentioned it.

The races in the year. The comfort that you are mentioning are expiring, but there are discussions ongoing because they weren't that'd be worth considering that are really important and there is a lot of interest to progress in and keep them. You know also in the future.

We confirm.

As you know that's a U S. A is very important and strategic market for us and.

We have a be able to add another race in the U S. A we have already great partner in those things, but we are looking at for other solutions that are will be very important for us.

What I can see with Vietnam for whatever reason to happen do you see we didn't have the race, but for sure that'd be that matter far east in general that is very important for this piece of growth, although our business in the future and for sure. That's what we're going to exploit the other opportunities for the future.

And if I could just add stefanos comments, which I agree with.

We do not have an unusual number of promoter contracts expiring. This year are pretty much in any year, we have a portfolio or certain number get renewed every year just like we have a certain number of broadcast contracts that get renewed every year and in general because we think demand will ride for our sport.

Fear that we actually appreciate that because we think theres more opportunity it had been behind.

Thank you.

Our next question comes from Ben Swinburne of Morgan Stanley.

Yeah.

Thanks, Good morning, guys.

I wanted to ask both Stefano and Greg just a question around sports rights and sort of the state of the market right now maybe Europe and U S.

You guys had a very successful at least based on the press reports renewal in Germany with Sky last year, but we've seen some of the some of the other deals.

That have happened or are happening have gone backwards, you know EPL the Bundesliga in and at least the press suggests Syria may.

It may roll back.

And even in the U S. There's been probably more tension unusual and Greg obviously with Sinclair and what's going on there and Fox sports is clearly tricky with cord cutting. So maybe can you guys just give us sort of a sense as you as you move through 'twenty, one and 'twenty two how you're feeling about your position both with F. One and the Braves.

I think the market has gotten even more complicated and more challenging than it was a couple of years ago.

That's why you aren't taking kind of a happy too.

Okay I mean in my opinion. The wish you are living today is for shorter interest from one side, but very very good about the average I mean, what we can see that as you know our business model the broadcaster partners out a hugely important for us, but we can see.

Good opportunity to extend and exploit beat from the modem to as I said to be complementary platforms and provide the data connection to their fan base both in the OTT world that thesis.

So it's an area that we will for sure give and I are very important for the future, but the cause the other day, who believes that if you are able to attack that is we are doing this.

This board you know the commercial accounts, because they said if he's there and we need to make sure that this book we are shaping up for the future give the context to make sure that is day livable to defense and that's why we have a lot of activity connected to make sure that first of all of course, we don't lose the traditional and am very religious fans, but we need to speak.

The language the new support that the new fans. The young generation. So we have a lot of programs to make sure that this has happened already this year. So I apologize to go back to be honest.

I agree with Stephane I was comments, but I had a couple of more if I could then.

You know we've done a lot over the last few years. Thank you Chase and now thank Stefano to try and build fan interest in fan excitement and that's better on track competition, that's more balanced field that we as we go into 'twenty. Two that's a lot of ancillary things like fan festivals like programming like drive the server.

All of those building fan interest.

Obviously esports component as well.

As an important component when you obviously go from renewal how much fan interest how much excitement there is.

Probably the most important component is how much competition. There is among potential bidders distributors of your product and Cadillac. The best deal, we have probably as our UK deal and it was largely because there were several theaters highly interested in getting a product I do feel it's Stefano notes, we have a relative value you have seen.

And some of the other higher cost European alternatives, but if you look on any kind of basis about what cost per eyeball cost per hour et cetera.

What looks like a relative value.

And I think a sign up then which I'm sure you can appreciate with the rising cost of alternatives like scripted content as that gets more expensive in some ways. It provides a floor on what the value of some of the live sports can be historically live sports book, So expenses, maybe not quite as much when scripted continuing to rise.

So I'm excited about <unk> prospects, but above all we would benefit from increased competition, which is potentially some of the new digital players entering an estimate and we'll see if we can get them excited I do believe ultimately they will become better and that will be to our benefit.

As far as looking back at U S rates in our brands.

Obviously, we've had a world where the bundle has caused a lot of overbuy, whether it would be for a sport up all kinds of sports programming, including the RF.

And is that bundle breaks there is risk around.

What the total amount paid to change will be including the Braves I feel relatively good about the Braves contracts.

Contracts from 27.

First and secondly, we have a good contract, but far and away not the highest.

Well below somebody like the Dodgers.

Contracts, we have the largest broadband household audience. So the brands have the largest territory with 12 million broadband households, sort of degree you look at digital targeted from alike. We are probably in the best shape.

Compared to many to benefit as new.

Alternatives to rise in the bundled potentially.

Weekends.

So tell me what that good luck in the Middle East this season. Thank you.

Yes.

Yeah.

Our next question comes from Bryan Kraft of Deutsche Bank.

Hi, good morning.

A couple of questions first can you Greg can you talk about your current expectations for what I'll call. The path to normalcy for your live event businesses looking out over 'twenty, one and 'twenty two.

There's obviously a lot of you know.

Our focus in the market by investors on how quickly.

Businesses like these are going to be able to bounce back and weather.

Half of 'twenty, one looks normal R 22 looks normal so would just love to get your thoughts on what Formula One live nation, the Braves, what that what that path looks like for them.

And then just quickly on the leverage target for Formula. One can you just remind us what your target leverage ratio is and is there any thought to running that balance sheet more conservatively in the future just given the experience with the pandemic or are you still comfortable with that thank you.

So I'll start on that.

The opening.

It's certainly not binary and it's not binary in a lot of ways because.

F one and the Braves, we have multiple sources of revenue.

<unk> got three big pillars, right broadcast, which was impeded, but probably will be paid less in 'twenty, one regardless of the pandemic sponsorship and advertising, which was impeded less in 2020 than than certainly the fan component the promotion component, but again probably less than <unk>.

'twenty and 'twenty, one and then fans and we're gonna have a variety of alternatives where fans will be to some degree there and I don't think again it'll be binary we're not necessarily going to see zero to 100, it will be somewhere potentially in between.

I'm more optimistic as we go to the ended the year, we're going to get to a 100 per cent of capacity.

And the same thing with the Braves multiple revenue streams, both television and.

On site, but we don't really have is we do have sponsorship is not as large a component as it did at formula one.

I think again not binary.

Expectation is we'll probably start out at 25%.

I mentioned already the GA is relatively open.

We will be in far better shape from.

The fan attendance than if you were in New York, or California, or some other locales.

And it will be decided not by baseball, but by the local.

Our rules of authorities.

So the expectation is we will have increasing numbers there.

But again not binary I don't think we're gonna go from 25 to 100 in the space of a flip of a switch.

And obviously live nation.

It doesn't have has obviously advertising and sponsorship doesn't have the broadcast element so its the most.

Responsive are vulnerable or affected by shutdowns.

Offset to that is global business really with the potential for very different responses, depending on where you are in the world.

I think formula one in particular is preparing for.

A.

Our balance sheet that is.

Vegetable whenever it comes and we're fully supportive of that.

I do think they will have fans at events this year, but certainly you've already seen some of that and it will grow they announced earnings slightly ahead of expectations I think just yesterday.

<unk>.

But meaningful efforts there will still be definitely work to be done throughout 'twenty one.

So that's kind of that's probably somewhat of a non answer Brian because we certainly are in a crystal ball business exactly but we are in the business of trying to prepare to make sure we benefit when it does open and that we're prepared if that doesn't happen at the rates of pay or change your pace that we would like and I think all three of those businesses are well prepared.

And that sort of trash the balance sheet question.

Thank you.

One of the things about being part of the Liberty Group is you can we have the ability to.

Hopefully look ahead and be thoughtful from the benefit of our operating companies.

The Formula one balance sheet is very very strong I think the operating levels that we have under our agreements are fine and I. Obviously, they have a strong growth of the F. One operating level and then when you look at the cash the flawed level.

It's quite strong so I'm not really worried about the balance sheet.

Great. Thanks for that and just to answer your question real quick on the leverage target our stated leverage target on Formula One is five to five five times.

And as you recall, we have a our 825 Max leverage has been waived through March 31, 2022, and when we bought the business. It had net approaching at eight times leverage and we substantially deleveraged it not only from cash operations generated but we did have a primary equity issuance as well so both of those.

<unk> reduced the leverage even prior to the pandemic.

Got it okay. Thank you. Thank you both I appreciate it.

Thanks.

Our next question comes from David Beckel of Fernberg capital.

Hey, Thanks, a lot for the question.

Sort of piggybacking on.

Your commentary about reopening I was wondering if you could help.

Help us think about revenue recognition for the promotion side really all the revenue streams under a variety of different scenarios. It seems as if the vaccine rollout.

For the most part is going better than expected in many parts of the world should we be thinking about wage promotion revenue.

In materially affected and each one or is that somewhat protected given the concessions you made last year and then some.

The follow up to that.

To hear your thoughts to the extent you're willing to share on how the team payment structure.

<unk> earnings or EBITDA to have won this year, specifically, maybe you could be pregnant law and reference of 2019 levels of EBITDA.

EBITDA level pre teen EBITDA Q2 thousand 19 should we expect margin upside.

In the current year.

So.

Al I think promotion will be still reduced in 'twenty, one certainly versus what we would have in a non pandemic here, we will have to restricted audiences.

Cricket fan at some of our events. So I do expect and we're not here to make a forecast in part because some of this is still up in the air.

Floating around but also because that's where.

We'd like to let you do.

So how much will be it will definitely be impacted the amount to which we'll see.

And.

Going forward.

We have with them.

The new Cochrane agreement, we have a structure, which as we are.

Increased profitability, we have the opportunity to take back some of what.

Historically F. One earned comparatively over the years the rates get a little more attractive for us whether we'll hit that in 'twenty, one given the risks around pandemic I'm not as confident but in the years going forward as we continue to have a fully healthy business I do believe are our share of the margin will slightly increase Stefano would you add anything.

I couldn't agree more and I think that's what is important that with the new government. So with the new Concorde agreement with the new <unk>.

No.

Cost control measure you know eats given the sustainability of proof that allow us to think bigger and this is something that I do believe that these are really there.

The right fundamentals that drives it that way both from a commercial point of view and also from the <unk> perspective to be part of this incredible championship.

Alright, Thanks Bill.

Thank you.

The next question today comes from David Joyce of Barclays.

Thank you very much.

Couple of questions one on the broadcast side of the Formula one business for for this year would there be any lingering COVID-19 related impacts or should we think about it as being.

Sort of comparable to 2019 and grossing up for step ups escalators and number of events.

And then secondly on the briefs with the.

Sinclair our ascent agreement.

And this was already touched on a little bit earlier in the call.

Where do you stand with the with them moving towards having a hybrid over the top model how does that play into your.

The economics, and what does that do for further fan engagement.

Yeah.

When does that could tie into sports betting once that becomes something.

Something on the horizon in Georgia. Thank you.

Thank you.

So we expect a fairly normal broadcast revenue stream.

And in line of our 23 races now.

Yes.

Crystal ball about exactly how COVID-19 plays out, but our goal was to try it.

Take the pain in 'twenty to the degree that we rightly had to make concessions to where some of our broadcasters are in total as much as possible, but to make that a 'twenty event and bring 21 back to normal but that is our open our expectation.

But COVID-19 could change that and just as a warning.

And on the.

Thinking about the RSM.

As I said, we have our contract runs to the end of 2007.

I know Sinclair is trying to do some different things, it's not clear to me exactly what rights Sinclair has to do some of the things that they think they can do or want to do.

Been some discussions with baseball about your alternatives, but I do not expect a major change assuming we can run a full 162 games schedule on a normal pace I would expect we would have normal revenue streams from Sinclair in.

Certainly in 'twenty, one and through the rest of the contract.

<unk>.

Whether they're new engagement models that help us from Sinclair that could be out of it we'll see again I'm not exactly sure what zone Sinclair thinks their rights are to do some of those things but.

Mr. Mitch remedies job.

And then just.

Finally on the Covid impact for Formula one.

In broad strokes, how should we think about those promotion and sponsorship contracts been.

The mix between fixed and variable components is there is there.

General algorithm, that's baked into the contracts or how should we think about that.

What I should think you'd look most of them probably do not have triggers.

Or any triggers that they do have we will likely to be able to meet on the other hand.

Take.

Our partner, who has a large international airline doing who basically gets shut down for all foreign travel you can decide when you're going to be a good partner with them or not from the long term and that's been our goal. So we will work with them in the way that we appreciate that they have worked with us during the difficult time.

Alright, thank you.

Thank you.

Our next question comes from Jason Bazinet.

Oh, thanks, so much.

Having extra liquidity is always a good thing, but I was wondering if there's any color that you might add in terms of these amendments that you did to unencumber some of the passive equity Stakes.

Was there something specific that you were that you were looking to do.

Suddenly you have tourism or just general Optionality.

Well, you know we're into Optionality, and Jason, but I'll, let Anna R&R relatively new treasurer answer.

Sure.

With respect to the Siri margin loan, we didnt do any upsize, but we kept the same billion shares collateralized in that loan as we had previously under the 135. So we're just maximizing our ability to access dollars.

With respect to y.

And so it really a function of what happened in the previous margin loan.

We repaid it and we had a substantial number of share throughout your line net secured debt.

Lateral pool, and so when we rightsize below $200 million.

Appropriately took the amount of shares underlying that.

Something that's closer to a realistic LTV per module.

Okay I understand thank you.

The next question comes from John Tinker of Gabelli.

Thank you.

Terrific numbers and the battery in the Fray.

Which unfortunately things get a little lost giving those people focus from Amy do you have any.

Do you ever considering any way highlighting that that valuation is the net fee.

Profit in a different way.

John when we have great analytes like you're writing up the value for it we don't need anyone else would come on net.

You know I think you're right there is value in the battery it is impressive.

And it's a function both of Georgia being a relatively open places we've noted and I think really the great job that the branch management team has done to create a secure environment.

One where people are willing to come in and it's open as well.

We are you know I'm not sure if we're going to create a tracker or do something different around that but we'll try and make sure. We highlight appropriately that there is value in the battery and our real estate development. Thank you.

Thanks.

From the final question today comes from Matthew Harrigan benchmark.

Oh, thank you.

Even though our formula one probably generates more data from any other sport.

Concert with AWS, and Intel and Qualcomm It was really under default under the onshore and Oh Gee with Bernie you got a lots of stuff is universal ground pretty email I think you've got a lot of loud too maybe if you have any more.

Okay angles, and all of that in cameras in the races.

But could you talk about the potential there and how you keep it out.

It looks like you've made some strides, but there's still a lot of headroom in terms of what you could do on just on the TV side and the video game side. Thank you.

No I think that's a great point, Matt if you'd think about.

<unk>.

The.

Evolving world.

Where we have increased.

On the broadcast side, where we have potential for increased digital players.

The number of cameras, we have the angles, we have your ability to dial up what angle you won that really plays perfectly to the strength of those kind of digital players and different administrative linear.

I think we are a sport.

The benefit from that increased attention on the digital side in terms of viewing.

Different experience and one that the fan and Taylor I think you can see that opportunity and it will be great.

The other point is that all of that data proprietary data.

We have begun we began to take advantage of through our contract with ISG that did not turn out as well as we'd like but as we go forward and look at the opportunities around that I do believe there is quite a lot around gambling around spanning formation that is valuable and that we are in a very strong.

Place relative to most sports because of the amount of data and the amount of which of it is proprietary so.

You got both sides, that's a huge asset.

Thanks, Greg.

Thank you.

So with that operator, I think we're done thank you to our listening audience for your continued interest from Liberty media and we look forward to speaking with you again next quarter if not sooner.

Ladies and gentlemen that concludes today's conference call. Thank you for your participation you may now disconnect.