Ladies and gentlemen, thank you for standing by. Welcome to Liberty Media Corporation's First Quarter 2022 Earnings Call. During the presentation, all participants will be in a listen-only mode. Afterwards, we will conduct a question-and-answer session. [Operator Instructions]. As a reminder, this conference is being recorded May 6th. I would now like to turn the conference over to Courtnee 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 10K and 10Q, or Liberty Media Acquisition's most recent Forms 10-K and 10Q, 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's expectations with regard there to 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 1 and 2 can be found at the end of the earnings press release issued today, which is available on Liberty Media's website. Now, I'd like to turn the call over to Liberty President and CEO, Greg Maffei.

Thank you, Courtney, and good morning to all of our listeners. Today, speaking on the call, we will also have Formula One's President and CEO, Stefano Domenicali, and Liberty's Chief Accounting and Principal Financial Officer, Brian Wendling. So I'll begin with Liberty Sirius XM. We received $872 million of gross dividends from SIRI tax-free in the first quarter, including the special and regular dividend. We -- because of the nature of our convertible bonds, we had to pass through $30 million of that special dividend. We continued our share repurchases, repurchasing $182 million across LSXMA [Indiscernible] from February to April. We repurchased those at a look-through price on SIRI of about $356 a share. We, of course, remain disappointed with the discount and attack it as much as we can. We're very focused on long-term value creation for our shareholders. Now looking at Sirius XM itself, a solid start to the year, continued to perform well financially despite a challenging auto market. Revenue was up 6%. Monthly churn was wonderful, down at 1.6%. And we had record ARPU up 9%. New car penetration for SiriusXM is now at 83% and has enabled a fleet of 146 million cars here in the U.S. As expected, self-pay net adds were down slightly due to challenges in the auto market. This was partially offset by strength in digital, and we had 50% increase in the subs listening digitally to our on-demand content. I'd also note we launched our first-ever streaming channel, Freakonomics, dedicated to podcasting and available across all the SXM platforms. SXM media was named the number one podcast ad network, according to Edison Research, and we represent four of the top 15 podcasts in the country with the addition of Crooked Media in this month. Also beginning with this year's masters,…

Thank you, Greg. And good morning, everyone. In January, we settled exchanges of the 2.25% Live Nation exchangeable bonds for a total consideration of $664 million. Funded with cash and margin loan drops. At quarter-end Liberty SiriusXM Group has attributed cash, liquid investments -- and liquid investments of approximately $634 million, which excludes $76 million of cash held at SiriusXM. There is also $1 billion of undrawn margin loan capacity at the parent level related to our SiriusXM and Live Nation margin levels. As of May 5th, the value of the SiriusXM stock held at Liberty SiriusXM Group was $19.7 billion and the value of the Live Nation stock held was $6.6 billion. We have $3 billion in principal amount of debt against these holdings. Total Liberty SiriusXM Group attributed principal amount of debt is $13.9 billion, which includes $9.9 billion of debt at Sirius XM. Formula One Group had attributed cash liquid investments in monetizable public holdings at $1.6 billion at quarter-end, which excludes $834 million of cash held directly at Formula One. Total Formula One Group attributed principal amount of debt was $3.4 billion, which includes $2.9 billion of debt at Formula One, leaving $454 million at the corporate level. F1's $500 million revolver is undrawn. And Formula One's leverage at the end of the quarter was 3.7 times, meaningfully within our target leverage range less than five times. As of quarter-end, we're no longer in a period covenant waiver. Looking at a few cash items on Formula 1. Formula 1 estimates its cash tax rate in 2022 to be a single-digit percentage of adjusted OIBDA, increasing modestly to low double-digits in 2023 and thereafter, as a result of the UK tax rate increase that's effective next year. Additionally, Formula 1 is currently undergoing a project to refurbish…

Thanks, Brian. I'm thrilled to be in Miami this morning, as we have set for the inaugural Miami Grand Prix. The seed is buzzing with excitement and we're looking forward to the weekend. The 2022 season is off to a phenomenal start. The many changes to the cars in regulation have resulted in improved racing. The cars now follow more closely, enabling greater opportunities for wheel-to-wheel racing, with drivers trading position multiple times, making them think most strategically above the moves. The strength is back and we held our first event of the season in Emilia that came down to the final few laps. It turned out to be a Grand Slam weekend for Red Bull, heading qualifying before winning both the race and the sprint; and securing the extra points for the fastest lap. The first sprint of the season recorded a total audience of 8.4 million, a 28% versus qualifying of the same Grand Prix in 2021. With strong growth in Brazil and in the U.S. The Emilia weekend on the Sky's for Italy website, recorded a 74% increase in unique user, compared to the Emilia GP in 2021. On F1 social platforms, we saw 149 million video view, up 36% versus Emilia in 2021 and 45 million engagements, a 43% increase versus 2021. However, the start of the season so far is Ferrari, which has shown real strength with the car and Charles Leclerc currently leading the drivers' championship by 27 points. Red Bull are catching up. And we expect the season to continue to create great racing and close battle at the front. As the constructions continue to refine the new cars, we expect more surprises during the season and opportunities for great racing across the grid. As confirmed on our last earnings call, we will…

Thank you, Stefano and Brian. We hope you'll tune into our inaugural Miami GP this weekend. We do appreciate your continued interest in Liberty Media and look forward to a healthy and productive 2022. And with that operator, I'd like to open the line for questions.

Thank you. [Operator Instructions]. We'll go first to David Karnovsky with JPMorgan.

Thank you. With the Las Vegas Grand Prix, I was hoping you could discuss a little bit more the decision to promote this yourselves as opposed to a third-party. This is primarily about capturing the financial upside beyond what you could get on a promoter fee. Would you look to apply this model elsewhere? And then Gregory, I think at the start of the call, you mentioned $240 million purchase for land adjacent to the site in Vegas. Just wondering if you could provide some incremental detail on what you're buying here and how that ties into the race logistics. Thanks.

I'll take a cut and then let's Stefano add. I think I indicated we're buying 39 acres for $240 million, and that'll be the site of the pit and paddock and some other hospitality. We don't have any other financial details yet to release on what else will be spent on that site. I think our decision to promote Vegas in conjunction with Live Nation, and local partners is driven by a couple of things. One proximity, it's fairly easy relative to being in Denver to get to Vegas for us to do the work. And we have some knowledge of the local U.S. market relative to many other markets. But I think, and more importantly, we see the opportunity to be a promoter as a way to expand our understanding the business, understand how to be the best Formula One product on the track for other promoters as well, to look at an opportunity to grow our knowledge and our understanding, and potentially promote other races down the road. And lastly, I think Vegas is going to be a large and unique -- perhaps unique opportunity. So from a financial perspective, we think this one sets up pretty well to be worthy the time extra focus to become the promoter. Stefano, I don't know what you would add.

No. Thanks, Gregory. I think that Gregory was very spot on in all the points. I would say that as we remember, David, Vegas has been always a place where we do believe that the association between the values of Formula One and the glamour and attractiveness, the possibility to be in that community is crucial. But I would say on top of the financial things that we can see around that business, we can be seen the enabler to maximize what potentially Vegas could be for Formula One in term of awareness, in term of business creation, in term of activating an area of the world where we can bring internationally. And I think that is a great wing to win a business also for the ones that are investing there. But for sure, our knowledge of the business and our opportunity to explore with our Live Nation partner, that I think is the best in order to make sure that in next year in November when we're going to have the race, that event will be spectacular, it will be unique, as I would say we can feel here in Miami already.

Thank you.

We'll take our next question from Bryan Kraft with Deutsche Bank.

Hi, good morning. I had a high-level question and then one on Formula one if you don't mind. I guess. Gregory first, what are your overall thoughts on the economy and the interest rate environment and how are they impacting your decisions around capital allocation, capital structure, and potential new investments? Is now that time to say, deploy capital for new investments given the decline in asset prices, are you more of the mind that cash preservation is most important now? And then on the Formula One side, I guess Stefano or Gregory, can you talk about how Formula One benefits in the -- from what appears to be really strong economics around the Miami Grand Prix? I think the terms there for Miami are bit more variable than some of your other raise promotion deal, so any color there would be great. And I guess as a follow-up to David's question, was anything that you were seeing in Miami, did that help to inform your strategy to become the promoter for Vegas? Because you saw that things are going so well there and saw an opportunity to participate in a bigger way in the upside. And then one more on, just on the investment in Vegas and developing that. In terms of order of magnitude, how much bigger might the Vegas build-out get in terms of dollars versus what you've already laid out for this year? And how would you think about potential external financing there, whether its debt specifically on the project, bringing in some of the creative stuff like you did maybe with the Braves in Atlanta? Thanks.

I'm going to parse those. On the last one, I don't think we're ready to talk anymore about the outlays at Vegas. It will be bigger than [Indiscernible], but manageable. I don't think we'll need outside partners. And I don't think we'll need debt, we have quite a lot of cash in F1. I'll let Stefano talk a little bit about -- more about what Miami informed us. And I'll talk more broadly about cash in the market. Thanks.

Thanks, Gregory. Bryan, I mean, as you know, different form of relationship with the promoter is related to maximize the opportunities that each place can bring to Formula 1. And I think that's it's clear that what we can see, as I just arrived two days in Miami, I mean, the vibes that the we have created as Formula 1 is immense, is great. And you can develop let's say two strategy on that. One, how we can maximize the value that Formula 1 will bring to community, but also how we can maximize the value of our partners that are coming here. At investing in Formula 1, can see us as once again, that enabling factor of creating business opportunity for them. And this is an indirect value that Formula 1 is bringing very highly today because of the success of our international platform. And of course, the fact that here we invested together with our promoters, the Miami Dolphins, is because they knew the community, they have the right expertise to maximize in the shorter term as possible, what we want to bring here for Formula 1. And as I said, this success, is already high before the start of the event. And of course this is the first time we are here, we can see a different business model having a lot of corporate business that wants to develop the [Indiscernible] to a different mode that is different from place to place. So this is something, that also from our side could be very important to learn in order to be even more effective when we come to Las Vegas, and we're going to be directing for the promotion of it.

So on the larger question about the market environment, it's scary to try and imagine investing or catching a falling knife in this interest rate environment and stocks. But I have to say in general, we try and take a longer view. There are opportunities that could create in these environments. Some of the best deals we've done like SiriusXM were created in difficult economic times. We are lucky to have not only cash availability at the SPAC and F1 significant excess cash at both and strong free cash flows at Sirius and Formula One that -- I think that creates opportunity for us. Exactly when that will be timed and when we make the decision -- we have a lot of benefits in our model, but we have some disadvantages. It's not like we can turn around and just say bye 5% of the company in the market where we think the bottom is, we'd see -- no it's a longer cycle in finding deals, but I definitely think the environment will create opportunities for us and we'll be on the lookout.

Thank you, both.

Thank you. We'll take our next question from Vijay Jayant with Evercore.

Thanks. On Formula 1, on the Las Vegas race for next year, should we think about it as an incremental race? So are we going to 24 races, assuming you get a replacement for Russia this year? And again, what is the policy to actually add more races? At least reading some of the drivers keep complaining that there are too many races already. Is that like a regulatory process that you have to go through with the FIA or the teams? Anything on that would be appreciated. And then, on some of the new races coming back since COVID-19, really Japan and Singapore, they used to be regional sponsors for them, the pretty material ones, I think. Is there an expectation we should have that they come back, I think Singapore Airlines and Honda? Thanks so much.

Thanks, Vijay. I can answer on the calendar as you know, first of all, we will have not published at the calendar for next year. In terms of process, you know that there is agreement within us, the FA, and the teams to discuss. It's on our side as a commercial right holder to make sure that we find right balance, between the number of events, the historical events, new opportunities that can become because we are a world championship. And I think if you think back a couple of years ago, as always, the right value for having a good calendar is related to the demand and to the offer that we can provide. And I think that today we are always talking about 23, 24 races, and that's what we believe today is the right number considering the success that we're living today. What we were talking about Las Vegas that will be in the calendar. Of course, that's the only thing that we have announced for next year. And I would say on the other hand, you would see soon what will be our strategy and we have to respect the process as we discussed. And we're going to announce it not earlier that at the end of summer because that's something that we want to keep it and prepare in the right way. With regards to the local promoters and sponsorship with Japan and Singapore, yesterday, we have already announced that Singapore alliance will be part of the promotional package on Singapore because for them is a very important partner and we respect that. Japan, you will discover soon that of course, for Honda, for example, because of their decision to quit officially Formula One, they could be something special that we want to recognize for them during that events. So this is part of this strategic discussion that we're having with our promoters. And I think that the economical benefit, of course, will go into the system, and of course also with us.

Great thanks so much.

Thank you. We'll take our next question from Stephen Lesic (ph), with Goldman Sachs.

Thank you. One on Formula 1, revenue in the first quarter came in a little bit stronger, [Indiscernible] most of us expected. I was wondering if you could help us maybe on packaging the drivers that [Indiscernible], maybe across media or sponsorship rates conversion, and other revenue even [Indiscernible] that high level.

I'm sorry, its revenue beat expectations?

Yes. Q1 was ahead.

Well, I mean, for Formula 1, obviously we had two races versus one last year; and we're really back to more normal activities than we've been over the past couple of years. So you had full crowds and we had good sponsorship revenue as well. Also, freight costs have been up a bit and some of those costs are obviously passed on to the team, so there's incremental benefit there. But normal activities compared to the past couple of years is really where we've seen the benefit.

If I could just add, I think we've seen growth in almost every revenue category. But the way we recognize revenue ratably across races probably had the single largest impact. The fact that it was two versus one in the first quarter, recognizing that many of our revenue streams are recognized ratably than could tie to the particular race.

Got it. Thanks for that. And then maybe one for Gregory on sports media rights. I'm curious how you think the interest and ultimately the value of sports media rights could be impacted over the long term if some of these concerns around slowing scheduled subscriber growth also may play out? Do you think it helps improve their hand given unique live content or is the softening market something that you think effects content spend more probably?

I think it's a complicated topic and partly where you sit is how you view it. And when I say that, I think there will be strains on the Braves potentially over the long term as the RSNs become less included in the bundle. On a regular basis, that'll put pressure on some of the RSN revenue streams. The Braves in particular have a very strong RSN revenue stream and a lot of demand, so we may be less impacted than many. But obviously, that turmoil could be a negative. On the other hand, Formula 1 has seen increases in demand and increases in viewership and we have the U.S. media rights as commonly known up for bid right now, beginning for next year season. And we have a lot of interest not only from traditional linear players, but digital players. And the offset to some of the decline in cable subs is the increase in some of the digital subscriptions. So that opportunity is, I think in the net were probably better off with more players bidding than their changing landscape, maybe plus or minus. And then a charter which is not the focus of today's call, we have a whole another set of dynamics where in some cases we're helped and in some cases, we may be hurt. So you really -- a lot changing and a lot of it depends on which company we're talking about.

Great. Thanks for that.

We'll take our next question from Barton Crockett with Rosenblatt Securities.

Great, thanks for taking the question. I wanted to put one question out, which comes from an investor, but I thought it was a good question. Which is, looking at the Braves, they're trading right now at market value of maybe 3.5 times or so sales. And you've seen private market transactions for baseball teams in the close to 7X sales range. So the question is, why won't you guys take some more steps to try and achieve that value right now for the Braves? One of the things that would seem to be opened to you, is that you now have a second ATB with Formula One and now Braves. So it would be possible to split maybe the Braves off as an actual stock which might help the value process to get people thinking about private market transactions, maybe down the road. So kind of curious what your thought process is there, why you haven't pursue those type of opportunities to date?

Great question. Even if it's not your Barton from the investor it’s still a good question. I think we're looking at all options and considering what we might do, some of these things are more recent about when our ATB flexibility is occurred. There's some issues also, we're still looking at around SIRI and what we might do there, as you know, we just crossed over the 80 there. We've just had Formula One become an ATB, so there's some moving targets and we evaluate all opportunities, and I think your investors probably right. I'm not sure, seven times we'll see, but certainly the multiple we're trading is lower than that multiple which has been in private transactions. Whether it would still trade to that level of what it's a private sale transaction versus the public market transaction, open question. But I do agree that probably having the flexibility to do that would probably even improve trading over time.

Okay. And then also on the Braves side I wanted to ask about the RSN deal with the [Indiscernible] RSN and their pursued obviously rights from teams to do the direct-to-consumer streaming service. The Braves are not yet sign up for that, but we did see that a friend of the Braves family at Charter has done a recent deal with Sinclair than involved the RSNs. I'm just wondering in the past, you guys have seen very skeptical about signing up for -- to have the Braves carried on that. It seems like you weren't really into that. Now Charter has done a deal with them, I'm just wondered if there's any evolution in you're thinking or whether it's still seems like not likely that you want to do that?

Well, I think that's evolving, Barton, as well. And we're charters as I -- similar to the answer I gave before of where you sit defines what you want to see happen. We have a good RSN deal that runs out till FY 27. I still think that's probably more value for less than any digital deal. Are there any incremental digital deals that are around that potentially and as you're seeing growth and lots of kind of digital around baseball and now people like Apple entering to buy rights? So I think it's evolving. I don't know if Valley is going to be the lead player, they've got their challenges, but we're certainly open to watching how the market evolves.

Okay. Great. Thank you.

Thank you. We'll take our next question from David Joyce with Barclays.

Thank you. Another question on Formula One, please. Conceptually, how should we be thinking about the principal versus agency relationship on fund self-promoting this? Not looking for any financial specifics, but just accounting-wise. Would it be something where your Live Nation is the promoter and is taking all the new top-line? But then they have the operating expenses and therefore, Formula One would get something along the lines of raise, promotion fee plus a margin or is this something that's all going to be reflected directly on Formula One's financial, and how our partners reflected in that?

I'll start, and let Brian give the really accurate answers. In general, we are the primary partner Live Nation from a financial perspective, is the secondary partner. They have a role is very important. But most of the capital investment, most of the outlays will come from us, not from Live Nation. And we don't anticipate at this is going to be called out separately on our income statements, won't be material in that sense. So the lines will generally be folded in promoter fees and the like, sponsorship, hospitality, etc. But Brian, what might you correct me?

That's very accurate. I would say we will consolidate as Gregory said, so the revenue and CapEx will be on our books as well as the costs. And also as Gregory said, we would expect that -- we need to ultimately find [Indiscernible] once we have the race, but our expectation right now is that you would see the revenues go into their traditional buckets. So Paddock Club would go into other revenue and then sponsorship, then would go where sponsorship currently goes. And then to the extent we're selling tickets, we would expect that that probably goes into our promoter revenues. So it'll look very similar except for the fact that we're consolidating the costs which normally -- and all the revenue, whereas under normal promoter relationship, we just have that fee.

Great. Thank you very much.

We'll go next to Jason Bazinet with Citi.

Another question on Formula 1. You mentioned that you may -- over time maybe promote other races. And I guess if you look at the 24 - ish races or whatever, some of those obviously you are in iconic places, where you probably won't self-promote. But if you just -- you were going to blue sky it. How many of the 23 other races that you wouldn't be self-promoting would be in the bucket where you might self-promote?

I don't think we've -- I'll let Stefano add. I don't think we've announced any plans. We're going to start to see where -- how we do this, hopefully make the success of it that we believe we can make it. I would only cautiously say don't be so certain that places which are iconic are places where we will not eventually become a self-promoter. I wouldn't -- can't decide that opportunity. Stefano, what might you add?

No, absolutely Gregory. I think that the beauty, if I may say that, of this moment is it's -- because the new promoters are really putting new energy and new vibes into the system. I think this is something that have a collateral effect on the traditional promoter that needs to keep up the pace with the respect. And we do respect a lot our promoters because they are the ones that really working with us to make sure that we have a great show all round the world. But this effect is giving us an incredible boost to make sure that all the system is very active to maximize what we're bringing into the platform. And this is really what Gregory said, is never say never. But with this in mind, I would say we're very happy with the promoters that are working with us. They're very, very loyal -- reliable partners on which we're going to build up even a stronger future together.

That's great. Thank you.

Thank you. We'll take our final question from Matthew Harrigan with Benchmark.

Thank you. Clearly, you have a take-off in the U.S. for Formula 1, which is really going to help with ESPN at the same time. You've got a lot of geopolitical changes, Sochi going away, but whac-a-mole zero COVID-19. In China, hopefully Shanghai comes back. Particularly with the desirability of getting more better times in the U.S. if it becomes even more appealing for ESPN, would you be more inclined to look at bringing back something like Nurburgring and maybe even promoting yet yourself in some of the classic venues, and kind of going more U.S. and Europe, versus a lot of the expansion that's taken place in Asia and in the Middle East. I know some of the Middle Eastern races are hugely successful, American stay around. But the world is changing so much, it looks like Formula 1 is a winner, but just how complex is your [Indiscernible] off everything going on in the world on geopolitics? Thanks.

What I can say Matt is that the Formula One and we’ve proven to be the say, flexible as possible also in the COVID-19 situation to maximize the fact that we want to have a great championship. And our duties to make sure that we, first of all, our world championship and we are investing either with partners or either with us involved directly in that to make sure that the strategic markets are becoming crucial for Formula one will be part of it. And you correctly say that U.S. has an incredible boom in the last, I would say two years. And the duties to make sure that we can even maximize more the effect on that. But we have other out of the world that need to be developed and need to be respected because of the tradition. But tradition doesn't mean that something given for granted. Tradition is a great base on which we're going to build up a better future. Europe has to stay for sure with a good bunch of number of races in our calendar, they will stay. We were talking about [Indiscernible] the general landscape is for sure a very interesting landscape in which no matter will be the promoter, we need to see what could be the action if needed, that we can recover that in the calendar. I'm sure if you want to be specific on that, something that could happen soon could be very important to be back on the calendar, but we don't have to forget that we have -- we want to vest in the Far East world because we so far been affected by COVID-19 but there is a great potential to grow there. We have to have other at out of the world which is East Africa, on which we may develop business there. So it's a great moment for us to maximize the opportunities, to see what would be the right schedule in the future of Formula One. We will not take out of the equation the possibility of having some places with rotational principal, because that will give a leverage to be multiple markets. So as I said, it's really our strategic thinking with regards to our future calendar.

Just continuing of determined team are still discussion of new OEMS coming in to Formula One. I know you can't be specific, but it feels like there are a lot of positive things still pushing in that direction, or are you still having discussions with various people on that?

Well, as you can imagine, Matthew, we cannot be specific on that. But the good news is that we can see what we rate, and we know we're doing, working with all the manufacturer. And if I may on that specific point without the same anything related to something that we can say, the good news that today Formula One is really showing the leadership in the technological landscape of the automotive business, in the multi-spot of course. And our charges related to sustainable through in the future and our strong path, that we want to prove to the world that we are really serious in the Netscope Caguan(ph) at zero within 2013. Is something that really gives us credibility, and this is the reason why everyone, not only the ones that you read, are interested to have stocks with us.

Perfect. Thank you.

Operator, I think that were done. To the listening audience, again thank you for your interest in Liberty Media. As we said, we hope to see some of you here in Miami, and for those who are not able to get to Miami, we do encourage you to watch. And I hope to speak to you again next quarter if not sooner. Thank you.

That will conclude today's call. We appreciate your participation.