Atlanta Braves Holdings, Inc. (BATRK) Q2 2021 Earnings Report, Transcript and Summary

Ladies and gentlemen, thank you for standing by. Welcome to the Liberty Media Corporation 2021 Q2 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded, August 6. 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 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-K and 10-Q or Liberty Media Acquisition's Form S-1 registration statement filed with the SEC. These forward-looking statements speak only as of the date of this call and Liberty Media and Liberty Media Acquisition expressly disclaim any obligation or undertaking to disseminate any updates or revisions to any forward-looking 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 statement is made. 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 available on Liberty Media's website. Now I'd like to turn the call over to Greg Maffei, Liberty's President and CEO.

Thank you, Courtnee, and good morning to all of you. 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 beginning with Liberty SiriusXM, we continue to repurchase shares purchasing $141 million across LSXMA and the K shares from May through July. The discount remains, and we, therefore, repurchased at a look-through price on SIRI of just over $4 per share. We continue to take advantage of the discount opportunity, and I expect we will continue to do it going forward. And our ownership of SiriusXM is 78.1% as of July 23. Looking now at Sirius itself, they had an outstanding results for the quarter, another beat and raise with record low churn at 1.5%. EBITDA also set a new quarterly record and new car penetration increased to 82%. We have a continued focus on growing the already strong presence in the car. There are 140 million vehicles on the road today which are enabled for SiriusXM and the 360L enhanced feature set continue to evolve based on data received from users. We're also growing engagement outside of the car and the rebranded SXM app is gaining traction. The variable margins are as good or better than satellite. I encourage you to get it today. And please don't forget, we are growing our advertising platform with $150 million listeners, the largest digital audio ad platform in North America. With all these combined platforms and capabilities, we believe SiriusXM presents a compelling comprehensive offering for talent, media and social brands to create and monetize audio experiences. So turning to Live Nation. The reopening accelerated led by outdoor concerts in the U.S. and the U.K. with other countries coming along as vaccination levels increase. Festivals and amphitheaters are the focus for the summer, led by Lollapalooza, Rolling Loud, the Hip Hop festival in Miami, Latitude in the U.K. Between them, they all had 750,000 fans, which is back to pre-COVID levels. Live Nation is helping to put on the New York reopening concert in Central Park on August 21. And Veeps, our streaming service, continues to be an incremental live revenue stream for us with the Bob Dylan show later this month. Live expects all segments to return to AOI profitability in the second half of '21. And all signs continue to point to a great 2022, and we expect 2022 activity and financial results will exceed 2019. Turning now to the Formula One Group. There was phenomenal racing in the first half of the season up until the summer break with a fierce battle between Lewis and Max. Among the rest of the drivers, there is a tight competition for third and the Constructor's Championship is also highly competitive with Mercedes and Red Bull going wheel to wheel, and McLaren and Ferrari battling for the third spot. We remain impressed with the way Formula 1 continues to navigate the continued challenges from the pandemic. I have lost count of how many times we have made changes to the 2021 calendar, but we continue to move forward. And the Formula 1 team continues to plan for the known and unknown variables that come at them. We did welcome a full crowd at Silverstone; 356,000 fans over the weekend, which was tremendous. And we remain confident in our ability to have a full '23 race season. We also had our first sprint event there, which was a resounding success. We make meaningful progress on sponsorship, we continue to do. And we're consistently announcing new partners. And if you haven't already, I encourage you to tune into the Business Breakdowns podcast with Stefano, where he's quite articulate about the future of the business. The link to it is on our IR homepage. The Braves, baseball fans nationwide, but particularly in Atlanta and here in certain parts of Colorado, were devastated to see Acuña end his season early. We do wish him a speedy recovery. The team has been battling despite setbacks. We had an impressive comeback last night to sweep the Cardinals and the Brains are now over .500. Truist Park fans are back in a big way. We expanded the capacity of 100% in early May. Baseball revenue per home game is up in the second quarter compared to 2021, despite only partial capacity early in the quarter. Ticket sales, concessions and retails per caps are all trending very favorably. We are having trouble keeping jerseys in stock, a high-quality problem. The Braves do lead Major League Baseball in total attendance at over 1.5 million and average attendance at over 29,000 per game. With our financial strength, we are reinvesting in on-field talent before the trade deadline. You saw us do that rather. And at the Battery, development revenue continues up in the quarter due to rental income for new tenants for TK and Papa John's and the end of COVID-related modified rents. You'll also see the Phase 2 office tower. We are confident it will be fully leased in the near term. And thyssenkrupp will move into their new headquarters later this month. Finally, we continue to make good progress on LMAC, the SPAC. We think the trends in the SPAC market, which are challenging for many, actually played to the benefit of Liberty. With that, I will turn it over to Brian for more on our financial results.

Thank you, Greg, and good morning, everyone. Liberty SiriusXM Group had attributed cash, restricted cash and liquid investments of approximately $418 million, excluding $1.1 billion of cash and restricted cash held at SiriusXM. We also have $1.1 billion of undrawn margin loan capacity at the parent level related to our SIRI and Live Nation margin loan. Note that a portion of our cash will be used later in 2021 to repay our 2.25% Live Nation exchangeable bond. Based on the fair value of the liability at quarter end, the amount of cash used would be $517 million. As of August 5, the value of our SiriusXM stock held at Liberty SiriusXM Group was over $20 billion. And the value of the Live Nation stake was nearly $6 billion. We have $3.2 billion in principal amount of debt against these holdings. Total Liberty SiriusXM Group attributed principal amount of debt is $14.1 billion, which includes the $9.9 billion of debt that's held directly at SiriusXM. Formula One Group had attributed cash and liquid investments of $1.7 billion at quarter end, which excludes $537 million of cash held directly at F1. The corporate cash balance includes $384 million that was received from LSXM in Q2 related to settling out the call spread. Total Formula One Group attributed principal amount of debt was $3.4 billion, which includes $2.9 billion of debt at F1, leaving $546 million at the corporate level. F1's $500 million revolver remains undrawn. While we are still in the period of a covenant waiver at F1, target leverage for the business remains 5 to 5.5x. Please note that during the 3 months ended March 31, 2021, F1 began reclassifying certain components previously reported and other revenue into primary F1 revenue to better align with the way it currently evaluates the business. Components reclassified in the primary F1 revenue include F1 TV subscriptions, F2 and F3-related fees, broadcast origination and support fees and digital advertising among others. Additional detail, including the impact of the revenue reclassification for the years ended December 31, '19 and '20, can be found on Schedule 3 of our earnings press release posted to our website. Lastly, to the Braves. At quarter end, the Braves had attributed cash, liquid investments and restricted cash of $231 million and attributed principal amount of debt of $694 million. Liberty and our consolidated subsidiaries are in compliance with their debt covenants at quarter end. And with that, I'll turn it over to Stefano to discuss Formula 1.

Thank you, Brian. The 2021 season is exceeding expectations across the board. Each weekend on the track brings drama and the unexpected. The Hungarian GP did not disappoint as Ocon claimed his maiden victory and Alpine's first as the newly branded team, and Alonso impressed with this expertise holding off Hamilton for numerous laps. The rivalry between Lewis and Max continues to build in their tight race for the championship, which culminated with the incident at Silverstone, and with the unpredictable outcome on Sunday, Hamilton and Mercedes enter the summer break slightly ahead in the standings. And the battle for third is tight between Norris, Bottas and Perez. The contest among the constructors is just as fierce between Red Bull and Mercedes for first and McLaren and Ferrari for third. Formula 1 is living up to the promise and the fans are responding. We had a full crowd at Silverstone, hosting 356,000 over the weekend with 140,000 on Sunday. This sort of attendance is unrivaled in sports. Attendance was certainly aided by the tight battle for the Championship, the inaugural F1 Sprint event that produced compelling racing, and the return of the Paddock Club. On the Sprint, the first of 3 events this season, we have received overwhelmingly positive feedback from the teams, drivers, and fans, and certainly this provides additional opportunities for our promoter, media and sponsor partners. We will continue to discuss any lessons learnt from the format with the teams, but the fundamentals are strong. We believe this can be expanded in 2022 and look forward to the next Sprint in Monza. Fans are engaging across all platforms. We have data through to the British Grand Prix and on the digital front, unique users for the F1 website and app this season are up over 80% compared to 2020. Social engagement continues to grow, reaching over 40 million social interactions for the British Grand Prix. And we've seen this growth reflected in our total number of those following F1 on social media, which now stands at almost 42 million. TV audiences are tuning in, and we have seen strong growth over 2020 and 2029 in many markets, notably, France, the Netherlands, Norway, Spain, Sweden and the United States. F1 TV remains a great way for fans to catch all the actions of the race weekends. Peak concurrent views for race days have consistently been more than 2.5x higher than the 2020 season average with minutes viewed over a race weekend, also up by more than 2.5x versus last season. We are now 11 races into our planned 23-race season. This time last year, we had only completed 4. 2021 has presented some of the same challenges as 2020, along with some new ones. I'm proud of our team and our partners as we continue to navigate the landscape. On our last earnings call, the Canadian Grand Prix had just been replaced by the Turkish Grand Prix. However, due to travel restriction related to Turkey, we had to quickly pivot again and secure back-to-back races in Austria by moving the French Grand Prix a week earlier. Ultimately, we were still able to secure slot for Turkey later in the calendar as a replacement for the Singapore Grand Prix. All of these changes require great nimbleness, creativity and hard work from our partners and the countries in which we race and live. Formula 1 has a demonstrated ability to manage the logistics of COVID restrictions in multiple countries and has set the gold standard in testing and effective protocols to deal with positive cases. Through the British Grand Prix, we have conducted 56,000 tests on drivers, teams and personnel that produce 38 positive cases for a positivity rate of 0.06%. Through these finely tuned operation, we feel confident in our ability to safely deliver a 23-race season. Demand to host Formula 1 races persist at an all-time high as evidenced by venues that were quickly able to finish slots in 2021. And we will still have interest from new venues that are now currently part of the 2021 calendar and existing venues that are open to hosting a second race. As different parts of the world are at various stages of emerging from the pandemic, governments view an F1 race as an exciting way to return to the public stage and welcome visitors back. We have made tremendous progress in 2021 in sponsorship and the momentum has continued since our last earnings call in May. Crypto.com joined as a global partner and inaugural partners of the F1 Sprint series and will become the official cryptocurrency sponsor and as the NFT partner of F1. They will present a brand new award that will be announced ahead of the Belgian Grand Prix. We have also welcomed BWT as the title sponsor of the Austrian double-header and last week announced that they will become F1's official water technology partner, working with F1 to deliver a single-use plastic-free paddock by 2025. Workday signed on as the regional finance and HR enterprise partner of F1 across the UK and Germany. Finally, we completed a multi-year extension to our Fanatics deal covering e-commerce and manufacturing, following outstanding performance on our F1 online store. Sales on the official online F1 store grew by more than 40% in 2020 and accelerate to triple-digit growth through the first 6 months of 2021. The U.S. market is the largest in terms of sales on the F1 side, highlighting the increased relevance of the sport in the country. Furthering our goal to expand our reach, we announced that Formula 1 car and liveries for all 10 F1 teams will feature in the video game Rocket League's latest Fan Pack, beginning a multiyear partnership. We are less than halfway through the 2021 season, but planning for 2022 has been ongoing for some time. As mentioned before, there is a high demand for venues to make 2022 calendar, and we hope to announce the provisional calendar in September, October. We can confirm that the much anticipated Miami Grand Prix will happen in the first half of May. Demand for these tickets is high, even though sales that have not officially started. We also look forward to our move to St. Petersburg for the Russian Grand Prix beginning in 2023. These iconic cities will provide a stunning backdrop for Formula 1. We have previously discussed the foundations that were put in place over the last few years with cost caps, regulations and the new Concorde agreement, which have created a sustainable and flourishing ecosystem for the sport. These, along with the compelling products on the track, has created interest and opportunities across the board. This includes ongoing discussion at the highest level with engine manufacturers who see the brand value in Formula 1 as well as opportunities for the new engines and development of sustainable fuels. Along these lines, we continue to develop programs under Formula 1's #WeRaceAsOne initiatives. For the British Grand Prix, we delivered a carbon neutral broadcast. We plan to take these learnings as we work towards our goals for ensuring all F1 events are sustainable by 2025 and on our way to become net-zero carbon by 2030. We have also seen great interest from OEMs in our plans for the next Formula 1 engine to be 100% sustainably fueled and those positive discussions are continuing. For our focus to increase diversity and inclusion across Formula 1, we have recently announced commitments relating to 10 engineering scholarships for underrepresented groups and apprentice and internship programs within the F1 organization. We believe that as a truly global sport, we can make a difference by ensuring that we are a diverse and inclusive in our own community as the communities we serve around the world. We thank Chase for his general donation to funding these scholarships. As we head into August break, I want to thank everyone at Formula 1, including all of our drivers, teams and business partners for their dedication and hard work so far this season. Enjoy some much deserved time off,, and we look forward to resuming racing in August 29. Avanti Tutta: full speed ahead. And now I will turn the call back over to Greg. Thank you so much. Bye-bye.

Thank you, Stefano and Brian. In very exciting news, our investor meeting will be held on Thursday, August 18. The full experience will be offered in person at the New York Time Center and virtually. Please save the date. Additional details will be provided soon. Please note that all in-person attendees will need to be fully vaccinated against COVID-19. We appreciate your continued interest in Liberty Media and hope you all stay safe and healthy. And with that, operator, I'd like to open the line for questions. Thank you.

[Operator Instructions] And our first question will come from Ben Swinburne with Morgan Stanley.

Greg, just to clarify, is it August 18 or November 18?

November 18. Did I say August?

You did, yes, which I thought you meant November. So thanks for clarifying and exciting for in person. Two actual questions, if I could. Greg, just looking at the discounts, Liberty Broadband, I know this isn't Liberty Broadband call, but I think it's relevant for Liberty SIRI. That discount has not improved, probably widened even since that buyback kicked into substantial levels. And I'm just wondering what you take from that as we think about the opportunity to sort of go after the discount at Liberty Sirius since you're going to -- and SIRI will have access to a lot more capital at some point over the next quarter or 2? And then you guys commented in the release about Formula 1 TV contributing to revenue growth. I feel like that product went from something we were really focused on as a business to sort of fading. And now I'm sort of wondering, given COVID and just the popularity of the sport increasing, what's the vision there? Is that something that you guys are investing more in? Do you see that as a big revenue opportunity or is it more of an enhancer of kind of the core rights and maybe a driver of engagement? Just maybe you can update us on how you're thinking about the OTT streaming product at this point.

Sure. Thank you, Ben. First, on the discounts. Well, I happen to be well aware since we have a Liberty Broadband call, what's going on there. And we actually -- during the quarter, for example, Charter was up about 15% and our NAV per share of Liberty Broadband of Charter was up about 17% because we were able to buy as much as we were able to buy this year at a discount. We are actually driving the NAV of Charter -- excuse me, of LBRD up substantially faster than Charter itself. So look, I think it will have its desired result. Good things come to those who wait. We are not necessarily hoping or suggesting everyone's going to wait forever, but we believe this will ultimately pay to our benefit. And we can already see those results mathematically in terms of what's happened to the NAV per share of LBRD compared to the underlying Charter. So I think we'll go at it. And as you point out, we're going to have more capital, we expect in the coming months, and we'll see what we -- how it responds. On the vision for F1 TV, I think it has evolved. I'll let Stefano comment as well. But I think just the sheer heft of the amount of content we have caused us to think about whether that was going to be a meaningful way to connect with our customers or an enhanced way, i.e. would it be the primary way or an enhanced way. And I think it still is going to be an enhanced way and how much of it becomes incremental revenue, how much of it becomes a way to join with our customers, that will evolve. But it's -- you've seen what's happened, for example, with WWE going into Peacock and obviously, the scale of content being much higher than us. I think it's very difficult for a point service to think you're going to replace, but we have currently with scaled aggregated services, whether those are linear or whether those are scaled aggregated digital services. So one way or another, I think that is -- that those are going to be the primary way we get paid, but we will find other ways to add value and revenue through things like F1 TV. Sorry, I hope I didn't steal your thunder there, Stefano.

No, Greg. I think that you're perfectly spot on. And I think, Ben, if I may add on what Greg has said is F1 TV has a huge potential to make sure that we can enhance the experience with more and more content to our customers. And we are exploring projects together with our promoters to give real and live content we can offer in a special position to the ones that attended to the event and then extend the appetite of having unique content in our platform in order to grow that experience because that's really an incremental way of adding more and more appetite and content for people that love Formula 1. On the TV, right, generally talking, I mean we have the privilege of -- many of our major deals have been already completed. And so we are in a situation where we can really see the evolution on the TV, right, because this is something that is not uniform. It's different from region to region, and the OTT development will for sure have a big hit in the future. So we are in a privileged position of having the biggest content really ready on and then having the chance to exploit what we are producing today in order to be ready at the right time to maximize the fact that Formula 1 is really in a great shape today.

And up next, we'll take a question from Bryan Kraft with Deutsche Bank.

I have one for Stefano and one for Greg. Greg, curious if there's anything from the infrastructure legislation that could be an opportunity or risk for Liberty that you're watching, whether it's something for an existing portfolio company or a new opportunity for Liberty to invest behind? Sort of an open-ended question, but curious on your thoughts there. And then Stefano, sports betting was one of the opportunities that Chase had identified when he first became CEO. And I'm just wondering if you could give some perspective on that opportunity for Formula 1 going forward and any plans or activity that you have going on in the sports betting area?

So touching first on the infrastructure bill, I think we're full on LBRD questions in a way today already in the LMC call, but that's all right. We'll -- I think there are some opportunities that will arise. Most of them are going to arise at Charter or GCI. And if you look at our businesses, I don't think we're going to see a massive change at SIRI. I guess, if you think about greater connectivity, in general, that's probably a plus for our 360L, but it's on the margin. It's not like a massive opportunity, I think, in and of itself. It's just the continuation or acceleration of ongoing trends. The rest of the businesses Formula 1, the Braves, not as -- Live Nation, not as obvious to me how the infrastructure bill is helpful. Obviously, at Broadband and Charter and GCI, there are both opportunities there in terms of increasing customer supply of funds to buy broadband, increasing money around broadband, probably helping us extend some of our broadband footprint, but there are also some threats there where new entrants may be encouraged. So pluses -- gives and takes in that bill, I would say, from the perspective of Charter and GCI. Could have been far worse for some of the initial proposals. I think the ones in terms of the threat level are way down from what might have been initially proposed about preferences for fiber over coax, preferences for overbuilds, preferences for munis -- muni bills, all of those things are muted compared to what might have been.

If I may, Bryan, on your question with regards to betting, first of all, we don't have to forget that we have already one partner is 188BET that we are working together. But as you know, the area of betting is an area with a lot of issue depending on the region and the country. And we need to make sure that everything is really clear on that side. For sure, it's a big opportunity that could be explored in the future. So once again, working in progress to make sure that the next step of our partnership will be the right one in terms of dimension, opportunity that could be good for our sport.

Next, we'll hear from David Karnovsky with JPMorgan.

On Formula 1, Stefano, can you discuss in more detail your takeaways on the sprint raise format, both in terms of how you think it was received by the fans but also by your partners on the race promotion and television side? And I think you mentioned maybe expanding the format next year. Any sense for how many races you roll this out to? And then maybe one for Greg. You mentioned good progress on LMAC. I know you're somewhat limited in what you can say on this, but is there any more color you can provide on it or your position in the SPAC market overall?

Thanks, David, for the question. Well, first of all, when we talk about big sprint format, the idea was to offer something different in order to make sure that there was something new that we can offer to all the stakeholders in Formula 1. We had said that we wanted to do 3 tests. One has been done in Silverstone, the other one will be in Monza and the other one will be at the end of the season in Brazil. At the end of this complete test, we're going to have a plan in order to see what will be the next step. What I can already say is that after the first sprint event in Silverstone, the response that we have, both from the drivers, from the teams, the media has been really positive. And also for the promoter because if you think that every day, we have something new to say. People come on the track on Friday where they're really tuned for the first qualifier on Friday. So the outcome of the first event has been dramatically positive, if I may say. And it's great because that grows attention, interest to TV and also partners because, thanks to that, we have brought in, for example, Crypto.com. And so we have already seen our financial interest being positive. Therefore, there has been, if I may say, good, good sign, a very, very, very positive sign, and we want to restate what we said. We're going to have a full -- the briefing, if I may say, of that at the end of the season. We have a plan for the future, of course. We are developing that. We are fine-tuning some of the comments that we received. And what I can say is that, if we move, as we should, I do believe so, in that direction in the future, for sure, there will be not every race. We have ideas to create a special promo for certain standard of Grand Prix and certain special awards that we want to offer and add to the already incredible platform Formula 1. So very, very positive comments after the first exercise and ready to prepare. At the end of the 3 events, a proposal that can bring home, what we can see, hopefully will be big step versus a different future of Formula 1 also in a sporting proposition.

And moving on, we are taking a question now from James Ratcliffe with Evercore ISI.

One on LSXM and one on Formula 1, if I could. First of all, on Formula 1 and couple of recent sponsorship deals. Can you just give us an update on how many remaining sort of verticals you think are really available to you and are attractive opportunities? And secondly, on Liberty Formula One, you bought back 100 -- excuse me, on Liberty Sirius, you brought back $140 million in stock in the quarter. You presumably are going to be able to get the cash flows from Sirius tax-free about the end of the year. Why not accelerate the buyback now? I mean, you've got, what, $1 billion in debt or a little bit more than that directly in margin loans and the massive value of the Sirius stake. Why not take that buyback activity up to -- ramp it up now rather than waiting until you have the ability to get the cash tax free?

Stefano, I'll let you answer first. Yes. Go ahead. You want to comment on the sponsors?

Thank you, Greg. James, I mean, from my perspective, we have seen already a great momentum this year in the sponsorship growth that is connected to all what we have seen in the championship. But going to your direct question regarding to how many verticals you believe there could be still open in our global partners, I would say, maybe 1 or 2. And maybe the one on which we are working on that is very important for us is the technological provider. That is something related to our possible commercial offer that we want to exploit to a great broadband that can be available around the world. That's mainly, I would say, the most important one that I think will be important for us to work on.

If I could add on sponsorship, I think it's an evolving market. And we certainly see new categories and technology, as Stefano pointed out, is one. When we bought the business nearly 5 years ago, I don't think we thought about a crypto sponsorship. I don't think that was really on our horizon, and now it's a meaningful number. So I think new categories are created, things change. BWT was a team sponsor. Now they're one of our sponsors. Things move around. So I'm not sure it's a static that is able to answer that is this many or this number. I think it moves around, and there are lots of opportunities still out there, and it's our challenge to go in and pursue them. On the question about LSXM, I think we have been ramping. We do have a plan. We will have more capital as it comes in. I think given that our -- the way to support the debt at LSXM is primarily with flows from Sirius recognizing we don't have an operating business there. We've been relatively cautious with margin debt and the like, and we've been relatively constrained in how much exchangeables we could do with this x amount of liquidity. So I think we'll -- you'll see a plan that's probably more aggressive recognizing what's coming, but those have been some of the constraining factors.

And our next question will come from David Joyce with Barclays.

A couple of questions. One on Formula 1, I was wondering, given all the fluidity in the race schedule this year, have the race promotion contracts been renegotiated based on the regulatory allowance of capacity or have they been fixed with the presumption that you still have -- you have some royalty coming back later same -- next year? And kind of secondly on that, would you be to kind of a normal sleep period do you think in capacity and race promotion revenue level by the fourth quarter? And then a second question on Liberty Sirius. It was kind of tax related in terms of your options. Hypothetically, if you were to sell into a Sirius share buyback program once you're over 80%, would your sales of the stock somehow be tax free or is there any leakage from that?

Greg, on the first...

So I'll -- go ahead, Stefano. You're first, Stefano.

Okay. Thank you, Greg. David, as you said, the fluidity is really the thing that we have to manage this year. And we are heading into the second part of the season where that will be a topic. The good thing is that it's a situation we have to manage is unique, different because every agreement is different from the one that we have, country by country, place by place. I have to say that, of course, the effort is always to make sure that from all the points that we need to manage and of course, also on the financial side, is to optimize the dimension of it and minimize any negative possible impact we can have. We have agreement where, honestly, the number of attendees doesn't mean anything to us. Some other we are working together to see what would be the benefit if we can bring home depending on the situation. And we are working closely with all the promoters and the authorities to make sure that we can really make the right plan for the future, knowing that, as Greg was saying before, the situation is evolving continuously. And the thing that we have to do is to make sure that we are able to react in the right way. And the thing that we can say so far today that we didn't have any material cash impact on our numbers.

I agree with Stefano's comments. And obviously, we work with our promoter partners to maximize the audience allowable and safely at each race and that will impact the revenues that occur that will impact. Obviously, there are -- it's a changing market every day. Delta, Lambda, we will see what happens. We're, obviously, designed to maximize attendance in the safest way possible. We skipped over one comment about LMAC and it was -- we were so excited about Formula 1. I think, it's probably what happened. Look, obviously, there's a limited amount I can comment. Our observations about the SPAC market are probably consistent with most of the investors and analysts on this call. It's gotten a lot harder to raise SPAC money, and it's gotten harder to get combinations done because the pipe market is particularly difficult and the discounts expected from fair trading value are probably widening. All of those have meant that weaker players have probably been washed out. We know of deals that were proposed at x price that didn't get done at any price, not just below the proposed price. And I think that trend, I'd like to believe, favors us, both because we have a very strong investor group in LMAC, the SPAC, who have expressed willingness to do a pipe with us, but also because unlike many sponsors who are just playing for the promote, we are putting up at least $250 million into the deal and could put substantially more if we found the right opportunity. And there our willingness to effect be a pipe investor -- alongside pipe investors, I think, is a comforting thought to many. I have recently been approached by numerous firms about, "Hey, we'd love to come along with you and partner on a deal, et cetera." So I think there's plenty of capital available for us for the right deal. The right deal is likely to involve something where there is more capital required to scale compared to a normal IPO or something like that, and it's probably partly due to COVID-related recovery or the like. So all of those are speculations about what we'll see. We have seen a lot of those kind of opportunities but have not found the perfectly priced one or opportunity like yet, but I'm confident we will. On the question about selling into the buyback, our tax treatment will vary depending on whether we sell to the company, we currently have no arrangement to do, or whether we sell into the market. And one -- the first would be -- the latter would be taxable to former would be tax-free.

And up next, we'll hear from Jason Basin with Citi.

I think this is going to be an easy question for you to answer. But if I just fast forward a bit and we get to the point where there is some sort of equity exchange or takeover between LSXMA and SIRI, where we get the one operating business and one security. Is it obvious to you which one of those is the surviving entity? Can you just talk about the pros and cons?

Thank you, Jason. No, I don't think it's a known -- I'm not sure it's an easy question, Jason. I'm not sure it's known. You could imagine scenarios where an effect SIRI becomes an operating subsidiary of Liberty with its own tracking stock or you can imagine scenarios where there was effectively an RMT, Reverse Morris Trust, where our shares were subsequently spun out to our shareholders and SIRI became a freely traded company. Both of those are imaginable scenarios, certainly.

Okay. So no real constraints to go either way from your perspective?

No.

And our last question will come from Matthew Harrigan with Benchmark.

Now [indiscernible] where I get to the default raised question. Stepping back from the phrase and looking at MLB. Overall, you've got good new TV contracts, 28, albeit pretty fast [indiscernible] even the nonbaseball team, plus you have some real issues over a longer period of time with ratings for the sport and the competition in the field. Do you think Manfred and the owners group overall are amenable to really draconian measures like maybe even moving back the pitcher's mound to get more excitement into the game? I know that's kind of a fourth question, but it translates to financials over a period of time as well.

Thank you, Matthew. We remain super-excited about the Braves. There are continuous work led by commissions, which involve both owners, representatives, MLB representatives and player representatives to look to make the game even more exciting. A lot of that revolves around speed to try and shorten the playing times. You've seen innovations like double-headers going to 7 innings, at least for this period of time. You've seen innovations around -- during COVID about starting a tie game, starting runners at second base, things like that. So there are certainly attempts to speed things up. And I'm not convinced moving the pitcher's mound is going to be happening anytime soon. But all things are open and possible. I think people respect the tradition of the game, but also want to create as much excitement as possible, and that balance will be -- try to be maintained. Thank you to our listening audience and the questioners. We hope to speak with you next quarter, if not sooner, and at our investor meeting in November, if there was any doubt. Thank you very much.

That does conclude today's call. We thank you for your participation. You may now disconnect.