Q4 2024 Liberty Media Corp Earnings Call and Business Update
Speaker Change: Greetings, and welcome to the Liberty Media Corporation 2024 Year-End Earnings Call.
Speaker Change: On the call today, we have Liberty's, president and CEO, Derek Chang Liberty's, Chief accounting and principal financial Officer, Brian Wendling Formula one's President and CEO Stefano Domenicali and other members of Liberty management will be available for Q&A.
Speaker Change: That I will turn the call over to Derek.
Speaker Change: Thank you Shane and good morning, everyone. It's great to be speaking with all of you today.
Speaker Change: Are those who don't know well I officially started on celebrity fee 27 days ago My relationship with Liberty Media goes back to 1997.
Speaker Change: When I first met John while working for Dci.
Speaker Change: We've had many points of professional overlap over the years at Directv stars and more most recently I've been fortunate to serve out Liberty Sports F 2020, one as a board member I am uniquely familiar with delivery structure culture, and mandate, which has enabled a seamless and efficient transaction transition to CEO.
Speaker Change: We've hit the ground running with a busy year ahead, even if a director for years. We've been asked what is the long term there'd be playbook.
Speaker Change: So it's been consistent Liberty playbook is one of constant evolution maximum flexibility and appreciation for change to drive long term shareholder value.
Speaker Change: That is and will remain true going forward.
Speaker Change: Our team will speak in more detail about the businesses, but I'll make some brief remarks first regarding our near term priorities for 2025.
Speaker Change: First we are working towards the close of the door and acquisition the Moto GP season kicks off in Thailand on March 2nd we'll be at 22 race calendar compared to 20 races in 2024.
Speaker Change: Featuring the new track in Hungary, and a return to the Czech Republic for the first time since 2020.
Speaker Change: We expect an exciting season ahead, Moto GP unveiled a new brand refresh and identity at the end of last season aimed at expanding its cultural relevance relevance beyond racing, we look forward to working with door not to take the sports to the next level on closing the.
Speaker Change: The phase two regulatory process is progressing which is a more in depth review by the European Commission and.
Speaker Change: Not uncommon in major transaction transactions like these we extended the long stop date for regulatory clearance to June 32025.
And are working constructively with the regulators towards the crews are.
Speaker Change: Our second priority is continuing our path towards structural simplification and better highlighting the value of our live nation equity stake.
Speaker Change: And finally, we will continue to drive the momentum that formula one the sport is coming off a record 2024 with high visibility into an excellent year ahead, I've spent a significant amount of time with Stefano and the S. One management team since I started this year and look forward to supporting them going forward change carries involvement and partnership.
Speaker Change: As a Liberty Board member has and will continue to be important as we leverage his expertise to continue momentum at Epsilon.
Speaker Change: I do want to touch specifically on the Las Vegas Grand Prix.
Speaker Change: Key area focus. Please note that we don't provide raise specific economics for any Grand Prix, particularly for Vegas, we see material benefit accrue from LPG to the broader F. One ecosystem cross sponsorship hospitality live entertainment licensing and data.
Speaker Change: I guess I served as a very successful testbed for product expansion and plays a key role in <unk> growth in the Americas, which they continued focus.
Speaker Change: The event, we held recently at the O two in London, and the upcoming F. One busy are also powerful marketing engine for all of our F. One fans, but particularly for that for Vegas, North American fans.
Speaker Change: 'twenty 'twenty four Standalone economics for Vegas met internal expectations on revenue and OIBDA. The team has moved very quickly however to enact changes that will benefit 2025 and supported financially successful raised for F. One.
Speaker Change: Continued growth and positive impact of the Las Vegas community. We now have two years of real data to understand what tickets and products are well the demographics of the fan base and the overall cost structure of the event as a result, we are making further revisions to ticket product and pricing strategy leveraging this data and more and as importantly, we are actively managing that.
Cost structure, given the Halo effect half one we've discussed we reorganized the structure of L. B G. P last month to integrate it fully into our London team and maximize those continued benefit.
Speaker Change: That's changed Leverages the strong organization, we have in London today across commercial finance and more at the same time, we are bolstering certain parts of the local Vegas. Jean This includes bringing the ticketing sales function back in house and offering a high touch on the ground presence, which was a key learning from last year.
Speaker Change: We will continue our partnership with Quint and benefit from their expertise in VIP hospitality and F. One experiences.
Speaker Change: Finally, we are also bolstering our partnership with local players.
Speaker Change: We believe that continuing to expand the F. One platform and all the new ways is critical and ultimately leads to both increase and new sources of revenue. We wanted to take these opportunities for long term benefit even if there are early bumps in the road, we have a clear handle on near term priorities there Vegas to improve and we are confident in the value it.
Speaker Change: Hi.
Brian: Look forward to sharing more as we progress with that I want to thank John the board and the Liberty team once again for this opportunity to our analysts and shareholders and look forward to getting to know you better in the months and years ahead now I'll turn it over to Brian for more on our financial results. Thank.
Brian: Thank you Derek and good morning, everyone.
Brian: Just a quick reminder, that the merger of Sirius XM with Liberty Sirius XM closed on September 9th.
Brian: Therefore, the results of Siriusxm holdings are presented as discontinued operations in our consolidated financial statements.
Brian: A year and Formula One group had attributed cash and liquid investments of $2 6 billion, which includes $1 3 billion of cash at F. One and $78 million of cash at Quint the cash balance as of year end includes proceeds from the previously mentioned loss share issuance, which was.
Brian: <unk> in August.
Brian: Total Formula One group attributed principal amount of debt was $2 9 billion at quarter end, which includes $2 4 billion of debt at F. One, leaving $528 million at the corporate level.
Brian: F. One $500 million revolver is undrawn and their leverage at 12 31 was one three times as a reminder, all Moto GP transaction related financing is in place and deal contingent.
Brian: Turning to the up one business.
Brian: Just a reminder, that it's best analyzed on an annual basis, given variability in year over year race calendar.
Brian: Total revenue grew 6% in 2024 with growth across all primary revenue streams revenue growth was primarily driven by the two additional races held and contractual increases across all of our revenue streams.
Brian: As well as the benefit of new sponsors, which drove a 10% increase in sponsorship revenue year over year.
Brian: Eric mentioned, the Las Vegas Grand Prix you did miss expectations, primarily on ticket sales offsetting some of the race promotion revenue growth year over year. Despite the two additional raises.
Brian: Other half one revenue was relatively flat in 2024, we saw strong growth in patent club revenue at most events in 2024 as well as increases in freight and licensing this was offset by softness in certain hospitality offerings at the Las Vegas Grand Prix.
Brian: Team payments as a percent of pre team adjusted OIBDA was 61, 5% in 2024 down from $62 six and 2023, we continue to expect incremental leverage to determine the current Concorde agreement, which runs through the end of the 2025 season.
Brian: Other costs at half one revenue was broadly flat at 31% of total revenue and SG&A was 8% of total revenue both in line with historical averages.
Brian: Adjusted OIBDA margin improved nearly 70 basis points year over year.
Brian: And then looking briefly at corporate and other results in the fourth quarter revenue was $118 million, which includes quint results and approximately $13 million of rental income related to the Las Vegas Grand Prix Plaza.
Brian: Approximately half of which is variable and recognized in the fourth quarter in connection with you Matt.
Brian: Corporate and other adjusted OIBDA loss was $2 million and includes Grand Prix Plaza rental income.
Brian: <unk> results and corporate expenses were.
Brian: <unk> results in the fourth quarter were primarily driven by the up one by one experiences across a six races held including Vegas as well as the MBA Cup.
Looking to 2025 F. One will host 24 races, consistent with 2024.
Brian: And while I'm reticent to encourage quarterly modeling.
Brian: Please note that the race count composition will be different in each of the four quarters this year compared to 2024 and.
Brian: In part this is due to our efforts to increase regionalization of the calendar and support of our net zero pledge by 2030 and four enhanced.
Brian: <unk> in our freight logistics.
Brian: We are in a strong financial position as we head into 2025. The majority of our revenue is under contract, including our sponsorship revenue, which has been derisked by pulling the pipeline forward given the level of announcements made prior to the season.
Brian: This also allows our team to focus on future sponsorship pipeline with an emphasis on high value and high quality partners.
Brian: Other revenue streams will predominantly be driven by renewals and escalators this season.
Brian: On Vegas, we're very focused on top and bottom line improvement relative to 2024 results and there are clear steps already taken in and put in process to achieve this.
Brian: Turning to a few cash items F. One estimated cash tax rate in 2025 to be low double digit percent of adjusted OIBDA, increasing modestly in future years.
Brian: Total capex incurred at the Formula One group in 2024 was $75 million approximately 73 million of which was incurred at formula One and includes capex related to technical improvement projects right now.
Brian: On television as well as for Las Vegas Grand Prix track impact building improvements.
Brian: Note that the operating company Capex has historically trended up 1% to 2% of total F. One revenue.
Brian: Excluding a onetime Vegas related Capex and we expect this range to be broadly consistent with 2025.
Brian: Turning to the Liberty Life group, there was attributed cash of $325 million and $400 million of Undrawn margin loan capacity related to our lead nation marginal.
Brian: As of February 26, the value of the live nation stock held at Liberty Life was 9.9 billion and we have 1.15 billion in principal amount of debt against these holdings Liberty.
Brian: Liberty in F. One are in compliance with our debt covenants at quarter end and with that I'll turn the call over to Stefano to discuss formula one.
Stefano: Thanks, Brian.
Stefano: Put them on one the senior should that 2020 food with solid financial results excellent racing in a very strong position heading into 2025, the one track competition intensified throughout the season and we expect an even closer fight when we begin the new season remember.
Stefano: The strength of our brand and fandom translated to some financial results in 2024.
Stefano: We continue to benefit from favorable supply and demand dynamics across our revenue streams that has strong demand to be part of the F. One ecosystem, whether he knows erases airing our content partner on sponsorship activation or enjoying the outdoors pretax profits.
Stefano: This is met with a relatively limited the supply across the board. We've seen these benefit commercial agreements with our opinions made incredible progress in a dozen twenty-four signing a number of books. He missed up provides clear visibility from near term financial and momentum beyond.
Stefano: As of year end, if one had $14.4 billion in future revenue contracted under multi year agreements.
Stefano: Well raise promotion, we remain focused on balancing growth and how do those markets as reflected in the extension of our real good. He meant two days in Shanghai throughout 2030, and then the news of both small zim Monica throughout 2031.
Stefano: We also extended the Netherlands for one year and Belgium under a multiyear rotational deal with the opportunity to put another ways to fill the alternating years slots.
Stefano: We remain in a strong position with demand from potential future ways venues across the globe and will assess any potential new calendar addition against the desert requirements for both the business and the sport.
Stefano: Turning to media rights our F. One TD product continue to grow at a healthy rate with subscribers.
Stefano: 15%.
Stefano: The U S remains its largest market capitalizing on the success, we are launching a new higher priced premium tier this year to try to get have it says. It will also then has functionality, including full K. It was at a high definition multi view, a beautiful pizza walk and the ability to watch a cross up.
Stefano: Two six devices.
Stefano: Brian touch on some financial inputs for the season entered.
Stefano: Entering 2025, I am, particularly proud of the growth in sponsorship both season, you'll terms and new partnership that will take effect this year.
Stefano: This includes our landmark deal with L. D M H as a global partner Lenovo become a global partner often being an official partner since 2022.
Stefano: It wasn't a new world with B Riley as well as bringing on the Omics center that and keep the cats as official partners.
Stefano: More recently, we announced the extension of our partnership with Cripple Dotcom through 2030, and all when our global lottery, operator, I don't know for sure.
Stefano: So popular.
Stefano: Our success in signing these partnership ahead of the season now allows the team to spend 2035 focus is on growing the skus in the pipeline of new deal and then you will I believe opportunity for 2026 and beyond.
Stefano: While 2025 is clearly a standout year and sponsorship I am optimistic about the discussion we have in developing through the new original deals upsells and the potential for movement above that exists disposal within Ts is the bar has been raised across the board.
Stefano: The team is also continuing to innovate on our hospitality products. The Vegas race allow us to test different concepts and salaried hospitality offerings, and we expect variation to be deployed the places this year Michelin Star chefs Gordon Ramsay was announced as the positive of our most premium hospitality.
F. One get rich. We're also pleased to extend our multi decade relationships with doing cool for another 10 years of public cloud delivery, we will continue to work with them on enhancing our paddock club all things looking at the Las Vegas Grand Prix, we delivered another outstanding spectacle track, creating buzzer throughout North America.
Stefano: And earning the promoter of the year award for Motor Sport moving into 2025, we are taking an important step in the race evolution and that fully integrating these operations into our F. One team in London.
Stefano: This will further maximize the value we believe the biggest race provides for F. One brothers commercial activities. In addition to being an excellent Legion of each of our commercial deal Vegas has been a successful test bed of innovation that we have now extending as aware informal one.
Stefano: A few recent examples include the expanding our licensed product and merchandise offering the global pop that she would go to the M. C. After his involvement in Vegas and building a new CRM system for all of F. One, which will enhance our fund targeting we also know the Vegas race is key to our expansion strategy.
Stefano: In the U S.
Stefano: Following the second year of the race, we have a clear vision of the changes needed to improve the risk Standalone economics, and maximize the overall value accruing to formula one.
Stefano: Turning to broader fan engagement Nielsen publishes set the fan data in December 2020 form twenty-four confirming if one is the most popular animal sports and see this globally with over 750 million fence enrolling younger.
Stefano: Younger females plans are growing the fastest I statistics that few sport gently.
Stefano: In the last five years, the under 35 years old the N E mail sent demographics to have both increased by over 50% with steady growth, especially in markets like the U S and China.
Stefano: In 2020 for 1.6 billion cumulative TV viewers tuned in for races with.
Stefano: With the number of unique if you were up 9% year over year.
Stefano: And Additionally, I get a gate, though this of most of our almost 500 million watched the F. One content on streaming platforms, including 230 million watching Youtube highlights wheels on the F. One channel.
Stefano: We saw TV growth, especially in China, Canada, Australia, Argentina, and the Middle East as we are increasing our global fan base at the same time, our European our stronghold markets, Italy U K, Germany were also up year over year.
Average viewership for race was 66 million of linear platforms with an additional 20 meaningless to meet it on digital platform, including the four T D.
Stefano: Nielsen is in is now capturing Youtube disease in these in the measurement, which will be included in our reported viewership numbers begin in 2025.
Stefano: This will provide a more comprehensive view on how current fund consume sports content and we aim to integrate new sources and platform overtime.
Stefano: On social media for more one ended the year with the 97 billion footwear across the platforms up 38% year over year. If you look at the comparable social media platforms, where all major sports operate for.
Stefano: For the fifth consecutive years F. One that's been the fastest growing global Sports League for fall overgrowth.
Stefano: We also reach an audience of 4 billion globally through our proactive media activity in 2024, showing the breadth of our reach.
Stefano: At races stronger tens as these trends continue throughout the season with the 2024 seen 17, sellout crowds and 10, new attendance records over $6 5 million people attended the races in 2020 for a new record growing 9% over 2023 four.
Stefano: Four races welcomed crowd of over 400000.
Stefano: The bulk of that goes to saw record attendance hosting 58000 total guests across the season up 20% on 2023.
Stefano: Despite the strength of these metrics, we know that only a fraction of our fund basis able to attain the race I think a key focus of our ongoing growth strategy is to reach fans in new creative ways to maintain their interest raise awareness and continue the growth momentum. This is our F. One always on strategy and shooting F. One is.
Stefano: Present beyond the 24 races calendar. These approaches supported by Albert exponential licensees initiatives.
Stefano: Following successful intellectual ventures in Boston D. C 2024 F. When a case is planning to open four additional U S location in 2025, including Las Vegas and Denver.
Stefano: The F. One exhibition sold almost 600000 tickets across all venues 2020 for connecting our Fabs with F one which history.
Stefano: He knows how this will be the fifth seeded to Jose exhibition when it's open on March 22nd and he's the first stop of a planned multi country yourself to American to them.
Stefano: So that was recently announced as the six locations set to open in April 2025.
Stefano: Leveraging learnings from other license activation, because I'm pretty proud that in Las Vegas is launching a series of new year round activities beginning at the end of March the site will be the low so medical homework, dysport, especially serving our growth U U S fan base in.
Stefano: In partnership with the round room live our partner in the F. One exhibition Grand Prix Plaza will host to see unique and immersive big speed is F. One drive athletics and therefore hub and we also had three new private demand spaces available for rent.
Stefano: We're building momentum in consumer products and other licensing areas, which we expect will be both economic a lucrative and provide new touch points for our diverse fan base.
Stefano: Our partnership with Lego launched with the product range featuring the old 10 teams engaged go onto the closed legal digital platform and presence at race weekends, including fan zone Activations.
Stefano: Our partnership with Mattel is launching throughout 2025 with H F want these brought to life across a range of product and presence and select races include the hot wheels activation their retail opportunities.
Stefano: Sustainability initiatives remain a priority and we are on track to be net zero by 2000 to 2030.
Stefano: In 2024, we began our investment these sustainable aviation fuel and they split that wood initiatives here, we lapped provided an approximately 19% reduction in 2020 foot relative emissions compared to traditional aviation pillar, we are already well advanced in our plans to expand the sustainable aviation fuel initiatives further.
Stefano: In 2025.
Stefano: Also in November we announced the formal diversity and inclusion charter agreed to by all 10 teams F. One and the FIA. This is an important step and invites collaboration across the ecosystem to producing tangible results.
Stefano: I had to the 2025 season and beyond we are working to capitalize on our momentum and establish key building blocks for future growth I'm confident that our brand awareness will continue growing, especially as we look to the Apple movie, which will premiere in June and the impact of our recent high profile seasonal launch event held at <unk>.
Speaker Change: Oh two in London.
Speaker Change: The launch event towards the first of its kind a feature and all 10 teams, revealing their 2045, Liberty's top theater entertainment and the gathering of the entire pool, one community to celebrate our 70 <unk> anniversary.
Speaker Change: Over 15000 fans packed the O two while over 40 global broadcast it air the show live F. One digital channels, including Youtube drill 7.5 million total light viewers, making it F. One most successful I assume ever the media buyers was incredible and over 2000 pieces of global content what pubs.
Speaker Change: We ship within 24 hours of demand.
Speaker Change: From a sports perspective this year, we expect an intensified on the track as teams continues to converge after a very competitive 2024 season.
Speaker Change: Changes are painful.
Speaker Change: With the many Rockies entering the greed demonstrated the success of the F. Two and half three Super Cedars in preparing drivers for four months. We also expect an interesting balance as the teams have to focus both on 2025 performers, but also prepare the significant changes required, but then you're taking to regulation taking effect in 2020.
Speaker Change: Six.
Speaker Change: We look forward to see the caustic to detract this weekend.
Derek: Wanted to touch full speed ahead, and now I will turn the call back over to Derek. Thank you Bye bye.
Derek: Great. Thank you Stefano I think we'd like now like to open the call for questions.
Speaker Change: Thank you well now be conducting a question and answer session. If you would like to ask a question. Please press star one on your telephone keypad.
Derek: Confirmation tone will indicate your line is in the question queue.
Derek: Press Star two to remove yourself from the queue for participants using speaker equipment. It may be necessary to pick up your handset before pressing the star keys.
Speaker Change: Our first questions come from the line of Ben Swinburne with Morgan Stanley. Please proceed with your questions.
Ben Swinburne: Thanks, I have two questions one for Derek on when hopefully for Stefano I know he said by but hopefully he is still is still there Derek welcome to the wonderful world of quarterly earnings calls.
Ben Swinburne: Talk to you again could you talk a little bit about you know sort of the message you have to you know liberty shareholders around kind of strategy I know you talked a little bit of it in your prepared remarks, but like what are your strategic priorities for the year and any comment you can share on sort of your philosophy around M&A I think liberty obviously.
Ben Swinburne: Tremendous track record on the M&A front at the same time investors really like the kind of pure plays that you have and are continuing to create so would love to hear some thoughts there and then I have an F. One question for Stefano if he's there.
Ben Swinburne: Thank you Pat down to hear you.
Ben Swinburne: Okay sorry.
Ben Swinburne: Thanks, Ben and thanks for the warm welcome that I guess I would say that.
Speaker Change: I've touched on some of the points in terms of our near term priorities.
Ben Swinburne: Clothing torn a.
Speaker Change: Structural simplification that we've discussed.
Speaker Change: And obviously, a huge focus right now on an F. One and continuing the growth trajectory that that's been on helping Stefano and his team sort of accomplish that we've got a lot sort of on our plate but.
Speaker Change: But as you get through the year, and we sort of roll forward I would think that a lot of what we've done in the past what sort of reflect on what we might do in the future. We've always been an opportunistic.
Speaker Change: And I think as those opportunities present themselves, we will certainly hopefully be active.
Speaker Change: Okay.
Speaker Change: To sort of build on the assets that we have.
Speaker Change: In terms of you know.
Speaker Change: Tuck ins orange agencies, and things like that but that as we start to talk beyond that.
Speaker Change: Where there is sort of opportunities that involve premium tea.
Speaker Change: Our ability to monetize and commercialize along the way that we've done with some of the assets like Epsilon.
Speaker Change: Those we would look at pretty seriously.
Speaker Change: But for now again back to sort of our near term priorities that we've already discussed.
Speaker Change: Stefano or do you want to have tough it out you're not yeah, yes, definitely you guys yes.
Speaker Change: Going on between you know Concord and.
Speaker Change: Media rights everything else, but theres a lot of focus as you can imagine on the U S media rights right now there's some press reports that F. One in E. S. P. N as have sort of moved on from each other and I guess I'm. Just curious if you could talk a little bit about how you're feeling about the demand for the U S broadcast rights for F. One today.
Speaker Change: Now, whether we still should think theres going to be an increase from your current deal and then your thoughts on including or excluding F. One T V. In the package that you're that you're bringing to market would be appreciated. Thank you.
Speaker Change: No. Thanks, Ben as you said these are lots of going on in this month, but that's the light the formal what every day is a new day with a lot of things that are always opportunities first of all let me say that you know with regard to ESPN and pool, one let me say that the you know I cannot deny.
Speaker Change: It's sort of a situation that is negative because first of all we need to be thankful for Walter Yes D. N is providing to US we are very happy about the quality of the service we need to always remember that they were first to believe in our project. So therefore, the fact that the at the end of the exclusivity period, they have not put in.
Speaker Change: Please and a formal offer it doesn't mean that the discussions are going I had actually is there to go wrong. So that'll still are a lot of discussion to try to find the best solution and of course now as we always said is the.
Speaker Change: The months, where other players around the table and that we cannot deny the fact that there is a lot of interest around our product. We are fortunate enough to have a compelling continents contents and growing fan base and the strong demand for different situation from various parties.
Speaker Change: We always said you know there is a the big point related to the fact that for one side, we always want to maximize the monetization of our media right, but on the other side, we need to make sure that also in terms of awareness in terms of growth of our Sundays, we need to.
Speaker Change: Try to find the best way in terms of reach therefore these are the two questions. The two points that are on the table. We have a lot of players that are we are discussing with I think the hot months will be the next one before summer well, we should have a better bet.
Speaker Change: Beecher and that's for sure something that I believe it will happen because as I said, we are really in a situation where our hour.
Speaker Change: Possibilities to grow and also to offer to them is the possibility to given the two hours because the Boston any lateral commercialization on how they can explore their rights are possible and I can I can say that the digitalization and also the experience about the broker has to do with in Europe and other parts of the world could be.
Speaker Change: An essential part on what could be the discount you were going to have with them and that's what I would say with regard to the media right I'm sure that the Derrick.
Speaker Change: If you want to say something more on that before I can't that's the situation on comfort.
Speaker Change: Thanks, Pat for now Yeah, I mean, I love talking about media right.
Speaker Change: I would I would add to that that you know people tend to look at at the touch of discussion somewhat simplistically, sometimes and and really focus on sort of the race in the race broadcast, but when you think about sort of media rights and in today's world.
Speaker Change: Now the broadcasters the distribution partners and the and the IP holders I think that's a much more involved relationship then and just sort of the event and I think that everyone benefits.
Speaker Change: And how people can use sort of our IP not just really bad, but the other forms of content or the activation and hospitality and things like that come into play and I think that.
Speaker Change: We continue to be very well positioned with respect to the content offer we have we've invested a lot of money in our own content production, which which can also be very helpful to be potential broadcast partners ultimately as everyone knows in this world things sort of hinge up a little bit about supply and demand and the competitive process.
Speaker Change: That you know unfold situations like that and sort of what the availability is off.
Speaker Change: You know other right around this time frame.
Speaker Change: These are the sort of oh, which of our potential partners.
Speaker Change: Looking for IP like ours at this time.
Speaker Change: And so.
Speaker Change: You know not that not that all of a complicated answer but I think we do believe that there is a robust process that will unfold here I think.
Speaker Change: Using an analogy where early in Iraq and people are still filling out the track per se, but I think Austin or you have an analogy.
Speaker Change: It's gonna be a pass rates and wait on them pretty quickly how it played out to come to conclusion as we get to sort of the end of the middle of the year.
Speaker Change: Part of the year and just to Echo one thing that that Stefano sad.
Speaker Change: You know a lot of times people on the outside tend to frame the thing at all.
Speaker Change: Now ESPN said they didn't want the F. One rights going forward.
Speaker Change: Again, soundbite sort of way to describe the relationship we've actually been quite a productive and constructive relationship and I personally have had a long term relationship with ESPN F. One has had a great relationship.
Speaker Change: With ESPN and we will continue to see how these conversations unfold.
Speaker Change: Thank you.
Speaker Change: Thank you. Our next question is come from the line of David Karnofsky with J P. Morgan. Please proceed with your questions.
Speaker Change: Alright, Thank you and welcome to dark.
Speaker Change: On Las Vegas, as you noted the Reis, Mr budgeting and.
Speaker Change: Get the need to look at this holistically given.
Speaker Change: Its impact of sponsorship and other Reits, but I wanted to see if you could take a little bit on the path here in 2025 in the next few years a spin.
Speaker Change: Specifically growing revenue and kind of also managing the cost base to get that back towards some of those original Standalone targets you had laid out if that's still the goal.
Speaker Change: Definitely what do you want to start.
Speaker Change: Yeah. Thanks, Derik I would say eh. Thanks, David I mean, I, we do believe that as we always said that D. C is an incredible Grand Prix, which will need to keep working and make sure that he will stay as we believe are the top of the range because of the benefits of these Grand Prix.
Speaker Change: As we said that provides a broader financial benefit to deal with all the old vehicle season. The football one what we are focusing with the actions that we have delivered is to make sure that you said correctly, we need to make sure that we focus our attention the cost structure of the situations that we have to manage in Vegas, we need to have a you know a even a better.
Speaker Change: Local relationship because that's the key of this success and by the way on that respect one news that I believe that it's an important for the ecosystem, but the communities that we have moved the race time two hours earlier and that's why because we believe that it's important always to be connected to the community and we do not forget that the committee is benefiting with a big impact.
Speaker Change: On their economics in the P&L.
Speaker Change: P&L on the weekend of the races, and then of the fact that we believe that the buy and eat in integrating their older function.
Speaker Change: Of Vegas, LPG be together with London will help to boost the synergy that we can use by knowing the system and the speed is that all the other Grand Prix out of let's say investor government given to US we don't have to forget that we were having is as.
Speaker Change: With that it was mentioned in it and it needs to.
Speaker Change: Speech at the beginning and the data relevant for that community and now we have taken that in the way to build you know the system in order to formalize the right packaging the right offer and nobody ever said I own they're on the other side. We have always said that since the beginning that we know that when there is a new approach has really not had you know the first he is a learning curve.
Speaker Change: We'll take the right time to make the right strategic decision because as we said these incredible event that will continue to be one of the most important event in the future that's what I could say on that perspective.
Speaker Change: Dairy and yeah, I I'd like to just add that you know if you step back for a second I think that LPG P has been a huge success.
Speaker Change: To put on an event like that in the short amount of time that that our team here in Denver, and London, we're able to do that over the last couple of years, it's been pretty impressive and I think we've talked at length about sort of the benefit to the F. One eight ecosystem as a whole whether it's it's the media the sponsorship.
Speaker Change: Fan you know Adam growing here in the U S. All that sort of stuff as it had been hugely impacted by.
Speaker Change: What we've been able to accomplish in Las Vegas, I think we all hear or disappointed by sort of the are some of the financial metrics in the early going here, but that was in my mind are all sort of durable extra ball and as Stephane.
Speaker Change: And I have already alluded to we're already sort of working on those plans and feel comfortable that we will see a nice improvement there.
Speaker Change: Over the course of the year.
Speaker Change: King.
Speaker Change: Okay, and then Stefano was interested to get your expanded beyond GM Cadillac and the decision to admit them as a team.
Speaker Change: Had the perception of some resistance to this in the past.
Speaker Change: I was interested to understand better any change in your thinking and what this can add to the sport, especially in the U S and.
Speaker Change: Can you just refresh us on how the entry if it works for the teams and what role if one pass afinitor.
Speaker Change: No. Thanks for that is very important to public fight that position that we always said that Cadillac is given and he will give an incredible boon to the ecosystem of formal ones are that we were referring to other situations that were handled before but now that the picture is totally different. Therefore, you know I think the Catholics.
Speaker Change: Preparing the entry and in term of preparing the season, because it would not be an easy situation for them to be you know in in such a high tech and embolden. The sporting platform. They are doing everything in order to show how Cabo is really involved in the in into the into.
Speaker Change: The into the sport now that he is the formality that is related to the process that the you know it's almost a ready together with USAID has to be you know an update and whenever this will be ready should be not too long there would be a sort of a beta to formalize what basically is already.
Speaker Change: Happened so they will be ready in a in a in a in a fight.
Speaker Change: Against all together with the other teams for next year and that is the evolution that as you know G M mistaken.
Speaker Change: Is that.
Speaker Change: As a fact that they want to be you know a real cost structure or a manufacturer that will invest in our sport because they do believe in the in the technological platform that you have one can provide to their to their system. So very very happy that now this is on board and moving forward and looking forward to see them on the tracks together.
Speaker Change: The other teams the tools to fight for for a great Championship.
Speaker Change: Okay.
Speaker Change: Thank you. Our next question is coming from the line of gotten marrow with Evercore ISI. Please proceed with your questions.
Speaker Change: Good morning, and thanks for taking the questions two if I could first on sponsorship I know between 25 log be already be very robust given the partnerships that you've already inked and it doesn't seem like the team has stopped either with the recent all in deal and bringing on tag Warrior as a title partner for monochrome I guess looking ahead do you see even more opportunities.
Speaker Change: As you look to the balance of this year or are you largely set for 2025 based on the pipeline and given the tenor of your conversations there or anything you can share about how sponsorship could look like in 2026 as well and then I have a follow up on M. G M. Cadillac.
Speaker Change: Yep. Thank you for that I mean this is as we said we have very robust are with regards to the pipeline for 2025, because basically in terms of achieving.
Speaker Change: Achievement of the entry of the robust partnerships that we've announced has been I would say impressive impressive with regard to the quality of the brand and of course, not only about the bullets about the divestment that bringing to US what for me is relevant is that these new partnership as broking and with protein.
Speaker Change: New way all the activating the partnership is not only visibility is not totally awareness. It's oh, what is behind that and now everyone is working together to make sure that this platform will offer to their needs in terms of business development. What we can offer to them. So that is an important.
Speaker Change: Our assessment that we have that together, we will see already with facts.
Speaker Change: With regard to the other possibility what do we lived and we don't have to forget where we were just couple of years ago. We have moved to not only in terms of quantity, but also in quality or possibly she did that so that was the need now to restructure they could take in order to make sure. There was that the possibility to develop regional deals or two.
Speaker Change: <unk> uplift with either Thermo Fisher to global partners and of course that either different possibility to maximize these.
Speaker Change: Through the digitalization, a that can be applied to our presentation, our problems on television and not only on to be able to track and on top of that of course, the final engagement that we're bringing with new partners.
Speaker Change: It is pushing us to move them and this is the reason why for example, one once more Vegas was important to create deeper opportunity with just vitale packages. They will just be tallied and the experience that we're offering to our fans looking ahead.
Speaker Change: I would say the pipeline already for the next year is very strong and that's what we need to do work together and if we would well the activation program that we are that we are activating with them with facts. It is showing that our strategy is right otherwise it wouldn't be such a good position and I do believe that this project will keep us.
Speaker Change: Going like that even in the future.
Speaker Change: That's very helpful. Thank you so much and then maybe if I could just follow up on the GM Cadillac discussion you know there've been some questions on what this could mean to the Concorde agreement discussions and ultimately.
Speaker Change: What it does to the splits and economics that the teams are pushing for I know that there's not much you can share on the Concorde right now, but how should we think about the financial impact of welcoming GM Cadillac to the grid and ease of hope that the long term topline opportunity through sponsorship and maybe media rights would offset any margin pressure or is it just wrong even assumed.
Speaker Change: There would be margin degradation. Thank you.
Speaker Change: No. Thanks, I mean with regard to the first question Theres no impact at all with the current discussion that comfortably and that's been the AR as you know Concordia is done by two major elements one is the financial one.
Speaker Change: And that is related to the commercialization and the and and and the marketing side with that discussion between the you know us and the and the teams and we're in a good position on that and the other topic Oh. The other part of it. These are the government said that of course that we need to work together with the FAA.
Speaker Change: And the teams that were working in order to respect the data as you know there's no time pressure on that because we are we are all working as partners and we want to find the best solution for the sport and this is something that we're gonna do.
Speaker Change: Even with one more team together into the future because of course, the Cadillac will be part of it and they will have a voice.
Speaker Change: Others into the future that with regard to the fact that Caldolor will bring to our new U S branch I think that we can bring opportunities and I'm totally parse it because they support is growing at such a magnitude that that you know everyone will exploit the best out of it and I'm sure that the Italian like Jim Group will benefit from.
Speaker Change: Being part of this group.
Speaker Change: Can I, just add I think stepping out that.
Speaker Change: In my early days here I have had the opportunity to meet with some of the teams.
Speaker Change: Certainly over the last month or so and.
Speaker Change: Don't think that I think the relationship between Formula one and the team has never been stronger.
Speaker Change: I've heard a lot of good positive Ah.
Speaker Change: Affirmation of that in terms of what Liberty has done since since we acquired F. One and I think people really.
Speaker Change: We are excited about the future and sort of growing the overall pie.
Speaker Change: In terms of the economics.
Speaker Change: Working to lever I think very specifically on the Concorde agreement and our splits with the teams Stefano already remarked on the fact that hopefully we kept the Concorde agreement that soon at.
Speaker Change: At this point.
Speaker Change: The entry of an 11th 10 has not really impacted sort of that discussion per say and if you think about it.
Speaker Change: It doesn't impact the splits between us and the team. It certainly is in all of our team in terms of the allocation suboxone.
Speaker Change: <unk>, but again I think with the entry of a group like yeah.
Speaker Change: I hope and I thought here is that we continue to grow the overall.
Speaker Change: Hi for Formula one and the Formula one ecosystem.
Speaker Change: Thank you both very helpful.
Speaker Change: Thank you our next questions come from the line of Jeffrey Volta check with pivotal Research group. Please proceed with your questions.
Good morning first of all congrats here.
Speaker Change: A new position.
Speaker Change: Had a couple related to formula one I guess a follow up on the Concorde agreement. So I mean should we expect that's going to be pretty similar to the current deal or can you make changes that really help the sport forward.
Speaker Change: I know I can Stefano on the 2026 powertrains, you talked with you as they develop that.
Speaker Change: Are there any major surprises positive or negative that you're seeing.
Speaker Change: Yes.
Speaker Change: Yeah.
Speaker Change: I think I think Jeffrey I mean.
Speaker Change: I didn't get the second question properly to be honest the first related to cohort I think that's it it's worth to say without.
Speaker Change: Saying that anything that we can say so far is this is the basic fundamentals are quite similar to the actual structure that is definitely the way that we are working on that the way we are progressing with that the second one I've heard some people related to the 2026 cars Jeffrey Hee Kim if you can repeat because the line was not great sorry for that.
Yeah, No worries hopefully you can hear me now.
Speaker Change: I was just wondering if there were any major surprises on the development of those 26 powertrains like you've heard from Exxon.
Speaker Change: Okay.
Speaker Change: Yeah no. Thank you know understood. Thank you very much I think that that's always where there is a change of regulation. There is a lot of a lot of things that are related to what's working the best who knows Oh has it been able to do to maximize the full myself to the regulation that is totally new so a lot of expectation.
Speaker Change: And then it is normal that are a part of the of the ecosystem at that stage is trying to say why we have changed the team is doing a moment, where the champion is so competitive that that's been always the case with the cycle of formal one I do believe that the fact that now with regard to the technological development, we put at the center of the sustainable fuel.
Speaker Change: It's something that will give us the future boost of a different thinking of a technological implication of the future and formal one that's one pretty convinced about it we need to keep at the center. The show the fact that the drivers' needs to be the center of the at the center of the stage and they take the neurological.
Speaker Change: Just for the future needs to be relevant for that we need to keep that clearly because it is relevant to say that that was 10 basis. He is shifting into moving to this that we need to have the duty to make sure that he is the right balance between the let's say the so called traditional fast versus the new Fabs and that's the focus that we want to keep it together.
Speaker Change: Alright, thank you.
Speaker Change: Thank you our next questions come from the line of Bryan Kraft with Deutsche Bank. Please proceed with your questions.
Speaker Change: Hey, Brian how are you able to check up yourself muted. Please.
Speaker Change: Okay.
Speaker Change: Our next questions come from the line of Stephen laws to check with Goldman Sachs. Please proceed with your questions.
Speaker Change: Hey, guys. Thanks for taking the questions two if I could first on the media rights opportunity internationally for Stefano and Derek if you want to jump in on this one I'm curious if there's anything you've learned so far through your U S. Media rights negotiation that has made you more or less optimistic on the demand backdrop for media rights for F. One more.
Speaker Change: Globally.
Speaker Change: Thanks, Steven I mean from my side.
Speaker Change: I see that is non stop a great opportunity to exploit the masks are moved out of it I'm not really worried about that because I do believe that it's potentially you know we would not potentially actually actually we have a growing fan base that we need to make sure we find the right product and they liked it.
Speaker Change: A partner in order to engage with them and that's really cool pollution and one thing that we need to with enough to forget that as part of the equation is our F. One to be brought up because it's something that it isn't relevant to it is really an incredible tool all the engagements and and this is something that we want to keep that inside the discussion.
Speaker Change: Whoever will be the partner of the future because we believe of the value we truly believe the value of this platform.
Speaker Change: I would say that that the I'm not so sure that U S. Reits are correlated to what we've learned through this experience is definitely correlate it to.
Speaker Change: Other markets per se because each of them have their own individual characteristics in terms of demand as well as sort of players in the market I would say that that one thing that is obviously transpired over the last several years.
Speaker Change: As a somewhat large streaming platforms have gotten engaged in sports.
Speaker Change: And it's sort of a.
Speaker Change: Demand on their part for first sort of worldwide rights for lack of better term and and hopefully that will certainly drive some of that demand as we walk you know around the globe. If you see the one of the big selling points of the Netflix sort of taking on the NFL Christmas games with it.
Speaker Change: Liberty Global.
Speaker Change: So you know this is clearly.
Speaker Change: Finally, an evolving space that we'll keep an eye on.
Speaker Change: Got it thanks for that and then second.
Speaker Change: Second question just on Vegas for Brian.
Speaker Change: I appreciate you're not commenting on very specific economics, but I was just curious if there's anything you can give us on the magnitude of the decline year over year in revenue and profit at the rates just given the focus at the moment by the market.
Speaker Change: I can maybe give us confidence that some of the underperformance in the quarter was isolated to Vegas, specifically and maybe not more broadly throughout the half one core business. Thank you.
Speaker Change: Yes, we can't comment on the specifics, but the majority of the.
Speaker Change: Of the Miss that you guys are calculating based on the team payment was Vegas related.
Speaker Change: Got it that's helpful. Thank you both.
Speaker Change: Thank you our next questions come from the line of Bryan Kraft with Deutsche Bank. Please proceed with your questions.
Bryan Kraft: Hi can you hear me now.
Speaker Change: Yes.
Speaker Change: Great.
Eric: Thanks for letting me back and welcomed Eric and congratulations.
Speaker Change:
Bryan Kraft: I had two questions. So first on the heels of several high profile race promotion renewals how did the results of those renewals lineup with your expectations that race promotion is increasingly becoming a revenue growth opportunity and then the second one is I know you don't want to give guidance, but could you just talk broadly about the media rights revenue outlook in 2025 relative.
Speaker Change: For 2024, it seems like growth in that line should accelerate this year.
Bryan Kraft: Would appreciate any color there. Thank you.
Bryan Kraft: Yeah.
Bryan Kraft: Thanks, Brian I mean race promotion.
Bryan Kraft: As you know we have a let's say we have taken the decision to be stronger long term agreement with the place where we do believe it is that is relevant to stay focused and working together because that is supposed to be two to increase even other revenue stream.
Bryan Kraft: So these are our relationship with the other thing is of course at every promoter ease at ease that innovating investing and I remember very well when I had my first earnings calls there were a lot of doubt.
Bryan Kraft: This revenue stream would be able to grow because there was a lot of thinking that that was not possible actually we've proven that they have to go wrong and I do believe that the due to the tension positive attention of the market because we want a lot of a lot of countries was to host the Grand Prix and they've been well was to basically show that they are committed to long term.
Bryan Kraft: There is the possibility to keep growing this revenue stream. This is our focus of course what is good is that we everyone. A house now the focus on defense Who's attended the race, so everyone loves to improve the different segmentation that defends our requires in term of a G. A in some of our media must vitale.
Bryan Kraft: In a higher profile hospitality working the marginality of course working on the speed is of the fast together with the promotion. So in that respect I do believe the expectation even if we had not given any kind of guidelines from that to all of them are in the direction of being very strong even in the future.
Bryan Kraft: With regard to the media rights. It if I may say, Derek and I would say on that.
Bryan Kraft: If you have a good package and if you have a good sport. If you have a good fan base you know the media rights should keep growing are in.
Bryan Kraft: And in that respect and I do believe that that work is that important for the future is to see how the first wants to capture the content from viewers and there would be not only the so called traditional media right, but there are other platforms that they will have a big effect.
Speaker Change: On that note Tony Grove in depth, but also growing the different possible to engaging with the FES and this is for me a in our opinion very very peculiar to the fact that this is relevant to the growth in that landscape.
Speaker Change: Yeah, I'd, just add Brian specifically on twenty-five versus 'twenty four for media rights, you're largely going to be seeing just regular uplifts in standard renewals. We would expect continued growth in F. One T V and we're launching our new premium F. One TV product too so those would be the primary drivers in 'twenty five.
Speaker Change: It's kind of similar in strength as last year from a growth perspective or would you expect any acceleration this year Brian.
Speaker Change: I'll leave it at what we well we've answered already Brian.
Speaker Change: Alright, Thank you both.
Speaker Change: Thank you. Our next question is come from the line of Steven Kay Hall with Wells Fargo. Please proceed with your question.
Speaker Change: Thank you for taking the question. So first just on media rights and with the expansion of premium F. One T. V. Can you just help us conceptualize how that products fits into the discussions that you have with some of the larger streaming companies I guess the expectation is that those streaming companies probably don't want to see a competing streaming product in March.
Speaker Change: It even if it's your own so how do you manage those dynamics as you look to maximize the value of of what you can get for rights.
Speaker Change: And then just one on on Concord, and maybe Concord dynamics I think the last Concorde.
Speaker Change: A big overhang from what was going on with the pandemic and maybe the team's expectation or need to limit some of their downside risk you've grown the sport a lot. Since then the teams have also added a lot to their calendar, both with media and with races. So how do you think team dynamics are this time, what do you think they're X.
Speaker Change: Spectation as are and do you think that they have any feelings about your ability to kind of hold team payments flat and would be willing to accept that thank you.
Speaker Change: Okay.
Speaker Change: Thanks, Steven I mean with regard to the to the to the let's say the value of the premium F. One TD or pro or we're doing internal give some propositions as we said that we believe that these is too because he is around the value and we find solutions I gave you. One example in the in our in the collaboration that we.
Speaker Change: The day I played in there.
Speaker Change: That market, we were able to find a solution that is integrated that in that package. So I do believe that we are flexible to understand what will be the need of our future broadcast knowing that there's a value because he said he collectible package and the extended and the different packages that we're offering you know allows all our fans to be connected with our world and I do believe this.
Speaker Change: Is relevant also this element has to be considering in our negotiation with blue chip partner.
Speaker Change: The comfort I mean, the the team dynamics I would say everyone recognized huge growth all of the business. I mean, he is not totally related to the fact that the there is a lot of interest to all eventually buying teams because they see the potential value of them you see from the numbers and the quality of partners.
Speaker Change: Next to each team.
Speaker Change: Everyone have a nice.
Speaker Change: The huge though we're doing together and the dynamics are very constructive. It's a it's part of the game that everyone wants to try 22222 to squeeze or maximize what they can bring home that's part of the game, but I would say the credibility that we have found that we have now together.
Speaker Change: As allow us to find the right balance so happy to progress with does that kind of relationship because that's the key point of our future and the very stable growth of the business together, we see everyone as a stakeholder of the business. The FAA the teams and all the purpose that they have in all of our partners.
Speaker Change: Great. Thank you.
Thank you and just last one.
Speaker Change: Just on the Concorde.
Speaker Change: Aspect that you were asking about we wouldn't expect to see degradation, we feel good with our relationship with the teams. So we would expect at a minimum we'd be in a similar place on the next agreement to where we finish out 2025.
Thank you our last question will come from the line of Barton Crockett with Rosenblatt. Please proceed with your questions.
Barton Crockett: Okay. Thanks for taking the questions.
Barton Crockett: I was interested in terms of the broadcast rights.
Barton Crockett: Spent a lot of focus on the U S. As a solitary market, but no theres rights that seem to be you know potentially up for renewal across the Americas, you know, maybe even elsewhere in Japan.
Barton Crockett: Are we at a place now where it could be more interesting, perhaps you know to get closer and with some of the global streamers to negotiate globe large regional packages not exactly global but.
Barton Crockett: You know large kind of reagents that go just beyond like the U S.
Barton Crockett: I'm, sorry, if you could discuss that.
Speaker Change: I mean do you want to go Oh I can go.
Speaker Change: I can just take the front end, we can wrap up this is the last question but.
Speaker Change: I think that the I think again like we said and I don't mean to keep repeating it but it's an evolving situation in terms of what.
Speaker Change: The media rights landscape it looks like globally, what the different players out there what we want to try to achieve with their own platforms. I think clearly the large streamers have consistently said that they want global rights to everything.
Speaker Change: That may or may not be possible that on a regional basis sort of similarly.
Speaker Change: It depends on how you define these various regions, but I do think that if some of these players are strong across the region than that.
Speaker Change: Clearly there could be benefit and I think we do have some regional deals in play.
Speaker Change: Sure.
We've got I know, we've got some deals with Booz Allen in various countries.
Speaker Change: For instance, obviously sky, we've got across multiple countries in Europe. So.
Speaker Change: You you.
Speaker Change: It really depends on sort of what their strength is and what their aspirations are and some of these markets because.
Speaker Change: The sum.
Speaker Change: Of all of those is greater than us growing out individually you would have to look at that.
Speaker Change: This is an opportunity seriously and.
Speaker Change: I think with that I appreciate everyone's time today I appreciate everyone listening in and all the warm welcome.
Speaker Change: And look forward and look forward to seeing more of everyone on future earnings calls and thank you again.
Speaker Change: Thank you. This does conclude today's teleconference. We appreciate your participation you may disconnect. Your lines at this time enjoy the rest of your day.
Speaker Change: [music].