Q2 2023 Liberty Media Corp Earnings Call

August 4, 2023

Operator: Good morning, and welcome to the Liberty Media 2023 Q2 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 will be recorded on 4 August 2023. I would now like to turn the call over to Shane Kleinstein, Vice President, Investor Relations. Please go ahead.

Good morning, and welcome to the Liberty Media 2023, Q2 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 will be recorded on August 4th.

I'd now like to turn the call over to Shane claims Green Vice President 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 the most recent Forms 10-K, 10-Q, and registration statement on Form S-4, filed by Liberty Media and Atlanta Braves Holdings with the SEC on 8 June 2023. These forward-looking statements speak only as of the date of this call, and Liberty Media and Atlanta Braves Holdings expressly disclaim any obligation or undertaking to disseminate any updates or revisions to any forward-looking statement contained herein to reflect any change in Liberty Media or Atlanta Braves Holdings expectations with regard thereto, or any change in events, conditions, or circumstances on which any such statement is based.

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 our most recent Form 10-K, and 10-Q and registration statement on form S. Four filed by Liberty media.

And Atlanta Braves holdings with the SEC on June eight 2023. These.

These forward looking statements speak only as of the date of this call and Liberty Media and Atlanta Braves Holdings expressly disclaim any obligation or undertaking to disseminate any updates or revisions to any forward looking statements contained herein to reflect any change in liberty media or Atlanta Braves holdings expectations with regard there to or any change in events conditions or circumstance.

There's on which any such statement is based on today's call. We will discuss certain non-GAAP financial measures for Liberty media, Siriusxm, and Atlanta Braves holdings, including adjusted OIBDA and adjusted EBITDA, the required definitions and reconciliations for Liberty media Siriusxm in Atlanta Braves Holdings schedules one through three can be found at the end of the earnings press release issued today, which is available.

Shane Kleinstein: On today's call, we will discuss certain non-GAAP financial measures for Liberty Media, Sirius XM, and Atlanta Braves Holdings, including Adjusted OIBDA and Adjusted EBITDA. The required definitions and reconciliations for Liberty Media, Sirius XM, and Atlanta Braves Holdings, Schedules one through three, can be found at the end of the earnings press release issued today, which is available on Liberty Media and Atlanta Braves Holdings websites. Now I'd like to turn the call over to Greg Maffei, Liberty's President and CEO.

On Liberty Media, and Atlanta Braves Holdings website, now I'd like to turn the call over to Greg Maffei, Liberty's President and CEO .

Greg Maffei: Thank you. Good morning. Today, speaking on the call, we will also have Formula One's President and CEO, Stefano Domenicali, Liberty's Chief Accounting and Principal Financial Officer, Brian Wendling. Also, during Q&A, we will be able to answer questions related to Atlanta Braves Holdings, and the Braves management will be available, too. Starting with some corporate updates, Atlanta Braves Holdings began trading as a C-corp on 19 July. We believe this split off will better highlight value at the Braves and its real estate. For example, the BATR A shares and the K shares are up 38% since the split announced last November. We also settled all of the remaining intergroup interests in connection with this split-off. Today marks the first day of trading for our new trackers, and we expect more focused equities.

Thank you good morning.

Today speaking on the call. We will also have formula one's president and CEO Stefano Dominik Kelly Liberty.

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

Also during Q&A, we will be able to answer questions related to Atlanta, Brave holding and embraced management will be available too.

Starting with some corporate updates Atlanta Braves Holdings began trading as a C Corp. On July 19th we believe the split off will better highlight value at the Braves and its real estate for example, the batter ishares in the case shares were up 38% since the split announced last November .

We also settled all of the remaining intergroup interest in connection with this split off.

Today marks the first day of trading for our new trackers, and we expect more focused after these more focused equities and increase future flexibility will trade better and be easier for investors to follow.

Greg Maffei: More focused equities and increased future flexibility will trade better and be easier for investors to follow. Beginning with Liberty SiriusXM, this simplified tracker consists only of an 83% interest in SIRI, cash, and debt. We continue to reduce debt in the second quarter, retiring the remaining $275 million of our 2.125 exchangeables for SIRI. We are having the 1.8 million new BATRA shares at LSXM exchanged for debt retirement in the near term. We reiterate the focus on rationalizing the SIRI and LSXM structures in the near term. Looking at SiriusXM itself, it reported strong financial results with an improvement over the first quarter, as was expected. We had a sequential improvement in self-pay net adds, and we do expect a positive back half in the aggregate in self-pay net adds.

Guinea with Liberty Sirius XM.

This simplified tracker consists only of an 83% interest in CRE cash and debt.

And we continue to reduce debt in the second quarter retiring the remaining $275 million of our two and one eight exchangeable for CRE.

And so having the $1 8 million new batter shares at <unk> exchange for debt retirement in the near term.

We reiterate the focus on rationalizing the CRE and <unk> structures in the near term.

Looking at Sirius XM itself it reported strong financial resorts with an improvement over the first quarter as was expected we had a sequential improvement in self pay net adds and we do expect a positive back half in the aggregate in self pay net adds.

Greg Maffei: Sirius sustained a historically low churn of 1.5%, and the business is focused on improved efficiency and cost structure, and that will benefit EBITDA in the coming quarters. During their announcement, Sirius increased its full-year free cash flow guidance by $50 million, up to $1.15 billion. During the quarter, we experienced continued progress on lowering the streaming cost per customer acquisition, and it was down 20% over the prior year. Data shows that this app is a great accelerant for in-car conversion as well, and we are making progress on our next generation SXM mobile app, which will launch this fall. Sirius is maintaining its focus on enhancing its in-car position, and I'd note EV manufacturers, which are a growth area, are an area of new success for us, as demonstrated by our agreement with Volvo.

Sirius sustained a historically low churn of one 5%.

And the business is focused on improved efficiency and cost structure and that will benefit EBITDA in the coming quarters.

During their announcement CRE increased its full year free cash flow guidance by $50 million up to 115 billion.

During the quarter, we experienced.

Continued progress on lowering the streaming cost per customer acquisition and it was down 20% over the prior year.

Data shows that this app is a great accelerant for in car conversion as well and we are making progress on our next generation Sx and mobile App, which will launch this fall.

Sirius is maintaining its focus on enhancing its in car position.

And I would know EV manufacturers, which are growth area, our area of new success for us as demonstrated by our agreement with Volvo.

Greg Maffei: Turning to the Formula One Group. At the corporate level, I'd remind you that the assets consist of F1 ownership and the motorsport-related assets we have, including the Vegas property. During the quarter, we effectively repurchased 1.1 million FWONA shares in settling the intergroup interest that were previously held at LSXM for $67.50 a share. At F1 itself, the number of fans engaging with F1 content across the platforms is bigger than ever. Stefano will give you more stats in a moment, but to name a few, we continue to have sellouts at almost all races. The sprint weekends are driving year-over-year growth in viewership. For example, the Spa total audience across race, sprint, shootout, and qualifying was up versus the Belgian GP last year. I'd note we've seen particularly solid growth in the US.

Turning to Formula One group at the corporate level I would remind you that the assets consist of F. One ownership and the motorsport related assets, we have including the Vegas property.

During the quarter, we effectively repurchased $1 1 million tswana shares in settling the intergroup interest that were previously held at <unk> $467 50, a share.

F. One itself the number of fans engaging with F. One content across the platforms is bigger than ever and ever.

I will give you more stats in a moment, but to name a few we continue have sellouts at almost all races. The sprint weekends are driving year over year growth in viewership for example, the spa total audience across race sprint shoot up and qualifying was up versus the Belgian BGP last year.

I would note, we've seen particularly solid growth in the U S b.

Greg Maffei: Viewership on ESPN is up season to date versus the 2022 average viewership, with strong F1 TV performance as well. The 2023 season has already seen three of the four largest live audiences in F1 history on US TV, including Miami, Monaco, and the Canadian GPs. All but two of our races have averaged more than 1 million viewers. Huge numbers for the US market. On the financial side, OIBDA was up slightly quarter-over-quarter, despite one less race, due to improved operating leverage on team payments and freight. Now turning to LVGP, excitement for the race grows, as demonstrated by momentum across social platforms. For example, LVGP had over 11 million social impressions and over 1 million engagements in July. The Las Vegas team is pulling together an event of unprecedented complexity and scale.

Viewership on ESPN.

Is up season to date versus the 2022 average viewership with strong F. One TV performance as well.

The 2023 season has already seen three of the four largest live audiences in F. One history on U S TV, including Miami, Monaco, and the Canadian Gp's, all but two of our races have averaged more than 1.001 billion viewers huge numbers for the U S market.

On the financial side, OIBDA was up slightly quarter over quarter. Despite one less rates due to improved operating leverage on <unk> payments and freight.

And now turning to LPG P excitement for the race grows as demonstrated by momentum across social platforms. For example, <unk> had over 11 million social impressions and over 1 million engagements in July .

The Las Vegas team is pulling together and event unprecedented complexity and scale.

Greg Maffei: It will be the largest, and our argument would be the most premium sporting event of 2023, and it's a view that's a testament to our Super Bowl aspirations for all our Grand Prix events. I am pleased to say preparations are running on schedule, and despite inflationary cost pressures, we expect no change in revenue and profitability assumptions that we laid out previously. We are increasing CapEx estimates for the paddock building and track work, and Brian will go into that in more detail in a moment. We remain confident in the return profile of this incredible project, which will support the incremental capital investment that we are making. I'd note we've also been already receiving inbounds with attractive economics for use of the paddock building within the next year, and we look forward to sharing those commercial plans once they are finalized.

It will be the largest in our argument would be the most premiums sporting event of 2023, and it's a view that's a testament to our Super Bowl aspiration for all our Grand Prix events.

I am pleased to say preparations are running on schedule.

Despite inflationary cost pressures, we expect no change in revenue and profitability assumptions that we laid out previously.

We are increasing Capex capex estimates for the past building attract work and Brian will go into that in more detail in a moment.

We remain confident in the return profile of this incredible project, which will support the incremental capital investment that we're making.

I would note. We've also been already receiving inbounds with attractive economics for use of the paddock building within the next year.

And we look forward to sharing those commercial plans once they are finalized.

Greg Maffei: We expect to learn a lot from our inaugural race and look forward to racing in Las Vegas for many years to come. Turning now to Liberty Live Group. Live Nation experienced its strongest Q2 ever, and they are confident in continued growth into the balance of the year in 2024. Revenue for the quarter was up 27%, and AOI was up 23% over the prior year. Growth was driven by international demand, a real opportunity for Live. International fans were up 46%, and more artists are touring globally. And lastly, on the international front, our OCESA acquisition in Mexico is outperforming expectations. Overall, attendance and per fan profitability were both up double digits for the quarter overall at Live Nation. Turning now to the Braves. Now a separate public company, but business as usual is continuing in Braves country.

We expect to learn a lot from our inaugural race and look forward to racing in Las Vegas for many years to come.

Turning now to Liberty Lie group.

Live nation experienced the strongest second quarter ever and Theyre confident in continued growth into the balance of the year in 2020 for revenue for the quarter was up 27% and AOI was up 23% over the prior year.

<unk> was driven by international Man, a real opportunity for life International fans were up 46% and more artists are torn globally.

And lastly on the international front, our assess acquisition in Mexico is outperforming expectations.

Overall attendance and per fan profitability were both up double digits for the quarter overall at live nation.

Turning now to the Braves.

Now a separate.

Public company, but business as usual is continuing and Braves country.

Greg Maffei: We've seen continued momentum in fan demand, having sold 56% of our ticket capacity season to date, tied for MLB's best. We've made it to 40 sellouts already, the fastest we've ever hit this milestone in a season at Truist, and concession revenue is up season to date, despite shorter game times. We announced a jersey patch sponsorship with Quikrete in a multiyear deal, and most importantly, on field, the Braves lead the NL East and the entire MLB. A franchise record eight players were in the All-Star Game, including our entire infield. All eight of these players are locked up through 2023 and most even longer. Excuse me, 2025, with most even longer. The Battery is also seeing continued growth. Adjusted OIBDA for the mixed-use development was up 18% in the first six months versus the prior year.

We've seen continued momentum in fan demand, having sold 56% of our ticket capacity season to date tied for <unk> best.

We've made it to 40 sellouts already the fastest we've ever hit this milestone in a season of truest and concession revenue was up season to date, despite shorter game types.

We announced the Jersey patch sponsorship with quickly.

A multiyear deal and most importantly on field the Braves lead the in at least in the entire MLP a franchise record eight players where in the all star game, including our entire Enfield.

All eight of these players are locked up through 2023, and most even longer excuse me 2025 with most even longer.

The battery is also seeing continued growth adjusted OIBDA for the mixed use development was up 18% in the first six months versus the prior year.

Greg Maffei: With that, I will turn it over to Brian for more on our financial results.

And with that I will turn it over to Brian for more on our financial results. Thank you, Greg and good morning, everyone.

Brian Wendling: Thank you, Greg, and good morning, everyone. My remarks will focus mainly on the 6:30 balance sheet figures, adjusted for the split-off that was completed 18 July, and the reclassification of our tracking stocks that was completed yesterday. At quarter end and adjusted for the split-off and reclassification, Liberty SiriusXM Group had attributed cash and liquid investments of approximately $331 million, which excludes $51 million of cash held at SiriusXM. There's also $1.1 billion of undrawn margin loan capacity at the parent level related to our SiriusXM margin loan. As of 3 August, the value of our SiriusXM stock was $16 billion. We have $1.5 billion in principal amount of debt against these holdings.

My remarks will focus mainly on the 630 balance sheet figures adjusted for the split off that was completed July 18th and the reclassification of our tracking stocks that was completed yesterday.

At quarter end and adjusted for the split off and reclassification Liberty Sirius XM group had attributed cash and liquid investments of approximately $331 million, which excludes $51 million of cash held at Siriusxm. Theres also a $1 1 billion of Undrawn margin loan capacity at the parent level related to our Sirius XM margin loan.

As of August 3rd the value of our Sirius XM stock was $16 billion, we have $1 5 billion in principal amount of debt against these holdings total Liberty Siriusxm group attributed principal amount of debt is $11 7 billion, which includes $9 5 billion of debt held directly at Sirius XM.

Brian Wendling: Total Liberty SiriusXM Group attributed principal amount of debt is $11.7 billion, which includes $9.5 billion of debt held directly at SiriusXM. In April, Liberty SiriusXM settled the remaining $275 million of its 2.125% SIRI exchangeables. Due to the net pay down at both SiriusXM and Liberty SiriusXM during the quarter, total attributed Liberty SiriusXM Group debt was down $360 million from $3.31 billion. This is exclusive of the debt reduction due to the reclassification. The 1.375% basket convertible notes mature in October, and $199 million principal remains on these notes. Liberty SiriusXM plans to exchange its $1.8 billion BATR shares with one or more third-party lenders to pay down debt in the near term.

And April Liberty Sirius XM settled the remaining $275 million of its 212, 5% CRE exchangeable due.

Due to the net paydown at both Sirius XM and Liberty Sirius XM during the quarter total attributed Liberty Siriusxm group debt was down $360 million from $3 31.

This is exclusive of the debt reduction due to the reclassification.

The one 375 basket convertible notes mature in October and $199 million principle remains on these notes.

Liberty Sirius XM plans to exchange its $1 8 billion batter shares with one or more third party lenders to pay down debt in the near term.

Brian Wendling: Turning to the Formula One Group, at quarter end, adjusted for the split off and reclassification, Formula One Group had attributed cash, liquid investments, and monetizable public holdings of $1.4 billion, which includes $1.1 billion of cash at F1. In connection with the reclassification, approximately $100 million of cash, as well as certain private and public assets previously held at Formula One Group, were attributed to the Liberty Live tracking stock. This includes $33 million of ETF and public assets that were liquidated prior to the reclassification and made up a portion of the $100 million of cash that was contributed over. Total Formula One Group attributed principal amount of debt was $3 billion, which includes $2.4 billion of debt at F1, leaving $536 million at the corporate level.

Turning to the Formula One group at quarter end adjusted for the split off and reclassification Formula One group had attributed cash liquid investments and monetize what public holdings of $1 4 billion, which includes $1 1 billion of cash it up one.

In connection with the reclassification of approximately $100 million of cash as well as certain private and public assets previously held at Formula One group were attributed to the Liberty lot of tracking stock.

This includes $33 million of ETF and public assets that were liquidated prior to the reclassification and made up a portion of the 100 million of cash that was contributed over <unk>.

Total Formula One group attributed principal amount of debt was $3 billion, which includes $2 4 billion of debt at up one leaving $536 million at the corporate level.

Brian Wendling: F1's $500 million revolver is undrawn, and their leverage at quarter end is 2.2 times. As we mentioned last quarter, the margin on F1's term loan B permanently stepped down to 3% from 3.25, effective at the beginning of May. The F1 business is best analyzed on an annual basis, given variability in the year-over-year race calendar. But I will make a couple of brief remarks on their quarterly results. During the quarter, F1 recognized a lower proportion of season-based income due to 6 out of 22 races occurring during the period, compared to 7 out of 22 that occurred in the prior year period. F1 also recognized proportionately less team payments given one less race, which was partially offset by expected increased team payments for the full year compared to 2022.

<unk> $500 million revolver is undrawn and their leverage at quarter end was two two times and as we mentioned last quarter. The margin on everyone's term loan b permanently stepped down to 3% from three to five effective at the beginning of May.

They have one business is best analyzed on an annual basis, given variability in the year over year race calendar.

But I'll make a couple of brief remarks on their quarterly results.

During the quarter <unk> recognized a lower proportion of season based income due to six out of 22 races occurring during the period compared to seven out of 22 that occurred in the prior year period F. One also recognized proportionately less team payments given one less race, which was partially offset by expected increases in payments for the full year compared to 2022.

Brian Wendling: Our team payments are best viewed on a year-to-date basis and represented 63% of pre-team EBITDA in the first half of the year. Formula One generated modest OIBDA growth in the quarter, despite one less race held and incremental investments in growth initiatives that were not in the prior year period, like the Vegas race and F1 Academy, as well as costs associated with the canceled Imola race. Given Imola was canceled on the Wednesday of race week, the majority of the race-related costs with regard to planning, logistics, and setup had already been incurred. On a full year basis, we estimate the impact to adjusted OIBDA from the cancellation of Imola is modest at less than $20 million. Reminder that other costs of F1 revenue and SG&A are best viewed as a percent of total revenue.

Our team payments are best viewed on a year to date basis and represented 63% of pre teen EBITDA in the first half of the year.

Formula one generated modest OIBDA growth in the quarter. Despite one less race held and incremental investments in growth initiatives that were not in the prior year period like the Vegas rates and F. One academy as well as costs associated with the canceled MLR race.

Given MLR was canceled on the Wednesday of race week. The majority of the race related costs with regard to planning logistics and setup had already been incurred.

On a full year basis, we estimate the impact to adjusted OIBDA from the cancellation of envelope.

Is modest at less than $20 million.

Reminder, that other cost of F. One revenue and SG&A are best viewed as a percent of total revenue.

Brian Wendling: Other costs of F1 revenue in the quarter was 24% of total revenue, consistent with our historical average. Note that the LVGP related revenues and other costs of sales will largely be incurred in the Q4 when the race occurs. But for the quarter on SG&A, we had $7 million of costs associated with LVGP. On Vegas, as Greg already noted, there's no change to our revenue and profit expectations for the race in year one. Our paddock building is now 85% complete. We expect CapEx related to the Vegas race, including both the paddock building structure and track-related CapEx, to be close to $400 million, of which approximately $155 million was incurred in the first half of the year.

Other cost F. One revenue in the quarter was 24% of total revenue consistent with our historical average.

Note that the <unk> related revenues and other cost of sales will largely be incurred in the fourth quarter when the rates occurs.

But for the quarter on SG&A, we had $7 million of costs associated with L. B G P.

And Vegas as Greg already noted Theres, no change to our revenue and profit expectations for the race in year one.

Our paddock building is now in the 85% complete we expect capex related to the Vegas rates, including both the paddock building structure and track related capex to be close to $400 million.

Of which approximately $155 million was incurred in the first half of the year the.

Brian Wendling: The majority of the CapEx spend will be incurred at the corporate level related to the paddock building, as the land and building both sit within F1 or FLAN, separate from Formula One. Track-related CapEx has and will be incurred at the F1 OpCo level. Our team has managed this project on a compressed timeline and in an inflationary environment. Much of our cost increase is attributed to track-related expenses incurred to be responsive to the concerns of the local community, such as minimizing disruption to businesses along the Strip. We have also invested in security enhancements and expenses incurred to ensure the quality of the fan experience with infrastructure changes to improve sight lines. We are working closely with our local Vegas partners, and the speed and efficiency with which we have completed this project is a testament to these relationships.

The majority of the Capex spend will be incurred at the corporate level related to the <unk> building at Atlanta building, both sit within F. One or flan separate from Formula one.

Track related Capex has and will be incurred at the F. One opco level.

Our team has managed this project on a compressed timeline and in and in an inflationary environment much of our cost increase is attributed to track related expenses incurred to be responsive to the concerns of the local community such as minutes minimizing disruption to businesses along the strip.

We have also invested in security enhancements and expenses incurred to ensure the quality of the fan experience with infrastructure changes to improve sidelines.

We are working closely with our local Vegas partners and the speed and efficiency with which we have completed this project is a testament to these relationships. We are excited about our investment in Las Vegas, and the associated opportunities for both the Grand Prix and year round activities of the facts of it.

Brian Wendling: We are excited about our investment in Las Vegas and the associated opportunities for both the Grand Prix and year-round activities at the Paddock building. At the Liberty Live Group, adjusted for the reclassification, there is attributed cash, liquid investments, and monetizable public holdings of $204 million, which includes the ETF assets contributed from Formula One Group. In connection with the reclassification, the Formula One Group also has contributed private assets with a fair value of approximately $380 million, measured at the time of our definitive S-4 filing. We do not anticipate providing ongoing updates to the value of these private assets. Additional disclosure on the composition of these assets can be found in the asset list posted to our website. There's $400 million of undrawn margin loan capacity at Liberty Live Group related to our Live Nation margin loan.

At the Liberty Live group adjusted for the reclassification, there is attributed cash and liquid investments and monetize both public holdings of $204 million, which includes the ETF assets contributed from Formula One group in connection with the reclassification of the Formula. One group also has contributed private assets with a fair value of approximately 380 million.

Measured at the time of our definitive S. Four filing we do not anticipate providing ongoing updates to the value of these private assets.

Additional disclosure on the composition of these assets can be found in the asset was posted to our website.

There's $400 million of Undrawn margin loan capacity at Liberty Live group related to our live nation March alone and as of yesterday the value of our live nation stock held at Liberty Live was 6 billion we have nine.

Brian Wendling: And as of yesterday, the value of our Live Nation stock held at Liberty Live was $6 billion. We have $920 million in principal amount of debt against these holdings. Liberty and our consolidated subsidiaries are in compliance with their debt covenants at quarter end. Looking quickly at the Braves-

$920 million of principal amount of debt against these holdings.

Liberty and our consolidated subsidiaries are in compliance with our debt covenants at quarter end.

Looking quickly at the brain, let me interrupt you for one SEC Brian .

Greg Maffei: Let me interrupt you for one sec, Brian. As we turn to the Braves, I think I misspoke, too early in the morning here, and said it was at 56 capacity, 56% capacity. The Braves Stadium is actually at 96% capacity. Sorry, go ahead.

As we turn to the brain, so I think I Miss spoke to.

Too early in the morning here instead of was it 56 capacity, 56% capacity. The Braves Stadium is actually at 96% capacity sorry go ahead.

Brian Wendling: Thank you, Greg, for clarifying that. So looking at the Braves, revenue growth reflects 96% capacity in the quarter, with more regular season home games in the period, as well as increased game attendance and growth in related revenues, including ticket and concession revenue. Battery mixed-use revenue also grew due to increased rental income from existing and new tenants. Baseball operating costs grew in Q2, primarily due to increased player payroll, as well as increased payments under MLB's revenue sharing plan and higher variable stadium operating costs due to the increased attendance. At quarter end and adjusted for the split off, they had attributable cash and liquid investments of $131 million, which excludes $52 million of restricted cash. Atlanta Braves Holdings had attributable principal amount of debt of $543 million.

Greg for clarifying that.

So looking at the Braves revenue growth reflects that 96% capacity in the quarter with more regular season home games in the period as well as increased game attendance growth and related revenues, including ticket and concession revenue a battery mixed use revenue also grew due to increased rental income from existing and new tenants.

Baseball operating costs grew in the second quarter, primarily due to increased player payroll as well as increased payments under Mlps revenue sharing plan and higher variable stadium operating costs due to the increased attendance at quarter end and adjusted for the split off they had attributed cash and liquid investments of $131 million, which excludes $52 million of restricted cash.

And Atlanta Braves Holdings had attributed principal amount of debt of $543 million and with that I'll turn it over to Stefano to discuss formula one.

Brian Wendling: With that, I'll turn it over to Stefano to discuss Formula 1.

Stefano Domenicali: Thanks, Brian, and good morning to everyone. We are already over halfway through the 2023 Formula 1 season. I would first like to congratulate Red Bull and Max Verstappen on their incredible performance this season, breaking an all-time record on consecutive wins. The title field behind them has produced incredible action for all our fans, and I believe the gaps will continue to close over time for all the teams. In Silverstone, the top six finishers crosses the line within 13 seconds of one another. Hungary had one of the most thrilling qualifying rounds to date, with the top six all within three-tenths of a second. McLaren's performance improvement following recent upgrades has delighted fans with Lando's second-place podiums at Silverstone and Hungary, and strong drive from Piastri. Our fans are accessing F1 content across multiple media platforms.

Thanks, Brian and good morning to everyone. We are already over halfway through the 2023 <unk> hundred one season I would first like to congratulate Red Bull and Maximus tapping on their incredible performance. This season, breaking all time record on consecutive wins, they type of field behind them.

Producing credible action for oil with fans and I believe the gas will continue to close over time for all of the teams.

Silver some of the top six finishers crosses the line within 13 second on off one another hungry had one of the most screening 45 routes to date with the top six all within three tenths of a cycle Mcleod as performance improvement. Following recent upgrades at the lights of plans with Lanza second place.

Poses a superstar and hungry and strong drive from past year.

Our fans have access and therefore constant across multiple media platforms global audience averaged 68 million through the first eight races and growth market like the U S. Viewership over the same period is up 5% on ESPN and events like mono quite throne of 29% compared to last year U S. <unk>.

Stefano Domenicali: Global audience averaged 68 million through the first 8 races. In growth market like the US, viewership over the same period is up 5% on ESPN, and events like Monaco had grown by 29% compared to last year's US viewership. The Sprint Series have continued to both generate excitement on the track and drive viewership growth. At Azerbaijan, our first Sprint of the season, total weekend viewership across the race and Sprint events was up 10% versus 2022. We recognize that sport fans today engage with content across a variety of platforms, including linear, digital, and social. Across our social media channels, F1 reached 64.6 million followers as of Q2, up 29% year-over-year. F1 continues to adapt and expand our content to cater to different platforms and serve all segments of fans.

The spring Skus are continuing to both generate excitement on the track and drive viewership growth.

Led by John our first print of the season total weekend viewership. We're close to these subsequent events was up 10% versus 2022.

We recognize that support plans today engaged with Thomson across a variety of platforms, including leaner digital and social.

Our social media channels F. One reached $64 6 million followers as of Q2 up 29% year over year and continuously.

Continues to adapt and expand our counter to gathered to different platforms and serve old segmental fabs.

Stefano Domenicali: For example, at the Hungarian Grand Prix, we piloted our first ever F1 broadcast for kids in partnership with Sky UK and Germany. In just one day, social media coverage for the announcement of the kid cast and the presentation of the drivers' avatars reached more than 45 million users, with 93 million impressions and hugely positive sentiment. F1 celebrity presence continues to be a large draw of, for fans. For example, F1 social post featuring Shakira at the Spanish Grand Prix generated over 50 million impressions and over 2 million engagement. As filming for the Apple TV movie began, the post at Silverstone with Brad Pitt and Damson Idris lining up at the back of the grid generated 2.8 million engagement and over 7,000 comments.

For example, let them get on Grand Prix, we piloted our first ever F on broadcast for kids in partnership with Sky, UK and Germany.

Just one day social media coverage for the announcement of the kit Kat and the presentations of drivers avatars reaches more than 45 million users with 93 million impression and huge the positive sentiment.

If one celebrity presence continues to be a large growth of four patents. For example, if one social posts featuring a shaky that the Spanish Grand Prix generated over 15 million impressions and over 2 million engagement as Tim in the for the Apple TV movie began the pasta Silverstone with breath beaten damson.

I addressed lining up at the back of the grid generated two point immediate engagement and over 7000 comments.

Stefano Domenicali: The social content, when Yuki Tsunoda and his Alpha Tauri teammates helped the community after the flood in France, generated almost 50 million social impressions. F1 is considering how to advance our approach to audience measurement as consumer behavior evolve to better capture our wider viewership and engagement for the future. Our discussion with commercial partners successfully focus on these broader engagement metrics. The promoters continue to improve the quality of Grand Prix events and invest in enhancing the overall fan experience. We have seen the result of these efforts with continued sellout races, many at increased capacity. The Canadian and Silverstone Grand Prix both set new attendance records with crowds of 345,000 and 480,000, respectively.

Social calling them when the U can sooner than these all fatality teammates help the community after the floods in plain sight generated almost 15 million social impressions.

If one is considering how to advance our approach to audience measurement as consumer behaviors evolve to better capture of a wider viewership and engagement for the future.

Our discussion with commercial partners successfully focus on these broader engagement metrics.

Promoters continues to improve the quality of the room, please events and invest in enhancing the overall client experience. We have seen the result of these efforts with continued sellouts races, many as increased capacity.

Canadian <unk> run pretty both set new attendance records with crowds of 345000 <unk> thousand respectively.

Stefano Domenicali: Silverstone attendance was up 20% compared to last year, in part due to cultivating fan experience across the entire race weekend, including a Calvin Harris conference on Thursdays, evening before the on-track activity started. We will continue to work with our promoters on these efforts. The success of their events is beneficial to the entire F1 ecosystem. There are growing ways to engage with F1 outside of race weekends. Our F1 Arcade licensees announced further expansion plans, with new site opening in Birmingham, in the UK, this December, and Boston in May 2024. Footfall at flagship London location grew 16% in Q2 compared to the prior quarter, with an average of over 7,000 visitors per week. In June, EA launched the F1 23 video game.

Silver some attendance was up 20% compared to last year in part due to cultivating funds experienced across the entire race weekend, including like Halloween and harvest covenants on Thursday evening before on track activities.

We will continue to work with our promoters on these imports.

The success of their events is beneficial to the entire F. One ecosystem.

There are growing ways to engage with F. One outside of race weekends. Our F 100, Cade licensees announced further expansion plans, we new sites opening in Birmingham in the UK. These December .

And Boston in May 2020 for football a flagship London location grew 16% in Q2 compared to the prior quarter with an average of over 7000 vehicles per week.

June .

<unk> launched the F 123 video game in its first week the game ranking number two and number three in UK games, and Globus team sales chart, respectively, and finally F. One related post because an increasingly providing other content to engage our fans.

Stefano Domenicali: In its first week, the game ranked at number 2 and number 3 in UK games and Global Steam sales chart, respectively. And finally, F1-related podcasts are increasingly providing other content to engage our fans. A new Formula Y podcast launched in May. It reached number 1 in the US and UK sport podcast channel, performing particularly well among newer fan cohort, with 35% of its audience in the US, and 30% of its audience, female, tuning our to race and update to on our commercial agreements. On race promotion, we recently announced a further extension of Austrian Grand Prix through 2030. Hungary also extended through 2032, with commitments made by the promoters to invest significantly in their physical infrastructure, including a new pit building and main grandstand by 2026.

A new Formula why podcast launch in May.

It reached number one in the U S and UK support Postal's channel, performing particularly well among newer final cohort with 35% of its audience in the U S and 30% <unk> female.

Tuning.

Two is an update on our commercial agreements.

Our race promotion recently announced the total essential novel Ocean Grand Prix throughout 2013.

Hungary also extended through 2032 with commencement is made by the promoter to invest significantly in their physical infrastructure, including a new pit building and make it add some by 2026.

Stefano Domenicali: We announced a record-breaking 24 races championship calendar for 2024, with the return of the race in China for the first time since 2019. F1 is further progressing on journey towards greater regionalization of the calendar where possible, including back-to-back races in Japan and China, as well as Abu Dhabi and Qatar. This improves the efficiency of our operations and reduce unnecessary lags in our travel, particularly from a freight perspective. On media rights, we enter into a multi-year agreement with Tencent to stream F1 event across its digital platform. This complements our existing coverage in China on CCTV. Additionally, we continue to grow F1 TV Pro and access subscribers with particular strength in the US market. On sponsorship, Heineken extended their global partnership in a new multi-year deal.

We announced a record breaking 24 races championship calendar for 2024 with a return of the race in China for the first time since 2019, and one is further progressing on journey towards greater of a generalization of the kolenda, where possible, including back to back races in Japan, and China as well as a buildout in Qatar.

This improves the efficiency of our operations and reduce our necessity legs in our travel, particularly from a freight perspective.

You're right we entered into a multi year agreement with Tencent to stream F. One event across its digital platform.

This complements our existing companies in China on the CCTV. Additionally, we continue to grow our F. One TV <unk> subscribers with particular strength in the U S market.

On sponsorship Heineken extended the global partnership in a new multi year deal as put anybody announced they will also be the official title Boston as other form of online consumer Let's Vegas Grand Prix.

Stefano Domenicali: As previously announced, they will also be the official title partners at the Formula One Heineken Silver Las Vegas Grand Prix. The relevance of F1 brands continues to generate interest in sponsorship opportunity, including leveraging our sustainability strategy in, and the new inventory like Las Vegas. We are focused on delivering incremental values to our existing sponsors and further developing our strong pipeline of new commercial partners. We are just over three months away from the inaugural Las Vegas Grand Prix. The Las Vegas Grand Prix will provide an unparalleled guest experience, combining the thrill of Formula One racing with premium live entertainment, musical acts, world-class culinary offering, and more. We continue to grow our fan offering with new partnerships, ensuring all partner venues meet the quality standards our fans expect and deserve.

Although one brands continues to generate interest in sponsorship opportunity, including leveraging our sustainability strategy in and the new inventory like Las Vegas.

We are focused on delivering incremental value to our existing sponsors and further developing our strong pipeline of new commercial partners. We have just over three months away from the inaugural Las Vegas Grumpily Las Vegas, Grumpy will provide unparalleled guest experience combine the thrill of Puma racing with premium live into that.

Statements musical acts World class culinary offering them more.

We continue to grow our final offering with new partnerships, ensuring all partner venues meet the quality standards. Our final expands and deserve. Most recently we were excited to announce Additionally, hospitality experience included the I think in House club Assai, and Clos parties as well as our partnership with <unk>.

Stefano Domenicali: Most recently, we were excited to announce additionally hospitality experience, including the Heineken House, Club SI, and Club Paris, as well as a partnership with Hilton Grand Vacations to host a premier on-track hospitality suite. Musical acts including J Balvin, Major Lazer, Mark Ronson, with the headline with the T-Mobile Zone at the Sphere stage, with many high-profile music and DJ acts still to be announced. The beverage brand, Liquid Death, was named as official event partner, and will provide fans with a more sustainable alternative to single-use plastic through their beverage offerings. Formula One and Liberty have made a long-term commitment to race in Las Vegas and have invested meaningful capital to make it happen. The team, led by Renee Wilm, has built incredible partnership with the local community, all of whom stand to benefit from the tremendous economic value we believe Formula One will bring.

Some ground vacation to wholesale plan, they're on track hospitality suite musical.

Musical acts, including J building major Lazer, Mark Robson with the headlines with the T Mobile zone at this stage with many high profile music N. B J Act still to be announced the beverage Brown linked with death was named as official event partner and will provide fans with a most sustainable tenant with a single use.

Through their beverage offerings.

For one our Liberty have made a long term commitment to rise in Las Vegas, and have invested meaningful capital to make that happen. The team led by Renee will has been an incredible partnership with the local community all of whom we stand to benefit from the tremendous economic value. We believe for one would bring the Las Vegas team work with third.

Stefano Domenicali: The Las Vegas team worked with third parties in gathering market-based data and estimated the economic impact to Las Vegas in year one of the race will be over $1.2 billion. This is in addition to meaningful community effort focused on food insecurity, water conservation, and access to education in Southern Nevada. We are proud of the work our team is doing, and are confident that Las Vegas Grand Prix will wow the global sporting community this November. Finally, F1 continues to progress our sustainability and diversity and inclusion efforts. F1 Academy began its inaugural season in Austria in April, and is now through six of seven races. The season finale will take place in Austin, alongside the F1 race weekend, with Marta García leading the championship.

Part of this and gathering market these data and estimated economic impacts to Las Vegas in the year one of the race with the over one 2 billion. This is an additional two meaningful community efforts focus on the puts in security water conservation and access to education in Southern Nevada, We are proud of the.

The work our team is doing and I am confident that Las Vegas Grand Prix will await the global Sporting community. This November .

Finally F. One continues to progress our sustainability and diversity and inclusion efforts F. One Academy began its inaugural season in the North Sea and Apple and he's now through six of 700 basis. The season finale would take place in Austin alongside the F. One race weekend with Martha Garcia, leading the championship last week, we announced that.

Stefano Domenicali: Last week, we announced that all 10 Formula One teams will have F1 Academy drivers and liveries for the 2024 season. This demonstrates the depth of support across the F1 community for the importance of F1 Academy grassroots initiatives. Building the next generation of young women in races stands to provide tremendous benefit for the entire F1 ecosystem. F1 has also progressed initiatives this season in environmental sustainability. In Austria, we piloted an energy-efficient power system that delivered a 90% reduction in carbon emissions from operating the paddock, pit lane, and F1 broadcast area. Additionally, a new fleet of bio-fuel trucks operated by DHL are delivering our broadcast production, technical, and other equipment for the European events of the 2023 season, which we expect will reduce our road freight emissions by a minimum of 60% compared to traditional fueled vehicles.

All 10 Formula one teams will have F. One academy drivers and leave it as for the 2024 season.

This demonstrates the depth of support across the airport community for the importance of I have won academy grassroots initiatives.

And the next generation of young women erases tends to provide tremendous benefits for the entire F. One ecosystem.

One has also progressed initiatives this season in the environmental sustainability in Austria, we piloted that in the energy efficient power system that delivered a 90% reduction in carbon emissions from operating the power the pit Lane and that's one broadcast area. Additionally, a new fleet of <unk> fuel trucks operated by DHL all delivered in an hour.

Broadcast production technical and other equipment for the European events of the 2023 season, which we expect will reduce our road freight emissions by a minimum of 60% compared to traditional fuel vehicles. The formula two and Formula three cars are successfully running on 55% advanced sustainable fuels.

Stefano Domenicali: The Formula Two and Formula Three cars are successfully running on 55% advanced sustainable fuel this season, and we remain on track to introduce 100% advanced sustainable fuel to Formula One in 2026. We are also encouraged by the increased awareness and openness of governments to include advanced sustainable fuels in their policy roadmaps to net zero, something F1 will continue to be at the forefront of pushing. We look forward to an exciting rest of the season, and of course, a well-deserved summer break for our teams. The season will resume in Netherlands later this month before going to Monza. The gaps are getting increasingly closer within the pack on the grid. We have three months Grand Prix series to come in Austin, Qatar, and Brazil.

This season, and we remain on track to introduce 100% of advanced sustainable field to form a one in 2026.

We are also encouraged by the increased awareness and openness of governments to include advanced sustainable fuels in the policy Roadmaps to net zero something F. One will continue to be at the forefront of pushing.

We look forward to an exciting rest of the season and of course, a well deserved summer break for our teams the seasonal wood, assuming Netherlands later this month before going to monitor the gaps are getting increasingly close within the back of the grid. We have three months of Brinci. This to come in Austin, Qatar and Brazil our.

Stefano Domenicali: Our business is in a position of incredible strength, both financially and commercially, and I look forward to updating you on our progress. Avanti tutta! Full speed ahead. And now, I will turn the call back over to Greg. Thank you. Bye-bye.

Our business is in a position of incredible strength, both financially and commercially and I look forward to updating you on our progress of antidote.

Full speed ahead, and now I will turn the call back over to Greg. Thank you Bye bye.

Greg Maffei: ...Thanks, Stefano and Brian. Our annual investor day will be Thursday, 9 November, in New York. Please save the date. Additional details will be provided soon. We hope to see many of you there. We do appreciate your continued interest in Liberty Media and Atlanta Braves Holdings. And with that, operator, I'd like to open the line for questions.

Thanks, Stefano and Brian .

Our annual Investor Day will be Thursday November 19 in New York. Please save the date additional details we provided soon we hope to see many of you. There. We do appreciate your continued interest in Liberty media, and Atlanta Braves holdings, and with that operator, I'd like to open the line for questions.

Operator: Thank you. We will now be conducting a question and answer session. If you would 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 would 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. Please hold while we poll for questions. Thank you. Our first question comes from Steven Cahall with Cowen and Company.

Thank you.

We'll now be conducting a question and answer session. If you would.

Like to ask a question. Please press star one on your telephone keypad.

Confirmation tone will indicate your line is in the question queue you.

You May 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 your handset before pressing the star keys. Please hold while we poll for questions.

Thank you.

Our first question comes from Steven <unk> with Cowen and company.

Steven Cahall: Hi, thanks for the question. Greg, can you help us better understand monetization of the Las Vegas paddock outside of the Grand Prix in 2024 and beyond? So what type of events do you plan on holding? You know, any early indicators on sponsorship interest outside of the Grand Prix? And do you expect this OIBDA contribution, you know, to match or exceed the Vegas Grand Prix over time? Thank you.

Stephen Glagola: Hi, thanks for the question. Greg, can you help us better understand monetization of the Las Vegas paddock outside of the Grand Prix in 2024 and beyond? So what type of events do you plan on holding? You know, any early indicators on sponsorship interest outside of the Grand Prix? And do you expect this OIBDA contribution, you know, to match or exceed the Vegas Grand Prix over time? Thank you.

Alright, thanks for the question.

Greg can you help us better understand monetization of the Las Vegas pilot outside of the Grand Prix in 2024 and beyond.

What type of events do you plan on holding money early indicators on sponsorship interest outside of the Grand Prix and do you expect this OIBDA contribution match.

To match or exceed the Vegas Grand Prix over time. Thank you.

Greg Maffei: I will manage expectations first and say I do not expect it will exceed the amount we'll make on the Grand Prix over time. But with that, we have Renee Wilm here, who's running our Las Vegas effort. I'll let her comment on some of the things we're thinking about outside the race.

I will manage expectations first and say I do not expect to well over it will exceed the amount we'll make in the Grand Prix over time, but with that we have Renee welcome here, who is running our Las Vegas effort I'll, let her comment on some of the things we're thinking about.

Outside the race.

Renee Wilm: Thanks, Greg. Happy to. So we are just beginning to really scratch the surface on what is available for us on a go-forward basis with the building. We have had a number of inbound requests. Think about Super Bowl parties, think about something relating to racing, maybe karting, high-end supercars. Of course, Las Vegas is the convention center of the world. Lots of interest in our state-of-the-art LEED certified building. Many of our partners in the F1 ecosystem are very interested in working with us throughout the year. So all I could say is a lot more to come over the next few months.

Thanks, Greg happy too. So we are just beginning to really scratched the surface on what is available for us on a go forward basis with the building. We have had a number of inbound requests think about Super Bowl parties and think about something related to racy, maybe carding high end Supercars of course, Las Vegas is the convention center of the World lots of interest in our state of the art.

Leds certified LEED certified building many of our partners in the F. One ecosystem are very interested in working with us throughout the year. So all I can say is a lot more to come over the next few months.

Steven Cahall: Thanks. Thank you. And if I could squeeze in one more, how should we interpret the, what appears to be some recent conflicting comments from the FIA, you know, with regards to an early renewal and then, you know, the Concorde Agreement and then the appetite of new team entrants? And, and maybe just, like, more high level, Greg, do you see any conflicts of interest with your vision of the sport long term versus what the FIA views? Thank you.

Stephen Glagola: Thanks. Thank you. And if I could squeeze in one more, how should we interpret the, what appears to be some recent conflicting comments from the FIA, you know, with regards to an early renewal and then, you know, the Concorde Agreement and then the appetite of new team entrants? And, and maybe just, like, more high level, Greg, do you see any conflicts of interest with your vision of the sport long term versus what the FIA views? Thank you.

Thanks.

Thank you and if I could squeeze in one more how should we interpret what appears to be some recent conflicting comments from the FAA.

With regards to an early renewal and then the Concord agreement and then the appetite of new team entrance.

And maybe just like more high level, Greg do you see any conflicts of interest with your vision of the sport long term versus what the FIA views.

Greg Maffei: Well, I'll make a comment or two, and then I'll let Stefano add. I think there's little daylight between Stefano and my view, which is, we have ten great teams. We're very excited about what they're doing. We are, there is a process to add more teams, but the bar is very high, and it's unclear what an eleventh team value they would add, and there is a lot of uncertainty among the other teams about adding an eleventh team. The FIA and we have had productive discussions about all this. Do we agree on everything, every moment? No. We discuss it, and we hopefully work things out. Stefano, what would you add?

Thank you.

I'll make a comment or two and then I'll, let Stefano ad.

I think there is little daylight between Stefan My view, which is.

We have 10, great teams, we're very excited about what they're doing.

We are there is a process to add more teams, but the bar is very high and it's unclear what an <unk> value. They would add in there is a lot of uncertainty among the other teams about <unk>.

The FIA and we have had productive discussions about all of this.

Do we agree on everything every moment no we discuss it and we hopefully work things out Stefan or what would you add.

Stefano Domenicali: I think, Greg, you said perfectly. I mean, the FIA started the process as it is in their possibility. We're waiting for the final conclusion, but, as always, in this discussion, we will find agreement together because, as you said, the value of the team and the value of the business today is very, very strong. So, that decision, that information will come very, very soon, I would say within the month of September.

I think Greg you said it perfectly I mean.

As we start the process.

Is there a possibility what are waiting for the final conclusion, but as always in this discussion we will find the agreement together because as you said the value of the team and the value of the business. There is very very strong so.

But the season that information will come very very soon that I would say it wouldn't be months in September .

Steven Cahall: All right. Thank you both.

Stephen Glagola: All right. Thank you both.

Alright, Thank you both.

Operator: Thank you. Our next question comes from Ben Swinburne with Morgan Stanley.

Thank you. Our next question comes from Ben Swinburne with Morgan Stanley .

Ben Swinburne: Thank you. Good morning. On F1, what's your sense of optimism about potentially signing a Concorde Agreement with the teams this year, which would be a couple years early? And, Stefano, when you look at the product this year, obviously being dominated by one team, you how do you look at that relative to all the changes you guys have made around driving more parity into the sport? Do you see this as a step backwards or just sort of the natural way the sport evolves, you know, unpredictably over time? And then I just had one Braves question for you guys. You know, there's been some teams that have left Diamond and gone on to new business models in different sports.

Thank you and good morning.

On F. One any whats your sense of optimism about potentially signing a concrete agreement with the teams this year, which would be a couple of years early and.

It's definitely when you look at the product this year honestly being dominated by one team.

How do you look at that relative to all of the changes you guys have made around driving more parity into this sport do you see this as a step backwards or just sort of the natural way the sport evolves unpredictably overtime.

And then I just had one Braves question for you guys. There's been some teams that has left diamond and gone on to new business models and different sports.

Ben Swinburne: What does that tell you, if anything, about how you think about the Braves' opportunity over the next, you know, couple years as this Diamond process plays out? Thanks a lot.

What does that tell you if anything about how you think about the Braves opportunity over the next couple of years as this diamond process plays out. Thanks, a lot I'll, let Stefan I will take the first two.

Greg Maffei: I'll let Stefano take the first two, and I'll take a shot at the Diamond question, and obviously, Derek, if you have things to add. But Stefano, why don't you speak first?

And I'll take a shot at the.

Diamond question, and obviously, Derek if you have things to add but Stefan why don't you speak first.

Stefano Domenicali: Yeah. Thanks, Greg. I mean, I would say, first of all, I think it's the right moment to celebrate the incredible job that this company is doing with that car, because if you see the other car and where the others are in terms of gap, it's just incredible how Max is doing an incredible job. But that has been always part of Formula One, you know, and I would say this is part of the game. I'm pretty sure that in the next couple of years, the terms of technical gaps will be reduced, but if someone is great, we need to celebrate what he's doing. And sometimes I have to say, there is also the need to confirm the legacy of someone that is doing some spectacular stuff.

Yeah. Thanks for asking I mean, I would say first of all I think it's the right moment to celebrate the incredible job that this happened was doing that probably because you can see the other car and the web Yao Zhao from a GAAP is just incredible all matches.

Political job, but that has been always part of formal one you know I would say that this is part of the game I'm pretty sure that the next couple of years.

Thank you Bill that's what it is.

Someone is great, but we need to see the great what he's doing and sometimes that the state.

The need to come from the legacy office, although somewhat these new subs.

Talk to yourself and in certain markets and many of the new one you can say.

Stefano Domenicali: In certain markets, maybe the new one, you can say that he's also putting an incredible legacy because, you know, that means something. You know, if you're able to win so many races, that means you're really a great leader. So nothing negative in that respect. If you look back, I would say this has been always part of F1 history. With regard to Concorde Agreement, I would say today, conversations are really going ahead because the momentum of the sport is really great. Of course, we are not in a rush, but I would say that all things are heading to a positive conclusion for this discussion, both with the teams and the FIA.

You can see that these also let me tell you.

Will that get to because you know it doesn't make something you know if you're able to win so many reasons I mean, youre really I'd get either so nothing negatively in that respect that in and.

And if you look back I would say this that something does that.

It's been always parts of Epsilon history.

With regard to cope with the agreement I would say today compensation are really going ahead, because the momentum sports is really great of course, we are not in a rush, but I would say that Oh things are heading to a positive conclusion for this discussion both with the team that would be up again.

Bryan Kraft: Thank you.

Ben Swinburne: Thank you.

Thank you so on the Braves I'll I'll give my view and Derek please feel free to add.

Greg Maffei: On the Braves, I'll give my view, and Derek, please feel free to add. We're blessed to have an incredibly strong territory. 14 million broadband households, a fan base which is very appreciative of a very successful team. And with a reasonable deal on what we are paid by Diamond or Valley, we think we are probably the most profitable RSN they have. Some of the other ones were less attractive, either territories or less attractive fan bases, or relatively less attractive revenue versus cost to Valley. And this is why in the bankruptcy proceedings, they were terminated as executory contracts by Valley. I don't anticipate that will happen for us because we have, for all the reasons I cited above.

We're blessed to have an incredibly strong territory.

14 million broadband households.

A fan base, which is very appreciative of a very successful team.

And with a reasonable deal on what we are paid by diamond or valley.

<unk>.

We think we are probably the most profitable Rs and they have some of the other ones were less attractive either territories or less attractive fan basis or relatively less attractive revenue versus cost to Bali and that's why in the bankruptcy proceedings. They were terminated as executors contracts by valley.

I don't anticipate that will be that what happened for us because we have for all the reasons I cited above but I do think if it does happen there will be other alternatives because of the strength of our product and the demand in our territory for.

Greg Maffei: But I do think if it does happen, there will be other alternatives because of the strength of our product and the demand in our territory for that will generate us positive returns. Derek, you want to add anything?

That will generate positive returns Derek do you want to add anything.

Derek Schiller: Greg, thanks. You said it very well. I would just comment that, first of all, we and Bally's are both adhering to the terms of our agreement as we currently stand. We are being paid in full, and we are delivering our rights in full. So we don't see that changing anytime soon. And then just generally, I would just tell you, live sports content continues to be very desirable, so we think long term, this is a good position regardless of what happens.

Great. Thanks, you said it very well I would just comment that first of all we and valleys or both are adhering to the terms of our agreement as we currently stand.

We are being paid in full and we are delivering our ryzen pool. So we don't see that changing anytime soon and then just generally I would just tell you live sports content continues to be very desirable. So we think long term. This is a.

Good position, regardless of what happens.

Bryan Kraft: You guys want to comment on the Mets season to date? Just kidding. Have a good day.

Ben Swinburne: You guys want to comment on the Mets season to date? Just kidding. Have a good day.

You guys want to comment on that that season to date.

That's a good day.

Greg Maffei: No, thank you. Next question.

No. Thank you.

Next question.

Operator: Thank you. Our next question comes from Vijay Jayant with Evercore.

Thank you. Our next question comes from Vijay Jayant with Evercore.

Vijay Jayant: Hi, good morning. A couple for me. On Liberty Live, Greg, some of those private assets that were moved from Formula One, are there any ATBs there? And then just broadly, you know, you have some liquidity at Liberty Live, is there any business strategy of buying venues or, you know, doing some stuff with Live Nation directly in growing sort of a real estate portfolio or anything? Or is it purely to, you know, tackle any discount if that sort of remains? And on Formula One, you know, don't need to want to nitpick particularly, but you know, the team payments, again, seem to be a little lower than I would have thought, and so it implies like a $1.3 billion.

Hi, good morning.

Couple for me.

Liberty live Greg.

Some of those private assets that move from Formula One are there any etb's that and then just broadly is that you know you have some liquidity at Liberty is there any business strategy.

Buying venues.

Doing some stuff with Leiden, Nathan directly and growing set of our real estate portfolio anything or is it purely to tackle any discount that.

So that's remains.

And on the Formula one yeah don't need to want to nitpick, particularly but you know the team payments again seem to be a little lower than I would've thought.

And sort of implies like a $1 3 billion and I don't know you said in the past that you are conservative, but I know there was the one less waste is there any tough in the numbers that sort of impact that to do.

Vijay Jayant: I know you said in the past that you are conservative. I know there's one less race. Is there any stuff in the numbers that sort of impact the 2022 estimate?

Summit.

Greg Maffei: Okay, Vijay, a lot to unpack there, but thank you. On Liberty Live, look, I think we are looking for... There is no ATB currently in that business, to start. We are looking for businesses in there which we think will be accretive and fit well, potentially, with the Live Nation strategy. And we'd like to do things which were additive to us and potentially to them in the future. That gives us a wide latitude, but real estate certainly is on the list of things we think could be attractive, particularly real estate, which is anchored by Live Nation events. You know, our liquidity there is relatively light, so we'll have to be creative about the ways we do that, but we have some ideas. Turning to Formula One, I'd note a couple of things.

Okay P J a lot to unpack there, but thank you on on Liberty Live look I think we are looking for there is no ATB currently in that business.

To start we are looking for businesses in there, which we think will be accretive and fit well potentially with the live nation strategy.

And we'd like to do things, which were additive to us and potentially to them in the future that.

That gives us a wide latitude, but real estate certainly is on the list of things, we think could be attractive, particularly real estate, which is anchored by live nation events.

We are liquidity there is relatively light. So we will have to be creative about the ways, we do that but we have some ideas.

Turning to Formula one I'd note a couple of things.

Greg Maffei: I think in general, how we look at the rest of the year, we feel good about where things stand, very good. But some of the analysis about how payments were done and where it would flow between Q3 and Q4, I think in general, we looked at our analysts as being slightly optimistic on Q3 and slightly pessimistic on Q4. The nature of the payouts, as you rightly noted, is it's conservative, and the timing of how the races fall impacts the payouts. Brian, what would you add?

I think in general.

How we look at the rest of the year, we feel good about where things stand very good.

But some of the analysis about how payments were done and where it would flow between the third and fourth quarters I think in general we looked at our analysts as being slightly optimistic on three and slightly pessimistic on for us.

The nature of the payouts as you rightly noted is it's conservative.

And the timing of how the races fall impacts the payouts, Brian would you add I would just say the other the other thing that there is noise in the second quarter because of the re phasing and the impact of MLR.

Derek Schiller: Yeah, I would just say the other, the other thing, that there's noise in the second quarter because of the rephasing and the impact of Imola. So I would just have you look at the first two quarters together and look at that percentage. As we said in our remarks, we are at 63%.

So I would just have you look at the first two quarters together and look at that percentage as we said.

In our remarks, we're at 63%.

Vijay Jayant: Great. Thank you both.

Alright, Thank you both.

Greg Maffei: Thank you, Vijay.

Thank you Vijay.

Operator: Thank you. Our next question comes from Brian Crest with Deutsche Bank.

Operator: Thank you. Our next question comes from Bryan kraft with Deutsche Bank.

Thank you <unk>.

Next question comes from Bryan Kraft with Deutsche Bank.

Bryan Kraft: Hey, Greg, I had a couple for you on Liberty Sirius. I guess, first, a question that many investors often ask is, why Liberty hasn't made its Sirius shares available for borrow so that the market can be more efficient, around that spread. So would love to hear, if you wouldn't mind sharing the rationale behind your decision not to do that. And then the second question is, I understand that the leverage is a sensitivity in a potential merger of Liberty Sirius with Sirius XM. Would it make sense for Liberty Sirius to sell some of its Sirius shares down to get closer to the 80% level? So you kind of stay above the 80, but bring some cash in and then use that to reduce debt of Liberty Sirius.

Hey, Greg I had a couple for you on Liberty Sirius I guess first a question that many investors often ask us why Liberty Hasnt made at Sirius shares available for borrow so that the market can be more efficient around that spread so would love to hear if you wouldn't mind sharing the rationale behind.

Your decision not to do that.

And then the second question is I understand that that leverage is the sensitivity in the central merger of Liberty Sirius with Sirius XM would it make sense for Liberty Sirius to sell some of its series shares down to get closer to the 80% level. So you kind of stay above the 80, but bring some cash and then use that to reduce debt at liberty Sirius and are there any risk.

Bryan Kraft: Are there any restrictions or considerations, preventing you from doing that or discourage you from doing that? Thank you.

Frictions or considerations are preventing you from doing that or discourage you from doing that thank you.

Greg Maffei: ... Yeah. I will let Ben Oren, if you're on, Ben, I think you are, answer the first one after. I'll answer the second first. I think that strategy, yeah, we are concerned or not concerned about the leverage. I think Sirius could support the leverage of the combined businesses, to be clear. It might depend on how that was executed in terms of who bought whom, but I think in general, Sirius can support that leverage. I don't like the idea, and I think we at Liberty don't like the idea of trying to sell some shares because we have very low tax basis in those and would be very tax inefficient. And as I said, I think we can support the combination. We are continuing to look at ways to, you know, manage our leverage.

Yes.

I will let Ben Oren, if you're on Ben I think you are answered the first one after I'll answer the second first.

The.

I think that strategy, we are concerned or not concerned about the leverage I think siri could support the leverage of the combined businesses to be clear it might depend on how that was executed in terms of who bought home, but I think in general Siri can support that leverage I don't like the idea and I think.

We at Liberty don't like the idea of trying to sell some shares because we are a very low tax basis in those it would be very tax efficient and as I said I think we can support the combination we are continuing to look at ways to manage our leverage we do get dividends out of Sirius XM and from time to time, they have paid special dividends in general over the <unk>.

Greg Maffei: We do get dividends out of Sirius XM, and from time to time, they have paid special dividends. In general, over the last year plus, we've been applying that to reducing leverage. But I don't like the tax inefficient. We have very low basis in those shares. Ben, do you want to address the borrow issue?

Last year, plus we've been applying that to reducing leverage.

But I don't like the tax inefficient, we have very low basis in those shares.

Ben do you want to address the borrow issue.

Renee Wilm: Yeah, sure. You know, while we're very sympathetic to the borrow issue because it does create a lot of volatility, we've done a lot of work internally and with lawyers on the ability to actually lend out our shares. I think at this time, I'll probably just summarize to say there are legal, there are different tax considerations to how any borrow facility or borrow of our shares would have to be structured, that would make it relatively inefficient for any, you know, potential user.

Yeah sure, while we're very sympathetic to the borrowers or is it does create a lot of volatility.

We've done a lot of work internally and with lawyers on the ability to actually lend out our shares I think at this time.

I'll, probably just summarize and say there are legal or definitely tax considerations.

Two how any bottle sold in New York borrow if our shares.

Structured.

That would make it.

Relatively inefficient core right now.

Renee Wilm: So for now, you know, that coupled with the optics that, you know, to the extent that we were going to lend out our shares, you know, what would the borrower be doing with those shares is probably why we will reluctantly not lend our shares for the time being. But we'll continue to look at it, and if any of the legal or tax considerations alleviate, you know, never say never.

User so for now you know that coupled with.

Optics that you know to the extent that we were going to lend out our shares what would the borrower would be doing with their shares and that's probably why we will reluctantly not lend or chairs for the time being but we'll continue to look at it.

And if any of the legal or tax considerations.

Yeah.

Never say never.

Operator: Jonathan, thanks to you both. Appreciate it. Thank you. Our next question comes from David Karnovsky with JP Morgan.

Got it thanks to you both I appreciate it.

Okay.

Our next question comes from David Karnofsky with J P. Morgan.

David Karnovsky: Hi, thank you. On the increased CapEx for Vegas, can you just remind us what the original projection was for Paddock, and maybe expand a bit on the drivers of the increased spend? And then just on race promo, I'm curious, revenue was up versus last year in Q2. That's with the same mix of races, minus Imola. Just wanted to see if you could comment on the drivers there. Were there any one-offs or kind of material step-ups that we could be aware of? Thanks.

Alright, thank you.

The increased Capex for Vegas can you just remind us what the.

The original projection was for Patrick and maybe expand a bit on the drivers of the increase then and then just on rates promo I'm curious.

Revenue was up versus last year in Q2, that's what the same mix of races minus Ebola.

See if you could comment on the drivers there were there any one offs or kind of material step ups.

We should be aware of thanks.

Greg Maffei: Brian, do you want to take the CapEx?

Brian do you want to take the Capex, Yes, I would say on the Capex. We never officially gave a number we said it approximated or was slightly higher.

Brian Wendling: Yeah, I would say on the CapEx, we never officially gave a number. We said it approximated or was slightly higher than the land purchase value.

Then the.

The land purchase value.

Greg Maffei: We still have not given a firm number. We've just told you that we now think it will be larger than the amount that we're spending on the land.

So we still have not given a firm number. We just told you that we now think it will be larger than the amount that we're spending on the land.

Brian Wendling: Yeah, approximating 400 is what we said.

Approximating 400 is what we said.

Yeah.

Greg Maffei: Can you repeat the second question just to make sure I followed it?

Can you repeat the second question is just to make sure I followed it.

David Karnovsky: Yeah, sure. And just with the CapEx, if you could expand on just the drivers of the increase, that'd be great. But on the second question,

Yeah, sure and just with the Capex if you could expand on just the drivers of the increase that'd be great, but on the second question.

Greg Maffei: It's about-

David Karnovsky: It was on race promo.

It looks like from us.

Greg Maffei: Renee, do you want to comment on the drivers?

Do you want to comment on the drivers, yes, I'm happy to do so.

Renee Wilm: Yes, I'm happy to. So we've entered into a couple of challenges as we've uncovered asphalt, cables under the ground that needed to be addressed. There have been wires overhead that have needed to be moved. A lot of this was driven by the requests and, quite honestly, requirements of the local stakeholders as we began this process of, you know, preparing the track for actual usage. We've also encountered some additional requests from the local stakeholders, such as the casino properties, around enhanced security, around opening and closing the track. So this has led to additional equipment that was needed, as well as just additional actual roadwork. Of course, with regard to the Paddock building, it is being built at lightning speed in an inflationary environment.

We've entered into a couple of challenges as we've uncovered asphalt cables into the ground that needed to be addressed there've been wires overhead that it needed to be moved a lot of this is driven by their request and quite honestly requirements of the local stakeholders. As we began this process of preparing the tax to actually use.

We've also encountered some additional requests from the local stakeholders such as the casino properties around enhanced security around opening and closing the track. So this is led to additional equipment that was needed as well as just additional actual road work.

Of course with regards to hepatic building is being built at lightning speed.

In an inflationary environment. So as you can imagine there've also been some additional costs along the way in that regard.

Renee Wilm: So as you can imagine, there have also been some additional costs along the way in that regard.

Greg Maffei: Great. Thanks, Renee.

Great. Thanks, Renee and to your second question about timing and revenue recognition, maybe you can repeat it please.

David Karnovsky: Yeah.

Greg Maffei: And to your second question about timing and revenue recognition, maybe you could repeat it, please.

David Karnovsky: Sure. It was just on race promo. The press release had noted it was up year-over-year, and I think you had the same number—sorry, same mix of races minus Imola. So just wanted to see if you could comment on the drivers there, if there were any one-offs or material step-ups to be aware of.

Sure. It was just kind of raise promo. The press release had noted it was up year over year and to get the same number of sorry, the same mix of races minus Muller.

Wanted to see if you could comment on the drivers. There are there are any one offs or material step ups to be aware of.

Brian Wendling: No, I mean, it's just, it's just regular contractual increases there, offset by the impact of the Imola race going away.

No I mean, it's just it's just regular contractual increases they're offset by the impact of the MLR rates going away.

David Karnovsky: Thank you.

Thank you.

Operator: Thank you. Our next question comes from Steven Cahall with Goldman Sachs.

Operator: Thank you. Our next question comes from Stephen Laszczyk with Goldman Sachs.

Thank you. Our next question comes from Stephen <unk> with Goldman Sachs.

Steven Cahall: Hi, great. Thank you. Maybe for Greg and Renee on Las Vegas, I appreciate the focus for year one as this fan experience, but maybe thinking into years two and beyond, are there any opportunities around the GP that have come more into focus over the last six months that you're particularly excited about, but might not be able to fit in time for this November? Just trying to think through the long-term vision and the profitability opportunity around Las Vegas compared to what we might see in year one. Thank you.

Stephen Laszczyk: Hi, great. Thank you. Maybe for Greg and Renee on Las Vegas, I appreciate the focus for year one as this fan experience, but maybe thinking into years two and beyond, are there any opportunities around the GP that have come more into focus over the last six months that you're particularly excited about, but might not be able to fit in time for this November? Just trying to think through the long-term vision and the profitability opportunity around Las Vegas compared to what we might see in year one. Thank you.

Hi, great. Thank you maybe for Gregg and Renee I'm must say, yes, I appreciate the focus for year, one as fan experience, maybe thinking into years, two and beyond are there any opportunities around the GP that had come more into focus over the last six months that you're particularly excited about.

It might not be able to fit in time for a finished November I'm, just trying to think through the long term vision and the profitability opportunity around let's say, yes, compared to what we might see in year one.

Brian Wendling: Yeah, I think we touched on some of this. I think both on the revenue side and the cost side, there will be opportunities both around the GP and outside the GP as we go into year two. We moved with lightning speed, the F1 team, Renee's team, to put this in place.

Yeah, I think we touched on some of this I think both on the revenue side and the cost side, there will be opportunities both around the G P and outside the GP as we go into year two.

We moved with lightning speed.

The F. One team when as team to put this in place.

Greg Maffei: ...And that's probably led to increased costs, and it's also meant that there are opportunities we had to not capitalize on, whether it be, you know, fan festivals, whether it be, sporting events, whether it be music events, all of those things that are potentially can grow around the second, and beyond, GP. So, those are all GP-related items, and I think we already touched on the fact, Renee touched on some of the things outside the GP that people are interested in, but I don't think we have more to talk about today in terms of numbers.

And that's probably led to increased costs and it's also meant that there are opportunities we had to not capitalize on whether it would be.

Fan festivals, whether it be.

Sporting events.

It would be music events all of those things that are potentially can grow around the second and.

And beyond G. P. So those are all G. P real items that I think we already touched on the fact Rene touched on some of the things outside the GP that people are interested in but I don't think we have more to talk about today in terms of numbers.

Stefano Domenicali: Got it. Thank you.

Got it. Thank you. Thank you. This is our last question operator.

Greg Maffei: Thank you. This is our last question, operator?

Operator: Thank you. Our last question comes from Marlene Carrero with Bank of America.

Thanks to our <unk>.

Next question comes from our Lane career with Bank of America.

Marlene Carrero: Hi, thank you for taking my question. Just quickly on, you know, SiriusXM, Liberty SiriusXM, is there, you know, sort of a target or, you know, an amount of debt you're looking to get down over the next year?

Hi, Thank you for taking my question just quickly on Sirius Liberty Siriusxm is there sort of a target or you know an amount of debt you're looking to get down over the next year.

Greg Maffei: Well, I think I touched on this a little earlier. We are, you know, have looked at many perturbations and potential combinations with SiriusXM. All of them would involve, in one form or another, adding the debt that's at LSXM to the SXM debt, and in some cases, taking on incremental debt. So there, there is no particular target because we don't know exactly what path it will follow. SiriusXM is a massive cash flow generator. One of the reasons why we're not -- another reason why we're not particularly interested in selling our stock. We're bullish on the prospects for the business and its continued ability to generate that cash.

Well I think I'd touch on this a little earlier.

We are.

I've looked at many proto basins and potential combinations with Sirius XM all of them would involve in one form or another adding the debt <unk> debt and in some cases, taking on incremental debt. So there. There is no particular target because we don't know exactly what path that will follow.

Sirius XM is a massive cash flow generator.

One of the reasons why we're not another reason why we're not particularly interested in selling our stock we're bullish on the prospects for the business and its continued ability to generate that cash so any combination, though it might have for a short period of time, a relatively high leverage.

Greg Maffei: So any combination, though it might have, for a short period of time, a relatively high leverage amount or leverage, you know, 4 to 5x, we know that that cash flow generating capabilities would allow the combined entity to pay that debt down back to the 3.5 target relatively quickly.

Mount or leverage four to five times.

We know that that cash flow generating capabilities would allow.

The combined entity to pay that debt down back to the three and a half target relatively quickly.

Marlene Carrero: Got it. And are there any factors? I mean, I think, you know, for the most part, you know, most think a combination would occur and, you know, perhaps make sense. But, you know, are there any factors to consider as to why maybe a combination wouldn't happen?

Got it and are there any factors I mean, I think you know for the most part it most I think a combination would occur and and you know perhaps makes sense, but you know are there any factor to consider as to why maybe a combination wouldn't happen.

Greg Maffei: Well, I think you'll have a independent committee at SiriusXM, which will negotiate on behalf of their shareholders and their considerations, and you'll have Liberty representing LSXM, and hopefully there'll be a meeting of the minds. But there's always the potential that there is not an agreement between the two parties.

Well I think you've got a.

You'll have a.

Independent Committee at.

Sirius XM, which will negotiate on behalf of their shareholders and their considerations and youll have liberty, representing <unk> and hopefully there'll be a meeting of the minds, but there's always the potential that that there is not an agreement between the two parties.

Marlene Carrero: Got it. I'll leave it there. Thank you.

Got it I'll leave it there thank you.

Greg Maffei: Thank you very much to all our questioners. Thank you very much for all of you on the line, for your interest in Liberty Media, and we look forward to speaking with you again next quarter, if not sooner. And I think we're done, operator. Thank you.

Thank you very much to our questioners. Thank you very much for all of you on the line for your interest in <unk>.

<unk> media and we look forward to speaking with you again next quarter if not sooner.

I think we're done operator, thank you.

Yeah.

Operator: The conference has now concluded. Thank you for attending today's conference call. You may disconnect your lines at this time.

The conference has now concluded. Thank you for attending today's conference call. You may disconnect. Your lines at this time.

Okay.

Uh huh.

Yeah.

[music].

Okay.

Yeah.

Okay.

Yes.

Yeah.

[music].

Okay.

Yeah.

[music].

Okay.

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Q2 2023 Liberty Media Corp Earnings Call

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