Q3 2022 Liberty Media Corp Earnings Call
Welcome to the Liberty media corporations third quarter 2022 earnings conference 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'd like to ask a question. Please press star one on your telephone keypad. As a reminder, this conference will be recorded today November 4th.
I would now like to turn the call over to your host Courtney Chun Chief portfolio Officer. Please go ahead.
Thank you and good morning, 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 1095 actual events or results could differ materially due to a number of risks and uncertainties, including those mentioned in Liberty media and most recent Form 10-K, and 10-Q Liberty media.
<unk> most recent forms 10-K 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 expressly 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 not really.
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 EBIDTA and required definitions and reconciliations for Liberty media and Sirius XM.
Just wanted to you 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 Gregg <unk> President and CEO .
Thank you.
Good morning today speaking on the call. We'll also have formula one's president and CEO Stefano Cao.
Liberty's, Chief accounting and principal financial Officer, Brian Wendling.
So let me start with Liberty Sirius XM.
Last quarter, we discussed our intention to reduce debt secondly, we took action during the third quarter, we opportunistically repurchased about 21% of the one and three eighths faster convert combining prudent debt management and effective share buyback.
One paid $64 million in battery paid $14 million to <unk>.
Their respective intergroup interest.
The remainder of the purchase was funded with our cash.
Cash and $27 million from a.
Unwind of a bond hedge and warrant.
Effectively this was a share repurchase across the LNG equities with a $179 million effective cost to repurchase four 5 million <unk>.
A shares and $1 $1 million, one and 500000 backdrop intergroup interest shares effectively repurchased.
We are still hedged on the remaining exposure.
Under that convert with our intergroup interest.
Turning now to Sirius XM itself.
They reported solid third quarter financial results, despite the macro factors impacting the business.
The resilient sub base experienced a record low churn of one 5% revenue was up 4% and EBITDA was flat as we continue to make investments, including and product development.
Despite the soft auto sales, we continue achieve vehicle penetration.
And enable fleet of approximately $150 million.
Sirius XM also set out strong cash flow business and guidance for the year full year guidance for 2022.
We continue to monitor headwinds in advertising and the reduced.
So our impact on the top of the funnel.
Sirius is also making progress in our streaming business September was one of the biggest streaming sub acquisitions months have experienced to date.
And we continue to add exclusive enduro diverse content, both in and out of the car for example, we extended the NFL agreement.
Sports is proven obviously to be high appeal for new subs to bode convert at a higher rate and a higher retention once they are obtained.
I'm trying to live nation.
Well I mentioned continues to see incredible demand with fans prioritizing spending on live events.
Versus 2019, Oi was up 45% and free cash flow was up 88%.
<unk> also beat last quarter's record for highest quarterly attendance with over 44 million fans across 11000 events.
<unk> spending was up 30% through September and U S amphitheater.
Ticketmaster experienced all time high GTD, which was up 62% versus 2019.
Live is closing out a record year, but there was more growth to come.
With 115 million tickets already sold and sponsorship for 2023.
Up 30% over this point last year.
Turning now to the Formula One group.
We continue to come up with new analogies, which are familiar and ethylene continues to fire on all cylinders with incredible fan demand.
There is significant both in grandstand and patent club attendance with many sellouts and records broken.
Importantly, as we've invested there has been a continued growth also in the U S market.
With three races planned for next year, including our landmark Vegas race.
We also announced the renewal of our ESPN contract at a value, which was many multiples of the prior contract.
We also announced a record 24 race calendar for the coming year, including renewing in Monaco, where we have a three year agreement to keep the iconic right on schedule.
Renewing in Mexico City, where we have a three year deal with.
Which highlights the value at one brings to all cities for example between 2015 and 2021 and.
The Mexico City Grand Prix generated $2 $4 billion of economic activity and created created 57000 jobs.
We will continue to capitalize on the momentum in the business and.
An example recently is drilling.
The Apple as planned.
Which we think will be epic.
We have a star studded cast, including Brad Pitt.
Directed by Joseph Kosinski, and it's produced by Jerry Bruckheimer All stars in their own right.
Very exciting.
The corporate level, we have refinanced the forlorn convertible on attractive terms with fewer shares.
Lying the instrument and a lower initial conversion price of $86 six.
And now turning to the Braves.
<unk> finished and impressive season, securing their fifth straight.
<unk> title.
<unk> finished $101 61 for the first time since 2003, they won over 100 games.
And it was an epic come back to the second half of the season as you may recall beginning.
Starting June we were kind of half games behind the mess.
From there we went on a major league best nearly 700 win rate.
Let's start with that June till the end of the season.
The fans had an incredible turnout with 52 games sellout is the truest and more tickets sold.
At the stadium since we had done.
Some slots in 2000.
Obviously.
The finale was not what we would hope but.
But I'll remind you we did win the World series last year, where for a few more weeks the reigning World series Champions.
There are wonderful things that come from that but it also can lead to increased costs. We think they ultimately create value for the franchise in and fan engagement, which will drive revenue, but on the increased cost side. Our largest component has been reinvesting and increased payroll, we think that sets us well well well rather for future years, but.
Elevated costs from our record attendance and four additional home we have other elevated costs, rather from our record attendance and four additional home games at the truest ballpark.
There were also modest cost increases for post World series activities for example at Trophy tour and creating special merchandise.
And let me finish by talking about Almac, we recently sent out a press release announcing our vote for an early rewind.
While the results have not been what we wanted in terms of finding the deal that we thought was attractive I would tell you we evaluated over 140 targets.
But the high valuations for 2021, the poor RP of IPO market.
Overall market volatility led us to the conclusion that we could not find a solid target with attractive valuation and return characteristics.
Finally, the recent tax law changes under the IRI created additional corporate liabilities. If we were to extend the unwind into 2023, and therefore, we took action to unwind and return the capital to the investors in 2022.
And with that I'm going to turn to Brian to let him talk about our financial results in more detail.
Thank you, Greg and good morning, everyone.
At quarter end Liberty Sirius XM group has attributed cash and liquid investments of approximately $225 million.
<unk> excludes $39 million of cash held directly at Sirius XM.
There was also $1 3 billion of Undrawn margin loan capacity at the parent level related to our Sirius XM and live nation margin models.
In September Liberty, Siriusxm group paid approximately $284 million to repurchase $210 million aggregate principal amount of the $1, 375% cash convertible notes. This was funded with $179 million of cash on hand, as well as cash from the Formula One group and <unk> group.
From the settlement of their intergroup interest held at Liberty Sirius XM corresponding to the amount of notes repurchased.
As a result, $1 1 million one a shares and 500000 shares underlying the portion of their respective intergroup interest held by <unk>.
Were canceled.
Liberty Sirius XM group also received $27 million of proceeds from that settlement of the bond hedge and warrants related to the repurchase of the convertible notes.
As of November <unk>, the value of the Sirius XM stock held at Liberty Sirius XM Group was $19 5 billion and the value of the live nation stock held was $5 3 billion.
We have $2 8 billion in principal amount of debt against these holdings.
Total <unk> group attributed principal amount of debt is $13 4 billion, which includes $9 9 billion of debt that's directly at Sirius XM.
Formula One group had attributed cash liquid investments and monetize the public holdings.
One 1 billion at quarter end, which excludes $1 1 billion of cash held at Formula One.
Total Formula One group attributed principal amount of debt was $3 5 billion, which includes the $2 9 billion of debt directly held at Formula one, leaving $567 million at the corporate level.
During the quarter, we issued 475 million aggregate principal amount of $2, 25% convertible notes due 2027.
A portion of the proceeds from the offering were used to repurchase $213 million aggregate principal amount of the 1% coupon convertible notes due 2023, leaving just 27 million outstanding at the end of the quarter.
At one $500 million revolver is undrawn and Formula one leverage at the end of the world.
Okay.
As Greg mentioned <unk> filed a proxy statement to obtain stockholder approval to unwind before year end Formula One group has incurred approximately $20 million in costs since <unk> IPO in January of 2021 through the initial warrant investment subsequent working capital loans on <unk>.
These are material investments will not be recoverable.
But the $250 million toward purchase agreement the Formula One group had committed to almac will be terminated.
On the Formula one operating business, we will remind you that <unk> is best viewed on a full year basis, given some volatility in the quarters.
One <unk> seven races. During the third quarter is about 2021 and 2022.
Are there wasn't one additional flyway rates during Q3 of 'twenty, one with Russia, having taken place last year in France hosting a race this year.
Race promotion revenue decreased accordingly for the quarter, the flyway races, typically pay higher fees for European races.
As a reminder, we recognize D payment team payments pro rata across the rig calendar quarter, where we recognize less revenue due to the mix of races. The team payment percentage may appear disproportionately larger.
I have one also recognize higher other cost of revenue primarily due to one additional patent club operating in Q3 2022.
The cost of servicing significantly larger paddock club attendance as compared to the prior year period.
SG&A as a percent of total revenue was generally in line with historical averages for the third quarter.
We didn't have modest increases in personnel cost of good change in the Companys <unk> from stock to cash based bonus program and increased headcount to support growth.
Looking at year to date revenue increased 35% and our adjusted OIBDA grew 43% with 140 basis points of margin expansion.
Finally at the Braves group at quarter end, we had attributed cash and liquid investments of $159 million, which excludes $15 million of restricted cash and the branch group had attributed principal amount of six $601 million.
Liberty and our consolidated subsidiaries are in compliance with our debt covenants at quarter end.
With that I'll turn it over to Stephane.
Thanks, Brian .
2022 season as continued to deliver very impressive racing for all our offense and once again shows have been you've taken through regulation has delivered at closing racing on the track that.
Instead of sticking tumor one is huge from fence potential process and those who wants to host a race. We continue to believe that this is due to us taking the right strategic decisions to grow the sport in the correct way and to focus on the most important priorities.
<unk> just finished a couple of amazing we can see Mexico seating in Austin.
The 2022 season has delivered the exciting action on the track.
Mexico is tough and that has been incredible this season setting the record for most women into the season did in 14 Grump. These wins, so fighting's doesn't 'twenty two with his win in Mexico City last weekend.
We secure the second World Championship in Suzuka and then once the constructive championship the first since 2013.
The team dedicated the victory to reboot Thunder Dietrich from Massachusetts. He was a visionary who help those puma with sport and he will be missed.
Even with these championship settled there is still a battle among the drivers infrastructure as where they finished can have a meaningful impact both financially and operationally.
Excitement for our support continues to grow certainly we've seen that the in the race attendance and now had 10 spaces with crowds over 300000 with three of those exceeded 400000.
Many of these events has been complete so sellouts.
This example of growing incidence is Austin, where we welcomed 400 <unk>.
Fans across the event.
More than the double the attendance in 2019.
The promoter states that the ticket demand could that reached 500000, but for these focus on maintaining a high quality fan experience.
We've also seen more first time on female attendance at our races.
The 10 basis, when we get the spectators that data. This year first time attendees were at about 50% of the total crowds.
And we've seen surging demand on the high end too we they can save in powder clip and that Pwc products.
These sorts of demand means our races slots at a highly <unk> and we were pleased to confirm the 2023 Callender a few weeks ago.
We were happy to renew our agreement with Monaco, and we will raise debt through 2025 with expanded rights before one related to broadcast powder clip and sponsorship.
We also announced a one year renewal for Belgium, and the three year than you will from Mexico City.
As Rick mentioned, the economic benefits Epsilon has brought to Mexico City. Since 2015 has been incredible this.
This highlights the value of our sport can bring to see this globally. Additionally, we will increase the number of sprint event 2073 to six from the commentary.
These events that are in high demand from our promoters and provide additional sponsorship opportunities and value to our broadcast partners.
We will announce the venues for those events.
We were thrilled to announce that I will do with joined <unk> in 2020 cities. They have selected <unk> as their strategic partner and plan to acquire a stake in this hub group, who will complete as of now the factory teams throughout 2026.
Well present, the global stage for the Audi brand and they see their high performance and competition, our sport as a driver of innovation and technology.
Audi was towards it attracted to <unk>, given our opposing sustainability and cost efficiency, which will aid in achieving their own sustainability goals.
It also shows the increasing value of the teams in the current environment.
Region by the stability provided under the new regulation and the growth of the sport, which are in one in Epsilon continues to benefit.
We are delighted to grow our partnership with AWS as we announced yesterday the expansion of our partnership with them, becoming a global partner for mobile.
We both share a passion for technological innovation and we work together to build the fan experience of the future view.
<unk> competed to tuning as well as we have seen substantial interest related to our media rights, we announced a partnership with Sky that extends rights in Germany and.
In Italy until 2027, and the UK and Ireland until 2020 that Sky Sport F. One will continue to be the only dedicated channel to broadcast the motorsport in each of these markets and they are highly rated commencing will be available in over 80 markets.
Sky has seen significant growth in their viewership. So far this season with average viewership in the U K up to 60% since 2019, Italy up to 20% 2021, and Germany up to 24 since 2021.
<unk> also seen attractive demographic shift with viewers, becoming more diverse and younger we also extended our U S agreement that we ESPN through 2025, they have been a great partner to us and with this new deal at least 16 races per year will add on either ABC or ESPN with Oprah.
S commercial fleet.
Through 18 races in 2022, they have seen an average audience of one 2 million up from $9 9000 in 2021, the Miami Grand Prix through an evidence viewership of $2 6 million the largest U S. <unk> vehicles for ICP. Additionally, we extended our agreement with <unk>.
Until 2026, and secure the partnership with Telcel and Telmex in Mexico to bring Epsilon TV pro to subscribers, who can easily add the service onto their existing content for mobile or Internet services.
The <unk> Pro championship presented by AMCOL with two full floor events each spanning over three years. This includes more live show as the teams and the drivers battle for the $750000 price spot <unk>.
Similar to F. One we've seen several high profile drive as move across the bridge.
We look forward to building on the incredible engagement for 2021, when we saw $4 5 million fans tuning for the ground peanut.
This year, we had $1 3 million players attempt to quantify almost three times. The amount we had in 2021, we continue to expand the way, we engage with defense and introduce the F 100 Kt.
This is the first F. One license experiential venue.
Patterns can be fully immersed with 60 motion simulators and experienced the thrill of racing, while enjoying and premium food and beverage offerings in the heart of London, We plan to rollout this conscious in additional cities and finally to further our progress to net zero formula to a formula three announced a partnership with Orion.
Two pioneer sustainable fuel from 2033. This is an important step to reach 100% sustainable fueled by 2026, which will be a requirement of all FAA Championships <unk> III have proven to be a great test bed for innovation as the weather with the 18 aegis.
<unk> now using for what we continue to show the innovation leadership in the technology space and believe that our sustainable fuels can have a huge real world benefits for the automotive sector and greenhouse gas emissions.
I want to thank the world's Epsilon <unk>, our plans and our investors for all the support this year to model. We are hosting a large party in Las Vegas at Caesars Palace, we are bringing the best places in the world to the entertainment capital of the World, including Alaska run on Las Vegas Boulevard, we look forward to completing on amaze.
2022 season, as we traveled to Brazil, and Abu Dhabi of attitude that full speed ahead, and now I will turn the call back over to Greg Bye Bye.
Thank you Stefano and thank you Brian .
We look forward to seeing many of you at our annual Investor Day on Thursday November 17th.
Please visit the IR calendar on our website for registration details.
John Malone, and I will be hosting our annual Q&A session, if you'd like to submit questions in advance.
Can email investor at Liberty Media Dot com.
We appreciate your continued support of and interest in Liberty media and with that operator.
Like to open the line for questions.
Thank you.
At this time, we'll be conducting a question and answer session. If you'd like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue. You May press star two if you'd like to remove your question from the queue.
For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys, one moment, please while we poll for questions.
Our first question comes from Doug Mitchelson with Credit Suisse. Please proceed with your question.
Oh, thanks, so much Greg I just wanted to focus on Liberty Sirius XM Group I was just curious if you have any updated thoughts on the discount asset value and sort of options and timing of options too.
Improve that in and I guess as part of that specifically.
Curious if you could talk about the strategy around the live nation stake at Liberty and whether there's ways for liberty to create value with that stake beyond just being sort of an ongoing shareholder of live nation, which I'm sure you're bullish on but are there other ways for liberty to create value with.
With that ownership stake thank you.
Well, Doug I think thank you for the question I think we've gone through.
Some of the options that are on the table and discussed it before and I am probably.
Unlikely to do that.
Both of them all again, but to say we are aware, we're paying attention we're taking actions.
To prepare ourselves for different choices.
Set ourselves up and when we have something to announce obviously will make the announcement.
I just want to reiterate we think live is very attractive.
We think that certainly the value was not fully recognized in <unk> and.
And we think there are things that businesses that are worthy to add onto live that could be interesting that are opportunities for us. So there is much we can do around that.
Around the life stage in particular, but im less likely to go through.
Nuance on what we can do with <unk>, because I think we've covered those before.
Maybe Greg just a quick follow up you can help investors kind of shape timeframes as or are there things that you can do that you think are material in the short term next 12 months are these things that will take longer to play out any thoughts around helping us with timetables timetables, Doug I'd give you full credit for persist.
But I think.
Thank you very much Greg.
Thank you Doug.
Our next question is from Bryan Kraft with Deutsche Bank. Please proceed with your question.
Hi, Good morning, I've got one for Stefano and one for Greg that you may or may not answer, but I'll try.
I think.
I think on past calls when asked about the ATB status of Sirius XM. You said that you believe it is an H D. D. I was wondering if your conviction with respect to Sirius XM being an ATB has since increased can you say more definitively.
That actually does have ATB status and then Stefano your comments on the attendance increases I think were really interesting I think that the view on race promotion revenue historically has been that it's sort of a flattish type revenue outlook given the high pricing on those deals and some challenged promoter economics, but with the increases in ticket.
Sales in attendance you talked about I mean that must deliver a lot of values promoters do you think that that means race promotion revenue could become actually a significant and consistent revenue growth driver going forward. Thanks.
I'm going to let Stefan I'll cover attendants first and then I'll touch on the things are not going to answer with you Brian .
Excellent okay. Thanks, Craig.
Well actually totally right the attendance increases just magnificent user in terms of the.
One is bringing mainly to new audiences and that is that the business model. We are having with certain promote but is it more relates to the fact that that is the fee that they have to pay that is.
High end part of the ticket that is allow a site and everybody that there is not the challenge, but the opportunity to move forward.
How we can maximize the revenue and monetize the revenue that we can take from the side of it for what has become more and more effective that's really well we're going to do in the future. We have a different way to do it said that I'm sure that we're going to capitalize this growth and the best way that we can in the next couple of years.
Thanks, Stefano so Bryan I'm going to give you confidence I'm going to restate I still believe Sirius XM is an ATB no change in our position.
Yeah.
These things tend to get all of them.
Firmed up at the time.
<unk> gets tested but that we still have that position.
Okay alright, thank you.
Our next question is from Jason Bazinet with Citi. Please proceed with your question.
I know you guys have always talked in the past about the flexibility that you.
Trackers give you because you can sort of move assets and liabilities across.
Is there is there, but when I step back and think about sort of broader liberty. It feels like there is sort of a slow march towards asset backed securities right like eventually the terminal year.
It seems to me everything is gonna be asset backed.
Is that wrong.
Well. Thank you for the question, Jason I don't think we've really seen a change in our procedure. We think the tracker has real value and gives us flexibility, but our history has also been that we've created many many asset backed securities off the top of my head I can think of the midyear, which was effectively direct.
TV com.
<unk> hub.
Expedia Liberty Expedia go into Expedia.
List goes on and we obviously breaking curate off on its own.
Many many times and that's going back in my 17 years I'm not sure we've had a.
Diminishing in our interest in trackers or a change in our perspective and asset backed securities certainly have their value at the right time and place.
Okay.
Just sort of unwinding of shuttering.
Spak.
Sort of made you more in the direction of not needing flexibility or is that sort of a false interpretation.
Yeah, I'm not sure I would read that interpretation I think it's a recognition of these things have a life.
The market at a moment in time, we thought there was an opportunity we couldnt find the one we wanted unlike many sponsors of stack. So we're playing for the carry we had committed real capital and were concerned about and aligned with our shareholders and wanted to have a good return.
Not just the pop.
I think spectra, obviously challenge for many reasons, both because of the market reaction right now and also because of the regulatory profile towards them. So that was a recognition of those factors not any statement about lack of optionality or flexibility or desire for that.
Thank you.
Our next question comes from David Karnofsky with J P. Morgan. Please proceed with your question.
Alright. Thank you Stefano I wanted to see if you could expand a bit on new media rights deal with Sky what drove the decision to do that deal early in across multiple territories and then Greg just wanted to see if you could update on how youre thinking about use formula one's cash balance in light of your net leverage and decision on <unk>. Thanks.
Thanks, David I think Thats, what we talked about <unk> is.
As the landscape, whether we have to consider the evolution mainly in the new markets.
Is it becoming attractive fulfillment what in the more let's say traditional or mature markets. I think that's what we have taken a decision to invest in to be stable with sky means a lot because in terms of the other opportunity in these markets are largely the ones that can extend that from the financial that also for the one <unk> book to Bill and the consequent to.
If you want to achieve it is clear that.
The fact that we are growing.
Give us potential for the future to see how that kind of dimension volatility pay TV, but also other means that could be interesting for that could be attractive for our business of course, we want to make sure that they use for the future. The decision that is also the possibility to for our <unk> TV is going tremendously well.
Incorporating the deal for our customers. So that's really the strategy that we have taken so far and.
And this is I would say if you go back to Sky the recognition of the value of that investment for the development of our <unk>.
<unk> content in the world.
Yes, if I could just add on.
To reinforce the point Sky is a great partner.
Three important geographies, but more than that they're a great partner in terms of their production.
Most of you here in the U S are watching the sky broadcast and I have to tell you I'm always very impressed with what they do and securing that and ensuring that good partnership for a longer period of time was attractive.
As far as what our uses of cash are going to be we have a high quality problem that we have a great free cash flow generating entity in formula one.
We believe the potential to increase that over time.
You've seen us.
Buy back stock at various times at Formula One, but we also think there are potentially in this market opportunities for all the reasons that I talked about the difficult market a non market.
<unk> tested or no need to do external financing ability to do something on our own could create interesting opportunities. So we will continue to weigh both the flexibility that were provided by those free cash flows and the delevering against share repurchase against other alternatives in the space like investing in our business at Las Vegas and outside.
For journeys.
Thank you.
Okay.
Our next question is from bench Swinburne with Morgan Stanley . Please proceed with your question.
Thanks, Good morning.
On an F. One for I guess for Greg or Stefan or both of you on the ESPN deal, which is our Disney deal is now formally announced.
At least according to the press you guys took less money. It took a lot of money, but less money than you could have had I think I know why but could you just spend a couple of minutes talking about why.
What is new in this ESPN ABC deal.
Besides more money that you think are strategic and sort of the benefits of this agreement and the duration that you picked.
Obviously, the U S market is a huge opportunity for you.
And then maybe this is for Brian , but just you didn't mentioned currency in the press release at F. One I didn't know if that was a material or not material impact in the quarter and G&A and corporate costs were both up quite a bit year on year and quarter on quarter, maybe Vegas related just any color. There if theres one timers would be helpful. Thanks, everyone. So I'll touch on I will try.
John ESPN first and then let Stefano add if it's okay.
Look we are.
Have had a belief.
And the strength of the business.
Which caused us to cut initially a shorter deal without getting the highest paid last time and on this renewal. We did the same we wanted the broadest exposure ESPN has been a very good partner, we think the opportunity to continue to grow the sport in United States.
Caused us to cut a relatively short term deal with them because we think we will get do better on the renewals. So far betting on ourselves has been the right strategy betting on growth betting on breath, rather than a current pay has been the right strategy and I think you saw that exhibited there were other things that ESPN has been a great partner about and I think the op.
Turning to work with them on things like F. One TV.
As a part of why they were a good partner.
And go forward on that basis. So we're very excited about F F. One and ESPN being together for the next three years.
But I have to tell you. We're also excited about the kind of opportunity, we'll see in three years, when we renew with somebody.
It's definitely what would you add I couldnt agree more Greg.
We need to recognize that.
Because sometimes we have a very short memory.
A couple of years ago that were not so many media right holders and use that wanted to invest with us and now we need to give the credit to ESPN that in terms of content in terms of attention in terms of how they are really fully pool, one they did a phenomenal job, which would be even stronger in the next three years, because we have agreed.
The position of the basin.
Certain channel to have more attention to that so I think that the.
We had thought carefully about these tests and I think that the fact also that with this agreement we keep a global mentioned <unk> seen on our side. It means a lot. So I think that the best solution that named three Years' time, we'll see how the market would develop we are pretty sure due to the growth in U S.
The other players that will be around the table and interested to be with us in the future.
Yes, Ben on your other two questions FX was pretty much de minimis for the quarter.
To remind you that about 80% of our revenue and costs are actually in U S dollars. So.
We do have ups and downs on FX from time to time it was not impactful in the third quarter and then on the G&A question again, I would just reiterate always better to look at this on a full year basis, but.
We did have a mix shift in the <unk>.
And the number of races that were either European versus flyway, We we lost Russia in the current period.
So that has a bit of a margin impact there was higher G&A to support the overall revenue growth and margin expansion on a year to date basis, and then as you pointed out on Vegas still not material, but obviously there are some costs in there related to Vegas is they have their prepare for the launch event and.
Ticket sales.
Thanks, Brian Thanks, guys.
Our next question comes from Barton Crockett with Rosenblatt Securities. Please proceed with your question.
Okay. Thank you I guess two questions if I could the first is just.
The macro situation in Europe .
It's really kind of.
Levels that we haven't seen in years maybe.
In my lifetime, I don't know about others.
And I'm just wondering.
At what point do you think that this could have an impact on the <unk> business. It doesn't seem like it has to date.
And maybe the answer is it never will but at what point.
Do you think we could ever get to a point, where this could have an impact on attendance at races, and maybe an impact on race promotion fees because communities are.
Our promoters are economically challenged.
Yeah.
Thank you Barton.
Let me figure it out.
These things first of all being a world championship weekend, the spread around the world the least competitive these kind of situations to manage.
The other hand, the fact that we have long term agreements will reduce the exposure to these rates and what I can say and share with you is that we already see an incredible number of pre legislation with regard to the ticketing of next year. So this is a good sign in a context that youre seeing in mainland Europe .
Good.
It is clear that this recession is taking place, but the thing thats the way that we structure the way that we have done the deal will protect us.
This will enable us to move forward in this direction. Therefore, I would say at this current situation.
Let us think that we should be optimistic in this context that is of course.
We monitor.
This is what we see today.
Yes, I think and then.
If I can just say that.
We're seeing a case where.
You look across our business and consumers.
Still purchasing whether that's at Formula one.
Or at live nation or at the Atlanta Braves demand for all of those services is very high and I think that is reinforcing the point that it's definitely we have many promoters who are doing very well and including those in the.
In Europe and there.
There is high demand both for among consumers and therefore, a promoter confidence on the <unk>.
Against those long term contracts, we feel very good.
Okay.
The other thing I was curious about it.
The fact that we've got the race winter if the team winters pretty well sewn up well before the season is over at Formula One.
Versus last year things were pretty competitive right until the very on the last lap.
What difference does that make in terms of the financial.
Arc of your business over the balance of this year I mean, it's not a headwind there in any way.
Anything you can speak to based on historical or any other kind of anecdotes.
Yeah.
Well actually we don't see any kind of risk I told them and first of all we have the best races was sold out.
And the numbers are.
It's really growing the attention will be shift of course, another cycle in the sport.
Supporting the.
From the spot perspective, so thats part of our operation and I would like to add if I may another comment that we have totally positive on the input that the change of regulation. Both this year and that we cannot comment on the fact that the team, but specifically in this case or match the stuff that you've done an incredible job maybe set up.
The team didn't take the right opportunities, but what we saw on the track is well to erase industrial we wanted and I'm totally confident that next year. The fight on the track will arrive up to the end of the of the calendar and.
Yes.
It just seems the last race.
On the sporting side, there is a lot of attention today is a fight for places that also for the team perspective.
Is it related to their financial position and the financial rewarding if they achieve a brazil, but the other thing. So I think that there will be a lot of interest in Brazil, and that would that mean to with no problem.
Okay. Thank you.
Our next question is from David Joyce with Barclays. Please proceed with your question.
Thank you a couple on Formula one first I was wondering if you could help us understand what's incremental in the new agreement with with AWS.
And then secondly, I was wondering if you could explain what the gating factors would be to adding another.
One team.
Is it allowed in the current Concorde agreement or would that require renewal and is it a factor of maybe the buy in to keep everybody equal just being.
Kind of prohibitive, but if you could just walk us through the thought process.
Restrictions there would be helpful. Thanks.
Thank you David for the question.
As you can imagine on the incremental value.
AWS, we cannot go into the details but.
It is a very strong relationship.
It's starting from a very technical.
Content point of view, we are working together with them on the preparation of the graphics. We are working together in order to give you the right data to our customers and to our fans. So the fact that we have a new for so many years with the interest and the increase in term of financial contributions. It means that the also.
AWS recognize the power of our of our platform with regard to the.
The venue or the process related to the possibility of FY <unk> to be <unk> it can be.
It's the championship of course there is.
Families.
Both us and <unk> to be in agreement with that and I think thats. The first thing that we need to consider is.
This.
Eventual possibility will bring an extra value to the championship.
So of course, we got this.
Cash used internally and we see if there's any kind of a real potential new entry Cancun can give the benefit for the.
For the value of the channel on top of it that is of value that has to be recognized with the team that that already into the championship because of course.
They cannot.
Allow any dilution of their financial.
The partnership with the FY <unk>. So this is the what is written in the concrete agreement and but mainly that point is it. Thus eventually a new entry will bring a better positional F. One championship. This is really it's about value and in terms of value from the financial point of view any similar Baidu front. This portion.
If I may on that.
It's not a problem to do I think global team to have a better racing. Therefore, we would see we are amongst the situation. If there will be a real credible new entry.
They want to discuss with US we are ready to discuss but we have not we are not in our best position to date for that.
Great. Thank you very much.
Our final question comes from the line of Matthew Harrigan with benchmark. Please proceed with your question.
Thank you.
So you can question an interesting one, especially in the U S are you seeing a lot more activity on the game code versus game, that's been around forever I guess since 2000 and is there a potential I guess somewhat lean implementations of <unk>.
That are out there right now now that you've got a movie it feels like a video.
Video games and such are another area, where you could probably.
Increased ancillary puts us a little bit thank you.
Well, Matthew I think thats it.
The fact that we are bringing a new customer that's how we're getting younger and younger.
Will allow us to see on the licensing point of view, an incremental opportunity to increase their lending industry for us and this and this will happen. We are pretty sure that did we already saw this year an incredible effect on this on the other hand, I would say what we need to deal with focus is that's it.
Our physical sport on the track so any kind of growth that is happening on the E gaming.
That has to be translated to the passion that we want to see people pulling through the track and this is really the things that we are focused in because that's an opportunity to stabilize the ROFO as both of the future.
Makes sense. Thank you.
So operator I think we're done thank you all for your interest.
And the Liberty Media group and we look forward to seeing many new and a couple of weeks in New York.
Not until then the next call. Thank you very much operator.
You're very welcome. This concludes today's conference you may disconnect. Your lines at this time and we thank you for your participation.