Q1 2021 Liberty Media Corp Earnings Call
[music].
Ladies and gentlemen, thank you for standing by welcome to day Liberty Media Corporation 2020, Q1 earnings call joined.
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 may 7th.
I'd now like to turn the conference over to Courtney Chun Chief portfolio Officer. Please go ahead.
Thank you.
Let me begin we'd like to remind everyone. On this call included certain forward looking statements within the meeting as a private Securities Litigation Reform Act, a 1995 actual events or results could differ materially due to a number of risks and uncertainties, including those mentioned in Liberty media. Its most recent form 10-K on 10-Q on Liberty media acquisitions forms S. One registration statement filed with the SEC.
These forward looking statements speak only as of the date of this call on Liberty Media and Liberty Media acquisition expressly disclaim any obligation or undertaking to disseminate any updates or revisions to any forward looking statement contained herein to reflect any change in liberty 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 expenses for Liberty media, and Sirius XM, including adjusted OIBDA and adjusted EBITDA, the required definitions and reconciliations for Liberty media and Sirius XM schedules one through three can be found at the end of the earnings press release issued today.
Which is available on Liberty Media's website now I'd like to turn the call over to Greg Maffei, Liberty's President and CEO. Thank.
Thank you Courtney and good morning for all of you out there.
Today speaking on the call Besides myself, we'll have.
Formula one's president and CEO Stefano Domenicali.
On Liberty's, Chief accounting and principal financial Officer, Brian Wendling.
Beginning with Liberty Sirius XM, we continued our share repurchases purchasing a $114 million across our six M. A N K shares from February through April the discount stubbornly remains and we repurchased at a look through price of a series of just over $4 per share.
We do expect to continue to take advantage of that stubborn discount opportunity.
Our ownership of Siriusxm as of April 26 stood at 77, 3%.
I'm looking at Sirius XM itself, they're off to a fast start this year with self pay sub growth.
Growth of 83%.
While starts in the first quarter were the highest in the company's history and they recorded record low first quarter churn.
We're also experiencing rapid growth and off platform advertising revenue.
360 L. A next generation platform is now a 2 million vehicles, providing valuable data and offering engaging features.
We expect it will be about 25% of this year's installs.
We are now of a largest digital AD platform in North America, reaching almost two thirds of online audio listeners.
We're also continuing at Siriusxm or expansion in the podcast segment with our acquisition of 99% and visible.
Furthering our content creation capabilities.
Turning to live nation.
You may have seen in today's earnings release on them concerts are back in a high demand for a date in 2021 in fact, we a book twice as many shows in 'twenty one as we did in 19.
Brian for 2021, ACM entertain a the years on going on tour and a Railbird festival with headliner David Matthews band is another notable addition.
Following up on acquiring a majority stake in <unk>, we've begun our ticketed live platform and started a equipping 60 plus concert venues to offer a turnkey live streaming events we.
We continue to help artists expand revenue and creative opportunities connecting them with more fans via a deep and other means.
Looking at a Formula one group, we've had phenomenal racing this season as Stefano will outline a little bit more in a minute, it's exciting to see the battle between Lewis and Max it's going to be a very competitive youre also for third place in a constructive championships a lots of exciting racing.
The teams continue to execute well on.
Ongoing challenges from the pandemic.
Turkey will replace Canada in June showing a sustained demand to expand gp's.
We've also extended our agreements with Canada and Japan.
Looking forward for the first we are looking forward for the first sprint qualifying race in July at Silverstone and there'll be two more of those during the rest of the season.
I have to survive.
Our programming on Netflix continues to grow on popularity in its third season, and it's also getting recognized on a reward circuits both in the U S and Canada.
And finally, we look forward to seeing all of you in Miami in 2022.
Turning to brace.
After a slow start for the season a record is just under 500 and we are close third in the least a game and a half out a first place.
We were helped by sweeping the net over the last three games raised.
Braves are number one at home runs this season and also a number one on average attendance almost 16000 per game that is if you exclude Texas, which we'd be third including Texas.
Bryan Caronia was named nationally play a month for April tableau set of all three pinch hit home runs in April the most by any Braves player in a calendar month for it and its franchise history and as of today, we expect to expand capacity.
To a 100% of fans after opening the season at 33%.
Notably in partnership with Emory healthcare, the Braves are offering vaccine shots before enduring games against filling Vance.
And to get vaccinated those gains will receive two free tickets to future Braves games as well.
And finally, the Braves looking at the battery kitchen crop is expected to occupy their office space in July and Papa John's later in the summer demand for remaining office space remains very strong and the aloft and omni hotels had high occupancy on Friday night.
And sorry, a night games are a nights in March with several self sellouts on game nights.
We continue to make good progress on Almac this back.
Stock market has changed in a way.
We believe it to our benefit as some of the euphoria of Japan.
January and February has deflated, we believe recent weakness in the pipe marketplace, well for Liberty, given our strong balance sheet our capabilities with investors.
The support that we have.
Finally, we wanted to share with you that we have recently published our SaaS B disclosure on our website as a part of our ongoing ESG efforts.
So with that I'd like to turn it over to Brian to discuss our financial results on a little more detail.
Thank you, Greg and good morning, everyone Liberty Siriusxm group had attributed cash restricted cash and liquid investments of approximately 1 billion, excluding $67 million, a cash and restricted cash held at Siriusxm.
Balance is prior to paying the Formula one group $384 million to settle the live nation call spread in April.
The settlement of a lot of initial cost spread was a non taxable transaction among the tracking stock groups.
We also have $1 1 billion, a undrawn margin loan capacity at the parent level.
No debt a portion of our cash will be used in 2021 to repay our $2 two 5% live nation exchangeable bonds based on the fair value of the bonds at quarter end the amount of cash used would be $514 million.
As of May six the value of the Sirius XM stock held by a Liberty Sirius XM group was nearly $19 billion and the value of the live nation stock held was $5 billion.
We have $3 2 billion in principal amount of debt against these holdings.
Total Liberty Siriusxm group attributed principal amount of debt is $13 2 billion, which includes $9 billion a debt held directly at Sirius XM.
Formula One group had attributed cash and liquid investments of $1 4 billion a quarter end. This excludes the $429 million a cash that's held directly at the up on Opco.
Post quarter end Formula One group received the additional $384 million that we just discussed and proceeds related to the live nation call spread total.
Total Formula One group attributed principal amount of debt was $3 6 billion, which includes the $2 $9 billion a debt held directly down at a one leaving $724 million on the corporate level.
<unk> $500 million revolver remains undrawn.
Please note that during the three months ended March 31, 'twenty one F. One began reclassifying certain components previously reported in other revenue and the primary F. One revenue for better align with a way management currently evaluates the business.
Components reclassified in the primary up one revenue.
Generally relate to F on TV subscriptions certain half two and a three related fees broadcast origination and support fees and digital advertising among others.
Additional detail on this re class, including the impact.
For the years ended 12 31 19 in 'twenty. It can be found on schedule III to our earnings release, which will be posted on our website.
At quarter end, the Braves group had attributed cash liquid investments and restricted cash of $218 million and attributed principal amount of debt of $678 million $676 million.
Liberty on our consolidated subsidiaries are in compliance with a debt covenants at quarter end.
And with that I'll turn it over to Stephane to discuss Formula one.
Thank you Brian and good morning also for my side. So 2021 has begun with a huge under a gym momentum in the past few weeks, we announced sell a segment rates and UFC Miami Gardens, which is a huge and positive reaction from our fence the teams and all our partners.
Take a waste in the U S. A starting in 2022 provides a great opportunity for our sport and will ensure we continue to increase our strong focus on finding growth.
Last week, we announced that we will have a subsidy 100 kilo meet the Supreme quality claim for months free.
In 2021, following 19 with support from all of the teams the events will be exciting for all of a fence provide more on track action, although it makes me Ken and Keith.
Our partners and the teams greater commercial opportunities sales person.
One of the vendors for the new Formula already reported a surge in peak sales following news that they would be hosting one of these events.
We have announced the three years extension of the Japanese Grumpy vs.
That's always been unimportant weights for Formula one and we cannot wait for the price to cheer on day one.
We have extended our partnership with the Canadian ground free by two years and welcome the New announced last week by that's a bell media has entered into a reading of the two acquired the molecule base can they be a race promoter octane racing group, which is a great news for the long term future and development of the basin.
Chemical.
While the global situation has been fluid to the COVID-19 pandemic for a one that's shown this ads b.
The ability to overcome the issue for <unk>.
And us and continues today safety just last week, we provided that these could be the case, while we are not able to waste and kind of a this year. We have secured a replacement rates in Turkey, a short notice. Many we have Nokia on Houston number where they seem to Colombia for deposits.
Some people on it is very exciting to see the level of interest on both the new and historic location to host exemplary and this gives us a possible option with a required for 2021, but also a good opportunity for the future.
We have had very good conversation with all our promoters and all of whom we expect the races. This season to go ahead as planned and just this week, we have had a confirmation that a 1000 fans with a time getting Barcelona, the studies on free and that multiple will welcome approximately 40%.
<unk> of the capacity for the grandstand for day rates in two weeks time.
On side of the business started the year off the track that AC on the track has been equally exciting dramatic.
We kicked it off our 22 weeks a season in Bahrain and haven't had a three cleaning races to date, which with the close battles overtake it and the tag closer together that in the recent views on those.
As mentioned with this bathroom for the churn pushing playing now this could be a golden year for Formula one.
The season operating but they did not disappoint with a stop and security a proposition it towards a pleading race between Maximo Luis that was only decided in the final laps the.
Wed also a strong showings by noise in Paris, and the Japanese Luca you get too little debt score points in his first exelon rates for doubtful salary and it looks like yes. It probably this could be a lie ahead.
For the for first continuing to email that <unk> has an amazing stat off the line in the rain and carry through for the weighted impressive given he stopped and third yeah.
Central Paris on the low risk.
That's what a mistaken qualifying debt securities pulse on the program showing the continued strength of Mclaren Lastly.
Last weekend in Portugal missed save a spend adult for a certain challenge strong Red Bull as Lewis Hamilton clinched a hub for Victor on imports come out with both a starting on Poland. Louis I had one for stopping a check from the start of delays. So the red Bull get passed in the phases of a habit from before the seven current Champ is it pull it off bring them.
It takes on both these teammates bulk December stop it's a bleached victory. It once again shows that there is a real battle underway for D. C. A title and we add on that the only the three day races in the competition for the Thursday, social peers in the constructor standard Mcclaren is making the early pace, but day any themes in the midst.
Do you have something to prove and it is great to see fit out of Houston is try to get this.
With respect them on Formula one is resonating with fans and engagement is very high for data data for the first two races across the 24 principal markets, we monitor and digital TV viewership growth over both 2020 in 2019 with particular strength in Italy, the Netherlands, France, the U K the U S. A in the spring.
On the digital front unique users for ex one web and App have been up 77% on the equivalent rates in 2010, and social engagement and also increase with old depicting media interaction in both of the first to a suite.
We continue to grow our social media following a reached $36 5 million after the immediate on the GP up from 35 million under the theory of it.
That's one PD our otp product has also stopped the second a strongly with a record viewing.
Current view each race weekend at around three times higher than the 2020 season average and engagement measured by the minutes viewed with a over the course of the weekend is that more than 60% on the last year. We launched an updated version of the App for the season that provides many additional features including high video quality and allows for.
For us to control the viewing experience. This new version also makes it easier to find comfort in our collection, which includes over 2000 hours a postage and coverage a basic around peak in the last 50 years, along with our latest series set to change inventory a faulty vs. Now available on your 188 territories with a brief on that for CD promo.
They live within 85.
Season, three a drive to survive the booth on March 19, and continues to be a mass global popularity for the sport, reaching number one on Netflix in 27 different countries and also globally.
And on almost daily basis, we hear a net.
About how the show was broken into a new non typical plants. It was.
It's great to the DCP 2020 season and seen the best story of the viral D. On many drivers changes.
Do highly recommend dep is a nine which is a terrifying exhilarating and expiring. This show was nominated for a sport any put a pending series sports documentary and made the short list and the momentum we can aggregate for the UK broadcast awards.
Moving into the season, we have had numerous sponsorship announcements we were pleased with new overbuild, a partnership with a DHL a relationship which now spans across several vacates. These extended after she will include enhanced his involvement and that's why on esports events and a pleasant of F. One digital channels as efficient but wasn't a zoom.
I'd say, there's just a martin as a ctrip provides on ancillary thing for the official dose for them at a walk. In addition, we announced a he advisors and drive a culture official supplier and welcome global citizen as charity partner for a what we raised is one initiative.
We continue to engage fans through esport and has a very successful series a visual Grand Prix during the off season.
Current drivers along with homeless dogs on future prospects competing to win a share of the $100000 price funding debt charities.
As part of the continuum for to improve diversity and inclusion a formula one as part of our a weird I suppose while on the initiatives, we announced a team on the only qualification a route for the F Y E sport to see this broke chapter XI.
This is our first female only competition and we hope it will encourage more drivers from the passionate and talented teammates in rates and community with a goal of becoming the first ever see a main driver to be signed by an official Epsilon esports series D. A.
Closing formula one is off to a strong start in 2020, but building off the foundation put in place the last few years.
Persistently is absolutely a strong and the competition on the check is clearly I want to thank all of a dedicated employees a formula one full day continuous diligence and hard work and I Hope you will watch the Spanish grumpy this weekend.
I'll, let Tony is a pulled back to over to you Greg. Thank you very much.
Thank you Stefano and thank you Brian.
And to the listening audience. We appreciate your continued interest in Liberty media, helping Allstate health and safety.
And with that operator, we will open it up for questions.
Yes.
Thank you.
So if you would like to ask a question again. Please press star one on your telephone keypad, if you're using a speaker phone. Please make sure youre on mute function is turned off to allow you a signal to reach our equipment again that a star one to ask a question.
We will now take our first question from Jeff Osborne.
On the research.
Please go ahead your line is open.
Good morning, I had one on series and one on a formula one.
Greg It at 77, he ownership stake in series.
All else being equal you're probably going a crossover to 80 plus in the third quarter.
Dividends go a tax free just wanted to get your latest thoughts on whether series going to raise our dividend materially or are you happy with a status quo on letting your buyback sort of continue to write higher and then on ex work just.
Just wondering about the color on how the $145 million cost cap is going relative to your expectations. Thanks.
I'll take the series now, let Stefano speak to the cost cap on sorry look we I think that.
For a pace may be just slightly aggressive Jeff I think it might be it depends on the stock price and where series buying but it might be in Q4.
We're in it on one of those two quarters, we're likely to pass a.
Obviously any dividend policies that are put on.
It will be decided by the full board there but.
We have lots of alternatives on which we could.
Either.
Take advantage of those dividends to continue to go after the discounted series at.
<unk>, rather a series or increase the dividend or potentially.
So into that buyback hold ourselves above 80 and use a capital to.
To buyback our own stock. So they are really multiple ways to get the same result, which is we are going after the discount and whether it's through.
Through their dividend, increasing or selling on the buyback we will be attacking a discount.
Definitely let me turn it to you about the cost GAAP.
Thank you, Greg and Jeff as you know cash capital as being one of the most important a significant think that's for wanting to do this.
Sure.
This is happening the fact, not only because of the savings that the teams were making the future but also in the change of a mentality that the major team has to apply with the organization to make sure that they can really be effective with a different line of expenditure and this is just a first step into a new way of managing supporting Formula One and I think debt.
Seeing if I see what is happening around the world that they don't want US focused just on the revenue side I think for for one has just started a properties on the other way around but of course revenues crucial but now we have just staple debt. So starting with a cost cap, we do not take all the costs GAAP in other area that did not close in this moment that on the edge for the future.
But we have a quickie short, but these are also the covenants of the theme, which has been a huge step in making sure that a former a sustainable fortitude.
Alright, thank you.
Thank you we will now take our next question from Dan asked a Morgan Stanley.
Please go ahead your line is open.
Yeah.
Hi, good morning.
Greg just on a cash balance at Liberty Formula One I think it's a 1 billion eight and.
All signs point to a a strong year ahead I'm just wondering at what point does that.
Some excess cash in the eyes of Liberty.
And then Stefano I have a couple of questions around driver is such a I'm wondering if you can humor humor me a bit.
I've gotten questions from investors around the retirement of Lewis Hamilton and bet on what that might mean for the sport and sort of a business I know theyre coming back coming back for next year at least but as you think about that and sort of the outsized impact they have on the sport you know how do you how would you suggest we think about it if it matters and how.
You manage that.
And then I was curious moving on.
A miami, obviously a huge.
Opportunity in the whole U S market as well as an American driver important a N F. One in terms of driving popularity here in the U S and do you have any expectations that we might see one a anytime soon.
Yes.
So on a cash at Formula one really at the hold co level one level.
I think a couple of things on our first of all we put that cash in place to ensure.
The health of a whole ecosystem not only the formula one.
Business that we own but really the teams and to ensure that we have liquidity and we did use some of that liquidity for some teams during.
During the pandemic, we still have.
Uncertainty about exactly what our revenues will be in 2021, you heard already we've had to cancel for example for Canada and put Turkey, and we are getting paid for that but those are a way reduced levels compared to what we would get if we had a full fans. So we have a fairly large.
Contingency in our own budgeting for the potential that we will not get the kind of revenue that we hope and therefore that cash is useful you may also know that we committed in.
And the for purchase agreement with Almac. This back at least $250 million would go towards the pipe in any transaction. If we were to complete one so I think we're going to see potential for opportunities.
In that market that could be attractive to us as the spec market gets more turbulent that plays to a way as I mentioned earlier, our strength and we wait it may want to put some of the cash on that but as the year progresses, and we get more certainty about promoter revenue.
We will look at what we do with that cash on how to utilize it.
<unk>.
What is the most epic efficacious way to deliver value to our shareholders.
Yeah.
If I may know a Greg to them. This is a question related to the drivers there that could be assignments for shortly channel. There's a great. That's a is doing an incredible job on the sports on side and some of image. It was able to abroad for my one and other and as we have nothing specifically related to former one but for more on itself a strong a strong.
Again, the drivers championship.
We're always in a place where have a one day. They may every time I thought on what Louis with low and we are talking with them, but of course now let's focus on these actual season is fully boosted to make sure that will be the only driver that theyre going to win the eight titles.
In the history for Milan.
But for one is solid robust and for sure whatever believes is a season of Lewis from a wild with a reactor will move forward for the good news is that Lewis a real hope will stay will have an incredible season from a landlord with a new cars with a new challenge and for sure. This will maybe vetting for this thing on him.
If it was decided that its a way around I mean, the good news is that thing for one we have so many good drivers today, that's at least a challenge of a chance would be even stronger, but Florida of course, whatever will be the season, a lowest little respect, but still more on these with a solid and strong with regards to Miami would be American drivers. It is important.
The answer for me, it's very clear thanks, yes.
We have a we are working with teams a play to understand what is really the possibility for a medical driver to come to the attention for will on team in the short term. This could come I don't see that as being very pragmatic a realistic coming as a next two three years, but maybe ask a yes, I know that the team's watching a the good drivers.
But if they're ready would be a big boost for the American tax because as we know you know faces fibers that puts a enthusiasm passion that people want to see these guys and that for the hope that we have is that's a very very soon we have on our most current drivers competing a gain so this is a promo on chocolate.
Thank you.
Yeah.
Thank you so on and then I will take our next question from Brian at Deutsche Bank.
Please go ahead good morning, Hi, Thank you good morning.
Would you be willing to size the onetime settlement impact on the first quarter a formula one revenue for US and then separately, it's great to see Miami on a calendar next year I know its something <unk> been working on for three or four years.
Can you tell us about your plans for the event, maybe contrast, it to Austin and how significant do you think it will be for growing the sport in the U S and related to that you broadcast contract with ESPN is up for renewal I believe after next season. So how are you thinking about the opportunity with ESPN given their focus on ESPN plus.
Now Miami in the calendar and also just the general progress you've made so far and growing in the U S. Thanks.
So I'll, let Brian talk about.
One time events in the first quarter revenue and then.
Hi.
On a weigh a little on ESPN and I'll, let Stefano as well for Brian start yeah as it relates to a settlement we can't comment on a specific details, but it did impact our results, but obviously when you look at the year over year results.
The fact that we have the one race versus zero last year on the proportionate revenue recognition was the material driver of that but we can't comment on a specific zone.
On the.
On the issue of a U S and ESPN look when we put that up a.
Among the various broadcasters in alternatives.
A little over a year ago.
A chase a.
And it was in total agreement had the belief that we were going to a grow in popularity in the U S. In our hand would be strengthened so due to both now doing Miami and doing drive to survive and all the other things that we have going on from a fan festivals to digital engagement all of those are building our interest in the U S. A.
Stefano noted.
Many groups that heretofore have not been interested I have people coming up to me, who are saying I'm obsessed with formula one because a drive to survive.
Who were not our typical audience a.
Women a.
Teenagers.
Many different kinds of audiences that are expanding which is great. When we did that we took a shorter deal with ESPN that had a broader.
Set of exposure for us in terms of their eyeballs, but it was not the highest.
A current deal we can get and it was not the longest deal we could get and in fact it was the opposite was the least amount of money. The most amount of eyeballs on a short period of time, because our belief was that we would have a much stronger hand, as we went forward among the various bidders I think that is a good debt. It's one that we are winning and all the reasons we.
I outlined before I think we will have a much a strengthened.
Strengthened when we go to renew a against that ESPN and other alternatives Stefan on what might you add.
Oh, absolutely Yeah, again, I think that you know the good news is that a.
We are talking about some other race in U S. Miami digitally culture with a digital kilos, a widow will give us a wait till we get a structured the the show around it and the incredible news that's a.
Just a couple of weeks up to L. A and announcement day, the attention where they've got to visit that is really a massive and the expectation of getting the level that we want and this is the reason why we are building.
No.
A good series of communications, let's see there's a book.
The program to a more communication with the medical community, because we want to maximize everything out of it.
I cannot keep it and if it had been for example, one thing that it would be fantastic. We go on a share.
They do a Miami gardens with a Miami Dolphins.
The races in multiple because there you know they want to start believing that atmosphere and this will provide us the right platform in order to be at a handy.
So the value that we got to generate a new ex will be even higher and that's really the fundamentals a strategical thinking behind the fact that because I have to ration in United States.
Great. Thank you so much.
Thank you so a and I'll tell you. Our next question from Vijay <unk> Evercore.
Please go ahead.
Hi, good morning, So I have a couple of questions on Formula one.
Primarily probably for a Stefano.
So.
Think about rates promotions. This year, obviously, you have a 22 races, but with a without fans in a different proportions a fan how should we think about that are you getting for promoter revenue.
Letting some of it based on fan or getting non non hosted in a risk any any sort of thoughts because thats sort of the sort of a segment that has the most variability.
And then.
We've been seeing a lot more press releases coming out on sponsorship on Formula one would be a new sponsorship had is there a resurgence on that or is that sort of more like a formalized process of letting us know on what's going on.
Because that seems to be probably one of the biggest growth drivers for the business long term and finally, one for for Greg maybe it's a little premature but.
Formula one becomes an ATB and Jan next year.
And you'll have grain for an ATB.
Any thoughts on what structurally you could do or would like to do if you can share. Thanks.
Thank you Vijay I mean, the first question was related to the fact that of course, we added a situation that is a Boe.
Moving with regard to the.
Attendance is of the people on track a Greg as a as I mentioned the simple we need to monitor a race by race case by case of course, they're mostly going to have more of a it's likely that the opening up a.
It's a bit too bad for the.
Fans will not have a direct effect on debt I think as you know, but we have a also concept, but we cannot get into the data rather we build a spec with the attendees of the people that have no influence on what would be the.
The effect on a relative so there's really a mixed situation, but really to a bolder messaging I didn't get the question with regard to the sponsorship VJ can you repeat that for me. Please.
Yes, definitely I mean, theres been a lovely announcements zoom a bunch of other answers you've announced more recently I'm just kind of on incentives that sort of a least a sponsorship.
In Formula one.
More recently or is it sort of debt.
Been a disclosure for us on.
No.
Just to show you just to show the fact that he thinks that it's two for one is getting back again at the level that we really believed as a REIT one so the fact that despite the pandemic situation, but a big companies debt.
On a willing to engage and be our partners is a great sign of trust on what we're bidding as the future and we need to expense.
This approach even stronger in the future.
And as far as structural a.
Changes, we have no plan or intent today, obviously, having a second ATB today, the only ATB we have at Liberty media is the Braves, having a second ATB gives us flexibility if we want to create other spins.
But we have no plans today.
Alright, thanks, so much.
Thank you for you on that would take our next question from Davis asked J P. Morgan.
Please go ahead.
Alright, thank you.
On a one.
We've seen Disney moved to shut down in Stark sports channels.
Parts of the Asia, just kind of interested to know how this impacts for you first directly as I believe they carry a a series, but at a higher level. How you think this pivot to a streaming will impact demand for sports content and some of those regions and then maybe just separately stepped on a Stefan a as you noted a viewership seems to be on a nice uptick.
Through the races, so far would be interested to get your thoughts on how much you attribute this to the rebel Mercedes dynamic versus kind of the actions that you've taken off the track like tried to size like a social media outreach.
Well, if I may start on the second David it's clear that there's about a show it's a breadth of engagement for them better. That's a statement for the people. There is no doubt, but the thing is that there's one element. The other element is the fact that we really are a.
Gauging with more people that getting a lovely for a more one that for the fact that we are able to attract other people to a.
It's a way of languages that were not used to.
To use before I think is also helping the fact of the viewership and the engagements in any case for them because they are both not only the TV if theres been about a social media platform on the other element that OTT is showing that there is a lot of attention a lot of interest for sure.
What is happening on the track is very very important that there is no doubt a bobby.
This is for sure.
On a good sign for us.
I would.
I would totally agree.
But Stefan I wanted to comment on the rest of it then I'll add.
First part.
Sorry, Greg on the language touched on.
We're excited.
Maybe you want to repeat your question because I don't think we cover sure Yeah sure. The question was about Disney and they're moved to a shutdown star sports.
I think a parts of Asia, just wondering how that empower you directly and it was just a higher level thoughts on you pivot to streaming and kind of what that means for demand.
So Stefan on why don't you start commenting and then I'll give you I may have some views. Thank you.
Yes, absolutely. Thank you Dave I mean, David we have of course as you know agreement in place. So we are expecting you know for that to be totally a postal. So we don't see that there's a problem, we see actually a big opportunity for the growth of the Tvs and the engagement Seeger and that's not for the world to find other solution debt.
We are working on of course, but on the on this year for nine shouldn't we don't expect anything that would happen.
So I think more broadly if you think about it.
More platforms is a positive for us and yes. They are the some of the <unk>.
Legacy platforms may decline or even be eliminated but in general we're seeing a.
New platforms created that as an opportunity to just a way that.
Here on the United States when satellite came in and eventually when files on other fiber alternatives came that created upward pressure on content costs.
On the bidding I think we will see the same opportunity and what we do worldwide at Formula One as usual, we'll have a tradeoff on exposure, which for a TV offers against.
In many cases higher short term rates for either over the top platforms or even more streaming platforms over the assuming platforms like satellite or streaming platforms.
And we will weigh on our total dollars available.
Against the exposure that we get for things like a generally promoter value in advertising and sponsorship so I'm not so worried about these.
And sort of slower growth platforms being cut out by people like Disney a much more excited about the opportunity on the digital platforms, particularly as they gain scale.
Oh.
Thank you.
Okay.
Thank you for swimming now take our next question for David back on a ask Aaron Berg.
Please go ahead, thanks a lot.
Great. Thanks, I've got two on F. One on just.
Wanted to talk a little bit about the spring race format, maybe get a little bit of the thinking behind that it obviously adds incremental value to your partners, but more specifically as it relates to future economics.
Do you expect this to add to the value you receive from your partners or is it more of a part of just adding value to existing agreements and then secondarily on.
Going back to the U S market and with the TV deal and play in a few years I'm sure you've paid attention to what Ww. He did with Peacock I'm wondering if there is a potential to sort of leverage the <unk> TB over the top platform in a way that can sort of augment.
The broader value of your U S broadcast and overall TV distribution rights.
Thank you David I mean with regard to a sprint sprint for Mark I think.
It will be.
Beneficial to everyone and if I had to answer a straight delayed for the last part of the question of course, we expect to have more value for that first of all debt is action that will be very very positive in some of the tech debt will be organized because from Friday to Saturday presented there is something to talk.
A lot of action a lot of intensity to debt is something that of course. These will have a a birth effect on the people that will account for the race and this has been a.
Welcomed by all the organizer and in a.
Very possibly a weight on top of it of course, that's something that we are offering to our media partners. Because we can create a new company. We can generate other form of entertainment in a new format that hasn't been never deployed before.
And also for the partners that have the chance to on the previous to be in the green for a two times Olson Saturday.
The promo will be different of course, because day the sensor on the weekend will be the race on Sunday, but this is something that we believe that we have also on impact on the on this a natural point of view.
On top of a added the excitement a walk as rates is all about with regards to the S. A.
Market, the TV deal and deleverage.
A related to all our tools all right. We believe that this will enable us to discussing the future even a different way all of a integrating our FTE a OTT.
OTT platform that is going very very well in the future and then for that will allow us to balance sheets for the fact that the market will be interesting other sports and the commitment that will be very very big on our side to make sure that this would happen.
Got it if I could add to what Stefano said on that I think we certainly watch what Ww day with Peacock and I think it's a.
Somewhat indicative of a longer term trend.
Very few sports I believe have enough content to run their own over the top service as their primary vehicle. There's just not enough content. If you look at WWE <unk> they have a tonnage.
Compared to us and so F on TV is a great asset.
For our for.
A connectivity with fans and for a connectivity in particular with our most hardcore fans, but I don't believe it's a plant or a traditional broadcasters or other other over the top broadcasters who are looking for a a broader set of content on relationships. So I think we certainly watch that it's consistent with our view and I do believe.
We'll see that kind of opportunity with larger digital platforms and F. On television can be a part of a solution with them as you know.
Great. Thank you.
Thank you we will now take our next question from David Joyce with Barclays. Please go ahead.
Thank you a two topics one was just another clarification on the promotion.
When you say it was worth a ton does that mean it was just one promoter or a.
Are there any others, a lingering out there and was it within a range of a typical promotion free.
And then secondly on sponsorship a how should we think about the range of sponsorship types of contracts like how many a.
Are based solely on a particular races versus the proportion of revenue that is really allocated across the season.
Are there any other types of sponsorship structures. Thank you.
But I can I can do the promoter piece. It was one race and that's disclosed in our earnings release.
As it relates to the typical range of a promoter agreement we have a wide range. So it falls within that range yes.
So.
David with regard to a sponsorship for the range of course depends on the on the on water.
The package that we have we have a official partner and a.
We have other kind of a relationship and all are related to a really the rights that they go on a half a.
And so we have little impact on just about that all consistent with a seasonal with the old and third championship and not related to the single event itself.
Okay.
Alright, thank you.
Okay.
Okay.
Thank you for so we will now take our next question from John asked Gabelli Your.
Your line is open. Please go ahead.
Hi, Thank you.
Switching gears.
Sports gambling as heart.
Probably saw a I think dropped kings swings and so on so what are the benefits you might see from a sandwich.
Prior on Bali, because it is now is there anything that could actually help you.
John.
Take a shot at that I think.
That those benefits are going to be secondary a not primary.
Increased fan engagement there may be a.
A.
Georgia is a <unk>.
Soon to open it appears.
Gambling will become legal in the near term in Georgia, it's not today, but it has been on the balance it looks fairly favorably inclined on the next in the coming cycles.
I think that will provide us some marginal revenue opportunities there, but I don't view it as a huge revenue line for us directly I view it secondarily, the interest and if we and baseball MLP can capitalize on that more broadly I think it just continues to draw a fans not not clear that it is.
No a revenue line on the P&L directly.
And just as a second broader question on sports, you're probably seeing some of the disruption in England.
For the fans became engaged.
About around the Super League Youre, saying.
Yeah generally.
A fair amount of disruption that a lot of talk a p/e companies buying into a series a nothing happening is that an area, where you might see some opportunities or is the fact that a soccer team can be relegated just makes it too risky.
No.
John we have looked at as many of those opportunities we can possibly find we.
We do think it's interesting we can debate what.
What's going on at each of the various leagues and where they stand in terms of their cycles on a monthly broadcast revenue and other kinds of opportunities. We do look to our experience both at Formula One and the Braves and what we'd like to think we have done positively with the league at Formula One and what we'd like to think we've done positively around things like a <unk>.
Truest and a battery and think about how we can apply the skill sets that are inside liberty at various opportunities.
And we tried to sell that we have been a a good and long term strong owner for.
Perhaps different than some of the other Americans have been perceived or how it's been received we haven't yet found the intersection of where somebody wants us and we want them, but we continue to look a.
And I do think that disruption over there does create opportunity we have gone through we watch with Super League with interest because.
Before we were involved.
With Formula one there was certainly the talk of a breakaway at Formula one, which did not come to pass and we.
We feel very confident we understand a breakaway is very well on I think we've pretty much eliminated that opportunity or potential at formula one as a side note.
Thank you.
Thank you. So we will now take our final question for today's conference from match U S. Benchmark. Please go ahead. Thank you.
Even apart from a Max for stop and literally banging wheels with Lewis Hamilton always seemed relatively a cortisol track.
Probably have the most competitive season. So I think 2012 for your for already is coming back and a Macquarie on Atlanta North.
It's Sarah and I was just curious you've got a broad suite of changes coming next year on can make a competition on the track more competitive.
Does it give you any pause for Trinity.
Thank you Mark next year.
Even if this year seemingly is proceeding so strong right out of the gate.
Do you have any ethanol will be a real focus heavily itself.
Okay.
We continue to roll on.
Well Matthew the changes has been already discussed the teams are already working on a new cars, a new regulation and the trading as a already left the station. So we had a very pleased because we are convinced that this year is a that'd be a great season for next year with the changes that has been a plan that will be another great opportunity.
Showcases what is formula one on terminals on the ability of always keeping the attention on.
On the center and therefore, there's no other things, but the checking on everything.
All business day to make sure that the changes will be Matthew on the cosmic Sheila Hi.
Highlights a burden that is to have a bigger site literally two or three drivers that even more and thats the objective.
Thanks stuff on a really a riveting right yes.
Look we're lucky this season's great.
Work that was done in the cockpit agreement a.
By Chase and Ross Brawn and others.
We hope to only increase the competitive next year and we're very excited as Stefano noted about what's going on now and even more excited about what we can do.
In the coming years.
With that operator, we are done for the day. Thank you very much to all of you listening out there for your interest in Liberty and we look forward to speaking with you again next quarter if not sooner.
This concludes today's call. Thank you for your participation you may now disconnect.
Okay.
Yeah.
[music].
Yeah.
[music].
[music].
[music].
Ladies and gentlemen, thank you for standing by welcome to the Liberty Media Corporation 2020, Q1 earnings call.
During the presentation, all participants will be in a listen only mode. Afterwards, we will conduct 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.
Second.
I'd now like to turn the conference over to Courtney Chun Chief portfolio Officer. Please go ahead.
Thank you.
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, a 1995 actual events or results could differ materially due to a number of risks and uncertainties, including those mentioned in Liberty media for most recent forms 10-K on 10-Q on Liberty media acquisitions forms S. One registration statement filed with the SEC.
These forward looking statements speak only as of the date of this call on Liberty Media and Liberty Media acquisition expressly disclaim any obligation or undertaking to disseminate any updates or revisions to any forward looking statement contained herein to reflect any change in liberty media or Liberty media acquisition, a corporation's expectations with regard there to or any.
In events conditions or circumstances on which any such statement is based on today's call. We will discuss certain non-GAAP financial measures for Liberty media and Sirius XM, including adjusted OIBDA on an adjusted EBITDA the required definitions and reconciliations for Liberty media and Sirius XM schedules one through three can be found at the end of the earnings press release issued today.
Which is available on Liberty Media's website now I'd like to turn the call over to Greg Maffei, Liberty's President and CEO. Thank.
Thank you Courtney and good morning to all of you out there.
Today speaking on the call. Besides myself, we'll have a formula one's president and CEO Stefano Domenicali and.
And Liberty's, Chief accounting and principal financial Officer, Brian Wendling.
Beginning with Liberty Sirius XM, we continued our share repurchases purchasing a $114 million across Alice ex M&A and K shares from February through April the discount stubbornly remains and we repurchased at a look through price of.
A series of just over $4 per a share.
We do expect to continue to take advantage of that stubborn discount opportunity.
Our ownership of series six as of April 26 stood at 77, 3%.
And looking at Sirius XM itself, they're off to a fast start this year with self paid sub growth.
Growth of 83%.
While starts in a first quarter with a highest in the company's history and they reported record low first quarter churn.
We're also experiencing rapid growth and off platform advertising revenue.
360 L. A next generation platform is now a 2 million vehicles, providing valuable data and offering engaging features.
We expect it will be about 25% of this year's installs.
We are now of a largest digital AD platform in North America, reaching almost two thirds of online audio listeners.
We're also continuing at Sirius XM, our expansion in a podcast segment with our acquisition of 99% and visible.
Furthering our content creation capabilities.
Turning to live nation.
You may have seen in today's earnings release on them concerts are back in a high demand for a date in 2021 in fact, we a book twice as many shows in 'twenty one as we did in 19.
Brian the 2021, ACM entertain a the years on going on tour and a Railbird festival with headline are David Matthews band is another notable addition.
Following up on acquiring a majority stake in Vieques, we've begun our ticket live platform and started equipping 60, plus concert venues to offer a turnkey live streaming events.
We continue to help artists expand revenue and creative opportunities connecting them with more fans via a deep and other means.
Looking at a Formula one group, we've had phenomenal racing this season as Stefano will outline a little bit more in a minute it's a.
Excited to see the battle between Lewis and Max it's going to be a very competitive youre also for third place in a constructive championships a lots of exciting racing.
The teams continue to execute well given the ongoing challenges from the pandemic.
Turkey will replace Canada in June showing that.
Sustained demand to expand GPS.
We've also extended our agreements with Canada and Japan.
Looking forward for the first we are looking forward for the first spread qualifying race in July at Silverstone and there'll be two more of those during the rest of the season.
Drive to survive.
Our programming on Netflix continues to grow in popularity in its third season, and it's also getting recognized on a reward circuits both in the U S and Canada.
Finally, we look forward to seeing all of you in Miami in 2022.
Turning to Braves.
After a slow start for the season a record is just under 500 and close a third in the least a game and a half out a first place.
We were helped by sweeping net adds over the last three games.
Braves are number one at home runs this season and also number one on average attendance almost 16000 per game that is if you exclude Texas, which we'd be third including Texas.
Bryan Caronia was named nationally players a month for April tableau, Santa ball three pension home runs in April the most by any Braves player in a calendar month for it and its franchise history.
And as of today, we expect to expand capacity.
To a 100% of fans after opening the season at 33%.
Notably in partnership with Emory healthcare, the Braves are offering vaccine shots before enduring games against Philly Vince.
And to get vaccinated those gains will receive two free tickets to future Braves games as well.
And finally, the <unk> looking at the battery kitchen crop is expected to occupy their office space in July and Papa John's later in the summer demand for remaining office space remains very strong and the aloft and omni hotels had high occupancy on a Friday night and Saturday Night games are a nights in March with several sales.
Sellouts on game nights.
We continue to make good progress on Almac this back.
The spec market has changed in a way we believe it to our benefit as some of the euphoria of Japan.
January and February has deflated, we believe recent weakness in the pipe marketplace well for Liberty given our strong balance sheet on.
Our capabilities with investors and the support that we have.
Finally, we wanted to share with you that we have recently published our SaaS B disclosure on our website as a part of our ongoing ESG efforts.
But with that I'd like to turn it over to Brian to discuss our financial results on a little more detail.
Thank you, Greg and good morning, everyone Liberty Siriusxm group had attributed cash restricted cash and liquid investments of approximately $1 billion, excluding $67 million, a cash and restricted cash held at Siriusxm.
This balance is prior to paying the Formula one group $384 million to settle the live nation call spread in April.
The settlement of the live nation call spread was a non taxable transaction among the tracking stock groups.
We also have $1 1 billion, a undrawn margin loan capacity at the parent level.
No debt a portion of our cash will be used in 2021 to repay our 225% live nation exchangeable bonds based on the fair value of the bonds at quarter end the amount of cash use would be $514 million.
As it makes ex the value of the Sirius XM stock held by a Liberty Sirius XM group was nearly $19 billion and the value of the live nation stock held was $5 billion.
We have $3 2 billion in principal amount of debt against these holdings.
Total Liberty Siriusxm group attributed principal amount of debt is $13 2 billion, which includes $9 billion a debt held directly at Sirius XM.
Formula One group had attributed cash and liquid investments of $1 $4 billion a quarter and this excludes the $429 million a cash that's held directly at the up on Opco.
Post quarter end 401 group received the additional $384 million that we just discussed and proceeds related to the live nation call spread.
A total formula one group attributed principal amount of debt was $3 6 billion, which includes the $2 9 billion a debt held directly down at up one leaving $724 million on the corporate level.
And half months $500 million revolver remains undrawn.
Please note that during the three months ended March 31, 'twenty, one up one began reclassifying certain components previously reported in other revenue and the primary up one revenue to better align with a way management currently evaluates the business.
Components reclassified in the primary up one revenue.
Generally relate to ethanol on TV subscriptions certain half two and a three related fees broadcast origination and support fees and digital advertising among others.
Additional detail on this re class, including the impact.
For the years ended 12, 31, 19% and 20 it can be found on schedule III to our earnings release, which will be posted on our website.
At quarter end, the Braves group had attributed cash liquid investments and restricted cash of $218 million and attributed principal amount of debt a $678 million $676 million.
Liberty and our consolidated subsidiaries are in compliance with our debt covenants at quarter end.
And with that I'll turn it over to Stephane to discuss Formula one.
Thank you Brian and good morning also for my side. So 2021 has begun with a few gender a gym momentum in the past few weeks, we announced our second race in the U S. In Miami Gardens, with a huge and positive reaction from our fans the teams and all our partners.
Take a waste in the U S. Starting in 2022 provides a great opportunity for our sport and will ensure we continue to increase our strong focus and finally a growth.
Last week, we announced that we will have a subsidy 100 kilometers pre qualifying formats, a pretty races in 2021 for.
Following 19 with support from all the teams.
Vince will be exciting for all of our clients provide more on track action over the next weekend.
Our partners and the teams greater commercial opportunities sales.
One of the vendors for the new Formula already reported a surge in Beacon savings following news that they would be hosting one of these events.
We have announced the three years extension of the Japanese Grand Prix.
That has always been on important ways for Formula one and we cannot wait for the price to cheer on day one.
We havent dependent that were a partnership with the Canadian ground fleet by two years and welcome the New announced last week by the Bell media has entered into a leading them to to acquire the molecule base can they be a waste removal of paying rebates on group, which is a great news for the long term future and development on.
<unk> chemical.
While the global situation is too fluid to the COVID-19 pandemic for one that's show these ads B a.
Ability to overcome the issue for <unk>.
And continues today safely just last week, we provided these could be the case, while we are not able to waste and kind of a this year. We have secured a replacement rates in Turkey, a short notice, meaning we have Nokia used the number on where they seem to Columbia for 2015.
What is very exciting to see the level of interest from both the new and historic location to host exemplary and this gives us a possible option with required for 2021, but also a good opportunity for the future.
We have had very good conversation with all of our promoters and all of whom we expect day rates as the season to go ahead as planned.
Just this week, we have had a confirmation that a 1000 fans will have been getting bumps for the only on the studies going on.
And Thats, a multiple will welcome approximately 40% of the capacity for the grandstand for day rates into wintertime.
Alongside the business started the year off the track that AC on the track has been equally exciting dramatic we kicked it off our 22 waits a season in body and have had a three <unk> raises to date, which with the close battles overtaking and the Pac closer together that in the region.
And for Us although it has grown as mentioned with this bathroom for the channel Cushing now this could be a golden year for Formula one.
It seems a note for anybody did not disappoint with a stop in security proposition. It was a pleading race between Maximo Luis that was only decide for them to final laps.
Wed also a strong showings by noise in Paris, and the Japanese Luca.
You'll get to know debt scored point in his first epsilon rates for alpha salary and it looks like yes, it probably just because a year ahead.
The backlog for the for first continuing to heme, a and whatnot has an amazing stat off the line in the rain and carry through for the weighted impressive given you start the third yeah and it made sense for Paris.
Maybe that's for them is taking qualifying and secured a pulse on the pogo showing the continued strength of mccloud.
We can be in Portugal, misstatements depend adult for a certain challenge stronger growth.
Lewis Hamilton clinched a hub for Victor on imports now with both a stopping on Poland. Louise day ahead of the tapping a second the startup delays so the red Bull get passed in the cases on the handling from before the seven Champ is a pull it all green until that takes on both these teammate belt December stop it's a glitch victory at once.
Again shows that there is a real battle underway for Bcf type a and we add on the only the three day racism.
A competition for the Thursday, social peers, because tucked a sensing Mclaren is making the early pace, but they any themes in the mix still have something to prove and it is great to see fit out a heating a stride again.
The spectrum on Formula one is relates to Nathan with fans and engagement is very high to date, we had a data for the phase two rates for both the 'twenty for principal markets. We monitor and these shows TV viewership growth over both 2020 in 2019, with particularly strength in Italy, the Netherlands, France, the U K the U S even space.
On the digital front unique users for Epsilon web and App have been up 77% on the equivalent rates in 2020, and social engagement and also pleased with old depicting media interaction in both of the first to a suite.
We continue to grow our social media following a reach at $36 5 million. After the immediate on a GP up from 35 million under the theory a ed.
<unk>, our OTT product I've also stopped the second a strongly with a record daily peak concurrent viewers each race weekend at around three times higher of the 2020 season average and the engagement measured by the Nimbus deal with over the course of the weekend is that more than 60% on the last year.
We launched an updated version of the App for the season.
<unk> many additional features including high video quality and allows us to control the viewing experience. This new version also makes it a T. J can find posted on our collection, which includes over 2000 hours a postage and coverage a anything lumpy in the last 50 years, along with our latest series set to change in the dream a faulted.
He is now available on your 188 territories with a beat on that point, a TV probably end up with an 85.
Three a drive to survive the booth on March 19, and continues to be a mass global popularity for the sport, reaching number one on Netflix in 2017 bits in a country and also globally.
And on all utmost daily basis, we hear.
About how this show was broken into a new non typical class. It was great to redeem the 2020 season and seen the back story of the viral D. On mainly drive those changes I do highly recommend that is a nine which is a terrifying exhilarating and expiring. This show was nominated for a sport any for us.
That being said is for documentary and made the short list and the momentum we can aggregate for the UK broadcast awards.
Heading into the season, we have had numerous sponsorship announcements we were pleased with new I wouldn't build a partnership with the DHL a real.
Relationship, which now spans across several vacates. These extended after she will include enhanced his involvement and that's why on esports EBIT and a pleasant I'll ask one digital channels as efficient, but we want them to do let's say a disaster Martin as a CP Scott provides on ancillary things for the official dose for them in a walk in.
Additionally, we announced a he advantage and drive a culture official supplier and welcome global citizen as charity partner for a what.
We have a says one initiative.
We continue to engage fans to esports and had a very successful series a visual Grand Prix during the off season.
Current drivers along with pool must target on future prospects competing to win a share of the $100000 price funding debt charity.
Part of the convenience for to improve diversity and inclusion a formula one as part of our a weird I suppose while on the initiatives that allow us a team on the only qualification a route for the F Y E sport to see this broke chat issue.
This is all of a first female only competition and we hope it will encourage more drivers from the passionate and talented teammates seen rates and community with a goal of will be covering the first ever see a named driver to be signed by an official Epsilon esports series.
In closing Formula one is off to a strong start in 2021 building on the foundation put in place the last few years.
Persistent knees, absolutely strong and the competition on the check is clearly I want to thank all of a dedicated employees a formula one full day continuous diligence and hard work and I Hope you will watch the Spanish grumpy this weekend.
And I'll, let Tony as it pulled back to over to you Greg. Thank you very much.
Thank you Stefano and thank you Brian.
To the listening audience. We appreciate your continued interest in Liberty media or can last a health and safety.
And with that operator, we will open it up for questions.
Yes.
Thank you.
So if you would like to ask a question again. Please press star one on your telephone keypad, if you're using a speaker phone. Please make sure youre on mute function is turned off to a now youre a signal to reach our equipment again that a star one to ask a question.
We will now take our first question from Jeff Osborne.
On the research.
Please go ahead your line is open.
Good morning, I had one on series and one on a formula one.
Greg It at 77, he ownership stake in series.
All else being equal Youll, probably going a crossover to 80 plus in the third quarter.
Dividends go a tax free just wanted to get your latest thoughts on whether series is going to raise their dividend materially or are you happy with a status quo on letting your buyback sort of continuing to write higher and then on F work just.
Just was wondering about the color on how the $145 million cost cap is going relative to your expectations. Thanks.
Paul I'll take the series now, let Stefano speak to the cost cap on sorry look we I think that.
For a pace may be just slightly aggressive Jeff I think it might be it depends on the stock price and where series buying but it might be in Q4.
We're in it on one of those two quarters, we're likely to pass a.
Obviously any dividend policies that are put on <unk>.
It will be decided by the full board there but.
We have lots of alternatives on which we could.
Either.
Take advantage of those dividends to continue to go after the discounted series.
As Alice XM, rather a series or increase the dividend or potentially.
So into that buyback hold ourselves above 80 and use a capital.
On to buyback our own stock. So there are really multiple ways to get the same result, which is we are going after the discount in <unk>.
Whether it's.
Through their dividend, increasing or a selling of the buyback we will be attacking a discount.
Definitely let me try to you about the cost cap.
Thank you, Greg and Jeff as you know cash capital as being one of the most important a significant since that's full of London's disease. This year.
And the fact, not only because of the savings that the teams will make in the future, but also in the change on mentality.
Major a team has to apply with the organization to make sure that they can really be effective with a different line of expenditure and this is just a first step into a new way of medical support and Formula One and I think that's facing if I see what is happening around the world that everybody is focused just on the revenue side I think for will on its just started a path.
On the other way around the gross revenues crucial but now we have just tackle that so starting with a cost cap, we do not take all the costs GAAP in other areas that did not close in this moment that on the edge for the future, but we are putting a short but these are also the problems of the theme because that's been a huge step in making sure that a formula a sustainable product suite.
Alright, thank you.
Yes.
Thank you we will now take our next question from Dan asked a Morgan Stanley.
Please go ahead your line is open.
Yes.
Hi, good morning.
Greg just on a cash balance at Liberty Formula One I think it's a 1 billion eight and.
All signs point to a a strong year ahead I'm just wondering at what point does that day.
Some excess cash in the eyes of Liberty.
And then Stefano I have a couple of questions around driver, especially I wondering if you can humor humor me a bit.
I have gotten questions from from investors around the retirement of Lewis Hamilton and bet on what that might mean to the sport and sort of a business I know, they're coming back and they come back for next year at least but as you think about that and sort of the outsized impact they have on the sport you know how do you how would you suggest we think about it if it matters and how.
Do you manage that.
And then I was curious moving on Miami, obviously, a huge opt.
The opportunity in the whole U S market as well as an American driver important a.
N F. One in terms of driving popularity here in the U S and do you have any expectations that we might see one a anytime soon thank you.
So on the cash at Formula one really at the hold co level one level.
I think a couple of things on our first of all we put that cash in place to ensure.
The health of the whole ecosystem not only the formula one.
Business that we own but really the teams and to ensure that we have liquidity and we did use some of that liquidity for some teams during.
During the pandemic, we still have a.
Uncertainty about exactly what our revenues will be in 2021, you heard already we've had to cancel for example, Canada and Turkey, and we are getting paid for that but those are a way reduced levels compared to what we would get if we had full fans. So we have a fairly large.
Contingency in our own budgeting for the potential that we will not get the kind of revenues that we hope and therefore that cash is useful you may also know that we committed in.
And the for purchase agreement with Almac. This back at least $250 million would go towards the pipe in any transaction. If we were to complete one so I think we're going to see potential for opportunities.
In that market that could be attractive to us.
On the spec market gets more turbulent that place to way as I mentioned earlier, our strength and we may want to put some of the cash on that but as the year progresses, and we get more certainty about promoter revenue. We will look at what we do with that cash on how to utilize it.
<unk>.
What is the most epic efficacious way to deliver value to our shareholders.
Yeah.
If I may know Greg for them the question related to the dry.
A new standards for shortly channel, there's a great. That's a he's doing an incredible job on the sports side and from a vintage it was able to broad from a widening other AD as well I'll tell you specifically related to former one but promo on itself as strong a strong again.
Drivers channel.
We're always in a place where a one day they may retire I don't know what Louis with low and we are talking with them, but of course now let's focus on these actual season is still a booster to make sure that will be the only driver that they are going to win the eight titles.
In the history of from day one.
But for one is a solid robust and for sure what other leads as a seasonal Lewis for them a wildly to react they will move forward for debt. The good news is that we lose a real hope will stay.
Have a an incredible season and from England with a new cars with a new challenge and push on these will may be vetting for listing on the home if you will.
Decidedly a its a way around I mean, the good news is that thing for one we have so many good job is today. That's a pleased that challenge for the chance will be even stronger and therefore of course, whatever will be the season, a lowest little respect, but still more on these with a solid and strong where they got to Miami would be American drivers. It is important to be answered.
For me, it's very clear these yes.
We have a we are working with teams a play to understand what is really the possibility for a medicine drive it to come on so the attention of a pool on theme on the short term debt.
It could come I don't see that as being very pragmatic a realistic coming as a next two three years, but maybe after yes, I know that the team's watching a the good drivers that they're ready would be a big boost for us.
For a for the American tax because as we know facing fibers.
So enthusiastic and passion that people want to see these guys and therefore, the hope that we have is that's a very very soon we have on a mood from drivers competing a gain. So this is a promo on chocolate.
Thank you.
Thank you. So we will now take our next question from Brian at Deutsche Bank.
Please go ahead good morning, Hi, Thank you good morning.
Would you be willing to size the onetime settlement impact on the first quarter a formula one revenue for US and then separately, it's great to see Miami on a calendar next year I know, it's something you've been working on for three or four years.
What can you tell us about your plans for the event and maybe contrast, it to Austin and how significant do you think it will be for growing the sport in the U S and related to that you broadcast contract with ESPN is up for renewal I believe after next season. So how are you thinking about the opportunity with ESPN given their focus on ESPN plus.
Now Miami on the calendar and also just the general progress you've made so far and growing in the U S. Thanks.
So I'll, let Brian talk about a.
One time events in the first quarter revenue and then.
Hi.
Want to weigh a little on ESPN and I'll, let Stefano as well Brian start yes, as it relates to a settlement we can't comment on a specific details, but it did impact our results, but obviously when you look at the year over year results.
The fact that we have the the one race versus zero last year on the proportionate revenue recognition was the material driver of that but we can't comment on a specific zone.
On the.
On the issue of a U S and ESPN look when we put that up.
Among the various broadcasters on alternatives.
A little over a year ago.
A chase.
And it was in total agreement had the belief that we were going to a grow in popularity in the U S. In our hand would be strengthened.
Due to both now doing Miami and doing drive to survive and all the other things that we have going on from a fan festivals to digital engagement. All of those are building our interest in the U S and a Stefano noted and many groups that heretofore have not been interested I have people coming up to me, who are saying I'm obsessed.
With Formula one because a drive to survive.
We're not our typical audience.
Women a.
Teenagers.
Many different kinds of audiences that are expanding which is great. When we did that we took a shorter deal with ESPN that had a broader set of exposure for us in terms of their eyeballs, but it was not the highest.
Current deal, we can get and it was not the longest deal we could get and in fact it was the opposite it was the least amount of money. The most amount of eyeballs on a short period of time, because our belief was that we would have a much stronger hand, as we went forward among the various bidders I think that is a good bet. It's one that we are winning and all the reasons we.
I outlined before I think we will have a much a strengthened.
Strengthened when we go to renew are against that ESPN and other alternatives Stefan on what might you add.
Oh, absolutely Yeah, again, I think thats the good news is debt.
We are talking about another race in U S. Miami wouldn't be fully culture with a different philosophy.
The weighted as we got a structured the the show around it and the incredible news that's just.
Just a couple of weeks up to a a little announcement day the attention.
They got to visit that is really a massive and and the expectation of getting the level that we want and this is the reason why we are building.
A good series.
Communications, let's see there's a book.
The program, Tim authentication with a good day, a medical community because we want to maximize everything out of it.
I cannot keep it and if it had been for example, one thing that it would be fantastic we've done a share.
They do a Miami gardens, with a Miami Dolphins the races medical because they know they want to start leaving the atmosphere and this will provide us the right platform in order to be ready to move showed up the volume that we go to generate for them you actually will be even higher and thats really the fundamentals a strategical thinking behind the fact that.
I have two based on United States.
Great. Thank you so much.
Thank you Steven and I would tell you our next question from Vijay.
<unk> Evercore.
Please go ahead.
Hi, good morning, So I have a couple of questions on Formula one.
Primarily probably for Stefano.
So.
Think about rates promotions. This year, obviously, you have a 23 races, but with a without fans in a different proportions a fan how should we think about that are you getting flow promoted a revenue.
Letting some of it based on fan or getting non non hosted in a risk any any sort of thoughts because thats sort of the set on a segment that has the most variability.
And then.
We've been seeing a lot more press releases coming out on sponsorship on Formula One will be a new sponsorship had is there a resurgence on that or is this debt.
More like a formalized process of letting us know on what's going on.
Because that seems to be probably one of the biggest growth drivers for the business a long time and finally, one for or Greg maybe it's a little premature but for me the one becomes an ATB and Jan next year.
And you'll have great from an ATB.
Any thoughts on what structurally you could do or would like to do if you can share. Thanks.
Thank you Vijay I mean, the first question was related to the fact that of course, we have a situation that is evolving with regard to the debt.
Attendance is of the people on track Okay. Greg is a as I mentioned, we think there's a need to monitor a race by race case by case of course, the movie going on there hasn't been more of a it's likely that the opening up a.
For the fans will not have a direct effect on debt I think as you know, but we have a also content, but we cannot get into the page rather we build a expected the attendees of the people that have no influence on what would be the D.
The effect on our own so it's really a mixed situation, but we need to evolve a manager I didn't get the question with regard to the sponsorship B J can you repeat that for me. Please.
Yes, that's what I mean, theres been a announcements zoom a bunch of other answers you've announced more recently I'm just kind of on incentives that sort of a least a vincent.
Sponsorship.
In Formula one more recently or is it sort of debt.
Been a disclosure for us.
No.
So yes, just to show the fact that a the inkjet is twofold. One is getting back again at a level that we really believe is the right. One so the fact that despite the pandemic situation, but a big companies debt.
On a willing to engage and be our problems is a great sign of trust on what we are beating that for the future and we need to expense.
These approach even stronger in the future.
And as far as structural.
Changes, we have no plan or intent today, obviously, having a second ATB today, the only ATB we have at Liberty media is the Braves, having a second ATB gives us flexibility if we want to create other spins.
But we have no plans today.
Great. Thanks, so much.
Thank you for you we'll now take our next question from David ask J P. Morgan.
Please go ahead.
Alright, thank you.
On a one.
We've seen Disney moved to shut down in Stark sports channels.
Parts of the Asia, just kind of interested to know how this impacts for you first directly as I believe they carry a a series, but at a higher level. How you think this pivot to streaming will impact demand for sports content and some of those regions and then maybe just separately stepped on.
On a Stefan a as you noted a viewership seems to be on a nice uptick.
Through the race on so far would be interested to get your thoughts on how much you attribute this to the rebel Mercedes dynamic versus kind of the actions that you've taken off the track like <unk> like the social media outreach.
Well, if I may touch on the cycling David it's clear that there's about a show it's a breadth of engagement for them residents a payment for the people. There is no doubt, but the thing is that there's one element. The other element is the fact that we really are engaging with more people that love it for a more one that for the fact that we are able to attract.
For other people to a.
It's a way of languages that were not used to.
To use before I think is also helping the fact of the viewership and the engagements in any case for them because they're about not only as a TV if theres been about a social media platform and then the other element that OTT is showing that there is a lot of attention a lot of interest for sure.
What is happening on the track is very very important that there's no doubt a Bobby and this is for sure a good sign for us.
I would.
I would totally agree.
But Stefan on why don't you comment on the rest of it and then I'll add.
First part.
Sorry, Greg on the language.
We're excited.
Maybe you want to repeat your question because I don't think we cover sure Yeah sure. The question was about Disney and their move to a shutdown star sports.
I think in parts of Asia, just wondering how that empower you directly and then just for a higher level thoughts on.
If it's a streaming and kind of what that means for demand. So it's.
Stefan on why don't you comment and then I'll give you I may have some views. Thank you yes.
Yes, absolutely. Thank you Dave I mean, David we have of course as you know agreement in place. So we are expecting you know for that to be totally a postal. So we don't see a doctor was a problem, we see actually a big opportunity for the growth of the TV and the engagement Seeger and debt talked on the wall to find other solutions.
We are working on of course, but on the on these shares for 19, we don't expect anything that would happen.
So I think more broadly if you think about it.
More platforms is a positive for us and yes. They are the some of the <unk>.
Legacy platforms may decline or even be eliminated but in general we're seeing a.
New platforms created that as an opportunity to just a way that.
Here in the United States when satellite came in and eventually when files on other fiber alternatives came that created upwards pressure on content cost.
Because of a bidding I think we will see the same opportunity and what we do worldwide at Formula One as usual, we'll have a trade off on a.
Exposure, which for a TV offers against.
Many cases higher short term rates for either over the top platforms or even more streaming platforms over the etame platforms like satellite or streaming platforms and will weigh on our total dollars available.
Against the exposure that we get for things like generally promoter value and advertising and sponsorship so.
I'm not so worried about these.
Sort of slower growth platforms being cut out by people like Disney a much more excited about the opportunity on the digital platforms, particularly as a gain scale.
Okay.
Thank you.
Okay.
Thank you we will now take our next question from David back on the assay have ehrenberg.
Please go ahead, thanks, a lot I have a.
Great. Thanks.
Two on F. One on.
Just wanted to talk a little a bit about the spring race format, maybe get a little bit of the thinking behind that it obviously adds incremental value to your partners, but more specifically as it relates to future economics do you expect this to add to the value you receive from your partners or is it more.
Part of <unk>.
Adding value to existing agreements and then secondarily on it.
Going back to the U S market and with the TV deal and play in a few years.
I'm sure you've paid attention to what Ww. He did with Peacock I'm wondering if there is a potential to sort of leverage the F. One TB over the top platform in a way that can sort of augment a bit.
The broader value of your U S broadcast and overall TV distribution rights.
Thank you David I mean with regards to a sprint sprint for a month I think.
Yes.
It will be.
Beneficial to everyone and if I had to answer a straight delayed for the last part of the question of course, we expect to have more value out of it first of all debt is action that would be very very positive in some of that type debt will be on a good night because from Friday to Saturday to Sunday, there is something to talk.
A.
A lot of action a lot of intensity that is something that of course. These will have a balance effect on the people that will account for the race and this has been a.
<unk> welcomed by all the organizer and in a very possibly a weight on top of VITAS a cool if that's something that we are offering to our media partners. Because we can create a new concept, we can generate other full moving containment in adding a new format that they never deployed before and also for the partners that have the.
Chance to on the previous two being the grief for two times sales in South Korea.
<unk> will be different of course, because the the sensor on the weekend will be the race on Sunday, but this is something that we believe that we levels on impact on the on this a national point of view.
On top of the admin the excitement a walk as rates is all about.
With regard to yes, a market.
A market the TV deal and deleverage.
A related to all our tools.
We believe that this will enable us to discussing the future even a different way of integrating our FTB OTT.
OTT platform that is going very very well in the future and then for that will allow us to balance sheets for the fact that the market will be collecting other sports and a commitment that we will be very very big on our side to make sure that this will happen.
Got it if I could add to what Stefano said on that I think we certainly watch what Ww day with Peacock and I think it's a.
Somewhat indicative of a longer term trend.
Very few sports I believe have enough content to run their own over the top service as their primary vehicle. There's just not enough content. If you look at WWE they have tonnage.
Compared to us and so F on TV is a great asset.
For our for.
A connectivity with fans and for a connectivity in particular with our most hardcore fans, but I don't believe it's a plant or a traditional broadcasters or other other over the top broadcasters, who are looking for a a broader set of a content and relationships. So I think we certainly watch that and it's consistent with our view and I do believe.
We'll see that kind of opportunity with larger digital platforms and F. On television can be a part of a solution with them as you know.
Great. Thank you.
Thank you we will now take our next question from David Joyce with Barclays. Please go ahead.
Thank you two topics one is just another clarification on the promotion.
When you say it was worth a ton does that mean it was just one promoter or a.
Are there any others lingering out there and was within a range of a typical promotion free.
And then secondly on sponsorship.
How should we think about the range of sponsorship types of contracts like how many.
Are based solely on a particular races versus the proportion of revenue that is really allocated across the season.
Are there any other types of new sponsorship structures. Thank you.
But I can I can do the promoter piece. It was one race and that's disclosed in our earnings release.
As it relates to the typical range of a promoter agreements we have a wide range. So it falls within that range yes.
Okay.
David with regard to a sponsorship for the range of course depends on the on the on water.
As a package that we have we have a official partner.
We have other kind of a relationship and all are related to a really the right for being on a half a.
And so we have little impact on just about that all consistent with a seasonal with the old subprime.
And not related to the single event itself.
Yeah.
Alright, thank you.
Okay.
Yeah.
Thank you for so we will now take our next question from John asked a gabelli.
Is open please go ahead.
Hi, Thank you.
Switching gears.
Sports gambling.
Probably saw I think dropped kings swings and so on so what are the benefits you might see from a sandwich.
Same player on Bali as it is now is there anything that could actually help you.
John.
Take a shot at that I think.
Those benefits are going to be secondary a not primary.
Increased fan engagement there may be a.
Net.
Georgia is a <unk>.
Soon to open it appears.
Gambling will become legal in the near term in Georgia, it's not today, but it has been on the balance it looks fairly favorably inclined in the next in the coming cycles.
I think that will provide us some marginal revenue opportunities there, but I don't view it as a huge revenue line for us directly I view it secondarily, the interest and if we and baseball MLP can capitalize on that more broadly I think it just continues to draw a fans not not clear that it is.
No revenue line on the P&L directly.
Just as a second quarter question on sports, you're probably seeing some of the disruption in England.
For the fans became a engaged and stuff about around the Super League Youre, saying.
Yeah just channel.
Italy.
A fair amount of disruption that a lot of talk a p/e companies buying into a series a nothing happening is that an area, where you might see some opportunities or is the fact that a soccer team can be relegated just makes it too risky.
No.
John we have looked at as many of those opportunities we can possibly find.
We do think it's interesting.
We can debate what.
What's going on at each of the various leagues and where they stand in terms of their cycles on a monthly broadcast revenue and other kinds of opportunities. We do look to our experience both at Formula One and the Braves and what we'd like to think we have done positively with the league at Formula One and what we'd like to think we've done positively around things like a.
Truest and a battery and think about how we can apply the skill sets that are inside liberty at various opportunities.
And we tried to sell that we have been a a good and long term strong owner.
Perhaps different than some of the other Americans have been perceived or how P. It's been perceived we haven't yet found the intersection of where somebody wants us and we want them, but we continue to look.
And I do think that disruption over there does create opportunity we have gone through we watch with Super League with interest because.
Before we were involved with.
With Formula one there was certainly the talk of a breakaway at Formula one, which did not come to pass and we.
We feel very confident we understand a breakaway is very well on I think we've pretty much eliminated that opportunity or potential at formula one as a side note.
Thank you.
Thank you. So we will now take our final question for today's conference from match U S. Benchmark. Please go ahead. Thank you.
Even apart from a Max for stop and literally banging wheels with Lewis Hamilton always seemed relatively cortisol off track.
We have the most competitive season since I think 2012 for your Ferrari is coming back and a Macquarie on Lando Norris.
It's Sarah and I was just curious you've got a broad suite of changes coming next year on to make a competition on the track more competitive.
Because it gives me on deposit.
Thank you Mark next year.
Even if this year seemingly is proceeding so strong right out of the gate.
The only real carefully assess for yourself.
Turning to <unk>.
Changing to roll on.
Well Matthew the changes has been already discussed the teams are already working on a new cars, a new regulation and the trading as a really let them.
The stations. So we have a very pleased because we are convinced that this year is already a great season for next year with a changes that's been a plan that will be another great opportunity to showcase what these formula one terminals on the ability of always keeping the attention.
The center and therefore, there's no other things, but checking on everything.
All of these days to make sure that the changes will be Matthew on the cosmic <unk>.
Hi line COVID-19, the possibility to have a bigger site not only to a pre drivers, but even more and thats the objective.
Thanks, a from a really a riveting.
Yes.
Just a look we're lucky this season's great.
The work that was done in the cockpit agreement.
By Chase and Ross Brawn and others.
We hope to only increase the competitive next year and we're very excited to Stefano noted about what's going on now and even more excited about what we can do in the coming years I think with that operator, we are done for the day. Thank you very much to all of you listening out there for your interest in Liberty.
And we look forward to speaking with you again next quarter if not sooner.
This concludes today's call. Thank you for your participation you may now disconnect.