Welcome to Liberty Media Corporation's 2024 Third Quarter 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 will be recorded November 7th. I would now like to turn the call over to Shane Kleinstein, Senior Vice President of Investor Relations. Please go ahead.

Thank you, and good morning. Before we begin, we'd like to remind everyone that this call includes certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual events or results could differ materially due to a number of risks and uncertainties, including those mentioned in the most recent Forms 10-K and 10-Q filed by Liberty Media with the SEC. These forward-looking statements speak only as of the date of this call, and Liberty Media expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statement contained herein to reflect any change in Liberty Media's expectations with regard thereto or any change in events, conditions, or circumstances on which any such statement is based. On today's call, we will discuss non-GAAP financial measures for Liberty Media, including adjusted OIBDA. The required definition and reconciliation for Liberty Media, Schedule 1, can be found at the end of the earnings press release issued today, which is available on our website. Now I'd like to turn the call over to Greg Maffei, Liberty's President and CEO.

Thank you. Good morning. Today speaking in 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 let me start with a couple of corporate updates. As you may recall, we completed the LSXM-Siri merger on the 9th of September. I look forward to remaining involved as Board Chair and a shareholder at Siri, but Liberty's ties are cut. We also announced updates to our voting and governance at the Atlanta Braves Holdings, and we are transitioning services directly to the Atlanta team. They held their earnings call yesterday. This is the next step in their evolution as a standalone private company, and I want to thank all the Braves management team for their partnership over the years. It's been so fruitful. Now let me turn to the underlying businesses, beginning with the Formula One group and looking at it from some corporate update perspective. We refinanced the F1 date. The Term Loan B was refinanced at SOFR plus 200 bps. We expect to step down to SOFR plus 175 bps upon the deleveraging post the MotoGP transaction. We raised an incremental 850 Term Loan B and 150 million Term Loan A, commitments to fund that MotoGP transaction. All of that is deal contingent. We also issued 949 million FWONK shares, replacing the equity consideration to the sellers in the transaction, so we'll directly pay them cash. We issued that stock at only a 4% discount to the market price, and it was placed with long-term holders. Those transactions complete the necessary funding for our MotoGP acquisition, and we expect F1 leverage to be between 3.5 to 4 times, assuming a year-end close on that MotoGP deal. The F1 season itself remains highly competitive. Both the…

Thank you, Greg, and good morning, everyone. The merger of Liberty SiriusXM with SiriusXM closed on September 9th. Please note that SiriusXM Holdings is presented as a discontinued operation in Liberty's consolidated financial statements. Please also note that due to the timing of the Live Nation release of their reported results, as Greg mentioned, Liberty does not expect to file its 10-Q until Tuesday, November 12th. At quarter end, Formula One Group had attributed cash, liquid investments, and monetizable public holdings to $2.7 billion, which includes $1.4 billion of cash at F1 and $65 million of cash at Quint. Cash balance as of 930 also includes the proceeds from the previously mentioned FWONK share issuance. Total Formula One Group attributed principal amount of debt was $2.9 billion at quarter end, which includes $2.4 billion of debt at F1, leaving $530 million at the corporate level. F1's $500 million revolver is undrawn and their leverage at 930 was 1.1 times. During the quarter, Liberty entered into additional interest rate swaps, and as of quarter end, $2.2 billion of the $2.4 billion of F1 debt was at a fixed rate. In September, F1 refinanced its Term Loan B and extended the maturities of its debt facilities. The Term Loan A and revolving credit facility now mature in September 29, and the Term Loan B matures in September 2031. The margin on F1's Term Loan B was permanently reduced from 2.25% to 2% with a potential to step down to 1.75% if certain leverage is met after the MotoGP acquisition closes. In connection with the refinance, F1 secured incremental funding for the new MotoGP transaction, and all acquisition-related financing is now complete. Reminder that we also obtained commitments for an incremental €150 million Term Loan A and an upsized €100 million revolver at…

Thanks, Brian. It's been a fantastic season at F1. The competition across the grid is captivating odysseys in the stands and on the screen. We just completed a triple header in the Americas with amazing action exciting on and off the track. We have a three-way battle for the Constructor Championship between McLaren, Ferrari and Red Bull. And the Driver's Championship is still very alive as we head into the final races between Verstappen and Norris, following three events in Austin, Mexico and Brazil, in front of huge crowds. It has been great to see the variety of winners this year. Something that is thrilling fans and raises excitement and the participation for a special season in 2025. Looking at our engagement across the season, 5.8 million fans have attended Grand Prix through Brazil. Attendance is up season to date, with sell-out crowds on many races and seven races setting new attendance records including the British Grand Prix, which welcomed 480,000 fans over the weekend, the largest crowd for the season. In the third quarter, we have massive crowds of over 300,000 at the Hungarian, Belgian, Dutch and Italian Grand Prix. We have also had a strong path to play Brazil this season, with attendance up across almost all races and four teams sold out. We have been expanding and innovating our hospitality products like the F1 Garage and the Monaco Yacht to continue to provide premium experience to our fans. Our promoter partners are investing in improved infrastructure and enhanced fan experience with live entertainment and on-site activation. Better fan experience benefits the promoters and the broader F1 brand. In Silverstone Castle with Kings of Lyon and Stormzy drew crowds on Thursday and Friday evenings. In Singapore, they had a festival-style lineup with over 100 hours of live entertainment…

Thanks, Stefano and Brian. I want to clear up one thing I might have misspoken during our corporate upgrade. On the Braves, they are transitioning to a standalone public company. We look forward to seeing you on Thursday, November 14th for our Annual Investor Meeting. You can tune in virtually or join us in person at our new location, Jazz at Lincoln Center. If you plan to attend in person, please make sure to register by Monday, November 11th, as there will be no on-site registration. The link to register can be found on our website. John Mueller and I will be hosting our annual Q&A session. If you would like to submit questions in advance, you can email investorday@libertymedia.com. We appreciate your continued interest in Liberty Media. And Operator, with that, I'd like to open the line for questions.

Thank you. [Operator Instructions] Our first question comes from the line of David Karnovsky with JP Morgan. Please proceed with your question.

Hey, thanks for the question. First for Greg or Stefano, just on Concord, any potential updates you can provide there on progress, tone of talks, or expected timing? And then a second one for Brian. Just on the team payment accrual in the quarter or even year-to-date, the figures do imply a lower full-year figure relative to what you would give in a Q1 or Q2. I just wanted to see if there's anything specific to call out in your quarter that shifted as far as your assumptions on pre-team profit for the year. Thank you.

Stefano, I'll let you take a first cut at the Concord.

Yeah, thank you, Greg. Thanks, David. I mean, as we said, first of all, it's very important to remember that we have still plenty of time under the existing Concord, so there is no urgent rush. Conversations are progressing very well. And as we said before, very, very positive, because at this moment the ecosystem is very solid. And also all the teams and all the levels to quarter have had a huge benefit from everyone in this moment. So the financial security for the future and stability that we have today it's underlining what we are preparing. And as soon as we have everything ready, of course, we will inform everyone. But as always, as I said, we want to do the right thing and consider there's no rush. Everything is progressing well, as we said, and looking forward to confirming to you when we're going to announce something concrete.

So I would just add that, to Stefano's point, the most important thing for everybody, including ourselves and the teams, is to get it right. And so we're progressing at a good pace with the expectation that everyone will sign with glee on their face.

Yeah, and David, on the team payments, as you rightly point out, they've come down just a little bit on a per race basis. I think that that represents some conservatism towards Vegas, because really that's the last remaining uncontracted revenue stream that we have for the year. And it largely reflects typical year two trends that promoters see. So that would be the primary reason.

Thank you.

Our next question comes from the line of Kutgun Maral with Evercore ISI. Please proceed with your question.

Good morning, and thanks for taking the question. Just on Formula One sponsorship, clearly there's a lot of momentum there. You've announced a number of new and expanded agreements. Seems like 2025 is going to be a banner year. And, Greg, I think you commented that you feel good about the pipeline for commercial activity in 2026 as well. Can you help us just think about how meaningful the sponsorship revenue growth outlook can be in the coming years? Thank you.

I'll take a first cut if it's okay, Stefano.

Yeah, absolutely.

Look, you've seen the announcements here that are mostly ‘25 related. It's unusual. One would not expect to be making announcements yet about ‘26 related deals. But we have a lot of activity going on around potential sponsorship, around licensing and other activities. So it's very hard. You're still quite a ways out from those. But I feel good about the progress. I don't know if you have anything, Stefano.

No, I would say for sure. And, as always, we need to remember we were just a couple of years ago in terms of quantity and also quality of our partnership. Now we have grown significantly in terms of quantity. And, of course, now the time is really to check in terms of restructuring the deals in terms of global, regional, official partners, due to the fact that we have a strong interest in our market so far. So there are for sure other that we will exploit in the future. But the only thing that I can confirm, as Greg was mentioning, is really, we are really bringing in the interest that we are having from partners that are high, high, high value in the market. And that will be another leverage because through a B2B business growth within the relationship we can create with all the partners, we can create even more interest in our platform. So, as I said, look back and see where we were and look where we are. And I think that the future will be very positive again.

Yeah, and one thing I would add, almost more towards David's question, that the sponsorship that we've announced for 2025, you've also seen, that's all moving into ‘25. So any expectations that we had for those new agreements for 2024 also have that impact on team payment.

Perfect. Thank you.

Thank you. Our next question comes from the line of Stephen Laszczyk with Goldman Sachs. Please proceed with your question.

Hey, great. Thanks for taking the questions. Two on Formula 1, maybe first for Greg on Media rights, just curious for your latest thoughts on the sports media rights landscape heading into the U.S. renewal next year and maybe how you're approaching your negotiations with ESPN? And then second on Vegas, Brian, you mentioned the Las Vegas Grand Prix being the last uncontracted piece of the puzzle here. Just curious if there's anything more you can say on demand for Vegas heading into the final few weeks and any expectations around revenue and profitability for the event this year. Thank you.

Stephen, thanks for the question. I'll start on the Media side. As I think is well known, we have a partnership with ESPN that runs to the end of ‘25. It would be not atypical that there is some negotiating period with them. I'm obviously not going to disclose the specifics. ESPN has been a great partner. We will look to see what we can do with them, but there's also a lot of other interest from partners, and we'll try and construct the deal that manages to bring both the best economic opportunity for F1, but even more importantly, perhaps, expose our fans the best experience in a logical way across as much breadth as possible. So, as always, we're going to play between economics and reach and hopefully come up with the best result for our F1 fans and ourselves. I'll let Renee talk a little bit about Las Vegas.

Thanks, Greg. Maybe we can just take a step back, focus on what we've been working on here in year two. Obviously, year one, we were very much focused on the quality of the fan experience. Year two has been a lot of focus around cost structure and optimizing our product ladder. We do expect that to continue going into years three and beyond. We made a number of improvements coming into this year, which have allowed us to continue to be dynamic in adjusting products and pricing based on real-time feedback we're receiving from the market. We would note the all-in cost of a Vegas race weekend has come into line with the other U.S. races, and we would refer you to the commentary from our hotel partners, Wynn and Caesars, regarding the continued strength of F1. In terms of recent activity, as expected, we are seeing an uptick in traffic and conversion rates around ticket sales, and we expect that to continue as we get closer to the race weekend. We are, of course, benefiting from the very competitive championship this year, and we have seen success with our recent promotions, including the Lewis Hamilton package and some special offerings that we've run in partnership with our sponsors, Timo and AmEx. We still have room to grow on ticket sales, but we are very excited to see year two come together over the next couple of weeks. And, of course, we remain very positive on the benefits that Vegas is providing to the broader ecosystem of Formula One, including the LVMH deal, American Express, and getting back to the media rights renewal. We're looking to see the benefit of Vegas next year as well when Greg starts those discussions.

That's great. Thank you both.

Thank you. Our next question comes from the line of Ben Swinburne with Morgan Stanley. Please proceed with your question.

Thanks. Good morning. I'm not sure, Greg, how much you would be willing to comment, but Live Nation stock has been quite strong the last few months, some of that, I think, in anticipation, correctly, I guess, of the election outcome. What do you think a Republican DOJ means for the range of outcomes for the lawsuit against Live Nation and its ability to navigate that successfully from a shareholder point of view? And then, at the risk of beating team payments to death, Brian, I think you've shown over 200 basis points of leverage year to date. How are you thinking about the full year versus that? And how much of a swing factor is Las Vegas? Is that sort of a larger than normal variable when you think about your business as we think about the full year? Thanks so much.

Ben, it was nice of you to set up and acknowledge it would be very difficult for me to comment, and I think you caught that. But Live Nation continues to prosper as a business and continue to believe it serves customers well, and there is no basis for the lawsuit, and I don't think that's going to change. Their view is not going to change regardless of the administration. Brian?

Yeah, on team payments, like we said last quarter, Ben, slight leverage, I think de minimis might have been the words I used when we were at 61.9% at year to date Q2, so we're going to stick with that. In terms of Vegas being a swing factor, I mean, if you think about our business, most of the revenues are contracted, most of the costs are contracted. The two big swing factors in any given year are the sponsorship go-get and then Vegas ticket sales because those have the highest volatility. So, yeah, as you get closer to the end of the year, you start to get more clarity on both of those, although Vegas being a last-minute market, as we've pointed out many times, there's lots of work to be done as you enter Q4. So it can be a swing factor, but we continue to be optimistic here.

Thanks a lot.

Thank you. Our next question comes from Ryan Cardiff with UBS. Please proceed with your question.

Great. Thank you. Not to look too far ahead, but I guess how are you thinking about the opportunity for race promotion and the race calendar in 2026? Is that a year when we could start to see some new venues added to the calendar and just more broadly how you're thinking about your positioning for renewals given the elevated attendance you've seen over the past few years? Thanks.

Stefano, do you want to take a cut?

Okay. Thanks, Greg. Of course, ‘26 race promotion, as you know, we have Madrid that will be part of the calendar. We have long-term deals on the other side, as you know, that is represented the vast majority of our situation today, and these allow us, of course, to work with them in order to promote better quality, to make sure that what we want to offer to our customers to level is the highest standard. In ‘26 and further beyond, of course, we have some news to share very, very soon with regard to the possibility in the midterm to have some rotational European Grand Prix and some other new options coming later. And this is something that, of course, we will clarify in the due course. It is true that we have a large demand of even new possible venues that want to come in, and our choice will be always balanced between the right economical benefits that we can have as a system and also to leverage in the growth of the market that we can see potential will be beneficial for us to grow even further our business. So it's something that we are managing in the right way. And thank God today, we have a quality problem to handle. That was not the case just a couple of years ago.

Great. Thank you.

Thank you. Our next question comes from the line of Bryan Kraft with Deutsche Bank. Please proceed with your question.

Hi. Good morning. And two, if I could, first on media rights. Are there other major markets in the Americas that have media rights contracts coming up for renewal around the same time as the U.S.? And might we consequently see in America's media rights deal rather than just the U.S. contract this time around? And then also related to that, how has what you value from your U.S. media partner changed since the renewal with ESPN given just how streaming has become such a larger part of the business now? And then just separately sort of a follow-up on Vegas, maybe to ask a little more bluntly, I mean, it sounds like promotion revenue is clearly going to be up, but ticket prices are going to be down. So probably overall ticket revenue is going to be down. Is that a fair interpretation of what Renee was going through before? Thank you.

So if it's okay, Stefano, I'll take a cut on the media. Look, we would love to find a partner who would take on more markets. That's always very interesting and make ease of perhaps for them and us. There are no huge renewals in the Americas that make it logical, not to say it wouldn't happen, but I don't think it would be an enormous economic swing in any case if we bundled with somebody for all the Americas. We certainly have had rumors of larger deals, and in some cases we certainly do have regional deals, but I'm not sure that's going to work for the Americas that way, that there's some partner who is going to take all of it that way. As far as streaming, obviously we see the rise of streaming. We've noticed across a couple of our businesses, we certainly notice. The reality is we have a great stream product in F1 TV ourselves, which has shown tremendous growth, and we would look to consider whether a media partner how we interacted with them on both a linear side if it existed and the streaming side and how our F1 TV fit in. But clearly streaming is going to be a more major component of all sports rights packages going forward. Renee, do you want to comment?

Thank you. And on Vegas, or sorry, go ahead.

Sure, yes, happy to. So I guess just to reiterate, we generally do not give race-specific economics, but with regard to your question on ticket revenue, aggregate ticket revenue will be down from what we originally budgeted in Q1. However, throughout the course of ‘24, we have also continued to reduce costs from what we budgeted in Q1. So I would say that we're working hard to focus on getting the best profitability that we can from Vegas, and again we would refer you to the broader benefit that it does bring to the F1 ecosystem.

Thank you.

Thank you. Our next question comes from the line of David Joyce with Seaport Research Partners. Please proceed with your question.

Thank you. Two little questions, please. One was just a little bit more on the media rights. Just given that some of your recent deals have been extended beyond the typical kind of three-year period we used to see, and other sports leagues have done that as well, just wondering how you're thinking about your objectives with these upcoming rights deals? And then the second question is on just a little one on the accounting of how you'll be recognizing the F1 movie next year? Thanks.

So I think on the media rights deals I outlined some of our goals in terms of growing reach and making it a great experience for our fans, as well as payments to us. So I think all of those goals remain the same. We've chosen market by market longer or shorter deals based on where we stood in the market, what our growth was, what our partners were doing, and what we wanted to go. And obviously one of the reasons we cut a shorter deal in the U.S. last time is we were confident and really betting on ourselves that we would get a larger renewal down the road. That did work the first time we did a three-year deal. I'm optimistic it will work again. I'm not projecting whether the deal will be shorter or longer. I would note it's likely, particularly if you went to another partner, which I'm not sure that's going to happen. You probably would cut a longer deal just because that partner would want to have some period to grow into it and work together. But that's just observing on the media market. That's not projecting what we will or will not do on the U.S. And on the F1 movie, we've been paid in 2023 and 2024 for their use of the paddock building and having access to certain races. I think going forward the revenues that you would expect there would be pretty small.

Okay. Thank you.

Our next question comes from the line of Barton Crockett with Rosenblatt Securities. Please proceed with your question.

Okay, great. Thanks for taking the question. I guess a couple if I can. One is turning to Vegas, looking beyond the race. I know there's been some hope that the off-season could be monetized at Vegas and that could help maybe the margin profile. And I was just wondering if you could give us an update of your progress there. Are you really doing anything meaningful in the off-season? You mentioned the film. I'm just wondering if there's anything else meaningful happening.

Sure. So we are working hard to launch the year-round business beyond just the event conference segment. Beginning in, I'd say, late Q1 of ‘25, it's going to be actually very much focused around educating new fans, bringing the new fans deeper into the sport. Obviously Las Vegas is a destination. And we want to try to leverage that and bring these visitors to learn more about Formula One, coming deeper into the U.S. culture. There will be a carding business there. There will also be a fun, interactive experience, sort of 3D, 4D type offering, which will also include a little bit of the legacy F1 exhibition type educational experience as well. And then we will be looking to package those experiences to enhance the event conference space. So a lot more to come, and we hope to be giving more specifics around that business during race week.

Okay. And then, you know, if I could just follow up also on sponsorships. Just to be clear, with all these announcements starting in 2025, it sounds like 2025 is going to be a strong year for sponsorship. But I was just wondering if you could comment on that more directly. Is that what we're seeing?

Yes.

Okay, great. Thank you.

It's going to be a good year, Barton, you called it correctly.

Okay. Thank you.

Thank you. Ladies and gentlemen, our final question this morning comes from the line of Jonathan Navarrete with TD Cowen. Please proceed with your question.

Hey, good morning. Just my question is around the new markets and expansion. Are there any plans to expand the race calendar, especially in emerging markets? And what I'm trying to get at is, I'm trying to get a sense of what your approach to balancing market expansion while maintaining the exclusivity or the allure of Formula 1?

Stefano, do you want to talk about expanding race calendar? I think I know the answer, but I'll let you go off on it.

No, thanks, Greg, I would say. As we said, we believe that the balance we have in terms of numbers is the right one. So 24 is the balance number that we feel is the right to keep exactly what you say, Jonathan. And I do believe that all the propositions that are coming on our table is just giving us the possibility to make even the better choice for our future. So, as always, we need to be balanced, knowing that we cannot follow only the pure direct financial proposition because that is different from region to region, but it's up to us to propose to our stakeholders the right choice. And I think that we are in a good momentum to make sure that the strategy for the future is even stronger. And that's why we are so confident about the fact that this will help to enhance our platform on the sport, on social, and business perspective.

Thank you.

So I think that, operator, we're done on questions, and we're done with the conference today. As I mentioned, we look forward to seeing many of you either virtually or in person next week at our Investor Day. Thanks for joining and your interest in Liberty Media.

Thank you. This concludes today's conference call. You may disconnect your lines at this time. Thank you for your participation.