Q1 2021 Liberty Media Corp Earnings Call
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Ladies and gentlemen, thank you for standing by and welcome to day 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 may 7th.
I would now like to turn the conference over to Courtney Chun Chief portfolio Officer. Please go ahead.
Yes.
Before we begin we'd like to remind everyone that this call includes certain forward looking statements within the meaning of private Securities Litigation Reform Act of thanks from 95 actual events or results could differ materially due to a number of risks and uncertainties, including those mentioned and Liberty media. Its most recent form 10-K, and 10-Q and 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 and 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 and liberty media or Liberty media acquisition corporations expectations with regard there to or any.
And 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 and schedules one through three can be found at the end of the earnings press release issued today.
<unk>, which is available on Liberty media 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 formula one's president and CEO Stefano Domenicali.
And Liberty's, Chief accounting and principal financial Officer, Brian Wendling.
Beginning with Liberty Sirius XM, we continued our share repurchases purchasing $114 million across <unk> and K shares from February through April the discount stubbornly remains and we repurchased debt will look through price of.
And Syria 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% and.
And looking at Siriusxm itself, they're off to a fast start this year with self paced subgroup of sub growth of 83%.
Trial starts and the first quarter were the highest and the Companys history and they recorded record low first quarter churn.
We're also experiencing rapid growth and off platform advertising revenue.
360 L. The next generation platform is now and 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 the largest digital AD platform and North America, reaching almost two thirds of online audio listeners.
We're also continuing at Sirius XM, our expansion and 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 from them concerts are back and and high demand for data in 2021. In fact, we have booked twice as many shows in 'twenty one as we did in 19.
Brian The 2021, ACM entertainer of the year's going on tour and the railroads festival with headliner David Matthews band is another notable addition.
Following up on acquiring the majority stake and beeps, we've begun our ticketed live platform and started and equipping 60, plus concert venues to offer turnkey live streaming events we.
We continue to help artists expand revenue and creative opportunities connecting them with more fans via veep and other means.
Looking at the Formula One group, we've had phenomenal racing this season as Stefano will outline a little bit more and 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 and the constructive championships and lots of exciting racing.
The teams continue to execute well given the ongoing challenges from the pandemic.
Turkey will replace Canada and June showing that sustained demand to expand gp's.
We've also extended our agreements with Canada and Japan.
Looking forward to the first we are looking forward and the first sprint qualifying race in July at Silverstone and there'll be two more of those during the rest of the season.
Arrived to survive our programming on Netflix continues to grow and <unk> and its third season and it's also getting recognized in the awards circuits, both in the U S and Canada.
And finally, we look forward to seeing all of you and Miami in 2022.
Turning to Braves.
After a slow start to the season. Our record is just under 500, and we are close to <unk> and the least a game and a half out of first place.
We were helped by sweeping and adds over the last three games raised.
<unk> are number one and homeruns. This season and also number one and average attendance almost 16000 per game that is if you exclude Texas, which we'd be third including Texas.
While <unk> was named nationally play of the month for April Tableau standard ball three pinch hit home runs and April the most by any Braves player and a calendar month for it and its franchise history.
And as of today, we expect to expand capacity.
100% of fans after opening the season at 33%.
Notably and partnership with Emory healthcare, the Braves are offering vaccine shots before and during games against Philly Vince.
And to get vaccinated those games will receive two free tickets to future Braves games as well.
And finally at the Braves looking at the battery kits and crop is expected to occupy their office space and July and Papa John's later in the summer demand for remaining office space remains very strong and the <unk>.
<unk> and omni hotels had high occupancy on Friday night.
And Saturday night games are the nights and March with several sellouts on game nights.
We continue to make good progress on Almac. This back this.
Back market has changed.
And we believe it to our benefit as some of the euphoria of Japan.
January and February has deflated, we believe recent weakness and the pipe marketplace well for Liberty, given our strong balance sheet, our capabilities with investors and the.
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.
So with that I'd like to turn it over to Brian to discuss our financial results and a little more detail.
Thank you, Greg and good morning, everyone Liberty Sirius XM group had attributed cash restricted cash and liquid investments of approximately $1 billion, excluding $67 million of cash and restricted cash held at Sirius XM.
And this balance is prior to paying the Formula One group $384 million to settle the live nation call spread and April the <unk>.
Settlement of the live nation call spread was a non taxable transaction among the tracking stock groups.
We also have $1 1 billion of Undrawn margin loan capacity at the parent level.
And a portion of our cash will be used in 2021 to repay our 225% live nation exchangeable bonds and based on the fair value of the bonds at quarter and the amount of cash used would be $514 million.
As of May six the value of the Sirius XM stock held by 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 and principal amount of debt against these holdings.
Total Liberty Siriusxm group attributed principal amount of debt is $13 2 billion, which includes $9 billion of 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 of cash that's held directly at the up one opco.
Post quarter and Formula One group received and the additional $384 million that we just discussed and proceeds related to the live nation call spread.
Total Formula One group attributed principal amount of debt was $3 6 billion, which includes the $2 $9 billion of debt held directly down at up one leaving $724 million at the corporate level.
And if one is $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 and other revenue and the primary and up one revenue and better align with the way management currently evaluates the business.
Components reclassified and the primary F. One revenue.
Generally related to F. One TV subscriptions certain F <unk> and F three related fees and 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 and schedule III to our earnings release, which will be posted on our website.
At quarter, and the Braves group had attributed cash and liquid investments and restricted cash of $218 million and attributed principal amount of debt of $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 savanna to discuss formula one.
Thank you, Brian and good morning, and also from my side. So 2001 has begun with Hugh gender and Jim momentum and the past few weeks, we announced <unk> segment rates and UFC and Miami Gardens, which is a huge and positive reaction from our fans and the teams and all our partners and it was.
And waste and U S and starting in 2022 provides a great opportunity for our sport and will ensure we continue to increase our strong focus and strong growth.
And last week, we announced that we'll have subsidy and 100 kilometers print quality claim formats.
Races in 2021, following 19 with support from all of the teams the events will be exciting for all our fence provide modem track action over a race weekend and.
And our partners and the teams greater commercial opportunities and silver.
One of the vendors for the new Formula already reported a surge in peak and saying following news that they would be hosting one of these events.
We have announced the three years extension of the Japanese Grand Prix.
And it's always been an important ways for Formula one and we cannot wait for the first achieve from their own units.
We have extended our partnership with the Canadian ground fleet by two years and welcome the new announced last week and by that the Bell media and entered into agreement to acquire the molecule base and maybe it wakes promoter of paying rates and group, which is a great news for the long term future and development of the basin.
Canada, while the global situation is fluid to the COVID-19 pandemic for one that's shown with this guidance.
And the ability to overcome day issue thrown us and continue to raise safety just last week. We provided that these can be the case, while we are not able to waste and kind of this year, we have secured debt replacement rates and taking a short notice. Many we have Nokia and use the number of they seem to Colombia.
And I think what is very exciting to see the level of interest from both the new and historic location to host exemplary and this gives us possible option, which required for 2071, but those are good opportunities for the future.
We have had very good conversation with all our promoters and all of whom I expect the races. This season to go ahead as planned and just this week. We have had the confirmation that one processing plants will attend and eating Barcelona, the Spanish Grand Prix and that multiple will welcome approximately 40%.
And of the capacity the grandstand for day rates in two weeks time.
One side of the business started the year off the track that as seen on the track and equally exciting and dramatic we kicked it off our 22 races season in Bahrain and haven't had three and treating races to date, which with the close battles overtake it.
And the Tac closer together that in the recent views and thoughts.
And as mentioned with this bathroom for the channel Cushing playing out this could be a golden year for Formula one.
The season, and operating but did not disappoint with the staff and security and pole position and it was a fleeting race between Mexico and Luis that was only the sizes and the final laps. The Weirdoes just strong showings by noise and Paris.
And the Japanese yen.
Get too little debt score points in these first epsilon rates for doubtful salary and it looks like yes, it probably just because he and I had the.
But for the full first continuing to email and whatnot.
Ladies and that's helpful.
Line in the rain and carry through for the weighted impressive given he stopped and third yeah, and his new team mates Central Paris and London.
And maybe that's what I'm mistaken qualifier and securities Hot on the Pogo showing the continued strength of Mclaren and lastly.
And last week and in Portugal, and lets say the standard office turned challenge from Red Bull as Lewis Hamilton clean shot hub for Victor and imports and now with both the stopping of COVID-19 and Louis I had them to stop and et cetera. The startup delays. So the red Bull get passed and that phases over having from before the seven time champion it pull it off bring them to.
And if it takes from both these teammates bulk assembly stop it depletes victory. It once again shows that there is a real battle underway for DCF guidance and we add on that the only the three day races, and the competition from the currently social peers and the constructor standard.
And the cloud and it's making the early pace, but mainly themes in the midst still have something to prove and it is great to see fit out of Houston is try to get.
The spectrum and Formula one race, so Nathan with fans and engagement is very high to date, we have data for the first two races and close to 24 principal markets, we monitor and digital TV viewership growth over both 2020, and 2019 with particular strength and Italy, the Netherlands, France, the U K the U S and the spin.
And the digital from unique users for Epsilon and web and App have been up 77% on the Cleveland and place in 2020, and social engagement and also increase with all depicting media interaction and both of the first two race week.
We continue to grow our social media following and reached $36 5 million after the immediate demand and the GP up from 45 million under the theory of it.
And it's one P D. Our OTT product and also stopped the second strongly with their viewing.
From current viewer each race weekend at around three times higher than the 2020 season average and engagement measured by the minutes viewed with over the course of the weekend is that more than 60% over the last year. We launched an updated version of the App for the season that provides many additional features including high video quality and allow us to.
Sales to control the viewing experience. This new version also makes it easier to find comfort in our collection, which includes over 2000 hours of footage and power virtual babies around peak in the last 50 years, along with our latest seat is set to change and the dream and from PV is now available and 188 territories with the people that want to deploy.
And 85.
Season, three of drive to survive the growth of March 19, and continues to build and mass global popularity for the sport, reaching number one on Netflix and 27 different countries and also globally.
And on almost daily basis, we hear.
About how the show was broken into new non typical plants and it was great to the diesel and the 2020 season and seen the back story of the viral T. O. Many drivers changes I do highly recommend debt because of nine which is a terrifying exhilarating and expiring. This show was nominated for the sport and put out.
Pending city sports documentary and made the short list and that took momentum.
For the UK broadcast awards.
Heading into the season, we have had numerous sponsorship announcement, we were pleased with new our global partnership with DHL and other.
Relationship, which now spans across several vacates. These extended and she will include enhances emboldened and that's why and esports EBIT and the president of Epsilon and digital channels as official possibly wasn't zoom and let's say this is promoting the seats got provide them and sell everything from the official both of whom and award. In addition, we announced.
And he's very interest and drive culture official supplier and welcome global citizen and charity partner for our <unk> initiatives.
We continue to engage fans to esports and have been very successful and see this additional grand Prix during the off season.
Current drivers along with homeless dogs and future prospects competing to win a share of the $100000 price drones and their challenges.
Part of the computers and the four to improve diversity and inclusion and formula one as part of our release as well and the initiatives, we announced the team and the only qualification routes for the F Y E sports and see this broke SAP issue. This.
And this is our first female only competition and we hope it will encourage more drivers from the passionate and talented teammates and rates and community with the goal of becoming the first ever see a named driver to be signed by and official Epsilon esports secrecy and.
Closing Formula line is off to a strong start in 2020, but building off the foundation put in place the last few years.
Persistent and these absolutely strong and the competition on the check is clearly I want to thank all the dedicated employees of 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 and to pull 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 and Liberty media, and Allstate health and safety and.
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 and you are using a speakerphone. Please make sure. Your mute function is turned off to allow your signal to reach our equipment again that is star one to ask a question.
So we will now take our first question from Jeff Osborne.
And the research.
Go ahead your line is open.
Good morning, I had one on Syria, and one on a formula one.
Greg It at 77, he ownership stake and Siri.
All else being equal, you're probably going to crossover to 80, plus and the third quarter and <unk>.
Dividends go tax free just wanted to get your latest thoughts and whether series going to raise their dividend materially.
Or are you happy with the status quo and letting your buyback sort of continuing to write higher and then on <unk>.
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 theory and I'll, let Stefano speak to the cost cap I'm, sorry look we I think that.
The 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 and Q4, but somewhere in there and one of those two quarters, we're likely to pass 80.
Obviously any dividend policies that are put aside and will be decided by the full board there but.
We have lots of alternatives and which we could.
Either.
Take advantage of those dividends to continue to go after the discounted Syria.
And Alex XM, rather of Siri to increase the dividend or potentially.
So and of that buyback hold ourselves above 80 and use the capital.
And to buyback our own stock. So they are really multiple ways to get the same result, which is we're going after the discount and.
Whether it's.
Through their dividend, increasing or are selling and the buyback and we will be attacking and discount.
Definitely let me turn it to you about the cost GAAP.
Thank you, Greg and Jeff as you know cost capital as being one of the most important and significant think that's from one into this year.
And the fact, not only because of the savings that the teams will make in the future, but also in the change of the 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 the first step into a new way of managed and support and Formula One and I think debt.
And if I see if I see what is happening around the world that everybody is focused just from the revenue side I think before and it's just part of the properties on the other way round of course revenues crucial but now we have just staple debt. So starting with the cost GAAP, we do not take all the costs GAAP in other area that did not close the and this moment and for the future.
But we are putting assured but these are also the problems of the theme, which has been a huge step and making sure that the former is sustainable fortitude.
Alright, thank you.
Thank you and I will now take our next question from Dan at Morgan Stanley.
Please go ahead your line is open.
Yeah.
Hi, good morning.
Greg just on the cash balance and Liberty Formula One and I think it's 1 billion eight and.
And all signs point to a strong year ahead I'm just wondering at what point does that day.
Some excess cash and the eyes of Liberty.
And then Stefano I have a couple of questions around drivers, which I wondering if you can humor humor me a bit.
I've gotten questions from from investors around the retirement of Lewis Hamilton, and Vettel and what that might mean to the sport and and sort of the business I know theyre coming back and they come back for next year at least but as you think about that and 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.
And you manage that.
And then I was curious moving to Miami, obviously huge opt.
Opportunity and and the whole U S market as well is and American driver important and F. One in terms of driving popularity here and the U S and do you have any expectations that we might see one anytime soon thank you.
So on the cash at Formula one really at the Holdco level one level.
I think a couple of things and are first of all we put that cash and 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 sell 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, 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 full fans. So we have a fairly large.
Contingency and 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 and.
And the forward purchase agreement with Almac. This back at least $250 million would go towards the pipe and any transaction. If we were to complete one so I think we're going to see potential for opportunities.
And that market that could be attractive to us as the spec market gets more turbulent debt placed away as I mentioned earlier, our strength and we wait and may want to put some of the cash and that but as the year progresses, and we get more certainty about promoter revenue.
And we will look at what we do with that cash and how to utilize it and.
And.
What is the most epic efficacious way to deliver value to our shareholders.
Yeah.
If I May know, Greg and then the question related to the drivers there that could lead to shortly channel. There's a great that Jim is doing and incredible job on the sports and side and some of image. It was able to broad and former one and other and as we have and I'll tell you specifically related to former one but promo line itself is strong strong.
And then.
Drivers and <unk>.
I'd always in a place where one day. They may retire I don't know what Louis with building, we have talked with them, but of course now let's focus on these actual season is fully boosted to make sure that would be the only driver that they're going to win the eight titles.
And the history up from a one.
But the full one is solid and robust and for sure whatever bleeds and the seasonal and Lewis from allows me to react they will move forward, but the good news is that Lewis as we all hope will stay and you will have an incredible season and from the amendment with the new cars and with a new challenge and push all of this will maybe that interest and all of them.
And if it was decided it'd be somewhere around I mean, the good news is that and for one we have so many good drivers to day, that's at least the challenge of the chance would be even stronger and therefore.
Of course, whatever will be the season and the lowest with respect but from the line is really solid and strong where they got to Miami would be American drivers. It is important and be answered for me, it's very clear these yes.
We have we are working with teams that play to understand what is really the possibility for nomadic and drive it to come to the attention of a pool, one team and the short term debt.
And could come and I don't see that as being very pragmatic and realistic coming as the next two three years, but maybe after yes, I know that the teams and watching other good drivers that already would be a big boost growth.
For the American plants, because as we know facing drivers.
And so enthusiastic and passion that people want to see these guys and therefore, the hope that we had this debt very very soon we have and American drivers competing against so this and the promo on chocolate.
Thank you.
Yeah.
Thank you and then I will take our next question from Brian <unk> with Deutsche Bank.
Please go ahead good morning, Alright, Thank you and good morning.
Would you be willing to size the onetime settlement impact on the first quarter of Formula One revenue for US and then separately, it's great to see in Miami on the calendar next year I know its something <unk> been working on for three or four years.
And 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 and 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 and given their focus on ESPN plus.
With now and Miami and the calendar and also just the general progress you've made so far and growing and the U S. Thanks.
So I'll, let Brian talk about.
And one time events and the first quarter revenue and then.
Uh huh.
Yes.
And I want to weigh a little on ESPN and I'll, let Stefano as well Brian start yeah as it relates to the settlement we can't comment on the 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 and the proportionate revenue recognition was the.
Material driver of that but we can't comment on a specific zone.
And <unk>.
Yes.
On the issue of the U S and ESPN look when we put that up.
Among the various broadcasters and alternatives.
A little over a year ago.
And chase.
And it was in total agreement had the belief that we were going to grow and popularity and the U S and 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 fan festivals to digital engagement. All of those are building, our interest and the U S and as Stefano noted and many groups that heretofore have not been interested I have people coming up to me, who are saying I'm upset.
First with Formula one because of drive to survive.
And who were not our typical audience.
Women Tina.
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 and 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 strengthened.
Strengthened when we go to renew against that ESPN and other alternatives Stefan and what might you add.
Absolutely and I think that's you know the good news is debt.
We are talking about some other ways.
U S Miami digitally culture with the digital and philosophy.
The way that we're going to structure the the show around it and the incredible news better and just a couple of weeks up to our announcement day, the attention where they've got to these events is really massive and and the expectation of getting the 11th and we want to and this is the reason why we are building.
No.
Good to see this all communications and see this program.
And in terms of indication with the medical community, because we want to maximize everything out of it and.
I cannot keep it and if it had been for.
For example, one thing that it would be fantastic and we're going to share.
With the stadium, and Miami Gardens, and with the Miami Dolphins.
The races, and multiple because there you know they want to stop and leaving the atmosphere and this will provide us the right platform in order to be that day to make sure that the value that we are going to generate from U S will be even higher and thus really the fundamentals of our strategy.
I think you'd be I, and the fact that we've ever had to race and United States.
Great. Thank you so much.
Thank you Susan and I tell you our next question from Vijay.
And for core.
Please go ahead.
Hi, good morning, So I have a couple of questions on Formula one.
Primarily probably for Stefano.
So what are you thinking about rates promotions. This year, obviously, you have 22 races, but with or without fans and different proportions and how should we think about that are you getting for promoter revenue.
Letting some of it based on fan or getting non and hosted and the risk any any sort of thoughts because that's sort of the sort of the segment that has the most variability.
And then.
And we've been seeing a lot more press releases coming out on sponsorship on from.
And the one with the new sponge, Japan is there a resurgence on that or is this debt.
More like a formulary process and letting us know and 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 or Greg, maybe it's too premature but from.
From the one becomes an ATB and Jan next year.
And you'll have grades and ATB.
Any thoughts from what's structurally you could do or would like to do if you can share. Thanks.
And thank you Vijay I mean, the first question related to the fact that of course and we have the situation that is evolving with regard to the.
And this is of the people and attract Greg those are as I mentioned the simple.
But we need to monitor race by race case by case of course, and moviegoing and there hasn't been more and it's likely that the opening up.
The fans will not have a direct effect on debt avenues.
And also content, but we cannot get into the day, rather we don't expect that the attendees of the people that have no influence on the what would be the.
The effect on our own and so it's really a mixed situation, but we need to evolve and message and I didn't get the question with regard to the sponsorship VJ can you repeat that for me. Please.
Yes, definitely there have been announcements zoom and bunch of other answers you've announced more recently I'm just trying to understand is that sort of a least a simple.
And to ship in Formula one and more recently or is it sort of gets better.
Ben and disclosure for us.
No.
Just to show Yeah, and just to show. The fact that he thinks that is two fold one is getting back again at the level that we really believe is the right. One so the fact that despite the pandemic situation, but all the big companies debt.
Are willing to engage and be our problems is a great sign of trust and what we're beating and as the future and we need to expense.
This approach even stronger and the future.
And as far as structural.
The changes we have no plan or intent today, and 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 and they'll take our next question from David ask J P. Morgan.
Please go ahead.
Alright, thank you.
And that's one.
We've seen Disney and moved to shut down and star sports channels and.
Parts of the Asia, just kind of interested to know how this impacts your first directly as I believe they carry this areas, 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 Stefan and $7. You noted viewership seems to be and a nice uptick.
Through the rates and 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 sharp as far as like the social media outreach.
Well, if I may start from the cyclone, David and it's clear that the better show rates and engagement and better and entertainment 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 and.
Gauging with more people that love it for more one therefore, the fact that we are able to attract other people too.
And a way of languages that were not used to.
We used before I think is also helping the fact of the viewership and engagement and in any case from because about not only the TV and yet there's been about that and social media platform and others.
Mr. OTT is showing that there is a lot of attention.
And it's for sure and.
What is happening on the track is very very important that there is no doubt and Bobby and visit for sure.
A good sign for us.
Yeah.
Good.
I would totally agree.
But stuff and I want to comment on the rest of it and then I'll add.
First part.
Sorry, Greg and the language and talk to them on my side.
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 shut down and Star sports.
And I think and parts of Asia, just wondering how that empower.
And then just your higher level thoughts on pivotal.
And with the streaming and kind of what that means for demand.
Stefan and why don't you say from commenting and then I'll give you I may have some views. Thank you yes.
Yes, absolutely. Thank you carry I mean, David we have of course as you know agreement in place. So we are expecting you know for that to be totally postal. So we don't see that there was a problem, we see actually a big opportunity for the growth of the Tvs and the engagement and Seeger and that's part of the world to find other solutions that we are working on of course.
But on the on this year and finance shouldn't be there with respect to 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 legacy platforms may decline or even be eliminated but in general we're seeing new platforms created that's an opportunity and just the way that.
You know here and the United States when satellite came in and eventually win buyouts and other fiber alternatives came that created upward pressure on content cost.
Because of 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 ATV offers against <unk>.
And many cases higher short term rates for either over the top platforms or even more streaming platforms over the TV platforms like satellite or streaming platforms, and we will way 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 and much more excited about the opportunity from the digital platforms, particularly as they gain scale.
Okay.
Thank you.
Okay.
Thank you we will now take our next question from David Beckham, and actually I have Eric Berg.
Please go ahead and makes a lot of.
Great. Thanks.
And on F. One.
Wanted to talk a little bit about the spring race format, maybe get a little bit of the thinking behind that and 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 just adding value to existing agreements and then secondarily.
Going back to the U S market and with the TV deal and play and a few years.
And I'm sure you've paid attention to what Ww. He did with Peacock I'm wondering if there is potential to sort of leverage the <unk> TB over the top platform and 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 regards to the sprint sprint format I think.
It would be.
Beneficial to everyone and if I had to answer straight delay to the last part of the question of course, we expect to add more value.
First of all that is action that would be very very positive and some of it type debt to be organized because from Friday to Saturday to Sunday. There is something to talk about a lot of action a lot of intensity debt is something that of course. This will have a better effect on the people debt.
We'll attempt to the race and this has been the.
And welcomed by all the organizer and and in a very positive way on top of it of course, that's something that we are offering to our media partners because we can't create the new content, we can generate other form of entertainment.
And then a new format that hasn't been never deployed before and also through the partners that have the chance to and the previous to be and the greed and four two times OS and Saturday at Docomo will be different of course, because the sensor all day weekend would be the race and assembly, but this is something that we believe that we levels Fleming.
On the on this industrial point of view.
On top of the AD and the excitement of what these rates and it's all about.
With regard to the.
Market, the TD deal and deleverage.
And related to all of our tools.
We believe that this will enable us to discussing the future even additional ways of integrating our FTE and OTT.
OTT platform that is going very very well in the future and therefore that will allow us to benefit from the fact that the market will be incorrect and our sport and the commitment that will be very very big on our side to make sure that this is what happened.
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.
Somewhat indicative of the 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 and if you look at WWE and they have tonnage.
Compared to us and so F. One TV is a great asset.
For our.
Connectivity with fans and for connectivity and particular with our most hardcore fans, but I don't believe and supplant or traditional broadcasters or other other over the top broadcasters, who are looking from a broader set of 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. One TV can be and part of the solution with them as you know.
Alright, thank you.
Thank you and we'll 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 the worst time does that mean it was just one promoter or.
Are there any others lingering out there and was within the range of a typical promotion fee.
And then secondly on sponsorship how should we think about the range of sponsorship types of contracts like how many.
Are based solely on the particular races versus the proportion of revenue that is really allocated across the season and our.
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 and we have a wide range. So it falls within that range yes.
So.
David with regard to the sponsorship of the range of course depends on the on the water.
The package that we have we have official partner and.
We have other kind of relationship and all are related to really the rights that they have.
And so we are vigilant pack and just about that all consistent with the seasonal with the old and third championship and not related to the single event itself.
Yeah.
Alright, thank you.
Okay.
Yeah.
Thank you. 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.
And probably saw I think draft kings swings and so on so what are the benefits you might see from Eros and with them.
And prior or 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 and not primary.
You'll have increased fan engagement and there may be.
Georgia is soon to open it appears.
Gambling will become legal in the near term and Georgia. It is not today, but it has been on the ballot and it looks fairly favorably inclined and the next and 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 and secondarily, the interest and if we and baseball MLP and capitalize on that more broadly I think it just continues to draw the fans not not clear that it is.
And our revenue line and the P&L directly.
And just as a second broader question on sports, you're probably seeing some of the disruption and England.
For the fans became engaged and stuff about.
About around the Super League Youre, saying.
Yeah, and just generally.
A fair amount of disruption that a lot of talk of P. E companies buying into series, a and nothing happening is that an area, where you might see some opportunities or is the fact that the soccer team can be relegated just makes it too risky.
No.
John we have looked at as many of those opportunities and we can possibly find we.
We do think it's interesting we can debate what.
And what's going on at each of the various leagues and where they stand in terms of their cycles unlikely 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 and Formula one and what we'd like to think we've done positively around things like truest and the 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 has 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 Formula one and 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 breakaways very well and I think we've pretty much eliminated debt opportunity or potential at formula one as a side note.
Thank you.
Thank you Sue and I will take our final question for today's conference from match U S. Benchmark. Please go ahead. Thank you.
Even apart from Max for stop and literally thing and wheels with Lewis Hamilton and always seemed relatively cortisol track.
We have the most competitive of seriousness and so I think 2012 for your Ferrari is coming back and Macquarie Lando Norris.
Sarah and I was just curious you've got a broad suite of changes coming next year to make the competition on the track more competitive.
Does it give you and you pause.
Thank you Mark next year.
Even if this year and seemingly is proceeding so strong right out of the gate.
Do you have any and all the real focus heavily incessantly and.
Okay and Sir.
We continue to roll on.
Well Matthew the changes has been already discussed the teams are already working on new cars, and new regulation and the training and as already left the station. So we are very pleased because we are convinced that this year and he's already a great season, and the next year with the changes debt thats been the plan and there will be another great opportunity.
Showcase is formula one and terminals and <unk>.
City of always keeping the attention.
At the center and therefore, there is no other things, but the checking and everything.
And those all business day to make sure that the changes will be massive from the cosmic <unk>.
Your line could then the possibility to have a bigger site not only two or three drivers that even more and thats the objective.
So from a really a riveting, but yes.
And just look we're lucky this season's great.
The work that was done and the cockpit agreement.
By Chase and Ross Brawn and others.
We hope to only increase the competitive next year and we're very excited and 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 are listening out there for your interest and Liberty and.
And we look forward to speaking with you again next quarter if not sooner.
This concludes today's call and thank you for your participation you may now disconnect.
Yes.
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