Q3 2022 Liberty Media Corp Earnings Call
Welcome to the Liberty media corporations third quarter 2022 earnings conference call joining.
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 uncertainties, including those mentioned in Liberty Medias <unk>. Most recent 10-K and 10-Q.
The acquisition 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.
The update of revisions to any forward looking statement 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 EBITDA.
Required definitions and reconciliations for Liberty media and Siriusxm 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 Gregg <unk> President and CEO .
Thank you.
Good morning today speaking on the call. We'll also have formula one's President and CEO Stefan I was wondering.
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 second 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 LSI to settle their respective intergroup interest.
The remainder of the purchase was funded with our cash.
Cash and $27 million.
Unwind of a bond hedge and warrant.
Effectively this was a share repurchase across the LFC 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 evident was flat as we continue to make investments, including and product development.
Despite the soft auto sales, we continue achieve vehicle penetration.
And enabled 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.
SAR impact on the top of the funnel.
Sirius is also making progress in our streaming business September was one of the biggest streaming sub acquisition months and experienced to date.
And we continue to add exclusive and 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'd mention 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 per.
<unk> spending was up 30% through September and U S amphitheaters.
Ticketmaster experienced all time high GTD, which was up 62% versus 2019.
Live is closing out a record year, but there is 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 continued 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 the.
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 thrilled that Apple is planned.
Which we think will be epic.
We have a star studded cast, including Brad Pitt, it's directed by Joseph Konwinski and is produced by Jerry Bruckheimer All stars in their own right.
Very exciting.
At the corporate level, we have refinanced the forlorn convertible on attractive terms with fewer shares.
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 NL.
<unk> title.
Finished $101 61 for the first time since 2003, they won over 100 games.
And it was an epic come back for the second half of the season as you may recall beginning.
Start of 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.
Finale was not what we would hope, but I remind you we did win the world series last year, where for a few more weeks the reigning World series Champions.
And there are wonderful things that come from that but it also can lead to increased costs.
They ultimately create value for the franchise 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 up well rather for future years, but other elevated costs from our record attendance and four additional home we have other <unk>.
Weighted cost 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 boat 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 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.
Which 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 months.
In September Liberty, Sirius XM group paid approximately $284 million to repurchase $210 million aggregate principal amount of the 175% 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 how by Alex <unk>.
Canceled.
Liberty Sirius XM group also received $27 million of proceeds from the net 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 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 Alex exam 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 go public holdings of $1 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 its going to have one leaving $567 million at the corporate level.
During the quarter, we issued 475 million aggregate principal amount of.
A 225% 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.
One is $500 million revolver is undrawn and formula one leverage at the end of the world.
Yes.
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 cost since <unk> IPO in January 2021 through the initial warrant investments subsequent working capital loans.
On online these are material investments will not be recoverable.
But the $250 million toward purchase agreement that 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.
At <unk> seven races. During the third quarter is about 2021 and 2022.
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 race calendar in the quarter, where we recognized 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 and four.
The cost of servicing significantly larger backlog attendances 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.
We did have modest increases in personnel cost to 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 Brad's group had attributed principal amount of debt 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 the 2022 season has continued to deliver very impressive racing for all our offense and once again shows have been you've taken through regulation has delivered a closer racing on the track that.
The incidence in tumor one is huge from fence potential partners 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 sitting in Austin.
And the 2022 season has delivered the exciting action on the track.
Most of US tapping that has been incredible this season setting the record for most women into season did in 14 ramp. 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 Abboud wounds that constructive championship. The first since 2013.
The team dedicated the victory to reboot founder Dietrich, 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 input both financially and operationally.
Excitement for our support continues to grow certainly we've seen that in the race attendance and now had 10 bases with crowds over 300000 with three of those exceeded 400000.
Many of these events has been complete so sellouts.
The example of growing incidence is Austin, where we welcomed 440000 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 experience.
We've also seen more first time as he made attendance at our races.
The 10 basis, while we get the spectators that data. This year first time attendees were about 50% of the total crowds.
And we've seen a surge in demand on the high then we.
We they can see it in powder slip and TWC 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 will raise debt through 2025 with expanded rights for full one related to broadcast powder clip and sponsorship.
We also announced a one year renewal for Belgium, and the three year than you will for Mexico City.
As Greg 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's event 2033 to six from that commentary.
These events that are in high demand from our promoters and provide additional sponsorship opportunities and value to our broadcast partners.
We'll 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 the sub group, who will compete doesn't know the factory team. So in 2026.
So I'm going to present, the global stage for the Audi brand and they see the high performance end competition, our sport as a driver of innovation and technology.
Audi was quoted 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.
Or even by the stability provided under the new regulation and the growth of the support all of which have been won 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 double positive 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 extend to write in Germany.
In Italy until 2027, and the UK and Ireland until 2029 Sky Sport F. One will continue to be the only dedicated channel to broadcast the motorsport in each of these markets and they had 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.
They've 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 old.
Broadcast commercial fleet.
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> photo ICP. Additionally, we extended our agreement with <unk>.
Until 2026, and secure the partnership with Telcel and Telmex in Mexico to bring excellent 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 Prize pumps similar to F. One we've seen several high profile drivers move across the group. We look forward to building on the incredible engagement for 2021, when we saw $4 5 million fans tuned in.
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 cable onda.
This is the first F. One license experiential venue, but patterns can be fully immersed in 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 these concepts into additional cities and finally to further our progress.
To net zero formula to a formula three announced a partnership with Aramco to pioneer sustainable fuel from 2033. This is an important step to reaching 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 they were with the <unk> now using from where what we continued to show the innovation and leadership in the technology space and believe that our sustainable too can have a huge real world benefits for the automotive sector and greenhouse gas emissions.
I want to thank the Exelon family.
Our plans and our investors for all the support this year to model their hosting a large part in Las Vegas at Caesars Palace, we are bringing the best relation in the world to the entertainment capital of the World, including Alaska run on Las Vegas Boulevard, We look forward to completing an amazing 2022 season, as we traveled to Brazil.
Another doubling of attitude that full speed ahead.
Now ill 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.
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.
You can email investor at Liberty Media Dot com.
We appreciate your continued support of an interest in Liberty media and with that operator I'd.
I'd 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 that ownership stake thank you.
Well, Doug I think thank you for the question I think we've gone through.
Some of the options are on the table and discussed it before and I am probably.
Unlikely to do that to go through 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 is 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 live stake in particular, but im less likely to go through every nuance of 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 and 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've 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 no 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 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.
<unk>.
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. If that was an increase it is just magnificent in term of Av.
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 there is a 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 this type of it for one is becoming more and more effective that's really well we're going to do in the future. We have a different way to do it and 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 serious ex Amazon ATB no change in our position.
Yeah.
These things and against all of them.
Firmed up at the time.
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 have.
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 media, which was effectively direct.
TB.
<unk> hub.
Expedia Liberty Expedia go into Expedia.
List goes on and we obviously breaking curate off on its own.
Many many times and I think 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 or shattering.
The stack.
Sort of made you more in the direction of not needing flexibility or is that sort of a false interpretation.
Yes, Im not sure I would read that as interpretation I think it is a recognition of these things have a life.
The market at a moment in time, we thought there was an opportunity we couldn't find the one we wanted unlike many sponsors of Spacs, who 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 specs are 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 the 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 your 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 almac. Thanks.
Thanks, David I think Thats, what we talked about media right.
Is the landscape, where we have to consider the evolution mainly in the new markets.
Is it becoming attractive fulfillment what in the more of a traditional mature markets I think that whilst 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 awareness both the deal and the consequent to.
One for cheap 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 us could be attractive for our business of course, we want to make sure that things for the future. The decision that is also the possibility to afford our echelon television is going tremendously well.
Incorporating the deal for our customers. So that's really the strategy that we have taken so far 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>.
One content in the world.
Yeah.
Yes, if I could just add on I mean.
Reinforce the point Sky is a great partner Cros.
Across three important geographies, but more than that they're a great partner in terms of their production.
Have 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 youre 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 difficulty in the market a non market.
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 outs.
Side opportunities.
Thank you.
Okay.
Our next question is from Ben Swinburne with Morgan Stanley . Please proceed with your question.
Thanks, Good morning.
Q1 on F. One for I guess for Greg or Stefano or both of you on the ESPN deal, which is our Disney deal is now formally announced.
At least part of the press you guys took less money 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.
It's more money that you think are strategic and sort of the benefits of this agreement and the duration that you picked because obviously the U S market is a huge opportunity for you.
And then maybe this is for Brian but just.
You 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 I'll touch on I will touch on 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 growth to support the United States.
Cause 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 and I think the opportunity.
To work with them on things like F. One TV were always 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.
I have to tell you. We're also excited about the kind of opportunity we will see in three years, when we renew with somebody.
Definitely what would you add I couldnt agree more with Greg and team.
We need to recognize that because sometimes we have a very short memory.
Couple of years ago, but not so many media right holders and use that 1% to invest with us and now we need to give the credit to ESPN that in terms of content until a lot of attention in terms of how they are really fully pool, one they did a phenomenal job.
Each will be even stronger in the next three years, because we have agreed that the position of the race.
Symptom channel.
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. There will be other players that will be.
Around the table and interested to be with us in the future.
Yes, and then on your other two questions FX was pretty much de minimis for the quarter. We will just 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.
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.
And the number of races that were either European versus fly away. We we lost Russia in the current period. So that has a good 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.
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.
Promoters are economically challenged.
Thank you Barton.
Let me figure out. These these things first of all being a world championship weekend spread around the world at least competitive these kind of situations to manage on the other hand. The fact that we have long term agreements will reduce the exposure to these these rates and what I can say and share with you is that we already see an incredible number.
Pre registration with regards to the ticketing of next year. So this is a good sign in a context that you are seeing in mainland Europe .
Thanks.
It is clear that this recession is taking place, but the thing thats the way we structure the way that we have done the deal will protect us.
With enable us to move forward in this direction. Therefore, I would say at this current situation.
Let us thinking that we should be optimistic and discounted studies of course.
We monitor that.
This is what we see today.
Yes, I think and then.
If I could just add that we're seeing a case where.
You look across our business and consumers.
Are 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.
Including those in the.
In Europe and.
There is high demand both for among consumers and therefore promoter confidence.
Against those long term contracts, we feel very good.
Okay and then the other thing I was curious about it.
The fact that we've got the race winner if the team winners pretty well shown 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 is that a headwind in any way.
Anything you can speak to based on historical or any other kind of anecdotes.
Well actually we don't see any kind of risk I told them and first of all we have the last race was sold out.
And the numbers are.
It's really growing.
Attention will be shift of course, another cycle in the sport.
The sporting.
This 40 perspective, so thats part of operation and I would like to add if I may another comment that we are totally positive on the input that the change of regulation throughout this year and that we cannot comment on the fact that the team, but specifically in this case, whether or not the stuff that is an incredible job maybe set up.
Tim 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 Columbus and yet and it just seems the last race.
On the sporting side that has a lot of attention that he is a fight for places that also for the team perspective.
It's related to the financial position and the financial rewarding if they achieve a brazil, but the other thing. So I think that would be a lot of interest in Brazil, and Abu Dhabi 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 <unk>.
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.
Because I meant to value.
Ws that 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 terms of financial contributions it means that the old so.
AWS or they could make the power of our of our platform with regard to the.
The value or the process related to the possibility of epsilon team to be either be it can be.
<unk>.
The championship of course, there is.
Primarily that.
Both us and <unk> to be in agreement with that and I think thats. The first thing that we need to consider.
This.
Eventual possibility will bring our next to value to the championship.
So of course, we don't know.
Cash it 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 chunk on top of it that is of value that has to be recognized with the team that that already into the championship because approach.
They cannot.
Allow any dilution of their financial.
The partnership with the <unk>. So this is.
What is written in the cooperative agreement and but mainly that point is it does eventually a new entry will bring a better positional F. One championship. This is really it's about value and in terms of revenue from the financial point of view any similar baidu felt this potent point of view.
If I may on that.
Another problem to do I think global team to have a better racing. Therefore, we would see we would monitor the situation if it will be a real credible new entry.
And I want to discuss with US we're ready to discuss but we have not we have not seen nova position today 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.
What's the big influx in interest in F. One, especially in the U S are you seeing a lot more activity on the game <unk> sustained its been around forever I guess since 2000 and is there a potential I guess somewhat lean implementation.
Or that are out there right now now that you've got a movie it feels like a.
Video games and such are another area, where you could probably.
The increased ancillary puts us in a little bit thank you.
So Matthew I think thats.
The fact that we are bringing in new customers that are getting younger and younger.
It will allow us to see on the licensing point of view, an incremental opportunity to increase that heading is doing for us and this and this will happen we are pretty sure liana.
So this year an incredible effect.
On this on the other hand, I would say, what we need to deal with focus is that.
Our physical sports on the check so any kind of growth that is happening on the E gaming.
Has to be translated to the passion that we want to see people pulling to the track and this is really the things that we are focusing 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.
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 and.
And if 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.