Ladies and gentlemen, thank you for standing by. Welcome to the Liberty Media Corporation 2019 Q4 Earnings Call. . I would now like to turn the conference over to Courtnee Chun, Chief Portfolio Officer and Senior Vice President of Investor Relations. Please go ahead.

Thank you. Before we begin, I'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 our most recent Form 10-K filed with the SEC.

Thank you, Courtnee, and welcome to all of you on the call. Today speaking, besides myself, we'll have Formula One's Chairman and CEO, Chase Carey; and Liberty's Chief Accounting Officer and Principal Financial Officer, Brian Wendling. During the Q&A, we will also be available to answer questions related to Liberty TripAdvisor. So beginning with Liberty SiriusXM, we continued our repurchases of the stock and bought an additional $55 million from the period of November 1 to January 31, including buying both LSXMA and LSXMK shares. I would note, this is the first time we bought the A shares in addition to Ks, and we just look out in the marketplace at what is a more attractive value in determining our repurchases. If you look through to the underlying SiriusXM shares, our look through price was $5.11 over this period, a price we find pretty attractive for the underlying Sirius stock. As I've said before and will continue to say, we continue to take advantage of the discount to NAV. And as of January 31, our ownership in SiriusXM was 71.6%. Looking at the underlying SiriusXM itself, they had a strong finish to the year with record high financial performance at both SiriusXM and Pandora. This was the tenth consecutive year of 1 million-plus self-pay net adds. SiriusXM returned about $2.4 billion of capital during the year, and they continue to focus on innovation. First, with 360L, its next-gen platform, which will be distributed across 6 OEMs and 13 of their underlying brands, we anticipate 2 million vehicles will be in operation by the end of 2020. And innovation on the content front, where they quadrupled the number of podcasts available in the platform last year with solid growth in monthly listening. They had very creative programming agreements with Drake, Marvel, LeBron, UNINTERRUPTED and U2. We are pleased with the integration of Pandora. To remind you, the deal closed just over a year ago, especially the combination of our local team and our ad tech resources. 75% of SiriusXM development resources are now being spent in ways that benefit both of the brands or services. And Pandora is a positive contribution to EBITDA today.

Thanks, Greg, and good morning, everyone. At year-end, Liberty SiriusXM Group had attributed cash, restricted cash and liquid investments of $387 million, excluding $120 million of cash and restricted cash held at SiriusXM. The value of the SiriusXM common stock held at Liberty SiriusXM as of yesterday close was $22 billion, and we have approximately $1.4 billion in debt against these holdings. Total Liberty SiriusXM Group attributed principal amount of debt was $9.3 billion, which includes $7.9 billion of debt that's held directly at the SiriusXM level. Formula One Group had attributed cash and liquid investments of $185 million, which excludes $402 million of cash held at F1. Formula One Group has attributed public market securities with a market value of approximately $4.9 billion as of yesterday's close, which includes intergroup interest in the Braves Group, the intergroup interest in Liberty SiriusXM Group and, of course, our stake in Live Nation. Total Formula One Group attributed principal amount of debt was $5.1 billion, which includes $2.9 billion of debt held at F1, leaving $2.2 billion of debt at the corporate level.

Thank you, Brian. 2019 was a year of growth for both fans and the business of Formula One. From a fan perspective, attendance at our races again exceeded 4 million, up 1.75%, even with the Saturday cancellation of the Japanese Grand Prix due to the typhoon. The average attendance per race was over 202,000. 8 Grand Prix exceeded crowds -- had crowds of over 200,000 over the weekend with 5 tracks hosting over 100,000 spectators on race day. The scale of these events is truly unmatched in sports, and we continue to be impressed with our promoters and the world-class events they orchestrate. Fans were even more engaged at home with a total global cumulative audience of 1.922 billion, the highest since 2012, and an increase of 9% over 2018. This is the third consecutive year of growth. 19 of the 21 Grand Prix had higher cumulative audiences than 2018. Across Formula One social media platforms, we saw followers increase significantly at almost 33% and page views in our core digital platform surpassing 1 billion. We continue to expand our digital initiatives, recently launching F1 TV on Roku in North America and bringing F1 TV to the large screen format for the first time. We also encourage you to listen to our podcast, Beyond The Grid, which now has 43 episodes and reached up to 15 million listens in 2019. From a business perspective, 2019 saw us begin to reap the benefits of our foundation built in 2017 and 2018. In 2019, revenue grew over 10% and EBITDA grew over 25%, OIBDA over 20%. Formula One also attributed -- continue to be a cash machine with 2019 net operating cash flow exceeding solid growth and strong cash conversion. We finished 2019 with a leverage ratio of about 5.1x, near the low end of our recently received range. We expect this momentum to continue into 2020. The 2020 season marks the 70th anniversary of the Formula One world championships, and we recently debuted a special logo for this milestone to celebrate this achievement throughout the year.

Thanks, Chase. Let me echo Chase's comments about we will miss Sean, my friend, and thanks for all your good work. Thanks also to Chase and Brian, as I said, for their comments here. All in all, a great year for Liberty Media. We set the date for our investor meeting in New York. Please hold Thursday, November 19. We do appreciate your continued interest in Liberty Media and look forward to speaking with you on next quarters call if not before. And with that, operator, I'd like to open the line for questions.

. We will take our first question from Benjamin Swinburne from Morgan Stanley.

Chase, could you -- I know the virus situation is quite fluid and sort of hard to pin down exactly where this is going to end up. But what are the things that factor into the decision to move forward with races or not? And what's sort of the level of confidence around some of the races in Asia that you've highlighted you guys are going to continue to -- you're planning on having sitting here today? Just trying to get a sense for sort of what the range of outcomes are as we think about at least the early part of the season. And then I was wondering, one of the things we've all been hoping for, I think you as well, on the new Concorde Agreement is greater team parity, long term. And I'm wondering if you could tell us today, given where you are in the process of negotiating these new agreements. Do you think you're going to achieve that? And if the sports is secret or parity as we move into 2021 and beyond?

Sure. Just first on the coronavirus. I mean, I think, as you said upfront, which is probably the obvious state. It's fluid. So it's difficult to really have, first of all, where this plays out. Obviously, a country like Italy wasn't really on the radar screen a few days ago and now it is. Yes, I think we -- by and large, as a process, what we're doing is we're actively engaged with all the events upcoming, I guess, particularly the more current ones to get perspective from in-countries. I said I had a conversation yesterday with our Hanoi partner. And their update was -- I think they said there are around 15 cases, and actually all of them have recovered. So they don't -- so the cases they had they have recovered. We are continuing to talk to others about it. We're obviously -- and we are in London through our own channels connecting with experts who have insights to this. I think mostly what we need to do is continue to -- on top of the issue to try to get the right advice, to try to plan. I mean, some of it's logistics because travel planning is merging. I mean Bahrain just added a number of cities that have travel restrictions if you're coming from those cities. So I think part of what we can plan is to make sure we have flexibility and options in place to -- either logistical issues in getting to and from races. Other than China, I guess, again, with a particular focus on the races beginning of the year, they're all going. So certainly, we're heading to a -- we're heading to Melbourne, heading to Bahrain, heading to Hanoi. Although, to state the obvious, we've got to see what evolves in…

Our next question is from David Karnovsky from JPMorgan.

Just for Chase. In France, it looks like you lowered the price of the F1 TV product and introduced the monthly option as well. Just wondering if you can elaborate on the strategy there and how this may have played into your recent broadcast renewal? And then for Brian. Would it be possible to get the operating free cash flow number for Formula One in 2019?

Yes. I guess what I'd say on F1 TV is as we launched F1 TV, there are different issues in different countries based on what agreements existed in place. And clearly we need to work with our traditional television partners . So we had different issues in different places. I mean, the U.K. as an example, it's still not available due to the agreement we have, in places like in the U.S. It's more widely available in France. We had distributed on a basis that was consistent with agreements we've reached with our local partners. I think what we've done in France is try and move it there. If you look through it, there probably is a market -- I mean there's not a single market price because it obviously varies due to a variety of issues in country, but there's generally a range of price that we've targeted for this. And I think France brings -- France is probably priced above the high end of what we would have -- we think would be appropriate price at this point in time for F1 TV. And I think this brings it more into what we think is settled up, where we'd like the market price for this to be. But I think the pricing is all part of how do we navigate through the distribution than existing television partnerships.

Yes. And on the free cash flow for Formula One, as you can see in the release, $482 million of adjusted OIBDA for Formula One for the year. Really good cash conversion this year with some positive working capital movements. So just over $500 million of operating free cash there.

Our next question comes from Bryan Kraft from Deutsche Bank.

I wanted to see if you could quantify for us the impact of the Japanese Grand Prix cancellation. And which revenue lines it impacted, so we can take that into account in forecast in 2020? And then separately, I wanted to ask you. Was there -- or perhaps related, was there a particular driver for the flat year-over-year trend in advertising and sponsorship in the fourth quarter relative to the much stronger full year growth? Was that Japan? Is there any read-through from that into the growth outlook for 2020 in advertising and sponsorship?

So the first question, just on Japan. What was the question on Japan because I'm not sure I followed it?

In Japan, the typhoon impact on the Grand Prix. Was there a financial impact you could call out?

There was not a -- there is not a financial -- there was not a financial impact on Formula One. The -- there was a financial -- probably a financial impact to the local promoter due to ticket sales. But there wasn't a material financial impact to us. There was an attendance impact. So as I said, if you're looking at attendance figures, clearly, they impacted, but we're on track. We had actually quite a nice growth in attendance in Japan and didn't matter -- that didn't matter for us. That didn't occur. But the financial impact was limited due to the typhoon. And the other impact you asked about?

Yes, the other -- and the other question was, I think in your release, you called out a decline in advertising and sponsorship revenue in the fourth quarter year-over-year?

Yes. I don't know that actually if there's anything particularly material. I mean, we can have local sponsors and local partners, so there was nothing sort of on a large scale sort of global partner level. So I would -- actually just I'm assuming, so I don't actually know specifically, but it would be more variance within probably the local partnership level or one-off partnership levels that can occur race to race or when you get -- it's why sometime for comparison on quarters where races fall. I don't know what race fell -- could have fallen on either side of, say, a quarter. And as with promotion fees or sponsorship, if you have a large promotion deals, when you get down to quarters, they can swing just on race scheduling and things like that.

Our next question comes from Vijay Jayant from Evercore.

One for Chase. Obviously you're talking about potentially a new U.S. race in 2021. You also talk about maybe a Saudi Arabia race. Can you just help us understand how fast can you scale those races up from 22 this year? Can you add 2 races in the new season or is it going to be like 1 race at a time? Just to sort of understand future race promotions. And then probably for Greg, but as you started buying some Formula One, started buying some Liberty Sirius stock, this quarter that we saw, can you just help us understand how do you think about how much Liberty Sirius stock to buy? Also how much could you potentially buy Formula One, given now like you're low end of your target leverage things?

Yes. I think in general -- as we said, I think we feel we can increase -- in a limited basis increase the number of races. I think we tried to -- I think our goal would be to do it in a disciplined basis, disciplined way. Clearly, the teams -- we recognize there are logistical and organizational issues for the teams to accommodate that. We -- directionally, they know where we're going, but I think we want to in fairness to them and to make it a manageable process, try and do it in a disciplined way. So I wouldn't see us all of a sudden adding 2 races in 1 year. So I think it's probably more stepping up to a level. And again, we only step up if we have races that we really think are bringing something -- bringing in other dimension to sports sort of beneficial to both for fans and the business. But I'd expect us to be -- I think our goal would be to do it in a disciplined way.

So Vijay, I think what we -- at Investor Day, we talked about the fact we had $3 billion of free cash flow, monetizable assets and leverage capability over the 4-year period, 2020 to 2023. And I think that gives us ample opportunity to buy back LSXM. The amount we will actually buy back is somewhat related to where that LSXMA trade and how much our potential liability is. But I can't -- if you look at the total, it's likely to be less than 1/3 of that over the period. So we'll see where that comes out. We have ample free cash flow to do that, which we need on LSXMA and anything else related to flexibility, deleveraging, share repurchase, other forms of return on capital.

Our next question comes from John Tinker from Gabelli.

Back to more gentle pace of baseball, if I could. The -- I understand that the teams can now sell the streaming rights the MLB have given them back. So what -- do you -- where do you stand on those rights, particularly vis-à-vis your TV deal? And just, secondly, thyssenkrupp's going through some changes. Does that have any impact on the timing of opening the new Elevator building by the, I think, summer of 2021?

So John, thanks. On the first point, I don't think the thyssenkrupp financial issues will impact the timing or construction cycle at all. We're in very good shape on that. And this is the jewel and the thyssenkrupp crown in terms of its business. So we feel very secure about whatever happens at thyssenkrupp that we're in good shape with them financially, et cetera. On the streaming rights, it's complicated because the contracts are with the RSN provider. Say if they're not utilized in a certain way, they go back to -- they go to them. So I would say we do not have any current plans or current large revenue streams we're going to explore where we go with that. And we'll see what happens to that RSN provider and what their capabilities are over the next couple years.

We'll take our next question from Bryan Goldberg from Bank of America Merrill Lynch.

I had a couple of questions on F1. First, on your comments about your direct-to-consumer growth plans in 2020. Just curious, I think you characterized this year as another year of like investment phase. And I'm just curious. When we talk about investment, are we talking more about programming around the events themselves or the acquisition of non-live programming? Or is this more a function of rising subscriber acquisition costs? And then my second question is, Chase, I think you talked about in 2020 your expectation for all 3 of your revenue categories to be up, in 2020. And I guess, as the calendar stands today, you should have a higher event count, which is an obvious driver of growth. But outside of that, how should we think about the same-store growth potential across race promotion, broadcasting and sponsorship? Is this a year that's going to be dictated more by rate escalators and existing contracts? Or are there significant contractual renewal opportunities and/or greater sponsorship sell-through opportunities?

So I guess, on the OTT investment, I mean, we're not investing significantly. I guess, probably more, I'd say, it's early stage growth. So it's probably a bit of all of those things, abating content, that -- marginal in the context of our overall business, abating marketing, as you push it out, particularly into those still. We're early stage in some markets. We're obviously relaunching the price point in France. And as I said, we only really stabilize the platform in the second half of last year. So it's not -- the investment side is probably more saying almost -- maybe a better phrase would have been early stage growth. But given its scale at this point, we are more focused on the growth of that subscriber base and the growth of that business than on -- as it being a significant profit contributor in the short term. I think as we said all along, I think there are certain areas that the opportunity inherent in it, whether it's the U.S. and China or OTT are clearly sort of payoffs down the road, not 12 months. So it's not an investment in terms of large resources for us, but it is probably investing and growing an early stage business that we think to be increasingly important as we go forward over the years. I think in terms of revenue, it is -- we do expect revenue from each area. There's some places -- for media it's not a bigger year in media. It's sort of 2021. We did have some renewals, but the renewals work slower, so it is a combination of some new deals and just some year-to-year increases. I think on the sponsorship side, again, we do expect -- as I said, we are looking forward to adding some sponsors in the short term. So we think there's opportunity to continue to -- and we certainly have the room and the capacity, and we expect to be able to take some steps to getting sponsorships to where we think it ultimately should be. So again, it's probably a bit of a mix of incremental growth and some new deals. And I think on the promoter side, the opportunity is probably -- we've got 2 new races. We've talked about them. So clearly, there are 2 new races as well as what would be the incremental growth. So we have Vietnam and Amsterdam coming in, replacing Germany. That clearly is a positive for us. And then we've got the ordinary course that exists beyond it. So there's a mixed bag of incremental growth and it varies by each of those big segments. The other areas like hospitality and licensing and some of the other things we talked about are probably again more ongoing growth. They're not event driven. They are in the 3 big categories. It is a bit of a mix.

Actually, if I could, just a quick follow-up. On your efforts in Miami, I think you got a favorable vote from the Miami-Dade County Commission, I think, last week. But now there's -- I think there's some sort of legal challenge to that. And I was just wondering how should we think about next steps from here in Miami before that event can really be solidified on the calendar?

Yes. Again, positive steps the last couple weeks. We're actively engaged with them. I think we've got meetings over the next week or 2 to continue to nail things down. And we feel good about where we are with that race, obviously, for 2021. I think, first and foremost, we want to make sure it's a great race, a race that will live up to what that -- the potential of what that race is, which is a real tentpole race for us, not just in the U.S., but around the world, a race that will capture the world's imagination. So we want to make sure we do the race. And we're still focusing on trying to get things in place for 2021. Obviously, time continues. Time gets shorter. But we are actively working on it and engaged with it and I think making good headway. I think we feel that these are complicated. So nothing new. We've been there -- through this before. So the steps and processes we go through to ultimately finalize a race always have degrees of complications to them. But I think we feel good about the path we're on, and we feel good about the opportunity to make the race in Miami a reality in short term.

We'll take our next question from Zack Silver from B. Riley FBR, Inc.

Okay, great. The first 1 for Chase on F1. Just -- I think you provided us an update on the sponsorship pipeline back in November. Just wondering if you could give us an update whether that has changed, gotten more healthy or perhaps dissipated with ?

No. I guess, I don't think it's a dramatically different story. Again, I think we are excited about the level of interest, the breadth of interest, the engagement in the sport. Certainly, we are actively pursuing many conversations. I guess, as we've said, sponsorships is probably -- over the 3 years we've been involved has been an area that has probably had a few more headwinds than we thought, I think, whether it was telling to degree to which that was in the pipeline there. So building the story, building -- providing an understanding, building the capabilities to create the more tailored offerings that I think you really need to be competitive in that world today. So I think we've made a headway. And I think we are excited about the degree. We are certainly -- I think the last 3 months, 2 months, since the season ended in this period, we've probably been more active than ever in the breadth and breadth number and variety of conversations we're in. And we look forward to closing a few in the short term.

Got it. And then 1 for Greg, to follow-up on the Braves. Obviously, maybe not for the Braves, just given the length of time between your last deal and this renewal in 2027. But for most teams a good chunk of revenues are coming from the broadcast deals. We've seen healthy growth in the value of the sports rights. But given some of the headwinds that's in the pay TV ecosystem and distributor -- some distributor drops, maybe that makes these rights uneconomical for some of the traditional RSN players. So more curious just to get your sort of high-level thoughts on how you think that evolves over the next couple of years.

I think it's a good question. If you were -- the team on the West Coast that had a relatively small territory and had gotten a massive RSN contract, you think about what would happen at the end of that renewal. It's an open question whether you're going to see incremental value or decline. We have a good contract, not an amazing one. It was a very low one than when we bought it from Time Warner. It's been renegotiated with the longest in existence of the time. It's still along the longest that's ever been written. And because of that, when it's relatively low, even at adjusted value, against the size of our territory, which is 12 million broadband households, the largest territory of any baseball team and this popularity of the Braves, I feel pretty good. You're right to point out those headwinds. And as you may recall, we spend a lot of time looking at the RSN to know the risks of the RSN business very well. And you can see the carnage that is Sinclair at the moment. So all balanced. But when you look at the factors that are favor the Braves, if you look at our territory, you look at our contract, I'm not worried compared to where a lot of teams are.

Our next question comes from Jason Bazinet from Citi.

Had a question for Mr. Maffei. Other than opportunistically working on the LSXMA discount with the liquidity that you alluded to, what are the other broad options that you think are at your disposal? Like if you're going to come up with an exhaustive list of options, what would be the 3 or 4 options that you have?

I'm not really sure. I could come up with an infinite number of options on what to do, but most of them are not financially attractive because it trades at a discount. I think the right thing to do is to go out of your way to capture the discount. There are several ways we could do that. We have sufficient liquidity between FWON and needs between FWON on the hedging side and LSXM's capabilities on inside, both with the dividend and the financial power we've raised to take advantage of that side. We think this is the optimal way. There are ways which we could accelerate that and perhaps raise more capital, find some holders, split the difference with, do things like that. But we believe attacking it systematically with our available resources, which are sufficient, is the right way.

Do you see M&A as one way to sort of close it?

I'm not sure what you mean by M&A. I don't want to use the stock because that -- issuing the stock at a discount seems like a fool's errand to me. And I'm not sure what M&A do I want someone else to buy into it because they're getting the benefit of that discount. I'm not really sure how that plays to our shareholders' benefits, which is my goal.

Well, I would say, use your liquidity to buy something that's cash generative to give you more firepower to shrink the discount.

So why not just go directly and use my cash to buy the discount itself. Why pay a premium...

Well, because the market will look through the quantum of liquidity that you have, which is very different than having an asset that generates cash flow year in and year out.

I disagree because I'd have to utilize my cash flow to do that. And I assume the combination of what capital we have and where we think we might get with SiriusXM as a more attractive option.

Our next question comes from Matthew Harrigan from Benchmark.

You have a very hardened out balance sheet. But if you go back to 2008, 2009, there are a number of media companies that were pretty lax. It created a lot of opportunities, some dislocations. If we do get a bad economic downturn off the coronavirus and the level of debt within the global economy right now, do you think you're going to have some really good deal prospects across the board as you did 12 years ago? Or do you think that other people are -- been more responsible talking to you as -- as easy as it was 2008, 2009? I know that's a hugely broad question. I apologize, but I wanted to ask because John always have interesting thoughts on the macro and the deal environment.

I think you look and say, to the degree we have strong franchises, which I believe we do, we will suffer less in that kind of a downturn than many other kind of businesses, which are maybe equally strong, but are not viewed as strong, don't have other pieces in place like a management team or something. So that could create opportunity. It also means that we may have to have nerve at a time when having nerve isn't readily apparent or you may be fearful. What's the Buffet line about be bold when others are fearful. And that's not always easy. So look, I'm certainly not wishing for a recession. I would note, as we have noted before, it's hard to buy things unless you either have synergies today or a particular story, both of which are hard in a market where things are rising, put aside corona. And so that may create opportunities. But speculating beyond that, Matthew, is hard just -- will we find the things in this space as we like? Will they be willing to sell? Oftentimes, which you have real problem is, is even if it's trading at a discount, people don't want to move. It takes a while for the sellers to want to -- to come to that realization. They look at the high watermark before and it takes a while to break. So we -- that could create opportunity, but it's no assurance. I think, operator, that was our last question for this call. Thank you again to all who joined and all who participated. Hope to speak to you again next quarter, if not before, and thank you for your interest in Liberty Media.

This concludes today's conference. Thank you for your participation. You may now disconnect.