Q1 2023 Liberty Media Corp Earnings Call

Operator: Welcome to the Liberty Media Corporation's 2023 Q1 earnings call. During the presentation, all participants will be in a listen-only mode. Afterwards, we will conduct a question and answer session. At that time, if you have a question, please press star one on your telephone keypad. As a reminder, this conference is being recorded 5 May. I would now like to turn the conference over to Shane Kleinstein, Vice President of Investor Relations. Please go ahead.

Welcome to the Liberty Media Corporation 2023, Q1 earnings call. During the presentation, all participants will be in a listen only mode.

Afterwards, we will conduct a question and answer session.

At that time, if you have a question. Please press star one on your telephone keypad as a reminder, this conference.

Is being recorded May 5th I would now like to turn the conference over to <unk>, Vice President of Investor Relations. Please go ahead.

Shane Kleinstein: 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. Actual events or results could differ materially due to a number of risks and uncertainties, including those mentioned in Liberty Media's most recent forms 10-K and 10-Q filed with the SEC. These forward-looking statements speak only as of the date of this call, and Liberty Media expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statement contained herein to reflect any change in Liberty Media's 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 our non-GAAP financial measures for Liberty Media and SiriusXM, including adjusted OIBDA and adjusted EBITDA.

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.

Cool events or results could differ materially due to a number of risks and uncertainties, including those mentioned in Liberty Medias. Most recent Form 10-K, and 10-Q filed with the SEC. These forward looking statements speak only as of the date of this call and Liberty media expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward looking statements contained herein to reflect any change in liberty.

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 including adjusted OIBDA and adjusted EBITDA the required definitions and reconciliations for Liberty media Sirius XM scheduled one through three can be found at the end of the earnings press.

Shane Kleinstein: The required definitions and reconciliations for Liberty Media and SiriusXM, Schedules 1 through 3, 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 Greg Maffei, Liberty's President and CEO.

Please issued today, which is available on Liberty Media's website now I'd like to turn the call over to Greg Mustang and Liberty's President and CEO .

Greg Maffei: Thank you, Shane, and good morning. Today, speaking the call, we will also have Formula One's President and CEO, Stefano Domenicali, and Liberty's Chief Accounting and Principal Financial Officer, Brian Wendling. I'm going to first update you on the split off of the Braves and the creation of the new Liberty Live tracker. We filed the amended S4 and are pleased with the speed of the SEC review. We believe we are nearing the end of that SEC process, and we are still targeting completion before the end of Q2. Turning first to Liberty SiriusXM, we continued our efforts to de-lever and simplify the balance sheet there. We raised $575 million of 3.75% LSXM converts, and we used the proceeds to repurchase 703 principal amount of LSXM debt, including $591 million of the 1.375% basket convert and $112 million of the 2.125% SIRI exchangeables.

Thank you Shane and good morning.

Today speaking on the call. We will also have formula one's President and C E O Stefano Domenicali.

And Liberty's, Chief accounting and principal financial Officer, Brian Wendling.

I'm going to first update you on the split up of the Braves the creation of the new Liberty Live tracker, we filed the amended S. Four and are pleased with the speed of the SEC review.

We believe we are nearing the end of that FCC process, but we are still targeting completion before the end of the second quarter.

Turning first to Liberty Sirius XM.

We continued our efforts to delever and simplify the balance sheet. There, we raised $575 million of three and three quarter L. S. Like some converts and we use the proceeds to repurchase seven.

703 principal amount a L S exempt debt, including.

$591 million of the one and three eighths basket convert and $112 million of the two and $2, 125% series exchangeable.

Greg Maffei: We also repaid the remaining balance of those in April. That was a reduction in gross debt, just over $400 million year to date, including the April activity. The reclassification of the LSXM tracker without the live stake will simplify our structure further. We continue to be focused on rationalizing SIRI and LSXM structures in the near term. When we look at SiriusXM itself, as expected, they had a challenging Q1 due to the SAAR and ad market trends. We expect this is the low point of the year on net self-pay net adds due to the lower Q4 trial starts, the seasonal Q1 higher churn, and the pullback in marketing as we wait to roll out our new app. Advertising did perform better than expectations. Podcasting continues to be a bright spot.

We also repaid the remaining balance of those in April .

That was a reduction in gross debt just over $400 million year to date, including the April activity.

The reclassification of the <unk> and tracker without the lifesaving will simplify our structure further and we continue to be focused on rationalizing CRE and <unk> structures in the near term.

Let me look at Sirius XM itself.

As expected, we had a challenging first quarter due to the SAR in AD market trends. We expect this is the low point of the year on net pay that self pay net adds.

The lower Q4 trial starts the seasonal Q1 higher churn and the pullback in marketing as we will wait to rollout our new app.

Advertising did performed better than expectations and podcasts and continues to be a bright spot.

Greg Maffei: We saw solid progress in rolling out 360L, our revolutionary new product enhancement, which leverages the best of our content and interactivity. We expect 40% penetration in new car trials by year-end 2023. We see a good conversion lift in vehicles with 360L, particularly as consumers are aware of and use advanced features. We did take costs out of the business at SiriusXM with an 8% workforce reduction in March, and we are confident we will see improvement in operating results through the year, with likely positive self-pay net adds in the back half of the year and the cost savings and ad revenue seasonality benefiting EBITDA. As a result, SiriusXM, on their earnings announcement, raised both EBITDA and free cash flow guidance $50 million each. We were excited to name Tom Berry as the new CFO. He was previously our chief accounting officer.

We saw solid progress in rolling out 360, L. A revolutionary new product enhancement, which leverages the best of our content and interactivity.

We expect 40% of Triptan creation, 40% penetration of new car trials by year end 2023.

We see a good conversion lift in vehicles with 360 L, particularly as consumers are aware of and use advanced features.

We did take cost out of the business at <unk> with an 8% workforce reduction in March.

And we are confident we will see improvement in operating results for the year with likely positive self pay net adds in the back half of the year and the cost savings and AD revenue seasonality benefiting EBITDA.

EBITDA.

As a result serious exam on their earnings announcement raise both.

And free cash flow guidance $50 million each.

We were excited to named Tom Barry as the New CFO . He was previously our chief accounting officer, Who's been with Sirius XM since 2009 and has a detailed knowledge of financial and strategic elements of the business, we do wish Sean well in his new role and his success on the course.

Greg Maffei: He's been with SiriusXM since 2009 and has a detailed knowledge of financial and strategic elements of the business. We do wish Sean well in his new role and his success on the course. Turning to Live Nation. Tremendous quarter. Continued growth in live events across all of its segments with a great Q1, as I said, even against a pretty reasonably strong comp last year, though there were some international markets that were not open in the prior period. Ticketing GTV was up 60%, AOI was up a stunning 53% to $320 million, and they converted 59% of that AOI into $190 million of free cash flow. We look forward to yet another expected record year at Live, with about 90 million tickets sold for Live Nation shows year to date. We expect to manage 600 million tickets globally.

Turning to live nation.

Tremendous quarter continued growth in.

In live events across all of its segments with a great Q1, as I said, even against a pretty reasonably strong comp last year. There were some international markets that we're not open.

In the prior period.

Ticketing <unk> was up 60% Oi was up a stunning 53% to $320 million.

And they converted 59% of the OE into.

Into $190 million of free cash flow.

We look forward to yet another expected record year at live with about 90 million tickets sold for live nation shows year to date, we expect to manage 600 million tickets globally.

Greg Maffei: We will host a record number of fans, even against a strong 2022 comp, which benefits from rescheduled shows in prior periods. We believe the AOI at Live can compound at double digits for the foreseeable future. On the legislative updates, we continue to make solid progress and hope the market will begin to recognize the momentum there. We continue to gain momentum on the Fair Ticketing Act, and the proposed bill in the Senate, called the TICKET Act, is actually a significant positive first step towards implementing initiatives we support. Turning now to the Formula One Group. On the corporate side, we paid $202 million of cash to LSXM to settle the intergroup interest in connection with the repurchase of the basket converts. That's an effective buyback of 3.1 million FWONA shares at $65 a share, proportionate to the amount of the convert repurchased.

We will host a record number of fans even against a strong 2022 comp which benefit from rescheduled shows in prior periods.

We believe the LOI at life and compound at double digits for the foreseeable future.

On the legislative updates, we continue to make solid progress and hope the market will begin to recognize the momentum there.

We continue to gain momentum on the Air Ticketing Act and the proposed bill in the Senate called the ticket is actually a significant positive first step towards implementing initiatives we support.

Turning now to the Formula One group on the corporate side.

We paid $202 million of cash Alex exempt to settle the intergroup interest in connection with the repurchase of the basket converts.

That's an effective buyback of $3 1 million shares at $65 a share proportionate to the amount of the convert repurchase.

Greg Maffei: The F1 season is back after several weeks off, beginning here with the exciting Miami Grand Prix this weekend. I would note we had our first F1 Accelerate Summit yesterday. It was successful. This business summit brought together leaders in sports, tech, and media, we expect we'll have further iterations of that in the future. We announced format tweaks to Sprint events. Now a standalone event with separate points and no impact to the grid on the GP itself. I also expect we'll see continued improvements in this format, resulting in three full days of on-track excitement. We continue to see growth in the sport. The Azerbaijan Grand Prix TV audience was up 7% versus the 2022 GP, in part due to the sprints. Continuing from here in Miami, we see growth in the US fandom on full display.

The F. One season is back after several weeks off beginning here with the exciting Miami race. This weekend.

I would note we had our first F. One accelerate conference yesterday with successful this business summit brought together leaders in sports Tech and media and we expect we will have further iterations of that in the future.

We announced format tweaks to sprint events.

Now a standalone event with separate points and no impact to the grid the GP itself.

I also expect we will see continued improvements in this format.

And three full days, resulting in three full days are on track.

We continue to see growth in our sport the back to sprint weekend television audience was up 7% versus the 2022 GP in part due to the spreads.

Continuing from here in Miami, we see growth in the U S spend them on full display.

Greg Maffei: The Saudi GP was on ESPN and cable's most live GP on record to date. US social media followers are up dramatically, 43% in Q1 versus the prior year. The US is now Formula 1's biggest audience across Instagram, YouTube, TikTok, and Snapchat. Quick update on Vegas. We completed the wave 1 and 2 ticket sales with strong demand. The final wave 3 sales are expected later this spring. We remain confident in our sponsorship pipeline, with many big deals already announced. We most recently added Virgin at Hard Rock. The construction of the paddock building itself is over 60% complete. CapEx is running in line with expectations, modestly exceeding our original cost of land purchase. Reiterating the race-specific economics for year one, we expect total revenues will approach $500 million, and we do expect it will be a top five race in profit economics.

The Saudi GP was on ESPN and cables, most live GP on record to date.

U S. Social media followers are up dramatically, 43% in the first quarter versus the prior year.

In the U S is now formula one's biggest audience across Instagram Youtube tick tock and Snapchat.

Quick update on Vegas, we completed the wave one and two ticket sales with strong demand. The final wave three sales are expected later this spring.

We remain confident in our sponsorship pipeline with many big deals already announced we most recently added Virgin at hard rock.

The construction of the building itself is over 60% complete.

Capex is running in line with expectations modestly exceeding.

Our original cost of land purchase.

I reiterate these were reiterating the race specific economics for year, one we expect total revenues will approach $500 million.

And we do expect it will be a top five race.

And profit economics.

Greg Maffei: On the balance sheet, F1 leverage at quarter end was 2.2 times. This will trigger a 25 basis point permanent reduction in the margin on our existing term loan B, regardless of future leverage ratios. Turning to Braves. Great start to the season. 22 and 10, best record in the NL and leading the NL East by 6 games. Ronald Acuña Jr. was named NL Player of the Month for April. He led the Major League Baseball in stolen bases and runs. We had the largest home opener crowd in Truist Park history. We've seen incredible ticket demand for season to date. We stopped selling season ticket sales for the first time in franchise history and started a wait list before opening day. We expect to sell out over half the games this season. Baseball is clearly benefiting from MLB's rule changes. Games have more action and less downtime.

On the balance sheet F. One leverage at quarter end was two two times.

This will trigger a 25 basis point permanent reduction in the margin on our existing term loan b, regardless of future leverage ratios.

Turning to brace.

Great start to the season in 'twenty, two and 10 best record in the MLR and leading at least by six games.

Ronald Laconia Junior was named NFL player of the month for April .

Major League baseball and stone basis it runs.

We had the largest home opener crowd in Truest Park history, we've seen incredible ticket demand for season to date.

We stopped selling season ticket sales for the first time in franchise history and started a waitlist before opening day.

We expect to sell over half the games this season.

Baseball is clearly benefiting from Mlps rule changes games have more action and less downtime across major League baseball you've seen stolen base attempts up over 30%.

Greg Maffei: Across Major League Baseball, you've seen stolen base attempts up over 30% versus last year, to the highest rate since 2012. Games are about 30 minutes shorter versus last year and dropping below three hours. Looking at the Braves themselves and innovations there, we already plan to implement a new POS system this year to enhance our fan experience, and this will help mitigate any impact to concessions from shorter games. We are actually seeing favorable trends in concessions year to date. Let me turn it over to Brian for more on our financial results.

Versus last year to the highest rate since 2012.

Gains are about 30 minutes shorter versus last year and dropping below three hours.

Looking at the Braves themselves and innovations there we already plan to implement a new.

We already plan to blend our new Pos system. This year to enhance our fan experience and this will help mitigate any impact to concessions from shorter gains and we are actually seeing favorable trends in concessions year to date.

Let me turn it over to Brian for more on our financial results.

Brian Wendling: Thanks, Greg. Good morning, everyone. At quarter end, Liberty SiriusXM Group had attributed cash and liquid investments of approximately $377 million, which excludes $53 million of cash held directly at SiriusXM. There's also $1.5 billion of undrawn margin loan capacity at the parent level related to our SiriusXM and Live Nation margin loans. As of 4 May, the value of our SiriusXM stock held by LSXM was $11.5 billion, and the value of the Live Nation stock was $4.7 billion. We have $2.7 billion in principal amount of debt against these holdings, or $2.4 billion pro forma for the additional paydown that occurred after the quarter. Total Liberty SiriusXM Group attributed principal amount of debt is $13 billion, which includes $9.6 directly at the Sirius level. In March, Liberty SiriusXM Group issued $575 million aggregate principal amount of 3.75 LSXMA convertible notes due 2028.

Thanks, Greg and good morning, everyone at quarter end Liberty Siriusxm group had attributed cash and liquid investments of approximately $377 million, which excludes $53 million of cash held directly at Sirius XM.

Theres also a $1 5 billion of Undrawn margin loan capacity at the parent level related to our Siriusxm and live nation margin loans.

As of May four the value of our Sirius XM stock held by.

L affect them was $11 5 billion in the value of the live nation stock was $4 7 billion.

We have $2 7 billion in principal amount of debt against these holdings or $2 4 billion pro forma for the additional pay down that occurred after the quarter.

Total Liberty Siriusxm group attributed principal amount of debt at $13 billion, which includes $9 six directly at the serious level in.

In March Liberty, Sirius XM group issued 575 million aggregate principal amount of $3 75 L. S. MA convertible notes due 2028.

Brian Wendling: We used the net proceeds of this offering to repurchase $591 million principal amount of the 1.375 cash convertible notes and $112 million of the 2.125 SIRI exchangeable debentures. In addition to the proceeds raised from the new convertible, LSXM used cash on hand, including $39 million from the proportional net settlement of the bond hedge and warrant, and cash received from Formula One Group to retire $3.1 million Series A intergroup interest shares underlying the corresponding portion of the convertible repurchase. Subsequent to quarter end, Liberty SiriusXM settled the remaining 2.125 SIRI exchangeables for $275 million at the April put/call date. There's approximately $199 million remaining on the 1.375 cash convertible notes, which mature in October. All remaining intergroup interests are expected to be settled and extinguished in connection with the Braves spin-off.

Net proceeds of this offering to repurchase $591 million.

Principal amount of the one 375 cash convertible notes.

$112 million of the 2125, CRA exchangeable debentures in.

In addition to the proceeds raised from the new convertible Alex like Sem used cash on hand, including $39 million from the proportional net settled settlement of the bond hedge and warrant and cash received from the Formula One group to retire $3 1 million.

One a intergroup interest shares underlying the corresponding portion of the convertible repurchase.

Subsequent to quarter end Liberty Siriusxm settled the remaining.

2125 serious tangibles for $275 million at the April put call date there's.

It was approximately $199 million remaining on the $1 375 cash convertible notes, which mature in October .

All remaining intergroup interest are expected to be settled and extinguished in connection with the spin off in.

Brian Wendling: Additional information regarding the intergroup interest is available in our press release, as well as the S4 that was filed with the SEC. Formula One Group had attributed cash, liquid investments, and monetizable public holdings of $1.8 billion at quarter end, which includes $1 billion of cash at the Formula One level. Formula One Group purchased $129 million of exchange traded funds in the Q1, which we expect to attribute to the Liberty Live Group tracking stock in connection with the announced reclassification of the trackers. Total Formula One Group attributed principal amount of debt was $3 billion, which includes $2.4 billion of debt at F1, leaving $538 million at the corporate level. F1 $500 million revolver's undrawn, and their leverage ratio at quarter end is 2.2 times, which will trigger a 25 basis point reduction in the margin on the term loan B debt.

Additional information regarding the intergroup interest is available in our press release.

Well as the S. Four that was filed with the SEC.

Formula One group had attributed cash liquid investments and monetize public holdings of $1 8 billion at quarter end, which includes the 1 billion of cash at the Formula one level.

Formula One group purchased the $129 million of exchange traded funds in the first quarter, which we expect to attribute to the Liberty life group tracking stock in connection with the announced reclassification of the trackers.

Total Formula One group attributed principal amount of debt was $3 billion, which includes $2 4 billion of debt at one leaving $538 million of corporate level.

<unk> $500 million revolver is undrawn and their leverage ratio at quarter ends to point to.

<unk>, which will trigger a 25 basis point reduction in the margin on the term loan b debt.

Brian Wendling: Looking quickly at the F1 operating business, given quarterly variability, we remind you to look at this business on a full year basis. That being said, let's take a quick look at the Q1. Our race count in the Q1 was consistent year-over-year with two races. Primary revenue grew with increases across race promotion, media rights, and sponsorship. Other F1 revenue decreased in the Q1, primarily due to easing of freight cost inflation versus the prior year, which was partially offset by growth in Paddock Club attendance. On the cost side, our team payments grew in the Q1 due to the pro rata recognition of increased payments for the year. Reminder that other costs of revenue, F1 revenue, and SG&A are best viewed as a percent of total revenue. Other costs of F1 revenue benefited from the easing of the freight inflation.

Looking quickly at the half one operating business given quarterly variability, we remind you to look at this business on a full year basis.

But that being said, let's take a quick look at the quarter.

Race count in the first quarter was consistent year over year with two races primary revenue grew with increases across race promotion media rights and sponsorship other F. One revenue decreased in the first quarter, primarily due to easing of freight cost inflation versus the prior year, which was partially offset by growth and paddock club attendance on.

On the cost side, our team payments grew in the first quarter due to the pro rata recognition of increased payments for the year.

A reminder, that other cost of revenue F. One revenue and SG&A are best viewed as a percent of total revenue other cost at half one revenue benefited from the easing of the freight inflation.

Brian Wendling: This was largely offset by increased hospitality costs and higher commission than partner servicing costs paid related to the growth in the primary F1 revenue streams. On SG&A, Q1 included $6 million of costs from the Las Vegas Grand Prix. Looking at Vegas, nearly all of LVGP's revenue and costs will be recognized in Q4 when the race takes place. Just a reminder on that. The Paddock Club building is progressing on schedule. In Q1, we incurred approximately $53 million of corporate-level CapEx related to Las Vegas. We will now be providing a forward-looking allocation between the F1 OpCo and the Formula One corporate CapEx.

This was largely offset by increased hospitality costs, and higher commission and partner servicing cost paid to related to the growth in the primary F. One revenue streams.

On SG&A in the first quarter included $6 million of costs.

From the from the Las Vegas Grand Prix.

Looking at Vegas, nearly all of <unk> revenue and costs will be recognized in the fourth quarter. When the race takes place just a reminder on that.

The Paddock club building is progressing on schedule in the first quarter, we incurred approximately $53 million of corporate level capital expenditures related to Las Vegas, we.

We will not be providing a forward looking allocation between the up one opco and the formula one corporate capex.

Brian Wendling: LVGP will pay rent and other fees out of F1 OpCo to Formula One corporate for use of the building during the race period, which will show up in our financial statements as revenue at the corporate level in Q4, but will eliminate in consolidation. Finally, at the Braves Group at quarter end, they had attributed cash and liquid investments of $215 million, which excludes $30 million of restricted cash. Braves Group had attributed principal amount of debt of $542 million. Liberty and our consolidated subsidiaries are in compliance with their debt covenants at quarter end. With that, I'll turn it over to Stefano to discuss Formula One.

<unk> will pay rent and other fees out of F. One opco to Formula one corporate for use of the building during the rice period, which will show up in our financial statements as at revenue as revenue at the corporate level in the fourth quarter, but will eliminate in consolidation.

Finally at the breakthrough at the quarter end, they had attributed cash and liquid investments of $215 million, which excludes $30 million of restricted cash.

Rea group had attributed principal amount of debt of $542 million.

Liberty and our consolidated subsidiaries are in compliance with our debt covenants at quarter end and with that I'll turn it over to Stefano to discuss formula one.

Stefano Domenicali: Thanks, Brian. Good morning from Miami. We are thrilled to be back for our second Miami Grand Prix, where the excitement in the city is as vibrant as year one. This year's event feature on expanded paddock, now located inside the Hard Rock Stadium, an upgraded Paddock Club, and a fully resurfaced track. We are four races into our record 23-race calendar. Red Bull has dominated the race to date, it is still very early in the season, and the races have been packed with excitement and drama. Alonso fans have had much to cheer about with Aston Martin recent performance. Alonso first place finishes in Saudi Arabia mark his 100th podium, making him one of only six drivers in F1 history to claim this feat.

Thanks, Brian Good morning from Miami, we are thrilled to be back for our second Miami Grand Prix, whereas the excitement in the city is as vibrant as year one this.

<unk> feature on the extended power.

Now located inside the Dolphins stadium, and our greatest Paddock club and a fully with Chauffeuse track, we are four races into our record 22 race calendar.

Red Bull has dominated the rates to date. It is still very early in the season and the races have been packed with excitement and drama.

I'll also I'll also fans have as much to achieve about with us too much in recent performance alone. So first place finishes in Saudi Arabia, Mark is hundred podium, making him one of only six drivers in F. When these two claims these feet.

Stefano Domenicali: The Australian Grand Prix featured three red flags, adding even more complexity to tire strategy and ended with only 12 of 20 drivers crossing the finish line. The new sprint format was unanimously approved by the teams F1 and FIA in advance of Baku. We all believe that the new format is the right one for our fans and the sport and increase the level of intensity and action across the weekend. Starting this season at the six sprint events, all three days of the weekend will be packed with on-track excitement. The Saturday sprint shootout is a shorter qualifying session to determine the sprint grid later that day. This makes the sprint standalone event with no bearing on the Grand Prix, allowing drivers to fight more aggressively without fear to race of the implication. Formula One is engaging with our fans across platforms.

The Australian Grand Prix features three red flags, adding even more complexity into di strategy and ended with only 12 of 20 drivers crossing the finish line.

The newsprint Puma was unanimously approved by the teams F. One and FAA the vessels that we all believe that the new format is the right one for our fans and the sport and increased the level of intensity and action across the weekend. Starting this season. This is sprint events all three days of the weekend will be.

Packed with on track excitement. This how does this please shoot out is a shorter qualifying session to determine the sprint grid later that day. This makes the sprint standalone event with no bearing on the Grand Prix, allowing drivers to find more aggressively without fear to race of the invitation.

Formula one is engaging with our plans for growth platform global audiences exceed 70 million viewers for the first two races of the season with significant increases in key markets across Europe , and North America in the U S. The southern <unk> pre build one $5 2 million viewers, marking ESPN and cables most viewed around pre owned.

Stefano Domenicali: Global audiences exceed 70 million viewers for the first two races of the season, with significant increases in key markets across Europe and North America. In the US, the Saudi Arabian Grand Prix broke 1.52 million viewers, marking ESPN and cable's most viewed Grand Prix on record. Across our digital channels, F1 reached 62.9 million social media followers as of Q1, up 31% year over year. Our f1.com website and F1 apps have launched additional content, including a new What is F1 section dedicated to new fans with videos and beginner's guide to the sport. Crowds continue to flock to our races globally. The vast majority of events are sold out for the 2023 season. Bahrain set its new record with nearly 100,000 fans over the weekend. Melbourne topped last year's record as the largest weekend sporting event in recent Australian history.

Across our digital channels F. One reached $62 9 million social media followers as of Q1 up 31% year over year.

That's one dot com website, and therefore, perhaps have launched additional content, including the new what is F. One section dedicated to new funds with videos and begin this guide to the sport.

Crowds continue to flock to our ratios globally. The vast majority of events are sold out for the 2020 season marine setting new record with net.

Nearly 100000 fans over the weekend Melbourne topic last year record as the largest weekend sporting event in the recent Australian history, we welcomed 445000 plants over the course of the weekend.

Stefano Domenicali: We welcomed 445,000 fans over the course of the weekend, up from 420,000 the prior year. This also marks a new record this century for Formula One in terms of total race weekend attendance. Turning to recent updates on our commercial agreements. On race promotion, we extended our Austrian Grand Prix through 2027, following last year's sold-out crowd of 303,000 fans. This year's event will mark our 10th anniversary since F1 returned to Spielberg. We also announced the extension of the Azerbaijan Grand Prix through 2026. On media rights, we entered into a multi-year extension of our partnership with ESPN to broadcast F1 channel in Latin America and in the Caribbean. ESPN will provide live coverage of over half of the races, with the full season available on the streaming service Star+.

From 420000, the prior year. This also marks a new record the censoring for wanting to almost total race weekend the Panthers.

Turning to recent updates on our commercial agreements.

His promotion, we extended our Austrian Grand Prix through 2027 fully last year sold out crowd of 303000 fence. This year event will mark our 10th anniversary since FY <unk> so to speak.

We also announced the extension of the Azerbaijan Gran Prix through 2026, our media rights, we entered into a multiyear extension of our partnership with ESPN to broadcast F. One churn on Latin America and the.

Caribbean ESPN will provide live coverage of over half of the races with the full season available on the streaming service that plus Espns continued to develop dedicated content across web and social platforms, allowing us to expand our global reach and attract an increasingly diverse base.

Stefano Domenicali: ESPN has continued to develop dedicated content across web and social platforms, allowing us to expand our global reach and attract an increasingly diverse fan base. Our Pro and Access product continued to see solid subscriber growth this season. On sponsorship, we made LIQUI MOLY an official partner. Our enhanced agreement includes track signage at the 3 races and virtual branding at 15 races, demonstrating the opportunity for digital ad insertion within the broadcast feed. We first welcomed LIQUI MOLY as a regional sponsor in 2019, grew our relationship to official sponsor in 2020, and now official partner in 2023. We continue to demonstrate growing value to our partners. We were thrilled to announce Paramount+ as official partner following our successful sport and entertainment collaboration last season. Our new multi-year agreement will feature their popular series, Fan Zone, on track-side display and in digital placement.

Our proven access product continued to see solid subscriber growth this season.

Our sponsorship we made the liquid moel unofficial partner our enhanced agreement includes the tuck signage.

Three races, and mutual branding 15 basis, demonstrating the opportunity for digital AD insertion within the broadcast fee. We first welcome leap as regional sponsor in 2019 grew our relationship to efficiently portion in 2020 and now official party in 2023, we continue to demonstrate growing value to our partners.

We were thrilled to announce permanent plaza as an official partner following our successful support and entertainment collaboration lessees.

Our new multiyear agreement with featured the popular fan zone on flip side display and in digital placements. This week, we announced Puma as the official provider of F. One supporting the appeal and a new multi year partnership and we extended our agreement with MSC cruises as global partners throughout 2026.

Stefano Domenicali: This week, we announced PUMA as official provider of F1 sporting apparel in a new multi-year partnership, and we extended our agreement with MSC Cruises as global partner throughout 2026. As part of the extension, MSC will bring a unique hospitality experience. Our sponsorship pipeline remains strong. Drive to Survive returned for its fifth season in February. Avid, casual, and new fans alike continue to be drawn to the series. The latest season didn't disappoint. On 14 April, we celebrate the topping out of our Las Vegas Grand Prix paddock building by placing a symbolic concrete barrier on top of the structure. We are very pleased with our progress. The efficiency of this project is a function of the incredible collaboration between the Las Vegas Grand Prix team, our talented design and construction crew, and local officials. We thank them all for their support.

Part of the extension MSC will bring a unique aspect that would you guys be that's our sponsorship pipeline remains strong.

Survival for its fifth season in February avid casual and new fans alike continue to be drawn to the see this latest season didn't disappoint on April 14th we celebrate the topping out of our Las Vegas lumpy pattern building by placing a symbolic concrete barrier on top of the structure. We are very pleased with.

Our progress the efficiency of this project, it's a function of the incredible collaboration between the Las Vegas Grumpy team, our the length of design and construction crew and local officials.

We thank them all for their support.

Stefano Domenicali: The paddock building spans 1,000 feet long, 100 feet wide, and three stories tall with a rooftop deck. It will be the largest paddock building on the race calendar and will host the largest Paddock Club. On the roof, we have a 28,000 sq ft LED screen in the shape of our F1 logo that provides unparalleled branding opportunities. When you fly over Las Vegas, you will know that F1 has established a permanent home in the US. We can monetize the LED screen and display third-party branding in the future years. The building itself has advanced AV capabilities. Temporary walls between team garages and additional features ensures ample flexibility to convert the entire space for a broad range of year-round uses. Future year-round activation are under development. We hope to have more to share in the coming months.

Business pads 1000 feet long 100 feet wide and <unk> told with a rooftop deck it will be the largest but building on the race calendar and will host the largest public club on the roof. We have a 28000 square foot LCD screen in the shape of our <unk> that provides on Pat.

<unk> branding opportunities.

When you flyover Las Vegas, you will note that the F. One has established a permanent home in the U S.

Can monetize the LCD screen and displace third party brand into the future years. The business itself has advanced campus capabilities temporary walls between themed <unk> and additional features and ensure us ample flexibility to convert the entire space for a broad range all year round uses future year round activation.

Under development and we hope to have more to share in the coming months I encourage you to visit the Las Vegas Grand Prix website for the time lapse video of the extraordinary construction progress.

Stefano Domenicali: I encourage you to visit the Las Vegas Grand Prix website for the time-lapse video of the extraordinary construction progress. Our trucked surfaces of Las Vegas roads began last month, and the second phase is scheduled for July. Once complete, this truck surface can last 6 to 10 years. The team also recently announced addition to the sponsorship lineup. Virgin Hotels Las Vegas was named an event partner and will have entitlement to the East Harmon Fan Zone. Hard Rock International was named a presenting partner and will build a grandstand in front of the Mirage on the Strip. In March, we announced an event partnership with Switch, the technology infrastructure company, who will supply LVGP with its sustainable goals and establish environmental conscious practice for the race weekend and beyond. Finally, touching on our broader F1 sustainability and inclusion effort.

Our truckload surpluses of Las Vega growth began last month and the second phase is scheduled for July was complete these trucks surface can last six to 10 years.

The team also recently announced the addition to this position lineup.

Tell us Vegas was named an event park and we will have entitlement to the east the Harman funds AUM.

<unk> block informational was name of presenting Barton and will build a grandstand in front of them at ash on the strip.

In March we announced an event partnership with switch the technology infrastructure company, who will supply <unk> with this sustainability goals and establish a rental car.

Conscious practice for the race weekend beyond.

Finally, touching on our broader epsilon sustainability inclusion effort.

Stefano Domenicali: The European Union recently recognized the role that sustainable fuel needs to play as part of the automotive solution alongside the electric vehicles up to 2035. This cement the future of sustainable fuels, following F1 extensive work with policymakers. Our F2 and F3 cars are running 55% sustainable fuel this season. We are on track to introduce 100% advanced sustainable fuels in 2026. The F1 Academy, our new all-female series, began its season in Austria last weekend, following two testing session in Barcelona and Paul Ricard in France. Congratulations to Marta García from PREMA Racing on winning two of the three races on opening weekend. With just 0.3 seconds separating her and the second place finisher in the third race. The season will have seven race weekends with the final race alongside us in Austin in October.

European Union recently recognize the role that sustainable fuel needs to play as part of the automotive solutions alongside the two vehicles.

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This is cement the future of sustainable fuels following the F. One extensive work with policymakers.

At two and three cars are running 55% sustainable fuels this season.

F. One cars are running 10% sustainable fuels and we are on track to introduce 100% advanced sustainable fuels in 2026.

The F. One economy, our new Ultima series began a seasoning last weekend following two testing session in Barcelona, 40, cutting frost congratulations to Martha Garcia from primary racing on winning two of the three races on opening weekend, we just 0.3 seconds separating her and the second.

<unk> finished <unk> in the third.

Those rates.

The seasonal will have seven race weekends with the final race alongside us in Austin in October I am pleased to say that in 2024 season will have OLED <unk> Academy races joined F. One weekend <unk>.

Stefano Domenicali: I'm pleased to say that in 2024 season, we'll have all F1 Academy races join F1 weekends. The creation of F1 Academy is an important step towards increasing opportunity for female participation in motorsport. It is the start of a journey. We hope it will be inspirational for young female drivers aspiring to reach professional motorsport, who now have the F1 Academy to aim for. I believe we are creating the best possible structure to find and nurture female talent, including those already in the series and those yet to come through from the grassroots level. We are looking forward to the season. Yesterday, F1 partnered with Custom Events from Wall Street Journal to host our first F1 Accelerate Summit.

The creation of <unk> Academy is an important step forward towards increasing opportunity for female participation in motorsports.

As part of a journey and we hope it will be <unk> for young teammates drivers aspiring to reach professional motorsport will now have the F. One academy to aim for I believe we are creating the best possible structure to find and nurture female talent, including those already in the cities and those.

Yet to come through from the grassroots level, we are looking forward to the season.

Yesterday F. One partner with custom events from worst to Jordan's to host our first Epsilon accelerates summit, we brought together trailblazer from the worlds of sports Entertainment and business to discuss how they can make a significant impact on the future of technology performance diversity and sustainability.

Stefano Domenicali: We brought together trailblazers from the worlds of sport, entertainment, and business to discuss how they can make a significant impact on the future of technology, performance, diversity, and sustainability, not only in their own business, but across industry and culture. We welcome familiar faces from the F1 grid and management, alongside marquee sport figures including Maria Sharapova and Liz Limón. Jay Leno was our host as business executives traveled from across the country, including Jerry Bruckheimer, Joe Kosinski, Maverick Carter, Sarah Harden, and Burke Magnus. We hope to continue leverage F1 brands to drive innovation and commercial success for the sporting and entertainment worlds. It is an exciting time for Formula One, on the track and in the commercial operation. Our unusual early season spring break didn't have a mandatory shutdown like summer break, meaning teams were hard at work with their cars upgrade.

All in their own business by the cross interesting culture, we welcome familiar faces from the echelon grid and management alongside Markese figures, including Maria Sharapova in listening mode.

Jay Leno was our host as businesses equities traveled from across the country, including Jerry Bruckheimer, Jocose Maverick Carter Saba Harden and Bruce Memphis, We hope to continue to leverage their farm brands to drive innovation and commercial success for the sporting and entertainment words. It is an exciting time for <unk>.

On the track and in the commercial operation our unusual early season spring break didn't have a mandatory shutdown like summer break meaning these wood hard at work with their cars are great. I believe competition will intensify as the season progresses Miami closed out the first double headed to the season before we had to euro.

Stefano Domenicali: I believe competition will intensify as the season progresses. Miami closed out the first double header of the season before we head to Europe for the first triple header. There is plenty of action to come. Avanti tuta. Full speed ahead. Now I will turn the call back over to Greg. Thank you. Ciao. Thank you, Stefano, and thank you, Brian. To our listening audience, we appreciate your continued support of and interest in Liberty Media. We hope you will all tune in to see the Miami Grand Prix this weekend and the start of our Braves series against the Orioles tonight. With that, operator, I'd like to open the line for questions.

For the first triple Heather that is plenty of action to come Avanti to foods.

Full speed ahead.

And now ill turn the call back over to Greg. Thank you Joe.

Thank you Stefano and thank you Brian .

To our listening audience. We appreciate your continued support of and interest in Liberty media.

We hope you will all turn into see the Miami Grand Prix This weekend and the start of our Brave series against the Orioles Tonight.

And with that operator, I'd like to open the line for questions.

Operator: Thank you. The floor is now open for questions. If you would like to ask a question, please press star 1 on your telephone keypad at this time. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up the handset before pressing the star keys. Once again, that's star 1 for questions. The first question is coming from David Karnovsky of J.P. Morgan. Please go ahead.

Thank you the floor is now open for questions. If you would like to ask a question. Please press star one on your telephone keypad at this time, a confirmation tone will indicate your line is for the question queue.

Press Star two if you would like to remove your question from the queue for participants using speaker equipment. It may be necessary to pick up the handset before pressing the star keys. Once again Thats star one for questions. The first question is coming from David Karnofsky of Jpmorgan. Please go ahead.

David Karnovsky: Oh, thanks. Stefano, just on the new sprint format, I'm interested to know what the response has been from your partners on the promotion side.

Thanks.

Stephane just on the new sprint format.

They know what the response has been from your partners on the promotion side.

Stefano Domenicali: Sure.

David Karnovsky: How are they thinking about the potential lift to their own ticket sales? Then what's the process you have to determine what GPs get that format, and is that something you can build into your contracts?

How are they thinking about the potential lift to their own ticket sales.

And then what's the process you have to determine what <unk>.

Get that format and is that something that you can build into your contracts.

Stefano Domenicali: Well, thanks, David. Of course, we did that thing in accordance with the teams and with the FIA because, as you know, our idea is to make sure that during the racing weekend, there is always action on the track. Actually, the result of the first one of this year has been very encouraging, and every one of our partners, promoter, media partners, and also team are very positive about that. Of course, there is something that we want to take as a lesson learned to see at the end of summer if there is something that we can learn to do even something better. In general terms, the first weekend of the spring format has been great.

Well, thanks, David of course.

Deep does seem to in accordance with the teams and with the FAA because.

As you know our idea is to make sure that doing the leasing we Kennedy is always actually number tracks actually the results of the first one of this year has been very encouraging.

Every one of our partners for multiple media partners and also team are very positive about that of course that is something that we want to take us to.

To see it.

The end of summer is there is something that we can learn to do even better but in the gel until the first we recap of the spring Puma has been great and it seems that there is always when you want to do something different in a very standardized ecosystem.

Stefano Domenicali: I think that as always, when you want to do something different in a very standardized ecosystem, the reaction of the, let's say, the traditional fans is the one that needs to be awaited for longer term. Normally with the new fans, we've seen a very positive reaction. Promoter was pushing for that, and I would say the real thing is that we don't want to go in a situation where in the future we're going to have all the races with the sprint format. We want to keep a limited number of it, maybe one third of the calendar number, and create something special with regards to the competition that we can give sporting value with trophies and of course, commercial opportunity to these things. I think that's the right way to go.

One of the let's say the traditional fans is the one that needs to be.

Wait for the for longer term, but nobody with the new Fabs that we have seen a very very positive reaction promoter was pushing for that and I would say the real thing is that we do want to go in a situation where in the future with that I have all the <unk>.

Races, with discipline focus we want to keep that.

A limited number of maybe walk through the calendar number and create something especially with regard to the competition that we can give them supporting value with choke season and of course commercial opportunities with these things, but I think that's the right way to go and if I may summarize and other things that they think is important I see a big trend to tables.

Stefano Domenicali: If I may summarize another thing that I think is important, I see a big trend today about sport, not to be stable, let's say, not to stay consistent with your regulation. We're just following what baseball did. I just following what NBA has done. That means that all the professional sport needs to listen to the request and to the new input that the fans, promoters, and partners are asking to have more excitement around the games. Positive and looking forward to keep working on this project.

For it not to be.

Stable, let's say not to see consistent with your regulations.

Just following the work Batesville date I just following what the NBA is done so that means that the all the professional sport needs to listen to the request to the new input that the past promoters and partners, Alaska, who have more excitement around the gate, so positive and looking forward to keep working on this.

Got it.

David Karnovsky: You've called out F1 TV in your releases for a few quarters now. Just wanted to see if you could update us on the product, where you see it in terms of the growth trajectory. Just for Brian, to the extent someone buys an annual plan at the start of the season, is that all booked in Q1 with the partner cost, or is that proportional to the races? Thanks.

Okay, and then you've called out <unk> TV in your releases for a few quarters now just wanted to see if you could update us on product where do you see it in terms of the growth trajectory and then just for Brian today.

To the extent someone buys an annual plan at the start of the season is that all booked in the first quarter with a partner cost or is that proportional to the races.

Stefano Domenicali: If I may, the first part of it, F1 TV is really working very well. You know that we are not providing any numbers on that, but what I can tell you in term of quality, in term of product, and in term of attention, is also an opportunity to select new market where there is not really a strong broadcaster provider. We are doing that with certain countries, and the effect is really good. We have a new plan also to update some of the content that we want to give to our fans. As I said, after a couple of years of very high investment, now we are paying back what has been a great decision taken a couple of years ago. Brian, you want to progress with the other question?

So if I may the first part of it the <unk> is really working very well, we know that we are not.

Providing any.

Numbers on that but what I can tell you in terms of quality income, we'll pivot and even some of the attention is also an opportunity to select new markets, where there is no treaty is strong.

Total cost of provider and we are doing that with certain countries and the effective vehicles.

Our new plan also to update some of the content that we want to give to our fence as as I said up to a couple of years of very high investment now we obtained back what has been a great decision taken a couple of years ago.

Ian do you want to progress we got a question.

Brian Wendling: Yeah, David, on your second question, it's proportional over the season.

Yeah, David on your second question, it's proportional over the season.

David Karnovsky: Great. Thank you.

Alright, thank you.

Operator: Thank you. The next question is coming from Bryan Kraft of Deutsche Bank. Please go ahead.

Okay.

Thank you. The next question is coming from Bryan Kraft with Deutsche Bank. Please go ahead.

Bryan Kraft: Hi, good morning. Greg, I wanted to ask you, how should we think about the capital needs of the Liberty Live tracker, both initially and over time, particularly as the business side of Liberty Live evolves and begins to invest in owning and operating venues? I assume that's still part of the plan, and it seems like it's capital intensive. Just wanted to understand how you might go about funding those endeavors. Thank you.

Hi, Good morning, Greg I wanted to ask you how should we think about the capital needs of the Liberty live tracker, both initially and over time, particularly as the business side of Liberty live evolves and begin to invest in owning and operating venues I assume thats still part of the plan I mean, it seems like it's capital intensive so just wanted to understand.

Stand how you might go about funding those endeavors. Thank you.

Greg Maffei: Thanks, Brian, for the question. As we've outlined, we expect to capitalize Liberty Live with a decent amount of cash, candidly, to the degree we go out and do something large there, we'll have to find other sources of capital, other sources of cash capital. I don't think it will be a massive generator of cash as you would expect, looking what's in the asset base there. We have some ideas that involve leveraging Liberty Live itself, not reliance as much on other trackers, if that's your fear, Brian.

Yes.

Thanks, Brian for the question.

As we've outlined we expect to capitalize.

Pretty live with it.

Decent amount of cash, but candidly to the degree we go out and do something large there will have to find other sources of capital.

Other source of cash capital.

So I don't think.

It will be a massive generator of cash as you would expect looking what's in there and the asset base there but.

But we have some ideas that involve leveraging liberty live itself not reliant as much on other trackers. If that's your for you Brian .

Bryan Kraft: Yeah, that was the nature of the question. Thank you. Can I ask you also?

Yes that wasn't answered the question. Thank you.

Greg Maffei: I try. I just might have read that subtext a little bit.

That's right my regret that subject a little bit.

Bryan Kraft: Well, a lot of people are asking about it, so I think it's good.

Well a lot of people are asking about it so I think it's fair to you.

Stefano Domenicali: You're-

Bryan Kraft: Get the message out there.

Greg Maffei: You get to ask it straight up front.

To match up that right upfront you get paid upfront.

Bryan Kraft: If I could ask you also maybe related on the F1 side, it seems like what you're doing in Vegas is really exciting. Do you see other opportunities to invest in F1's business by taking on the promoter role in other markets and investing in facilities to drive that longer term growth?

Sure.

If I could ask you also maybe related on the on the.

F. One side I mean, it seems like what you're doing in Vegas is really exciting.

Do you see other opportunities to invest in <unk> business by taking on the promoter role in other.

Markets and investing in facilities to drive longer term growth.

Greg Maffei: Look, I think Vegas was unique in the opportunity and also the geography and a bunch of other factors which made it the place where we should be the promoter first. We'll try not to have too much hubris and assume that we need to prove we can be a good promoter first. I don't look at a lot of other places where it's as obvious. I have mentioned in the past that I do think in some cases, some of our partners in the promoter space are not necessarily as capital-rich as Formula One. There may be opportunities for us to participate alongside them, maybe not in a full co-promotion role, but to take elements of the chain of value being created and further it for both of our benefits. We'll certainly look at that and talk to partners to the degree that's available.

Look I think Vegas was unique in.

And the opportunity and also the geography in a bunch of other factors, which made it the place where we should be the promoter first.

We'll try not to have too much hubris and assume that we need to prove we can be a good promoter first.

I don't look at a lot of other places where it's obvious.

<unk> mentioned in the past that I do think in some cases some of our.

Partners in the promoter space are not necessarily as capital rich as formula one and so there may be opportunities for us to participate alongside them.

Maybe not a full co promotion role, but to take elements of.

The chain of value being created and further it for both of our benefits. So we'll certainly look at that and talk to partners to the degree that's available.

Stefano Domenicali: If I may add another comment, Greg, that an indirect qualitative effect is that with this investment, we are pushing also up the quality of the promoters that are already very important for us in Formula One. Now the game is to have unique events that are working very well. Of course, commercially viable, but I would say that direct effect will, as given to the system, an uplift in the qualitative approach of every Grand Prix.

And if I may ask another comment Greg.

It's qualitative effect is that.

With these investments we are pushing also.

The quality of the promoters that are already very potent for asking for one. So now the game is to have unique events at <unk>.

Working very very well of course commercially viable, but I would say that that would affect stephen to the system and uplifting the quality approach of evergreen.

Bryan Kraft: Great. Thanks, Greg. Thanks, Stefano. Appreciate it.

Okay. Thanks, Greg Thanks, Stephen I appreciate it.

Operator: Thank you. The next question is coming from Vijay Jayant of Evercore. Please go ahead.

Thank you. The next question is coming from Vijay <unk> of Evercore. Please go ahead.

Vijay Jayant: Hi. Good morning. I have a couple on Formula One. Greg, the $112 million of team payments in the quarter implies a little less than, I think, $1.3 billion for the year. Can you sort of talk about how team payments are being communicated to the teams, given the fact that this year you have something sort of different with the Vegas race that is not sort of contractual, and is that something we should look at as a proxy in what you're sort of thinking on the full-year EBITDA number? Second, obviously the free cash flow was very strong at Formula One this quarter, and I'm assuming that had to do with ticket sales for, I think, wave one and wave two on Vegas. Any way you can help us think about what sort of the underlying free cash flow is excluding the ticket sales, if possible?

Hi, Good morning, I have a couple on formula one.

Greg the $112 million of team payments in the quarter.

Little less than $1 3 billion for the year can.

Can you just sort of talk about how the team.

Payments are being communicated to the team given the fact that you have something different.

Different with the Vegas rates that has not been a contractual.

And is that something we should look at it as a proxy and what you're sort of thinking in the full year EBITDA number.

And second obviously the free cash flow was.

Very very strong formula one's Florida, and I'm, assuming that has to do with <unk>.

<unk>.

Well I think the way one way to on any way you can help us think about what sort of the underlying free cash flow is exact excluding the ticket sales as possible.

Greg Maffei: I'll comment on the first and second, and if Brian, you want to add anything on the free cash flow when I'm done, that would be great. Looking at the team payments, I think if you look at our history, we try to manage that conservatively, particularly in the first quarter of the year. As you rightly note, probably even more conservatively this year, given we've added some volatility to payroll, or rather to the potential, by having Vegas. We think it's positive volatility. It's going to be a great event, but it is unknown. It is not as well experienced as some of the other events that we have. I think you should look at that as a conservative proxy for how we expect the year will go.

So I'll comment on the first and second and if Brian you want to add anything.

The free cash flow when I am done that would be great.

Looking at the team payments I think if you look at our history.

We try to manage that conservatively.

Particularly in the first quarter of the year.

And as you rightly note, probably EBIT more conservatively this year given.

We've added some volatility of the payroll rather to the potential in.

By having Vegas, we think its positive volatility it's going to be a great event, but it is unknown it is not as well.

Experienced some of the other events that we have so I think you should look at that as a conservative proxy for how we expect the year will go.

Greg Maffei: The last thing we want to do is have teams overspending in anticipation of monies that don't show up towards the end of the year. On the free cash flow, you rightly note, because of the wave 1 and 2 sales, a lot of cash has been brought to us. It's deferred collection, but it's generated into that free cash flow line. It has probably overstated the true impact of the operating business for Q1. We do expect to recognize that as free cash flow as the year progresses. I don't know, Brian, if you want to comment or can comment a little on a more normalized level without providing Vijay too much clarity, because gosh knows we want him to do some real work.

Lastly, we want to do is have teams.

Overspending in anticipation of monies that don't show up towards the end of the year.

On the free cash flow you rightly note.

Because of the wave one and two sales.

A lot of cash has been brought to US was deferred collection, but it is generated in that free cash flow line.

So it is probably overstated the true impact of the operating business for Q1, but we do expect to recognize that as free cash flow as the year progresses I don't know, Brian if you want to comment on can comment a little on a more normalized level without providing VGA too much clarity because gosh knows we wanted to do some real work.

Brian Wendling: Yeah. To help the efforts, I guess I would say, if you look at our tracking stock schedules, you can see the deferred revenue as of 31 March 2023. You can go back and look at our Q1 from last year, you can see the deferred revenue related to Formula One at 2022. It is up roughly $130 million, give or take. You could think of that largely being related to Vegas, although there are other puts and takes.

Yes.

To help the efforts I guess I would say if you look at our tracking stock schedule as you can see the deferred revenue.

The March 31, 2023, and you can go back and look at the if you look at our first quarter from last year, you can see the deferred revenue related to formula one.

At 2022.

Roughly $130 million give or take and you could think of that largely.

Being related to Vegas, although there are other puts and takes.

Stefano Domenicali: Thank you both.

Okay.

Stefano Domenicali: If I may add one comment. Sorry, Brian.

Great. Thanks, I may add one comment.

Greg Maffei: No, go ahead. Stefano, please add.

Sorry, Brian .

No go ahead.

Stefano Domenicali: Sorry. No, Vijay, I just want to add two comments that I think is important to consider and to remember. At the end of the day, it's important to remember the teams are benefiting from what we are doing so far. Investing in Vegas for them is an incredible opportunity indirectly also for them to develop their business. Indirectly, it will get our proposition even stronger as an ecosystem in Formula One. I think that it's really something that, as Greg was mentioning, we have a prudential approach, but that gives you the magnitude of what we need to do and need to deliver at this stage that will be very important for all of us.

Can I please ask.

Sorry, I just want to add two comments that I think is important to consider as you remember that at the end of the day.

It is important to remember the teams. The teams are benefiting from what we are doing so far I mean, they invest in vegas for them.

And the incredible opportunities undoubtedly also presented at <unk>.

Yes.

These will get our proposition even stronger as an ecosystem for rollout. So I think that is really something that was mentioning we have our prudential approach that gives you the magnitude of what we need to do and need to deliver that discussed that would be very very important for all of us.

Greg Maffei: Thanks, Vijay.

Vijay Jayant: Thank you.

Thanks P J.

Thank you.

Operator: Thank you. The next question is coming from Peter Supino of Wolfe Research. Please go ahead.

Thank you. The next question is coming from Peter Zaffino of Wolfe Research. Please go ahead.

Peter Supino [Managing Director, Senior Analyst: Hey, good morning, and thanks. On the Concorde Agreement, Greg, I wondered, or Greg or Stefano, I wondered if you could comment on how you'd like investors to think about the timing of that renegotiation. A second question, Greg, if you would talk about Live Nation, your view of both the risks posed by the DOJ investigation, and then separately, the bear case that the business ought to slow down a lot in 2024 after this post-pandemic surge of supply. Thank you.

Hey, good morning, and thanks.

On the Concorde agreement Gregg I wondered or Greg once the final I wondered if you could comment on how you'd like investors to think about the timing of that renegotiation and then a second question. Greg If you would talk about live nation.

Your view of both the risks posed by the Doj investigation, and then separately the bare case that the business ought to slow down a lot in 2024. After this post pandemic surge of supply. Thank you.

Yeah.

Greg Maffei: Look, we have several years left to run on the Concorde Agreement. I think there's a consensus among the teams and the FIA and ourselves that now might be a good time to try and strike while the iron is hot and renew and extend the Concorde Agreement. There's certainly no obligation to do that. There's certainly no risk if that doesn't get done. As you may recall, we went right to the end. Historically, in many cases, the teams have operated without a Concorde Agreement. They've basically done a handshake. Then completed the deal post the period when the new Concorde Agreement was supposed to start. Our hope is that this time we'll be able to change that dynamic, in part because of the way that Chase and Stefano have changed the dynamic with the teams in particular.

Look we have several years left to run on the cockpit agreement, but.

I think there is a consensus.

The teams and the FIA and ourselves that.

Now it might be a good time to try and strike while the iron is hot and renew.

<unk> the Concord agreement there is certainly no obligation to do that and there is certainly no risk if that doesn't get done as you may recall, we went right to the end and historically.

In many cases the teams have operated without a concrete agreement. They basically got a handshake and then completed the deal post.

The period when the Concord, New Congress. He was supposed to start our hope is at this time, we'll be able to change that dynamic in part because of the way that chase and Stefano will change the dynamic with the teams in particular I hope we have a more positive relationship and everybody sees the benefit of going early and providing certainty for all involved definitely what would you add nothing because I think that.

Greg Maffei: I hope we have a more positive relationship and everybody sees the benefit of going early and providing certainty for all involved. Stefano, what would you add?

Stefano Domenicali: Nothing, because I think that you synthesized perfectly the situation, and I think that will be our strategy now.

Synthetase constantly the situations and the same.

That will be our strategies now.

Greg Maffei: On Live Nation, I would not say it's a DOJ investigation. You could always say that. Look, we've had a DOJ consent decree and monitor now for several years, and it was renewed. There is a hotline that anybody can report what they perceive as violations of that consent decree, and the DOJ has a monitor who is investigating continuously perceived or alleged violations of the consent decree. There obviously is another track, which is a legislative potential, and we've talked about some of those. I mentioned the couple of bills that are being considered. I'm not sure those bills will get done, but in the main, we view those bills as positive.

On live nation.

Sure.

I would not say at the Doj investigation, you could always say that but look we've had a doj consent decree and monitor now for several years and it was renewed and there is a hotline that anybody can report what they perceive as violations of that consent decree and the Doj has a monitor who is investigating continuously proceed.

<unk>.

Or alleged violations of the consent decree there obviously is another track which is.

Our legislative potential in <unk>.

Talked about some of those I mentioned.

A couple of bills that are being considered.

Sure those bills will get done but in the main we view those bills is positive.

Greg Maffei: Frankly, I think anything that moves forward and ends the negative speculation about the regulatory side is positive, because we do not perceive it nearly as big a risk as the market perceives it to be. On the business itself, hard to project what the consumer will do when you can imagine recession scenarios and the like, we see none of that. We see strong demand, we see it going forward with upcoming tours. Our expectations, as I noted, are the business is going to continue to grow.

And frankly, I think anything that moves forward and the negative speculation about the regulatory side is positive because we do not perceive it.

As big a risk is the market proceeds to be.

On the dot on the business itself.

Hard to project, what the consumer will do and you can imagine recession scenarios and alike.

But we see none of that we see strong demand.

And we see it going forward with upcoming tours and our expectations as I noted our the business is going to continue to grow.

Peter Supino [Managing Director, Senior Analyst: Thanks a lot, Greg.

Thanks, a lot Greg.

Greg Maffei: Thank you, Peter.

Thank you Peter.

Operator: Thank you. The next question is coming from Stephen Laszczyk of Goldman Sachs. Please go ahead.

Thank you. The next question is coming from Stephen <unk> of Goldman Sachs. Please go ahead.

Stephen Laszczyk: Great. Good morning. Maybe one on F1 sponsorship for Stefano. It seems like you're finding a fair amount of success in stepping up some sponsors into more comprehensive packages. You had Paramount+, MSC, and LIQUI MOLY this past Q. I was wondering if you could maybe talk about how much opportunity you think there is as you look out across your sponsorship portfolio to step more sponsors up, and if there's any constraints, especially with there being 10 global partners already that could limit this.

Great. Good morning, maybe one on Epsilon sponsorship for Stefano It seems like you're finding a fair amount of success in stepping up some sponsors into more comprehensive packages Paramount plus MSC.

Molly this past quarter I was wondering if you could maybe talk about.

Yes. This is more how much opportunity you think there is as you look out across your sponsorship portfolio to step more sponsors up and if theres any constraints, especially with there being 10 global partners already that could limit us.

Stefano Domenicali: Well, thanks, Stephen, for the question. I think that we always need to look behind to understand what we are doing today. We were talking about only four official partners just two years ago. Now we are heading to 10 official partners, plus an incredible group of technical partners that are part of our family. I think that our main goal is for sure to connect with the potential business partners that are interesting to develop business together. In any case, we don't have to overcrowd our group in order to offer what they need, and it's up to us to prepare for them different packages with different contents, with different experience, with different opportunities. This is what we are doing.

Well thanks, Tim for the question I think thats it.

We always need to look behind that you understand what we're doing today I mean, we're talking about volume for US official Department just two years ago now.

Head into 10 official partner plus.

I have an incredible group of technical.

What is the thought of it.

First of all I think that.

Our main goal is to for sure to connect with the potential business parts of that.

I think that I can pull to develop pieces together, but.

In any case, we don't get to Overcrowd our group in order to also what they need and it's up to us to prepare for them different packages with different countries with different experiences with different opportunities is what we are doing and the fact that we are so strong in this moment that the pipeline is still very solid growth for the future is giving us.

Stefano Domenicali: The fact that we are so strong in this moment, that the pipeline is still very solid also for the future, is giving us the creativity to work on the digital landscape, to have different proposition, different markets, for example, as one opportunity that we have today, or including other categories that are interested to come back in Formula One. I would say now the real thing is not to work only on adding more, but making sure that each of them receives the right qualitative answer to their question. The other thing that I think is really relevant, that gives in another way the fact that we are serious on the sustainability platform, because no one will invest today in a business that is not credible on this landscape.

<unk> to work on the digital landscape.

To have different proposition different markets for example.

One opportunity that we have to date or including other categories that are adding to that is to come back and forward. So I would say now the real thing is not to work on deals.

That anymore, but making sure that each of them received is like $40.

Answer to that question and the other thing that I think is really rather than that gifts in another way. The fact that we really see this.

On the sustainability of that.

Because no one will invest today in the business.

Credible on this landscape. Therefore that this is another booster really seem to fall off is to make sure that our goals with this sustainability and led company.

Stefano Domenicali: That is another push that we receive from our partners to make sure that our goals with sustainability and net carbon in 2030 has been achieved. It's a, let's say, a constructive push that we are working together in order to be stronger and stronger together.

Certainly has been achieved so let's say a concerted push that we are working together in order to be stronger and stronger together.

Stephen Laszczyk: Great. Thanks for that. Maybe one for Greg. Could you just update us on the way you're thinking about capital allocation at Formula One now that you hit the trigger on your term loan this quarter? Should we expect this to give you some more flexibility from this point going forward to ramp leverage back to more historical levels? Thank you.

Great. Thanks for that and then maybe one for Greg could you just update us on the way Youre thinking about capital allocation at Formula One now that you have to trigger on your term loan. This quarter should we expect this to give you some more flexibility from this point going forward to ramp leverage back to more historical levels. Thank you.

Greg Maffei: Well, thank you, Stephen. I think, look, we are pleased to have triggered the reduction. Honestly, that's a nice benefit, it has not been what's driving our thinking about capital allocation. We are looking for and believe we will find attractive opportunities for our cash and our cash flow generation. I've talked about some of those in the past, including the Vegas effort, which I think is going to generate a good return. Ancillary businesses around which are synergistic and around our existing business and the potential for return of capital versus share repurchase. As I noted, we effectively did that this quarter for just over three million shares through the intergroup interest settlement. I expect you'll see us look at all of the alternatives above. Again, it was nice to click off the 25 basis point reduction, that wasn't what drove our thinking.

Well, thank you Steven I think.

Look we are pleased to have triggered the reduction.

Honestly, that's a nice benefit but it has not been whats driving our thinking about capital allocation.

We are looking for and believe we will find attractive opportunities.

For our cash and or generate cash flow generation I've talked about some of those in the past, including the Vegas effort, which I think is going to generate a good return.

Flurry businesses around which are synergistic in and around our existing business and the potential for return of capital versus share repurchase as I would as I noted, we effectively did that this quarter for just over 3 million shares for the intergroup interest settlement. So I expect you'll see us look at all of the alternatives above.

And again it was nice to click off a 25 bps reduction, but that wasn't what drove our thinking it's really the strength of the business, which is generating the capital.

Greg Maffei: It's really the strength of the business, which is generating the capital. Great. Thanks, Greg.

Great. Thanks, Greg.

Operator: Thank you. The next question is coming from David Joyce of Seaport Research Partners. Please go ahead.

Yeah.

Thank you. The next question is coming from David Joyce of Seaport Research Partners. Please go ahead.

David Joyce: Thank you. A couple questions. First, on Formula One, what's the current view of Formula One, the league and FIA and the F1 teams related to potential addition of more teams? What are the gating factors from here? Secondly, if you could provide any update on your views of what's happening with the regional sports network as it pertains to Atlanta Braves. Thanks.

Thank you a couple of questions first on Formula one what's the current view of Formula One the league.

And if one team related to potential additional teams.

What are the gating factors from here.

Then secondly, if you could provide any update on your views.

What's happening with the regional sports network as it pertains to <unk>.

Atlanta brands. Thanks.

Greg Maffei: I'll let Stefano handle the first part, and I'll handle the RSN question.

I'll, let Stefan I'll handle the first part and I'll handle the second question. Thank you, Greg I mean with regard to the situation of seeing potentially entering or interesting for what.

Stefano Domenicali: Thank you, Greg. With regard to the situation of a new team potentially entering or interesting for one, as always said, there are someone that is quite vocal, some other are quite silent. As you may know, David, there is a process in place that has been activated by the regulator to see and to collect the interest of other partners to be part of Formula One. The first step will be finished, I think, within the middle of May, and then there will be the analysis done properly, checking the technical feasibility, the financial feasibility, and then we're going to have the discussion to see if any kind of potential enter will fit into the equation of creating more value to the sport. That's something that we're going to take the decision at the right time within the end of the year. That's the plan.

<unk> always said that someone that is quite vocal some others are quite solid.

As you May know, David there is a process in place.

In activated by the regulators to see and to collect the interest of other partners to be part of what the first step will be.

<unk> finished I think within the middle of May and then there will be the analysis is done properly checking the technical feasibility.

Yes.

The discussion to see if any kind of potential to enter.

It fits into the equation of creating more packets with sports and Thats something thats going to take the decision at the right time with at the end of the year. That's the plan, but of course that is once again showing the growth of all of what I mean.

Stefano Domenicali: Of course, that is once again showing the growth of Formula One. Just a couple of years ago, the value of a team was very small, actually almost none. Today, the value of the franchise is very high, so we have the duty to protect the business and making the right decision. This is something we're going to do within the end of this year.

Just couple of years ago.

Very small.

Actually almost no today the value of the franchise is very high so we have the duty to protect the business and making that decision and this is something we're going to do within the end of this year.

Greg Maffei: Regarding the RSNs, look, obviously it's a difficult situation given Diamond's filing. That having been said, we continue to receive payments from our Sports South contract. That is not true for some other RSNs out there, where my understanding is three or four have not received payments from Diamond. That I think reflects the fundamental strength of the territory we have and the strength of the interest in the Braves, such that our understanding is we have a profitable RSN, so it's unlikely that Diamond will view us as an executory contract which they wish to reject. Even if they were to reject it, which again, don't expect, I think there are other alternatives we could construct in the marketplace that would enable us to get paid and have our products shown to our fans, which is really the most important thing.

And regarding the <unk>.

Look obviously, it's a difficult situation given diamonds file.

<unk> filing.

That having been said we continue to receive payments from.

Our sports South contract.

That is not true for some other RF sends out there with my understanding is three or four it's obviously payments from diamond.

And that I think reflects the fundamental strength of the territory, we have and the strength of the interest in the Braves such that our understanding is we have a profitable RSM. So it's unlikely.

Diamond will view us as an executor, we contract, which they wish to reject.

Even if they were to rejected which again don't expect I think there are other alternatives we could.

Construct in the marketplace that would enable us to get paid and have our products shown to our fans, which is really the most important thing.

Greg Maffei: We're certainly prepared if we have to go out and exercise those alternatives.

<unk>.

We're certainly prepared if we have to go out and exercise those alternatives.

David Joyce: Great. Thanks, Greg and Stefano.

Great, Thanks, Greg and Stefano.

Operator: Thank you. The next question is coming from Matthew Harrigan of The Benchmark Company. Please go ahead.

Thank you. The next question is coming from Matthew Harrigan of Benchmark Company. Please go ahead.

Matthew Harrigan: Thank you. Live Nation, among its other merits, are absolute home run acquisition of OCESA, just Mexico and Colombia, I think they said that, and Asia were 50% of the AOI growth in the quarter year over year. Do you see very many other targets out there to expand internationally as the music business is just now unbelievably globalized given the cross-market appeal of artists as Michael Rapino talked about yesterday? Thank you.

Thank you.

A lot of news amongst other merits of an absolute homerun acquisition.

Mexico and Colombia.

<unk> said that in.

As there were like 50% of NOI growth in the quarter year over year I mean do you see there are many other targets out there to expand internationally is music business.

It's just unbelievable way globalize, given the cross market appeal of our this is Michael talked about yesterday. Thank you.

Greg Maffei: Thank you, Matthew. You're right, OCESA is a great deal, and it's nice that Alejandro Soberón's business, who's also our partner in the Formula One Mexico City Grand Prix, is acting so successfully. There are other targets out there, probably not as many with the scale of OCESA that we could get done because of potential regulatory issues. Live Nation has a long history of successfully adding primarily promoters into the fold, usually in some form of a partnership agreement where the management stays involved, but we take some ownership interest as well. I expect you'll continue to see that either in venues or promoter relationships where we continue to take advantage of the strength of our business and our ability to try and offer both fans and artists a global product. The more we can fill in our global footprint, the better for both of them.

Thank you Matthew.

Youre right it is a.

Great deal and it's nice that.

Our 100 silver ounce business, who is also our partner in the Formula one.

Mexico Citigroup create is acting so successfully.

There are other targets out there.

Probably not as many with the scale of a setup that we could get done.

Cause a potential regulatory issues, but live nation has a long history of successfully adding primarily promoters.

Into the fold usually at some point, but partnership agreement, where the management stays involved but we take some ownership interest as well and I expect you'll continue to see that either in venues or.

Promoter relationships, where we continue to take advantage of the strength of our business and our ability to try and offer both fans and artists the global product.

And the more we can fill in our global footprint to better for both of them.

Matthew Harrigan: Thanks, Greg.

Thanks, Greg.

Greg Maffei: Operator, I think we're done. To our listening audience, again, thank you for your interest in the Liberty Media companies. We look forward to speaking with you next quarter, if not sooner, and have a great weekend.

Operator, I think we're done and to our listening audience again. Thank you for your interest in Liberty media companies.

We look forward to.

Speaking with you next quarter, if not sooner.

And have a great weekend.

Operator: Ladies and gentlemen, this concludes today's event. You may disconnect your lines or log off the webcast at this time, and enjoy the rest of your day.

Ladies and gentlemen. This concludes today's event you may disconnect your lines or log off the webcast at this time and enjoy the rest of your day.

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