Q2 2021 Liberty Media Corp Earnings Call
[music].
Yes.
Yeah.
Ladies and gentlemen, thank you for standing by 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 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 on the call includes certain forward looking statements within the meaning of the private Securities Litigation Reform Act of Thank you for 95 actual events or results could differ materially due to a number of risks and uncertainties, including those mentioned in Liberty media at the most recent form 10-K on 10-Q for 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 to disseminate any updates or revisions to any forward looking statement contained herein to reflect any change in liberty media or Liberty Media acquisition Corporation, the expectations with regard.
Arthur 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, including adjusted OIBDA on an adjusted EBITDA the required definitions and reconciliations for Liberty media on Sirius XM 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 Maffei, Liberty's, President and CEO. Thank you Courtney and good morning for all of them.
Today speaking on the call. We will also have formula one's president and CEO Stefan on the metallic 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 across <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 of I expect we will continue to do it going forward on our ownership of Sirius XM is 78, 1% as of July of 'twenty 3.
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 in the car there of 140 million vehicles on the road today, which are enabled for series 6 of them.
And the 360 L. Enhanced feature set we continue to evolve based on data received from us.
We're also growing engagement outside of the car on the rebranded SSM App.
Is gaining traction the variable margins are as good or better than satellite on.
Courage you to get it today.
And please don't forget we're growing our advertising platform with 150 million listeners the largest digital audio AD platform in North America.
With all of these combined platforms and capabilities, we believe Sirius XM presents a compelling comprehensive offering for talent media and social brands create and monetize audio experiences.
So turning to live nation the.
Reopening accelerated led by.
Outdoor concert in the U S and the U K with other countries come in the long test vaccination levels increase.
Festivals amphitheaters are the focus for the summer led by law of Palooza Rolling loud the hip hop Festival in Miami.
Latitude in 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 on.
'twenty 1.
And beeps are streaming can service continues to be an incremental live revenue stream for us with Bob for Bob Dylan show later this month.
A lot of expect all segments to return to profitability in 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 2019.
Turning now to the Formula 1 group.
That was phenomenal racing.
The first half of the season up until the summer break with the 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 Formula 1 is continues to navigate the continued challenges for 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 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 on sponsorship we continue on it we're consistently announcing new partners.
If you haven't already I encourage you to tune into the business breakdown podcast with Stefano.
The <unk> 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 in the year in certain parts of Colorado were devastated so you're cooling you 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.
Truth of Truth Park fans are back in the Big way, we expanded the capacity of a 100% in early may.
Baseball revenue per home game is up in the second quarter compared to 2021, despite only partial capacity.
Ticket sales concessions and retail per caps are all trending very favorably.
We are having trouble keeping jersey in stock the high quality problem.
For the Braves do lead major League baseball in total attendance at over $1.5 million and average attendance debt over 29000 per game.
With our financial strength, we are reinvesting in on field talent before the trade deadline, you saw us do that rather than at the battery development revenue continues up in the quarter due to rental income for new tenants for the Teekay and Papa John's and the end of Covid related modified rents.
You'll also see the phase III off the tower.
We are confident it will be fully leased in the near term.
Just on crop will move into their new headquarters later this month.
Finally, we continue to make good progress on Almac the spec.
We think the trends in 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 Syria and lot of nation marches on.
Note that a portion of our cash will be used later in 2021 to repay our 225% odd nation exchangeable bonds.
Based on the fair value of the liabilities at quarter end of 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 <unk>.
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 of quarter end, which excludes $537 million of cash held directly at F..1 the corporate cash balance includes.
$384 million that was received from <unk> in 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 at up 1, leaving 546 million of at the corporate level.
F..1 500 million $500 million revolver remains undrawn.
While we are still on the cut the period of the covenant waiver at F..1 target leverage for the business remains bond of 5.5 times.
Please note that during the 3 months ended March 31, 2021 F..1 began reclassifying certain components of previously reported in other revenue and the primary of 1 revenue to better align with the way it currently evaluated.
Components reclassified in the primary of 1 revenue include F..1 TV subscriptions up 2% on 3 related fees broadcast origination and support fees and digital advertising on others.
Additional detail, including the impact of the revenue reclassification for the years ended.
December 31, 19, and 20 can be found on schedule 3 of our earnings press release posted to our website.
Lastly, the the Braves at quarter end.
<unk> had attributed cash liquid investments and restricted cash of $231 million and attributed principal amount of debt 694.
Liberty on our consolidated subsidiaries are in compliance with the debt covenants at quarter end.
That I will turn it over to Stephane to discuss Formula 1.
Thank you Brian.
1 of the season is exceeding the expectation across the board.
Each weekend on the planet.
Tom.
Thanks.
The <unk> did not disappoint a zone.
Blaine These amazing victory and the highest first kind of the newly branded <unk>.
Most impressed with is the size of holding off on it first.
Total spend of 1 of those labs the.
Of the rivalry between Lewis next Consignors for building the place for the championship, which culminated with the instance of the service and.
And we the unpredictable outcome on Sunday and rentals on the potatoes and for the some of the break the slightly ahead in the.
And the bulk of the Thursday between all of these bulk of some of it the.
The contest among the total doctor.
Just the skus between growth.
Let's say the first and the collateral on for Ravi.
For 1 on 1 leaving up to the promise and the sensor responding.
On the food crowd of the silver slipper posting 300 of.
Sample over the weekend with the hands of influences.
The sorts of of tenders is unrivaled in the schools.
Attendance was certainly aided by the type of room for the championship the NAV.
F..1 spring event, the produce compelling racing and the return off of the public cloud.
On the strength the social free events in the season.
Have received overwhelmingly positive it seems like some of the themes drivers.
And certainly these provides additional opportunities for the hour for mobile media and sports some of us.
We will continue to discuss any lessons learned from the farmers with the themes of the fundamentals are strong.
This kind of be expands on the 2022 of them and look forward for the next strength.
Cash at.
Engaging across the Oakland.
We havent data throughput of the British Columbia, Inc, and on the digital front unique users for the S..1 website and App the season.
Over 8 per cent compared to the.
Social engagement continues to grow reaching a total of 14 medium social interaction for the business.
Great.
And we've seen this growth reflected in our total number of dose literally as well on social media, which now stands at almost sports media.
Given the <unk> opportunity and we have seen strong growth over 2012.
And 2020 net in many markets, notably songs that Netherlands, Norway, Spain, Sweden, and the United States.
That's 1 TV remains a great ways for clients to catch all of the actions of the.
This weekend.
Concurrent views for risk based has consistently been more than 2 points higher.
Higher non <unk>.
For 2020 season average with many of SKU over the race weekend.
By more than the 2.5 times the vessels last season.
We are now level basis into our planned 23 races season. This time last year, we had only completed for.
2021 as presented some of the same challenges as 2020, although with some new ones.
South of our team and our partners as we continue to navigate the line.
On our last the earning calls the Canadian royalty of just being replaced by the total case growth.
However use of drug administration related to the turnkey we have to compete with the gap and secured back to make the races in Ulster Bank moving the strengths of them free of weekend.
Yeah.
Once the mentally we with the aim to secure the software turnkey in nature of the Columbus as a replacement for the Singapore Grumpy.
All of these changes required great named blizzards 3 of the.
PBT in the hard work from our partners and the confidence in which new ways.
<unk> hundred 1 as of demonstrated the ability to manage the logistics of Covid restrictions in multiple countries and the set the gold standard in the testing and the effective protocols to deal with positive cases.
Good day square on free we have conducted 56000 tests on drive the seams and personnel that produced the.
Both of these cases for.
Positivity rates of 0.06 per se.
2 of these fine tune the operation, we've seen comfortably the and our ability to safely the EBIT of 23 race season.
The non to a host of all of our races for the season up.
All on high as evidenced by vendors the web.
And be able to slow in 2021.
And we will see that the interest for new venues that now currently part of the 2020 volume calendar and the existing venues open to host in the second base.
As the full impact of the world.
On the stages of emerging from the Governor's view <unk> as an exciting way to return to the public stage and was convinced the OPEC plus.
We have made tremendous progress in 2021, the sponsorship and the momentum has continued since our last earnings call in May.
Joining us on 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 end of <unk> portion of the Epsilon.
They will present the brand New award would be announced the hands of the budget growth.
Also will come on being done and do you see as the types of sponsor of the of still in double hit of the last week announced that they will become 1 of the official water technology Pablo working with Epsilon the lever our single use flash the screen tablet.
The 25.
Good day.
On the regional finals, and the chart on Patrice partly on the left 1 of course, the UK on Germany.
Finally, we completed the multiyear extension of our financings the company E Commerce on lending sector. Following the outstanding performance of our ex 1 off line.
Sales on the official online net flows total grew by more than 40% of 2020 and like slitting for triple digit growth. Some of the first 6 months of 2021.
The U S market is the largest in terms of sales on the <unk> side highlight the increasingly a resolution of the.
The sports in the country.
So the thing I would go on to expand our reach we are announcing the approval on current leverage for all debt Epsilon teams will feature in the video game of rocket. The these latest strength at beginning of the multi year partnership.
We have like on how can we assume the 2021 season.
Revenue for 2022 has been ongoing for some time.
As I mentioned before the ease of high demand for the need to make 2022 calendar and we hope to announce the provision of a cleansing September.
We can confirm that the much anticipated Miami Grand Prix will happen in the first half of.
The non school they think of as high.
Of note the official news talk.
We also look forward to our move to some features for the <unk>.
<unk> growth rate beginning in 2023.
Tony will.
We will provide as timing backdrop for formula 1.
The previously discussed the foundation that were put in place over the last few years with costs GAAP regulation and then you've got the good image. We have created the are sustainable and the flourishing ecosystem for the sport.
These along with the compelling products on the escalators.
The weighted interest and opportunities across the board.
These include some growing discussion on the highest led the way with edge among the sectors. We've seen the breath of day doing formula 1 as well as opportunities for the new engine and development of the sustainable fuels.
Along these lines, we continue to develop programs on the flow.
Once released the 1 initiatives.
For the British Grand Prix will 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 our way to become net zero carbon by 2019.
Good day.
We are also seeing great interest from Oems in our plans for the next form of 1 engine to be out of the percent of sustainable fuels and those positive discussion of continuing.
But I want to focus the increased diversity and inclusion of gross for 1 we have recently announced commitments relating to 10 engineers scholarships for it and the representative groups and the apprentice and into the ship brokers within the ex 1 organization.
We believe that that's a truly global sport, we can make the difference by ensuring that we are the most of the inclusive in our own communities as the communities we serve around the world.
Thanks for change for these channels the nation to funding of these scholarships.
I think the logos right I want to thank everyone on the total of 1 including all of our drivers teams and business partners for this indication of hard work so far this season.
Some of much deserved time off and we look forward for the Humanization in August on Tonight.
How about it of.
Full speed ahead.
And now I will turn the call back over to Greg. Thank you so much bye bye.
As Stefan Alan Thank you Stefano and Brian.
And very exciting news on.
Our investor meeting will be held on Thursday August 18th the full experience will be offered in person at the New York Times Center and virtually please save the date.
<unk> details will be provided soon.
Please note that all in person attendees will need to be fully vaccinated against the COVID-19.
We appreciate your continued interest in Liberty media and hope you all stay safe and healthy and.
And with that operator, I'd like to open the line for questions.
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 2 of lennar 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 on November 18th.
November 18th of I'd say August.
You did yeah, which.
I thought you meant November so thanks for clarifying and the 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 call, but I think it's relevant for Liberty Siri that discount has not improved probably widened even since the that 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 out for the discount at Liberty Sirius since youre going to end.
The way of access to a lot more capital.
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 I feel like that product went from something we were really focused on as a business to sort of fading and now I'm sort of wondering you know given COVID-19 and just the the popularity of the sport increasing what's the vision there or is that something that you guys are investing more in.
And do you see that as a big revenue opportunity or is it more of an enhancer of the kind of the core rights. It may be a driver of engagement. Just maybe you can update us on how you're thinking about the OTT streaming product at this point.
Sure.
Thank you Ben.
First on the discounts.
Well.
It happened to be well aware since we have of Liberty broadband simple.
Sure.
Going on there and we actually.
During the quarter for example, charter was up about 15% and our NAV Z per.
For share of Liberty broadband of charter was up about 17% for because we were able to buy as much as we were able to buy this year at a discount.
We're actually driving the NAV of our.
Charter of excuse me of L BRD up substantially faster than charter itself.
Look I think it will have its desired results.
The good things come to those who wait.
Not necessarily hoping for 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> on the comp.
<unk> for 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 how it how it responds.
On the vision for F. On television 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.
It caused us to think about whether that was going to be a meaningful way to connect with our customers for an enhanced way I would it be as the primary way on enhanced way and I think it still is going to be enhanced way on how much of it becomes incremental revenue how much of it becomes a weighted to join with our customers that will evolve, but it's <unk>.
<unk> 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 you're going to replace what we have currently with scaled aggregated services, whether those are linear or whether those are.
The 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. On TV, sorry, I hope I didn't steal your Thunder there Stefano.
No Greg I think that you are totally spot on and I think Ben if I may ask on what the biggest said ease of F. <unk> the huge potential to make sure that we can enhance the experience with more of a more content to our customers and we are exploring relative together with our promoters to give the real in line.
We can also and especially provision to the.
1 said that attended to the to the.
Event, and then extended the appetite of AD and the unique content for India.
Hello Catherine.
Note that the experience because thats really an incremental way of adding more and more appetizing 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 complete with them. So we add to the wage when we can really see the evolution of the TV right. Because of this is something that is not uniformly ctrip zone.
We seem to reach and the OTT development for should have the big hit in the future. So we are in the Cleveland position of I think the biggest come to really revenue all of that then the habit that says let's deploy for what we are.
Listen to day, though this will be ready at the right time to maximize the fact that for what he's really great sit today.
That makes sense, thanks Heath I spoke to.
And up next we'll take a 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 for.
On the infrastructure legislation.
Could be an 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 of an open ended question, but I'm curious on your thoughts there and then Stefano sports betting was 1 of the opportunities that the chase that identified when the 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 for activity that.
That you have going on in the sports spending area. Thank you.
So touching first on the infrastructure Bill I think where we're full on LDR day questions in a way that today already in the <unk> call, but that's alright.
I think there are some opportunities that will arise 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 in 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. It's just the continuation or 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 in GCI.
There are both opportunities there in terms of increasing customer.
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 on that Bill I would say for the prospect for charter.
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 been.
If I may Brian on the on your question with regards to debt first of all with the enough to put debt because we have already more partner of these onetime bad debt.
We are working together, but the as you know the idea of bad news that added with a lot of issue depending on the region of the country and we need to make sure that everything is it really clear on that side for sure the ease of big opportunity, but could that be exposed in the future. So once again working on programs to make sure that the the next step of our partnership.
It would be the right 1 in terms of dimension 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 for.
Some of the 1 definitely could you discuss in more detail your takeaways on the sprint race format. Both in terms of how do you think it was received by the fans, but also the buyer partners on 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.
Good progress on 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 positioning.
The market overall.
Thanks, David for the question well first of all of what we talked about the sprint for months.
The year was to offer something different that in order to make sure. The was something new that we can offer to all the stakeholders.
And from the 1 we had the sad that we wanted to do 3.3 tests 1 that has been done super some the other 1 would be.
The Monza and the other 1 of them would be at the end of the season in Brazil.
At the end of this.
The complete cash we're going to have a plan of the receivables will be the next step 1 of the cannot let me say desktop for the first thing that's true.
The event on the Superstorm the the respond but we have both from the drivers from the teams. The media has been really positive and also for the for the promoter because if you think that the April day, we have something new to say.
The people will probably 1 of the truck on Friday, whether the 2.
For for the first 1 of your final revenue on Friday. So the cause of the person Venmo has been dramatically positive if I may say and it's great. Because that's really the pension interest of TB and also partners because of the types of the that we have built in the for example, the dot com and the so we have already seen on financial.
On the port that has been the if I may say look the good sign the very very very positive sign and we want to respect what we said we gonna have a full of the breach business that makes it the I forget them of the season, we have a plan for the future of the pools. We are developing the fine tuning of some of the comments that with the seats and the.
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 took the rates, especially the Puma for certainly as part of the rugby and certain especially on the worst, but we want to offer and add the food they already the incredible problem for 1 on ones. So very very positive cash.
Elements of the first the exercise on ready to prepare at the end of the of the of the 3 events of proposal that's been the home what we can see hopefully would be a big step for vessels at the point of view.
Each of them for 1.
Also in the sporting proposition.
Alright, and moving on we are taking the question now from James Ratcliffe with Evercore ISI. Please go ahead.
Thanks, I want to on the SEC Sam on 1 of them for me on 1 of if I could first of all on Formula 1 and a couple of weeks of sponsorship deals can you just give us an update on how many remaining sort of verticals you think of really available to you and are attractive opportunities and secondly on Liberty Formula 1 you bought back 100.
Excuse me on the Liberty Sirius.
140 million Bucks in 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 you've got quite.
The $1 billion on debt or was it more than that directly in the margin loans.
And you know the massive value of the Sirius stake why not take that buyback activity up to now.
Ramping up now rather than waiting until you have it.
Did you get the cash tax free.
Definitely.
Yeah Yeah.
You want to comment on spot.
Thank you Greg of the James.
For my perspective, we have seen of that'd be a great the momentum shifting in the sponsorship for.
Growth is connected to all what we are achieving in the championship that theyre going to the better question regarding 2 of how many birth because you believe that could be still open in the asset.
Our global partners I would say, maybe 1 or 2 and maybe the 1 on which we are working on debt is very important for us as the technological provider.
That is sub debt related to our possible.
The promotional offer but we want to exploit through of great broadband could be available around the world, that's mainly I would say the.
The most important 1 that I think it is.
It will be both of the rest of World Cup.
If I could add on sponsorship.
I think it's an evolving market.
And we certainly see new categories and technology as Stephane pointed out as 1.
When we.
Bought 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 that 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.
On 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 on to pursue them on.
On the question about what takes them I think we have been ramping we do of a plant. We will have more capital that comes in I think given that our that the way to support the debt at L. S. X M is primarily with the flows from.
On a serious recognizing we don't have an operating business there we've been relatively cautious with margin debt and the like and we've been relatively constrained on how much exchangeable that we can do this ex amount of liquidity. So I think we'll you'll see a plan that's probably more aggressive recognizing what's coming but those of in some of the constraining factors.
Okay.
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.
I was wondering given all of the fluidity in the the the rescheduled this year.
Hum the.
The race promotion contracts spin on it.
The renegotiated.
On the regulatory allowance of capacity.
Or the or have they been fixed with the presumption that you still have.
You have some normalcy coming back later.
Yeah, but see the next year and kind of secondly on the would you be too of kind of a normal free period do you think of capacity in 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.
Vertically if you were to sell into a serious of share buyback program. Once you are over 80%.
With your sales of the spot.
From her Ob.
Ex free or is there any leakage for now thank you.
So all of the moly Greg.
The first of all your for you for Stefano.
Okay. Thank you really are they the as you said the fluidity is really.
The thing that we have to manage this year and that we are heading into the second half of the season.
Would be the topic the growth thing is that each day.
The situation, we have to manage these unique piece for them and because of that every agreement is different from the 1 that we have more country by country place take place at the.
The state that's of course the of course is always to make sure that the from all of the points of leverage.
Of course also of all based on actual side is to optimize that the.
As I mentioned the beat that minimize the any negative possible until we can have we.
We have agreement on.
Honestly the number of attendees doesn't mean anything to us some of the weekend 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.
Greg was saying before the situation is evolving continuously on.
On the thing that we have to do is to make sure that we have a bill to the options that I wait and.
The things that we can see so far to date that we didn't have any material cash input on our numbers.
I agree with Stephane on his comments on obviously.
Yes.
We work with our promoter partners to maximize the audience allowable.
Safely at each race and that will impact the revenue that occur that will impact. Obviously there is the changing market every day Delta Lambda, we'll see what happens where.
Obviously designed to maximize attendance in the safest way possible.
We skipped over 1 comment about Almac and it was we were so excited about formula 1 of our I think its probably what happened.
Obviously, there is limited amount of can comment.
Our observations about the stock market of probably consistent with most of the investors.
Analysts 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.
The discount is 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 ex price that didn't get done at any price. It's 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 of it we found the right opportunity and our willingness to effect via pipe investor alongside pipe investors I think is.
Comforting thought to many.
I have recently been approached by.
Numerous firms about hey, we'd love to come along with you on partner on it on a deal et cetera. So I think there's plenty of capital available for us for the right deal.
The right deal is likely to involve something where there is more capital required the scale <unk>.
<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.
Speculations about what we will see we have seen a lot of those kind of opportunities, but have not found the perfectly price of 1 of our 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.
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 the next we'll hear from Jason Bazinet with Citi. Please go ahead.
I think there's going to be an easy question for you to answer, but if I just fast forward and we get to the point where.
There is some sort of equity exchange or takeover.
Between all of us actually in Syria, where we get the 1 operating business in 1 security.
Is it the obvious to you, which 1 of those is the surviving entity could you just talk about the the pros and cons.
Thank you Jason No I don't think its 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.
With its own tracking stock or you could imagine scenarios, where there was effectively on.
<unk> reverse Morris trusts, where our shares were subsequently spun out to our shareholders in theory became a freely traded company both of those of our imaginable scenario 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 Thanks for that.
The Comscore I guess the default rates question.
Stepping back from the phrase but.
Looking at the MLP overall, Scott the good news television contracts for 28, albeit the pretty box centric.
Tawny, having a lot of the fuel even the non baseball.
She has the real issues.
Longer periods of time, where we're trading for the sport and the competition on the field do you think man for the owners group overall or for me.
Matter of bulk to fairly draconian measures like maybe even moving back into the picture of smell of them to get more.
5 minutes into the game.
I know that's kind of the fourth question, but principally for the financials over a period of time as well.
Thank you Matthew.
We remain Super excited about the Braves there are.
Continuous work.
Led by commissions, which involve both the.
Owners' representatives.
<unk> Representatives of player representative to look to make the game, even more exciting a lot of that revolves around speed.
To try and shorten the playing times.
The innovations like.
Double headers.
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 rent is the second base things like that so there are certainly attempts to speed things up.
And I'm.
I'm not convinced moving the pictures of Mt is going to be happening anytime soon but.
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 on the questioners.
Hope to speak with you next quarter, if not sooner and.
At our Investor meeting in November if there was 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].
Yeah.
[music].
Okay.
[music].
Okay.
[music].
Okay.
[music].
Okay.
Yes.
[music].
Yes.
[music].
Yes.
[music].
Thank you.
[music].
Yes.
Yes.
[music].
Okay.
[music].
Okay.
Okay.
Hi.
Okay.
[music].
Yes.
Okay.
Yes.
[music].
[music].
Yes.
Yeah.
[music].
Okay.
[music].
Yes.
[music].
Okay.
Yes.
[music].
Okay.
Okay.
Yes.
[music].
Okay.
Okay.
Okay.
Okay.
Okay.
Yes.
Okay.
Okay.
[music].
Right.
[music].
Ladies and gentlemen, thank you for standing by welcome to the Liberty Media Corporation 2021, Q2 earnings call.
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. On this call includes certain forward looking statements within the meaning of the private Securities Litigation Reform Act of Thank you for 95 actual events or results could differ materially due to a number of risks and uncertainties, including those mentioned in Liberty media is the most recent form 10-K on 10-Q for 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 at the 7.
Any updates or revisions to any forward looking statement contained herein to reflect any change in 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 for Liberty media and Siriusxm.
The adjusted OIBDA and adjusted EBITDA, the required definitions and reconciliations for Liberty media on 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 now I'd like to turn the call over to Greg Maffei, Liberty's President and CEO. Thank you Courtney and good morning for all of you.
Today speaking on the call. We will also have formula one's president and CEO Stefan on from an accounting and Liberty's Chief accounting and principal financial Officer, Brian Wendling.
So beginning with Liberty Sirius XM.
Continued to repurchase shares purchasing $141 million across Ellis ex M&A in the case years for 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 on our ownership of Sirius XM is 78, 1% as of July 23.
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 in the car there of 1.
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 on the rebranded SSM App.
Is gaining traction the variable margins are as good or better than satellite.
Courage you to get it today.
And please don't forget we are growing our advertising platform with 150 million listeners of 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 for talent media and social brands to create and monetize audio experiences.
So turning to live nation.
The reopening accelerated led by.
The outdoor concerts in the U S and the UK with other countries coming along <unk> vaccination levels increase.
Festival and amphitheater are the focus for the summer led by law of Palooza Rolling loud the hip hop Festival in Miami.
Latitude in the UK.
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.
<unk> our streaming can service continues to be an incremental live revenue stream for us with Bob for Bob Dylan show later this month.
A live expect all segments to return to profitability in the second half of 'twenty 1.
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, the up until the summer break with the ear is balanced between Louis and Max.
Among the rest of the drivers there is a tight competition for third.
On the Constructors Championship is also highly competitive with Mercedes and Red Bull going wheel to wheel.
The Macquarie Mclaren and Ferrari battling for the third spot.
We remain impressed with the way Formula 1 is continues to navigate the continued challenges for 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 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 for sprint event, there, which was a resounding success.
We made meaningful progress on sponsorship we continue on it we're consistently announcing new partners.
If you haven't already I encourage you to tune into the business breakdown podcast with Stefano.
For us quite articulate about the future of the business the linked to it as on our IR homepage.
The Braves baseball fans nationwide, but particularly in Atlanta and here in certain parts of Colorado were devastated so you're cooling of NTS 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 Cardinal is on the brands are now over 500.
The truth of.
The Truest Park fans are back on a big way, we expanded the capacity of 100% in early may.
<unk> revenue per home game is up in 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 start the high quality problem.
For the Braves do lead major League baseball in total attendance at 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 rather than at the battery development revenue continues up in the quarter due to rental income for 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.
We are confident it will be fully leased in the near term.
Just on crop will move into their new headquarters later this month.
Finally, we continue to make good progress on Almac the stack.
We think the trends in 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.
<unk> $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 Syrian line nation margin line.
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 end of 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 of quarter end, which excludes $537 million of cash held directly at F..1 the corporate cash balance includes.
$384 million that was received from Alice ex them in 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 at F..1, leaving 546 million at the corporate level.
<unk> 500 million $500 million revolver remains undrawn.
While we are still on the cut the period of a 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, 2021 F..1 began reclassifying certain components of previously reported in other revenue and the primary of 1 revenue to better align with the way it currently evaluated.
Components reclassified in the primary up on revenue include F..1 TV subscriptions up 2% on 3 related fees broadcast origination and support fees and digital advertising on others.
Additional detail, including the impact of the revenue reclassification for the years ended December $31.19 of 20. It can be found on 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 attributed principal amount of debt of 690 for Liberty.
Liberty on 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 of across the board.
We can on the plan for putting.
Putting drama and the end.
Thanks.
The <unk> did not disappoint a zone.
Blayne This amazing victory and the highest first kind of the newly branded team and.
And I was also impressed with this expense of holding off on in terms of ordering of those labs.
The rivalry between Lewis ex continues to build in the right place for the championship, which culminated with the answer to the simple and we.
On the predictable outcome on Sunday and rentals on the potatoes, and for the start of a break the slightly ahead in the standard.
And the backlog for the certainty of supply.
Between all of this focus on.
The contest among the total doctor.
Just the fiercely hold on let's say.
The first.
On the cloud on for Ravi.
For 1 of <unk>, leading up to the Thomas and the trends are responding.
We have the full crowd of the silver posting 300 of sample.
Over the weekend with the hands of in front of you.
Tom.
The source of the tenders is on line.
Rivals in schools.
<unk> was certainly aided by the type of volume for the championship the.
Ex 1 sprint the vans up against the competitive racing and the return of the public cloud.
On the strength the.
First of all 3 events in the statement, we have received overwhelmingly positive feedback from the team.
These drivers.
And certainly these provides additional opportunities for the hour for multiple media and sports on partners.
We will continue to discuss any lessons learned on the farmers with the themes of the fundamentals are strong.
At this time with the expanded the 2022 and look forward to the next strength.
Cash at engaging across the ultra.
We have the data throughput of the British Grand Prix and on the digital front unique users for the F..1 the website and App the season.
On the over 8 per cent compared to the CASM trend.
Social engagement continues to grow the reaching the 40 media and social interaction for the business.
And we've seen this growth reflected in our total number of dose literally as well on social media, which now stands at almost sports media.
<unk> of training and we have seen strong growth over 2010, and 2020 of that in many markets, notably songs that Netherlands, Norway, Spain, Sweden, and the United States.
<unk> remains a great ways for clients to catch all of the actions of the race weekend.
Concurrent viewers for risk based have consistently been more than 2.5 times higher than the 2020 season on average with minimum skew over the race weekend also by more than 1.5 times of the vessels last season.
We are now in the level of patients into our planned 23 races season. This time last year, we had only completed for.
2021 as presented some of the same challenges.
Although with some new ones.
I am proud of our team and our partners as we continue to navigate the line.
On our last the earning calls the Canadian royalty of just being replaced by the sort of growth. However, useful drug administration related to the turnkey we have to compete with again and secure a back to back the races in Ulster Bank moving the transcon free of weaker.
Once the mentally we were able to secure the slots for turnkey in nature in the calendar.
Replacement for the Singapore Grumpy.
All of these changes require great named Blenders credit PVC.
PVC and the hard work.
Our partners and the confidence in which we raised it on me.
For 201 as of demonstrated the ability to manage the logistics of Covid restrictions in multiple countries and the set the gold standard in cash.
The total cost to deal with positive cases.
So on free we have conducted 56000 tests on drivers seems the question at that point.
The positive.
Positive cases for.
Positivity rate of 0.06 per se.
Some of these fine tune the operation we've seen confident in our ability to safely deliver of 23 of a season.
The non to host all of them on <unk>.
This is kind of seized up.
All on high as evidenced by the web.
We've been slow in 2021.
And we wouldn't see that the interest from new venues at that now currently part of the 2020 volume calendar and the existing venues the open to host in the sector weights.
As different on part of the World.
At the various stages of emerging from the from that in the.
The Governor's view for.
Non res has an exciting way to return to the top.
The next stage and was convinced the OPEC.
We have made tremendous progress in 2021, the sponsorship and the momentum that has continued since our last earnings call in May.
Please join.
Joining us on global partners and not 1 of the partners of the <unk> status and will become the official hit the photos of sponsor and Thats the end of <unk> Houghton of echelon.
They will present the brand New award would be announced the hands of the Belgian growth rate.
We are also well coming DWP has the type of sponsor of the Austrian double Heather on last week announced that they will become 1 of the location of water technology Pablo working with Epsilon. The Levered on single use lastly screen tablet by 2025.
For base title on the regional finance and HR and the priest partnering on Thats 1 of the cost the UK on Jim.
Finally, we completely of multi year of expansion of our financing companies E. Commerce on manufacturing following outstanding performance on our FY more kind of school.
Sales on the official online excellence for grew by more than 40% of it doesn't plan to 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.
The increase of the resolution of the sport in the country.
For the thing I would go on to expand our reach we are announcing the approval on currently but it's for all debt F..1 teams will feature in the video game of rockets on these latest bill.
The beginning of the multi year partnership.
We have less on how can we assume the 2021 season.
For 2022 has been ongoing for some time.
As mentioned before there is the high demand for babies to make 2022 calendar and we hope to announce the provision of calamity in September.
We can confirm that the much anticipated Miami Grand Prix will happen in the first half of.
The non for these think of as high some of <unk>.
As of now sufficiently stock.
I also look forward to our move to some theaters for the Russian growth beginning in 2023 of.
Of these iconic city will.
We will provide us coming back Joe for Formula 1.
Previously discussed the foundation that were put in place over the last few years with coast GAAP regulation and then you're pulling forward. The good image, we have created a sustainable and the flourishing ecosystem for the sport.
These along with the compelling products on the strength.
Great net interest and opportunities across the board.
This includes ongoing discussion on the highest led the moving as you might of sectors. We're seeing the breadth of daily with Formula 1 as well as opportunities for the new engine and development of sustainable fuels.
Along these lines, we continue to develop programs on the tumor once we get a sense 1 initiatives both of them.
It is going for you we delivered on a carbon neutral growth.
We plan to think of these learnings as we work towards our goals for the ensuring all of Thats, 1 events of sustainable by 2025 and on our way to become net zero carbon by 2030.
We are also seeing great interest from Oems in our plants for the next form of 1 engine to be out of the percent of sustainable.
Sustainable fuels and those positive discussion of continuing.
But I want to focus the increased diversity and inclusion of those 401, we have recently announced commitments relating to 10 engineers scholarship for Florida, and the representative groups and the apprentice and Ethan the ship brokers within the ex 1 organization.
We believe that that's a truly global sport, we can make the difference by ensuring that we are most of the inclusive in our own communities as the communities we serve around the world.
Thanks for change for the general donation to funding these scholarships.
I think the logos great I want to thank everyone on the October 1, including all of our drivers teams and business partners.
The indication of hard work so far this season.
The only some much deserved time off and we look forward to assume innovation in August in C&I.
The amount the total.
Full speed ahead.
And now I will turn the call net.
Moving to Greg. Thank you so much bye bye.
Stefan Alan Thank you Stefano and Brian.
And very exciting news.
Our investor meeting will be held on Thursday August 18th the full experience will be offered in 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 attendees will need to be fully vaccinated against the COVID-19.
We appreciate your continued interest in Liberty.