Q3 2022 Liberty Media Corp Earnings Call
Yes.
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.
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 that's calling for 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.
Acquisitions. 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.
Any updates or revisions to any forward looking statement contained herein to reflect any change in liberty media or not really acquisitions expectations with regard there to or any change in events conditions or circumstances on which any such statement is based on today's call. We will discuss certain non-GAAP financial measures for Liberty media and Siriusxm, including.
Adjusted OIBDA, and adjusted EBITDA 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 frankly.
President and CEO .
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 L. A sector. I mean, we took actions 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 and battered paid $14 million to LLS to settle their respective intergroup interest.
The remainder of the purchase was funded with cash and $27 million from.
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 Batra 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% and <unk> 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.
Are we continuing to monitor headwinds in advertising and the reduced.
So our impact on the top of the funnel.
Sirius is also making progress on our streaming business September was one of the biggest streaming sub acquisition months I've 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 come in obviously to be high appeal for new subs, both convert at a higher rate and a 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%.
<unk> 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 amphitheaters.
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.
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 pattern club attendance with many sellouts and records broken.
Importantly, as we've invested there has been again 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, which highlights the value of the F. One brings to all cities for example between 2015 and 2021.
In 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. An example, recently is thrilled that Apple is 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 flock 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 Steven securing their fifth straight.
And at least 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 the.
Starting June we were kind of half games behind the mess.
From there we went on a major league best nearly 700 win rate from.
Let's start with that June until 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.
Flat to 2000.
Obviously.
Finale was not what we would hope.
But I'll 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 our Austin can lead to increased costs. We think they ultimately pre value for the franchise and fan engagement, which will drive revenue.
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 other elevated costs from a record attendance and four additional we have other elevated costs around it 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 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.
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 Siriusxm 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 live nation Marshalls.
In September Liberty, Sirius XM group paid approximately $284 million to repurchase $210 million aggregate principal amount of the $1 37, 5% 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 a shares and 500000 IRT shares underlying the portion of their respective.
<unk> held by <unk>.
Cancel.
Liberty Sirius XM group also received $27 million proceeds from the 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 L. S 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 mono 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 so.
A portion of the proceeds from the offering were used to repurchase $213 million aggregate principal amount of the 1% fall in 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 fourth.
Oh My gosh.
As Greg mentioned <unk> filed a proxy statement to obtain stockholder approval to unwind before yearend Formula One group has incurred approximately $20 million in costs since <unk> IPO in January 2021 through the initial warrant investment in subsequent working capital loans.
The line 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 F. One is best viewed on a full year basis, given some volatility in the quarters.
I have 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 a race 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 prepayments team payments pro rata across the race calendar 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.
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 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'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 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.
Formula One just finished a couple of amazing weekends in Mexico sitting in Austin.
And the 2022 season has delivered the exciting action on the track.
Much this top and that has been incredible this season setting the record for most leaning into the season did in 14 ramp. These wins. So fighting this doesn't twenty-two we this win in Mexico City last weekend.
He secure the second World Championship in Suzuka and Red Bull once the constructive championship the first since 2013.
The team dedicated the victory to Red Blue Thunder Dietrich Matthews. He was a b journey, who help transform our sport and he will be missed.
Even with these championship settled there is still a battle among the drivers same constructor as where they finished can have a meaningful input both financially and operationally.
Excitement for our sport 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.
The 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 we've seen a surge in demand on the high then to whether they can save in powder clip and that Pwc brothers.
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 renewal for Mexico City.
As Rick mentioned, the economic benefits F. One that's 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 in 2023 to six from the commentary there.
These events that are in high demand from our promoters and provide additional sponsorship opportunities and value to our broker partners.
We'll 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 throughout 2026.
So I'm going to 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 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.
Or even 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 view.
He was competed to tooling 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 U K and Ireland until 2020 that Sky Sport. That's one we'll continue to be the only dedicated channel to broadcast motor sport in each of these markets and they had 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, they've also seen attractive demographic shift with viewers become.
And 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 a b C or ESPN with old broadcast commercial fleet.
Through 18 races in 2022, they have seen an average audience of $1 2 million up from $9 9000 in 2021, the Miami Grand Prix through an evidenced viewership of two 6 million the largest U S oldest saw record photo light GP. Additionally, we extended our agreement with <unk>.
Until 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 content 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 ground peanuts.
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 immerse. It 60 motion simulators and 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 reaching 100% sustainable fueled by 2026, which will be a requirement of all FAA championships as two and three have proven to be a great test.
Bed for innovation as they were with the 18 aegis ties now using for more of 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 F. One family.
Our fans 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.
In Abu Dhabi attitude that full speed ahead, and now I will turn the call back over to Greg Bye-bye Joe.
Thank you Stefano and thank you Brian .
We look forward to seeing many of you at our annual Investor Day on Thursday November 17th leaves.
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 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 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 and 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 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 <unk>.
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's much we can do around that.
Around the life stake 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 and in the short term next 12 months, where these things that 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.
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.
It 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 that I'm not going to answer with you Brian .
Excellent okay. Thanks, Craig.
Well actually totally right. The attendance increases is just mother nature, sending set in terms of the well.
For one he's bringing mainly to new audiences and that is true.
We are happy with the way that would sort of promote the is it more relates to the fact that that is a fee that they have to pay that is at the high end if possible a figure that is allow a site and everybody that that is not the challenge, but the opportunity to move forward is that how we can maximize the revenue and monetize the revenue 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 be a nice couple of these.
Thanks Stefano so.
Brian 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 and against all of them.
At the time.
It 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 the trackers give you because you can sort of move assets and liabilities of cross.
Is there is your you know, 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 back.
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 media, which was effectively Directv.
Commerce hub.
Expedia go at Liberty Expedia go into Expedia.
The list goes on and we are obviously breaking curate off on its own mini.
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 of shuttering this back.
Now did 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 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 Ah I think Spacs 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 a recognition of those factors not any statement about lack of optionality or flexibility or desire for that.
Okay. Thank you.
Our next question comes from David Karnofsky with J P. Morgan. Please proceed with your question Hi.
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 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.
It would be kind of an attractive form of 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. It 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 view.
Once a cheap it is clear that our the fact that we are growing give us potential for the future to see how it does kind of dimension no totally 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 they use for the future.
Decisions that is also the possibility to Florida, our echelon Tvs is going tremendously well to be incorporated in the 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.
At one Congress in the World.
Yeah, if I could just add on I mean, I reinforce the point Sky is a great partner.
<unk> 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 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.
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.
Okay.
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.
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 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 Didnt 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 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 the United States our COO.
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 opportunity.
To work with them on things like F. One T V.
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'll 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 that wanted 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 fully pool, one they did a phenomenal job, which would be even stronger in the next three years, because we have agreed but you know the position of the reason that in the in certain channels and to have more attention to that so I think that's the way we had thought carefully about these tests and I think that the fact also that.
With this agreement we keep it as Michael mentioned the F. M. P. D right, we're seeing 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 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 dollars. 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 the launch event and ticket.
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.
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 coast communities are.
Promoters are economically challenged.
Thank you Barton I mean.
Let's let me figure out these.
These things first of all being a war championship weekend are spread around the world at least converted these kind of a situation to manage on the other hand. The fact that we have long term agreements with reduced the exposure to these these raised and then what I can say and share with you is that we already see an incredible number of pre registration with rigor.
The ticketing of next year. So this is a good sign in that context that you're seeing in mainland Europe , where what I'm, leaving.
It is clear that this recession is taking place, but the thing that the the way we are structured the way that we have done the deal will protect us when will enable us to move forward in this direction. Therefore, I would say these these kind of situations.
Let us thinking that we should be optimistic and discounted studies of course, we monitor the this is what we see today.
Yeah, I think and then if I could just add.
We're 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.
Including those in the in Europe and there.
There is high demand both for among consumers and therefore promoter confidence on the against the 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 the race winner 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 now until the very young boy flap, what difference does that make in terms of the financial.
Part 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 a risk I told them and first of all we have the last races with Philadelphia.
And the numbers are it's really growing the attention will be ships of course, you're in other sites on the sporting August 14th.
40 perspective, so that's part of our operation and that I would like to add if I may another covenant that we have totally positive on the input that the change in regulation royalty Sheila and 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.
It didn't take the right opportunities, but what we saw on the track is a will to erase industrial we wanted and I'm totally confident that next year. The fight all the tracked with a wrap up at the end of the calendar.
And in the end it yet and it just seems the last race.
On the on the sporting side, there is 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 will be a lot of interest in there.
And that would that be too with no problem.
Okay. Thank you.
Yeah.
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 if one team.
Is it allowed into current Concorde agreement or would that require renewal and as it's a factor of maybe the buy in to keep everybody you know equal just being.
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 cause I meant to value or the AWS. We cannot go into the details but it is a very strong relationship that are it's starting from a very technical content.
Comfort 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 our financial contribution it means that the old. So you know AWS actually cause like the power of our of our COO.
With regard to the you know just the the value or the process related to the possibility of F. One team to be either be it can be a into the it's the championship of course that is the primary that's that are both us and S. A has to be in agreement with that and then.
And I think Thats, the first thing that we need to consider.
This.
Eventually, possibly it 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 is a value that has to be recognized for the teams at 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 cooperative agreement and but mainly the point is it.
Eventually a new entry will bring a better positional F. One championship. This is really a it's about value and in terms of value from the financial point of view any similar baidu further supported what to do.
And if I may on that.
It's not a problem to do I haven't level teams do have a bedroom racing that's what one would see well amongst all the situation is it won't be a real credible a new entry.
He 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.
So you can flex in interest in F. One, especially in the U S are you seeing a lot more activity on the you want your game Codemasters game, that's been around Forever I guess since you know 2000 and is there a pretense all with I guess, it's somewhat lean implementations of Ey are that are out there right now that now that you've got a movie it feels like.
Our video games and such are another area, where you could probably.
Hi increase yet ancillary, but tell us a little bit thank you.
Well, Matthew I think that the.
In fact that we're bringing a new customer that started getting younger and younger will allow us to see on the licensing point of view any incremental opportunity to increase does that industry and for us and this and this will happen we have a pretty short about did we already show the sheer incredible effect on.
On this on the other hand, I would say what we need to stay always focus is that's it.
We are a physical sports on the check so any kind of growth that is happening on the E gaming or 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 focusing because that's an opportunity to stabilize the growth always thoughtful 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 of you in a couple of weeks in New York 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.