Q4 2021 Liberty Media Corp Earnings Call
Ladies and gentlemen, thank you for standing by welcome to the Liberty Media Corporation 2021, Q4 earnings call. During the presentation, all participants will be in a listen only mode. Afterwards, we will conduct a Q&A session.
That time, if you have a question. Please press star one on your telephone as a reminder, this conference is being recorded February 25th.
I would now like to turn the conference over to Courtney Chun Chief portfolio Officer. Please go ahead.
Good morning, before we begin we'd like to remind everyone. This call includes certain forward looking statements within the meaning of the private Securities Litigation Reform Act of 1995 actual events or results could differ materially due to a number of risks and uncertainties, including those mentioned in Liberty Medias. Most recent Form 10-K , and 10-Q are Liberty media acquisitions form S.
One registration statement filed with the SEC. These forward looking statements speak only as of the date of this call and Liberty media and Liberty Media acquisition expressly disclaim any obligation or undertaking to disseminate any updates or revisions to any forward looking statement contained herein to reflect any change in Liberty media Liberty media acquisitions.
Spectation with regard there to or any change in events conditions or circumstances on which any such statement is based on today's call. We will discuss certain non-GAAP financial measures for Liberty media and Siriusxm, including adjusted OIBDA and adjusted EBITDA, the required definitions and reconciliations for Liberty media and Sirius XM schedules, one and two.
Can be found at the end of the earnings press release issued today, which is available on Liberty Media's website now I'd like to turn the call over to Greg Maffei, Liberty's President and CEO .
Thank 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.
And Liberty's, Chief accounting and principal financial Officer, Brian Wendling.
So beginning with Liberty Siriusxm today, we should receive our proceeds from Sirius XM was $1 billion special dividend, we expect our share of those to be about $770 million net of a pass through to bondholders.
We did continue during the quarter repurchasing shares.
Brian back a $189 million across our six M. A L. S X M K shares from November through January .
As you know the discount remains and we therefore were able to repurchase our shares at a look through price.
On CRE of just over $4, we will continue to take advantage of the discount opportunity.
We also settled the exchange of our two and a quarter live nation exchangeable in January for consideration of $664 million using cash and some margin loan draws.
Looking at the underlying business Sirius XM. They recorded record results for the year record high subs revenue and adjusted EBITDA.
Also experienced the fifth straight year of improving churn.
New car penetration is up to 82% from 78% in the prior year.
And we launched 360 L in more than 30, new vehicle models models across various Oems in 2021.
Now more than 25% of Sirius XM equipped vehicles sold in the fourth quarter incorporated our new 360 L opportunity.
We also teamed up with Apple and discovery during the quarter, adding 12 months subscriptions, Apple music and discovery plus for new and existing platinum VIP plan subscribers.
We introduced audio powered by ads with a listener identity solution, enabling marketers to reach and connect with consumers at scale.
<unk> went live with distribution and monetization of popular crime Chunky podcast in January we launched new exclusive artist channels, including Alicia Keys, David Bowie.
We had small stage series of intimate live performances, which featured premier artists spanning music generations, including ensuring the Gogo <unk>.
Her J code and John Mayer and more so a busy quarter.
At live nation, a great quarter as well fan attendance at outdoor events in the U S and U K in the last five months of 2021 was up 25% versus the same period in 2019.
On site spend the per cap continues to grow at a double digit rate versus 2019.
And ticket sales in October November and December were the top three months ever in terms of GDP.
We have expanded our venue portfolio as well, adding 31, new venues in 2000 22021 path through the assessor acquisition.
Every leading indicator in the business reports points to a record 2022.
Confirmed show Count through February is up 30% versus 2019, we sold 45 million tickets for shows this year already and no show rates are backed out to their 2019 levels live nation is entering its strongest multiyear growth chapter in a concert history.
Looking at the Formula One group on the corporate side.
We effectively repurchased $2 2 million Juana and one case shares at an average per share price of 50 859 that included both want to share repurchases and an effective share repurchases work shares due to the purchase of the underlying $64 million of Walker cash convert that we bought.
And now let me turn to F. One and first address the circumstances in Russia.
I'm sure you saw our statement this morning.
As we said we are watching the situation with sadness in shock.
And it's impossible to hold the Russian GP in the current circumstances.
Turning back now to 2021.
Cliff cliffhanger ending towards drilling season.
And since then we've had a month of announcements coming out about one with more to come bands are attending a tuning even with COVID-19 . It affecting a good chunk of the season, we saw very strong attendance.
And tuning across many platforms 155 billion of cumulative TV viewers with the highest rates viewership being a $109 million in Abu Dhabi, which rivals that of the Super Bowl.
Average attendance was up 14% on like for like races.
And once again, we saw great growth in social media followers, making F. One once again, the fastest growing major sport on social media.
We signed numerous race renewals a desirable locations showing continued strength in our contracted revenue and.
And we continue to further our sustainability initiatives.
One came in at number two of 102 Global Motor Sports Championships evaluated by the FIA honest sustainable Championship index.
Many such as extremely Moto GP and NASCAR.
We are ready to kick off our record breaking twenty-three race 22 season, and we hope to see you at some if not all of the races. This year.
Turning now to the Braves.
We capped off an incredible 2021 with our World series title, but in addition to that we had 239 home runs which ranked second nationally we had a 3.8.
<unk>, which was second best in the Italy's and there are too many player accolades to human name.
The World Series Trophy tour will visit 151 stops celebrating the 151 seasons a Braves baseball.
And we will start 2022 with the highest number of season ticket holders in 'twenty two seasons since 2000.
We are sold out of our premium seats for the first time intrawest part history.
Including all the suites, the premium seats, including all the suites.
And tourist park will hold five stadium concert in 2022 its highest ever.
Teekay Tower and innovation Center Grand opening took place on February 9th.
And in 2021, the battery had close to 9 million visitors, including 330000 during the three World series games.
We also did close on the sale of the minor league teams in January .
The geographic alignment of the teams is important and the major league Ghraib rework of minor league last year.
Ensured that this will continue.
The teams do remain affiliates for future player development.
Let me just address the CBA for one moment, we are certainly aware of the latest developments in our discussions with brain management, but are obviously prohibited from commenting any further.
We.
To review opportunities for Almac this back.
As I've said before we do believe the turbulence in the stock market has made deals more difficult, but actually will benefit liberty and our strength.
With that let me turn it over to Brian for more financial results. Thank.
Thank you, Greg and good morning, everyone as Greg mentioned in January we settled the exchanges on the 2.25% live nation exchangeable bonds for a total consideration of $664 million.
This was funded with cash and margin loan draws including drawing in part on our newly amended live nation margin loan, which had upsized in Q4, reflecting appreciation in the underlying what nation share price.
Pro forma for the exchanges Liberty Sirius XM group had attributed cash and liquid investments in liquid public debt and equity securities of approximately $143 million, which excludes $191 million of cash held at Siriusxm.
We also had $925 million of Undrawn margin loan capacity at the parent level.
As of yesterday's close the value of the Sirius XM stock held at Liberty Sirius XM Group was $19 4 billion and evaluate the value of the live nation stock held was $8 7 billion. We have $3 1 billion in principal amount of debt against these holdings pro forma for the exchanges elimination exchangeable bonds.
Total pro forma Liberty Sirius XM group attributed principal amount of debt is $13 1 billion, which includes $8 9 billion of debt held directly at Sirius XM.
Formula One group had attributed cash liquid investments and liquid public debt and equity securities and $1 6 billion at quarter end, which excludes 700 not $709 million of cash held at Formula One.
Total Formula One group attributed principal amount of debt was $3 4 billion, which includes $2 9 billion of debt at F. One, leaving $455 million at the corporate level.
As Greg mentioned in the fourth quarter, we repurchased 64 million face value of 1% swamp.
Walt converts effectively retiring one 7 billion of underlying loss shares.
<unk> $500 million revolver remains undrawn.
Formula one's leverage at the end of the quarter was four four times and we are revising our target leverage range down to be less than five times on a go forward basis.
We are still in a period covenant waiver until March of this year.
As previously disclosed beginning in March and January 2021 F. One began reclassifying certain components previously reported in other <unk> revenue in the primary up one revenue to better align with the way currently evaluates the business components reclassified in the primary F. One revenue include F. One TV subscriptions up 2%.
Three related fees broadcast origination and support fees as well as digital advertising amongst other.
Items additional detail, including the impact of the revenue reclassification for the year's ended 12 31, 19% and 20 can be found on schedule four of our earnings release posted on our website.
At quarter end, the Braves group had attributed cash and liquid investments of $142 million, which excludes $102 million of restricted cash on their balance sheet.
Grace group had attributed principal amount of debt of $700 million.
At the end of the year Liberty in all of our consolidated subsidiaries subsidiaries are in compliance with our debt covenants.
With that I'll turn it over to Stefano to discuss Formula one.
Thanks, Brian .
The 2021 season will be discussed for the case to come as one of the greatest it came down to not just to find the race.
The final four months of this happen.
Two edged past Luis Amazon and when its first World Championship.
We look forward to this continuing rivalry in 2022 between Mexican Louise who will be with totaling two pools, who is eighth World Championships and we hope to see new drivers moving up the field to challenge football just more regularly.
The action on and off the track.
<unk> pads in person and also platform, we sold $2 6 million fans in good stand around the globe. Even so we were limited in our capacity due to COVID-19 .
This includes three beds with attendance of over 350000 U S. Great Britain, and Mexico 11 events attracted crowds of over 100000 people.
Our total cumulative TV audience over the seasonal was 155 billion an increase of 4% over 2020. The average audience. The race was $70 3 million with our biggest audience is up $108 7 million tuning in for this season.
Or are they not would that be.
Markets that saw significant growth in cumulative ordinances, whereas the Netherlands, Italy, the U K, Spain and the U S.
Our sprint events proved to be a draw with the TD average orders uplift of 70% for the weekend.
Looking only at the markets, where the like for like broadcasting Horizon, well maintain a close 2020 and 21. The average audience is was 63 million.
Million up to glass.
S 13 year on year and the best since 2013. Please note that the in 2021, despite our broadcast in a range of Athene, Germany, and Brazil changes significantly we saw positive developments in Brazil, we are now enjoying far more in depth coverage and more how was.
One being broadcasted that 2020.
In Germany.
It's cumulative oldest as in 2021 has seen significant growth of plus 55% year on year.
Our digital reach was very strong in 2021, social media followers grew 40% to $49 1 million once again, making pool on the fastest growing major sport Liam follow up a little.
We saw at $1 5 billion and the engagement with the 7 billion video views.
<unk> web and App unique users video views and page views were all up double digits.
The digital share of video minutes consumed the increase from 10% in 2022, 16% in 2051.
We look forward to the start of the seasonal March 'twenty anybody we have a local 'twenty three races season plan and Thats scheduled to too many trucks, we could not reasonably in 2020 and 2021.
We are extremely excited to welcome the Miami Grand Prix to the calendar in May and again reached a unanimous agreement with the teams and the FAA to again have the screen or three venues this year, Ebola, Australia and Brazil.
On the revenue front, we look forward to the new pairing of Lewis Hamilton <unk> George Russell.
Total Alex album, and we welcome a new driver for diseases with the ones you Xu joining our total nail who would provide exciting opportunities to engage them grow almost Tom Beijing, China speaking of the 2022 season. There are many changes to the cars and regulation aimed at improving innovation and increased relevance to World Cup.
Technology.
The most visible change will be discrete store 13 inches to 18 inches ties with covers.
This along with the other changes to the regulation at the goal of reducing debt.
<unk> coming up the costs with the aim of allowing for closer racing and more.
Safety is also a focus and the new 2032 cars will be able to absorb the impact at the front end. That's really additionally, more components of the car and now some device we should help keep costs down.
Most close closer racing.
Edition changes will also include the implementation of E 10, Hulu when the F. One cars, comprising 10% to ethanol, which will reduce seal to admission and the free zone performance development for the power units from March the first.
We have recently made many exciting announcements driving future growth with our sport.
<unk> felt we extend the debates agreements in China through 2025, Singapore until 2008, Abu Dhabi herd.
Kirk.
Through 2046, but England till 2000, and <unk> and.
And since the purple Medicare through 2026, each of these locations bring something unique to the calendar and we appreciate these long term partnership, which our sustainability goals with feature prominently.
On the sponsorship from it is a busy time with robust interest and a very strong pipeline of discussion ongoing we expect to announce further details soon on a number of opportunities that have been progressing in the past few weeks.
All major rights due to the closure of Disney Fox Sports channels. In October 2021, we successfully concluded nine new partnership across Southeast Asia, securing new broker in Hong Kong, Singapore, Indonesia, Malaysia, and Brunei, Bob Brian Yugraneft the Philip.
Thailand, Vietnam and Myanmar, We also extended our existing partnership with these room, Japan and India. In addition to this we will also have a new partnership in the nevertheless for the stockholders present regulatory championship season, with the Viably nernst new streaming platform.
The 2021 F. One esports see this pro championship presented by Aramco also had the painting season.
<unk> opened EMEA clinched a second consecutive title and secure the team championship format status.
The 2021 F. One season audience and the Desert Vegas broke viewership and engagement with Iqos building upon the huge momentum gathered in 2020.
The full series, which ran through our.
Our 2021.
We've over 23 million views across digital platforms.
103% year on year increase.
We had already onto the second step of qualified for 2022 esports series and look forward to another fantastic season ahead.
We continue to invest in our ESG initiatives to address the biggest issue facing our sports and global communities sustainability is a major focus for formula one and many of our promoter spotless targets, even Ed is where we can have greatest environmental and social impact.
Our initiatives can take many forms including 100% sustainable fuels.
With the <unk>.
Renewable energy sources, Todd because although less zero carbon emission.
The Cat book Pooping increased recycling airports significant savings on overall energy costs and a large initiative working with our promoters positives on events sustainability a comprehensive ESG briefing note is posted to our website I encourage you to read it.
We recently announced our extensive public commitment to the full one engineer that scholarship program for a representative group through 2035 parts per hour drive to increase diversity within the sport. These.
This program was launched in 2021 with the selection of Pensacola is in the UK and Italy and the scholarship covers the full cost of our student tuition and living expenses for the full duration of their degrees.
As part of a larger program of diversity and inclusion initiatives.
What is also committed to creating apprenticeships and intend to ship across our business.
In advance of the Miami Grand Prix, we launched the F. One is called stem program in Miami Gardens.
One is called is the largest program in the world operating in over 50 countries and provide these hands on interactive experience to develop key engineering and social skills. We were proud to announce that the WC. This will continue to join us at eight formula one races in 2022.
They see this with visa five new venues in 2022, including making step in Asia.
We believe in the importance of providing everyone the opportunity to reach the highest level of the sport and our partnership with the WC. This demonstrate our resolve to build greater diversity of gross form robot.
It seems like we just concluded our three in 2021 season, but we are ready for the 32.
We believe the new regulation and the changes to the cars combined with old rivalries the new drivers will provide more drama on and off the track get ready by watching season portal drive to survive, which adds another place on March 11th.
Avanti Tusa full speed ahead, and now I will turn the call back over to Greg. Thank you Bye bye.
Thanks, Stefano and Brian .
And to the listening audience. We appreciate your continued interest in Liberty media and look forward to a productive 2022 and with that operator I'd like to open the line for questions.
Thank you.
Like to ask a question. Please signal by pressing star one on your telephone keypad, if you're using a speaker phone. Please make sure. Your mute function is turned off to allow your signal to reach our equipment again press star one to ask a question.
We will take our first question.
From Vijay Jan. Please go ahead your line is open.
Yeah.
Thanks, Good morning.
Couple of questions on sort of buybacks first on Formula. One obviously, you have new leverage targets that you talked about today, but you don't get 2 billion of cash a lot of free cash flow generation, and obviously EBITDA growth or at least that's what we think in 'twenty 'twenty. Two onwards can you just talk about.
How we should think about buybacks at formula one going forward.
Conceptually, we do sort of run to your new leverage target, which is way below that right now so.
That's my first one and then sort of on on Sirius XM, obviously, they announced a special dividend.
Curious to understand why special dividend versus sort of a buyback.
Possibly.
And you guys selling into the buyback that somebody kids as you called out on the dividend is that really has to do with the live.
Live nation exchangeable payment this time than maybe you would look back to another strategy there on the China capital. Thank you.
Yeah.
Thank you P J lots of questions. Okay, we'll try.
On the buybacks on one you'd note I'm sure that we did execute on buybacks Antoine effectively and we're doing both liability management.
And buyback there what we repurchased those in the money converts.
Actively both debt reduction and an equity buyback.
You've seen that we have quite a lot of cash and free cash flow generation and we do have an open to buy in terms of a board authorization on repurchase I don't think we've ever said.
We're going to buy X in a quarter or we buy explained it by X, but you can look at our history you can look at what we've done.
What we have for free cash flow and available cash and assume that we will.
Act as we usually do in history.
We are also looking to be fair it opportunities that one may help the almac this back.
So far those have been difficult, but we do keep in mind that there may be opportunities that arise outside of.
Just the share repurchase as you noted we have quite a lot of cash and a lot of free cash flow.
So I hope that.
A round enough answer around our intentions and what other things might come from that arise.
On Siri.
Sir I believe has stated that the Intel still intend to do buyback obviously, that's not entirely in our control. We are on the board, but there is a independent group of directors, who also have a pine on where cash flow should go.
They do have some there.
Their own constraints around how much they want to shrink their available float.
And there are triggers that things like 90% that they probably are fearful of crossing in a hurry.
So they have their own issues around share repurchase.
We have our issues around selling into the buyback because it is not actually not taxable to us unless we have a relationship directly with the company.
Its complicated given some of the ongoing litigation so.
If we were just to sell and maintain our equity position that has the effect it looking like from a tax perspective a dividend.
So the special dividend was not taxable to us and we found it attractive both to help address some of the liability management issues that you pointed out.
And to allow us to continue to share repurchase.
Hope that helps answer some of your questions.
It does thanks, Greg.
We will now take our next question.
From Ben Swinburne. Please go ahead your line is open.
Thanks, Good morning.
Maybe a couple on F. One and then if I could ask a braves won as well.
What's what's the pipeline look like for race promotion or a new home.
The city has obviously been a lot of news about Las Vegas.
It seems like there's a ton of demand.
Sounds like you guys are replacing Russia was something else can you just talk about the outlook there and can you expand the count beyond 'twenty three races realistically are the teams on board with that.
That's my first one and maybe for you or Greg.
On the U S media rights deal that's coming up you had this great success with ESPN.
How are you thinking about reach versus monetization and then you've seen deals like the U F C.
Limited platform like ESPN, plus but a big fat check what's what's your priority as you look forward.
And then I'll ask my branch one after that thank you.
Definitely.
So first yes.
Definitely go ahead, it's okay for you Greg I would go ahead on that so hey, good morning from London. Thanks, Ben for the question I mean, I guess, what kind of rates are rates. One point that is related to the fact that now due to the great success that the F. One flapping. This happen the possibility will have a new races in the <unk>.
<unk> is still very very big I mean, if youre talking specifically about the situation this year.
Because of the Russian situation I, just confirmed to us that we have already proven last year in the last couple of years to be very flexible than that not to have any problem finding possible solution to that so I can just confirm that there could be an option for this year with no problem at all with regard to other you know voice is around possible venues.
The future Yeah, I mean, if we can just say that there are a lot of discussion going on we need to make the right choices for the strategic market that we believe are the right one for formula one but for sure I mean that we can expand the lender because technically speaking that as you know we can go up to 25 that is written in the in our regulation.
On the Cobra agreement and the team will follow our vision on that I would say that it's still there.
It's something that we don't have to forget that this year will be the 23 calendar basis is the highest number of races than the in the history of Formula One. So I think that we can watch that in the right way taking the ride. The season, we are not in a rush for that is just a method of two in the name of the different possibly though we have in front of us.
Yeah, I'll I'll add on that just to say I think Stefano and team and the FIA and the teams themselves have done a great job managing both through the flexibility of Covid, but also increasing number of races.
We understand there are constituents, who are less enthused about that and we have to do it at the races. In a way that is logical and doesn't strain the resources of all involved. So we'll see how 23 growth goes and as Stefano rightly noted contractually we can't go to 25, but we're going to do it in conjunction with our partners.
On the media rights I think you probably know and credit Chase and I'll, obviously, Stephanie you can add any comments.
We took out a prospective on checking a shorter broader deal mean broader coverage over the money on the last deal and I think thats paid off we will weigh what's available to us and I don't think as you know it's a complete <unk>.
Laid off there will be degrees of access degrees of coverage and there'll be degrees of money and obviously.
Having the.
The benefit of more U S races.
And more potential U S sponsorship or more global sponsorship, which once a U S presence weighs into our thinking about that breadth as well and how long a deal we want to cut.
We are very confident that our.
Product will be more desirable in the coming years in the U S that even if today, we continue to build enthusiasm and audience et cetera. So.
It's not just breath and money, it's also duration and will weigh all those factors.
Got it that's very helpful dragging on that.
Yeah.
Oh, absolutely spot on Greg.
That's exactly the point that we need to measure between Oh, the ratio between award and as growth and and the return on that is a key point and also I have to say you know the content that they are developing the new market talking about full one.
It's something that we are really focused on because we are having now the possibility of engaging with new fans the needs to understand why with the different cup. So it's up to us to provide the right quality and the right type policies that would be different from the added science approach. So that's the beauty of this challenge that we have in front of us, but these are all great news.
I have to say.
Yeah.
And then Greg I am sure you know there's a lot in the news also about our direct to consumer sports networks and Diamond sports in Bali.
Can you just remind us what are your rights at the Braves level in terms of either enabling or not enabling a valley sports service in the southeast in.
And then do you you, obviously, you'll get another cable business well through charter et cetera, do you think the market can bear a direct to consumer our S N without putting the full distribution benefits of pay TV in the region at risk obviously, that's a pretty tricky balancing act, but what's your perspective from a brand point of view.
There are certain out of market rights that could get triggered but.
But frankly the way it structured I don't think it's attractive for most teams to do that so I don't think that will happen and you have seen Rob Manfred comments.
I am sure you have about that those are not owned by Diamond Sinclair Bally or whatever we want to call. It.
And there's not really an incentive the way it's structured to trigger those.
How a DTC offering will play.
And over the top offering against the RSM seems pretty self evident if you can get it on DTC youre going to put more pressure on the.
The negotiation between the Mvpds traditional mvpds and any suppliers of an <unk> type product. So again, it's a little like that discussion around reach breadth and money and time, there's probably not an absolute relationship with any of those but obviously competitive offerings makes the bundled product.
That much harder to push.
Yeah.
Yeah.
We will now take our next question from David Karnofsky. Please go ahead. Your line is open.
Alright, thank you.
Question for Greg or Stefano.
The drive to survive set to release in a few weeks on Netflix would be interested to get your thoughts on how you view the importance of the series to Formula one and its growth.
It's been a notable success, especially here in United States in terms of widening the fan base.
C F. One.
In this for the long term and is that something where you think there is buying from the teams.
Definitely I'll, let you go first.
Okay. Thanks, Greg.
There is no doubt David that the drive to survive at an incredible effect, mainly on the new overdoses and Theyre also in other new markets like U S for sure.
And this will continue and then I can anticipate to you that a you have to stay tuned and you'll see this because they've just had the possibility to see it.
It will be fantastic and with the right tone and as you can imagine with what has happened last Sheila you there will be a lot of.
A lot of action on that so that's good but you know I think that what we have shown that formula. One is has been always to be in front of the step change that everything has to happen. So I think that it's important for us to be with drive to survive with our mezzanine trends up to the moment, where do we believe that we'll make sure that.
The finished some factor if it's becoming just a different way to not have to speak about from a well without having well gave into full on plasma and then he added value maybe I think it's better to renegotiate them see with Nestle so without the pause in what could be a possibility to do something different in the future but for sure. You know this is that this platform has been.
FIFO point on the growth of awareness, mainly with a young generation and when you come as a form of what and for that we need to take that vision and proud of the quality of that but that's been released.
Very very good.
I agree with Stephane his comments, let me if I could just add a couple more.
I think it's a great partnership while it clearly has helped us and you've seen growth in our TV audience. For example in the U S. Garage, we noted 58% this year and our average age over the last few years has come down for years in terms of our who are our fan base.
That contrasts dramatically with how other sports many other sports hobby, both aging fan bases and declining TV viewership.
That having been said, it's a wind product for Netflix into it was the number one at some point during the year in 27 countries. It is relatively cost effective programming for them. So I think it's an absolute win as much as Netflix has done for us I'd like to think we've done well for Netflix and what I've talked to Reed and Ted I know Theyre very enthused about the.
Product.
We've clearly seen a change in mentality the teams I loved to tease total about how he hated that drive to survive in the first season wouldn't participate.
<unk> had a host of reasons and now I would describe as a pretty enthusiastic fan and I think he is representative of what the way most of the teams feel.
So it's been a win all the way around.
<unk> grown our sport not only in the U S, but around the world, but it is a great thing for Netflix as well so I hope that the marriage continues for a long time.
Okay, and then maybe just one more for Stefano would be.
Interested to get your thoughts on the kindred concepts partnership.
What's the opportunity in terms of broadening the sandridge here Ed can you say what F. One long term financial commitments.
Okay.
Sorry can you repeat the question because I had a cutoff of the line sorry.
Sure just wanted to get your high level view on the Kindred concepts partnership you guys announced a few weeks ago, what's the opportunity to broaden the foundry it should.
You know the financial commitment per side.
Hello.
David sorry for that.
I Couldnt hear that.
Hi, yes.
Hope I'm coming through we just wanted to get your high level thoughts here at kindred.
Can't say about podcasts.
The opportunity to broaden the fan reach any way to frame the financial commitment.
Yeah.
It's about the podcast thing Stefano.
Okay, sorry, because the line is not very clear to us and it is something for sure that it is.
There is an opportunity to increase as I said that the possibility of all before I will pass to be connected in a different way of that.
Talking about Formula one so potentially is great and I think that together, we can do a really good stuff because at the end of the day is something that is going to be very important to increase once again the level of award as it from a one because I know that the book casting is getting is getting there and having a bigger use it for the future.
Yeah.
Thank you.
We will now take our next question from Jason <unk>. Please go ahead. Your line is open.
I have sort of a dumb question.
Perhaps erroneously I was operating under the assumption that if series did a buyback and you participated in that buyback that those proceeds for tax free to you because of the tax sharing agreement, but I think at the beginning of the call and response to T. J 's question, you hinted at some potential complexities.
Related to that so do you mind, just circling back to that in elaborating a bit Mr. Buffet.
Happy to do that Jason So if.
If you look at the deal for example, where liberty broadband cells.
An agreement we have directly with charter back to charter that is one kind of a relationship.
We do not have that current tax deal with.
Sirius XM, we have a.
Tax sharing arrangement related to the fact that we now are in 80% owner, but we do not have a deal to sell a certain percentage of our stock or commensurate percentage or hold our percentage with Sirius XM, if we sell into the marketplace that.
That is taxable if we sell back to the company being over 80 that would not be taxable, but we do not currently have that agreement with Sirius XM.
That makes sense okay. Thank you.
We will now take our next question from David Joyce. Please go ahead. Your line is open.
Thank you two questions. Please first on sponsorship for Formula one.
A lot of investors have been wondering why there, possibly hasn't been more sponsorship generation since you.
The acquired Formula one.
Given that there looks like there still be ruined subtle categories first global sponsorship deals and also in light of.
The large oracle deal for one of the F. One teams so what what does.
What does the sponsorship successively F. One teams due to your efforts for the potentially growing that revenue lines of the war.
And then secondly, just a technicality on Elm, Eric do you have to have a an.
An acquisition deal.
Announced or a fully closed loop by the end of the two years, a two year period.
Early next year. Thank you.
Okay.
Well, David with regard to sponsorship in pool, one and as I stated before in my in my speech. You know there are very important negotiation that that in place. So we cannot anticipate the outcome of it yet otherwise we would have done it what it is clear that they were.
World of Formula one in and is really capable of attracting new sponsorship both for for the full for the commercial rights holder and also for the teams that means that you know we are really doing a good job and that there is a lot of interest around that platform.
With regard to us as I said I think that the in the coming weeks, you're going to see some good news that we can share together.
Great and on Almac this back.
Uh huh.
The basic agreement is to get a deal done in two years, but there is an opportunity to for us to pay a little more mining extend for another year or so I think we have.
And there's three months past that.
And then we can extend for another year by paying for some more money. So I think we have a fair amount of runway left if we found something attractive.
Great. Thank you very much.
We will now take our next question from Steven Logic. Please go ahead. Your line is open.
Great. Thank you a question on that form ticket prices, we've seen some pretty strong demand.
Tailwind in the live events space coming out of pandemic I was wondering if you could maybe talk a little bit more about how you work with promoters on the ticket pricing strategy, maybe the opportunity you see over the next couple of years to benefit alongside these partners on ticket pricing and perhaps as these deals are now.
Okay.
Thanks, Stephen for the question you know with regard to taking pricing the promoters has the right to and not the Reits, even more he knows the market, but anyone else. So he's able to prepare the different offer that they can offer to the different customer and clients and of course.
We know that we are informed about this strategy because we it's important that we gave our all of our position on that but the structure. We have so far with our promoters that that this is the business of which we want to give our input because we believe there'll be can add some beds, but they know better than anyone asks what is the loan.
The market that the local interest and of course. It. If you just look what does happen in the last couple of events and because of the success. You know there was a new way of dynamic pricing that would say that we saw growing and this is something.
Something that it could be interesting for the future, but so far with regard to the mold that this is a as I mentioned that's.
It belongs to the to the to the to the promotional if youre talking about the puzzle club experience of course, that's a different story. This is something that we manage and this is something related to the fact that we know the market. We believe tool to present to our customers the right the right pricing the vessels the level of the quality of the service.
We want to provide today and as always this is something that we are working on the other way around the pool with the promoters because they know that market, but one that is.
Is that the depending from place to place these matters by us.
Great. Thanks for that and then one for Greg.
This theory buyback question too much here, but I think you alluded to a potential legal complication for why you might not have that arrangement material you might not be able to have that arrangement.
Correctly and if so is there a possibility you could elaborate on that.
Sure.
Yeah.
We would have to go to get a tax free deal we would have to go and negotiate an arrangement with Sirius XM.
For that buyback and you might do something where a typical arrangement might be something where you bought back at the average weighted price that they bought back during the quarter something like that.
But to have that kind of relationship would probably put pressure on the independent directors of Sirius.
At a time when we've seen other litigation probably.
A bridge too far at the moment, perhaps down the road, we'll have something like that but we have no deal signed and really have done no negotiation about trying to negotiate.
Have a arrangement like that with the Sirius XM independents.
Got it thanks for that.
Yeah.
We will take our next question from Doug Mitchelson. Please go ahead. Your line is open.
Oh, thanks, so much Greg I actually would love to belabor. The Siri buyback question. So like my question Greg is.
Good morning, I'm getting way too good to do that to keep going.
Yeah.
Well the question is to the extend special dividends continue I know its uncertain, but to the extent they did it.
Is the liberty bias to use that cash sort of dollar for dollar for share repurchases at Liberty Siri or would the increased cash on hand give you the comfort to lever up those series shares amplifying your ability to repurchase stock, but also sort of increasing the beta of of that position and then I do have a second one I'll just ask.
Right away on Formula one not talk too long term, but.
Okay, I will come back will come back to that one Doug I don't understand that question because are you, saying, okay. We get the special dividend, we can repurchase our own shares or what was your second alternative.
The second alternative is you have enough cash on hand, now that you should have some comfort to be able to pay interest expense for a long period of time. So you could issue would exchangeable.
Or.
Our margin loud and and you know with interest rates is still as low as they are you could have a substantial amount of capital.
Yeah look I first of all there are probably some constraints on how money more exchangeable is we can do just given the liquidity in the market.
That's it's a little bit at the same problem with Siri has on the share repurchase how much you want to.
Have availability.
But it would seem easier Doug just to use the cash we're getting if there are special dividends to buyback the stock directly.
So that would probably be our first bank.
Inclination, rather than double down with another exchangeable and use that cash we're getting to buy to pay the interest on the exchangeable.
And and I think you've sort of suggested this with your comments on this call, but I'll still ask directly Greg are there any other options for liberty to close the discount versus CRE that investors should be thinking about at this point.
Well.
You know.
There are a lot of choices out there about.
And that if they continue to repurchase stock we continue to repurchase stock, maybe we close out and eventually becomes a 100% owner that seems like at some point that's the natural situation, how we get there remains to be seen but.
But I think all of those will.
Move forward to the degree that we have special dividends and that capital moves up to L. S X out.
I think that allows us to go attack that discount with more vigor.
That's been our hope.
Alright, understood and I'm.
Formula one given our Disney coverage not look to long term, but is there a pathway to take experiencing formula one from a two D experienced with <unk> experience and is that practical given the races cover so much geography, and the reason I'm sort of going there as you touched on this a bit in the <unk>.
Comments, but I wanted to ask you know this is more directly as well how much does technology innovation matter with regard to choosing your broadcast partners when you're going through these distribution renewal processes plus all thank you Scott and I'll take let Stefano answer as well I can't imagine few.
Kind of like experiences you kind of.
Sporting events that are better suited to the idea of the med averse and for example, choosing your camera angle, which driver you wish to watch the race through what angle you want to see are you looking at it at the driver from the driver across sideways.
Around the whole track I think the opportunities are limitless and your point about thinking how technology innovation will enter into that and you can imagine as we have the potential for new digital partners, who have expressed an interest in getting into sports programming, who have capabilities. There all of that opens up a host of new interesting.
So I think we're well situated and well suited to have that going forward frankly, even the fact that we've had somebody buys like electronic arts bye.
Our distribution partner for our video game partner Electronics, obviously, having more depth and strength, probably then codemasters did on a standalone basis all of those lead up to I think more opportunities for us in the future in that idea.
Yeah absolutely.
No no I absolutely agree with what I can say is that the value of our content is the differentiating factor of what we can offer to our customer nomad set out of abbvie door, new or whatever the whoever they are and in that respect I think that you know the the mix between technology graphic Emusic language is what we're looking for.
For the future because we are already studying some new technology that we can use already in the short term because they see the interest we see the interest of all of that and we see that request.
<unk> from our fast to see something new and this is something that we're going to do because that is a topic that is related to who we are that's been always very important for formula one.
And then what they can see with proud in this that that's one that has been always the leading edge of how we can sell the experience through different channels to our customers and this is really what are we going to do even stronger in the future.
Alright, Thank you both.
We will take our final question.
Yes, we will take our final question from Matthew Harrigan. Please go ahead. Your line is open.
Thank you all self identify this as a potentially stupid question like like Jason just do it because that's an admirable approach, but we've had a number close to <unk>.
T backs that you may have had pretty good prospects, but some of them. Some of his business sector flex space that are thoroughly MIM is is there any way to take advantage of that through your own stock or through some other you know FINRA excellence enduring Ingalls, because youre, probably better sorted through the through this and if that's a word them.
And some other people out there thanks.
Thank you Matthew will I think.
While TMT has had a budge as you rightly describe a busted specs theyre probably not alone.
When we looked recently a couple of weeks back of the last 20 specs that had been done.
<unk>, we're trading below that $10 price that it would be fair.
Most of those facts. This is probably looking at the results in November December most of those facts had probably been.
The deals have been cut back in the summer and I think there are to your point about finding looking into detritus I think when you see the rack and the deal if you try and cut deals that are being done now effectively six eight months. Later there are may be more opportunities out. There. We would also like to think that we have tried to be clever with some of our.
Investment banking partners and the like to think about ways to look at things, which are just different than the traditional ways specs have been utilized so hopefully between.
The somewhat tech wreck.
The challenge as I've gone around the spec market.
And some cleverness around structuring and the fact that we have really have an unparalleled group of investors in our spec who hopefully would be interested in that the reason they came in with tobacco with pipe money, we can find something but it is a difficult market. It's one that is challenging for everybody including us.
Hopefully there is an opportunity that resides in that challenge.
Thanks, Greg.
How to pronounce the detritus correctly.
Happy to help.
With that operator, I think we're done for today. Thank you everyone for your interest in Liberty Media and we hope to see you next quarter if not sooner.
This concludes today's call. Thank you for your participation you may now disconnect.
Okay.
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