Q3 2023 Liberty Media Corp Earnings Call

Welcome to the Liberty Media Corporation, 2023, Q3 earnings call.

During the presentation all parse 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.

As a reminder, this conference will be recorded in November 3rd.

I would now like to turn the call over to Shang clients Dean Vice President Investor Relations. Please go ahead.

Thank you 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, and 10-Q filed by Liberty media with the SEC and the most recent Form 10-Q and registration statement on form S. One followed by Atlanta Braves holdings with the SEC.

These forward looking statements speak only as of the date of this call and Liberty media and 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 circumstances.

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 and Atlanta Braves Holdings schedules one through three can be found at the end of the earnings press release issued today, which are available on Liberty media and Atlanta Braves Holdings web.

Right now I would like to turn the call over to Greg Maffei, Liberty's President and CEO. Thank.

Thank you Shane and good morning to all.

Today speaking on the call. We will also have formula one's president and CEO, Stefano Domenicali, and Liberty's, Chief accounting and principal financial Officer, Brian Wendling.

Also during Q&A, we will be available to answer questions related to the Atlanta Braves holdings embraced management will be available as well.

So beginning with Liberty Sirius XM.

We did propose a combination of our <unk> and CRE.

It goes to rationalize the dual corporate structure create a single share craft class and benefit group.

Groups of shareholders.

We believe such a combination would lead to enhanced trading dynamics of new serious with increased liquidity.

Tactically pressure for example, smaller short interest in.

And a higher likelihood of future index inclusion.

We will provide updates on this potential transaction only if and when an agreement is reached.

Turning to serious itself, our Q3 results demonstrate what management had put forward during the year that there would be continuous improvement throughout the year and we saw sequential improvements in self pay net adds and we expect a slightly positive back half of the year EBITDA.

EBITDA grew 4% versus the prior year, and 6% sequentially and there were $40 million of cost savings that were realized during the third quarter.

The debit the dividend was raised 10% board approve that showing continued confidence in serious cash flow generation capabilities.

Sirius also announced an expanded partnership with Ford to make series six Emmy standard feature in all traditional F. One beginning with the 2020 for model year, that's important because the Ford F. 150 has been the best selling vehicle in the U S for over 40 years.

Management does remain focused on its strategic objectives.

Supported by the significant EBITDA and free cash flow generation.

You will see a new streaming experience and branded platform announced next Wednesday, the day before our analyst day by the serious management team at their own event and we believe this new experience will be able to drive engagement and enhance subscriber acquisition and retention.

Turning now to the Formula One group.

We announced in September our planned acquisition of quaint.

Quint is a provider of.

Hospitality inventory and they sell at unique experiences to have won the MBA for the NBA All star game, the Kentucky Derby and other sporting events.

We believe this merger this purchase will announce unable us an enhanced partnership with F. One.

And lead us to expand to other live sporting events.

So <unk> is a high growth asset.

EBITDA and cash flow positive capabilities.

Currently are already are both but we'll expect we'll grow more over time.

Turning to other things that have won during the quarter in October we repriced the $1 $7 billion of our F. One term loan b and we tightened the spread there from 300 basis points to 225 basis points.

And that's one itself, we see surging popularity and it continues we've had continued sellouts in the Grand stands in the Paddock club.

We've seen growth in engagement and awareness across social platforms T V.

Digital platforms like F <unk>, social consumer media and others.

You continue to see new interest in Formula. One for example, we've seen new investors high profile investors joined at our pain, Rory Mcilroy, Anthony Joshua Patrick Mahomes and that follows Ryan Reynolds investment in June.

This morning, one we also announced a five year extension of our race in Brazil through 2030.

We are excited for the inaugural Vegas race, just under two weeks.

<unk> begin the pit building is ready we received a certificate of occupancy to operate for the race. This will be the largest pit building on the F. One calendar the rooftop deck and wraparound balcony will provide 360 degree views of the track.

The temporary structures in place the bridges are complete we are ready to go.

This event will offer an unparalleled fan experience.

Kickoff with an all star lineup for the opening ceremony Wednesday before the race, which will air on ESPN two to name a few there'll be Keith urban Andrew de J Belden will I.

I am journey and others will also have Netflix hosting its first ever live sporting events. The Netflix Cup. This will be a golf tournament with F. One drivers drivers and PGA tour players and it will scream on Netflix on the 14th of November at six P. M Eastern time.

The Vegas race is generating record breaking sponsorship levels with new marquee brands. In these example include moet Hennessy T Mo and Google Chrome.

But more importantly, we think the biggest expand experience will create commercial opportunities beyond the REIT itself and accrue to the broader FY ecosystem. The Amex partnership. We recently announced is a great example, and there are more to come.

We did incur significant expense and watching your one in Vegas and that included extra provisions for safety security and traffic planning, which was required by local regulators and we had several non reoccurring items. For example, our first you're only opening ceremony as I mentioned and the design and launch of our multi purpose app and crew.

<unk> of our fan database.

We remain highly confident in increased efficiency to operate there and our growing profitability in years, two and beyond.

And we remain bullish on the broader value creation.

L. B G P that far outweighs the increased investment in startup costs.

Let me turn now to Liberty Lie group, where we issued.

1.15 billion of two and three eighths live exchangeable in September.

$918 million of those proceeds were used to repurchase 93% of our existing.

L y exchangeable.

Looking at the lab nation itself.

Another record quarter announced a looking year to date <unk> sold 140 million tickets versus $121 million for the full 2022.

Revenue was up 36%, a why was up 33% they saw strength in all markets venues and price points with international leading the way.

Year to date concert fans are up 21% with international fans up 34%.

Her fan profitability is up double digits globally at operated and owned theaters and clubs.

And sponsorship has been a tremendous win with a new large deal with Mastercard driven.

Driven again by growth in the international conflict concerts platform.

Lives. These continuing trail win tailwind into 2024 and beyond.

Consumer wallets are continuing to be spent on live experiences, we see untapped potential in the continuum and globalization of life's business.

And large venues are showing a pipeline and sponsorship commitments, which were up double digits.

Lastly, looking at the Braves.

It was an incredible season on field and off the field, even if the playoff run was obviously more disappointing than ended earlier than we had hoped.

We finished with the best record in Major League Baseball 104 wins against 58 losses three.

$323 2 million tickets were sold a new record virtuous park.

We want our six straight nationally geese title.

The Braves have one the most division titles at any team in baseball since the institution of divisional play and $19 69.

Grace had strong financial performance baseball revenue was up 11% year to date from increased ticket demand and attendance.

And the battery continue to benefit from increased traffic and rent growth with adjusted OIBDA at the mixed use up 15% and their nine months versus the prior year.

And with that let me turn it over to Brian for some more on our financial results.

Thank you, Greg and good morning.

My remarks, this morning, when I'm talking about balance sheet figures will become comparing 930.

So the adjusted 630 balances that are adjusted for the split off that was completed on July 18th and the reclassification of our tracking stocks that was completed on August 3rd as Youll see noted in the release.

At quarter end Liberty Siriusxm group had attributed cash liquid investments and monetize public holdings of $339 million.

Excluding $53 million of cash held at Siriusxm and including the batter stake held at Alice Exxon is valued at $65 million as of 930. We expect these shares will be exchanged with third party lenders to pay down debt in the near term.

There is also $1 1 billion of Undrawn margin loan capacity at the parent level related to our Sirius XM margin loan.

As of November 2nd the value of the Sirius XM stock was $14 9 billion, we have $1 4 billion in principal amount of debt against these holdings total Liberty Siriusxm group attributed principal amount of debt is $11 5 billion, which includes $9 4 billion of debt at Sirius XM.

Subsequent to quarter end Liberty Sirius XM retired the remaining $199 million outstanding face value of the 1375 basket convertible notes.

Turning to the Formula One group at quarter end Formula One group had attributed cash and liquid investments of $1 5 billion. This includes a $947 million of cash at Formula one.

Total Formula One group attributed principal amount of debt was $2 9 billion, which includes $2 4 billion of debt F. One, leaving $500 million at the corporate level.

F. One $500 million revolver is undrawn and their leverage at quarter end was two two times and as Greg mentioned Def one repriced its term loan b in October, resulting in 75 basis points of margin compression.

225 basis points.

The <unk> business is best analyzed on an annual basis, given its variability and the year over year race calendar.

That said, though I will make a few brief.

Marks on the quarterly results during the quarter F. One recognize the higher proportion of season based income due to eight out of 22 races occurring during this quarter compared to seven out of 22 last year.

The mix of Reis has also benefited our financial results in the third quarter with two fly away races, Singapore, and Japan, taking place this year versus France, and the prior year period.

Formula One group in the quarter in line with revenue growth.

We realized leverage on team payments during the quarter, while also making incremental investments in growth initiatives that were lower or not incurred in the prior year period like the Vegas race and have won academy.

Our team payments are best viewed on a year to date basis and represented 64, 6% of pre team OIBDA for the first nine months I will note that Q2, and Q3 tend to have higher percent payout ratios based on the greater mix of European races. In these two quarters.

Reminder, that other cost of F. One revenue and SG&A are best viewed as a percent of total revenue other costs at half one revenue for the quarter was 21% of total revenue.

Note that the <unk> related revenues and other cost of sales will largely be recognized in the fourth quarter. When the race occurs on SG&A in the third quarter included $8 million of costs related to <unk>.

Non Vegas as Greg said, the bank buildings ready.

Year to date through the third quarter, we incurred approximately $280 million of Capex related to the pit building structure and track preparation. The majority of the Capex spend has and will be incurred at the corporate level related to the fifth building is the land and buildings sit within F. One F. One.

Formula One group sorry separate from the Formula one.

<unk> track related Capex has and will be incurred at the F. One opco level.

At the Liberty Live group Theres attributed cash liquid investments and monetize what public holdings of $417 million, which includes the ETF assets. There's also a $400 million of Undrawn margin loan capacity related to our live nation margin loan.

As of November 2nd the value of our live nation stock was $5 7 billion, we have $1 2 billion in principal amount of debt against these holdings.

During the quarter, we raised 1.15 billion of new two 375 live nation exchangeable bonds. A portion of these proceeds were used to repurchase approximately 93% of our outstanding 5% live nation exchangeable bonds for at $918 million.

There are $62 million remaining outstanding on the <unk>, 5% bonds, which have a September 24 put call date that we expect to settle with the remaining proceeds from the recent issuance.

Liberty in Arkansas that subsidiaries are in compliance with our debt covenants at quarter end.

Turning briefly to the Atlanta Braves revenue growth in the quarter, primarily reflects increased attendance at regular season games and growth in related revenues, including ticket and concession revenue, which more than offset the impact of one less home game in the current period.

Battery mixed used revenue grew due to increased rental income from existing and new tenants.

And then baseball operating costs grew in the third quarter, primarily due to increased player play player payroll and hire a minor league expenses SG&A was also elevated in the third quarter driven by costs related to the split off and with that I'll turn it over to Stefano to discuss formula one.

Yeah.

Thanks, Brian Good morning, we are coming to the end of an action packed people had the India Medicus from Austin to Mexico City, and this weekend to Brazil.

Stopping and Red Bull.

I've had been incorrectly billed season, we need their second consecutive constructed championship and desktop and third consecutive title.

While the championship has been secured for senator races. The other themes of steam competing fiercely with type vehicles, all the way down to see activity, but.

We have had six different teams represented on the podium season to date the clouded, let's say this and cirrhotic have gained strength throughout the season evidenced in Austin with lenses excellent top and excitement around the various tests that is implemented.

Lewis is getting closer to Max in Austin, and Mexico, and fulfilled I suppose in the last six races.

We have more buses left to witness for the remainder of the season.

Even with the number of team is shifting focus to that 2020 forecast.

With gaps in performance opinion to be closing over recent events, we hope for a wheelchair for Maxim debut next year.

Our business is in a position of strength.

Anil engagement. These high commercial intent is strong the teams have to sustainably improve their financial health generating their own incremental sponsorship, which benefits our entire the Athlon acquisition have you have a number of brand expansion initiatives in the works, including the much anticipated Apple theme starring Brad Pitt.

I will have more to shed on our strategy to capitalize on this momentum at Liberty's Investor Day next week.

Ladies and tenders in 2023 containers to sell out the highlights of the third quarter was a record 480000, a weekend tens of silver spring for the ability to grow the highest with causes of any event in recent decades.

So the Japanese company welcome total we cannot then there's all the London 2002.

The highest level since 2006, the Netherlands sold out three of them 5000.

Singapore is sold out of 260000 last weekend in Mexico. So another they call with 400000 and these are massive crowds for the kudzu well we race.

As we've discussed our find out increasingly accessing that content across multiple media plus one include a leaner digital and social we are building a richer and more providers come to the close medium to satisfy the various types of funds all.

While linear TV global audience as average of approximately $70 million gross market that seems solid year over year growth viewership, including Spain, Australia, and Mexico as well as the U S. Where we have also had particularly strong growth in that broad TV steps.

We've seen growth on digital video viewership.

With the F. One Youtube channel, reaching almost 10 million subscribers.

14% year over year.

Cross sell with social media channels, and far reaching $67 6 million followers as of Q3.

The 6% year over year.

The stock is now fastest growing platform those social media.

Existing and new funds a lot massive Ole just gravitate to both the racing the lifestyle content that grows our social channels.

<unk> launched the S 120 to the game in June and the U S is now the biggest market for our game. So bus in the UK for the first time.

According to open clinic. The game continues to be the highest rated annualized sporting game franchise globally.

If one continues to advance our approach to oldest measurement as consumer behaviors evolve we aim to better capture level why the viewership of engagement for the future as we continue to build these touch points.

Turning to recent updates on our commercial agreements.

All right promotion, we look forward to the confirmed 20 Chipotle Championship Glenda next year, where do you think this isn't you our agreement in Belgium for additional in 2025 off the record we have released the <unk> 380000 a day.

Susan.

The promote that has invested in these capacity increases and more variety than the payments for five simulation to use which.

Which has benefited their attendance figures.

Omega right, we entered into a strategic partnership with the via play in the Netherlands.

We'll allow that customer to access the asphalt TV pro as part of their via play subscription providing fans with incremental commensurate camera angles radio communication and more.

Our our TBS in the Netherlands, and Belgium, where it also a new for multiple season. This past week, we have announced an expansion of our gaming with the zone to broadcast that funding, Spain in an attractive deal until the end of 2026.

Market with strong growth in TV viewership this season.

V Pro and access subscribers continued to grow and provide a tailwind to our media rights revenue.

Our on sponsorship, our recently announced new multiyear regional partnership with American Express welcome them also please note payment barden before the F. One in the Americas and four Las Vegas broke rate card.

Card members will have special benefits and access across F. One races, India, medicus, including presale tickets and greater downside benefits.

We were also thrilled to the new album of anyone with Pirelli Illiquid Molly do you that he will remain F. One global tire popped them until 2037, securing that place as long standing supply to form or what.

<unk> will also continue as an official partner under a multi year renewal.

They're all demand and interest from sponsor continues to be strong given the growth in our brand and the opportunity to align with F. One sustainability initiatives with them.

To have meaningful success in securing new whether the new sponsors and we are a company in our upcoming pipeline.

All eyes.

Now I'll Las Vegas, as we come down to the Grumpily weekend was the race itself would be a spectacle. It does also generates excitement always the benefits the inside of the S. One ecosystem through the increased commercial inflows funnel awareness and broader brand value the fan experience will be unparalleled.

<unk> continued to invest in creative offering for its fan, including announced with the winter with club a first of its kind membership program that was the beauty Las Vegas growth rate.

The program is designed for the F. One enthusiasts and we provide members with an unparalleled hospitality experience, including exclusive access to location with you the pier building bespoke and services any credible excuse me.

Members will also enjoy year round benefits to it that's additional net four races and services throughout over when properties.

As part of a partnership with the brand new sphere, we will be taking over the exosphere from Wednesday through Sunday race weekend to display a combination of unique partners F. One and Las Vegas will pick up.

The team in Las Vegas led by Renee will has recently secured a number of new partnership. In addition to the previously mentioned in the medical space to deal with.

With the agreements announced this quarter the Las Vegas Grand Prix is now secured over 20 partnership to date for the marquee event.

We are committed to raising the Las Vegas in the long term the total local they come on the economical benefit of the Grand Prix DCF is expected to reach over $1.2 billion, which includes the that expense if want to put on where the race the incremental spent by visitors and the impact, but a lot of supply of that.

Businesses.

In addition, the Las Vegas property will generate estimated $25 million that would be allocated to K 12 public school and he is developing as term program that will be implemented in the Clark County School district in the coming years.

That's a future that's one engineer would be born out of this.

Finally, <unk> continues to progress our sustainability and diversity and inclusion efforts if one academy completed its the boot season in Austin La months, congratulations to Martha <unk> victory.

And as we promise she has now secured a poll found that seat with claim erasing the efficacy. This underlining our determination to ensure the best in the Academy see this move upward to the system. The affluent Academy final finale was broadcast live in over 100 territories, marking a significant attention.

<unk> coverage.

These demonstrate the support level brokers partners and their commitment in bringing F. One academy to both existing and new generation. Therefore fun can be inspired by these incredible recent tablet.

Additionally, our ambition at Ford into developing 100% of bus sustainable see what other bus and well just last week, our partner that ampco announced that they will start operating to plateau, producing 32 by 2025, our partnership with DHL to use biofuel truck.

Across the European leg of the season was highly successful.

They reduce submission by Enel <unk> of 83% compared to the diesel driven trucks.

They use a biofuel.

We are continuing to 2024 and beyond and we are excited about the insights we are gaining this year.

As far as we are exploring further opportunity in the connection with DHL.

We have only three races left in the record breaking season I want to thank our <unk> family.

Eight teams partners and shareholders to all of their support and enthusiasm this season.

Our <unk> isn't done yet.

With the Buffalo for constructor standing outside the first place likely to come down to the last round of racing we.

We hope you tune into Brazil. This weekend before we make our way to the inaugural Las Vegas promptly and then wrap the season and help with that.

I look forward to providing additional updates at Liberty's Investor Day next week Avanti to full speed ahead, and now I will turn the call back over to Greg. Thank you Joe.

Stefano and thank you Stefano and Brian.

Some of you may have seen our release that Albert Rosenthal, who is retiring after 20 years at Liberty.

Many of you know who Albert is and how much value. He has added for our shareholders.

Most recently he served as Chief Corporate Development Officer previously he was head of tax and never really relinquish that as we know Fortunately he will remain a senior adviser we do have a deep.

Bench of talent, both on the corporate development and tax teams.

And we will continue to grow in those areas, but I am pleased that they Albert will work with them and meet to drive future investment opportunities and our tax strategies.

We look forward to seeing many of you at our annual Investor Day on Thursday November 19 in New York Additional information is available on our website, John Malone and I will be hosting our annual Q&A session.

You would like to submit questions in advance you can email investor day at Liberty Media Dot com.

None other questions can ask if there will be about comedy.

We do appreciate your continued interest in Liberty media, and the Atlanta Braves holdings and with that operator.

We will open the line for questions.

Thank you.

Now be conducting a question and answer session. If you would like to ask a question. Please press star one on your telephone.

A confirmation tone will indicate that your line is in the question queue.

You May press star two if he 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.

Our first question comes from the line of David Karnofsky with J P. Morgan. Please proceed with your question.

Alright, thanks for the question.

Formula one payments our team payments year to date, if we look at the implied figure for the full year I think it is.

Down a bit relative to where it was in August Greg you noted significant launch and nonrecurring costs related to Vegas. So wanted to see if you've adjusted your expectation for the economics of the race in the first year.

I'm going to comment a little on Vegas, and then I'll, let <unk>.

Brian reiterate some of his comments or hopefully clarity about how those payouts team payouts.

It can be misleading if looked at just on a quarterly basis.

On the first point, yes, I think Vegas is proving to be a.

A bigger spectacle and more impactful than we had anticipated, but theyre also have proven to be initial startup costs I outlined some of them are.

The increased security.

One time things like the opened a ceremony, but there are other ones like consultants that help us set it up.

Permanent costs that were unusual and the like so there are a bunch of initial costs that are probably higher than we had originally estimated.

I remain very bullish we remain very bullish on as I said the impact of Formula one overall.

By Las Vegas, and the potential for this rates to be a profitable exercise itself.

Yes.

Year to date, we're running at 64.6.

You rightly noted out.

You can see you can see it imply a decline in the overall to your payment for the year, but those are covered by what Greg noted, but Q2 and Q3 tend to have a higher percentage.

<unk> payment than what we typically see for the full year, just because of that higher mix.

The European races that have lower economics versus flyways, so to say another way as we come into some of the races that are.

Higher revenue one might expect that the payout ratio will be higher payoffs the teens Buddy.

Lower percentage overall.

This quarters may not be indicative of the full year number.

That helps.

Yes.

Sticking with Vegas for a second it looks like there is a possibility of a labor strike next week at the hotels, obviously this could resolve before the rates, but how are you thinking about the potential impact should have a work stoppage go through.

We have worked with the unions and I believe our.

Grace will not be impacted directly we are obviously watching what impact that may have on the overall Las Vegas market.

Thank you.

Thank you.

Our next question comes from the line of Ben Swinburne with Morgan Stanley. Please proceed with your question.

Thanks, Good morning.

Congratulations to Albert.

And I guess the IRS.

He's not he's not quite done yet thank goodness, we're going to get to keep them around so I'd have to say goodbye to him yet but go ahead sorry.

No problem.

Greg just to put a finer point on it I think people want to know are you guys still expecting this sort of approaching $500 million of revenue and tough.

Race weekend that'll be.

Within the top five producing EBITDA type numbers or are you changing that perspective today.

A couple of thoughts I think.

I think those revenue numbers approaching that still a reasonable estimate on profitability I think I noted we've seen.

Some one time and startup costs that may have been larger than anticipated.

Remembering.

How this is <unk>.

Impactful to us not only directly but.

Indirectly.

This is a very profitable race for us.

As far as being measured as a top five.

Obviously, we don't tell the world what the top five are but we have noted that this one will have that impact I still think that's true.

Particularly when you look at the bottom line for one it will have that impact overall and I think that.

We will see that profitability as I noted once we get past some of these initial startup costs will and we optimize.

<unk>.

It will increase let's be clear this year, we optimized for being there being on time and having a great race.

That's not to say, we won't have some of that objectives next year, but I think we'll be able to optimize on other variables as well and increased profitability.

Okay. Thank you and then you.

You made a comment Greg at a conference recently I.

I think acknowledging that kind of post the Disney the charter thing and just higher interest rates in the world. We're in the sports rights inflation are probably going to be impacted you guys. Just announced this zone deal. There was the Apple story out there that you probably won't comment on but can you guys can you just give us your.

Perspective on what the market feels like right now for sports rights as a seller.

Whether the <unk> deal as an indication of.

The direction ahead, as we think about forecasting your business your businesses that are in the sports business. Thank you.

There are really a couple of variables here I mean, if your.

The fully distributed.

<unk> and more stable.

Sports property, there are certainly trends about fragmentation of the market and overall pricing that might give you pause.

Nonetheless, we've seen pretty good increases at some properties, we're in somewhat of a different position and I think when youre focused rightly on the U S, where we're still relatively nascent.

Our product is gaining traction and our audiences are growing dramatically.

Dramatically, so I think I feel very comfortable with the F. One.

Renewals.

Much more than I do with the overall market. There are a lot of factors in the overall market. We you know well the fragmentation.

To find scale and if you have a property in trying to decide between how you get paid in reach and that is always a challenge to be managed that will be made more difficult with the fragmentation of the market.

But.

On the other side.

Things like the Sag strike things like the continued increase in cost of scripted content do make sports still a very desirable place to be in the place where scale can be reached so.

There are a bunch of countervailing trends that are make me Matt.

On the whole market, but still very bullish on F. One.

As Europe tougher than the U S. How would you compare those.

I think the reality is most of the trends that are negative or further along in the U S and in Europe.

Okay, but a lot of cases, Ben as you know, how what sports rates get bid largely a function of which distributor in the market needs the product or once the product and it could be.

Market, where there are multiple bidders youre going to do very well and where there are fewer bidders you will do less well than that may almost be unrelated to what is going on in the market in that particular geography.

Alright.

Thanks, so much thank you.

Okay.

Thank you. Our next question comes from the line of Bryan Kraft with Deutsche Bank. Please proceed with your question.

Good morning.

Yes, I wanted to ask a couple if I could Greg what.

What do you think that timeline will look like to reach an agreement with the special committee of serious assuming you do reach one and.

Whether you choose to answer that question or not I was wondering if you could maybe address the second one which is if you do reach an agreement once that agreement has been reached what would be the key milestones and the probable timing to close the spin and merge.

And then separately I just wanted to ask you about quaint events. Once you closed that acquisition are there significant advantages to F. One from owning the asset or is it more of an opportunistic acquisition to pursue growth opportunities outside of that one thanks.

Okay. So a lot Brian alright, let's start with I already said I'm not going to comment on any further on.

The negotiations timing or the like.

If a deal is reached I think it will be require.

A shareholder vote likely the structure of the shareholder vote on the <unk> side the structure on the <unk> side, given our high equity ownership and the structure of how they work their charter and bylaws will be quicker, but there will also be the typical typical regulatory SEC.

Matters and FCC matters that likely would have to be cleared so I would still expect several months delay even post <unk>.

Any deal is reached.

On Quint.

I think we're excited about for many reasons and I'll, let either.

Stefano or Rene who both have views added, but we're excited because of what it can do for us.

One of the trends that we are pushing forward in formula one is understanding our customers better and really having a direct connection and so many things that we're doing whether it be the app or Las Vegas, or quint allow us to better understand our customers and their needs and desires.

And I think Thats, a continuing trend you will see that will add power to the F. One ecosystem and allow us to do much more.

<unk> is important because of how they touch those customers are some of our best customers and how we can utilize their talents to grow in our understanding of our existing customer base, but also expand that customer base.

The opportunity outside of F. One is also very interesting I mentioned some of the places where they are at MBA Churchill Downs.

We think there are many sporting events, many live events that could benefit from Quint type experiences and we think liberty can be in a position potentially to help them reach out to some of those leagues and opportunities. So we're excited both for what it can do for F. One.

And what we can help do together hopefully in the outside world of sports stuff.

Stefan or do you want to add anything.

No I think Greg that you touch accepted the points of today's pro forma one for sure the need of understanding better our customer and the growth of the requests that we have in all around the world. It's related to the experience and that this acquisition will allow us to to talk with them better and to offer them better products and better things.

That will be that will enable them to be closer to our F. One world.

Thanks to you both Greg if I could ask one follow up just on the first one I think you mentioned FCC is in Federal Communications Commission matters.

My understanding is there would be no HSR approval needed because you already have or control.

Or is there an approval needed what how should we think about what the FCC's role would be.

My understanding is is that we're not you want to go yes, I'm happy to be very much pro forma application process.

Likely done within 45 to 60 days is what we're expecting I think the longer polymer turns will be the SEC review, which to Greg's point to take a few months think maybe four to six months.

To get the entire thing done after we haven't announced it.

Okay, great. Thank you so much.

Thank you. Our next question comes from the line of Vijay Jayant with Evercore. Please proceed with your question.

Thanks.

On the Las Vegas race.

I'm, assuming that the Opco is paying the holding company as a promoter and Liberty media spend money on the track and the land.

Out of a promotion fee so when Greg when you talk about the profitability of the Vegas face are you assuming that includes Oh.

Do you believe that payment too.

The opco.

From from the uplift to the Holdco or is it at the operating company the profits you're sort of expecting from the race.

Well Vijay you are correct that there is that relationship.

I think we are talking about.

The totality, but also I think over time, how the <unk> will be a very profitable rates as well. So I think you can look at it both ways.

And then just.

Stefano you talked about the attendance at all of these ratios can you sort of confirm that the Vegas races sold out on ticketing.

No I'm happy to take that one hi, Vijay its Rene we have a handful of tickets left and the demand coming in in the last minute, which knowing because at the last minute market. We didnt backed who will take it back for that purpose. So we are very excited and we will be sold out by the time of the event.

Great. Thanks, a lot.

Los Angeles book for Las Vegas, relatively late which is.

Well part of our strategy.

Great. Thanks.

Okay.

Thank you. Our next question comes from the line of Stephen <unk> with Goldman Sachs. Please proceed with your question.

Hey, great. Thank you for taking the questions maybe just a follow up on the media strategy for F. One to the extent you'd be willing to add to bens question I'd just be curious to better understand how you think through the pros and cons of entering a longer term exclusive global media rights deal with a single distributor.

Just curious to the extent you think the formula one IP could be well suited for that type of structure over the long term.

Thank you.

Yes.

So the question I think.

We've tried to be consistent answering this.

There's always a trade off between reach and profitability.

There are relatively few if any distributors today.

You have the global reach that individual players do in their respective markets. So there would be you'd be thinking hard about that trade off.

And you can see that in some markets, where we've actually tried to play both sides of that where they made some of it's on broadcast and some of it's on pay because we don't want to see all of our product.

Behind the paywall in it which is not widely distributed so that.

I don't have a comment other than youre always going away that tradeoff in Tim live.

<unk> on how we feel about the maturity of the business and in each respective market and the length of deal were willing to cut and in many cases is dependent on how far we are on that curve.

I would note we've noted before the U S. We're fairly nascent we've tried to keep a shorter term deal partly because we think we will do better as time goes on.

In other markets, where it's more mature youre willing to talk about more stability and there is benefit in many cases for the distributor to have more stability because they will be able to make a greater investment in the product promotion et cetera. If they know they have long term. So you weigh all those factors.

And if I may add to Greg on that are you know correctly, saying about this ratio.

Reaching profitability. This people. These change is different from country to country from region to region and this is really the reason why the media market today is quite culpas, but we do believe that with the mix that we have we will take the advantage of the strategy put in place today that we are very comfortable.

Got it thanks for that and then maybe one on the sponsorship side could you talk a little bit more about the original deal with American Express that you recently signed maybe the value you saw in each other how to bring this deal on the table and if you think that could be a good template our framework for other payment providers or financial institutions on a more global basis.

Thank you.

I'll, let renee add but I would I would.

Note.

One of the reasons why Amex is unique is not only is a great company, great brand et cetera within audience, and our customer base, which fits very well with us but.

But it also the case, where it really they came out in the regional basis because of the strength in wanting to be in loss involved in Las Vegas, which is a great example of Las Vegas, leading us and broadening the base.

And it's also a case, where we're using our digital capabilities, we're going to be able to for regional players to be able to show.

Sponsorship capabilities and opportunities in our respective market arent expect a series of markets in our region because of those Rene.

I would just add to that something Greg mentioned earlier around the importance of data management and understanding who our fan data and being able to work with American express on their pre sale platform has really proven to not only help us move the hospitality early on but also to get more visibility into who our fans. So we think this is going to be a great win across the board.

Thank you.

Thank you.

Thank you.

Our next question comes from the line of Steven <unk> with TD Cowen. Please proceed with your question.

Yes, thanks for the question.

These initial startup costs for Vegas fully captured in the increased Capex guidance last quarter and what are your expectations for recurring annual maintenance Capex for the grant P Granberry Vegas.

I think we are not changing anything we set about capex from what we said last quarter I think most of my comments were really directed at more opex and some of those costs that I mentioned like security like.

The opening Sir festival opening ceremony rather.

I don't believe we are making any announcements today on on.

On Capex.

I would differentiate there.

There will potentially be I don't think theres massive ongoing capex for maintenance I'll make that statement, but there will be capex potentially four.

Year round activation as we come up with new opportunities to take advantage of the facility and we really are not captured or forecast that because we're still working on what that may look like so we don't really have a number for you today or something to talk about because we are looking at a range of activation capabilities and candidly we're focused on November 18th.

Thanks, Greg I appreciate that and if I can just ask one more.

Stefano would you add.

Definitely a approving and Draggy last month can you just give us any updates on your views with respect to adding in <unk> to the grid now how are you evaluating this and what are the potential gating items for you to get incrementally more inclined to granted mission or reject thank you.

I'll, let Stefano answer that yes.

Okay. Thanks, Thanks, Steven I mean, as you know there is a process that is in place. So as always we don't have to do given anticipation DSA D. These right rollover doing first assessments now we are in the process of doing our assessment on the commercial marketing side on that as soon as these first of all the finished of course with lymphoma, everyone. Accordingly.

First of all of course sharing these aimed for first thesis with the FAA.

Okay. Thank you.

Thank you. Our next question comes from the line of David Joyce with Seaport Research Partners. Please proceed with your question.

Thank you.

Wanted to turn to the Liberty live track or just wondering what your opportunities and constraints are there.

Separately, what might be some logical next steps for the.

Might you in Baidu music venue that could allow you to spin that off in five years or might you do something like what you proposed to do with serious and.

And given that you've got such a discount is that equity would that be something of interest.

With live nation that combined given that they've got a significant cash balance now.

Thank you David I think.

Our strategy is around Liberty Libre evolving.

We do.

If you look at it is as you've seen in the past is something we've been able to do it.

Expand and grow.

Creating an ATB there.

So that we could potentially have a spin down the road.

As always something Liberty wants to maintain maintain optionality around but our first goal would probably be too bill.

Our strategies and maybe in conjunction with live nation around things that are incremental and additive that we could own there'll be we think are positive that could somewhere potentially be valuable to to live nation as well so no plan or intent today on any of the above but we're we have ideas and are working through.

Thanks, and the second if I could on the.

The Atlanta Braves on the <unk> side of the equation Thats a significant revenue.

The annually. So that's coming from the <unk> is there any update or any thoughts of how that could be replaced if needed either by.

The league or your own capabilities.

Yes, Derek do you want to handle that.

Yeah sure so.

Obviously, there's ongoing legal with the with this situation. So we don't want to go too far with what we can say on it I think probably the best way to answer this is.

We are continuing to deliver what we're expected to do under the terms of our agreement.

Up to this point in time they are.

You would expect that to continue.

Yes, Derek <unk> being more cautious and I would I think our understanding is this is among if not the most profitable of diamond's RSM.

Reflecting the large territory, we have the high demand that Derek and his team have built around the Braves and the.

Relatively.

Not the highest payment among RSM payments that there is a very profitable and so I do not believe there'll be rejected but given the strength of the territory and the strength of the Braves People's interest in the Braves I do believe we could replace that revenue stream.

A good portion of it at least with other alternatives.

Thanks, Alright, thanks Derek.

Thank you. Our next question comes from the line of Jason Bazinet with Citi. Please proceed with your question.

I just had a question on Formula one.

You guys have accomplished so much with this asset since you bought it.

The concrete agreement growing sponsorship tweaking the calendar.

<unk> popularity.

The sport.

I'd just be curious over the next three to five years other than getting to know your fan base better, which you mentioned what do you think the top two or three opportunities that remain are.

Yeah.

Look I think.

We have three or four big revenue streams, and I think all of them have upside.

Starting with broadcast.

The increased interest in the sport.

Globally, but particularly in the U S have.

Given us an opportunity with a broader range of distributors and the increasing number of digital players who might enter the market and as they get broader awareness as sports players our willingness to go with them only increases.

So you've seen examples like the zone, you're seeing things like Netflix coming and doing something with us around.

<unk> and Formula one admittedly small, but an interesting start all of those make us have opportunities there.

In.

The races.

Yes, we're not going to increase the number of races at certainly at the pace if at all that we have but.

In a perverse way. The fact that there is a limited supply and an increasing number of people who want a race and increasing number of cities or venues that want to race hub allowed us in many cases to utilize that limited supply to <unk>.

Play off.

<unk> raised the requirements raise our prices.

And promoters are doing far better if you've seen for example, how many people showed up in Austin, how many people are showing up decreasing demand has made it so promoters or more profitable have more scale and we're able to extract more money from them not in the victim way that some people would call it but because it is a better business for them and there are other players who.

If they don't want to play in sponsorship Youre seeing us have grown that dramatically over the last several years I think far more we can do <unk> is a great example, moving from a world of just paint on the track to a digital experience to activation part of that is and again understanding our customers better all of those I think have an opportunity and then hospitality.

And quint as a part of that what we're doing what we've been able to do increase the paddock club.

Frankly, because of the demand how we've been able to increase prices at the Paddock club all of those give us I think range of opportunities in hospitality. So I think all four revenue streams are healthy and have upside Stefan what did I Miss.

Yeah.

I think thats, the least is already quite interestingly pool, but for sure. The cost that we have seen about the IMAX theaters. Our regionalization is another key factor of attracting new partners and these were going to be our strategy, but forget that that throughout that Eddie was for sure will be very important in these licensing and merchandising where we.

Just to add it up.

Beginning of restructuring, where we can really see potential of of what we can do I mean, we don't have to also underestimate the potential of being bigger and on social and the big hit on on the award as the sport and being able to connect more and more with these new initiatives with our fence, we will be able to provide services.

Of course, we will have a payback for that so I think critical time in front of us and that's the beauty of the sport.

We are investing now really believing in it.

Thank you.

I believe our last question.

Thank you. Our final question comes from the line of Barton Crockett with Rosenblatt Securities. Please proceed with your question.

Okay. Thanks for getting me on here.

I was curious.

Greg how about your thoughts about.

Opportunities.

For.

Baseball.

<unk> to create a better screening experience then.

Fragmented.

Circumstance, that's developing right now with the team's.

Doing their own kind of local streaming their own local broadcast.

Do you think over time, there should be some type of aggregation of the local team rights into.

New streaming or an existing screening platform.

<unk>.

Optimize kind of experience for market opportunity and from a consumer experience perspective.

That should happen do you think it can happen did you guys play a role on that that creates value for your shareholders.

I'll comment then I'll let.

Derek at <unk>.

Baseball is was an innovator.

With MLB Dot com.

<unk> back to Bob Bowman that they did with Bam Tech.

And much of that has been accrued to the benefit and I think with the increased interest in the sport this year.

All to the good youre right that the local rights regime is complicated and.

And how that has been divided has made.

Some innovation.

More difficult over time, we at various times have looked at that and potentially partnering with MLP to help on that I think there are many plans out there being looked at non is yet to come to pass, but there surely is demand in the sport Derek what would you add.

Yeah. Thanks, Craig So what I would say just on the macro level not trying to get too far ahead of major league baseball or the Commissioner's office in this but.

You think about baseball and maybe even ahead of that.

Live sports content still very much in demand regardless of all the changes in fragmentation that's happening in the marketplace. So I think being in the live sports content business is certainly.

Very good thing and then.

To baseball specifically, you got 162 games.

So there's an enormous amount of that content.

The sport is extremely popular is as Greg mentioned, selling 70 million tickets this year as all the other factor.

Doctor, So I think from a from a macro perspective.

<unk> is is very healthy and has great opportunity.

And looking at it from just the Braves lens.

A little bit to Greg's earlier comments, we have you know a very large marketplace. We.

Are significantly advantaged in that marketplace, especially against a lot of our peer sets and.

So theres a lot of opportunity there.

Disruption might happen, but at the same time I think the opportunity for us and for the broader sport is certainly there.

Okay.

Okay, great. Thank you.

Thank you all for your interest in Liberty Media I think that was our last question, we look forward to seeing.

The Atlanta Braves don't mean to slight <unk>.

<unk> friends are so used to being part of the family I don't have to call them out separately.

Thank you for your interest as I said, we look forward to seeing many of you next week in New York and if not on our next earnings call.

<unk>.

This concludes today's teleconference. You may now disconnect your lines at this time. Thank you for your participation.

Oh.

Mhm.

Hum.

[music].

Hum.

[music].

Mhm.

[music].

Hum.

Oh.

[music].

Hum.

Hum.

Okay.

Oh.

Hum.

Yeah.

Yeah.

Yeah.

Yeah.

Yeah.

Hum.

[music].

Hum.

Mhm.

[music].

Yeah.

Hum.

Yes.

[music].

Hum.

Uh huh.

[music].

Uh huh.

[music].