Q2 2021 Liberty Media Corp Earnings Call
[music].
Ladies and gentlemen, thank you for standing by and welcome to the Liberty Media Corporation 2021, Q2 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 of a question. Please press star 1 on your telephone as a reminder of this conference is being recorded August.
I would 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 of this call includes certain forward looking statements and the meaning of the private Securities Litigation Reform Act of Thanks, and 95 actual events or results could differ materially due to a number of risks and uncertainties, including those mentioned and Liberty media at the most recent form 10-K, and 10-Q and Liberty media acquisitions form S..1.
<unk> statements 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 of corporations expectations with regard.
Are there to or any change in events conditions or circumstances on which any such statements made on today's call. We will discuss certain non-GAAP financial measures for Liberty media and the Sirius XM and adjusted OIBDA and adjusted EBITDA, the required definitions and reconciliations for Liberty media and Sirius XM and schedules 1 through 3 can be found.
At the end of the earnings press release issued today, which is available on Liberty media website now I'd like to turn the call over to Greg and I say, Liberty's President and CEO. Thank you Courtney and good morning to all of you.
Today speaking on the call. We will also have formula one's president and CEO, Stefan and I was kind of salary and Liberty's chief accounting and principal financial Officer, Brian Wendling.
So beginning with Liberty Sirius XM.
Continuing to repurchase shares of purchasing 141 million of cross <unk> and the case years from May through July.
The discount remains and we therefore were purchased at a look through price for the I'm, sorry of just over $4 per share.
We continue to take advantage of the discount opportunity and I expect we will continue to do it going forward and our ownership of Sirius XM is 78, 1% as of July of 2013.
Looking now at serious itself they had an outstanding results for the quarter, another beat and raise with record low churn at 1.5%.
EBITDA also set a new quarterly record and new car penetration increased to 82%.
We have a continued focus on growing the already strong presence and the car there of 140 million vehicles on the road today, which are enabled for Sirius XM.
And the 360 L. Enhanced feature set will continue to evolve based on data received from users.
We're also growing engagement outside of the car and the rebranded the SSM App.
Is gaining traction the variable margins are as good or better than satellite and <unk>.
Courage, you to get it today and.
And please don't forget we are growing our advertising platform with 150 million listeners the largest digital audio AD platform and North America.
Well the all of these combined platforms and capabilities, we believe Sirius XM presents a compelling comprehensive offering per talent media and social brands to create and monetize audio experiences.
So turning to live nation the <unk>.
Reopening accelerated led by.
Outdoor concert and the U S and the U K with other countries coming along and vaccination levels increase.
Festival and amphitheater and are the focus for the summer led by Lollapalooza.
Rolling loud the hip hop festival in Miami.
The latitude and the U K.
Between them. They all had 750000 fans, which is back to pre COVID-19 levels.
Live nation is helping to put on the New York reopening concert in Central Park.
<unk> 21.
And beeps are streaming conserving cash continues to be an incremental live revenue stream for us with Bob The Bob Dylan show later this month.
Yes.
I would expect all segments to return to profitability and the second half of 'twenty 1.
And all signs of continued point to a great 2022, and we expect 2022 activity and financial results will exceed.
19.
Turning now to the Formula 1 group.
That was phenomenal racing.
For the first half of the season, the up until the summer break with the ear is balanced between Louis and Max.
Among the rest of the drivers there was a tight competition for third.
And the Constructors Championship is also highly competitive with Mercedes and Red Bull going wheel to wheel and Macquarie Mclaren and Ferrari battling for the third spot.
We remain impressed with the way Formula 1 is continues to navigate the continued challenges from the pandemic.
I have lost count of how many times, we have made changes to the 2021 calendar, but we continue to move forward.
And the Formula 1 team continues to plan for the known and unknown variables that come out of it.
We did welcome a full crowd at Silverstone and 356000 fans over the weekend, which was tremendous.
And we remain confident of our ability to have a full 23 race season.
We also had our first sprint event, there, which was a resounding success.
We made meaningful progress and sponsorship we continue and we are consistently announcing new partners and if.
You haven't already I encourage you to tune into the business breakdowns of podcast with Stefano.
And where he's quite articulate about the future of the business the linked to as on our IR homepage.
The Braves baseball fans nationwide, but particularly in Atlanta, and here and certain parts of Colorado were devastated so youku and yet and his season early we do wish him a speedy recovery.
The team has been battling despite the setbacks, we had an impressive comeback last night the sweep the Cardinals and the brands are now over 500.
And truth of true as park fans are back and a big way.
We expanded the capacity of a 100% and early may.
Baseball revenue per home game is up and the second quarter compared to 2021, despite only partial capacity.
Ticket sales concessions and retail per caps are all trending very favorably.
Having trouble, keeping jersey and stock of high quality problem.
And.
And the Braves do lead major League baseball and total attendance and over 1.5 million and average attendance debt.
29000 per day.
And with our financial strength, we are reinvesting and on field talent before the trade deadline, you saw us do that rabbit and at the battery development revenue continues up and the quarter due to rental income for new tenants of the Teekay and Papa John's and the end of Covid related modified rents.
You'll also see the phase III office tower.
We are confident it will be fully leased and the near term and.
And just and crop will move into their new headquarters later this month.
Finally, we continue to make good progress on Almac the spec.
Think the trends and the spec market, which are <unk>.
<unk> for many actually play to the benefit of Liberty.
With that I will turn it over to Brian where more of our financial results.
Thank you, Greg and good morning, everyone Liberty Sirius XM group had attributed cash restricted cash and liquid investments of approximately $418 million.
Excluding $1.1 billion of cash and restricted cash held at Siriusxm.
We also had $1.1 billion of Undrawn margin loan capacity of the parent level related to our series and lot of nation market alone.
Note that a portion of our cash will be used later in 2021 to repay our 225% 5 nation exchangeable bonds.
Based on the fair value of the liabilities at quarter and the amount of cash use would be $517 million.
As of August 5th the value of our Sirius XM stock held at Liberty Sirius XM group was over $20 billion.
And the value of the live nation stake was nearly $6 billion.
We had $3.2 billion of principal amount of debt against these holdings.
Total Liberty Sirius XM group attributed principal amount of debt of $14.1 billion, which includes the $9.9 billion of debt that's held directly at Siriusxm.
Formula 1 group had attributed cash and liquid investments of $1.7 billion, a quarter, and which excludes $537 million of cash held directly at F..1 the corporate cash balance includes.
$384 million that was received from <unk> and Q2 related to settling out of the cost growth.
Total Formula 1 group attributed principal amount of debt was $3.4 billion, which includes $2.9 billion of debt and F..1, leaving 546 million of the corporate level.
F 1 and 500 million $500 million revolver remains undrawn.
But we are still in the cut the period of the covenant waiver at F..1 target leverage of the business remain 5 to 5.5 times.
Please note that during the 3 months ended March 31, 2021 F..1 began reclassifying certain components of previously reported and other revenue and the primary F..1 revenue to better align with the way it currently evaluated.
Components reclassified and the primary iPhone revenue include F..1 TV subscriptions of 2 and half 3 related fees broadcast origination and support fees and digital advertising among others.
Additional detail, including the impact of the revenue reclassification for the years ended December 31, 19, and 20 and can be found and schedule 3 of our earnings press release posted to our website.
Lastly to the Braves at quarter end, the brands had attributed cash liquid investments and restricted cash of $231 million and.
The attributed principal amount of debt of 694 libert.
Liberty and our consolidated subsidiaries are in compliance with the debt covenants at quarter end.
And with that I'll turn it over to Stephane to discuss Formula 1.
Thank you, Brian the 2000 and safety when the season is exceeding the expectation across the board.
We can all the plants and putting.
Putting the drama and the <unk>.
Okay.
The <unk> did not disappoint a zone.
And these amazing victory and the highest first kind of the newly branded <unk> and <unk>.
The most impressed with this expense of holding all of them in terms of oil and 1 of those labs.
And the rivalry between Lewis <unk> continues to build and the price wasteful of the channel, which culminated with the issuance of the simple and.
And with the.
The outcome on Sunday, and Windows, and the potatoes and for the some of the break the slightly ahead and the spending.
And the bulk of the Thursday between all of these bulk of some of it.
The contest among the total Tucker.
And just the Skus between Venezuela, and let's say, the first and the collateral of them surrounding sort of.
Furthermore, while leaving up so the strongest and defense of responding.
And the full brunt of the silver slipper posting 300 of.
Sample over the weekend with the hands of influences.
The source of of Denver is unrivaled in the schools.
Attendance was certainly aided by the type of 5 of them for the championship. The inaugural F..1 spring event, the produce compelling racing and the and turned off of the public cloud.
On the strength the first of 3 events and the season, we have received overwhelming because it seems it seems like some of the teams and drivers and sentence.
And certainly these provides additional opportunities for the hour promoted and media and sports So part of it will go.
And we're continuing to discuss any lessons learned from the summer months with the teams.
Fundamentals are strong.
We believe at this time with the expands and the 2022 and look forward to the next strengthen.
<unk> and.
Engaging across all platforms, we have the data through the of British brink and on the digital from you and excuses for the S..1 of the website and App the season.
Over 88 per cent compared to 2000 and.
Social engagement continues to grow reaching a total of about 40 million of social interaction for the business.
The quick.
And we've seen this growth reflected in our total number of dose literally as 1 of the social media, which now stands at almost sports media.
Did any of <unk> opportunity and we have seen strong growth over 2000 and trends and 2020 and not in many markets, notably songs, the Netherlands, Norway, Spain, and Sweden, and the United States.
And that's 1 TV remains a great ways of patents and catch all of the action of the race weekend.
Peak concurrent viewers per race days has consistently been more than 2.5 times higher than the 2020 season average with many of SKU over the race weekend also by more than 2.5 times of the vessels last season.
We are now and level basis into our plans and 23 racing season.
And last year, we had only completed tour.
2021 as presented some of the same challenges.
And although we have some new ones.
And I'm proud of our team and our partners as we continue to navigate the landscape.
And our last the earning calls the Canadian royalty of just being replaced by the sort of keeps growing.
However use of drug administration related to turnkey, we have to compete with again and secure and back to make the races, and Ulster Bank moving the transfer of them free of weaker.
Once the mentally we with the aim of <unk>.
Good of software Silicon nature, and the Kolenda as the replacement for the Singapore growth.
All of these changes require great nimbler and creativity and hard work from our partners and the confidence and which new ways of late.
<unk> hundred 1 as the demonstrated the ability to manage the logistics of Covid restrictions in multiple countries and the set the gold standard and testing and effective throughout the course to deal with positive cases.
So the good news from free we ask them that the 56000 and excellent drivers themes and questionnaire that produced the.
Both of these cases photo of positivity rate of 0.06 per se.
2 of these fine tune the operation, we've seen comfortably the and our ability to safely deliver of 'twenty 3 race season.
The non to host of all of them are racist consists of all all the high as evidenced by vendors. The web leads me able to slow in 2021.
And we will see that the interest of new venues and that now currently part of.
All of the 2020 calendar and the existing venues open to hosting of several weeks.
As different and part of the World.
And the stages of the merchant.
From the from day <unk>.
Governors view and flow Ace has an exciting way to return to the public stage and was convinced of OPEC.
And it made tremendous progress in 2021, the sponsorships and the momentum has continued since our last earnings call and May change.
Joining us of global partners and not 1 of the partners of the <unk> status and will become the official hit the photos the sponsor and Thats the NFC howerton of Epsilon.
They will present the brand New award would be announced the hands of the budge and growth rate.
We are also well coming and BW CEO of the title sponsor of the Austrian double hit the and last week announced that they will become 1 of the official water technology, Pablo working with Epsilon and deliver a single use plastic free tablet by 2025.
What day, Thailand, the regional finals, and HR Enterprise pardon me and all of that 1 of course, the UK and Germany.
Finally, we completed a multiyear the extension of our financing the company and ecommerce and manufacturing following the outstanding performance of our F..1 more kind of school.
Sales of the official online as far as total grew by more than 40 percentage of it doesn't and 'twenty and accelerates the triple digit growth. Some of the first 6 months of 2000 and Cynthia well the.
The us market is the largest in terms of sales on the <unk> side.
And the increasingly of resolution of the sports and the country.
Some of the thing I would go and to expand our reach we have announced in the Q1 call and leveraged for all debt and F..1 teams and will feature and the video game and rockets and the latest transact the.
Beginning of the multi year partnership.
And how can we assume the 2021 season, our planning for 2022 has been ongoing for some time.
As mentioned before that is the highest full day needs to make 2022 calendar and we hope to announce the provision will commence during September and October.
We can confirm that the much anticipated and Miami Grand Prix will happen and the first half of the.
And so think of it as high and through sales of not sufficiently stock.
We also cohort 2 hour and move to some pizza for the Russian growth rate beginning in 2073.
And these like Tony City will.
And we'll provide is coming back Joe of Formula 1.
Previously discussed the foundation that were put in place over the last few years with coast GAAP and regulation and the new concourse and the good image, we have created a sustainable and the flourishing ecosystem for the sport.
These along with the compelling products on the track as greatest interest and opportunities across the board.
And includes ongoing discussion and the highest led the way with engie among the sectors, we've seen the breadth of data and with Formula 1 as well as opportunities for the new engine and development of the sustainable fuels.
Along these lines, we continue to develop programs and the tumor once released there's 1 initiatives both of them.
It is growing free we deliver the carbon neutral growth.
We plan to think of these learnings as we work towards our goals for the ensuring all of that's 1 events of sustainable by 2025 and on other ways to be called net zero carbon by 2000 and we are.
We've also seen great interest from Oems and our plans for the next form of 1 engine to be out of the percent of sustainable fuels and those close of the discussion of completely.
But I want to focus the increased diversity and inclusion of those 401, we have recently announced commitments relating to 10 engineers and scholarships, Florida and the representative groups and the apprentice and Eaton the ship brokers within the <unk> organization.
We believe that that's a truly global sport, we can make the difference by ensuring that we are diverse of the inclusive in our own community as the communities we serve around the world.
The change for these channel donation to funding these other ships.
I think the logos right I want to thank every 1 of the total of 1 including all of our drivers teams and business partners.
The indication and hard work so far this season and <unk>.
And some much deserved time off and we look forward to the Humanization and August and Tonight.
The multitude of.
We'll see the head.
And now with 2 and the cold.
Moving to Greg. Thank you so much bye bye.
As Stefano and thank you Stefano and Brian.
And very exciting news.
Our investor meeting and will be held on Thursday August 18th the full experience will be offered and person at the New York Times Center and virtually please save the date.
<unk> details will be provided the soon.
Please note that all in person and attendees will need to be fully vaccinated against the COVID-19.
We appreciate your continued interest and Liberty media and hope you all stay safe and healthy and.
And with that operator, I'd like to open the line for questions. Thank you.
Absolutely and if you would like to ask a question. Please signal by pressing star 1 on your telephone keypad, if using a speaker phone. Please make sure. Your mute function is turned off to a letter of signal. The return equipment. Once again, everyone to ask the question Press Star 1 on your telephone keypad and we'll pause for a quick moment to assemble the queue.
Alright, and our first question will come from Ben Swinburne with Morgan Stanley. Please go ahead.
Yeah.
Hey, good morning, everybody.
Greg just to clarify is it August 18th or November 18th.
November 18th of I'd say August.
And you did yes.
And I saw you meant November so thanks for clarifying and the exciting for for in person.
2 actual questions if I could Greg just looking at the discounts.
Liberty broadband and I know this isn't the liberty broadband and call, but I think it's relevant for Liberty Siri that discount has not improved probably widened even since the debt buyback kicked into the substantial levels and I'm. Just wondering what you take from that as we think about the opportunity the sort of go after the discount at Liberty Sirius since youre going to and theory of the.
The access to a lot more capital.
And at some point over the next quarter or 2.
And then.
You guys commented in the release about Formula 1 TV contributing to revenue growth and I feel like that product went first and then we were really focused on as a business to sort of fading and now I'm sort of wondering.
Given COVID-19 and just the popularity of the sport increasing what's the vision there or is that something that you guys are investing more and do you see that as a big revenue opportunity or is it more of an enhancer of the kind of the core rights and may be a driver of engagement. Just maybe you can update us and how you're thinking about the OTT streaming product at this point.
Sure.
Thank you Ben.
First on the discounts.
Well.
Happened to be well aware since we have of Liberty broadband and simple.
Okay, and what's going on there and we actually.
During the quarter for example, charter was up about 15% and our Z per.
Per share of Liberty broadband of charter was up about 17% because we were able to buy as much as we were able to buy this year at a discount.
We are actually driving the NAV of.
Charter of excuse me of L. BRD up substantially faster than charter itself. So look I think it'll have the desired result.
The good things come to those who wait.
And not necessarily hoping or suggesting everyone's going to wait forever, but we believe that ultimately pay to our benefit and we can already see those results mathematically in terms of.
And what's happened to the NAV per share of L. B R D on the.
Compared to the underlying charter.
So I think we'll go at it and as you point out we're going to have more capital we would expect in the coming months.
And we will see what we how it how it responds.
On the vision for F..1 TV and I think it has evolved I'll, let stefano comment as well but.
I think just the sheer heft.
The amount of content we have.
Cause us to think about whether that was going to be a meaningful way to connect with our customers.
And enhanced way would it be.
Merry way or and enhanced way and I think it still is going to be enhanced when and how much of it becomes incremental revenue how much of it becomes of weighted to join with our customers that will evolve, but it's you've seen what's happened for example, with WWE going into Peacock and obviously the scale of content being much higher than us I think it's very difficult for a point service to <unk>.
Youre going to replace what we have currently with scaled aggregated services, whether those are linear or whether those are <unk>.
Scaled aggregated digital services, so 1 way or another I think that is that those are going to be the primary way, we get paid but we will find other ways to add value and revenue through things like F..1 TV, sorry, I hope I didn't steal your Thunder there Stefano.
No, Greg and I think the U.
And hopefully spot all of them and I think Ben if I may ask him what the Vega said.
F <unk> the huge potential to make sure that we can and has the experience with more and more content to our customers and we are exploring relative together with other promoters to give the real and constantly can also and especially condition to the to the ones that that attended to the to the.
The events and then extended the appetite of AD and the unique content.
And Catherine.
Note that the experience.
That's really and incremental wheel, but adding more and more appetite and comfortable with people that the level of 4.1.
On the TV rights.
Generally talking I mean, we have the privilege of the and many of our major deals have been the already completed and so we are not in that situation. When we can really see the evolution of the T V. Right. Because of this is something that is not the units when we see threats from region to region and the OTT development should have the big hits and the future.
So we are and the Cleveland position of I think the biggest come to really read the all of them and then the habits of chance.
It's flowing through.
And so they know the to be ready at the right time to maximize the fact, the pool, what he's really great fit today.
That makes sense, thanks, Keith I spoke to you.
And up next we will take the question from Bryan Kraft with Deutsche Bank. Please go ahead.
Hi, Thanks, Good morning, I have 1 for Stefano and 1 for Greg.
Greg and curious if there's anything.
From the infrastructure legislation that could be an opportunity or risk for liberty that you're watching whether it's something for an existing portfolio of company or a new opportunity for liberty to invest behind.
Sort of an open ended question, but I'm curious on your thoughts there and then Stefano and sports betting was 1 of the opportunities that the chase had identified when we first became CEO and I'm. Just wondering if you could give some perspective on that opportunity for formula 1 going forward and any plans or activity that.
Do you have going on and the sports spending area. Thank you.
So touching first on the infrastructure Bill I think where we're full on LDR day questions and a way that today already and the LFC call, but that's alright.
I think there are some opportunities that will arise and most of them are going to rise at charter for GCI.
And if you look at our businesses.
I don't think we're going to see a massive change.
CRE I guess, if you think about greater connectivity and general that's probably a plus for our 360 L. But it's on the margin it's not like a massive opportunity I think in and of itself and the continuation of our acceleration of ongoing trend.
The.
The rest of the businesses Formula 1 the Braves.
Not as live nation, not as obvious to me how the infrastructure Bill is helpful. Obviously of broadband and charter and GCI.
And there are both opportunities there and in terms of increasing customer.
And the supply of of funds to buy broadband increasing money of around broadband probably helping us extend some of our our broadband footprint, but there are also some threats there were new entrants.
May be encouraged so pluses gives and takes and that bill I would say from the perspective of charter and.
The.
GCI could have been far worse for some of the initial proposals I think the ones in terms of the threat level are way down from what might've been initially proposed about preferences for fiber over coax preferences for overbuild the preferences for munis Muni.
Beauty builds all of those things are muted compared to what might have debt.
If I may Brian on the on your question with regard to debt first of all with the enough to put debt because we have already more partner of these <unk> pet and debt.
We are working together.
The.
The idea of better news and added with a lot of issue depending on the region of the country and we need to make sure that everything is it really killed them debt side for sure the each of big opportunity, but could that the exploded in the future. So once again working and brokers to make sure that the next step of Bellwood partners, who would be the right..1 example of that I mentioned the opportunity.
And that could be good pull in front of the sport.
Okay. Thank you.
Yeah.
Up next we'll hear from David Karnofsky with J P. Morgan. Please go ahead.
Alright, Thank you and.
The terminal 1 and Stefano can you discuss in more detail your takeaways and the sprint race format. Both in terms of how do you think it was received by the fans, but also by our partners and the race promotion and TV side and I think you mentioned, maybe expanding the format next year any sense for how many races, you could roll this out to and then maybe 1 for Greg you mentioned.
And good progress on the Almac I know you're somewhat limited in what you can say on this but is there any more color you can provide on it or your position and.
Stock market overall.
Thanks, David for the question well first of all of what we talked about the screen format.
Idea was to offer something different that in order to make sure that the was something new that we can offer to all the stakeholders.
And from the 1 we have the sad that we wanted to do 3.3 tests 1 that has been done the soup. The other 1 would be and.
And the Monza and the other 1 of them would be at the end of the season in Brazil.
The end of this.
The complete cash we're going to have a plan and the receivables will be the next step 1 of the cannot let me say that after the first day.
Strength the event and the Superstorm. The the response that we have both from the drivers from the teams the media as being a really positive and also for the for the promoter because if you think that the age of the day, we have something new to say.
And the people from the other tuck on Friday, whether the.
2 of them.
For the first 1 of your final radio and Friday, So the cause of the post to them has been dramatically positive and if I may say and it's great because of that roadmap of pension interest of TV and also partners because of the types of debt. We have built in the for example, the dot com and the so we have already seen the financial income.
The port that has been the if I may say good a good sign of very very very positive sign and we want to respect what we said we gonna have a full of the briefing that makes it the I forget the the season, we have a plan for the future of the pools. We have the benefit that we are fine tuning and some of the comments that with the seats and what I can say that.
The if we move how do we show that I do believe so.
The direction of the future for sure there would be not every race, we have ideas of grape, especially the Puma of course, certainly started the rumford and certain especially of the worst, but we want to offer and add the food they already and incredible problem for 1.1 so very very positive the car.
The first of the.
The size and ready to the tab at the end of the of the of the 3 bench of proposal that's in the home.
And so hopefully it would be.
The big step of vessels at the current and future.
And our sport and proposition.
Alright, and moving on we are taking the question now from James Ratcliffe with Evercore ISI. Please go ahead.
Thanks, and I want to and Oh, the SEC, Sam and 1 of them and put me on 1 of if I could first of all and Formula 1.
Couple of weeks of sponsorship deals can you just give us and update on how many remaining sort of verticals. You think of really available to you and are tracking opportunities and secondly on Liberty Formula 1 and you bought back 100, and excuse me on the Liberty Sirius you profit back of 140 million Bucks and stock in the quarter.
Presumably you're going to be able to get the cash flows from Sirius tax free zone at the end of the year why not accelerate the buyback now.
Got.
The $1 billion and debt or was it more and not directly and margin loans.
And you know the massive value of the Sirius stake why not take that buyback activity up to.
Ramping up now rather than waiting until you have it.
The ability to get the cash tax free.
Definitely.
First of.
You want to comment on spot and thanks.
And thank you, Greg and Jamie and Mike.
And from my perspective.
I've seen of that'd be a great the momentum she had the.
And in the sponsorship the.
Growth that is connected to all what we are achieving and the championship that theyre going to the other question regarding 2 of how many verticals do you believe there could be still open in the asset.
And our global partners I would say, maybe 1 or 2 and maybe the 1 of which we are working on debt is very important but actually the technological provider.
That the subsidy related to our possible.
And the promotional offer but we want to exploit through of grades go bad and it could be available around the world, that's mainly I would say the.
The most important 1 that I think it is.
Both of the first of all of them.
If I could add on sponsorship.
I think it's an evolving market and.
And we certainly see new categories and technology as Stephane pointed out as 1.
When we.
And what the business nearly 5 years ago I don't think we thought about of crypto sponsorship I don't think that was really on the horizon and now it's a meaningful number so I think new categories of created things change.
The BW T was the team sponsor now the 1 of our sponsors things move around so I'm not sure it's the static.
And the April to answer that is this many of this number I think it moves around and there are lots of opportunities still out there and.
And it's our challenge to go and pursue them on.
And the question about what the exam.
I think we have been ramping we do of a plant we will have more capital that comes in and I think given that our that the way to support the debt at L. S. X M is primarily with flows from.
The serious recognizing we don't have and operating business. There, we've been relatively cautious with margin debt and the like and we've been relatively constrained and how much exchangeable and we can do this X amount of liquidity. So I think we'll you'll see a plan that's probably more aggressive recognizing what's coming but those are and some of the constraining factors.
Thank you.
And our next question will come from David Joyce with Barclays. Please go ahead.
Thank you a couple of questions 1 on Formula 1 and.
And I was wondering given all of the fluidity and the the the rescheduled this year.
Hum.
The race promotion contracts and.
The renegotiated.
On the regulatory allowance of capacity.
Or the or have they been fixed with the presumption that you still have the.
You have some normalcy coming back later.
Yeah, but see the next year and kind of secondly on the would you be too and it kind of a normal free period, do you think and capacity and race promotion revenue level by the fourth quarter.
And then the second question on Liberty Sirius.
It was kind of tax related in terms of your auctions the hyper.
Critically if you were to sell into a serious of share buyback program. Once you are over 80%.
With your sales of the spark from her Ob.
Tax free or is there any leakage from the thank you.
So all of that mainly Greg.
And the Fresno.
First Stefano.
Okay. Thank you.
As you said the fluidity is really.
The thing that we had to manage through this year and that and we are heading into the second half of the season, where half of that.
And would be the topic of the group.
Is that.
The situation, we have to manage these unique different and.
And because of every agreement is different from the 1 that we have more country by country place by place and state that the of course the of Port is always to make sure that the from all of the points of leverage.
And of course also the selection side is to optimize the the.
The dimension of it and minimize the of any negative possible until we can have.
We have agreements where the honestly the number of attendees and doesn't mean anything to us some of the we got working together to see what could be the benefits of we can bring home of depending on all of the situation and we are working closely with all of the promoters and the authorities to make sure that we can really make the.
<unk> planned for the future knowing that the how's the redwood.
And we'll see before the solutions of all the continuously and.
And the thing that we have to do is to make sure that we have a bill to the options that I wait and and and.
And the things that we can see and so far to date that we didn't have any material fashion and other numbers.
I agree with Stefan and his comments and obviously.
<unk>.
We work with our promoter partners to maximize the audience allowable and.
Safely at each race and that'll impact of the revenues and occur.
That will impact obviously, there is the changing market every day Delta Lambda, we will see what happens, we're obviously designed to maximize attendance and the safest way possible.
We skipped over 1 comment our about Almac and it was we were so excited about formula 1 and I think probably what happened.
Obviously, there's a limited amount of can comment.
Our observations about the stock market of probably consistent with most of the investors and.
And what's on this call.
It's gotten a lot harder to raise back money and it's gotten harder to get combinations done because of the pipe market is particularly difficult and the discounts expected from fair trading value of probably widening.
All of those have meant that weaker players.
Have probably been washed out we know of deals that were proposed at X price that didn't get done at any price and not just below the proposed price and.
Think that trend I'd like to believe favors us both because we have a very strong investor group in Almac. This back who have expressed willingness to do of pipe with us, but also because unlike many sponsors who are just playing for the promote we're putting up at least $250 million into the deal and could put substantially.
More if we found the right opportunity and our willingness to effect via pipe investor alongside pipe investors I think is.
Comforting thought to many.
And.
And I have recently been approached by.
Numerous firms about hey, we'd love to come along with you and partner on it and audit deal et cetera. So I think there's plenty of capital available for us for the right deal.
And the right deal is likely to involve something where there is more capital required the scales.
<unk> 2 of normal IPO or something like that and it's probably partly due to COVID-19 weighted related recovery or the like so all of those.
Our speculations about what we will see we have seen a lot of those kind of opportunities, but have not found the perfectly price point of opportunity would be like yet, but I'm confident we will.
On the question about selling into the buyback.
Our tax treatment will vary depending on whether we sell to the company.
We currently have no arrangement to do or whether we sell into the market and 1 of the first would be the latter would be taxable the form of would be tax free.
Great. Thank you very much.
And up next we'll hear from Jason Bazinet with Citi. Please go ahead.
I think there's gonna be and easy question for you to answer, but if I just fast forward and we get to the point where.
And there is some sort of equity exchange or takeover.
Between now and section of M series, where we get the 1 operating business and 1 security.
Is it is it obvious to you, which 1 of those is the surviving entity could you just talk about the pros and cons.
Thank you Jason No I don't I don't think it's a known.
I'm not sure. It's an easy question, Jason I'm not sure it's known that you could imagine scenarios where.
And effects here becomes a.
The operating subsidiary of Liberty.
And with its own tracking stock or you could imagine scenarios, where there was effectively and all.
M T reverse Morris Trust, where our shares were subsequently spun out to our shareholders and Siri became a freely traded company. Both of those are of imaginable scenario of certainly.
Okay. So no real constraints to go either way from your perspective.
No.
Okay. Thank you.
Yeah.
And our last question will come from Matthew Harrigan with benchmark. Please go ahead.
Thank you.
John.
The Comscore I guess the default rate question.
Stepping back from the phrase I'm.
And looking at MLP overall, Scott the good news television contracts of 28, albeit pretty fast and that's correct.
Tawny, having a lot of the fuel even the non baseball.
She has the real issues.
Longer period of time, right and for the sport and and the competition and the field do you think man for it and the owners group overall or.
Notable to share.
All of a draconian measures like maybe even moving back into the picture of smell and to get more.
And then and into the game.
I know that's kind of the fourth question, but kind of places the nationals over a period of time as well.
And.
Thank you Matthew.
We remain Super excited about the Braves there are.
Continuous work led by commissions, which involve both the.
Owners represent us.
MLB Representatives of play of representative to look to make the game, even more exciting a lot of that revolves around speed.
And to try and shorten the playing times.
The innovations like.
Double headers.
Ill go into 7 innings at least for this period of time, you've seen innovations around.
During the Covid about starting of tie games, starting renters and the second base things like that so there are certainly attempts to speed things up.
And I'm.
And I'm not convinced moving the pictures of Mt is gonna be happening anytime soon but.
And all things are open and possible I think people respect the tradition of the game, but also want to create as much excitement as possible and that balance will be try to be maintained.
Okay.
Thanks, Greg.
Thank you to our listening audience and the questioners.
And hope to speak with you next quarter, if not sooner and.
At our Investor meeting in November and with any of the thank.
Thank you very much.
That does conclude today's call. We thank you for your participation you may now disconnect.
[music].
Yes.
[music].
Okay.
[music].
Yes.
Okay.
[music].
And.
Mhm.
[music].
Okay.
[music].
The.
Okay.
[music].
Okay.
[music].
And.
[music].
Yes.
And.
[music].
Great.
[music].
Okay.
Okay.
[music].
And.
And.
[music].
Okay.
Okay.
[music].
Yes.
And.
Okay.
And.
Okay.
Yes.
Okay.
[music].
Yes.
Right.
Okay.
[music].
Okay.
Okay.
Okay.
Okay.
[music].
Right.
Yes.
Okay.
Okay.
And then.
Okay.
And.
And.
And.
And then.
And.
[music].
Ladies and gentlemen, thank you for standing by and welcome to the Liberty Media Corporation 2021, Q2 earnings call. During the presentation. All participants will be in a listen only mode. Afterwards, we will conduct the question and answer session.
At that time, if you have a question. Please press star 1 on your telephone as a reminder, this conference is being recorded August.
I would now like to turn the conference over to Courtney Chun Chief portfolio Officer. Please go ahead.
Thank you before we begin we'd like to remind everyone that this call includes certain forward looking statements and the meaning of the private Securities Litigation Reform Act of banks and 95 actual events and results could differ materially due to a number of risks and uncertainties, including those mentioned and Liberty media and most recent form 10-K, and 10-Q and Liberty media acquisitions form S..1.
Registration statements 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.
And any updates or revisions to any forward looking statement contained herein to reflect any change and Liberty media Liberty media acquisition corporations expectations with regard thereto or any change in events conditions or circumstances on which any such statements.
On today's call, we will discuss certain non-GAAP financial measures and Liberty media and Siriusxm, including the adjusted OIBDA and adjusted EBITDA, the required definitions and reconciliations for Liberty media and Siriusxm schedules 1 through 3 can be found at the end of the earnings press release issued today, which is available on Liberty media website.
To turn the call over to Greg Maffei, Liberty's, President and CEO. Thank you Courtney and good morning to all of you.
Today speaking on the call. We will also have formula one's president and CEO, Stefano Domenicali, and Liberty's, Chief accounting and principal financial Officer, Brian Wendling.
So beginning with Liberty Sirius XM.
We continued to repurchase shares of purchasing 141 million of cross Ellis SMA and the case shares from May through July the.
And the discount remains and we therefore were purchased at a look through price for the I'm, sorry of just over $4 per share.
We continue to take advantage of the discount opportunity and I expect we will continue to do it going forward and our ownership of Sirius XM is 78, 1% as of July 2003rd.
Looking now at Sirius itself, they had an outstanding results for the quarter, another beat and raise with record low churn at 1.5% day.
EBITDA also set a new quarterly record and new car penetration increased to 82%.
We have a continued focus on growing the already strong presence and the car there of 140 million vehicles on the road today, which are enabled for Sirius XM and.
And the 360 L. Enhanced feature share will continue to evolve based on data received from users.
We're also growing engagement outside of the car and the rebranded SSM App.
Is gaining traction the variable margins are as good or better than satellite I encourage you to get it today.
And please don't forget we are growing our advertising platform with 150 million listeners the largest digital audio AD platform in North America.
All of these combined platforms and capabilities, we believe Sirius XM presents a compelling comprehensive offering per talent media and social brands create and monetize audio experiences.
So turning to live nation.
The reopening accelerated led by.
The outdoor concert and the U S and the UK with other countries coming along and vaccination levels increase.
Festival and amphitheater and are the focus for the summer led by Lollapalooza Rolling loud the hip hop Festival in Miami.
Latitude and the U K.
Between them. They all had 750000 fans, which is back to pre COVID-19 levels.
Live nation is helping to put on the New York reopening concert in Central Park.
August 21 and.
And <unk> our streaming can service continues to be an incremental live revenue stream for us with Bob and Bob Dylan show later this month.
A live expect all segments to return to profitability and the second half of 'twenty 1 and.
And all signs continue to point to a great 2022, and we expect 2022 activity and financial results will exceed 2019.
Turning now to the Formula 1 group.
That was phenomenal racing.
For the first half of the season and up until the summer break with a fierce battle between Louis and Max.
Among the rest of the drivers there is a tight competition for third.
And the Constructors Championship is also highly competitive with Mercedes and Red Bull going wheel to wheel and Macquarie Mclaren and Ferrari battling for the third spot.
We remain impressed with the way of Formula 1 as continues to navigate the continued challenges from the pandemic.
I have lost count of how many times, we have made changes to the 2021 calendar, but we continue to move forward and.
And the Formula 1 team continues to plan for the known and unknown variables that come out of them.
We did welcome a full crowd at Silverstone and 356000 fans over the weekend, which was tremendous and.
And we remain confident and our ability to have a full 23 race season.
We also had our first sprint event, there, which was a resounding success.
We made meaningful progress on sponsorship we continue and we are consistently announcing new partners.
You haven't already I encourage you to tune into the business breakdown of podcast with Stefano.
And he's quite articulate about the future of the business the linked to what is on our IR homepage.
The Braves baseball fans nationwide, but particularly in Atlanta, and here and certain parts of Colorado were devastated so you're cooling you enter the season early we do wish him a speedy recovery.
The team has been battling despite setbacks and we had an impressive comeback last night the sweep the Cardinal and the brands are now over 500.
And truth of.
The Truest Park fans are back in the Big way, we expanded the capacity of 100% and early may.
<unk> revenue per home game is up and the second quarter compared to 2021, despite only partial capacity.
Ticket sales concessions and retail per caps are all trending very favorably.
We're having trouble keeping jerseys and stock of high quality problem.
And with the brace do lead major League baseball and total attendance and over $1.5 million and average attendance at over 29000 per game.
With our financial strength, we are reinvesting and on field talent before the tread deadline, you saw us do that rabbit and at the battery development revenue continues up and the quarter due to rental income from new tenants for the Teekay and top of John and the end of Covid related modified rents.
You'll also see the phase III office tower work.
Confident it will be fully leased and the near term and.
And just and crop will move into their new headquarters later this month.
Finally, we continue to make good progress on Almac the stack.
Thank the trends and the spec market, which are.
Challenging for many actually play to the benefit of Liberty.
With that I will turn it over to Brian for more on our financial results.
Thank you, Greg and good morning, everyone Liberty Sirius XM group had attributed cash restricted cash and liquid investments of approximately $418 million.
Excluding $1.1 billion of cash and restricted cash held at Siriusxm.
We also have $1.1 billion of Undrawn margin loan capacity of the parent level related to our ceria and live nation market alone.
Note that a portion of our cash will be used later in 2021 and repay our 225% 5 nation exchangeable bonds.
Based on the fair value of the liability of quarter and the amount of cash use would be $517 million.
As of August 5th of the value of our Sirius XM stock held at Liberty Sirius XM group was over $20 billion and the value of the live nation stake was nearly $6 billion.
We had $3.2 billion of principal amount of debt against these holdings.
Total Liberty Sirius XM group attributed principal amount of debt of $14.1 billion, which includes the $9.9 billion of debt that's held directly at Sirius XM.
Formula 1 group had attributed cash and liquid investments of $1.7 billion, a quarter and which excludes $537 million of cash held directly at F..1 the corporate cash balance includes.
$384 million that was received from Alice XM and Q2 related to settling out of the cost growth.
The Formula 1 group attributed principal amount of debt was $3.4 billion, which includes $2.9 billion of debt and F..1, leaving 546 million at the corporate level.
F 1 and 500 million $500 million revolver remains undrawn.
While we are still in the period of the covenant waiver at F..1 target leverage for the business remain 5 to 5.5 times.
Please note that during the 3 months ended March 31, and 2021 F..1 began reclassifying certain components of previously reported and other revenue and the primary add 1 revenue to better align with the way it currently evaluated.
Components reclassified and the primary iPhone revenue include F..1 TV subscriptions of 2 and a 3 related fees broadcast origination and support fees and digital advertising and among others.
Additional detail, including the impact of the revenue reclassification for the years ended December 31, 19, and 20 and can be found and scheduled 3 of our earnings press release posted to our website.
Lastly to the Braves at quarter, and Brian had attributed cash liquid investments and restricted cash of $231 million and attributed principal amount of debt 694 Liberty.
Liberty and our consolidated subsidiaries are in compliance with the debt covenants at quarter end.
And with that I'll turn it over to Stefano to discuss Formula 1.
Thank you Brian the 2021 of the season is exceeding the expectation across the board.
Each week and on the plants and putting drama and the unexpected the.
And Gavin GP did not disappoint as Hong Kong play and these amazing victory and the highest first and then you would and blended fee and I'm also impressed with this expense of holding all of in terms of oil and 1 of those labs.
The rivalry between Lewis and <unk> continues to build and the right place for the channel, which culminated with the entrance of the service and with the unpredictable outcome and Sunday and until then the potatoes and for the start of the break slightly ahead and the.
And the bulk of the certainty of supply between now and the bulk of some of the.
And the context among the total Doctor is Jeff of appears to be willing to say this the first and the collateral and surrounding sort of it.
For 1 of the winding is moving up to the promise and the fans are responding.
And the full crowd of the silver slipper posting.
Most of them 300.
Over the weekend with the hands of insulin <unk>.
And Tom.
These sorts of of tenders is unrivaled and schools.
<unk> was certainly aided by the type of back rooms of the championship.
The inaugural F..1 spring prevented the produce compelling and racing and the return of the public cloud.
On the strength the first of 3 events and the season, we have received overwhelmingly positive feedback.
The drivers.
And certainly the data provides additional opportunities for the our promotional media and sports and partners.
We will continue to discuss any lessons learned from the partners will be the themes of the fundamentals are strong.
Under the 2022 and look forward to the next strength.
Cash and engaging across the all platforms, we have the data through the British Graham Creek and on the digital front unique users for the F..1 the website and App the season.
Of the over 8 per cent compared to the CASM trend.
And social engagements continues to growth, reaching the 14 media and social interaction for the British company.
And we've seen this growth reflected in our total number of dose literally as well and social media, which now stands at almost sports to media.
<unk> of training and we have seen strong growth over 2000 and plant and.
And 2020 and that in many markets, notably songs, the Netherlands, Norway, Spain.
Sweden, and the United States.
And that's 1 TV remains a great ways of patents to catch all of the actions of the race weekend.
Concurrent viewers per race days has consistently been more than 2.5 times higher than the 2020 season average with minimum skew over the race weekend and also by more than 1.5 times of the vessels last season.
We are now and lateral basis into our plan and 23 racing season. This time last year, we had only completed 4.
2021 as presented some of the same challenges as 2012, although with some new ones and <unk>.
Brown of our team and our partners as we continue to navigate the landscape.
And our last the earning calls the Canadian crop. He has just been replaced by the sort of growth rate.
However, useful drug administration related to the turnkey we have to compete with again and secure a back to back the races, and Ulster Bank moving the transplant free of weekend.
Once the mentally we wished and able to secure the slots with Turkey, and Nathan and the calendar as a replacement for the Singapore Grumpy.
All of these changes require great named blenders.
And PVC and hard work from our partners and the confidence and which new ways of elite.
<unk> hundred 1 as of demonstrated the ability to manage the logistics of the COVID-19 restrictions in multiple countries and the said the gold standard.
The total cost to deal with positive cases.
And it's grown free we have conducted CPC thousands of test on drivers themes and question that.
And it was positive.
Positive cases photo of positivity rate of 0.06 per se.
2 of these fine tune the operation, we've seen comfortably the and our ability to safely deliver of 23 of a season.
The non to host 1 of our races. The season at all all the high as evidenced by venue where the fleet.
The April will slow in 2021.
And we wouldn't see that the ethos of slow new venues and that now currently part of the 2020 volume calendar and the existing venues the open to host and the separate ways.
As the full and part of the World.
And the stages of emerging from the pump than the Governor's view and <unk> as an exciting way to return to the public stage and welcome back.
Tremendous progress in 2021 of the sponsorship and the momentum that has continued since our last earnings call and May change.
Join us and global partners and now what are the partners of the <unk>.
<unk> Green Stephens and will become the official hit the photos the sponsor and Thats the end of the horizontal echelon.
They will present the brand New award would be announced ahead of the bulge and grumpy.
We are also well coming DWP has the type of sponsor of the Austin and double Hither and last week announced that they will become 1 of the location of water technology partner working with Epsilon the lever of single use plastic free patent by 2025.
What day time on the regional finance and HR and the priest Pago and all that's 1 of the cost the UK and Germany.
Finally, we completed a multi year of expansion of our financing the company E Commerce and manufacturing following the outstanding performance of our F..1 off kind of school.
Sales of the official online net flows total grew by more than 40% and it doesn't and accelerates the triple digit growth some of the first 6 months of 2020 well the.
The us market is the.
The largest in terms of sales on the <unk> side.
And in the increasingly of resolution of the sports and the country.
1 thing I would go to expand our reach we have announced in the Q1 call and leveraged for all debt and therefore teams will feature in the video game of rockets and the latest bill.
The beginning of the movie and partnerships.
We have life and how can we assume the 2021 season.
And it will 2022 has been ongoing for some time.
As mentioned before that is the high demand for babies to make 2022 calendar and we hope to announce the provision of a cleansing September.
We can confirm that the much anticipated and Miami Grand Prix will happen and the first half of the.
And so they think of as high and some sales have not sufficiently stock.
We also look forward to our move to some theaters for the Russian growth beginning in 2073.
These current CP will provide us coming back Joe of Formula 1.
The previously discussed the foundation that were put in place over the last few years with costs GAAP and regulation and the new Concorde. The good image, we have created a sustainable and the flourishing ecosystem for the sport.
These along with the compelling products on the strength.
The greatest interest and opportunities across the board and these.
And includes ongoing discussion and the highest led the way with edge among the sectors. We've seen the breath of daily with Formula 1 as well as opportunities for the new engine and development of sustainable fuels.
All of these lines, we continue to develop programs and the formula and once we get a sense 1 initiatives.
For the British company, we deliver the carbon neutral growth.
We plan to think of these learnings as we work towards our goals and ensuring all of Thats, 1 events of sustainable by 2025 and on other ways to be called net zero carbon by 2000 and until.
We are also seeing great interest from Oems in our plants for the next form of 1 engine to be out of the percent.
And sustainable fuels and those positive discussion of continuing.
But I'm going to focus the increased diversity and inclusion of those 401, we have recently announced commitments relating to 10 engineers scholarships, Florida and the representative groups and the apprentice and Ethan the ship brokers within the S..1 organization.
We believe that that's a truly global sport, we can make the difference by ensuring that we are diverse of the inclusive in our own community as the communities we serve around the world.
Thanks Chase <unk> general donation to funding these scholarships.
I think the logos right I want to thank everyone on the Formula 1, including all of our drivers teams and business partners for this indication and hard work. So far this season and joy of some much deserved time off and we look forward to the Humanization in August and C&I.
The amount of total.
Full speed ahead.
And now I will turn the call net.
Moving to Greg. Thank you so much bye bye.
Stefan <unk> and thank you Stefano and Brian.
And very exciting news.
And our Investor meeting and will be held on Thursday August 18th the full experience will be offered and person at the New York Times Center and virtually please save the date.
Additional details will be provided soon.
Please note that all in person and attendees will need to be fully vaccinated against the COVID-19.
We appreciate your continued interest and Liberty media and hope you all stay safe and healthy and.
And with that operator, I'd like to open the line for questions. Thank you.
Absolutely and if you would like to ask a question. Please signal by pressing star 1 on your telephone keypad, if using a speaker phone. Please make sure. Your mute function is turned off to a lot of your signal to reach our equipment. Once again, everyone to ask the question Press Star 1 on your telephone keypad and we'll pause for a quick moment to assemble the queue.
Alright, and our first question will come from Ben Swinburne with Morgan Stanley. Please go ahead.
Yes.
Hey, good morning, everybody.
Greg just to clarify is it August 18th of November 18th.
November 18th of I'd say August.
You did yes.
I thought you meant November so thanks for clarifying and yet exciting for for in person.
The 2 actual questions if I could Greg just looking at the discounts.
Liberty broadband I know this isn't of Liberty broadband and call, but I think it's relevant for Liberty Siri that discount has not improved it's probably widened even since the that buyback kicked into substantial levels and I'm. Just wondering what you take from that as we think about the opportunity of this sort of go after the discount at Liberty Sirius since youre going to ensign.
The way of access to a lot more capital.
And at some point over the next quarter or 2.
And then.
You guys commented and the release about Formula 1 TV contributing to revenue growth and I feel like that product went first and then we were really focused on as the business to sort of fading and now I'm sort of wondering.
Given COVID-19 and just the popularity of the sport increasing what's the vision there or is that something that you guys are investing more and do you see that as a big revenue opportunity or is it more of an enhancer of the kind of the core rights and may be a driver of engagement. Just maybe you can update us and how youre thinking about the OTT streaming product at this point.
Sure.
Thank you Ben.
First on the discounts.
Well.
And it happened to be well aware since we have of Liberty broadband and the call.
Sure.
And going on there and we actually.
During the quarter for example, charter was up about 15% and R and Z per.
Our share of Liberty broadband of charter was up about 17% because we were able to buy as much as we were able to buy this year at a discount.
We are actually driving the NAV of.
Charter excuse me of <unk> substantially faster than charter itself.
Look I think it will have its desired result.
The good things come to those who wait.
Not necessarily hoping are suggesting everyone's going to wait forever, but we believe that ultimately pay to our benefit and we can already see those results mathematically in terms of what's happened to the NAV per share of <unk> <unk>.
And the underlying charter.
So I think we'll go at it and as you point out we're going to have more capital we would expect in the coming months.
And we'll see what how it how it responds.
On the vision for <unk> TV I think it has evolved I'll, let stefano comment as well but.
The.
I think just the sheer heft.
The amount of content, we have caused us to think about whether that was going to be a meaningful way to connect with our customers or enhance the way I would it be of the primary way or and enhanced way and I think it still is going to be enhanced way and how much of it becomes incremental revenue how much of it becomes a weighted to join with our.
Our customers that will evolve, but you've seen what's happened for example, with WWE going into Peacock and obviously the scale of content being much higher than us I think it's very difficult for a point service to think youre going to replace what we have currently with scaled aggregated services, whether those are linear or whether those are.
And scaled aggregated digital services, so 1 way or another I think that is that those are going to be the primary way, we get paid but we will find other ways to add value and revenue through things like F..1 TV, sorry, I hope I didn't steal your Thunder there Stefano.
No, Greg and I think that's new.
Hopefully spot all of them and I think Ben if I may ask on what Greg has said.
<unk> Tvs the huge potential to make sure that we can and have the experience with more and more content to our customers and we are exploring relative together with other promoters to give the re and the confidence we can all score.
And especially condition to the to the ones that that attended to bear to the event.
And then extended the appetite of Ed and the unique content in these in our Catherine.
Note that the experience because thats media and incremental way of adding more and more appetite and comfortable with people's at the level of 4.1.
On the TV rights.
Generally talking I mean, we have the privilege of the and.
Many of our major deals have been the already completed and so we had net.
The situation when we can really see the evolution of the TV right. Because this is something that is not uniformly different from region to region and the OTT developed with the 4 short half of it in the future. So we are and the Cleveland position of having the biggest come true relief revenue all of them and then the habit the chance to exploit the what we are.
And to date of the to be ready at the right time to maximize the fact the pool, what he's really great sit today.
That makes sense. Thanks for your thanks, both of you.
And up next we will take the question from Bryan Kraft with Deutsche Bank. Please go ahead.
Hi, Thanks, Good morning, I have 1 for Stefano and 1 for Greg.
Greg just curious if there's anything.
From the infrastructure legislation.
Could it be and opportunity or risk for liberty that youre watching whether it's something for an existing portfolio of company or a new opportunity for liberty to invest behind sort.
And open and the question, but I'm curious on your thoughts there and then Stefano sports betting was 1 of the opportunities that the chase had identified when we first became CEO and I'm. Just wondering if you could give some perspective on that opportunity for formula 1 going forward and any plans or activity.
That you have going on and the sports betting area. Thank you.
So touching first on the infrastructure Bill I think we're full on LDR day questions and a way that today already and the LFC call, but that's alright.
I think there are some.
Opportunities that will arise most of them are going to arise at charter for GCI.
And if you look at our businesses.
I don't think were going to see a massive change.
And CRE I guess, if you think about greater connectivity and general that's probably a plus for our 360 L. But it's on the margin it's not like a massive opportunity I think in and of itself and just the continuation of our acceleration of of ongoing trends.
The rest of the businesses Formula 1 of the Braves.
Not as a live nation not as obvious to me how the infrastructure Bill is helpful. Obviously of broadband and charter and GCI.
Our growth opportunities there and in terms of increasing <unk>.
Customer.
And the supply of of funds to buy broadband increasing money of around broadband probably helping us extend some of our.
Our broadband footprint, but there are also some threats there were new entrants.
May be encouraged so pluses gives and takes and that bill I would say from the perspective of charter and.
GCI could have been far worse for some of the initial proposals I think the ones in terms of the threat level are way down from what might have been initially proposed about preferences for fiber over coax preferences for overbuild preferences for munis.
Muni builds all of those things are muted compared to what might have been.
Okay. If I may Brian on the on your question with regards to debt first of all with enough to put debt that we have already more partner is 1 of them.
Debt.
We're working together as you know the idea of better news and added with the local <unk>, depending on the region of the country and we need to make sure that everything is really get them debt side for sure the keeps a big opportunity, but could the big slug in the future. So once again working and probably is to make sure that the next step of our partners who will be the right.
1 example of as I mentioned of opportunity that could be good for front of the sport.
Okay. Thank you.
Yeah.
Up next we'll hear from David Karnofsky with J P. Morgan. Please go ahead.
Alright, thank you.
And it'll 1 definitely could you discuss in more detail your takeaways and the spring race format. Both in terms of how do you think of it was received by the fans, but also by our partners on the range promotion and TV side and I think you mentioned, maybe expanding the format next year any sense for how many races, you can roll this out too.