Q1 2022 Liberty Media Corp Earnings Call
Ladies and gentlemen, thank you for standing by welcome to Liberty Media Corporation first quarter 2022 earnings call.
During the presentation, all participants will be in a listen only mode. Afterwards, we will conduct a question and answer session at that time. If you have a question. Please press star one on your telephone as a reminder, this conference is being recorded may 6th I would now like to turn the conference over to Courtney Chun Chief portfolio Officer. Please go ahead.
Thank you before we begin we'd like to remind everyone that this call includes certain forward looking statements 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 <unk>. Most recent forms 10-K, and 10-Q are Liberty media acquisitions. Most recent forms 10-K, and 10-Q filed with the SEC. These forward looking statements speak only as of the date of this call and Liberty Media and Liberty Media acquisition.
Presley disclaim any obligation or undertaking to disseminate any updates or revisions to any forward looking statements contained herein to reflect any change in liberty media or Liberty media acquisitions expectations with regard thereto 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 Liberty, President and CEO , Greg Maffei.
Thank you Courtney and good morning to all of our listeners.
Today speaking on the call. We'll also have formula one's president and CEO Stefano Domenicali.
And Liberty's, Chief accounting and principal financial Officer, Brian Wendling.
So I'll begin with Liberty Sirius XM.
We received $872 million of gross dividends from CRE tax free in the first quarter, including the special and regular dividend, we because of the nature of our convertible bonds, we had to pass through a $30 million of that special dividend. We continued our share repurchases repurchasing $182 million across <unk> and Kay from.
February to April .
We repurchased those at a look through price on CRE of about $3 56, a share we of course remain disappointed with the discount and attack it as much as we can we are very focused on long term value creation for our shareholders.
Now looking at Sirius XM itself.
Our solid start to the year continued to perform well financially despite a challenging auto market.
Revenue was up 6% monthly churn was wonderful down at one 6% and we had record <unk> up 9% new car penetration for Sirius XM is now at 83% and has enabled a fleet of 146 million cars here in the U S.
As expected self pay net adds were down slightly due to challenges in the auto market.
This was partially offset by strength in digital and we had a 50% increase in the subs listening digitally to our on demand content I'd.
I'd also note, we launched our first ever streaming channel Freakonomics dedicated to podcasts and available across all of the S X M platforms.
Essex and media was named the number one podcast AD network. According to Edison Research and we represent four of the top 15 podcast in the country with the addition of cricket media in this month.
Also beginning with this year's Masters Sirius XM has the exclusive audio provider for the <unk> MIT and providing excellent programming across all four rounds.
Turning to live nation.
Five lives first best quarter ever including.
You had another record quarter at Ticketmaster.
And compared to 2019.
<unk> is up two times transacted <unk> is up 39% and sponsorship is up 75%.
We expect a record 2022.
We've already sold 70 million concert tickets and expect double digit fan growth versus 2019.
Concert ticket pricing is up double digits over 2019 due to sand demand for the best seats.
And over 90% of our planned sponsorship net revenue is already committed.
Turning to Formula One group on the corporate side, we repurchased 348001 shares for $20 million or <unk> $56 14, a share.
And looking at F. One itself.
Thrilling start to the 2022 season.
So far we've had battles back and forth on who will be on the podium each weekend.
Spread eventid MLR brought exciting qualifying results and the format is working well with the new regulations and producing strong viewership numbers sprint audience is up 28% versus the qualifying last year at MLR.
We also see record demand in the U S. Early in the season on ESPN viewers for the Sunday race in both Saudi and Bahrain were up 56% and that was the most viewed race since ESPN reacquired the formula one rights in 2018.
The momentum in the United States continues with this weekend's inaugural Miami GP and of course, you can't have not heard about the announcement of our Las Vegas GP for November 2023.
As we've noted before that'll be a night race down the strip and notably in differently than most places formula one in Liberty media or sell promoting the race in partnership with local stakeholders and live nation.
The build out for this track will require increased capex and opex to develop and it's too early to provide you with numbers, but we intend to update you later this year.
I would note that Liberty media did entered an agreement to acquire 39 acres east of the strip to lock in circuit design and create capacity for the pit panic among other hospitality and race support venues I expect that transaction will close in the second quarter and the purchase price was $240 million will be funded by cash on hand at the Formula One group level.
Yeah.
We announced numerous commercial announcements, including on the media rights signed an extension with Boxtel group in Australia and can help loose in France sponsorship is off to an exciting start this year with several new deals, including two new global partners MSC and Salesforce and.
And we look forward to more announcements as the year progresses.
We also look forward to seeing some of you this weekend in Miami.
Turning to Braves.
We started the season with a weeklong World series Champions celebration, including delivering World Championships rings to the players.
We've completed less than 20% of the season, it's a long way to go and last season showed how far things can change over this 162 games. We are hovering at around the same record as last year and we all know how that turned out at least we did manage the split with the Mets over the last couple of days we.
We are excited about our roster we signed for space met Olson, a 27 year old Atlanta Native we strengthen the bullpen with Janssen addition, and we're thrilled to welcome Ron Lacount Your junior back in the lineup this week.
While it is Julian the season financial performance has already been incredible.
Going to the season, we had the highest season ticket sales and more than two decades, we sold out all of our multi year premium seats for the first time ever and open our renovated Delta club and retail and concession sales have been strong for the first few homes dance, including so selling out most of our gold program jerseys.
As you undoubtedly know a new CBA was signed in March.
There'll be minimal impact from the late start since loss games were away games, and we still expect a full 162 game season.
In January we also completed the sale of three minor league teams.
And in final exciting news.
We raised debuted the digital Truest Park in April for future <unk> opportunity engagement.
Turning briefly to Almac.
Nothing to report today, obviously, we will announce when we have something but I would note the environment, which is very difficult as many of you know I think does favor us and we continue to look at some interesting opportunities and with that I'll turn it over to Brian for more on our financial results.
Thank you Greg and good morning, everyone. In January we settled exchanges of the two 5% live nation exchangeable bonds for.
For total consideration of $664 million.
Funded with cash and margin loan draws at quarter end Liberty Sirius XM group has attributed cash liquid investments and liquid investments of approximately $634 million, which excludes $76 million of cash held at Siriusxm.
There is also 1 billion of Undrawn margin loan capacity at the parent level related to our Siriusxm and live nation margin loans.
As of May 1st the value of the Sirius XM stock held at Liberty Siriusxm Group was $19 7 billion and the value of the live nation stock held was $6 6 billion.
We have $3 billion and principal amount of debt against these holdings.
Total Liberty Sirius XM group attributed principal amount of debt is $13 9 billion, which includes $9 9 billion of debt at Sirius XM.
Formula One group had attributed cash liquid investments and monetize will public holding $1 6 billion at quarter end.
Which excludes $834 million of cash held directly at Formula one.
Total Formula One group attributed principal amount of debt was $3 4 billion, which includes $2 9 billion of debt at Formula one, leaving $454 million at the corporate level.
At <unk> $500 million revolver is undrawn.
Formula one's leverage at the end of the quarter was three seven times meaningfully within our target leverage range of less than five times as.
As of quarter end, we are no longer in a period of covenant waiver.
Looking at a few cash items on Formula one formula one estimated cash tax rate in 2022 to be single digit mid single digit percentage of adjusted OIBDA, increasing modestly to low double digits in 2023 and thereafter as a result of the U K tax.
Tax rate increase.
Effective next year <unk>.
Additionally, Formula one is currently undergoing a project to refurbish and upgrade its UK based media and technology Center out of Big and Hill in the UK, which broadcast production and other technical activities and related staff our base.
Formula one expects to incur about $40 million of incremental capex associated with this project approximately half of which will be recognized in 2022 and the remainder next year.
This elevated capex excludes any capex necessary to support the launch of the last biggest Grand Prix in 2023, and as Greg mentioned, we will provide updates on that later in the later in the year.
As a reminder, under the current Concorde agreement team payments now take the form of an entirely variable priced bond, which is now calculated based on <unk> adjusted EBIT rather than adjusted EBITDA.
The adjusted EBITDA measure that was used in previous agreements such that the calculation now takes account.
Capex, which is incurred through including depreciation cost in the calculation.
Finally at the Braves group the quarter end they have attributed.
<unk> cash and liquid investments of $311 million, which excludes 26 million of restricted cash raise.
Braves group had attributed principal amount of debt was $678 million.
As Greg mentioned, the brand's completed the sale of three minor league teams in January proceeds are included in our financial results.
Disposition in the first quarter and you can see additional details on that in our 10-Q, which will get filed later today.
Liberty and our consolidated subsidiaries are in compliance with our debt covenants at quarter end and with that I'll turn it over to Stefano to discuss formula one.
Thanks, Brian .
I am thrilled to be in Miami. This morning, as we have set for the inaugural Miami Grand Prix. The seat is buzzing with excitement and we're looking forward to the weekend.
The 2022 season is off to a phenomenal start the many changes to the cost of regulation <unk>.
<unk> improved racing the car.
<unk> now follow more closely enabling greater opportunities for wheel to win the racing we drive is trading position and multiple times, making them think most strategically above the moves.
The strength is back and we held our first event of the season anymore that came down to the final few labs.
And out to be a grand Slam weekend for rebel heading qualifying before winning both the race and the sprint and security the extra point for the fastest lap.
The first point of the season recorded a total audience of $8 4 million.
28% versus qualified at the same run rate in 2021 with strong growth in Brazil and in the U S.
Even though we can on this case for Italy website recorded up 74% increase in unique user compared to the Ebola GP in 2021.
On the F. One social platforms. We saw one of the 149 million video view up 36% versus Ebola in 2021, and $45 million engagements, a 43% increase versus 2021. However, the start of the season. So far is Ferrari, which has shown real.
Strength with the cut and shows the cloud could be a lead in the drivers championship by 27 points rebel catching up and we expect the season to continue to create great rating and close that loop dropped.
The construction will continue to refine the new cars, we expect more surprises during the season and opportunities for great racing across the grid.
As confirm on our last earnings call, we will not be raising them rushing in September we had a current delinquency the options for the spot and hope to announce more information soon.
The action on the track is certainly drawing in the audience through email at the average the oldest from pre across the main Saturday and Sunday sessions is $23 8 million and is up 10% versus 2021 season average in the U S. The Saudi Arabian Grand Prix growth in over one 4 million average.
The viewers the ninth highest of all times and second highest is on cable.
And other raised himself the SaaS back in huge numbers, we had record attendance in Bahrain and Saudi we add the 140000 over the weekend with full capacity Melbourne was the largest weekend ever in Australia support in history with 420000.
Strong advanced ticket sales almost every web suggest we may continue to see sell outs of the races for the remainder of the season, including here in Miami.
We were thrilled with the response to seasonal floor of drive to survive. The <unk>. Most popular season, yet on the opening weekend fans consumed 28 million hours of drive to survive and the show was ranked number one in 33 countries looking towards the 2053 season, we announced the boom of the last day.
As Graham print in November 2023, this will be assessing the night's release down the iconic stream, we cannot think of a more perfect marriage of speed them to level.
Staging of the race in the U S demonstrates the huge appeal and growth while wireless fourth Q.
In fact in the 24 hours following the official announcement wins as Vegas and anchor resort. So more request for hotel room reservation that any one day period in the history.
We also saw the announcement generate four times more social media activity.
2020 for Vegas Superbowl announcements.
It is precisely these opportunities that led us to take on the promoted rule for this race, we believe acting as promoter will provide us with valuable insights across the globe.
As Greg mentioned these will require investment on both the Capex and Opex side, and we plan to shed more on this later this year.
Additionally, on the res side, we announced that we extended the immediate reminding Grand Prix at they started chemo track through 2025.
We are pleased with the progress made in the other commercial areas, especially with our new sponsors including several in the technology space Salesforce has joined a global part in a multiyear deal. In addition to the growing and deepening the engagement with our fan base, we will gain actionable insight around the outlook.
<unk> footprint as we March toward our goal of net zero emissions by 2030.
The communications with term as the official broadcast connectivity provider of Formula one.
They would facilitate the transfer of more than 100 video fees and 250 audio channel between the venues and the F. One media and technology Center in the UK in under 200 milliseconds, enabling us to reach over 500 million fans in a 180 <unk> territories.
We've already made great strides here on the ESG front as our move to remote broadcast operation in 2020 allows us to reduce our volumes of traveling and freight and stuff at the race track.
We also welcome the Lenovo as an official partner and we use that technology across our operations, we will leverage their extensive selection of premium hardware innovative next generation technology, such as augmented and virtual reality.
Additionally, we will work together with Lenovo on projects around diversity and inclusion.
We're also pleased to announce the renewal and expansion of our partnership with Workday, a leader in enterprise cloud applications for finance and human resources.
South of the global space, we announced a multiyear deal with MSC cruises as a global partner and they plan to bring the cruise ships port side during selected grumpy weekends and alpha salary rents with premium fashion brand has become the official premium fashion appeal supplier of home robot.
On the broadcast front with renewed our partnership with cannot blues until 2029, we are seeing significant viewership growth in France. The 2021 average viewership for each group <unk> was up 18% over 2020 and up 50% compared to 2019 and.
And the first two Grand Prix of the season already ranked among the top five rating of all times for F. One event from calipers.
As part of the defense partnership kind of a blue subscribers will now get access to F. One TV through Mike. We also knew our partnership with the folks to group in Australia in a multiyear deal every Grand Prix will be available in full K and folks tell with integrated the <unk> TV App <unk> set top boxes from too.
23, the <unk> TV app will be available free to folks as subscribers and will provide multiple lighting raise feet comprehensive life timing data and exclusive programming on the <unk>.
The trek.
<unk> TV continues to see significant growth accelerating into 2022 from an already strong 2021 of the first race of the season embody the platform gained 427 key new users and concurrent viewers were up to 144% compared to 2021.
We continue to evolve on the gaming front and then feeding therefore manage at 2020 to the first management simulation game as part of our long term multi title agreement that will be released this summer.
The game allows you to be the team principal choose Youll drivers and engineers imbalanced budget as you manage your team to victory.
<unk> total or accretion or may even the gunter.
As you can see from our recent commercial announcement, our ESG goals at our major focus not only for US but also for our partners. We are moving towards our goal of be net zero carbon as a support by 2030 for the Marine group three we exceeded our target to offset our emissions with experienced promoter they bought.
International is who can demonstrate vision and speed by completing a major solar projects that more than cover the energy requirements of the entire group who weekend. These successful initiatives shows while we can do as a supporting community to make a positive contribution to reduce emission and our carbon footprint we.
We hope you enjoy this weekend operation as much as we plan to a multitude.
Firstly that and now I will turn the call back over to Greg. Thank you.
Thank you Stefano and Brian .
We hope you will tune into our inaugural Miami GP This weekend.
We do appreciate your continued interest in Liberty media and look forward to a healthy and productive 2022 and with that operator I'd like to open the line for questions.
Thank you if you would like to ask a question you may signal by pressing star one on your telephone keypad, if youre using a speaker phone. Please make sure. Your mute function is turned off to allow your signal to reach our equipment. Once again star one for questions well go first to David Karnofsky with J P. Morgan.
Alright, thank you.
With the Las Vegas Grand Prix I was hoping you could discuss a little bit more of the decision to promote this yourself as opposed to a third party. This is primarily about capturing the financial upside beyond what you could get on a promoter fee would.
Would you look to apply this model elsewhere, and then Greg I think at the start of the call you mentioned $240 million purchase for land adjacent to the site in Vegas.
Wondering if you could provide some incremental detail on what you're buying here and kind of how that ties into the race logistics.
Okay.
Well I'll take a cognate let Stefan I'll add I think I indicated were buying 39 39 acres for $240 million and that'll be the site of the pit and paddock and some other hospitality, we don't have any other financial details yet to release on what else will be spent.
On that site.
I think our decision too.
Promote vegas in conjunction with.
Live nation and local partners is driven by a couple of things one proximity it's fairly easy relative to being in Denver to get to Vegas for us to do the work and we have some knowledge of the local U S market relative to many other markets.
But I think even more importantly, we see the opportunity to be a promoter as a way to expand our understanding of the business understand what how to be the.
The best Formula one product on the track for other promoters as well.
To look at an opportunity to grow our.
<unk> knowledge, and our our understanding and potentially promote other races down the road.
And lastly, I think Vegas is going to be large and unique perhaps unique opportunity. So from a financial perspective, we think this one sets up pretty well to be worth the time extra focus to become the promoter Stefano I don't know what you would add hello. Thanks, Greg.
Greg was very spot on and all the points that I would say that.
As we remember David.
<unk> has been always a place where we do believe that the association between the values of formula the glamour and attracting the possibility to be at that community is crucial.
I would say on top of the financial things that we can see around that business week, we can be seen the enabler to maximize what potentially vegas can be for follow up in terms of awareness in the intermodal business creation in term of activating an area of the world, where we can bring internationally.
And I think that is a great win to win the business also for the ones that at Investor day, but for sure our knowledge of the business.
And our opportunity to exploit with our live nation part that I think is the best in order to make sure that in next year in November we will have the race that event will be spectacular that will be unique as I would say, we can feel here in Miami are ready.
Thank you.
We'll take our next question from Bryan Kraft with Deutsche Bank.
Hi, Good morning, I had a high level question and then one on Formula one.
I guess, Greg first what are your overall thoughts on the economy and the interest rate environment and how are they impacting your decisions around capital allocation capital structure and potential new investments is.
Now the time to let's say deploy capital for new investments given the decline in asset prices are you more of the mind that cash preservation as most support now.
And then on the Formula one side, I guess Stefano or Greg can you talk about how formula one benefits.
From what appears to be really strong economics around the Miami Grand Prix.
I think the terms there for Miami or are a bit more variable than some of your other his promotion deals. So any color there would be great.
And I guess as a follow up to David's question was anything that youre seeing in Miami.
Did that help to inform your strategy to become the promoter for Vegas, because you saw that things were going so well there and saw an opportunity to participate in a bigger way in the upside and then.
One more just on the investment in Vegas in developing that.
In terms of order of magnitude how much bigger might the Vegas buildout get in terms of dollars unit versus what you've already laid out for this year.
And how would you think about potential external financing there whether it's debt specifically on the project.
Bringing in some of the creative stuff like you did maybe with the Braves and Atlanta. Thanks.
So I'm going to parse those on the last one I don't think were ready to talk anymore about the.
Outlays at Vegas, it will be bigger than a bread box, but manageable I don't think we'll need outside partners and I don't think we'll need that we have quite a lot of cash if one I will let stephane to talk a little bit about more.
About what Miami informed us and I'll talk more broadly about cash in the market. Thanks.
Thanks, correct Brian .
As you know.
Different form of relation with the promoter is related to maximize the opportunities that the each place can glenn can bring to formal what and I think that it's clear that what we can see are they just arrived.
These are go in Miami, I mean, a device that we have created us for more what is immense is great and you can in the queue.
Develop let's say strategy Thats, one how we can maximize the value for what we're bringing to the community, but also how we can maximize the value of our partners.
Coming here.
Adding vessel for one can see once again, the enabling factor all of our creative business opportunity for them.
And that is a formal one is bringing very highly to date because of the success of our international platform and of course.
The fact that here, we invested together with our promoters the Miami Dolphins it because they knew the community. They have the right expertise to maximize in the shorter term as possible, what we want to bring him.
Pro forma one and as I said this success is already high before this type of event and of course. This is the first time. We are here, we can see a different business model, having a lot of corporate business that wants to develop the data to a different model that is different from place to place.
So this is something that also from our side could be very important to to learn in order to be even more effective when we come to Las Vegas, and we are going to be directly into the promotion of it.
So on the on the larger question about the market environment.
Yes.
Gary to try and imagine investing catching a falling knife in this interest rate environment and stocks, but I have to say in general we try and take a longer view.
Yeah.
There are opportunities that could created in these environments. Some of the best deals we've done like Sirius XM were created in difficult economic times, we are lucky to have not only cash availability at this back and it won a significant excess cash at both.
And strong free cash flows at serious and.
Formula one.
I think that creates opportunity for us exactly when that will be timed and when we'll make a decision we have a lot of benefits in our model, but we have some disadvantages. It's not like we can turnaround and just say by 5% of the company in the market and we think the bottom is which it's a longer cycle and finding deals, but I definitely think the environment will create opportunities for us.
And we'll be on the lookout.
Okay. Thanks to you both.
Yes.
Thank you we'll take our next question from Vijay Jayant with Evercore.
Thanks on Formula one.
On the Las Vegas race for next year should we think about it that as an incremental rates are we going to 'twenty four races, assuming you get a replacement for Russia. This year and again what is the policy to actually add more races at least reading some of the drivers keep complaining that the two new races already is there like a.
A regulatory process that you have to go through with EFI with the teams anything on that would be appreciated and then.
On some of the new races, coming back since Covid, really Japan, and Singapore, they used to be a reasonable sponsors for them, that's pretty material ones I think.
Is that an expectation we should have that they come back I think Singapore Airlines and Honda.
Thanks, so much.
Thanks, Vijay I mean, I can answer on the calendar as you know first of all we will have not published at the calendar for next year in terms of process. You will know that he is an agreement within us and the teams to discuss and it's on our side as a commercial rights holder to make sure that we find the right balance between the.
Number of events.
Article event, new opportunities that can become because we have a world championship and I think if.
If you think back a couple of years ago is always the right value for having a good calendar as it related to the demand and to the offer that we can provide and I think that today. We are always talking about 'twenty three 'twenty four races, and Thats. What we believe today is the right number considering the success that we are living today.
<unk>.
While we were talking about Las Vegas that will be in the calendar of course thats. The only thing that we have announced for next year and I would say on the other hand, you will see soon what will be our strategy.
We have to respect the process as we discussed.
Got to announce if not earlier.
At the end of summer because that's something that we want to keep it and put that in the right way.
As regard to the local promoters and slash sponsorship with Japan, and Singapore yesterday.
We have already announced that Singapore Airlines would be part of the promotional package, Singapore because for them. It's a very important partner and we respect that Japan you.
You will discover assumed debt of course for Honda for example, because of their decision to quit sufficient for one there.
It could be something special that we want to recognize for them during that event. So this is part of the strategic discussion that were having with our promoters and I think that the economical benefit of course, we'll go into the system and of course also with us.
Great. Thanks, so much.
Yeah.
Thank you we'll take our next question from Stephen <unk> with Goldman Sachs.
Great. Thank you one on Formula one revenue in the first quarter came in a little bit stronger than expected I was wondering if you could help us maybe unpack some of the drivers of that strength, maybe across media rights sponsorship rates production.
And other revenues even if.
Paul.
I'm sorry.
Revenue beat expectations, Yes, Q1 was ahead, yeah, well I mean for Formula One obviously, we had two races versus one last year and we're really back to more normal activities than we than we've been over the past couple of years. So you have full crowds.
And we had good sponsorship revenue as well also freight costs have been up a bit and some of those costs are obviously passed onto the team so theres incremental benefit there but.
Normal activities compared to the past couple of years is really where we've seen the benefit.
If I could just add I think we've seen growth in almost every revenue category.
But the way we recognize revenue ratably across races, probably had the single largest impact. The fact that it was two versus one in the first quarter recognizing that many of our revenue streams are recognized ratably.
Tied to the particular race.
Got it thanks for that and then maybe one for Greg on the sports Media rights I'm curious, how you think the interest and ultimately the value of sports media rights could be impacted over the long term with some of these concerns around cyber.
Cyber risk ultimately play out do you think it helps improve their hand, given quite content or is the softening market something that you think FX context, probably.
Yes, I think.
It's a complicated topic.
Partly.
Where you sit is how you view it and when I say that I think there will be strains on.
On the Braves potentially over the long term as the <unk> become less included in the bundle.
On a regular basis that will put pressure on.
Some of the RSA revenue streams. The Braves in particular have a very strong RSM revenue stream and a lot of demand. So we may be less impacted than many but obviously that turmoil.
It could be a negative on the other hand.
Formula one has seen increases.
In demand and increases in viewership and we have the U S media rights as commonly known up for bid right now beginning for next year's season.
And we have a lot of interest not only from traditional linear players, but digital players.
And the offset to some of the decline in cable subs is the increase in some of the digital subscriptions.
So that opportunity is I think in the net we're probably better off with more players bidding then.
Then the changing landscape.
Plus or minus and then a charter which is not the focus of today's call. We have a whole another set of dynamics where in some cases. We're helped in some cases, we may be hurt so you really to either a lot changing in a lot of it depends on which company we're talking about.
Great Thanks for that.
We will take our next question from Barton Crockett with Rosenblatt Securities.
Okay, great. Thanks for taking the question.
So I'm wondering I wanted to put one question out.
Sure.
I'm, an investor, but I thought it was a good question, which is looking at the Braves. They are trading right now.
The market value of maybe three five times or so kind of sales.
And you've seen private market transactions for baseball teams and close to 700 kind of sales range.
So the question is.
Why won't you guys take some more steps to try and achieve that value right now for the Braves.
One of the things that would seem to be open to you is that you now have a second ATB with formula one and operates so it will be possible to split maybe the brakes off as an actual stock which might help the value process.
Don't get people thinking about private market transactions may be down the road.
Kind of curious what your thought process is there why you havent pursued those type of.
Opportunities to date.
A great question, even if it's not yours Barton from the investors feel a good question.
<unk>.
I think we're looking at all options and considering what we might do some of these things are more recent about when our ATB flexibility has occurred there are some issues also we're still looking at around CRE and what we might do there as you know we cross just crossed over the 80, there. We've just had formula one become an ATB.
So there are some moving targets and we evaluate all opportunities and I think your investors probably right I'm not sure seven times, we will see but certainly the multiple we're trading it is lower than that multiple which has been in private transactions, whether it would still trade to that level of what it is a private sale transaction versus the public market transaction open question.
But I do agree that probably having the flexibility to do that we'd probably have improved trading overtime.
Okay, and then also wanted to I wanted to ask about.
The Rsi deal with the valley of RF.
And their pursuit, obviously of rights from teams to.
Do the direct to consumer streaming service.
The brakes are not yet signed up for that but we did see that.
<unk> family of charter has done a recent deal with.
Sinclair that involved the <unk>.
I was just wondering in the past you guys have seem very skeptical about.
Signing up for can I have the Braves carried on that it seems like you weren't really into that now charter has done a deal with them I'm. Just wondering if there's any evolution in your thinking or whether it's still it seems like not likely that you wanted to do that.
Well I think thats evolving Barton as well.
Charters as I kind of similar to the.
The answer I gave before where you sit declines.
Defines what you want to see happen, we have a <unk>.
Good RSM deal that runs out until 'twenty seven.
I still think that is probably more valuable lesson of any digital deal are there incremental kind of digital deals that are around that potentially in there as you've seen growth in lots of kind of digital around.
Baseball and now people like Apple entering to buy rights. So I think it's evolving I don't know if valley is going to be the lead player they've got their challenges.
But we're certainly open to watching how the market evolves.
Okay, great. Thank you.
Thank you we'll take our next question from David Joyce with Barclays.
Thank you another question on Formula one please.
Separately, how should we be thinking about.
The principal versus agency.
Agency relationship.
Promoting this.
Looking for any new financial specifics, but just accounting was.
Would it be something where you live nation as the promoter is taking all of the top.
Topline, but then they have the operating expenses.
And therefore formula one would get.
Along the lines of the.
Please promotion fee plus a margin or is this something that is going to be.
Reflected directly on the new formula one's financials.
Sure.
Partners are partners reflected in that.
Yes.
I'll start and let Brian give the really accurate answers.
In general.
The primary partner live nation is the from a financial perspective as the secondary partner. They have a role is very important but most of the capital investment most of the outlays will come from us not from from live nation.
And we don't anticipate that this is going to be called out separately on our income statements won't be material in that sense. So the lines will generally be folded in promoter fees and alike.
Sponsorship hospitality et cetera, but ill, Brian what might you correct me on that.
That's very accurate I would say, we'll consolidate as Greg said.
So the revenue and Capex will be on our books as well as the cost.
And also as Greg said, we would expect that.
And we need to ultimately fine tune. This once we have the rates, but our expectation right now is that.
You would see the <unk>.
Revenues go into their traditional buckets, So paddock club would go.
In the other revenue and then sponsorship and we'd go go where sponsorship currently goes and then is it.
Extent, we're selling tickets, we would expect that that probably goes into our.
Promoter revenues. So it will look very similar except for the fact that we're consolidating the costs, which normally.
And all of the revenue, whereas under normal promoter relationship we just have ft.
Great. Thank you very much.
We'll go next to Jason Bazinet with Citi.
Another question on Formula one.
You mentioned that you may over time, maybe promote other leases and I guess, if you look at the 24 ish reasons or whatever some of those obviously are an iconic places where you'd probably want self promote but if you just.
You were going to blue Sky it how many of them.
Three other leases that you wouldn't be self promoting would be in the bucket, where you might sell.
So I don't think we have been up I'll, let Stefano and I don't think we've announced any plans we're going to start to see.
Where.
How we do this hopefully make the success of it and we believe we can make it.
I would only cautiously say don't be so certain that places, which are iconic are places, where we will not eventually become a self promoter.
I Wouldnt kept aside that opportunity definitely what might you add no absolutely Greg I think that.
The building if I may say that this moment is it.
Because the new promoters really putting new energy and <unk> since the system I think is something that they have.
Collateral effect on the traditional promoted that needs to keep up the pace with respect to when we do our respect a lot our promoted because they are the ones that are really working with us to make sure that we have a great ratio around the world, but this.
This effect is giving us an incredible boost to make sure that the system is very active promising lies what we're bringing into the into the platform and this is really.
What Gregg said never say never but with this in mind I would say we are very happy with the promoters are working with us very very loyal.
Reliable partners, which we got to build up even a stronger future together.
That's great. Thank you.
Thank you we will take our final question from Matthew Harrigan with benchmark.
Thank you.
You have to take off in the U S for Formula one, which is really going to help with ESPN at the same time.
Not a lot of geopolitics geopolitical changes <unk> going away, but whack, a mole zero zero COVID-19.
China hopefully Shanghai.
Comes back.
Typically what the desirability of getting more better times in the U S. It really becomes even more appealing.
Would you be more inclined to look at bringing back.
Rob, we're getting and maybe even.
Promoting it.
So some of the classic venues and kind of going more U S and Europe versus.
A lot of the expansion that's taking place in Asia in the Middle East the Middle East and races are hugely successful and they're going to stay around.
The world is changing so much it looks like Formula one is a winter, but just how complex. These are life off.
Anything going on in the world on geopolitics.
Well, what I can say, Matt is that the full one and we have proven to be let's say as flexible as possible also in the COVID-19 situation to maximize the fact that we wanted to have a great championship and our duty to make sure that we first of all our World Champion Championship and we are investing.
Either with parts of the ore either with a with us on Volta involved it does seem that to make sure that the strategic market they'll become closer for one will be part of it and you correctly to say the U S has an incredible boom in the last I would say to us and they do this to make sure that we can even maximize more the effect on that but we have other out of the world.
That needs to be developed that need to be expected because of the tradition, but tradition doesn't mean that.
It's something to give us the tradition is a great base are we still going to build up a better future Europe has to say for sure with the good bunch of number of races in our Kolenda. They will stay that you were talking about new Hogan.
German landscape is for sure the very interesting landscape in which <unk> will be the normal promoter we need to see what could be the action if needed that we cannot cover that in the collective I'm sure. If you want to be specific on that as something that could happen sooner it could be very important to be back on the calendar, but we don't have to forget that.
We have and we want to invest in the far east.
World because we so far have been affected by Covid, but there is a great potential to grow that we add to that.
Out of the World, which is Africa, which we may develop business. There. So is a great moment for us to maximize the opportunities to see what will be the right. The right schedule in the future of Homeaway, we will not.
The out of the equation that book to be so.
Some places with rotational principle, because that will give a leverage to be multiple markets. So as I said that is really our sustaining thinking with regards to our future calendar.
Just continuing on the German team are still does.
New Oems coming to Formula one.
The specific but it feels like there are a lot of positive things still pushing in that direction or are you still having discussions with various people on that.
Well as you can imagine.
Matthew we cannot be specific on that but the good news is that the.
We can see what we read and we know we're doing the.
Working with the manufacturer if I may on that specific point that without saying anything related to something that we cannot say the good.
News that today for what is really showing the leadership in the technological landscape.
Automotive business in the motor sport of course, and other charges related to sustainable too in the future and our strong past, though we want to prove to the world that we are really serious in the net cash.
<unk> zero within 2030 is something that really gives us credibility and this is the reason why everyone not only the ones that you read are really interested to have talks with us.
Perfect. Thank you.
Operator, I think we're done listening audience again, thank you for your interest in Liberty media.
We hope to see some of you.
Here in Miami and for those who are not able to get to Miami, We do encourage you to watch.
Speak to you again next quarter, if not sooner. Thank you.
That will conclude today's call. We appreciate your participation.
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Okay.
Yeah.
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