Q1 2021 Liberty Media Corp Earnings Call
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 based on.
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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. On this call includes certain forward looking statements within the meaning of the private Securities Litigation Reform Act of 1995 actual events or results could differ materially due to a number of risks and uncertainties, including those mentioned in Liberty media. 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 Corp, 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 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 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 $114 million of Cros.
<unk> and K shares from February through April the discount stubbornly remains and we repurchased at a look through price.
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%.
I'm looking at Sirius XM itself, they're off to a fast start this year with self paid sub growth.
Sub growth of 83%.
While starts in the first quarter were the 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. The next generation platform is now in 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 in North America, reaching almost two thirds of online audio listeners.
We're also continuing at Sirius XM, our expansion in the podcast segment with our acquisition of 99% invisible.
During our content creation capabilities.
Turning to live nation.
You have seen in today's earnings release on them concerts are back and in high demand for data in 2021. In fact, we are booked twice as many shows in 'twenty one as we did in 19.
Brian The 2021 ACM entertainer of the year's on going on tour and the railroads festival with headliner David Matthews band is another notable addition.
Following up on acquiring the majority stake in <unk>, we've begun our ticketed live platform and started equipping 60, plus concert venues to offer turnkey live streaming events.
We continue to help artists expand revenue and creative opportunities.
<unk> them with more fans via EBIT other means.
Looking at the 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 the constructive championships have 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 to the first we are looking forward to the first spread 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 award circuits, both in the U S and Canada.
Finally, we look forward to seeing all of you in Miami in 2022.
Turning to brace.
After a slow start to the season. Our record is just under 500 and we are close third in the NL East a game and a half out of first place.
We were helped by sweeping the net over the last three games Reyes.
Braves are number one at home runs. This season are 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 player per month for April Tableau standard ball 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.
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 Friday night, and Saturday Night games are the 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 the 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 market plays well for Liberty, given our strong balance sheet, 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 E. S. GE 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 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.
The 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 of 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 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 Sirius XM 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 at quarter end. This excludes the $429 million of cash that's held directly at the up on Opco.
Quarter end 401 group received an 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 F. One, leaving $724 million at the corporate level.
And at <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 up one revenue to better align with the way management currently evaluates the business.
Components reclassified in the primary up one revenue.
Generally related to ethylene on TV subscriptions certain half two and half 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 of $678 million $676 million.
Liberty on 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 also from my side. So 2021 has begun with huge under Jim momentum over the past few weeks, we announced our second race in the U S C. Miami gardens, with a huge and positive reaction from our fans the teams and all our partners.
The waste in the U S. Starting in 2020 to revise a great opportunity for our sport and will ensure we continue to increase our strong focus and it's probably on growth.
Last week, we announced that we will have the 100 kilometer sprint qualifying formats three races. In 2021, following 19 with support from all the teams.
<unk> will be exciting for all of our guidance provide more on track action over our latest weekend. Thank you.
Our partners and the teams greater commercial opportunities.
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 Grand Prix.
<unk> has always been on important ways 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 Dr. Bell Media and current leading up to two acquired the molecule base. Okay, maybe at least through bolt on paying rebates on group, which is great news for the long term future and developing of the meeting.
Chemical wildly.
While the global situation has been fluid to the COVID-19 pandemic for one has shown it has.
The ability to overcome the issue so donuts and continued to raise safety just last week. We provided these could be the case, while we are not able to waste and kind of this year, we have secured debt replacement rates in Turkey at short notice. Many we have Nokia used the number on where they seem to Colombia.
I think what is very exciting to see the level of interest on both the new and historic location to host exemplary and this gives us possible option with required for 2021, but those are good opportunities for the future.
We have had very good conversation with all our promotions and all of whom we expect the races. This season to go ahead as planned and just this week. We have had the confirmation that 1000 fans will have 10 getting bumps on the studies going on free.
And that multiple will work on approximately 40% of the capacity of the grandstand full day rates into wintertime.
Non 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 races season in body and had had three races to date, which with the close battles overtake it and the tag closer together that in the recent years, although it has grown as mentioned with this bathroom for the channel Cushing now this could be a golden year per formula one.
The season operating but did not disappoint with the stop in security proposition. It was a pleading race between Maximo Luis that was only decides on the final laps. The weirdoes just strong showings by noise in Paris.
And the Japanese Yoki Ya.
No debt scored points in his first at low rates for doubtful salary and it looks like yes. It probably this could be a lie ahead.
Buffalo.
First continuing to email or whatnot ads on them.
That's helpful.
Line in the rain and carry through for the weighted impressive given you're starting the third yeah and he didn't mean Nate central Paris.
Maybe that's what I'm mistaking qualifying debt securities pulse on the program showing the continued strength of Mclaren.
Last week on being Portugal, let's say the spend adopt us certain challenge stronger as Lewis Hamilton clinched a hub for Victor on imports now with both the stopping on Poland Lewis I had on the stopping to check on the startup delays. So the red Bull get Austin phases on there hadn't been before the seven chapters it pull it off Greenland.
So if it takes on both these teammates both December stop it depletes victory.
Once again shows that there is a real battle underweight four Bcf tightened and we add on on the only the three day recently.
Admissions for the Thursday, social peers because doctors.
The cloud on is making the early pace, but they any themes in the mix still have something to prove and it is great to see siddhartha he's been he's tried to get.
With respect those on Formula one is resonating with fans and engagement is very high to date, we have data for this phase two races across the 24 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 sprague.
On the digital front unique users for X, one web and App have been up 77% on the equivalent rates in 2010, and social engagement and also pleased with old depicting media interaction in both of the first two race week.
We continue to grow our social media following reached $36 5 million after the immediate on line the GP up from 35 million under the player yet Ed.
That's one P D. Our otp profit has also stopped the second strongly with their daily peak concurrent viewers each race weekend at around three times higher than the 2020 season average and 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 easier to find posted on our collection, which includes over 2000 hours on <unk>.
Virtually everything around peak in the last 50 years, along with our latest serious debt to changing the dream a faulty vs. Now available on your 188 territories with the beta on that part of TD, probably end up with an 85.
Excuse me on three of drive to survive the Booth on March 19, and continues to build mass global popularity for the sport, reaching number one on debt mixing 27 different countries and also globally.
And on all utmost daily basis, we hear.
About how this show was broken into new non typical plants. It was great to the vision 2020 season and seen the back story of the viral D. O mainly drivers changes I do highly recommend episode nine which is a terrifying exhilarating and expiring. This show was nominated for a sport any put out.
Pending city sports documentary and made the short list and the momentum for the UK broadcast awards.
Heading into the season, we have had numerous sponsorship announcements we were pleased with new our global partnership with DHL are 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 wasn't zoom, let's say it does have some martin seats got provide that on Saturday things there'll be official dose or put them on a walk in.
Additionally, we announced he advisors and drive culture official supplier and welcome global citizen as charity partner for our what we raised is one initiative.
We continue to engage fans to esports and had the very successful series of visual Grand Prix during the off season.
Current drivers along with pool must dogs on future prospects competing to win a share of the $100000 price point in their challenges.
Part of the convenience for to improve diversity and inclusion of Formula one as part of our weird I suppose while on the initiatives that allow us a team on the only qualification routes for the F Y E sport to see this broke chat issue.
This is our first female only competition and we hope it will encourage more drivers from the passionate and talented teammates seen rates and community with the goal of becoming the first ever see a named driver to be signed by an official F. One esports seriously.
In closing Formula one is off to a strong start in 2020 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 the dedicated employees on Formula One full day continuous diligence and hard work and I Hope you will watch the Spanish Grand Prix 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.
On the health and safety.
And with that operator, we will open it up for questions.
Yeah.
Thank you.
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 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 I, specifically on 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 in Siri.
So all else being equal youll, probably going to crossover to 80 plus in the third quarter.
Dividends go tax free just wanted to get your latest thoughts on whether series going to raise your dividend materially or are you happy with the status quo on letting your buyback sort of continuing to write higher and then on S 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 Syria, now, let Stefano speak to the cost cap on 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 in Q4.
We're in it on one of those two quarters, we're likely to pass any.
Obviously any dividend policies that are put.
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 Syria at.
Alice XM, rather of Siri to increase the dividend or potentially.
Delve into that buyback hold ourselves above 80 and use the capital to.
To buyback our own stock. So there are really multiple ways to get the same result, which is we are going after the discount and whether it's their through.
Through their dividend, increasing or selling on the buyback and we will be attacking the discount.
Definitely let me turn on to you about the cost cap.
Thank you, Greg and Jeff as you know Klaus cathodes being one of the most important significant thing that's overwhelming.
Sure.
This has had some effect not only because of the savings that the teams will make in the future, but also in the change of mentality.
<unk> 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 managing supporting tumor one and I think that the you know you're facing if I see what is happening around the world that everybody is focused just on the revenue side I think before on has just started the process.
On the other way around but of course revenues crucial but now we have just taken the first step into the cost GAAP, we do not take all the costs GAAP in other areas that did not close the in this moment debt at the edge for the future, but we have put insured but he's out also the governance of the team because that's been a huge step in making sure that the formula is sustainable fortitude.
Alright, thank you.
Okay.
Thank you, we'll 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 at Liberty Formula One I think it's 1 billion eight and.
All signs point to 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 drivers, which I wondering if you can humor humor me a bit.
I have gotten questions from investors around the retirement of Lewis Hamilton and bet on what that might mean to the sport and sort of the business I know they are 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 Miami, obviously huge opt.
The opportunity in the whole U S market as well as an American driver important Ah in F. One in terms of driving popularity here in 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 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.
Uncertainty about exactly what our revenues will be in 2021, you heard already we've had to cancel for example, Canada input, 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 the forward purchase agreement with Almac. This back at least $250 million would go towards the pipe in any transaction if we were to compete.
So I think we're going to see potential per opportunities.
In that market that could be attractive to us as 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 and.
What is the most epic efficacious way to deliver value to our shareholders.
Yeah.
If I may know beg the question related to the drivers that could lead to shortly channel. There's a great that she is doing an incredible job on the sports on side and some of image. He was able to grow the former one and other AD as well I'll tell you specifically related to former one but total line itself is strong strong.
And again, you know drivers changes you know I'd always in a place where one day. They may every time I do know what Louis with low and we are talking with them, but of course now it'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 it.
In the history of from day one.
But the full one is solid and robust and for sure what are the lead that the seasonal flu as you know from a wildly to react they will move forward, but the good news is that we lose as we all hope will stay will have an incredible season in front of him with a new cars with a new challenge and push on these will maybe getting to this thing on.
If it was decided it'd be probably around I mean, the good news is that thing for one we have so many good draw. This debate that the police the challenge of the chance will be even stronger and therefore of course, whatever will be the seasonally lowest little respect, but still more on these really solid and strong where they've got to Miami with the Americans drive. This it is important.
The answer for me, it's very clear thanks, yes.
We have we are working with teams that play to understand what is really the possibility for American driver to come on to the attention on football team on the short term. This could come I don't see that as being very pragmatic and realistic coming as the next two three years, maybe absolute yes, I know that the team's watching on the good drivers.
But theyre ready would be a big boost for the American tax because as we know you know basic drivers you know the puts.
And does he hasnt passion that people want to see these guys and that border. The hope that we had this debt very very shortly on our most on drive is competing against so this is a promo on channel.
Thank you.
Okay.
Thank you. So we will now take our next question from Brian <unk> with 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 of Formula One revenue for US and then separately, it's great to see in Miami on the calendar next year I know, it's something you've been working on for three or four years.
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.
It's now in 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 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 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 had 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 the specific zone.
On.
On the issue of the U S and ESPN look when we put that up.
Among the various broadcasters in alternatives.
A little over a year ago.
Chase and it was in total agreement had the belief that we were going to 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 fan festivals to digital engagement all of those.
Our building our interest in 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 obsessed with formula one because of drive to survive.
Who were not our typical audience are women.
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.
The 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.
Think that is a good bet. It's one that we are winning and all the reasons, we outlined before I think we will have a much strengthened.
Strengthened when we go to renew against that ESPN and other alternatives Stefan on what might you add.
Oh, absolutely Yeah again, I think that's you know the good news is debt.
We are talking about some other ways.
U S Miami wouldn't be fully culture with the geological window would get you to wait till we get on a structured the the show around it and the incredible news that the you know just a couple of weeks up to our announcement day the attention where they got to this is that its really massive and and the expectation of getting the label doesn't work and this is the reason why we are building.
Good to see this all day.
Communications, let's see this.
The throat and simple 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 it with you.
They do Miami gardens, with the Miami Dolphins the races, multiple because there you know they want to start leasing debt atmosphere and this will provide us the right platform in order to be ready to make sure.
So the volume that we go to generate for them you actually would be even higher and that's really the fundamentals are strategically thinking behind the fact that we've ever had to race in the United States.
Great. Thank you so much.
Thank you so when I 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 what do you think.
Thinking about rates promotions. This year, obviously, you have 22 races, but with or without fans in different proportions of fan how should we think about that are you getting flow promoter revenue lettings.
Letting some of it based on fans are getting non non hosted on the risk any any sort of thoughts because that's sort of the debt or the segment that has the most variability.
And then.
We've been seeing a lot more press releases coming out on sponsorship on on Formula One will be a new sponge, Japan 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 long term and finally, one for or Greg, maybe it's too premature but.
Probably the one that 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 on related to the to the fact that of course, we have the situation that is evolving with regards to the debt.
Attendance is of the people on track Greg goes on as I mentioned.
But we need to monitor race by race case by case of course, the moviegoing or has it been more of a it's likely that the opening up.
On the defense will not have a direct effect on debt I think as you know, but we have also content, but we cannot get into the day, rather we don't expect that debt tenders are the people that have no influence on the what would be the.
The effect on our own so it's really a mixed situation, but really to a bolt on message I didn't get the question with regard to the sponsorship VJ can you repeat that for me. Please.
Yes, that's what I mean, there have been announcements zoom and bunch of other answers you've announced more recently I'm just kind of incentives that sort of a resurgence in sponsorship in formula one more recently or is it sort of just better disclosure for us.
No.
Just to show you just to show the fact that day. The inkjet 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 that are.
Willing to engage and be our Portland is a great sign of trust on what we're bidding in the future and we need to expense.
This 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.
Alright, thanks, so much.
Thank you for you on that would take our next question from David ask J P. Morgan.
Please go ahead.
Alright, thank you.
On that one.
We've seen Disney moved to shut down and star sports channels.
Parts of the Asia, just kind of interested to know how this impacts your first directly as I believe they carry the 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.
Stefan on as you noted 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 drive the size like the social media outreach.
Well, if I may start on the cyclone David it's clear that that's about the show itself, but the engagement from residents. If they moved for the people. There is no doubt, but the thing is that these one element. The other element is the fact that we really are engaging with more people that are in love with Formula. One. Therefore, the fact that we are able to attract.
Other people to.
It's a way of languages that were not used to.
We used 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 the T. V. We are thinking about the 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's no doubt about it.
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 the language.
Syed.
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 are I think in parts of Asia, just wondering how that empower.
And then just your higher level thoughts on yes, pivot to streaming and kind of what that means for demand.
So Stefan on why don't you say, commenting and then I'll give you I may have some views. Thank you.
Yes, absolutely. Thank you gave I mean, David we have of course as you know our agreement in place. So we are expecting you know for that to be totally 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 starts on the wall to find other solutions.
We are working on of course, but on the on the ship finance 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 legacy platforms may decline or even be eliminated but in general we're seeing a new platforms created that as an opportunity to just the way that you're.
Here on the United States when satellite came in and eventually when filed and other fiber alternatives came that created upward pressure on content costs.
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>.
In many cases higher short term rates for either over the top platforms or even more streaming platforms over their TV platforms like satellite or streaming platforms and we will weigh on 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 are sort of slower growth platforms being cut out by people like Disney I'm much more excited about the opportunity on the digital platforms, particularly as they 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 it makes a lot of.
Great. Thanks.
<unk> on F. One on.
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.
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 the sprint sprint four months I think.
It will be.
Beneficial to everyone and if I had to answer straight away to the the last part of the question of course, we expect to have more value on.
First of all debt is action that would be very very positive in some of that type of debt would be on a good idea because from Friday to Saturday to Sunday. There is something to talk about a lot of action on lots of intensity that is something that of course. This will have a direct effect on the people that are low.
We will attempt to the race and this has been a welcomed by all day organizer in a in a very possibly be weight on top of it of course, that's something that we are offering to our media partners because we can't create the new concepts, we can generate other form of entertainment.
In a new format that hasn't been never deployed before and also through the partners that have the chance to on the previous to be in the dream for top line sales and Saturday the promo will be different of course because day there.
The center of the retail will be the race on Sunday, but this is something that we believe that the we levels on impact on the on this industrial point of view.
On top of the added the excitement on what these rates is all about.
With regard to the.
Market, the TV deal and deleverage.
And related to all of our tools all right. We believe that this will enable us to discussing the future even additional ways of integrating our FTB OTT platform that is going very very well in the future and therefore that will allow us to balance sheets from the fact that the market will be.
Did I see another sports and the commencement of it will be very very big on our side to make sure that this will happen.
Got it if I can add to what Stefano said on that I think we certainly watch what Ww day with Peacock and I think its.
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. If you look at WWE they have tonnage.
Compared to us and so F on TV is a great asset.
Or are free.
Connectivity with fans and for our connectivity in particular with our most hardcore fans, but I don't believe its a plants are traditional broadcasters or other other over the top broadcasters, who are looking for 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 will see that kind of opportunity with larger digital platforms and F. On television can be a part of the 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 said it was one 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 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 agreement we have a wide range. So it falls within that range yes.
Yeah.
David with regard to the sponsorship of the range of course depends on the on the on what Uh Huh.
The package that we have we have official partner and.
We have other kind of relationship and all are related to really the rights slipping on a half until we have little impact just about that all consistent with the seasonal with the old <unk> championship and not related to the single event itself.
Yes.
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 as hot coffee.
Probably saw I think dropped kings swings and so on so what are the benefits you might see from raw sand with.
Prior on Bali as it is now is there anything that could actually help you.
John I.
Take a shot at that I think.
Those benefits are going to be secondary not primary.
You'll have increased fan engagement there may be a.
Georgia is soon to open it appears.
Gambling will become legal in the near term on Georgia, 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 you can capitalize on that more broadly I think it just continues to draw on the fans not not clear that it is.
No 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.
But the fans became engaged.
About around the Super League Youre, saying.
Yeah generally.
A fair amount of disruption that a lot of talk of P. E companies buying into Siri, a 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 as we can possibly find.
We do think it is interesting we can debate what.
Uh huh.
What's going on in each of the various leagues and where they stand in terms of their cycles on Luckily 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.
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 havent yet on the intersection of where somebody wants us and we want them, but we continue to look and.
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 feel very confident we understand breakaways very well on I think we've pretty much eliminated debt 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 extra stopping literally banging wheels with Lewis Hamilton always seemed relatively quarters off track you'd probably have the most competitive season. Since I think 2012, your Ferrari is coming back and Macquarie on Atlanta North.
Sarah and I was just curious you've got a broad suite of changes coming next year on to make the competition on the track more competitive.
Does it give you any pause that you're moving along the next year.
Even if this year seemingly is proceeding so strong right out of the gate.
Do you have any ability to reassure them, having to yourself on the reassessment painters or just.
Continue to roll on.
Hello, Matthew.
<unk> has been already discussed the teams are already working on new cars on new regulation and the training has already led to this day.
<unk>. So we are very pleased because we are convinced that this year is already a great season for next year with the changes that thats been the plan there will be another great opportunity to showcase what is formula one terminals on the ability of always keeping the attention.
Center, and therefore, there's no other things, but the checking on that.
Everything in terms of all these days to make sure that the changes will be Matthew on the cars next year.
Hi line to burden the proceedings.
I think just like literally two or three drivers that even more and thats the objective.
Thanks stuff on a really a riveting right.
Just on.
Look we're lucky this season's great.
The work that was done in the cockpit agreement.
Bye.
<unk> 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.
Yeah.
Yeah.
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Yes.
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Yeah.