Q2 2022 Liberty Media Corp Earnings Call
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Welcome to the Liberty Media Corporation, 2022 Q2 earnings call. During the presentation, all participants will be in a listen-only mode. Afterwards, we will conduct a question and answer session.
At that time, if you have a question, please press star one on your telephone. As a reminder, this conference is being recorded August 5th.
I 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 security's litigation reform act of 1995. Actual events and results could differ materially due to a number of risk and uncertainties, including those mentioned in Liberty Media's most recent forms, 10K and 10Q.
or Liberty Media acquisitions, most recent ones, 10K and 10Q, filed with the FEC.
These four lucky statements speak only as the date of this call and liberty media and liberty media acquisition expressly display any obligation or undertaking.
to disseminate any updates or revisions to any forward-looking statement contained here.
to reflect any change in Liberty Media or Liberty Media acquisitions expectations 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-gaft financial measures for Liberty Media and serious exempt including adjusted OIDDA and adjusted EBITDA. The required definitions and recommendations for Liberty Media and serious exempt schedules one and two can be found at the end of the Earnings Press release issue today which is available on Liberty Media's website. Now I'll turn the call over to Greg Mfe, Liberty's president and CEO .
Sorry, little muting. Good morning. Today on the call besides myself, we'll also have Formula One's president, CEO , stephimo given the call. And Liberty's Chief Accounting and Principal Financial Officer Brian Wendley.
So let's begin with Liberty Series XM, where we received a $70 million regular dividend from Siri in the second quarter. So let's begin with the $70 million regular dividend. Let's begin with the $70 million regular dividend. The $70 million regular dividend. The $70 million regular dividend.
which was tax-free. We also repurchased $93 million across the LSXM and K shares from May to July . At a look through price on Syria 288 per share. At a look through price on Syria 288 per share.
We do understand the discount is widened and it is frustrating.
And while the decline of LSXM is in line with the overall market, the wider widening of the discount has been very disappointing.
We still believe purchases are attractive means to capture that discount, but it's becoming clear they're not enough to collapse it on their own.
We are focused on this.
While not a false some list, potential actions we might consider include.
Reducing data at LSXM to enable a combination and a not overly levered Siri LSXM. And a not overly levered Siri LSXM.
Steps to better illuminate the value of our live stake.
and other potential actions.
I would remind you at Liberty Media and some of our various spun off entities, we have a long history of corporate action to capture this cap. And these include structuring the GCI acquisition in such a way it was immediately in ATB. And such a way it was a middling ATB. And such a way it was a middling ATB.
The Direct TV R&T and Subsequent Sale to AT&T.
and the separation of Liberty Expedia and subsequent merger with Expedia. and subsequent merger with Expedia.
In summary, we have options and actions we have can take and we have a history of doing so.
So let me turn to Syria itself.
which I believe is handling the market challenge as well and maintaining their financial guides despite a reduced subguides due to a weak SAR.
which has been well documented for reasons like chip supply issues.
They had robust financial results in the second quarter including revenue up 4% of the second quarter including revenue up 4%
Churn steady at 1.5%.
and new and used car penetrations up to 84 and 51% respectively.
We also announced extensions with important automaker partners, including Mazda and Mitsubishi.
We make continued progress on our connected TV platforms like Amazon Fire, Android TV, LG and Roku.
We cited new agreement to fully integrate. It launched. It launched.
A serious XM audio experience on Xfinity with Comcast with video to come.
And on-demand music listening in the Sirius XM app is up 41% year over year. And that's partly driven by the addition of new, unique and diverse content. record.
Overall, sports listening is up in the app.
our agreement to make Siri exclusive third party platform for NFL games is helpful. Keeping the family we also announce an extension with F1 to cover every race on the world championship calendar. gravy is very important.
Lastly, we're very excited about our continuing work and podcasting. American Listen to Audio's up 9% last year podcast audio of 9% last year and our podcasting and off platform business revenues were up to 50%. And off platform business revenues were up to 50%.
We also expanded our grim and comscore to release AI-powered podcast audience targeting capabilities.
So many returned to live nation, which announced very strong results. It is clear live events are back on a global scale with yet another quarter of record results.
Versus 2019 AOI is up 50% pre-cashable was up 72%.
And that rose to $379 million.
As ticket master itself, AOI was up 86%, and the transacted GTV was up 76% again over 2019.
Sponsorship AOI was up 81% over 2019 and important new clients included Google, AWS, and Hulu.
We had the highest, highest, quarterly attendance ever over 33 million fans.
and our onsite fan, Spengrove.
continues across all venues.
We have an outlook for a record of 2022 with a hundred million concert tickets already sold, fan attendance up 13% of the operated venues and almost 30 new venues in the pipeline, and the 2023 artist pipeline is the largest we've ever had at this point in the year.
So exciting stuff.
Turn your formula one group.
F1 continued to see record attendance and viewership in the second quarter. The Austrian Grand Prix was our second sprint event and viewership was up 39% versus the 2021 Austrian qualifying.
We're also benefiting from the return of coverage on CCTV, boosting our audience in China.
Similarly, we've had record in-person attendance. Four races this year have had over 300,000 attendance with incredible demand for the Pata Club.
The Hungarian Week of attendance, for example, with 290,000 was the largest ticket sporting event in history and Hungary.
So we've seen strong ticket sales and sell out demand for the rest of the year.
and figure out the calendar as well.
The new regulations.
that we're part of the Concord Agreement are succeeding in enabling closer raising and demonstrably more overtaking.
We are continuing to pursue trail-wap raising work around sustainable drop-in fuel and regenerative engine development. And we think these will have implications across the entire transportation industry.
Turning recent to our most recent work in Las Vegas, we completed the land purchase at the F1 corporate level. We're excited about the potential for this property. We do expect to have year round activations on this site. We do expect to have year round activations on this site.
The main paddock building, which is estimated to be 900 feet long with the length of three football fields, will be exciting and we're actively working with potential commercial partners.
to expand our opportunities there.
We are building out the F1 team in Vegas across sales, marketing, race operations and more. We are leveraging local expertise and talent as well, including the LVCBA and our partners at Live Nation.
We are still working through the specifics on capacity.
But I'd note that our founding partners in Vegas, Caesars, Wynn, and MGM are seeing incredible demand.
and we haven't even announced the formal date.
We will obviously share more details on Vegas over time.
Well, some of you are excited, you don't have to wake up early for races over the summer break. We here at Liberty Look4 to restart Formula 1 at Spa on August 28th.
Turn it to the brakes.
They've been playing excellent baseball over the cat-class, past couple of months.
As of today, we're just under 600 record for the season. And since June 1st, we have the best record in baseball, despite a sad loss to the Mets last night.
It's an exciting team and the world's Halo is still driving fans to Truis Park.
Braves attendance is up 23% compared to an already strong 2019 season. We've had 24 sellouts to the All-Star break.
trending to roughly 50% sellouts for the year.
Tickets, parking, concessions, and concept deroxy are all performing well.
We've had six all stars named this year, and most of the teams since 2011.
and double the amount from last year. We just signed an extension with Austin Riley, a 10-year deal, $212 million, the largest in Fran's history after outstanding performance by Austin this season, including a historic July .
Alex Anthopoulos once again deserves credits for the moves he took to strengthen the team before the trade deadline. We do remember how well this worked out last year.
acquiring Grossman left-heeled, an odor-rizzy picture, both insurance to Arlenum, adding also bullpen capacity.
We want to congratulate SNCC on his 500th career win after the last week.
And again, we encourage you to tune in to the METS tonight.
We have nothing to report today on LMAC, but we do continue to review opportunities and look at the... We do continue to review opportunities and look at the...
environment was difficult for SPACs as an opportunity for us. And with that, I'll turn it over to Brian for more on our financial results.
Thanks, Greg, and good morning, everyone. At quarter end, Liberty Serious XM Group had attributed cash, liquid investments, and liquid public debt and equity securities of approximately $368 million.
which excludes $126 million of cash held directly at Sirius XM.
There's also 1.3 billion of undrawn Marginloon capacity at the parent level related to our serious exam and live nation Marginloon. connection and innovation in a large number of family means live Nation March and month.
Heads of August 4th, the value of our Sirius XM stock held at Liberty Sirius XM group was 21.5 billion and the value of the Live Nation stock was 6.8 billion.
We have 2.8 billion in principal amount of debt against these holdings.
Total Liberty Sirius XM Group attributed principal amount of debt is $13.7 billion, which includes $10 billion of debt at Sirius XM.
Formula One Group had attributed cash, liquid investments, and monetizable public holdings of 1.1 billion a quarter end, which excludes 935 million of cash casually dressed for 43 million and African 1800 me the one.
Total Formula One group attributed principal amount of debt was $3.2 billion, which includes the $2.9 billion of debt at Formula One.
You need 306-4 per level.
During the quarter, we would purchase 146 million base value of 1% flunk and cascant verbal notes.
Do in 2023 for approximately 240 million. Sector hiring 0.95 million underlying wonk shares.
at an average price of $59.88.
F1-500 million dollar revolver is on drawn and Formula One at the end of the quarter was
As we discussed last quarter, 100 of the current concourse agreement, team payments now take the form of an entirely variable price fund, which is calculated with reference to a measure of F1's adjusted EBIT rather than the adjusted EBIT a measure used in previous agreements.
such that the calculation now takes into account CAPEX incurred by including depreciation costs.
There's an immaterial difference today between 4M1's adjusted EBIT and adjusted EBIT.
Then material difference today between Formula 1's adjusted EBIT and adjusted EBITDA for purposes of this calculation.
Note that our reported F1 depreciation in AMOR includes purchase counting amortization related to the acquisition that is excluded for purposes of the price on calculations.
We've quantified this purchase counting amortization and our earnings release to assist in calculations.
Also at Formula One, other F1 revenues running materially higher than the prior year, up about 80 million in the second quarter and 130 million year today compared to 2021.
Increased freight and hospitality income accounts for 98% of the quarter of our quarter increase.
Note that the paddock club didn't run until July of last year, while year to day through the second quarter, that one has welcomed over 35,000 guests at the seven events where we've ran our paddock club. We've got the seven events where we've ran our paddock club.
Other costs of F1 revenue is higher primarily due to the same factors.
These costs are up 76 million in the second quarter, approximately 75% of which is due to freight and hospitality cost barrens.
Finally at F1, last year's investor day, we included an appendix fly detailing F1's foreign exchange exposure. These percentages are still accurate, with approximately 80% of F1's revenue and cost denominated in US dollars.
Finally, the bridge group of quarter-end, they had attributed cash and liquid investments of 207, 277,000,000. 277,000,000. 277,000,000.
which excludes 66 million of restricted cash.
Braze Group had a attributed principal amount of dash 602 million.
The Atlanta Braves also announced several new construction projects.
for 2022. A new office building will be constructed known as 5 Ball Park Center that will have the national headquarters for tourist securities under 18-15 year lease. The office building will have the national headquarters for the national headquarters. The office building will have the national headquarters. The office building will have the national headquarters. The office building will have the national headquarters. The office building will have the national headquarters. The office building will have the national headquarters.
Construction is expected to begin in the second half of 2022. The brains estimate their cash contribution will be approximately 20 million.
The Brazers are also working on a new project with Golden Rod Development Company called the Henry ElectroRepartment Building.
If completed, the Braves would have a minority equity stake in exchange for two acres of contributed land with no additional cash contribution.
from the braids. Additionally the braids are evaluating a phase two project from Golden Rock to build in the Jason Hotel and condominium complex.
This is still in the evaluation phase but would be another minority investment with a modest cash investment.
Our real estate projects have individually and collectively performed ahead of our expectations.
The battery is generating healthy cash flow which is partially used to support the operations of and future investments in the battery and partially to support Braves baseball.
Liberty in Arkansas, did subsidiaries or compliance with their deck governance at the quarter end.
With that, I'll turn it over to Stephanie to discuss Formula One.
Thanks Brian .
For the last seven calls, we were in Miami for the inaugural Miami Grand Prix.
It was an incredible weekend as former one was welcome to the city with open arms.
The celebrities came out in full force and much of the coverage had helped the soldier establishment of Formula One in the US.
It was wonderful to see so many of you in person.
We are now over halfway through the 2020 to race season and we have seen unpredictable outcomes and lots of real to real racing, especially in the midfield.
It is a testament to the new regulation that everything has code points already deceased.
Calusine secured his first F1 career race win at Silverstone, and Luis Hamelto marked his 300th race start with a second place finish and first double podium of the season for Mercedes in France.
Up front, Maxper's tap and currently leads the driver's championship over Charlotte Lev, a Ferrari-as-shown incredible speed and the battle between these two is intense.
We have seen a fight between McLaren and Alpine and it is great to see Haas beginning to move forward currently in seven in the construction championship.
And as we said, Mercedes continues to fight back with Louis II and George on podium again.
This action on the track as Drone and the Fans will set out crowds at our events with 420,000 in Melbourne, 400,000 at Silverstone, 300,000 in Austria, 300,000 in Hungary and 338,000 for Canada.
and the Pado Club has experienced record sales, welcoming over 35,000 people across nine events this year.
including record-breaking attendance at Silversun, where we had 7,500 guests.
The TV audiences is also tuning in with the average audience program pre through the France up to 9% this 2001 season average.
We continue to see tremendous growth on all platforms.
We were thrilled to announce that the highly popular Netflix series, Drive to Survive, has been renewed for the fifth and sixth season.
The series is the elapsedract in new fans.
and season 4 broke into the weekly top 10 in 56 countries.
Building on demands for our media rights, we reached a renewal agreement with Banderantes in Brazil throughout 2025, which will cover all qualified sessions and get a pre-zone live, 3-2M basis.
Additionally, we secure a strategic partnership with Clara Brazil to be the exclusive distributor of F1 TV Pro in the country.
F1 TV Pro has proven to be a compelling product for our fans, so it's worth a brief overview.
F1 TV Pro Office covers of every F1C session life on demand, as well as live access to all 20 onboard drivers' cameras and theme radio channels. Session replays and highlights. Live streaming of every F2F3 and 4 SuperCup session and a library spanning over 2,000 hours of archives and feature programming.
The platform was revamped in 2021 and is now more accessible than ever before, with the release of the service across May or B.S. platform enhancing the viewing experience for former one fans around the world. On to the racing promotion site, we were pleased to reach a long-term agreement with a member that will have us racing their through 2035.
This new agreement will bring F-2 and F-3 to the track for the first time ever. We were also thrilled to announce Honda at the title sponsor of the Japanese Grand Prix in October .
We are focused on the calendar for 2023 and expect to have more details around early October .
On the sponsorship front, we announced Patron Tequila as the first ever official Tequila partner of the F1 Paddle Club. We also focused on Licenses opportunity and partnered with Round Room Studios for the first official exhibition in F1 history.
Details, including venues on the City of St. Petersburg will be announced this fall.
We also extended our agreement with the Momentum Group through the 2035 season.
These already cover authentic certified and licensed F1 memorabilia and now includes the right to sell XF1 racing show cars.
The recently completed the auction for the 1990 latent house CG901 which placed second in the restaurant please sold for over 500,000 pounds.
We continue to boost to hit our net zero carbon by 2030 target. And one is developing our 100% sustainable fuel that will be using for more on cars from 2026. We continue to build our own fuel for more on cars from 2026.
In line, we then introduction of the next generation hyperventure.
The fuel is purpose in design to drop in for both internal combustion engine and hybrid.
It is already in development with support from our Keystake Otis, the FIA, Aramco, and from the F1 Global Partners who provide us an F1 THM manufacturer.
While racing fuels represent only 0.7% of our emissions, we believe sustainable fuels where we can have a greater impact on the global transportation sector.
While we have already instituted significant changes to create the most sustainable sport, we are now focusing on the following areas.
Exploring carbon reduction measure for fan stravening to point one events.
sharing the cover induction activities from across our sporting community.
taking steps and continue to investigate our measures to deliver more efficient logistics and travel arrangements from air, sea and land.
Father, our commitment to the environment, we are partnered with Bargo Center there to amplify the Center there, X-Clobal Challenge, count down to zero, a competition that challenges entrepreneurs to create sustainable solutions for the future.
We continue to promote diversity in e-sport and hosted the F1 e-sport Women's Wildcard Experience Day at the McLaren Technological Center.
First launched in 2021, the women wildcard represents another route into F1 Esports for female participants.
The initiative was born from the desire to create a space that encards more females to take part in solving their time trials via the official F1 video games. With the past securing in sport, in F1 is sport pro-efficient for the chance to be selected by team for the pro-champership later this year.
We also announced early in the year our extended funding commitment to the phone 1 and unit scholarship program for UN represented group until 2025. Continue it, it's tried to increase diversity within the sport.
We hope everyone has enjoyed the first part of the season.
While the teams in the drivers enjoy a much deserved break, we will continue to capitalize on the growing popularity of one and convert these into opportunities to drive the business forward. Avanti Tuta, full speed ahead. And now I will turn the call back over to Greg. Thank you. Bye, ciao.
Thank you, Brian and Stefano.
Our annual investor day will be Thursday, November 17th in New York. Please save the date.
Additional details will be provided soon. We hope to see many of you there.
We appreciate your continued support of an interesting Liberty Media. And with that offer, I'd like to open the line for questions. And with that offer, I'd like to open the line for questions.
Thank you. If you'd like to ask a question today, please signal by pressing star 1 on
If you're joining us using a speakerphone, please release the mute feature from your phone to allow your signal to reach our equipment. Once again, that's star 1 if you'd like to ask a question today.
We'll turn first to Ben Swenberg with Morgan Stanley .
Thank you, good morning. Greg, a couple of things on the structural side, I want to ask you about. You mentioned separating live nation, I think you mentioned that context with L-Siri. Let me just talk about the pros and cons. It's just to be crisp, I said. I like the value, I didn't say so.
Okay, highlight the value. Okay, yeah, I guess my question was sort of, how do you highlight the value? And I want you to answer that as you see fit. And then I wanted to, you know, we get the question quite a bit. I'm sure you do too about the hard spin of the braves. Who shares it, you could just comment on kind of the puts and takes and pros and cons. So that thought process.
And then I wanted to ask you and then Stefano or whoever wants to take it on Vegas, what are you guys doing second half of this year in terms of both staffing up and on the CapEx side with the track and the Pata Club? Any way to help frame sort of the investment size here as we look into the back half of the year as you get ready for next year's race. Thanks.
So, you know, we, I'll try and answer the structural questions and then touch on Vegas and what others as well.
So on the structural side, look, we're not here to announce the end of the day. You'll know when we do and you know the advantages of our structure have been with the trackers have allowed us to have flexibility to move assets around, have allowed us to have flexibility to
align things in the most.
attractive way to manage our taxes in the most efficient manner. There are...
reasons to want to keep things together until we have ATV flexibility around all of them. That's just more optionality. As far as how we might highlight the value of the track, there are ways from spinning to creating another tracker to other kinds of actions we can take.
We have obviously decided on those that we've been announced in today. We have been announced in today. We have been announced in today. We have been announced in today. We have been announced in today.
Hey...
The history of Liberty is we've tended to, over time, take these businesses to where we thought they were weak and add value, keep them internally, and then at some point spin them out. We thought that they would be more attractive as independent entities for the long term, not just in the short term. And we'll monitor all that for all of our entities.
So obviously I've given you as much of a non-answer as I can then but that's just with our history. But I think you should look at our history and say we have taken corporate actions to spin things off and I went through a few of them and the subsequent disposition of those companies.
On Vegas, it's a little hard to forecast.
the CAPEX because we are still putting together the program that we will undertake there. And I mentioned our goal is to have a facility which is not only magnificent for the race, but has the opportunity to be an ongoing activation, have ongoing activations and events at that facility when even when the race is not underway. I think you should be thinking we can well manage this within the capital we have.
it's not going to drain us in any way and it's not going to forestall us from doing other actions including you know potentially
investments around the SPAC purchases debt management and the like. I don't know if I...
if Brian or Renee or Stephanie want to add anything on the biggest question.
if I can
If I can Greg, just to add on the fact that of course the CAPEX builds and the TITE program is there, which is almost 16 months ago, but it's important that we are working very hard in driving the engagement and getting the new city excited by Formula 1. So we're going to come back to digital with all the plans that we have in order to make sure that we want to bring F1 to life with emotion, passion, that is really important to...
to increase the level of engagement that we are experts on Vegas City.
and though we are expect from Vegas City. Thank you everybody.
Thanks.
We'll take our next question from Brian Kraus with Deutsche Bank.
Thank you. Good morning. I guess Greg also had a –
structural question. I guess in eliminating or narrowing the NAV discount on LSXM.
It sounds like you alluded to an R&T spin merge. I guess another option that you have would be to distribute Sirius XM shares to Liberty shareholders. The former though would basically make the combined company though still a Liberty company with Liberty board and management and the ability for Liberty management and board to make strategic investments and acquisitions. The latter would sort of.
be an exit from that as a management team. So I guess, are both of those on the table or do you really want to kind of still control serious and be able to use it strategically? And then I also wanted to ask a question on Formula One costs. How should we think about the higher SG&A level this quarter in the context of future quarters? It seems as though there may have been some temporary impacts in there from legal advisory fees. I guess, is that the right way to think about it?
You know, or is that a meaningful, or is there kind of a reset in the SGA run rate going forward and maybe that has to do something with the August ? Thanks.
So on the first point, I think, Brian , there's a wide range, you know, all the way from distribution of shares, which would probably not would be, you know, unless you can figure out some way to get compensated for our control position, probably not optimal. There are things that are halfway in the middle, you know, like, as you may remember with Lamedia, where we did where we spun our direct TV shares, but we still had in the form of the B shares having influence. you
to hard spins that are just fully away or even subsequent spin merges, like the GCI example or like effectively what we did in Expedia. So I don't think there's anything off the table based on either what we might do there or our history. I think there's a full range of opportunities and we'll try and do the one we think maximizes long-term guidance. And we think maximizes long-term guidance.
Ah, on the...
On the side of expenses, I'll let others comment as well, but we'll know we did have some increased expenses, increased investment to start up around Vegas.
including some issues there. So on far as the longer term, I think we're not at an elevated level, but one of those add their views.
Yeah, this is Brian . I'd say we had some higher personnel in other costs to support the large increase in revenues and higher activities that we had in 2022 versus... and higher activities that we had in 2022 versus...
The prior year, there were some minor one-time professional fees that we wouldn't expect to repeat. And I would say pretty minor, Vegas expenses at this point. And I would say pretty minor, Vegas expenses at this point.
Okay, thank you very much.
We'll turn next to Vijay Jaya with Evercore.
Thanks. On Formula 1, obviously, Greg, the equity is liked because there's a contractual nature of the business, but obviously there are numerous macro headwinds with inflation, higher rates. Obviously, you gave some color on the impact of Forex. And with the escalators, can you help us really think about what the variability of outcomes are given all those?
sort of pressures out there given your contractual nature of the business is sort of the budget and expectations pretty much in line with what you sort of expected at the beginning of the year kind of thing for what the performance could be at Formula One operation.
So I think a couple things. I think you're right to note, DJ, the highly contracted nature of the business.
and which manages downside. Obviously there's effects downside and there's cost potential downside. But in general, we've seen demand that's been able to outstrip those. And while we made budget conservatively with contingencies as our nature, we've been able to outperform those contingencies even wider the cost structures.
So I remain, I believe the demand that we have and the strength of business.
on top of the contracted nature will allow us to power to most of that, but obviously we can't foresee every inflationary impact. But in general, I think we've been able to work to those and the effects. I don't know, Brian , definitely no one else wants to add.
I think that I'd end.
And if I could follow up, obviously, on the maybe a little early on the race calendar for next year, but there's a bunch of European races that come sort of end of contract. It looks like France, Belgium, Monaco. And obviously have a couple of new races next year, coming Qatar, coming back, and Shanghai, coming back. Can you just talk about what the race outlook can be next year? I'll be obviously going to have more than 22 races. I'm going to have to go back to the race. I'm going to have to go back to the race.
If I make great first step now.
Thank you, Agnéri. As I've stated before, we will come back to early October due to the process of having the clearance for the World Multiple Council of our calendar. Of course, there are discussions to make sure that the calendar is robust. It's following also the fact that we would like to keep the right flow in terms of efficiency around the world considering the needs of our calendar to be spread out.
from March to November or around the world. Of course, the effect that you were seeing before, there's a bit of the choice between the European and the Auto European races has an effect on the revenue side, but I would say the main point is, however, an effective calendar, the demand is very, very high and is our response to be to put in place a calendar that is available to our stakeholders, but also very good to respond to the correct available.
Hi, thank you. First of all, we've seen in the press the possibility of some auto OEMs entering F1 either on the manufacturer engine side. And the question we sometimes get is, what's the potential benefit to form it alone, either from a commercial standpoint or to the product itself? So I wanted to put that question to you. And then separately with other F1 revenue, I know there's a lot of noise in there because of the freight costs. But wondering if you could speak to the performance outside of the past through revenues, in particular areas like paddock club or licensing, and kind of messbbe sustisse so the other branch existing automotive you
and maybe how that looks relative to the pre-pandemic period. Thanks. Thanks.
Thank you. With regard to new OEM coming in, as you can imagine, it's not for us to say anything that will be, let's say, we shouldn't say. It's true that we are in contact with other manufacturers and hopefully we have other information soon. I think that in terms of what is the benefit, the benefit for sure, credibility, the benefit is showing that our strategy of the future will help the manufacturer to have another route.
that will allow them not to be only fully electric in their offer to the mobility side, but also using the expertise that only 401 through the technology that we have can help them in order to find a new way of being present in the market. Every then, you will stay in the field and will be able to be much more effective in our opinion all around the world if we want to achieve the goal of carbon neutrality. And all the other hand, from this point in point of view,
The more manufacturer we have, the more structure in terms of having manufactured with other teams will enable the support inside to have, I would say, more teams that could be seen even in the more independent into the support. So I think that will be to written news. Let's see how the situation will evolve, but no matter will be the decision that the OEMs will provide to the market, hopefully very soon, we have strongly believer that our technological platform for the future is the right one.
engines of innovation and enormous engines of promotion.
And all of those are only seem to be good for our sport.
Outside me near a
Now, I want you to try to briefly patch based on the second question. We see, and this is what we have already seen for this year, incredible numbers with regard to product law, with regard to new license that will be seen as an attack on our balance sheet. And we see already an incredible number of orders despite the calendar has not been announced, already in term of reservation for the races that would be in any case definitely in the calendar next year. So.
great, great attention, that means the attention on our platforms with the cubes today.
Yeah, just to add to that, David, in the other F1 category, 98% of what we're seeing on the increase is all coming from Pat and Club and Freight as we talked about in our prepared remarks where we didn't have races last year and we weren't traveling as much. So big increases there. But within primary revenue, you know.
know, we're seeing increases across the board as Stefano just mentioned. So licensing to your point and F1TV as well as the main three categories of promotion sponsorship media rights.
Thank you. If you look at some of these things like PADA Club, yeah, just add a Brian , I mean, if you look at these, some of these things like PADA Club, we've never seen more demand. And we've not only seen demand, we've been able to, in some cases, promoters have able to increase the size of the PADA Club areas and still manage it at a higher number and higher prices. So a lot of positive is there. So a lot of positive is there. So a lot of positive is there.
Thank you. Thank you. Martin Crockett with Rosenblatt Securities has our next question.
All right, thanks for taking the question.
Craig
The discount at Liberty Series versus Sirius.
is so much larger than the discount you would see at Liberty Broadband and Charter.
Why do you think that is? Why is there such a disconnect?
Does that inform in any way what some of the solutions might be for that?
Pardon to a great question.
i think uh...
You could argue a little more complexity. You could argue investor fatigue. You could argue the relative scale and size of the two entities compared to a broadband entity. Hard to attribute any certainty to any of those, but those are probably all factors.
You know.
fear that we're not going to act on it in some way, where is it broadbanded, maybe it's more crisp where the future is going. All of those are potential factors.
You know, I think as you said, what we said before, and I said earlier on this call, we're gonna take advantage of that through the discount, and at some point we're gonna take an action, and we're looking at those actions to do to tighten that discount. But in the interim, we're gonna buy that stock and take advantage of it and drive our NAV relevant to the underlying NAV up.
I don't know if anybody else in the team then or somebody else wanted to add something, but I think it's hard to be determined about which of these factors is driving the difference. So, I'm just going to be a little bit more patient. Thank you.
Okay, and if I can ask one other kind of separate question.
I'm just interested in your perspective on
streaming at this point as pertains to kind of baseball. We have the direct-to-consumer.
launches at Nesson and at Diamond Sports.
The braves are not participating at this point. Spend some roll up of rights at some of the big platform players to strike out full. Apple.
Do you think that this is the time to move in and…
Restructure.
structure, the straining rights.
For baseball or do you think it's not right? Yeah, you don't know what to do yet
Well, I think baseball has a more complicated situation because of all the regional sports network situation than other sports in particular, the cleanest comparisons or the completeness of football. And certainly my understanding is MLB would love to find a structure where they could deliver more national rights. Our
which is really not available or difficult today on some kind of games.
is really not available or difficult today on some kind of games. So
Streaming interest has been high for people like Apple, which is a good sign. And obviously the RSN weakness is going to create an opportunity, whether that happens this year or next. I do think there will be some change in that given where Diamond appears to be headed. Looking just at the Braves, we're blessed as we've said before with the
a lot of demand and good audience in our territory. We're also blessed with the largest.
broadband household territory among baseball teams.
So we remain optimistic about our relative position on any kind of streaming deal and we feel good that
You know, we have a product which people want in a big territory, and probably what some people estimate may be the most profitable RSN, where we're getting paid pretty well, but the RSN owner is also making money. So that seems to create some opportunity where there'll be somebody wants to do something interesting in our space.
Stay tuned.
Thank you.
Thank you. Thank you.
We'll now move to David Joyce with Barclays. Thank you. I guess some more clarifications on the structural opportunities. Greg, I think you mentioned in response to Ben's question something about testing and interesting information is only subject of percent grandfather who had previously been out in Houston.
you know, the reasons to keep things together until you have full ATB flexibility. Maybe I misheard or misunderstood, but I thought that everything was... I was just wondering what restrictions there still are. No, I think we are... if I could just interrupt David. That's one of the factors. We love to have as much flexibility in ATBs as possible, as many.
So that's a factor that that's not the only reason I think I mentioned to keep
They corp us together or to keep things, as I mentioned, some of the other reasons around. A ability to move assets, tax advantage, tax flexibility, et cetera. Sorry, go ahead. I didn't just want to step before you set the question. I want to make a clear that's not.
No, that's fine. Bye bye.
No, that's fine. That clarification is what was part of my question. And then the other aspect is, are there any further gating factors on the separation of the equities, such as, you know, do you need to prioritize getting something done with Elmact the SPAC or is that completely in a separate path? Is that completely in a separate path?
Yeah, I don't, I can't. I don't know I'm gonna talk my head, but I'll just note the one you called out. I don't think anything we're going to do around L-MAC this back is likely to be impacted by structural changes because you know, it's generally getting funded by the excess cash and any incremental would be funded by the other for their excess cash had fallen. So I don't think that's the driver. So I don't think that's the driver.
Okay, appreciate it. Thank you.
Okay, appreciate it. Thank you. Thank you. Thank you.
Next up is Jason Bezenet with Citi.
I just had a high level question. You guys over the years have done such a good job improving the financials of the braves in Formula 1.
How to see curious, as you sort of look at the landscape, would you describe both of those as sort of one-off, rare exceptions unique opportunities? You know, rare exceptions unique opportunities?
Or do you think you're sort of building a competency that might be applicable to other potential assets?
Yeah, I don't know.
I don't know.
I don't know if we have a confident, I'd like to think that credit to the teams at both the Braves and Formula One for what they've done with those assets. I think they've taken attractive businesses and only made them better. And I credit that. So if we deserve any credits for finding the right management teams and backing them and doing the great work that they've done, I get my showy. We can take much beyond that.
Okay, thank you. Now we'll move to Matthew Harrigan with Benchmark.
Thank you. Firstly, getting more specific on the sential's ventures, there's a report in the European media that Porsche has something down in Chile that they're testing that's basically carbon capture, synthetic, methanol, and the story also alluded to Saudi-Aramco building plants and Saudi Arabia and Spain. I guess you probably wouldn't be that specific, but have you nailed down?
a path on the technology? Are you looking at a lot of different things? What sort of capital commitment, just vaguely, would go into having that sort of plan? Because this sounds a little more real as well as aspirational at this point. And then secondly on
On the adventure that ticket master did with Snapchat and now with TikTok, is that something that you really see, you know, pushing the event demand as well as, you know, people from Pantsons, you just can get outside the house right now and now have one super quick follow up if you don't mind.
Stephanie, do you want to take this in that if you have a question?
Yeah, yeah, thank you. Thank you Greg. Thank you, Matthew. I think that all these technologies, capital capture and other things that are related to the past of technology is related to the transition in this sector they were living. And the beauty of what I believe we are doing with the tremendous effectiveness, is the fact that we are just pushing the system towards the future in the right way. So all the commitments that we have taken on our side to go to.
to zero-cambo fuel in such a short term is because we do believe that that's the right way to go. And the good news is that on the other side, the investment on our side is not relevant because we don't own any capis in that respect. So we are just a neighbor to the oldest stakeholders or business to push for the future. And this is something we do believe is our way to go. And we don't have to forget one other important element of the equation that we are not talking about the man only about the man.
We should be very, very proud of this idea of pushing forward this technology to our leadership on that respect.
Matthew, on the second point, I'm not sure exactly what you're referring to. Maybe you could help. Yeah. I know some of your health is into comment on the operating companies, but they do that.
arrangement with snapchat a number of months ago to push basically ticket master pushing tickets on snapchat and just a couple days ago they announced something really similar with with tiktok is that something that you really see as being a nice impetus for demand on the ticketing side do you think it's just people are sure crazy after COVID-19 and they just want to get outside outside the house
Well, I think it's part of live nation strategy to be ubiquitous as possible, making buying ticket as simple as possible. And the technology is the developed to distribute their ticket-bying capabilities are a unique advantage, I think, compared to most in the industry. And they want to be where buyers are. And if buyers are on TikTok, which they increasingly are, and looking for music and...
That's a place which would they originate, it's a logical place for them to be. And the same thing I think about a snap, which has obviously had music aspirations as well. So I think it's an important element of continuing the Groves' tragedy, but I'm not sure it's uniquely different than anything else we've done at just a continuation. done it just to continuation.
Lastly, if you don't mind, do you have a secular view on sports teams' valuations going up even higher that makes you want to wait further with the grades in terms of doing something?
You know, I think it's facts and circumstances will dictate. Obviously, these have been trophy assets that that people have wanted to buy the best of. We certainly look at patterns, for example, if there's going to be an tragedy if there's just a pain that might be our fault and there's a risk that these people will give us a spinal third Pod and then we will shut the place of guilty.
at purchasing in lots of cases other sports assets and been Surprised of some of the prices nonetheless they continue to move Upwards and I think for the right kind of trophy assets probably valuations are going to continue to rise
cases, other sports assets have been surprised at some of the prices. Nonetheless, they continue to move upwards and I think for the right kind of trophy assets, the valuations are going to continue to rise.
Thank you. And with that, we'll conclude the question and answer session.
I'll now turn the conferen back over to the speaker' to remarks.
Now I just want to say thank you to all our listening audience for your questions and your attention. I appreciate your interest in Liberty Media. Hope to see you next quarter if not sooner and again at our November meeting for many of your people.
Have a great rest of your summer. Thank you.
Have a great rest of your summer. Thank you. Thank you. Bye bye.
With that, we'll conclude today's conference. Thank you, everyone, for your participation. You may now disconnect.