Earnings Call: Q4 2020

Feb 26, 2021

Ladies and gentlemen, thank you for standing by. Welcome to the Liberty Media Corporation twenty twenty Year End Earnings Call. During the presentation, all participants will be in a listen only mode. Afterwards, we will conduct a question and answer session. As a reminder, this conference is being recorded today, February 26. I would now like to turn the conference over to Courtney Chun, Chief Portfolio Officer. Please go ahead. Thank you. Good morning. Before we begin, we'd like to remind everyone that this call includes certain forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual events or results could differ materially due to a number of risks and uncertainties, including those mentioned in Liberty Media's most recent Form 10 k or Liberty Media Acquisition Form f one registration statement filed with the SEC. These forward looking statements speak only as of the date of this call, and Liberty Media and Liberty Media Acquisition expressly disclaim any obligation or undertaking to disseminate any updates or revisions to any forward looking statements contained herein to reflect any change in Liberty Media or Liberty Media Acquisition Corporation's expectations with regard thereto or any change in events, conditions, or circumstances on which any such statement is based. On today's call, we will discuss certain non GAAP financial measures for Liberty Media and SiriusXM, including adjusted OIBDA and adjusted EBITDA. The required definitions and reconciliations for Liberty Media and SiriusXM Schedules one and two can be found at the end of the earnings press release issued today, which is available on the Media's website. Now I'd like to turn the call over to Greg Maffei, Liberty's president and CEO. Thank you, Courtney, and good morning to all of you. Today speaking on the call, we will also have Formula One's new president and CEO, Stefano Dimunicale, and Liberty's chief accounting officer and principal financial officer, Brian Windland. I'd once again like to recognize and thank our management team and employees for the tremendous job they have done, mainly through COVID and difficult circumstances. Beginning with Liberty SiriusXM, I note we continued our share repurchases, repurchasing $99,000,000 across both LSX and ANK shares in the November to January time frame. As you know, the discount persists, and we repurchased at a look through price on CRE of about $3.7 per share. We do expect to continue to take advantage of discount opportunity, in part driven by some recent balance sheet improvements we have at LSXM. In November, we raised $929,000,000 of a live exchangeable bond at 50 bps to repay our live exchangeable maturing later this year and fund the call spread between LSXM and FWON that originated when we did the reattribution. In tandem, we amended the live margin loan and unencumbered a substantial portion of our live equity. Also, after quarter end, we amended our Siri margin loan, increasing our borrowing capacity from $1,350,000,000 to $1,750,000,000 Accordingly, we have generated substantial incremental borrowing capacity to go after that discount, and we continue to take advantage of it. Our ownership of SiriusXM as of January 29 stood at 76.4. We do expect to get to 80% ownership in this year, and we recently announced a tax sharing agreement between SiriusXM and Liberty SiriusXM. The Siri Board of Directors evaluates capital return strategy every quarter and will continue to do so if Liberty gets to the 80 ownership level as we expect later this year. So looking at Sirius itself, we welcome Jennifer Witt, who assumed her new CEO role in January. The new car penetration at Siri hit 80% in the fourth quarter, and we have line of sight to get to 82 in 2021. SiriusXM hardware is now in one out of every two cars on the road, and the number continues to climb. FXM self pay households listening in the digital environment, I. E. Out of the car, grew 40% in 2020. And Stitcher has the largest share of US podcast listening audience available to advertisers. Please do make sure you listen to the podcast of the year, Office Ladies. For those of you who have been to our Investor Days, you know how much we love The Office. Turning to Live Nation. We continue to have great demand for concerts, perhaps notably. The Weeknd sold over 1,000,000 tickets worldwide for his twenty twenty two tour just one week after announcing the tour. Clearly, there is robust demand as we noted for live music. Live also acquired a majority stake in Beeps, a ticketed livestream platform. I encourage you to check out the series they have on Rufus Wainwright. Turning the form turning to the Formula One Group. As I mentioned, we have a new CEO there, Stefano Jimnicalli, from whom you'll hear in a minute. We are planning for a record 23 races this year. Notably, the Orange Army is ready to welcome the Dutch GP and local hero Max Verstappen in September at Zandvoort. 2020 showed we have ample demand for hosting races even on short notice from both new and historic tracks. And now for many of you who have seen everything you wanna see streamed online this year, get ready to tune in for season three of Drive to Survive, which drops on Netflix on March 19. In January, we introduced LMAQ as SPAC. We raised $575,000,000. That's the largest corporate SPAC to date. According to banks who were involved, and maybe they're biased, it was the most oversubscribed SPAC of all time, and the first trade at 13.2 was the highest initial trade for any SPAC to date. Stock has continued to trade well, though admittedly on thin volume. We are actively in discussion with a number of targets in the TMT space. The 20% interest in El Mac, is attributed to the Formula One Group. And I would remind you that the Formula One Group has committed to board purchase $50,000,000 at $10 per unit in connection with the initial business combination when it occurs. Turning to Braves. We sadly lost some icons of the Braves in this offseason, and we'd like to start by paying tribute to them, notably Phil Nicrow and, of course, Hank Aaron. We started a fund named after Hank Aaron, ceded with $1,000,000 from the Braves, plus $1,000,000 from Major League Baseball and the Major League Baseball Players Association to help grow diversity in baseball. We are excited about our enhanced 2021 roster coming off of winning the NLEs for our third straight season. We did resign Marcel Lejuna to a four year deal. As you may recall, we came within one year one win rather from going to last year's World Series, so our guys are ready to go. Freddie free Freeman coming off of his twenty twenty NL MVP. Acuna, Albee, and more are hungry and ready. Spring training did start, recently, on Tuesday, and our first three spring training game is this Sunday. We expect fans to be in attendance at 25% capacity. Turning back to the home front at 3 Ballpark Office Tower, we are near completion and 70% leased. Both Kiss and Crook and Papa John's will fully occupy their space by the 2021. 97% of the battery's tenants are operational, which speaks to the relative openness of Georgia, and we believe bodes well for fans at Truist this year. We do expect to have fans in the stands, but are not yet sure of the seating capacity restrictions. And we do have significant demand for both tickets at Truist and spring training. As I noted, we look forward to a great 2021 season and including hosting the m MLB All Star Game on July 13. So with that, let me turn it over to Brian for some more financial results. Thanks, Greg, and good morning, everyone. At Liberty SiriusXM Group, we've taken a number of steps to boost liquidity and strengthen the balance sheet. In the fourth quarter, we issued $920,000,000 of Live Nation exchangeable bonds and amended our Live Nation margin loan, unencumbered substantial Live Nation equity value as part of the amendment, decreasing the shares underlying the loan from $53,700,000 to $9,000,000 Subsequent to quarter end, we amended our CRE margin loan, increasing borrowing capacity to $1,750,000,000 up from $1,350,000,000 at year end, and borrowing an additional $125,000,000 Inclusive of this additional margin loan draw, Liberty SiriusXM Group has attributed cash, restricted cash and liquid investments of $1,100,000,000 excluding $83,000,000 of cash and restricted cash held directly at SiriusXM. We also have $1,100,000,000 of undrawn margin loan capacity at the parent level. That approximately $850,000,000 of our cash will be used in 2021 to settle the call spread between the Formula One Group and the Liberty SiriusXM Group and to repay our 2.25% Live Nation exchangeable bonds. This value is based on estimates of the fair value or or the fair value of both liabilities at year end. As of February 25, the value of the SiriusXM stock held at Liberty SiriusXM Group was 19,000,000,000, and the value of our Live Nation stock was 6,000,000,000, excluding the value of the Live Nation call spread held at Formula One, valued at $37,471,000,000 at year end. We have 3,200,000,000.0 in principal amount of debt against these holdings. Total Liberty SiriusXM Group attributed principal amount of debt is 12,800,000,000.0, which includes $8,600,000,000 of debt at SiriusXM directly. Formula One Group had attributed cash and liquid investments of $1,400,000,000 which excludes $265,000,000 of cash held at Formula One. And the total and total Formula One Group attributed principal amount of debt was 3,600,000,000.0, which includes 2,900,000,000.0 of debt at f one, leaving 727,000,000 at the corporate level. At year end, Formula Formula One's 500,000,000 revolver remains undrawn. At quarter end, Brace Group had attributed cash and liquid investments and restricted cash at $185,000,000 and attributed principal amount of debt of $674,000,000 We are currently in compliance on all debt covenants across the portfolio. With that, I'll turn it over to Stefano to discuss Formula One. Thank you, Brian. I'm thrilled, first of all, an honor to lead Formula One. Thank you to Liberty, the FIA, the teams and all of our partners for the warm welcome. Before I start, I want to thank Chase for his tireless work over the past four years and building an organization that gives us the very strong foundation for the growth in the decades ahead. Last year was a challenge for everyone around the globe, and every base of the sport felt the impact of the pandemic. Formula one delivered what many thought was impossible. A 17 races calendar delivered safely and with huge enthusiasm from our fans. 72% think f one has improved over the past two years. 68% believe f one is in good hands on delivery media. 71% rate their satisfaction with being an f one fan as eight or higher. Furthermore, fans believe Formula One handled it safely very, very well during the global pandemic, with 90% believing the safety measure put in place to allow races to go ahead have been handled well. 81% believe in F1 has communicated well with fans during the shutdown, and 73% believe in F1 has handled the absence of fans of the races well, and 88% feeling positive about the calendar in 2020. We all continue to navigate the challenge of COVID nineteen this year. However, that will not preclude us priorities and opportunities we see in front of us, which are, number one, putting the drivers at the center of f one as they represent the soul and Audi ambassador of the sport. The level of talent we have today on the grid is one of the highest f one history, and we should celebrate that. Number two, delivering an incredible product that strengthens competition and action on the track, including 23 races this year. Number three, enhancing the long term perspective of sport and shooting an attractive business model for all participants and attracting new participants. And number four, remaining committed through our action to our WeRace as One platform focused on sustainability, diversity and inclusion, and community. To reflect on 02/2020, we were extremely proud to complete a successful 17 race season. The last few races brought some new faces to podium, including the Saccio GP, which saw Sergio Perez claiming his first win alongside Esteban Lecora last draw. In the same time in the same race, we were relieved to see Roman Rogan walk away from a fiery crash, a testament to Roman to support teams on the track and improved safety measure in the sport. Max Verstappen secured the win of our last Grand Prix in Abu Dhabi, which capped a very successful season for Red Bull who placed second in the constructor standing. On the financial front, clearly, we were impacted by COVID nineteen by working in collaboration with our partners to mitigate these impacts. Due to the reduced number of races, duration of the season and almost no panel attendance unsurprisingly, primary revenue declined in all categories. However, we worked with our promoters to extend contracts where mutually agreed and worked with certain sponsor to defer selected rights into future years. We approached this agreement with a spirit of partnership and largely isolated the old contract impact 2020. The spirit of collaboration together with the ongoing terms of our contract leave us well positioned with all of our material commercial partners as we enter in 2021. For the full season, we are pleased with the reaction from our fans across multiple platforms. We made significant gains across social platforms, making us the second fastest growing major sport league in terms of follower across the four major social platform ahead of major sport, such as NFL, NBA, PGA Tour, and WWE. We have seen the fastest growth in the digital engagement compared to all our major sport within a 99% increase in 02/2020. On TV, our average audience per grand prix was 87,400,000, very marginally down on 02/2019, but still higher than the average audience in 2018 compared February to other major sport with an international footprint that experienced big decline in 2020 due to the pandemic. We plan to engage more fans in 02/2021, and we have set forth an exciting 23 races calendar. This includes the addition of Saudi Arabia and much anticipated race in Netherlands. We will navigate the challenge of the pandemic, but are pleased with how we have already been working with our partners. We were able to reschedule Australia later in the year and announced the return of Vimal and put him out to the schedule. All conversation with promoters have been positive since the start of the year, and every one of of them has made it clear that the events should be going ahead as scheduled. We'd love to welcome fans back on the track, and we'll be working with the local organizing and governments on that approach. We are also grateful for the efforts made by the government to allow Formula One to continue to travel to our events during a time of global quarantine. Our highly robust safety procedure have proven we can travel and race safely. Furthermore, we have evaluated the race weekend with a proposal to try a new Saturday sprint race format of some races in 02/2021, the result of which would determine the grade for the main event on Sunday. This was supported by the teams in principle at the meeting a few weeks ago, and we will work with them and the FAA to finalize the details before the start of the season. On the sporting side, we are expecting an exciting season with Louis Hamilton, Mercedes fighting for a unique and historic eight world championship. We hope to see Ferrari with their older history in the sport being their fight back and are excited for all the new faces and lines up on the grid. For most of the season, we were wondering where Sergio Perez would find the driver's seat, and we can't wait to see him paired up with Max Verstappen. McLaren, who had spectacular 2020 season, finished third in construction standing. We'll see Daniel Ricchiavo and Landon Norden and up together. We welcome Aston Martin, an iconic brand with an achievement of Sebastian Belling behind the wheel. We also welcome the return of Fernando Alonso to a renamed Alpine team. He's doing well, by the way, following his recent accident and looking forward to see him at the start of the season in Bahrain. And, of course, the world will be watching the maiden season of Nick Schumacher at pass. Last year was momentous for Formula One in signing the new Concorde Agreement and reaching agreement on the introduction of a cost cap taking effect this year in 02/2021. The next major area to cover relates to the to the power unit or engine. In a demonstration of our collaboration, the FIA, Formula One, and the teams voted to freeze power unit development from the start of 02/2022. A high level of working group has been established with increased power unit manufacturer and full supplier. As we look to the next generation of the power units for 02/2025, the key objective are carbon neutrality, truly sustainable fuels, hybrid power units, significant cost reduction, and, of course, attractiveness to the new power unit manufacturers. We believe that the sustainable fuel hybrid engine will be a very attractive offer for the OEMs and their portfolios and provides another solution to the automotive decarbonization drive across the world. I feel very positive about this product in this area and have already had very productive conversation with existing and potential OEMs about the direction Formula One is moving in. Continuing on this topic, we confirm the WeRaceAsOne platform will become our official ESG platform with the three core pillars of sustainability, diversity and inclusion and community. We are proud of the impact this platform has last year and will continue with our action to push forward as a sport. In the coming weeks, I will meet with all the drivers to discuss with them our We Race As One plans for this year and beyond, including the rollout of our apprenticeship, internship, and scholarship in our sport for underrepresented groups and very important are heroes, role models, and chances of progress in our sport that inspired fans around the world. We are looking forward to season three of drive to survive, hitting Netflix on March 19. The two once again captured all the drama and storylines of 02/2020, and there's no question that series continues to bring new parts to the sport. I can't express enough my excitement for all the opportunity Formula One has in front of us, and I look forward to update you on our progress. But please be sure to watch the season opening grandpa in Bahrain on March 28. And with that, once again, thank you so much, and we'll turn it over to you, Greg. Thank you. Thanks, Brian. Thanks, Stefano. And to our listening audience, we appreciate your continued interest in Liberty Media and hope you are all staying safe and healthy. And operator, with that, I'd like to open the floor to questions. Thank you. Our first question today comes from Vijay Jayant of Evercore. Thanks. I I have to, first, Greg, obviously, with the tax sharing agreement with Sirius, that sort of kicks in the 80%. You know, obviously, you you mentioned that the board will decide how capital allocation works post that moment. But, you know, given the float will be pretty small and, you know, I think your dividends will be tax free post that, is there an expectation that we should assume that we'll shift more towards dividends over buybacks? Or are we effectively on a path to sort of taking the company private? And and are there any obstacles sort of on that path? Is there, like, a squeeze out requirement at 90%? Anything you could share on sort of what happens to the capital, equity capital structure sort of post the 80% level. And second for Stefano, welcome. I I just wanted to sort of get your perspective. You you've been, mentioned in the press suggesting that you you're looking for more quality over quantity in terms of races and, you know, obviously, talking about a sprint race. Do you really think you need to change the format of the race weekend? Do you need free, you know, free practices and, you know, making it a bigger spectacle? Can you just talk about, you know, what what you really think is is the opportunity to make the weekend bigger than, broadly? Thank you. So I'll go first and chat a little bit about dividend capital allocation and and the like. First of all, it really is a decision of the full board. You would know correctly that on the margin, we would probably have a slight tilt towards dividends, we at Liberty Media, Liberty Siri, compared to where we once were. But it's really not that big a tilt. While we're looking at the discount to NAV running about just under 28%, substantially tightened from the 45% when the GME world blew up. And, you know, we were running more like in the mid to low 30s, so we have tightened it. But that's still quite large compared to even the 7% rate we would normally pay with the DRD, exclusion. So, you know, I don't think it's a huge sum on the scale for Liberty. We are marginally more oriented towards dividends, but not massively. But that decision really will be driven by management and the board. As far as triggers that might involve, I would say the independent board will have to make their own decisions. But one thing I think would likely be in the back of their minds is if we get to 90%, we could do a short form squeeze out merger of the remaining 10%. So some directors might think about the pace at which we would get to that kind of a number. But, again, those decisions really will be made by the full board. And, at some point, the independent directors will have voice about ensuring that, you know, the minority is appropriately protected. Okay. That's my goal to to answer to the question with regard to the format on the on what we are thinking and to improve in term of show. First of all, let me say that our objective is to try to offer to the people that are coming to the event, to the people that are watching television, to the people that are really fans of someone some something that is exciting. So the idea that we have shared, and I think that we have received a great feedback from everyone in in the sport is that we will try to figure out something that will give us a qualifying on Friday, Saturday, the sprint race that will determine the the grid order for the Sunday race so that will give the thrill of a great weekend that will be beneficial to all the party boats. And this is something that we are detailing with the with the with the teams and the FAA in the next weeks in order to present the final format before the start of the season in the rain. But that's the aim of what we have what we try to do this year in that respect. Okay. Thanks so much, both. Our next question comes from David Karnovsky of JPMorgan. Thanks for taking the question. Welcome, Stefano. Can you discuss the freeze on engine development and how you think this might impact on track competition? And then just maybe expand a bit on your view of f one's long term engine goals in light of some of the OEMs like GM and Jaguar, moving toward all electric vehicles. Well, thank you, David, for the question. I think that, what is important to say that this idea of freezing one year in advance is connected to the new business sustainable approach that Formula One has taken. You know, we will have taken this year with the cost cap that is related to a certain part of the cost of managing the team. The other part was not marginal, but very important was how we can capture the control of investment cost as in the normal business on the power unit. Therefore, by associated the fact that we would anticipate the end of spending new money for a new engine, we were thinking how we can capture the attention of potentially manufacturer, but also making sure that the ones that are involved today are interested in the future. So we do believe by being hybrid in the future is the exact position that will allow, you know, all the manufacturers to have an access to a different portfolio, not only electrification, to to to their normal business. So, therefore, I think that what we are putting in place in that respect, having carbon neutrality, fully sustainable fuels at the center, and bid hybrid gave us a really great position in term of package, in term of being always at the pinnacle of technology advanced research in 04/2001, and making sure that everyone can benefit from this activity also to have a a sort of road relevancy extra activity that can be beneficial to all the automotive manufacturers. And by doing that, we're gonna have a win win situation. A lot of attention of power unit in a different way of all being electric, having the cost control under under, under control, and, of course, being, aligned with our value of being sustainable for the future. So these are the basic thinking that, we're thinking when we decided to go and follow this path. Okay. And then I I believe there's a number of rate promotion contracts expiring at the end of this year, I think Singapore and The US. Just wondering how you're thinking about f one's commitment to these regions versus, you know, maybe adding new races and other flyaway markets. I think you've mentioned South Africa recently. And and with regards to the Vietnam GP, is there any update you can provide on on whether we might that rate at some point in the future? Well, yeah. I mean, for sure, we are in a great moment because, despite the pandemic, we are receiving an incredible number of request by by by that shows that the f one of the center of the interest, not only from the organizer of the all around the world, but also from the motorsport community. Therefore, our strategic plan is to decide, first of all, what is the right dimension in term of of races in the year. The the contract you are mentioning are expiring, but there are discussion ongoing because the ones that you were considering are really important, and there is a lot of interest to progress in in and keep them, you know, also in the future. We confirm, as you as you know, that US is very important and strategic market for us. And we have the aim to add another race in US. We have already great partner in Austin, but we are looking for other solution that will be very important for us. Your what I can say with Vietnam, for whatever reason happened, is she wouldn't have the race. But for sure, that is an era, Far East in general, that is very important for the strategic growth of our business in the future. And for sure, that's an era where we're gonna exploit other opportunities for the future. And if I could just add to Stefano's comments, which I agree with. You know, we do not have an unusual number of promoter contracts expiring this year or pretty much in any year. You know, we have a portfolio where a certain number get renewed every year, just like we have a certain number of broadcast contracts that get renewed every year. And in general, because we think demand will rise for our sport, we don't fear that. We actually appreciate that because we think there's more opportunity ahead than behind. Our next question comes from Ben Swinburne of Morgan Stanley. Thanks. Good morning, guys. I wanted to ask both Stefano and Greg just a question around sports rights and sort of the state of the market right now, maybe Europe and U. S. You guys had a very successful, at least based on the press reports, renewal in Germany with Sky last year. But we've seen, you know, some of the some of the other deals, that have happened or happening have gone backwards. You know, EPL, the Bundeslig, and and at least the press suggests Syria may roll back. And even in The US, there's been, you know, probably more tension than usual. And Greg, obviously, with Sinclair, what's going on there and Fox Sports is is clearly tricky with cord cutting. So maybe can you guys just give us sort of a sense as you as you move through '21 and '22, how you're feeling about your position both with f one and the Braves? And if you think the market's gotten, you know, either more complicated or more challenging, than it was a couple years ago. Stefan, you wanna take a cut, or I'm happy to? Okay. I mean, I, in my opinion, the situation we're living today is for sure interesting from one side, but very, very good on the other. I mean, what we can see that, as you know, on our business model, the the the broadcaster partners are hugely important for us. But we can see a very good opportunity to to extend and explore different models to, as I said, to be complementary platforms and provide direct connection to the fund by supporting the OTT world. That is still an area that we will, for sure, give an eye a very important eye for the future. But to the other side, I do believe that if you are able to attract us, we are doing, the sport, you know, the commercial account because the interest is there, and we need to make sure that the the sport we have shaping up for the future give the context to make sure that it's deliverable to the fans. And that's why we have a lot of activity connected to make sure that, first of all, of course, we don't lose the traditional and and very religious fans, but we need to speak to a language of the new supporters, the new fans, the young generation. So we have a lot of progress to make sure that this has happened already this year. So I'm positive on that, to be honest. I agree with Stefano's comments, but I had a couple more if I could then. First, you know, we've done a lot over the last few years. Thank you, Chase, and now thank you, Stefano, to try and build fan interest and fan excitement. And that's better on track competition. That's a more balanced field that we use to go into '22. That's a lot of ancillary things like fan festivals, like programming, like drive to survive. All of those building fan interest. Obviously, esports component as well. That's an important component when you obviously go for renewal. How much fan interest, how much excitement there is. Probably the most important component is how much competition there is among potential bidders, distributors of your product. And, candidly, you know, the best deal we have probably is our UK deal, it was largely because there were several bidders highly interested in getting our product. I do feel, as Stefano notes, we have a relative value. You've seen declines in some of the other higher cost European alternatives. But if you look on any kind of basis about what cost per eyeball, cost per hour, etcetera, f one looks like a relative value. And I think a side note then, which I'm sure you can appreciate, with the rising cost of alternatives like scripted content, as that gets more expensive, in some ways, provides a floor on what the value of some of the live sports can be. Historically, live sports look so expensive, maybe not quite as much when scripted continues to rise. So I'm excited about F1's prospects. But above all, we would benefit from increased competition, which is potentially some of the new digital players entering, and they have sniffed. And we'll see if we can get them excited. I do believe, ultimately, they will become bidders, and that will be to our benefit. As far as looking back at US rights and the Braves, obviously, we've had a world where the bundle has caused a lot of overbuy, whether it be for, sport of all kinds of sports programming, including the RSNs. And if that bundle breaks, there is risk around, what the total amount paid to teams will be, including the Braves. I feel relatively good about the Braves. Our contract's the 20 seventh, first. And secondly, we have a good contract, but far and away not the highest, well below somebody like the Dodgers. But in contrast, we have the largest broadband household audience. So the Braves have the largest territory with 12,000,000 broadband households. So to the degree you look at digital alternatives and the like, we are probably in the best shape compared to many to benefit as new alternatives arise and the bundle potentially weakens. Our next question comes from Bryan Kraft of Deutsche Bank. Hi, good morning. A couple of questions. First, can you Greg, can you talk about your current expectations for what I'll call the path to normalcy for your Live Event businesses looking out over 2021 and 2022? There's obviously a lot of focus in the market by investors on how quickly businesses like these are going to be able to bounce back and whether back half of 'twenty one looks normal or 'twenty two looks normal. So we'd just love to get your thoughts on what Formula One, Live Nation, the Braves, what that path like for them? And then just quickly on the leverage target for Formula One, can you just remind us what your target leverage ratio is? And is there any thought to running that balance sheet more conservatively in the future, just given experience with the pandemic? Or are you still comfortable with that? Thank you. So I'll I'll I'll start on the, you know, the opening. It's certainly not binary, and it's not binary in a lot of ways because at f one and the Braves, you know, we have multiple sources of revenue. You know, f one's got three big pillars. Right? Broadcast, which was impeded, but probably will be impeded less in '21 regardless of the pandemic sponsorship and advertising, which was impeded less in 2020 than than certainly the the fan component, the promotion component, but, again, probably less in '21 in '21. And then fans, and we're going to have a variety of alternatives where fans will be, to some degree, there. And I don't think, again, it'll be binary. We're not necessarily going to see zero to 100. It will be somewhere potentially in between. So I'm more optimistic as we go to the end of the year, we're gonna get to 100% of capacity. And the same thing with the Braves, multiple revenue streams, both television and, on-site, but we don't really have as we do have sponsorship. It's not as large a component as it is at Formula One. I think, again, not binary. You know, the expectation is we'll probably start out at 25%. I mentioned already that Georgia is relatively open. We will be in far better shape in terms of the fan attendance than if you were in New York or California or some other locales, and it will be decided not by baseball but by the local rules and authorities. So I the expectation is we will have increasing numbers there, you know, but, again, not binary. I don't think we're gonna go from 25 to 100 in the space of a flip of a switch. And, obviously, Live Nation, doesn't have has obviously, advertising and sponsorship doesn't have the broadcast element, so it's the most responsive or vulnerable or affected by shutdowns. Offset to that is global business, really with the potential for very different responses depending on where you are in the world. So, I think Formula One in particular is preparing for a, you know, a balance sheet that is, invincible, this whatever comes, and we're fully supportive of that. The, I do think they will have fans at events this year. Certainly, you've already seen some of that, and it will grow. They announced earnings slightly ahead of expectations, I think, just yesterday. But meaningful efforts. There will still be definitely, you know, work to be done throughout '21. So that's kind of you know, that's probably somewhat of a non answer, Brian, because we certainly aren't in a crystal ball business exactly, but we are in the business of trying to prepare to make sure we benefit when it does open and that we're prepared if that doesn't happen at the rate of change or pace that we would like. And I think all three of those businesses are well prepared. And that sort of turns to the balance sheet question. You know, I I think one of the things about being part of the Liberty Group is you can we have the ability to, you know, hopefully look ahead and be thoughtful for the benefit of our operating companies. The Formula One balance sheet is very, very strong. I I think the operating levels that we have on our agreements are fine. And I, obviously, they're strong both at the F1 operating level. And then when you look at the cash at the FWOD level, it's quite strong. So I'm I'm not really worried about the balance sheet. Great. Thanks for And just to answer your question real real quick on the leverage target. Our stated leverage target on 4.1 is five to 5.5 times. And as as you recall, we have a our our 8.25 max leverage has been waived through 03/31/2022. And when we bought the business, it had that approaching that 8x leverage. And we substantially delevered it not only through cash operations generated, but we did have a primary equity issuance as well. So both of those reduced the leverage even prior to the pandemic. Got it. Okay. Thanks for you both. Appreciate it. Thanks. Our next question comes from David Beckel of Berenberg Capital. Hey, thanks a lot for the question. Sort of piggybacking on your commentary about reopening, I was wondering if you could help us think about recognition for the promotion side, really all the revenue streams under a variety of different scenarios. It it seems as if the vaccine rollout, for the most part, is going better than expected in many parts of the world. Should we be thinking about wage promotion revenue, being materially affected in h one, or is that somewhat protected given the concessions you made last year? And then, sort of as a follow-up to that, I'd love to hear your thoughts to the extent you're willing to share on how the team payment structure, might affect earnings or EBITDA to f one this year. Specifically, maybe if you could frame it in reference to twenty nineteen levels, If your EBITDA level, pre teen EBITDA exceeds twenty nineteen, should we expect marginal upside in the current year? So I'll I think promotion will be still reduced in, '21, certainly versus what we would have in a non pandemic year. We will have restricted audiences and restricted fans at some of our events. So I do expect, and we're not to make a forecast in part because some of this is still up in the air, floating around, but also because, that's what we like to let you do. So I you know, I how much will be it'll definitely be impacted, the amount to which we'll see. And going forward, we have with the the new Concord agreement, we have a structure which, as we increase profitability, we have the opportunity to take back some of what, historically, F1 earned comparatively over the years. The rates get a little more attractive for us. Whether we'll hit that in '21, given the risks around pandemic, I'm not as confident. But in the years going forward, as we continue to have a fully healthy business, I do believe our share of the margin will slightly increase. Stefano, would you add anything? I couldn't agree more. And I think that what is important that with the new governments, with new conquered agreement, with the new, you know, cost control measure, you know, it's given the sustainability approach that allow us to think bigger. And this is something that I do believe that is, really the right fundamentals that that drives the right way, both from, the commercial point of view and also from the team perspective to be part of this incredible championship. Great. Thanks, Scott. Thank you. The next question today comes from David Joyce of Barclays. Thank you very much. Couple of questions. One, on the broadcast side of the Formula One business for this year. Would there be any lingering COVID related impacts? Or should we think about it as being sort of comparable to 2019 and grossing up for step ups escalators and number of events? And then secondly, on the Braves, with the Sinclair RSN agreement, and this was already touched on a little bit earlier in the call. Where do you stand with them moving towards having a hybrid over the top model? How does that play into your economics? And what could that do for further fan engagement, even as that could tie into sports betting once that becomes something on the horizon in Georgia? Thank you. So we expect a fairly normal broadcast revenue stream, in light of our 23 races now. Again, crystal ball about exactly how how COVID plays out, but our goal was to try and, take the pain in 20 to the degree that we rightly had to make concessions to some of our broadcasters. Our goal was much as possible was to make that a 20 event and bring 21 back to normal. Well, that is our hope and our expectation. But, you know, COVID could change that just as a as a warning. And on the you know, thinking about the RSNs, as I said, we have our contract runs through the twenty seventh. You know, I know Sinclair is trying to do some different things. It's not clear to me exactly what rights Sinclair has to do some of the things that they think they can do or want to do. I know there have been some discussions with baseball about new alternatives, but I do not expect a major change. Assuming we can run a full 162 game schedule, on a normal pace, I would expect we would have normal revenue streams from Sinclair in, certainly in '21 and and through the rest of the contract. And I, you know, I whether their new engagement model would help us with Sinclair, that could be additive. We'll see. Again, I'm not exactly sure what someone Sinclair thinks their rights are to do some of those things, but that's Mr. Ripley's job. And just finally on the COVID impacts on Formula one. In broad strokes, how should we think about those promotion and sponsorship contracts in the mix between fixed and variable components? Is there a general algorithm that's baked into the contracts? Or how should we think about that? Well, I think, look, most of them probably do not have triggers. Or any triggers that they do have, we will likely be able to meet. On the other hand, you know, take partner who's a large international airline doing, who basically gets shut down for all foreign travel. You can decide whether you're gonna be a good partner with them or not for the long term, and that's been our goal. So we'll work with them in the way that we appreciate that they have worked with us during the difficult time. All right. Thank you. Thank you. Our next question comes from Jason Bazinet of Thanks so much. I guess having extra liquidity is always a good thing, but I was wondering if there's any color that you might add in terms of these amendments that you did to unencumbered some of the passive equity stakes that you have. Is there something specific that you were that you were looking to do or something you need that you have, or is it more just general optionality? Thanks. Oh, you know we're into optionality, Jason, but I'll let Ben Warren, our relatively new treasurer, answer. Sure. With respect to the Siri margin loan, we did do an upsize, but we kept it to the same billion shares collateralizing that loan as we had previously under the 1.35. So we're just maximizing our ability to access dollars. With respect to why, it's really a function of what happened in the previous margin loan, where we repaid it and we had a substantial number of shares that were underlying that secured that collateral pool. And so when we right sized the loan to 200,000,000, we, appropriately took the amount of shares underlying that to something that's closer to a realistic LTV for a margin loan. Okay. I understand. Thank you. The next question comes from John Tinker of Gabelli. Thank you. Terrific numbers in the battery and the brave, which unfortunately, I think get a little lost given those people focused on pain. Do you have any would you you ever consider in any way highlighting the that that valuation of the the your property in any different way? John, when we have great analysts like you writing up the value for us, we don't need to deal with the work. Come on. The no. But, you know, I think you're right. There is value in the battery. It is impressive, and it's a function both of Georgia being a relatively open place as we've noted. And I think, really, it's a great job that the Bridge management team has done to create a secure environment, where people are willing to come and are and it's open and and and doing well. We I'm, you know, I'm not sure if we're gonna create a tracker or do something different around that, but we'll try and make sure we highlight appropriately that there is value in the battery and our real estate developments. Thank you. Thanks. And the final question today comes from Matthew Harrigan of Benchmark. Thank you. Even though Formula One probably generates more data than any other sports, you know, in concert with AWS and Intel and Qualcomm, it was really under the belt under under the Onshan regime with with Bernie. You had a lot of successes, virtual grand pre now. I think you've got a lot of latitude and maybe having more look angles and all that on cameras and the races eventually. But can you talk about the potential there and how you see that developing? It feels like you've made some strides, but there's still a lot of headroom in terms of what you could do on the TV side and the video game side. Yes. No, I think it's a great point, Matt. If you think about the an evolving world, where we have increased starting on the sort of the broadcast side, where we have potential for increased digital players, the number of cameras we have, the angles we have, your ability to dial up what angle you want, that really plays perfectly to the strength of those kind of digital players and different than a straight linear speed. So I think we we are a sport that will benefit from that increased attention on the digital side in terms of viewing. Different experience and one that the fan can tailor. I think you could see that opportunity ahead. It will be great. The other point is that all that data, proprietary data, we have begun we began to take advantage of through our contract with ISG. That did not turn out as well as we would like. But as we go forward and look at the opportunities around that, I do believe there is quite a lot around gambling, around fan information that is valuable and that we are in a very strong place relative to most sports because of the amount of data and the amount of which of it is proprietary. So I think on both sides, that's a huge asset. Thanks, Greg. Thank you. So with that, operator, I think we're done. Thank you to our listening audience for your continued interest in Liberty Media, and we look forward to speaking with you again next quarter, if not sooner. Ladies and gentlemen, that concludes today's conference call. We thank you for your participation. You may now disconnect.