Earnings Call: Q1 2021

May 7, 2021

And gentlemen, thank you for standing by. Welcome to the Liberty Media Corporation 2020 Q1 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, May 7. I would now like to turn the conference over to Courtney Chun, Chief Portfolio Officer. Please go ahead. Thank you. Before we begin, we'd like to remind everyone that this call includes certain forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual events or results could differ materially due to a number of risks and uncertainties, including those mentioned in Liberty Media's most recent Forms 10 ks and 10 Q Our Liberty Media Acquisition's Forms S-one registration statement filed with the SEC. These forward looking statements speak only as of the date of Call and Liberty Media and Liberty Media Acquisition expressly disclaim any obligation or undertaking to disseminate any updates or revisions to any forward looking statement contained herein To reflect any change in Liberty Media or Liberty Media Acquisition Corporation's expectations with regard thereto or any change in events, conditions or circumstances on which any such 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 1 through 3 can be found at the end of the earnings press release issued today, which is 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 out there. Today, speaking of the call besides myself, we'll have Formula 1's President and CEO, Stefano Domenicali and Liberty's Chief Accounting and Principal Financial Officer, Brian Wendling. Beginning with Liberty SiriusXM, we continued our share repurchase, Purchasing $114,000,000 across LSXM A and K shares from February through April. The discount stubbornly remains and we repurchased at a look through price of and siri of just over $4 per share. We do expect to continue to take advantage of that stubborn discount opportunity. Our ownership of SiriusXM As of April 26, stood at 77.3%. And looking at SiriusXM itself, they're off to a fast start this Here with self paced sub growth of 83%. Trial starts in the Q1 were the highest in the company's history And they recorded record low first quarter churn. They're also experiencing rapid growth in off platform advertising revenue. 360L, the next generation platform, is now in 2,000,000 vehicles providing valuable data and offering engaging features. We expect it will be about 25% of this year's installs. We are now the largest digital ad platform in North America, reaching almost 2 thirds of online audio listeners. We're also continuing at SiriusXM our in the podcast segment with our acquisition of 99 Percent Invisible, furthering our content creation capabilities. Turning to Live Nation. You may have seen in today's earnings release from them, concerts are back and in high demand for dates in 2021. In fact, we have booked twice as many shows in 2021 as we did in 2019. Luke Bryan, The 2021 ACM Entertainer of the Year is ongoing on tour and the Railbirds Festival with headliner David Matthews Band is another notable addition. Following up on acquiring the majority stake in Veeps, we've begun our TicketLive platform and started equipping 60 plus concert venues to offer turnkey live streaming events. We continue to help artists expand revenue and creative opportunities, connecting them with more fans via Veep and other means. Looking at the Formula 1 group, we've had phenomenal racing this season as Stefano will outline a little bit More in a minute. It's exciting to see the battle between Lewis and Max. It's going to be a very competitive year also for 3rd place in the instructors' championship, Lots of exciting racing. The teams continue to execute well given the ongoing challenges from the pandemic. Turkey will replace Canada in June, showing the sustained demand to expand GPs. We've also extended our agreements with Canada and Japan. Looking forward to the first we are looking forward to the first Sprint qualifying race in July at Silverstone and there'll be 2 more of those during the rest of the season. Drive to Survive, our Programming on Netflix continued to grow in popularity in its 3rd season, and it's also getting recognized on the award circuits both in the U. S. And Canada. And finally, we look forward to seeing all of you in Miami in 2022. Turning to Braze. After a slow start to the season, our record is just under 500 and we are close 3rd in the NL East, a game and a half out of 1st place. We were helped by sweeping the nets over the last three games. Braves are number 1 in home runs this season and also number 1 in average attendance almost $1,000 per game, that is if you exclude Texas, which we'd be 3rd including Texas. Ronald Acuna was named nationally player of the month for April. Pablo Sandoval hit 3 pinch hit home runs in April, the most by any Braves player in a calendar month in its franchise history. And as of today, we expect to expand capacity to 100% of fans after opening the season at 33%. Notably, in partnership with Emory Healthcare, the Braves are offering vaccine shots before and during games against Philly. Fans who get vaccinated at those games will And finally, the Braves looking at the battery, Kiss and Crook is expected to occupy their office space in July and Papa John's later in the summer. Demand for remaining office space remains very strong And the Aloft and Omni Hotels had high occupancy on Friday night Saturday night games or nights in March with several sellouts on game nights. We continue to make good progress on LMAC to SPAC. The SPAC market has changed in a way we believe is to our benefit as some of the euphoria January February has deflated. We believe recent weakness in the pipe market plays well for Liberty given our strong balance sheet, our capabilities with investors and the support that we have. Finally, we wanted to share with you We have recently published our SASB disclosure on our website as a part of our ongoing ESG efforts. So with that, I'd like to turn it over to Brian to discuss our financial results in a little more detail. Thank you, Greg, and good morning, everyone. Liberty SiriusXM Group had attributed cash, restricted cash and liquid investments of approximately $1,000,000,000 excluding $67,000,000 of cash and restricted cash This balance is prior to paying the Formula One Group $384,000,000 to settle the Live Nation call spread in April. The settlement of the Live Nation call spread was a non taxable transaction among the tracking stock groups. We also have $1,100,000,000 of undrawn margin loan capacity at the parent Note that a portion of our cash will be used in 2021 to repay our 2.25% Live Nation exchangeable bonds. Based on the fair value of the bonds at quarter end, the amount of cash used would be $514,000,000 As of May 6, the value of the SiriusXM stock held by Liberty SiriusXM Group was nearly $19,000,000,000 and the value of the Live Nation stock held was 5,000,000,000 We have $3,200,000,000 in principal amount of debt against these holdings. Total Liberty SiriusXM Group attributed principal amount of debt is 13 $2,000,000,000 which includes $9,000,000,000 of debt held directly at Series XM. Formula 1 Group had attributed cash and liquid investments of $1,400,000,000 at quarter end. This excludes the $429,000,000 of cash that's held directly at the F1 OpCo. Post quarter end, Formula 1 Group received The additional $384,000,000 that we just discussed and proceeds related to the Live Nation call spread. Total Formula 1 Group attributed principal amount of debt $3,600,000,000 which includes the $2,900,000,000 of debt held directly down at F1, leaving $724,000,000 at the corporate level. And F1's $500,000,000 revolver remains undrawn. Please note that during the 3 months ended March 31, 2021, F1 began reclassifying certain Components reclassified in the primary F1 revenue, generally relate to F1 TV subscriptions, Certain F2 and F3 related fees, broadcast origination and support fees and digital advertising, among others. Additional detail on this reclass, including the impact to the years ended twelvethirty onetwenty nineteentwenty twenty can be found in Schedule 3 to our earnings release, which will be posted At quarter end, The Braves Group had attributed cash, liquid investments and restricted cash of $218,000,000 An attributed principal amount of debt of $676,000,000 Liberty and our consolidated subsidiaries are in compliance with their debt covenants at And with that, I'll turn it over to Stefano to discuss Formula 1. Thank you, Brian, and good morning also from my side. So 2021 has begun with huge energy and momentum. In the past few weeks, we announced our 2nd race in U. S. In Miami Gardens with a huge and positive reaction from our fans, the teams and all our partners. Adding a second race in the U. S. Starting in 2022 provides a great opportunity for our sport and will ensure we continue to increase our strong focus and find growth there. Last week, we announced that we'll have Saturday 100 kilometers sprint qualifying formats at 3 races in 2021, following unanimous support from all the teams. The events will be exciting for all our fans, provide more on track action over the rest we can and give our partners and the teams greater commercials opportunities. Silverstone, one of the venues for the new format, already reported a surge in ticket sale following news that they would be hosting one of these events. We have announced the 3 years extension of the Japanese Grand Prix. This has always been an important race for Formula 1, And we cannot wait for the fans to cheer on their own new pizza Nova. We have extended our partnership with the Canadian Grand Prix by 2 years And welcome the news announced last week by Dassault Media has entered into agreement to acquire the Montreal based Canadian race promoter of Tain Racing Group, which is a great news for the long term future and development of the race in Canada. While the global situation is still fluid to the COVID-nineteen pandemic, 401 has shown that it has the ability to overcome the issue Thrown us and continue to race safely. Just last week, we provided this to be the case. While we are not able to race in Canada this year, We have secured the replacement race in Turkey at short notice, meaning we have not reduced the number of race in the Kalanda 4th 2020 1. It is very exciting to see the level of interest on both the new and historic location to host a Grand Prix, and this gives us possible option, if We have had very good conversation with all our promoters And all of whom expect the races this season to go ahead as planned. And just this week, we have had the confirmation That 1,000 fans will attend here in Barcelona, the Spanish Grand Prix. And that monoclonal will welcome approximately 40% of the capacity to the grandstand for the race in 2 weeks' time. Alongside the busy start of the year of the track, the racing on the track Has been equally exciting and dramatic. We kicked off our 23 races season in Bahrain and have had 3 races to date, which with the close battles, overtaken and the pack closer together than in the recent years. Avos Braun has mentioned, with this battle for the championship play now, this could be a golden year for Formula 1. The season opener in Bahrain did not disappoint with Verstappen's security proposition. It was a thrilling race between Max and Luis That was only decided in the final laps. There were also strong showings by Norris and Paris and the Japanese rookie, Yuki Tsunoda, Score points in his first F1 race for AlphaTauri, and it looks like he has a prominent career ahead. The battle So first, continuing to IMO, where Max had an amazing start of the line in the rain and carried through for the win. Impressive given he's starting in 3rd, Diane and his new teammate Sergio Perez. London Norris made up for a mistake in qualifying and secured his spot on the podium, Showing the continued strength of McLaren. Last weekend in Portugal, Mercedes extended off a stern challenge from Red Bull as Lewis Hamilton Clinch are half full victory in Portugal. With both Estapin on Paul and Lewis ahead of Estapin in 2nd, the start of the race So the Red Bull get past the Mercedes of Hamilton before the 7 time championship pulling off, brilliant overtakes on both his teammates, Bautista and Bastiato to clinch victory. It once again shows that there is a real battle underway for this year, Titan, and we are only the 3 ZARES is in. The competition for the 3rd is also fierce in the cost structure standing. McLaren is making the early pace, But mainly teams in the mid field have something to prove, and it is great to see Ferrari hitting his stride again. The spectrum of Formula 1 is resonating with fans To date, we have data for the first two races across the 24 principal markets we monitor, And this show TV viewership growth over both 2020 2019, with particularly strength in Italy, the Netherlands, France, the U. K, the U. S. And Spain. On the digital front, unique users for F1 web and app have been up 77% on the equivalent rates in 2020 and social engagement and also increased with over 30,000,000 interaction in both of the first two race week. We continue to grow our social media following, reaching $36,500,000 after the €1,000,000 of annual GP, up from €35,000,000 of the prior year end. F1TV, our OTP product, has also started the second strongly with Big concurrent view each race weekend at around 3 times higher than the 2020 season average. And engagement measured by the minutes viewed over The course of the weekend is up more than 60% on the last year. We launched an update version of the app for the season that provides many additional features, including high video quality and allows us to control the viewing experience. This new version also makes it easier to find content in our collection, which includes over 2,000 hours of footage and coverage of every Grand Prix in the last 50 years, along with our latest series set to Chasing the dream. F1 TV is now available in 188 territories with the premium F1 TV Pro available in 85. Season 3 of Drive to Survive debuted on March 2019 and continues to build mass global popularity for the sport, Reaching number 1 on Netflix in 27 different countries and also globally. And on all utmost daily basis, We hear an ad hoc about how the show was brought into new non typical fans. It was great to revisit the 2020 season and see the back story of the variety of many drivers changes. I do highly recommend Episode 9, which is a terrifying, exhilarating and expiring. The show was nominated for a sport Emmy for Outstanding Series Sport Documentary and made the shortlist in the documentary category for the UK Broadcast Awards. Heading into the season, we have had numerous sponsorship announcements. We were pleased to renew our global partnership with the DHL, Our relationship, which now spans across several decades. This extended partnership will include enhanced involvement in F1 Esports Series and the presence of F1 Digital Channels. As official partner, we worked in Zoom, Mercedes Benz, Aston Martin as a Zipcar Provider and Ferrari Plentor, the official Toast of Formula 1. In addition, we announced Head Vouchers and Drive Coffee as official supplier and welcome Global Citizen as charity partner for our We Race as 1 initiative. We continue to engage fans through e sport and have a very Successful series of Visual Grand Prix during the off season. Current drivers along with former stars and future prospects competed to win a share of the $100,000 price found in their charities. As part of the continued effort to improve diversity and inclusion in Formula 1, As part of our We Race Aswan initiatives, we announced a female only qualification route for the FYE Sport Series Pro Championship. This is our first female only competition, and we hope it will encourage more drivers from the passionate and the talented female sim racing community with the goal of becoming the 1st ever female driver to be signed by an official F1 Esports Series B. In closing, Formula 1 is off to a strong start in 2021. Building off the foundation put in place the last few years, the ecosystem is Absolutely strong and the competition on the track is trending. I want to thank all the dedicated employees of Formula 1 For their continued diligence and hard work, and I hope you will watch the Spanish Grand Prix this weekend. Now I turn the call back to over to you, Greg. Thank you very much. Thank you, Stefano, and thank you, Brian. To the listening audience, we appreciate your continued interest in Liberty Media. Hope you all stay healthy and safe. And with that, operator, we will open it up for questions. Thank you. So we will now take our first question from Jeff at Pivotal Research. Please go ahead. Your line is open. Good morning. I have one on Siri and one on Formula 1. Greg, at $77,300,000 ownership stake in Siri, all else being equal, you're probably going to cross over to $80,000,000 plus in the 3rd quarter. Your dividends go tax free. Just wanted to get your latest thoughts on whether Siri is going to raise their dividend materially? Are you happy with the status quo and letting your buyback And then on FWONK, just was wondering about the color on how the $145,000,000 I'll take the Siri and then I'll let Stefano speak to the cost cap. On Siri, look, I think that your pace may be just slightly aggressive, Jeff. I think it might be. It depends on the stock price and where Siri is buying, but it might be in Q4. But somewhere in one of those 2 quarters were likely to pass, Eddie. Obviously, any dividend policies that are put Decided will be decided by the full Board there. But we have lots of alternatives in which we could either Take advantage of those dividends to continue to go after the discount at LSXM, rather, at Sirius to increase the dividend or potentially Sell into that buyback, hold ourselves above $80,000,000 and use the capital to buy back our own stock. There are really multiple ways to get at the same result, which is we are going after the discount. And whether it's through their dividend increasing or us selling the We will be attacking the discount. Stefano, let me turn it to you about the cost cap. Thank you, Greg. I mean, Jeff, as you know, cost cap has been one of the most important and significant things that Formula One introduced this year. This is as in effect, not only because of the savings that the teams will make in the future, but also in the change of mentality The major team has to apply with the organization to make sure that they can really be effective with a different line of expenditure. And this is just the first step into a new way of managing support in Formula 1. And I think that if I see what is happening around the world that everyone is focused Just on the revenue side, I think the Formula One has just started the path that is on the other way around. Of course, revenue is crucial, but now we have just taken the first step into the cost cap. We're going to take all the cost cutting of the areas that have not closed in this moment as the engine for the future, but we are pretty sure that These are also the comments of the team. This has been a huge step in making sure that the former is sustainable for its future. All right. Thank you. Thank you. We will now take our next question from Dan at Morgan Stanley. Please go ahead. Your line is open. Hi, good morning. Greg, just on the cash balance at Liberty Formula 1, I think it's $1,800,000,000 and all signs point to a strong year ahead. I'm just wondering at what point does that Become excess cash in the eyes of Liberty. And then, Stefano, I have a couple of questions around drivers, which I'm wondering if you could humor me a bit. I have gotten questions from investors around the retirement of Lewis Hamilton and Vettel and what that might mean to the sport and sort of the business. I know they're coming back. I think they're coming back for next year at least. But as you think about that and sort of the outsized impact they have on the sport, How do you how would you suggest we think about it, if it matters and how you manage that? And then I was curious, Miami, obviously, a huge Opportunity in the whole U. S. Market as well. Is an American driver important in F1 in terms of driving popularity here in the U. S? And do you have So, on the cash at Formula 1, Really at the Holdco level, FHWAIN level. I think a couple of things to note. First of all, we put that cash in place to ensure The health of the whole ecosystem, not only the Formula 1 business that we own, but really the teams and to ensure that we had And we did use some of that liquidity for some teams during the pandemic. We still have Uncertainty about exactly what our revenues will be in 2021. You've heard already, we've had to cancel, For example, Canada and put Turkey in, we are getting paid for that, but those are at way reduced levels compared to what we would get if we had full fans. So, we have a fairly large contingency in our own budgeting for the potential that we will not get the kind of revenues that we hope and therefore that cash is useful. You may also know that we committed in the forward purchase agreement with LMAQ to SPAC that At least $250,000,000 would go towards the pipe in any transaction if we were to complete one. So, I think we're going to see potential for opportunities In that market, that could be attractive to us as the SPAC market gets more turbulent. That plays to, as I mentioned earlier, our strengths And we may want to put some of the cash in that. But as the year progresses and we get more certainty about promoter revenue, we will look at what we do with that And how to utilize it and what is the most efficacious way to deliver value to our shareholders. If I may now, Greg, to answer the question related to the drivers with regard to Luis Amel. For sure, Luis Amel is a great asset. He is doing an incredible job on the sporting side and in term of image, he was able to grow the Formula 1 in other And as well, not really specifically related to FOMO 1. But FOMO 1 itself is strong, strong and drivers, champions You know, are always in a place where one day they may retire. I don't know what Lewis was doing. We are talking with him. But of course, now it's focused on his Actual season is fully boosted to make sure that we'll be the only driver that they're going to win the 8 titles in the history of Formula 1. But 401 is solid and robust. And for sure, whatever will be the decision of Louis, 401 will react and will move forward. The good news Is that if Louis, as we all hope, will stay, will have an incredible season in front of him with the new cars, with the new challenge. And for sure, this will maybe very interesting of them. If we will decide a different way around, I mean, the good news is that in 401, we have So many good drivers today that at least the challenge and the chance will be even stronger. Therefore, of course, whatever will be the decision of Lewis, we will respect, But FOMO 1 is really solid and strong. With regard to Maiele, with the American drivers, it is important. The answer for me is very clear, it's yes. We are working with teams to try to understand what is really the possibility for American Drug to come To the attention of Fumu 1 team in the short term, this could come. I don't see that being very pragmatic and realistic coming in the next 2, 3 years, but maybe after, yes. I know that there are teams watching the good drivers that if they're ready, would be a big boost for the American fans because as we know, You know, faces drivers, they put enthusiasm, passion, the people want to see these guys. And therefore, The hope that we have is that very, very soon we have American drivers competing against all the others in the Formula One champion. Thank you. Thank you. So we'll now take our next question from Brian at Deutsche Bank. Please go ahead. Good morning. Hi, thank you. Good morning. Would you be willing to size the one time settlement impact on the first And then separately, it's great to see Miami on the calendar next year. I know it's something you've been working on for 3 or 4 years. What can you tell us about your plans for the event, maybe contrast it to Austin? And how significant do you think it will be for growing the sport in the U. S? And related to that, your broadcast contract with ESPN is up for renewal, I believe, after next season. So how are you thinking about the opportunity with And given their focus on ESPN plus with now Miami in the calendar and also just the general progress So, I'll let Brian talk about One time events in the Q1 revenue. And then, I want to weigh a little on ESPN and I'll let Stefano as well Brian, start. Yes. As it relates to the settlement, we can't comment on the specific details, but it did impact our results. But obviously, When you look at the year over year results, the fact that we had the 1 race versus 0 last year and the proportion of revenue recognition was the Material driver of that, but we can't comment on the specifics related to the settlement. On the issue of the U. S. And ESPN, look, when we put that up among the various broadcasters and alternatives A little over a year ago, Chase and I was in total agreement Had the belief that we were going to grow in popularity in the U. S. And our hand would be strengthened. So due to both now doing Miami and doing Drive to Survive and all the other things that we have going on from fan festivals to digital engagement. All those are building Our interest in the U. S, and as Stefano noted, many groups that heretofore have not been interested. I have people coming up to me who say I'm obsessed with Formula 1 because of Drive to Survive, who were not our typical audience, women, Teenagers, many different kinds of audiences that are expanding, which is great. When we did that, we took a shorter deal with ESPN that had a broader set of exposure for us in terms of their eyeballs, but it was not the highest Current deal we could get and it was not the longest deal we could get. And in fact, it was the opposite. It was the least amount of money, the most amount of eyeballs and the shortest period of time Our belief was that we would have a much stronger hand as we went forward among the various bidders. I think that is a good bet. It's one that we are winning. And all the reasons I outlined before, I think we will be much strengthened when we go to renew against that ESPN and other alternatives. Stefano, what might you add? Yes, absolutely, Bir. Again, I think that the good news is that we are talking about another race In U. S, Miami with a different culture, with a different philosophy, with a different way that we're going to structure the show around it. And the incredible news that In just a couple of weeks after our announcement, the attention with regard to this event is really massive. And the expectation of getting at the level that we want. And this is the reason why we are building a good series of communication, a good series of program in terms of communication with the American community because we want to maximize everything out of it. And I can anticipate, for example, one thing that it would be fantastic. We're going to share with the stadium Miami Gardens And with the Miami Dolphins, the race is in Monaco because they want to start leaving the atmosphere. And this will provide us the right platform in order to be ready to make sure that the value that we're going to generate from U. S. Will be even higher. And that's really the fundamentals, strategic thinking behind the fact that we're going to have to race in the United States. Great. Thank you so much. Thank you. So we will now take our next question from Vijay at Evercore. Please go ahead. Hi, good morning. So I have a couple of questions on Formula 1, primarily probably for Safano. So when we think about race promotions this year, obviously, you have 23 races, but with our fans and different proportions of fans, How should we think about that? Are you getting full promoter revenues? Are you splitting some of it based on fans or getting none and hosting the race? Any sort of thoughts, because that's sort of the segment that has the most variability. And then we've been seeing a lot more press releases coming out on sponsorship On Formula 1 with the new sponsorship head, is there a resurgence on that or is this that sort of more like formalized process of letting us know on what's going on, because that seems to be probably one of the biggest growth drivers for the business longer term. And finally one for Greg, maybe it's a little premature, but Formula 1 becomes an ATB in Jan next year, Again, you'll have Grace with an ATB. Any thoughts on what structurally you could do or would like to do, if you can share? Thanks. Thank you, Vijay. I mean, the first question related to the fact that, of course, We have a situation that is evolving with regard to the attendances of the people on track. Greg, as I already mentioned, the things that we need to monitor race by race, case by case. Of course, the more we're going ahead and the more it's likely that the opening up To the fans, we'll not have a direct effect on the revenues. But we have also content that we cannot get into the page where We do respect that the attendance of the people has no influence on what would be the effect on our earnings. So it's really a mixed situation, but we need to evolve and manage I didn't get the question with regard to the sponsorship, Vijay. Can you repeat that for me, please? Yes. Stefano, there's been a lot of announcements, Zoom and Zoom and a bunch of other sponsors you've announced more recently. I'm just trying to understand, is there sort of a resurgence in sponsorship In Formula 1 more recently? Or is it sort of just better disclosure for us on No, it's just to show Yes. Just to show the fact that the interest to 401 is getting back again at the level that we really believe It's the right one. So the fact that despite the pandemic situation, there are big companies that are willing to engage and be our partners is a great Sign of trust on what we are building as the future. And we need to expect this approach even stronger in the future. And as far as structural changes, we have no plan or intent today. Obviously, having a second ATB today, the only ATB we have at Liberty Media is the Braves. Having a second ATB Gives us flexibility if we want to create other spins, but we have no plans today. Great. Thanks so much. Thank you. We will now take our next question from David at JPMorgan. Please go ahead. Hi, thank you. On F1, we've seen Disney move to shut down its star sports channels In parts of Asia, just kind of interested to know how this impacts you first directly as I believe they carry this series, but at a higher level, how you think this pivot to streaming Will impact demand for sports content in some of those regions? And then maybe just separately, Stefano, as you noted viewership seems to be on a nice uptick Through the races so far, would be interested to get your thoughts on how much you attribute this to the Red Bull, Mercedes dynamic versus kind of the actions that you've taken The track like Drive to Spy, like the social media outreach. Well, if I may start from the second, David, it's Clear that the better show is better engagement and better entertainment for the people, there's no doubt. But the thing is that is one element. The other element is the fact that we really are Engaging with more people that are in LOVED from ORION. Therefore, the fact that we are able to attract other people through Different way of languages that we are not used to use before, I think it's also helping the fact that the viewership and the engagement in any case, We talked about not only the TV, we are talking about social media platform and other elements of OTT. It's showing that there is lot of attention, a lot of interest, for sure. What is happening on the track is very, very important. There's no doubt about it. And this is for sure a good sign for us. I would totally agree. But Stefano, why don't you comment on the rest of it, then I'll add. First part. Sorry, Greg, the line went off to my side. Maybe you want to repeat your question, because I don't think we covered it. Sure. Yes. Sure. The question was about Disney and their move to shut down Star Sports, I think in parts of Asia, just wondering how that impacts you directly and then just your higher level thoughts on the pivot to streaming and kind of what that means for demand? So, Stefano, why don't you start commenting and then I'll give you I may have some views. Thank you. Yes, absolutely. Thank you, Thiago. I mean, David, we have, of As you know, agreement in place, so we're expecting for that to be totally enforced. So we don't see that as a problem. We see actually A big opportunity to the growth of the TV and the engagement figure in that part of the world to find out a solution that we are working on, of course. But on this year's financial, we don't expect anything that will happen. So, I think more broadly, if you think about it, More platforms is a positive for us. And yes, some of the legacy platforms may decline or even be eliminated. But in general, we're seeing new platforms created. That's an opportunity. And just the way that Here in the United States, when satellite came and eventually when Fios and other fiber alternatives came, that created upwards pressure on content costs Because of the bidding, I think we'll see the same opportunity in what we do worldwide at Formula 1. As usual, we'll have a trade off on Exposure, which Free TV offers against, in many cases, higher short term rates for either Over the top platforms or even more streaming platforms over the excuse me, platforms like satellite or streaming platforms. And we'll weigh our total dollars available against the exposure that we get for things like generally promoter value And advertising and sponsorship. So, I'm not so worried about these sort of slower growth Platforms being cut out by people like Disney, I'm much more excited about the opportunity from the digital platforms, particularly as they gain scale. Thank you. Thank you. So we will now take our next question from David Beckel at Berenberg. Please go ahead. Hey, thanks a lot. I have a great, thanks. I have 2 on F1. I just wanted to talk a little bit about the Sprint race format, Maybe get a little bit of the thinking behind that. It obviously adds incremental value to your partners, But more specifically, as it relates to future economics, do you expect this to add to the value you receive from your partners? Or is it more Part of just adding value to existing agreements. And then secondarily, Going back to the U. S. Market and with the TV deal in play in a few years, I'm sure you paid Into what WWE did with Peacock, I'm wondering if there's potential to sort of leverage the F1 TV Over the top platform in a way that can sort of augment the broader value of your U. S. Broadcast and overall TV distribution rights. Thank you, David. I mean, with regard to the Sprint format, I think it will be Beneficial to everyone. And if I had to answer straight away to the last part of the question, of course, we expect to have more value 1st of all, there is action that will be very, very positive in terms of effect to the organizer, Because from Friday to Saturday to Sunday, there is something to talk about, a lot of action, a lot of intensity. That is something that, of course, This will have a direct effect on the people that will attend to the race. And this has been welcomed by all the organizers in a very positive way. On top of it, of course, that's something that we are offering to our media partners because we can create the new content. We can generate other form of entertainment in adding a new format that has been never deployed before. And also to the partners That have the chance to and the privilege to be in the grid for 2 times on Saturday, even if the format will be different, of course, because The center of the weekend will be the race of the sun. But this is something that we believe that will have also an impact on the financial point of view, on top of adding the excitement on what this rate is all about. With regard to the S market, the TV deal and the leverage related to all our tools, I We believe that this will enable us to discuss in the future even a different way of integrating our FTB OTT platform that is going very, very well in the future. And therefore, that will allow us to benefit from the fact that the market will be interested in our sport and the commitment will be very, very big on our side to make sure that this will happen. Yes. And if I could add to what Stefano said on that, I think we certainly watch what, WWE did with Peacock, and I think it's Somewhat indicative of the longer term trend, very few sports, I believe, have enough content to run their own over the top service as their primary vehicle. There's just not enough content. If you look at WWE, they have tonnage certainly compared to us. And so, F1 TV is a great asset for connectivity with fans And for connectivity, in particular with our most hardcore fans, but I don't believe it supplants our traditional broadcasters or Other over the top broadcasters who are looking for a broader set of content and relationships. So, I think we certainly watch that and it's consistent with our view. And I do believe we'll see that kind of opportunity with larger digital platforms and F1 TV can be a part of the solution with them, as you know. Great. Thank you. Thank you. We will now take our next question from David Joyce at Barclays. Please go ahead. Thank you. Two topics. One is just another clarification on the promotion. When you said it was one time, does that mean it was just one promoter or are there any others Lingering out there and was it within the range of a typical promotion fee? And then secondly, on sponsorship, how should we think about The range of sponsorship types of contracts, like how many are based solely on particular races versus the portion of revenue that is really allocated across the season. And are there any other types of new sponsorship structures? Thank you. I can do the promoter piece. It was one race and that's disclosed in our earnings release. As it relates to the typical range of a promoter agreement, we have a wide range. So it falls within that range, yes. David, with regard to the sponsorship, the range, of course, depends on what It's the package that we have. We have official partner and we have other kind of relationship and all are related to really The rights that they're going to have and so we have different packages, but are all consistent with the season with the old entire championship and not related to the single event itself. All right. Thank you. Thank you. So we will now take our next question from John Assigarelli. Your line is open. Please go ahead. Hi. Thank you. Switching gears, sports gambling is hot. You probably saw, I think, DraftKings, Sling and so on. So what are the benefits you might see from your RSN with Sinclair or Bali as it is now, is there anything that could actually help you? John, I'll take a shot at that. I think that those benefits are going to be secondary and not primary. You'll have increased fan engagement. There may be Georgia is soon to open, it appears. Gambling It will become legal in the near term in Georgia. It's not today, but it has been on the ballot and it looks fairly favorably inclined in the coming cycles. I think that will provide us some marginal revenue opportunities there, but I don't view it as a huge revenue line for us Directly, I view it secondarily the interest and if we in Baseball MLB can capitalize on that more broadly, I think it just continues to draw to fans, Not clear that it's revenue line of the P and L directly. And just as a second broader question on sports, You've probably seen some of the disruption in England, where the fans became engaged since About around the Super League, you're saying? Yes. And just generally, a fair amount of disruption there, a lot of talk of PE companies buying into Series A, nothing happening. Is that An area where you might see some opportunities? Or is the fact that the soccer team can be relegated just makes it too risky? No. John, we have looked at as many of those opportunities as we can possibly find. We do think it's interesting. We can debate what's going on at each of the various leagues and Where they stand in terms of their cycles on likely broadcast revenue and other kinds of opportunities, we do look to our experience both at Formula 1 and the Braves And what we'd like to think we have done positively with the league at Formula 1 and what we'd like to think we've done positively around things like Truist and the battery and think about how we can apply the skill sets that are inside Liberty at various opportunities. And we tried to sell That we have been a good and long term strong owner, perhaps different than some of the other Americans have been perceived or how PEA has been perceived. We haven't yet found the intersection of where somebody wants us and we want them, but we continue to look. And I do think that disruption over there Does create opportunity. We have gone through we watch with Super League with interest because before we were involved With Formula 1, there was certainly the talk of a breakaway at Formula 1, which did not come to pass. And we feel very confident. We understand Breakaways very well, and I think we pretty much eliminated that opportunity or potential at Formula 1 as a side note. Thank you. Thank you. So we will now take our final question for today's conference from Matthew at Benchmark. Please go ahead. Thank you. Even apart from Max Verstappen literally banging wheels with Lewis Hamilton always seem relatively cordial off the track. You probably had the most competitive season since I think 2012, you know, Ferrari is coming back, McLaren, Landon North, etcetera. And I was just curious, you've got a broad Tweet of change is coming next year on to make the competition on the track more competitive. Does it give you any pause that you're making live revisions Next year, even if this year seemingly is proceeding so strong right out of the gates and do you have any ability to reassess Continue to roll on. Matthew, the changes has been already The teams are already working on new cars and new regulation and the train has already left the station. So we are very pleased because we are convinced that this year It's already a great season, but next year with the changes that has been planned, there will be another great opportunity to showcase what is Formula 1 in term of The ability of always keeping the attention at the center, and therefore, there's no other things but checking Everything in terms of all the details to make sure that the changes will be massive on the cards next year will Highlight the possibility to have a bigger fight, not only 2 or 3 drivers, but even more. And that's the objective. Thanks, Stefano. Really riveting. Thanks. Yes. If I could add just look, we're lucky this season is great. The work that With Don, in the Concorde Agreement, by Chase and Ross, Braun and others, We hope to only increase the competitive next year. And we're very excited, as Stefano noted, about what's going on now and even more excited about what we can do in the coming years. I think with that operator, we are done for the day. Thank you very much to all of you listening out there for your interest in Liberty. And we look forward to speaking with you again next quarter, if not sooner. This concludes today's call. Thank you for your participation. You may now disconnect. Ladies and gentlemen, Welcome to the Liberty Media Corporation 2020 Q1 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, May 7.