Q2 2024 Atlanta Braves Holdings Inc Earnings Call
Welcome to Liberty Media Corporation, 2024 second quarter earnings conference call during.
Speaker Change: During the presentation, all participants will be in a listen only mode.
Afterwards, we will conduct a question and answer session at.
At that time, if you have a question. Please press star one on your telephone keypad.
As a reminder, this conference will be recorded today August eight.
Speaker Change: I would now like to turn the call over to Claire Adams Senior manager of Investor Relations. Please go ahead.
Speaker Change: Good morning, before we begin we'd like to remind everyone that this call includes certain forward looking statements.
Speaker Change: The private Securities Litigation Reform Act of 1985.
Speaker Change: Actual events or results could differ materially due to a number of risks and uncertainties, including those mentioned in the most recent Form 10-K, and 10-Q filed by Liberty media.
Speaker Change: Small gains, but as you see it.
Speaker Change: These forward looking statements, which speak only as of the date of this call and Liberty media and we embrace holdings expressly disclaim any obligation or undertaking.
Any updates or revisions to any forward looking statement contained herein to reflect any change in liberty media or at least branch holdings expectations with regard there to or any change in events conditions or circumstances on which any such statement is based.
Speaker Change: 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.
Greg Maffei: 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 releases issued today, which are available 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. Thanks.
Greg Maffei: Thanks, Claire and good morning to all.
Speaker Change: Today speaking on the call. We will also have formula one's president and CEO Stefano Domenicali.
Greg Maffei: Liberty's, Chief accounting and principal financial Officer, Brian Wendling.
Greg Maffei: And also during Q&A, we will answer questions related to Atlanta Braves Holdings embraced management will be available to answer them as well.
Speaker Change: So beginning with Liberty Sirius XM.
Speaker Change: The transaction is progressing towards close.
Speaker Change: <unk> FCC and FCC approvals, we set the shareholder meeting date for August excuse me August 23, and we expect to close on September 19th.
Speaker Change: Note. The adjusted merger exchange ratio has been reset to reduce the shares of new series by 90%.
Speaker Change: We expect the new CRE share price will be higher at close because of that and we expect enhanced trading dynamics, including east increased potential for index inclusion.
Speaker Change: Look forward to remaining chairman any meaningful shareholder.
Speaker Change: Turning now to series six time itself.
Speaker Change: Company maintains its strong financial position self pay net adds improved sequentially and year over year, driven primarily by a reduction in voluntary churn.
Speaker Change: But it was flat versus the prior year, but plus eight versus the first quarter.
Speaker Change: We expect solid margin and cash generation through the balance of 2024.
Speaker Change: 2024 is also going to be a peak capex year, and we expect to return to free cash flow growth in the coming years.
Speaker Change: We believe Sirius XM is attractive on a free cash flow multiple basis.
Speaker Change: Sirius continues to preserve pursue growth opportunities.
Speaker Change: Getting in the car with a new three year subscription with a new vehicle purchase certain automakers.
Speaker Change: Free access the first free AD supported platform, which aims to increase trials and win back listeners and 360 L is continuing to drive improved share of listening in the car looking at streaming Sirius is launching new features and updates every month and we've seen early improvements in <unk>.
Speaker Change: Multi day listening. We've also seen increased engagement in the trial period versus the first quarter.
Speaker Change: And finally by pursuing smart you need content. The smart was podcast is kicking off his partnership in August.
Speaker Change: We're the exclusive subscriber events, featuring Howard Stern jelly roll and many more.
Speaker Change: Turning to Formula One group.
Speaker Change: Despite early questions. This is turning out to be one of the most competitive seasons certainly.
Speaker Change: <unk> back to 2012 across the first 14 races, we've seen seven different race winters and eight drivers had been on the podium.
Speaker Change: This is we're on track to have the closest constructors championship across the top four since 2012 as well.
Speaker Change: The difference in time from front to back up grid at this point in the season is the closest also since the start of the current qualifying system in 2010.
Speaker Change: Looking at the 2020 driver market continue to find interesting and excitement.
Speaker Change: Carlos Science going to Williams.
Speaker Change: Haas announcing o'connor, joining as a current and current Ferrari reserve diver procurement as well.
Speaker Change: As showcasing the pipeline support series talent, that's delivering to formula one.
Speaker Change: And the biggest open question remains what what Mercedes do with its open season.
Speaker Change: Looking now at the financial results for F. One we had a great first half year to date revenue was up 29% and OIBDA is plus 35%, partially driven by three additional races in the period this year.
Speaker Change: We know LDL CVA as well as an official partner, they're going to activate across 25 races in 2024 and 10 in 2025.
Speaker Change: And we continue to successfully scale partners brought in through L. B G. P. We remain excited about our sponsorship pipeline.
Speaker Change: Let me turn briefly to Moto GP.
Speaker Change: The transaction is progressing well.
Speaker Change: Regulatory filings are progressing on track, we've received foreign investment control clearance in both jurisdictions need, Italy, Spain, and we recently received merger clearance in Brazil, and Australia. We continue to expect the transaction to close by year end.
Speaker Change: At Moto GP the racing has been awesome pickup on.
Speaker Change: Quickly close the gap with Horae Martijn, but Martine just took the lean back and Silverstone, we're seeing a very competitive title fight now separated by only three points.
Speaker Change: And at Moto G. P 12 writers across Atms had been on the podium this season.
Speaker Change: Attendance is up across our races with a new all time attendance record set of command.
Speaker Change: And Germany was a 253000 was up 8% often already record 2023 attendance.
Speaker Change: Similar to F. One rider movements are fueling excitement. We've also seen interesting movements into constructors Championship constructors.
Speaker Change: Category, rather with prima.
Speaker Change: Switching from Ducati Yamaha next season.
Speaker Change: The summer break ended last weekend and Silverstone, we're excited for more action.
Speaker Change: In the second half.
Speaker Change: Turning briefly to.
Speaker Change: Some of the second quarter highlights we had the 150 in Kentucky Derby, which was an enormous success the largest single event executed and Quint history, serving over 12000 customers per day.
Speaker Change: <unk> experience a sustained meaningful growth across eight races. This year.
Speaker Change: And we've completed inaugural Activations for several new partnerships, including the WNBA All star game, and the men's and women's U S opens for the USDA.
Speaker Change: Turning to live nation.
Speaker Change: So another record quarter with no signs of slowdown.
Speaker Change: 2024 is a year.
Speaker Change: Amphitheaters and arenas in the second quarter. Despite stadium activity being lower concert attendance was up 5% Oi was up 21% with record concert segment profitability and this was one of the top five quarters.
Speaker Change: History for ticket sales.
Speaker Change: Revenue from onsite spending is also up double digits year to date and cancellation rates for North America are tracking lower than last year.
Speaker Change: The ticketing and artist pipeline continues to expand globally, new orders new artists have increased touring by 130% year to date.
Speaker Change: Two thirds of all total new enterprise tickets signed year to date are from international.
Speaker Change: Turning briefly venue nation, we're continuing to see the enhancements made generate incremental revenue.
Speaker Change: Major festival festivals average per fan spend is up double digits year to date.
Speaker Change: Apathete or average per fan spend is also expected to grow by $2 per fan.
Speaker Change: And live nation plans to open 14 major global venues across 2024 and 2025.
Speaker Change: Turning to the Braves.
Speaker Change: We've had strong performance from key players this season through last weekend.
Speaker Change: The junior led the National League with 86 RV eyes.
Speaker Change: Since April 12.
Speaker Change: <unk> added 264 <unk>.
Speaker Change: Free to set a $2 seven one of your REIT, which ranked second and third respectively and the National League.
Speaker Change: Ahead of the trade deadline, the Braves announced the return.
Speaker Change: Jorge Xolair to fill a key position in the outfield and right handed pitcher loop Jackson.
Speaker Change: Most players were on the 2021 World series winning team.
Speaker Change: Fan demand remains strong per caps up in ticketing in concessions year over year. There are 18000 on the season ticket waitlist and we've seen a 90% renewal to date on season tickets for 2025.
Speaker Change: Several of the Master planning projects completed earlier this year are already adding value and enhancing the fan experience. The new 60 foot six inch Jim beam bar concessions are up double digits versus 2023 concessions in the same location.
Speaker Change: Recently, they've announced further upgrades ahead of the 2025 season, including a new seating product the bullpen, which includes access to exclusive lounge underneath seats and extension of the Coors light chophouse seating area.
Speaker Change: Also the British recently involved the low unveiled the logo to kick off the 2025, all star game the.
Speaker Change: The Braves are thrilled to host the all star game, it's incredible opportunity to showcase the truest.
Speaker Change: In the battery sections.
Speaker Change: Now I'll turn it over Brian for more on our financial results.
Brian Wendling: Thank you, Greg and good morning, everyone at quarter end Liberty Siriusxm group had attributed cash of $88 million, excluding 100 million of cash held at Siriusxm.
Brian Wendling: During the quarter Liberty, Sirius XM and paid down $35 million under the margin loan using cash on hand, there's $1 1 billion of Undrawn margin loan capacity as of quarter end.
Speaker Change: As of August 7th the value of our Sirius XM stock was $10 billion and we have $1 2 billion in principal amount of debt against these holdings.
Speaker Change: Total Liberty Sirius XM group attributed principal amount of debt is $10 9 billion, which includes a $9 1 billion of debt at Sirius XM.
Speaker Change: As Greg mentioned the transaction with Sirius XM is expected to close on September 9th.
Speaker Change: In connection with the transaction close to $3 75.
Speaker Change: Percents Liberty Sirius XM convertible notes and the $2 75, CRA exchangeable notes will be assumed by new serious.
Speaker Change: And the margin loan will be retired.
Speaker Change: Following transaction close holders of the $2 75, exchangeable notes will have the right to require new serious to repurchase the notes.
Speaker Change: And we would expect a substantial majority of holders will exercise this right.
Speaker Change: Turning to the Formula One group at quarter end the Formula One group had attributed cash liquid investments and monetize about public holdings of $1 5 billion, which includes $1 2 billion of cash at F. One and $58 million of cash at Quinn.
Speaker Change: Total Formula One group attributed principal amount of debt was $2 9 billion, which includes $2 4 billion of debt at F. One, leaving $530 million at the corporate level.
Speaker Change: F one $500 million.
Speaker Change: Dollar revolver is undrawn and their leverage at quarter end was one three times.
Speaker Change: Moto GP transaction is progressing well, we have syndicated I'll bridge financing commitments and reduce the total commitment from 2 billion to $1 65 billion.
Speaker Change: Note that the $1 65 billion commitment is expected to be replaced with a combination of cash and debt financing at the up one opco level. We also entered into commitments for $150 million incremental term loan at Formula One are conditioned on the transaction close and.
Speaker Change: And we obtained commitments from banks to provide dorner with a new 150 million Euro term loan a and an upsized $200 million revolver to be entered into after and subject to transaction closed and to be used by dorner for general corporate purposes.
Speaker Change: Looking at the F. One business I will again remind you that the business is best analyzed on an annual basis, given variability in year over year race calendar.
Speaker Change: But that said I'll make a few brief remarks on the quarterly results, but with very much encourage you to focus on the year to date results.
Speaker Change: During the quarter F. One recognize the higher proportion of season based income with eight out of 24 races occurring during the period compared to $6 22 in the prior year period.
Speaker Change: He writes in sponsorship revenue also increased due to contractual increase in fees and revenue from new agreements.
Speaker Change: Growth in half one TVA continues to benefit media rights revenue.
Speaker Change: Race promotion revenue is relatively flat given the mix of races, with Australia, and Azerbaijan dropping out of Q2 compared to last year, with Japan, China, and Austria being.
Speaker Change: Being added in the current period.
Speaker Change: Other revenue increased primarily due to higher hospitality in freight revenue driven by the additional races.
Speaker Change: Adjusted OIBDA grew in the quarter as revenue growth.
Speaker Change: More than offset increased costs due to higher pro rata recognition of team payments and the expectation of increased tech team payments for the full year over 2023.
Speaker Change: Increased costs due to the additional races held in cost supporting revenue growth.
Speaker Change: Jim payments are best viewed on a year to date basis and represented 61, 9% of pre teen OIBDA for the first half of the year compared to $62 six in the prior year I would note Q2, and Q3 tend to have the highest percentage payout ratios based on the greater mix of European races. In these quarters.
Speaker Change: Other cost of half one revenue and SG&A are best viewed as a percent of total revenue for the year again looking at it on a year to date basis. The adjusted OIBDA margin improved from $24 six through Q2 23 to 25, 8% through Q2 24.
Speaker Change: Looking briefly at corporate and other results in the second quarter corporate and other revenue was $141 million, which includes quint results in approximately $6 million of rental income.
Speaker Change: Related to the Las Vegas Grand Prix Plaza.
Speaker Change: Corporate and other adjusted OIBDA was $5 million in the second quarter earnings results.
Speaker Change: Grand Prix Plaza rental income offset by corporate expenses.
Speaker Change: Great results in the second quarter were primarily driven by the Kentucky Derby and up one experiences across eight races held.
Speaker Change: Reminder, that the quench business is seasonal with the largest and most profitable.
Speaker Change: Events, taking place in Q2 and Q4.
Speaker Change: We expect corporate and other adjusted OIBDA will benefit from the rental income and results for the full year.
Speaker Change: At the Liberty Live group Theres attributed cash at four $406 million and a $400 million of Undrawn margin loan capacity related to our live news live nation market.
Speaker Change: As of August 7th the value of the live nation stock or our live nation stock was $6 3 billion and we have $1 2 billion in principal amount of debt against these holdings Liberty and our consolidated subsidiaries are in compliance with our debt covenants at quarter end.
Speaker Change: Turning briefly to the Atlanta Braves Holdings revenue grew in the second quarter, despite three fewer home games compared to last year.
Speaker Change: Baseball event revenue growth was driven by a new sponsorship agreements as well as contractual increases on season tickets and existing sponsorship contracts.
Speaker Change: Casting revenue grew as there were more total games.
Speaker Change: Between home and away played in the second quarter.
Speaker Change: Baseball operating cost increase in the second quarter, primarily due to higher player payroll increased payments under Mlps revenue sharing plan and higher minor league team and player expenses.
Speaker Change: The battery continues to perform very well with revenue up 11% and adjusted OIBDA up 13% in the second quarter.
Speaker Change: Looking at the capital improvement projects around the ballpark reminder, that the Braves are spending approximately $15 million related to the projects completed ahead of the 'twenty 'twenty four season across the back half of 2023 in early 'twenty four the.
Speaker Change: <unk> recently announced additional improvement projects to open ahead of the 25 season, primarily related to new seating options and expect to spend approximately $20 million on these projects across the back half of 'twenty four in early 'twenty five.
Speaker Change: These are all high returning projects will generate incremental revenue for the Braves and the 2025 season at.
Speaker Change: At the battery the Truest headquarters is progressing ahead of schedule and we'd expect to hand that building over two truest in September now I'll turn it over to Stefano discuss formula one.
Stefano Domenicali: Thanks, Brian that's what doesn't 24 season is deliberate and vegetable racing action for our fans at home and our sold out events.
Speaker Change: That's one continues to prove that he's an incredible competition on sac.
Speaker Change: 14 basis. This season, we have had seven different witnessed from our four teams. The gaps between teams are getting closer both in qualifying and embraces in Ebola Max bid to landfill by only seven tenths of a second full Dolby lenses incredible winning Miami.
Speaker Change: In medical we saw childhood Cliff take his first home victory in Canada. They kept between the top four equaling find was one tenths of a cycle and we have seen but say this would turn to the top step of the podium with George winning in those two and Louise Sydney, He's like a ninth seat system hung.
Speaker Change: Hungary, so another excellent race ending in guest is excellent with.
Speaker Change: We the Macleod and one and two and habits of rounding out the podium inspire we have an incredible race with very tight gas throughout the race led by being Swabbed multiple times George Russell Cross the finish line first after a premium final laptop was against Louis but was disqualified after the race because the curve did not meet them.
Speaker Change: Quad weight I mean, there's always took a second of the season with I'll Skip you asked a second in Charlotte.
Speaker Change: By many measures we have never had more competitive rates.
Speaker Change: I spent the remainder of 2024 seasonal will continue to deliver breakthrough basin, but all of that and as we look forward that can easily close racing office very exciting prospect for 2025.
Speaker Change: The credit book competition on track is leading to even higher engagement as our diverse fan basis continues to grow.
Speaker Change: We have welcomed over $3 7 million attendees are through the first 14 basis of the season with the Canadian reprise seen breakout of tens of.
Speaker Change: Thompson and see that the matching these incredible 2015.
Speaker Change: Attendance of 480000.
Speaker Change: We continue to see sold out events and there is strong demand for that Ace is still to come this season.
Speaker Change: On television, we have seen particularly strong numbers in key growth markets, including Australia U S, China, Canada, South Africa, and the Middle East.
Speaker Change: Looking at the recent races, the Canadian Grand Prix was the most viewed live race at Abbott in Canada. The British Grumpy was impressively the most viewed live European races over.
Speaker Change: On Sky UK and earned the largest overall weekend audience for the F. One in the UK since 2016.
Speaker Change: Looking at the U S five races of the season or achieve a regular live viewership for their respective events the Chinese.
Speaker Change: Any monocoque Canadian and British company.
Speaker Change: The Miami Grand Prix viewership peaked at the $3 6 million a b C and the 18th to 49 demographic is everybody's wants to be $1 3 million and the screen raises averaged 96000 viewership on the ESPN the largest on the channel since we introduced this print format in 2051.
Speaker Change: Our digital and social platform also continued to see very strong performance. We saw a 32% decrease in social media followers compared to 2023, driven by the success of the new channel, So that's and whatsapp and accelerated growth on each of them.
Speaker Change: We also have high engagement with $4 1 billion video views at 818 million interaction on this item year to date.
Speaker Change: That's one television continues to perform well total subscriber.
Speaker Change: 11% year over year and in the U S market subscribers up 16% year over year.
Speaker Change: As previously mentioned, we implemented <unk> price increases for the first time, our gross markets Leds.
Speaker Change: This year, which have been well received with the limited the upticks insurer and plenty of it continues to be an important and growing profit. We also continue to see great results from our close kept the season total listens to all episodes of the Epsilon podcast, including beyond degree F. One nation and.
Speaker Change: When explain since launch in 2018 surpassed 125 million this quarter.
Speaker Change: The F. One explained pulp costs, these engaging new and more diverse audience with 40% of the listeners in the U S market.
Speaker Change: A few weeks ago, we announced the 2025 spin collector with durations to take place at 60 beds, China, Miami, Belgium, Austria, Brazil in Qatar.
Speaker Change: Sprint continues to be a big success with the high TV illness for the Friday sprint qualifying and suddenly screens race compared to traditional practice session.
Speaker Change: The events also bring extra answer like action for our fans attend these events, providing additional values co promote us 80% of fans surveyed after the Chinese companies said that they preferred the newsprint format and we look forward to maintaining the momentum in 2075.
Speaker Change: The F. One Academy season is also off to a strong start with the first three races completed in South Miami in Spain, and then next week since Apple.
Speaker Change: I'll be pooling is leading the serious with the enriched and to become the first woman to win a British set four races American drivers clearly chamber to first lien raise too in Barcelona, with a dominant victory over putting.
Speaker Change: If one academies growing engagement and attracting new fans in the last 12 months, if when academy social media followers has increased by three times with a diverse polymer base.
Speaker Change: 7% of the F. One academy followers needs to come out female 57% under 25 old and 83% are under 35 years old.
Speaker Change: Online coverage of what our CASM it draws new sites and social reaches the almost 700 million Internet users.
Speaker Change: Miami Grumpily alone generated $14 7 million video views and 4 million interactions on social media with two millionth light viewers on broadcast television.
Speaker Change: F. One Academy has also been engaging fans attending F. One events around the calendar given the success of onsite F. One races weekend many of the promoter the hosting if when academy events. These ships are lining up to the host again in 2025, and we have received interest from several of the markets.
Speaker Change: Turning to commercial updates on the race promotion that continues to be significant demand for potential new res hosts we don't currently intend to go above 24 races of the season as our duty is to ensure the right strategy balanced for the long term future of the sport. The added benefit of this demand with limited rate slot.
Speaker Change: <unk> creates increased incentives for motors to innovate and improve the experience of the base across the calendar.
Speaker Change: More promoters that committing to investments in dairy for example, Hungary has committed to significant the furbish, including the new building front 2026. We have also seen an example of great entertainment promoters, including the Barcelona fan event. So it was the closest in silver and of course, we look forward to returning to Las Vegas.
Speaker Change: They're an incredible show in 2023.
Speaker Change: We announced the 2025 kolenda much earlier, this year, which keeps the teams and promoted more time to put a bed and market. Their events. We now continue to focus and optimize the calendar for 2026 and beyond.
Speaker Change: Our media rights, we have some key renewal to address for 2026, including our deals across the Americas U S, Canada, Brazil, and Mexico as well as cross most of Asia, including Japan.
Speaker Change: The continued growth of our diverse fan base around the world, including the U S and demand from broadcasters means we have confidence in the future of our wouldn't be your ideas.
Speaker Change: We also continue to be excited about the amount of content. The F. One has to offer a close race weekends, we have many events and lots of data provided by numerous cameras around the trucking costs.
Speaker Change: We kept all sort of our broadcast partners and the fans are told me incredible axis and insights into the weekend to all these countries.
Speaker Change: Alongside this we are very pleased to once again deliver the F. One key program in the season for 70 bps. The feedback from 2002 D. C was impressive and therefore it gives is providing to be a brilliant way to engage children informal one in a way that's accessible and fun for them.
Speaker Change: IPhone kits is available through broadcasters around the world via our lives dedicated international feed off the ground with the fee to feature three D graphics child friendly team radio transmission technical explanation in a bespoke package of colorful graphics and mission <unk>.
Speaker Change: Included a cartoon drivers of others and our greatest currently but he does that.
Speaker Change: Production returning Saudi.
Speaker Change: Followed by monitors Silverstone and we'd also be available for Dodge, Singapore, Some Paolo and Abu Dhabi Grand Prix later this season.
Speaker Change: Look at our sponsorship we are confident in the pipeline with exciting conversation underway. We continue to have opportunities in categories, such as financial services consumer electronics telco and but we are also more closely integrated the sponsorship licensing hospitality marketing teams in a comprehensive status.
Speaker Change: To optimize to grow the growth of our fandom and commercial opportunities. We are also continued strong progress on final engagement opportunities outside of the race weekend in partnership with Apple and Warner brother, we were delighted to listen to confirm that the much anticipated movie title F. One starring Brad Pitt and directed by Joseph <unk>.
Speaker Change: <unk> produced by joined Brook Hymer will be released on the 26th of June 2025, we were excited to release the movie teaser during the buildup of the British Grand Prix. This theme is unique in that it is being filmed authentically during the aberration, we can and it will be a great opportunity for Westport to reach new fans.
Speaker Change: And engaged audiences.
Speaker Change: Seek season of drive to survive after reaching the top 10 on Netflix in over 40 markets has seen as a global audience of over 100 million viewers in the first five months since release.
Speaker Change: Season to date, the cumulative audience for the Cedars is close to 800 meter and one of the key continues to perform well with high numbers of book into both res and non res weeks, the new Boston location has seen 50000 guests in the first two months. Since launch also has one of the kids venues hosted a ticket to watch party during the three.
Speaker Change: Silverstone race and nobody knew sold out with the London venues welcome over most of the T cell to the guests.
Speaker Change: The ongoing success of the project means that in addition to the finish in London, Birmingham, Boston and one of the cave is planning to open new vendors in Washington, DC in late 2024, and Las Vegas in 2025 with more to come.
Speaker Change: Following a successful runs embodied in Vienna. The F. One exhibition is continually successful road show in Toronto, We just been extended through mid September and we opened in London. Later this month showcasing the credible he is sort of the sport in the U K, even through the London show is Nokia to open 60000 T cells.
Speaker Change: Are these being sold.
Speaker Change: These are great example of bringing fans and future fans into our sport through different routes with a mix of F. One entertainment and hospitality, our ESG program remain an important focus for the business and this year, we published our first impact report showing the progress we are making.
Speaker Change: On our net zero 2030 commitment as well as our diversity and inclusivity initiatives, both within our business and why the sport.
Speaker Change: A key part of our plans would be to move to a fully sustainable since it doesn't 26, which we believe could provide huge benefits as an innovative solution to decarbonize existing and future cost for both the F. One ecosystem and the broad that automotive is he.
Speaker Change: This has been a very important reason behind Fortinet. The joined this potent doesn't 26, we continue to work closely with the teams the F E partners and promote us to deliver on our commitments as highlighted by recent events.
Speaker Change: The Silverstone event was powerful was powered by renewable energy, including over 2000 solar panels and that increased our recycling their demand. Following success and also last year that I've been further trials of a low carbon energy system deployed to support activity across the platform be playing and broadcast compiled.
Speaker Change: That has been shown to reduce it related emissions by 90%.
Speaker Change: This year, that's taking place in Austria, and Hungary, with a third scheduled it for months.
Speaker Change: On diversity and inclusion we were delighted to recently confirmed that as a part of our program to provide education opportunities who are represented groups 20 engineers to this in the UK and Italy will become the latest recipient of the former one that you Didnt scholarship over two dozen 'twenty four and 'twenty five founded in 'twenty one this quarter.
Speaker Change: She program at that I said some of the key barriers to higher education for a represent the students, including financial burden and axis by 'twenty 550 student will have entered the program.
Speaker Change: As I mentioned earlier F. One Academy continues to go from strength to strength and is critical to go to our goal of developing that preparing young female drivers to progress to higher levels of competition 80 mid drivers, including five F. One Academy drivers racing around six of the F. Four British chapter should we.
Speaker Change: Would the highest ever level of female participation in the championship. We also have a talented drivers Sofia flourish. They sing S. A a formula three or four van I must have racing. This shows the huge importance of the F. D. F. I L. Three and that's why you have to plan. It rendezvous Michelle that continues to develop and nurture.
Speaker Change: Sure young talent to reach the very top of our sport, creating the right structure for these talented female drivers and ensuring we have the right system in place to nurture talent at a young age is incredibly important that is.
Speaker Change: While we continue to be excited about our retro program discover your drive to encourage and nurture females as young as 8% to try to go casting.
Speaker Change: We remain focused and on the long term goals and building a sustainable increasing female participation in motor sport. It has been a fantastic season, so far with more to come after the summer break.
Speaker Change: Instead, it in and demand for our sport continues to be huge and I'm confident in our future of antitumor full speed ahead, and now I will turn the call back over to Greg. Thank you Joe.
Greg Maffei: Thanks, Stefano and Brian.
Speaker Change: Our annual Investor Day will be Thursday November 14th in New York City.
Greg Maffei: Please note we've moved to a new location, we will look forward to seeing you at the jazz at Lincoln Center save the date additional details will be provided soon we hope to see many of you there.
Speaker Change: With that operator, let's open the line for questions.
Greg Maffei: Thank you.
Speaker Change: At this time, we'll be conducting a question and answer session. If you'd like to ask a question. Please press star one on your telephone keypad.
Speaker Change: Confirmation tone will indicate your line is in the question queue.
Speaker Change: You May press star two if he like to remove your question from the queue.
Speaker Change: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.
Speaker Change: As a reminder, we as a reminder, we please ask you to limit to one question and one follow up.
Speaker Change: Our first question comes from Bryan Kraft with Deutsche Bank. Please proceed with your question.
Bryan Kraft: Hi, good morning.
Bryan Kraft: I wanted to ask what formula one and its promoters youre seeing in the coincident in leading indicators script on demand.
Speaker Change: Ticket sales pricing percentage sell out on site spending or whatever metrics. You look at has there been any moderation at all in the strength of demand and maybe specifically if you could comment on what you're seeing since the Vegas tickets.
Speaker Change: Tickets went on sale in late March Thank you.
Bryan Kraft: Why don't you start and I'll ask Renee yet comment on Vegas.
Speaker Change: Yeah. Thank you Greg. Thank you, Brian I mean for what we can see as we have already announced we don't see any kind of significant the backdrop of any interest I mean, we have a sold out even in the event. We added in front of us and in the end there is a still a very very very high interest.
Bryan Kraft: We are of course monitoring the situation you know on the event side, because we know that's the other area that is sort of drop of the of that request, but this is something that we don't see at all in our championship.
Speaker Change: Okay.
Speaker Change: Origin to hear thank you.
Speaker Change: And maybe just to focus a little bit on the on the biggest portion of the question.
Speaker Change: I would say that what we're seeing in terms of ticket sale trends is consistent with what you would expect for a year or two of them.
Speaker Change: Although you asked at the last minute market and Las Vegas is even more of a last minute market.
Speaker Change: Your one is not necessarily the best comparison for a couple of reasons first off there was a longer sales cycle. We went on sale during our launch of that which was six months earlier than this year's on sale for a year.
Speaker Change: And there is just you cannot minimized just the excitement around the early demand that you see for year, one of that so focusing directly onto your to what what we have done a little differently. This year and a couple of our partners mentioned this earlier the peak during their own earnings call, It's really focused our marketing on the upcoming period.
Speaker Change: What we did last year it was really market throughout the year again, it was a year one event and we wanted to maintain the excitement and the momentum, but what we're seeing here is that you know leading three months up to an event you are getting the most demand. So we're putting our dry powder into the marketing spend that's upcoming and we're really excited about the demand that.
Speaker Change: We're starting to see and expect to continue to see an uptick in.
Speaker Change: Thank you very much Renee.
Speaker Change: Thank you Brian next question please.
Speaker Change: Our next question comes from Peter So piano with Wolfe Research. Please proceed with your question.
Speaker Change: Hi, Good morning, I wanted to ask about promotion revenue at F. One.
Speaker Change: Was relatively flat year over year. Despite the two additional racism you started event mix is the reason I just wondered if you could give any more color on the mix, specifically and how we should be thinking about those dynamics into 2024.
Speaker Change: And then I wanted to ask about the Concorde agreement and.
Speaker Change: Wonder if you have any fresh thoughts on that process. Thank you.
Speaker Change: It's definitely.
Speaker Change: Yeah, Ryan talk about the AR, but the mix and then let you comment on the concrete agreement.
Speaker Change: Okay.
Speaker Change: Yes, so on the.
Ryan: Promoter mix as we noted in the in our prepared remarks.
Speaker Change: You had Australia and Azerbaijan Fallout, you had China, Australia, Japan, and MLR come back into the quarter for 2024.
Speaker Change: Obviously, each race has a different fee so when we say promoter mix.
Speaker Change: Youre looking at different fees for each race.
Speaker Change: Which has an impact there.
Speaker Change: If you look at the remainder of the year, you have pretty comparable quarters as you look forward Japan.
Speaker Change: In 'twenty and Q3 will have one less race with Japan, Japan, basically falling out, but Azerbaijan coming back in and then Q4 looks pretty similar so again, we would just highlight that you look at the.
Speaker Change: The business on a year to date or full year basis when available.
Speaker Change: That's the second question was on Concorde agreement I would say as we said that the other time I mean, it's it's a it's all good because we have the right time the right relationship with the team that as you know the comfort is divided in three main pillars, one is financial.
Speaker Change: This conversion that was related to governance everything is progressing very very well as you know we are not in a rush to go play the long for but the everything is running smoothly as expected and this is really great because the relationship with the teams with the FAA and with all the other cycles that he is very good in this moment, so working and progressing.
Speaker Change: You know in in the right way and of course, we are focusing to try to maximize the benefit to us.
Speaker Change: Massimo joint commercial activities with all the teams and making sure that what we're gonna sign up it would be the right in terms of divisional that I'd be nose up between the team and the commercial rights holders, but these old right now.
Speaker Change: Thanks to funnel.
Speaker Change: Our next question comes from Ben Winborne with Morgan Stanley. Please proceed with your question.
Speaker Change: Thanks, Good morning, everyone.
Ben Winborne: I guess two questions probably for Greg.
Speaker Change: Live nation can use to perform really well from a business perspective with the stock.
Ben Winborne: Obviously limited given the Doj overhang Im just curious from your perspective, if there's any appetite.
Speaker Change: You know from Liberty's point of view to think about a breakup of the company kind of proactively obviously, that's not the desired outcome from the lawsuit but to the extent these things can take years to play out.
Speaker Change: The equity if there's any thought that you would share on potentially expressing that like that.
Speaker Change: And then I don't know, if you would or stuff that I want to take this but you know what.
Speaker Change: What what prevented the Andretti from joining F. One and obviously theres some Doj noise, there I guess keeping on theme, which I'm imagining you probably not too worried about it but just curious if that's something that might be revisited in the future. If you think team expansion is something that makes sense for the sport and any comment would be interesting and helpful.
Speaker Change: Okay.
Speaker Change: I'll take a cut so first on live nation.
Speaker Change: I think the business as you heard and you noted continues to operate very well.
Speaker Change: I think that.
Speaker Change: The company operates fully within the law has had a monitor in place for 14 years.
Speaker Change: And so any actions have been well known for a long time and we believe the charge of the Doj are without merit.
Speaker Change: The idea that somehow breaking it up with lower ticket prices. So I don't think that that remedy, which we don't think it's in our interests or the interests of consumers is what the Doj really.
Speaker Change: Once they actually understood what was wrong.
Speaker Change: With the market. The fact is as the market driven by excess demand compared to supply that drives prices.
Speaker Change: So I don't think a breakup is in the interest of live nation today or in the interest of the consumer and will go forward plan to lease as far as I understand it to go forward with the businesses we have.
Speaker Change: And the continued business as well, but we believe will continue to operate very well through the base through 2024 and into 2025.
Speaker Change: Looking at <unk>.
Speaker Change: And ready as you saw this morning.
Speaker Change: We announced that there.
Speaker Change: There is a Doj investigation, we intend to fully cooperate with that investigation.
Speaker Change: Reading any related request for information.
Speaker Change: We believe our determination if once the termination was in compliance with all applicable U S. Antitrust laws and we've detailed the rationale for this decision vis vis and ready and prior statements.
Speaker Change: We are certainly not against the idea that any expansion is wrong. There is a methodology for expansion that requires approval of the FIA in year, one and both groups have to find the criteria are met.
Speaker Change: And we're certainly open to new entrants, making our applications and potentially being approved if those requirements are met.
Speaker Change: Thanks, Craig.
Speaker Change: Our next question comes from David Joyce with Seaport Research Partners. Please proceed with your question.
David Joyce: A question on <unk>, if you could please help us understand how the relationship works before you acquired it in terms of.
David Joyce: Would they buy tickets from you on a wholesale basis.
Speaker Change: Part of their wholesale hospitality packages, but now that its inside what.
Speaker Change: What are the impacts on revenue expenses and EBITDA in terms of any eliminations from your activities specifically a part of it.
Speaker Change: Maybe maybe Renee is in a good position to take that.
Renee: Thanks, Greg Thanks for the question on Quint.
Speaker Change: Prior to the acquisition.
Speaker Change: Obviously, a third party vendor and they would acquire inventory directly from the promoters, particularly around secondary hospitality offerings.
Speaker Change: And then the relationship after forming the line would be essentially got a profit share arrangement. They did also provide some reseller capabilities with regard to patent club for the teams as well as for F. One directly.
Speaker Change: Now that Clinton is a subsidiary of Liberty media.
Speaker Change: To integrate those businesses.
Speaker Change: More closer manner thought while also still being cautious around leakage into the Concorde agreement and so keeping really do keeping those business relationships on a kind of a third party basis with regard to L. V. P. We have directly integrated and then we outsourced our sales team.
Speaker Change: <unk> they are running ourselves in ticketing program, obviously in partnership with myself and with Emily Appraiser and then their results will be consolidated up through Liberty media with a commission based arrangement being paid to Formula One which commission they've seen it then goes into the prize fund.
Speaker Change: Going forward. We are also going to be looking for looking for new ways to really prove out the thesis around the acquisition and enable quick to be a closer partner to other promoters and F. One but that is all in process. So I'll defer to Brian on the accounting question.
Brian Wendling: You can see on page three the eliminations for the quarter that primarily represents the eliminations between Quint and Formula. One you also have the lease payment across from.
Speaker Change: That'll be G P up to Liberty corporate in there as well, but that that largely represents quit buying tickets from formula one and then reselling them.
Speaker Change: But at the price that they are buying them for formula one.
Speaker Change: I appreciate it thank you very much.
Speaker Change: Next question. Please our next question comes from Vijay Jayant with Evercore ISI. Please proceed with your question.
Speaker Change: Thanks.
Speaker Change: So Greg you you didn't know thank few times.
Speaker Change: We're really excited about the sponsorship business.
Vijay Jayant: Obviously, that's probably the most updates for us on the other side and anything you could share what is that.
Speaker Change: Meaningful is it going to be there's obviously been some press reports that L. D. M. H is gonna be a new partner.
Speaker Change: Anything on that would be really helpful. And then just ultra low sulfur Rene on the Vegas race, just for clarity with your hotel partners, but you just sort of curious high end hospitality with Williams and everything did they buy tickets.
Speaker Change: From you directly and then do it or is it some other form of arrangement.
Speaker Change: Thanks P. J, so I'll comment a little on sponsorship and let Stefano.
Speaker Change: Issues.
Speaker Change: Look I think I'm very excited about the sponsorship pipeline excited about what.
Speaker Change: Emily Fraser and her team Johnny Youre doing there we've seen.
Speaker Change: Continued interest from Blue chip.
Speaker Change: Clients want to be involved at prices, which are more attractive for us than historical levels.
Speaker Change: And filling out categories that we previously had not had an entrant in the sponsorship world. So obviously I can't comment on any rumors or unannounced deals, but I feel very good about the pipeline feel very good about where we both are on those new entrants and on renewals at attractive prices from some.
Speaker Change: Our existing players.
Speaker Change: Definitely win anything you want to add.
Speaker Change: I Couldnt agree more Greg I think that the numbers is proving the internal studies that are in a in our business and I think that now if you look back four years ago. We are the only four global part and now we had to turn and and there is a big big interest now, but the real point is to keep the quotes here.
Speaker Change: <unk> partners with the right price level, but we want to to engage together. So it's we haven't.
Speaker Change: Very very strong situation I believe is as I said the.
Speaker Change: We have an incredible opportunity for our partners to create partnership between also themselves. So it's a beat to be religious that's exactly the multiplier effect and this is really what is important for all of this is to developing towards in the future. So nothing to add but the as I said just stay tuned because everything is looking forward looking very good for our future.
Speaker Change: Yeah, I think it's definitely hit on some great points I'll just add.
Speaker Change: It's not only the quality of the partners.
Speaker Change: And what they're willing to pay if they are willing to pay because they are getting value out of it and they're finding ways to activate on.
Speaker Change: At this at the races on the grade on the around.
Speaker Change: Dent in ways that are more meaningful for them and for us. So all of those are very positive.
Speaker Change:
Speaker Change: What would you add.
Speaker Change: I think that's an excellent point, Greg to pick up on the sponsorship piece for a second we really use the L. D. P is the test bed for how we can bring these marquee sponsors more deeply into the Activations on track and then the fan zone.
Speaker Change: One of the most important impact of the Vegas raised beyond the financial side is just the increase in interest in the pipeline, including with some of these marquee companies with whom we're speaking.
Speaker Change: Lot of excitement around the sponsorship portion and then do you do to answer your question.
Speaker Change: We do sell tickets to our hotel partners, which they then package into their own deal where their customers are obviously, there I'm sure. There are some comp arrangements for other big senders, who come to town for gambling and then they'll come to US later in the year as they need more inventory. So you're one we let's say they bought a lot of tickets vary.
Speaker Change: Again to address that early demand that everyone's stuff for year, one and now this year. We are working closely with them to again do the marketing push and start filling those hotel rooms now that people are back from school and back to school back from vacation and looking at their full calendars.
Speaker Change: Great. Thanks, so much.
Speaker Change: Our next.
Speaker Change: Our next question comes from David Karnofsky with J P. Morgan. Please proceed with your question.
David Karnofsky: Hey, Thank you Greg as you noted.
David Karnofsky: Really tech performance and the constructor standards, which is great to see you do have new car and rigs coming in 2026, and historically that kind of change has been associated with a temporary period of <unk> dominance.
Speaker Change: What confidence do you have that the rules you have put into place and we will put into place can prevent that kind of outcome and then Stefano as you noted I think nearly all of your American steels are expiring this year or next year.
Speaker Change: To know if you've seen any prospect for a multi country deal and whether there'd be any benefit financially or otherwise with that type of structure. Thank you.
Speaker Change: Well I'll comment on the regs briefly, but I think stefano could actually be articulate on them as well.
Speaker Change: We think the regs are designed to create a more.
Speaker Change: Uh huh.
Stefano Domenicali: Exciting racing while also meeting many other goals around issues like sustainability and things that help our OEM partners drive innovation.
Speaker Change: So we're trying to hit on multiple levels I think.
Speaker Change: People were doubtful about what these regs, how the rigs would play out.
Speaker Change: When we introduce them last time and as by many measures as we noted earlier, we've never had more competitive racing. Our hope is that to 2026 rigs will do the same but as you rightly note somebody may figure out a way to get a jump.
Speaker Change: And take care of the lead but.
Stephan: We think they are designed to create more parity and more exciting racing and should over time Stephan.
Stephan: Definitely what might you add.
Speaker Change: I would say that is this dilemma AR at the end of each cycle Overregulation is dead.
Speaker Change: And then it seems that that's one that together with the FAA has always done that I totally believe too. So it's been to anticipate the needs of the change and then we of course keep the center, but the fact that we want to have a very good competition on track give the possibility to dry.
Speaker Change: Ivor to express themselves and making sure that the budget cap combination and limitation development teams can catch up quicker to keep the gaps between the teams it smarter.
Speaker Change: But on the other side, we have the duty to anticipate the things that that are relevant.
David Karnofsky: Technology to keep at the central parcel.
David Karnofsky: So important that's why.
Speaker Change: You know two years ago. We added we took the decision at all or a portion of the center the new parcel unit with sustainable fuel there was the need to put that at the center. Because then in terms of a particular multiple challenges this would that be at that moment to be the most important ones. So I do believe that our you know I E.
Speaker Change: Part of the game teams that are working on that is playing out for 'twenty six because the regulation would be very very different Bob.
David Karnofsky: Sure.
David Karnofsky: The ones that are very skeptical about a.
Speaker Change: What normally we try to anticipate you know when they would think differently, that's who they will see the axon track and that's drags whats it correctly, saying before I remember very clearly people without with speed and thinking that the regulation that we have now in wood that the slowdown caused by more than six seven seconds and the notes.
Speaker Change: Having these kinds of situations. So I think that we're doing the right things and as always in life, you need to be brave to try to anticipate the things the right way and that's what we did.
Speaker Change: On the second one.
Speaker Change: Think is related to U S. A.
Speaker Change: First of all let me say that we are very happy with the ESPN was a deep for our sport and what Theyre doing since the beginning of our journey together and we see now big interest for sure.
David Karnofsky: We see some other support applying to divide the package in a different way but of course, that's it that's a personal opinion, we're going to take hold that to a subject you know in the in the due course in the next couple of months I do believe that in the in U S. We are seeing the place where the award and this is very very important so what.
David Karnofsky: They can save from.
Speaker Change: Customer point of view, if you are not really all the salt on the sport, creating multiple offer is creating more confusion, let me put it. This way. So therefore, I would say we need to make sure that the incredible demand that we have some different partners will be taken.
David Karnofsky: Wait at the appropriate time, but for sure yes margins will represent for us a big opportunity for the next years.
Speaker Change: Thank you.
Speaker Change: Thank you next question. Please our next question is from Barton Crockett with Rosenblatt Securities. Please proceed with your question.
Barton Crockett: Alright, thanks for taking the questions.
Barton Crockett: Two the first one hopefully is quick.
Barton Crockett: On the race promotion revenue discussion with Formula one.
Speaker Change #101: So I think you have 24 races. This year I think 22 last year.
Speaker Change: Normally I would assume that there's growth in promotion revenue per race, but given you know what we can see from the mix and what you think this year is there any reason to think differently about that for 2024.
Speaker Change: So thoughts on Formula one and the Braves.
Speaker Change: Switching gears, a little bit I was curious you know you've been off of Comcast for most of the season because of their dispute with diamond.
Barton Crockett: Has that had any meaningful impact on the business in terms of fan interest or sales or anything.
Barton Crockett: Or not and if not you know what.
Speaker Change: What does that say about the value of the TV promotion.
Barton Crockett: So I'll comment on the first one and I'll, let Derek if you'd like to take the second.
Derek: I think Barton your assumption that.
Speaker Change: We get increases generally in race promotion fees is correct.
Speaker Change: Eric do you want to take on.
Speaker Change: Raves impact of Diamond.
Greg Maffei: Sure. Thanks, Greg.
Eric: Yeah, obviously, we were off for three months.
Speaker Change: You never like to see carriage disputes.
Speaker Change: We're thankful that the carriage dispute is resolved.
Speaker Change: What I can tell you is there's really no material impact on our business.
Speaker Change: We've certainly seen a reduction during that period of time and ratings.
Speaker Change: Is somewhat commensurate with the reduction in carriage and all that that stock. We would expect that those ratings to also go up so we're glad that it's done and glad that they got got that all resolved.
Speaker Change: Did you guys tried to do any type of additional streaming pushed to offset that in and if not why not.
Speaker Change: Well the streaming rights are held at the league level right now so those don't belong necessarily too.
Speaker Change: Diamond there is a provision.
Speaker Change: Inside of the agreement that's that's rather complicated as it relates to the streaming of course, you know in the future should all these rights come back to US I think we're prepared to evaluate all the different options, including streaming.
Speaker Change: Thank you.
Stephen <unk>: Our last question comes from Stephen <unk> with Goldman Sachs. Please proceed with your question.
Speaker Change: Great. Thank you two on Formula one you called out other strong demand for race promotion.
Stephen <unk>: What youre seeing for improved hospitality from promoters, maybe a longer term question here, but I am curious how you would encourage us to think about the financial opportunity from improved hospitality over the next few years and he calls perhaps on the Paddock club capacity side of the equation and then just quickly on team payments for Brian you called out some of the seasonal aspects.
Speaker Change: Round the payout this year I'm curious, if there's anything more you'd be willing to add on how the dynamic works in perhaps what that can mean for the pace of operating leverage on the <unk> payments. The rest of this year. Thank you.
Speaker Change: Definitely do you want to take the Paddock club issue and all of them.
Speaker Change: Yeah.
Speaker Change: Yeah. Thank you Stephen I mean are we have a quality problem too.
Speaker Change: They can know for sure that is the <unk>.
Speaker Change: Fact that we in almost all the events we are sold out and that's what we're talking about those pitatus well, we've got a very good to do it is to try to maximize the different packages now. The point is if you want to add that the places with the right space and the right quality for the service that we're offering that he is the need of course to tackle.
Speaker Change: Race by race situation to see what we can do with the promotion in terms of capacity from a possible extension and this is something that we're discussing.
Speaker Change: Out of that situation.
Speaker Change: You know for example, with Australian promote doesn't mean, some others because for US of course is a method of experience. So we cannot run the risk of overcrowding in the hospitality area because the demand is very high. So now we have seen while watching as I said with everyone. What we can do into intermodal and the possibility to expand.
Speaker Change: These are these add up to offer the right service for the ones who wants to lead it.
Speaker Change: Yeah, Steven on the on the team payments part.
Steven: I would point you to the year does it year to date results. There. So we were at 61, 9%.
Speaker Change: On a U S GAAP basis pre team T payments as a percent of pre team share OIBDA compared to $62 six last year, we would expect some very minimal leverage as you go throughout the year and look the end to end the year, but.
Speaker Change #101: It's fairly de Minimis.
Speaker Change #101: It definitely focus on the year to date number not the not the quarter.
Speaker Change: Great. Thank you for that.
Speaker Change #101: Operator, I believe that was our last question.
Speaker Change: Thank you to our listening audience for your interest in Liberty media and the Atlanta Braves Holdings.
Speaker Change: We look forward to speaking with you next quarter if not sooner.
Speaker Change: This concludes today's conference you may disconnect your lines at this time and we thank you for your participation.
Speaker Change: Today's conference has ended please disconnect your lines at this time.