Q3 2022 Liberty Media Corp Earnings Call
[music].
Okay.
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 1995, and actual events or results could differ materially due to a number of uncertainties, including those mentioned in Liberty media and most recent Form 10-K, and 10-Q are Liberty media.
<unk> most recent Form 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 statement contained herein to reflect any change in liberty media or not really.
Physicians expectations with regard there to or any.
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 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 Frank Mckay President and CEO . Thank.
Thank you.
Good morning today speaking on the call. We'll also have formula one's president and CEO Stefano Cao.
And 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 our sector. I mean, we took actions during the third quarter, we opportunistically repurchased about 21% of the one and three eights faster convert combining prudent debt management and effective share buyback.
One paid $64 million and battered paid $14 million to LSI.
Their respective intergroup interest.
The remainder of the purchase was funded with cash and $27 million from unwinding.
The unwind of a bond hedge and warrant.
Effectively this was a share repurchase of Crosby, LLC 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.
How does 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%, but it 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 a 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 acquisition months I've experienced to date.
And we continue to add exclusive enduring diverse content, both in and out of the car for example, we extended the NFL agreement.
Sports is come in obviously to be high appeal for new subs about converting to higher rates and higher retention once they are obtained.
I'm trying to live nation.
Well I've 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%.
Well I've also beat last quarter's record for highest quarterly attendance with over 44 million fans across 11000 events.
Her fan spending was up 30% through September and U S amphitheater.
Ticketmaster experienced all time high G T D, 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.
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 kind of continued growth also on 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 out of iconic race on schedule.
In Mexico City, where we have a three year deal with.
Which highlights the value of the F. 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 I'm thrilled that Apple as planned.
Which we think will be epic.
We have a star studded cast, including Brad Pitt and directed by Joseph Kosinski, and it's produced by Jerry Bruckheimer All stars in their own right.
A very exciting.
At the corporate level, we have refinanced the fault convertible on attractive terms with fewer shares underlying 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.
And at least 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.
It started June we were 10 and a 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 sell out is the truest and more tickets sold.
At the stadium since we had done.
It's flat 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. We think they ultimately pre value for the franchise and fan engagement, which will drive revenue, but an increase cost side.
The largest component has been reinvesting and increased payroll, we think that sets us well well well rather for future years, but other elevated costs from a record attendance and four additional 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 watch it in terms of finding the deal that we thought was attractive I would tell you we evaluated over 140 targets, but.
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 I already.
Additional corporate liabilities, if we were to extend the unwind into 2023, and therefore, we took action to unwind and return of 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 had 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 my vision Marshalls.
In September Liberty, Sirius XM group had 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 Braves 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 eight shares and 500000 outer ishares underlying the portion of their respective intergroup interest held by Alex <unk>.
Were 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.
$2 8 billion in principal amount of debt against these holdings.
Total Alice exam group attributed principal amount of debt is $13 4 billion, which includes $9 9 billion of debt that's directly at Sirius XM level.
Formula One group had attributed cash liquid investments and monitor high school 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 2020.
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 $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 yearend Formula One group has incurred approximately $20 million and costs and Zomax IPO in January 2021 through the initial warrant investment subsequent working capital loans.
The line these are material investments will not be recoverable.
But the $250 million toward purchase agreement at Formula One group had committed to almac will be terminated.
On the Formula one operating business, we will remind you that F. One is best viewed on a full year basis, given some volatility in the quarters.
One held 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 rates this year.
Race promotion revenue decreased accordingly for the quarter, the flyway races, typically pay higher fees than 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 recognized 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 did have modest increases in personnel costs due to a change in the companys out there from stock to cash.
This 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 branch group had attributed principal amount of six O $601 million Liberty.
Liberty and our consolidated subsidiaries are in compliance with our debt covenants at quarter end.
Now I will 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 the new technical regulations have to leave it at closer racing on the track that.
Instead of sticking pool, 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.
Football one just finished a couple of amazing we can see Mexico sitting in Austin.
The 2022 season has delivered exciting action on the track.
But it is tough and that has been incredible this season setting the record for most women into the season did in 14 ground. Please wins, so fighting's doesn't 'twenty two we this win in Mexico City last weekend.
We secure the second World Championship in Suzuka and Red Bull once the constructive championship the first since 2013.
The team dedicated the victory to reboot founder Dietrich, Massachusetts. He was a visionary who helped us form our sport and he will be missed.
Even with these championship settled there is still a battle among the drivers same constructor as wet they finished can have a meaningful impact both financially and operationally.
Excitement for our support continues to grow certainly we've seen that in the race attendance and now had 10 races with crowds over 300000 with three of those exceeded 400000.
Many of these events has been complete so sellouts.
A great example of growing interest is Austin, where we were 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 fan experience.
We've also seen more first time on female attendance at our races.
The 10 basis, while we gather spectators that data. This year first time attendees were at about 50% of the total crowds and.
And we've seen a surge in demand on the high then too we they can save in powder clip and our <unk> products.
These sorts of demand means our races slots at a highly Kobe 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 paddock labs and sponsorship.
We also announced a one year renewal for Belgium, and the three year than you will for Mexico City.
As Rick mentioned, the economic benefits F. One that's brought to Mexico City since 2015 has been incredible.
This highlights the value of our sport can bring to see this globally. Additionally, we will increase the number of sprint event in 2023 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 Puma. One in 2026, they have selected <unk> as their strategic partners and plan to acquire a stake in the sub group, who will complete as of now the factory team saw in 2026.
Formula one 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 F. One given though would have foreseen 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 driven by the stability provided under the new regulation and the growth of the sport all of which have been won in F. One 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.
Viewers competed to tooling as well as we have seen substantial interest related to our media rights, we announced a partnership with Sky that extent right in Germany.
In Italy until 2027, and the U K and Ireland until 2020 that Sky Sports F. One will continue to be the only dedicated channel to broadcast motorsport in each of these markets and they are highly rated commented he 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.
I've also seen attractive demographic shift with viewers, becoming more diverse and younger we also extend the Davita 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.
<unk> is commercially.
Through 18 races in 2022, they've seen an average audience of $1 2 million up from $9 9000 in 2021, the Miami Grand Prix through an evidence viewership of $2 6 million the largest U S oldest sounds Lakewood fertilized GP. Additionally, we extended our agreement with <unk>.
And in 2026 and secure the partnership with Telcel and Telmex in Mexico to bring Epsilon TD Pro two subscriber who can easily add the service onto their existing contest for mobile or Internet services.
The F. One esports. He this pro championship presented by AMCOL with tuneful four events each spanning over three years.
This includes more live show as the teams and the drivers battle for the $750000 Prize part similar to F. One we've seen several high profile drive as 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 Grand finale.
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 up.
This is the first F. One license experiential venue, but patterns can be fully immersed with 60 motion simulators and the experience the thrill of racing, while enjoying a 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 Aramco to pioneer of sustainable fuels through 2033. This is an important step to reach 100% sustainable fueled by 2026, which will be a requirement of all FAA check of ships as two and three have proven to be a great test.
Bad debt for innovation as they were with the 18 aegis ties now using for more what we continued 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 Epsilon family, our fans and our investors for all the support this year to model. We are 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 Buddha, We look forward to completing an amazing too.
<unk> thousand 22 season, as we traveled to Brazil, and Abu Dhabi attitude that full speed ahead, and now I will turn the call back over to Greg Bye-bye gel.
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 you.
You can email investor at Liberty Media Dot com.
We appreciate your continued support of an 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 Q.
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 and and I guess, that's 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 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 that are on the table and discuss them before and I'm 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, we'll make the announcements.
I just want to reiterate we think live is very attractive.
We think that certainly the value was not fully recognized in our sector.
And we think there are things that you know businesses that are worthy to add onto live that could be interesting that are opportunities for us. So there's much we can do around that.
Around the lives take in particular, but I'm less likely to go through every nuance of what we can do with Atlas XM, 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 and in the short term next 12 months are these things that you know will take longer to play out any thoughts around helping us with timeframe timetables.
Give you full credit for persistence, 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 a T V 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 and that must deliver a lot of values for motors 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 that I'm not going to answer with you Brian .
Excellent okay. Thanks, Craig.
Well actually you know totally right. There if that was an increase it is just about the nature of sending set in terms of the well.
So what he's bringing mainly to new audiences and that is true.
We are happy with the way that would set up a holding is it more relates to the fact that that is the fee that they have to pay that is at the high end part of the figure that is allow a site and everybody that there's not the challenge, but the opportunity to move forward is that how we can maximize the revenue and AR and monetize did that view that we can.
<unk> takes on the side of it for one is becoming more and more effective that's really well we're going to do in the future. There are different ways to do it said that I'm sure that we do not capitalize these growths in the in the best way that we can in the next couple of years.
Thanks Stefano so.
Brian I'm going to give you confidence I'm going to restate I still believe Sirius XM, it's an ATB no change in our position.
Yeah.
These things tend to get involved and firmed up at the time something 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 get there.
Trackers give you because you can sort of move assets and liabilities across.
Is there a is there, but when I step back and think about sort of broader liberty. It feels like there 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.
Yeah.
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 T D.
Commerce hub.
Expedia Liberty Expedia go into Expedia.
The list goes on and we are obviously breaking curate off on its own I mean, I can you know.
Many many times and I've got that's going back in my 17 years I'm not sure we've had a 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.
Back.
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 as the 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 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 as Baxter, 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 your media rights and we will 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 are in light of your net leverage and decision on almac. Thanks.
Thanks, David I think that's what we talked about media rights. He is a is a landscape where but we have to consider the evolution made into new markets.
If it would be kind of in the attractive fulfillment what in the more let's say 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 not really the ones that can extend that from the financial that also for the wooden is supposed to do and the consequent to.
Once a cheap it is clear that our the fact that we are growing.
Give us the potential for the future to see how that kind of dimension notes all the 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 Florida, our echelon Tvs is going tremendously well to be in.
Cooperating and deal for our customers. So that's really the strategy that we have taken so far and and and and this is I would say if you go back to sky the recognition of the value of that investment for the betterment of our pets.
One concrete in the world.
Yeah, if I could just add on I mean.
Enforced the point Sky is a great partner.
Across 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 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.
You know 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.
Buyback 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 their 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 opera.
Charities.
Thank you.
Yeah.
Our next question is from bench Swinburne with Morgan Stanley . Please proceed with your question.
Thanks, Good morning, a few one on F. One for I guess for Greg or Stefano or or both of you on the ESPN deal, which is our Disney deal is now formally announced.
Yeah. He's at least according to 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 E. S. P. N. A b C deal. Besides more money that you think are strategic and sort of the benefits of this agreement and the duration that you pick.
Because 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.
All are there if theres one timers would be helpful. Thanks, everyone. So I'll touch on I'll touch on ESPN first and then let Stefano add if it's okay.
Look we.
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 in 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 Brett 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 <unk>.
Turning 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 FY about 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 will see in three years, when we renew with somebody.
It's definitely what would you add I couldn't agree more with Greg and team that we need to recognize that because sometimes we have a very short memory a couple of years ago, but not so many media right holders in U S. The one thing to invest with us and now we need to get them ready to ESPN that in terms of accounting until a lot of attention in terms of how.
They are really pulling pool, one and they did a phenomenal job, which would be even stronger in the next three years because we have agreed the you know the position of the reason that in the in certain channels as well.
I have more attention to that so I think that the we thought carefully about these tests and I think that the fact also that the disagreement we keep a global naturally the F. M. P. D. Right, let's say you know what size 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.
And you asked that there would be other players that will be around the table and interested to be with us in the future.
Yeah, and then on your other two questions Opex was pretty much de minimis for the quarter will just remind you that about 80% of our revenue and costs are actually in U S. Dollar. So we do have ups and downs on FX from time to time. It was 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 in.
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, it's still not material, but obviously there are some costs in there related to Vegas and if they have their prepare for their launch event and ticket.
Ticket sales.
Thanks, Ryan 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.
You know that.
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 F. One 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 cause communities are.
Promoters are economically challenged.
Thank you Barton.
Let's let me figure out these.
These things first of all being a world Championship weekend are spread around the world at least call that in these kind of situations to manage on the other hand. The fact that we have long term agreements would reduce the exposure to these these races and what I can say and share with you is that we already see an incredible number of pre legislation with regards to the <unk>.
Think of next year. So this is a good sign in that context that you're seeing in mainland Europe , well, let him leaving.
It is clear that this recession is taking place, but the thing that they wait till we have a structure. The way that we have done the deal will protect us will enable us to move forward in this direction. Therefore, I would say these these kind of situation.
Let us think he thought that we should be optimistic and discounted studies of course that we monitor are about the this.
This is what we see today.
Yeah, I think and then if I could.
I mean, if that were seeing a case where.
You look across our business high end 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 and including those in the in Europe and.
There is high demand both for among consumers and therefore promoter confidence against the long term contracts, we feel very good.
Okay and then.
And then the other thing I was curious about is the.
The fact that we've got the the race winter if the team winters pretty well shown up well before the season is over at Formula One.
Versus last year things were pretty competitive right you know until the very end.
Flap, what difference does that make in terms of the financial.
<unk> 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.
All of them and first of all we have the best races with Philadelphia.
And the numbers are it's really growing the attention will be ships of course, yet another cycle into supporting on the sporting a sporty perspective. So that's part of our operation and that I would like to add if I may another comment that we have.
Totally positive on the input that the change of regulation broke this year and we cannot comment on the fact that the team, but specifically in this case, whether or not the stuff that he doesn't incredible job maybe set up a team didn't take the right opportunities, but what we saw on the track is a real race and that's why we wanted and the.
Totally confident that next year. The fight all detract will arrive up to the end of the of the Columbia and the N and M. It yet and it just seems the last race.
On the sporting side that there's 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 financially rewarding if they achieve up was even better than the other thing. So I think that there would be a lots of interest the industrial and end up would that be too 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 the with AWS.
Then secondly, I was wondering if you could explain what the gating factors would be to adding another if one team is it's 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.
It kind of prohibitive, but if you could just walk us through the thought process and.
Restrictions there would be helpful. Thanks.
Thank you David for the question as you can imagine the one the only incremental value.
That'd be less we cannot go into the details, but it is a very strong relationship that are it's starting from a very technical content.
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 use it with the interest and the increase in some of our financial contribution and it means that the old. So you know as that would actually cause that the power of our of our.
With regard to the you know just the the value or the process related to the <unk>.
Possibility, that's one thing to be either be it can be a into the it's the championship of course, there is that primarily that that are both us and <unk> to be in agreement with that and then and I think that's the first thing that we need to consider.
This.
Eventual possibility will bring an extra value to the championship Ah if so of course, we cannot discuss it internally and we see if there's any kind of a real potential new entry Cancun cannot give the benefit for the fourth.
For the value of the chunk on top of it but he's a venue that has to be recognized for the team, but that already into the championship. Because of course, you know they cannot allow any dilution of their financial.
Partnership would they have to watch out for so this is the what is written in the concrete agreement and but mainly the 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 term of value from the financial point of view any similar baidu felt this potent what to do.
And if I may on that.
It's not a problem to do I think level of team to have a bedroom racing. Therefore, one would see well amongst the other situation is it won't be a real credible a new entry.
And I want to discuss with US we are ready to discuss but we have not we have not seen a vast 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 inflection in interest in F. One, especially in the U S are you seeing a lot more activity on the you want a game called about this game has been around forever I guess since you know 2000 and is there a potential with the I guess somewhat lean implementations of Ey are that are out there right now that now that you've got a movie it feels like.
Yeah.
Video games and such are another area, where you could probably increase your ancillary but tell us a little bit. Thank you.
So Matthew I think that's the.
The fact that we're bringing a new customer that's out of getting younger and younger will allow us to see on the licensing point of view any incremental opportunity to increase that heading is doing for us and this and this will happen we have a pretty short about did we already sold this year an incredible effect on this on the other hand, I would say, what we need to deal with.
Focus is that the.
Our physical sports on the check so any kind of growth that is happening on the E. Gaming all of that has to be translated to the passion that we want to see people willing to the track and this is really the things that we are focusing because that's an opportunity to stabilize the ROFO with 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.