Welcome to the Liberty Media Corporation's 2024 First Quarter Earnings Call. [Operator Instructions] As a reminder, this conference will be recorded, May 8. I would now like to turn the call over to Clare Adams, Senior Manager, Investor Relations. Please go ahead.

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 and Atlanta Braves Holdings with the SEC. These forward-looking statements speak only as of the date of this call, and Liberty Media and Atlanta Braves Holdings expressly disclaim any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained herein to reflect any change in Liberty Media or Atlanta Braves Holdings' 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 certain non-GAAP financial measures for Liberty Media, SiriusXM and Atlanta Braves Holdings, including adjusted OIBDA and adjusted EBITDA. The required definitions and reconciliations for Liberty Media, SiriusXM and Atlanta Braves Holdings Schedules 1 through 3, can be found at the end of the earnings press releases issued today, which are available on Liberty Media and Atlanta Braves Holdings' websites. Now I'd like to turn the call over to Greg Maffei, Liberty's President and CEO.

Thank you, Clare, and good morning to all. Today, speaking on the call, we will also have Formula One's President and CEO, Stefano Domenicali, Liberty's Chief Accounting and Principal Financial Officer, Brian Wendling. Also during Q&A, we will answer questions related to Atlanta Braves Holdings and Braves' management will be available as well. So beginning with Liberty SiriusXM, the LSXM SIRI transaction is progressing well. The regulatory process is on track, and we still expect a close by the -- early in the third quarter. Turning to SiriusXM itself, had a solid first quarter performance, revenue up 1%, EBITDA up 4%. They are continuing to benefit from cost optimization across the org. They expect to pay net adds, improvements in the second half and in fiscal '24 versus '23. They did, also on their call, reiterate the 2024 guidance. They are maintaining margins while investing to support future growth. Management is focused on a couple of key strategic initiatives, and we've seen some still early, but promising metrics on the new app. We continue to move engagement for lower listening cohorts to higher listening levels, and we've been able to adapt to consumer feedback more quickly utilizing this application. SIRI exclusive content continues to attract new customers. James Corden, series recently -- which was recently initiated, quickly moved into the top 3 talk shows. Notably, we're also progressing with the rollout of 360L. There was an expanded Hyundai Genesis partnership, which will integrate 360L, and adoption of 360L leads to better consumer trends, including higher conversion. Now turning to Formula One Group. We were thrilled to announce in April the acquisition of MotoGP. I want to reiterate the attractive qualities of this asset, a global league-level sport with incredible racing. For example, across the first 4 races, we've had 10…

Thank you, Greg, and good morning. At quarter end, Liberty SiriusXM Group had attributed cash and liquid investments of $64 million, excluding $71 million of cash held at SiriusXM. During the quarter, Liberty SiriusXM paid down $65 million under the SiriusXM margin loan using cash on hand. There's $1.1 billion of undrawn margin loan capacity related to our SiriusXM margin loan as of quarter end. As of May 7, the value of our SiriusXM stock was $10 billion, and we have $1.2 billion in principal amount of debt against these holdings. Total Liberty SiriusXM Group attributed principal amount of debt is $11.1 billion, which includes $9.3 billion of debt at SiriusXM. Turning to the Formula One Group. At quarter end, Formula One Group had attributed cash, liquid investments and monetizable public holdings of $1.3 billion, which includes $1 billion of cash at Formula one. Quint acquisition closed in January and was funded with $205 million of Formula One Group cash on hand, net of the Quint cash that was acquired. Total Formula One Group attributed principal amount of debt was $2.9 billion, which includes $2.4 billion of debt at Formula One, leaving $531 million at the corporate level. F1's $500 million revolver is undrawn and their leverage at quarter end was 1.7x. Looking at the F1 operating business. As we've reiterated multiple times, it is best analyzed on an annual basis giving variability in the year-over-year [indiscernible] calendar. With that said, however, I will make some brief remarks on the first quarter. There were 3 races held in the first quarter compared to 2 races in the prior year period. F1 recognized an additional race promotion fee this year as well as a higher proportion of season-based income due to 3 out of 24 races occurring during Q1 '24 compared…

Thanks, Brian. The 2024 season is off to a great start with lots of action on the track and the gaps between the teams across the grid getting closer. While Red Bull and Max Verstappen continue to show their strength, we have seen regular [ produce ] from Ferrari, including 1 and 2 in Melbourne, showing their ongoing improvement as well as increasingly strong performance from McLaren including a great first race win by Lando Norris in Miami in front of a sellout crowd. The battle in the midfield is the closest it has been for many years, and we look forward to this continuing as the season progresses. We have 24 races this year with 6 Sprints events and are also delighted to have the F1 Academy alongside us at 7 F1 events. The return to China after full year break was incredible, and it was great to see a sold-out event, with over 200,000 weekend attendees. Interest in the events underline a growing younger fan base in the country, with all our Chinese fans cheering on their home hero [ Zhou Guanyu ]. Over 1.5 million viewers watched the race live on CCTV-5, far beyond the $1 million when we last visited in 2019. China was also host to our first sprint of the season, won by Max Verstappen and Red Bull with Lewis Hamilton taking second place. The sprint continues to deliver great action for our fans, broadcasters, sponsors and promoters. There has been plenty of drivers news of the track at the start of 2024. We have the exciting announcement that Lewis Hamilton will join Ferrari in 2025. Fernando Alonso has committed to remain with Aston Martin. Hulkenberg will go to Sauber in 2025, and we have yet to see where Carlos Sainz will be next…

Thanks, Stefano and Brian. And to the listening audience, we appreciate your continued interest in Liberty Media and the Atlanta Braves Holdings. And now operator, I'd like to open the line for questions.

[Operator Instructions] First question comes from Vijay Jayant with Evercore ISI.

Can you talk about the trajectory of team payments as a percentage of pre-team EBITDA? Over the last couple of years, that's sort of declined about 300 basis points. I know there's structures in the splits of the teams that we're not aware of, but could we assume that kind of operating leverage again in 2024? And then anything you could say about the sponsorship pipeline at Formula One. It seems to be that revenue stream is slowing down a bit. Obviously, we can't really know what's happening there.

Yes, Vijay, this is Brian. I'll take the team payment one. We'll try to give you the most information we can here without giving you the full model. But over the past few years, as F1 has grown pre-team share EBITDA and EBIT under the current Concorde Agreement, we've moved through various brand -- bands of pre-team share EBITDA, where the payout to the teams has decreased as a percentage for each band. We're now at a point where the percentage to the teams is fixed for incremental EBITDA and EBIT through the end of this current Concorde Agreement. We do expect to continue to have leverage in the team payments as a percent of pre-team share EBIT this year or adjusted OIBDA on our reported results, but not at that incremental rate that you noted that we saw from '22 to '23.

Stefano, do you want to touch on sponsorship?

Yes. Thank you, Greg. I would say, Vijay, just to talk about our sponsorship pipeline. I would say the situation is very positive because I think that if you just look back just a couple of years ago, we had the only 4 global sponsors. Now we have 10 global sponsors, a lot of regional partnership, and the pipeline is very strong. And I would say, as you know, we are not giving here any kind of expectation but the situation is very solid. And today, it's not only a problem of quantity of sponsorship is really related to the quality, and we need to ensure that everyone is investing in Formula One has the right quality in terms of exposure, in terms of experience, in terms of what we can offer. So I would say that's really a very, very positive trend that we will see together with our partners who believes in Formula One.

If I could just add, I agree with everything Stefano said. I feel very good about where we are recognizing sponsorship revenue for the balance of this year and into 2025, and are working hard at building that pipeline for '26 and beyond.

Our next question comes from Jeff Wlodarczak with Pivotal Research Group.

First of all, congrats on Lando, winning in Miami GP. It's always good to get a new face top of the podium. I've actually got 2 questions not related to F1, one on Live Nation, one SIRI. Greg, on Live Nation, you comment on the pending any trust case against Live Nation? And then also, Greg, you mentioned the car app and seeing some sort of early positive signs when are we going to know if that was successful? Is that sort of a second half thing we should be looking for? And then looking forward, do you feel comfortable, I guess, all else being equal economically that SIRI can get back to positive subscriber growth?

Hold on, app and economic growth. Okay. So look, I think on the discussion around Live Nation and the trust issues, the management team led by Joe summarized it well on their call last Thursday. The DOJ investigation appears focused on specific business practices within divisions of the company, not the merger or the business structure. Live doesn't believe the breakup of Live Nation Ticketmaster would be legally defensible remedy. And beyond that, we're kind of limited to what was said on that live earnings call if you listen to that. Turning to SIRI. Look, I think it's early days. We certainly would hope during the balance of this year to see a positive impact and greater learnings from the new app. The way the app is being rolled because of the app as a platform, you'll see us continue to roll out, at SIRI, new modules and new opportunities, which will help us get benefit. So I think you'll see some learnings early and hopefully more growing over time. But the exact timing of those and how the consumer -- both how we release them and how the consumer takes them up are still open to question. On economic growth, I do believe that we can start driving. We'll see better numbers in '24 versus '23 on SP&A. And I do think, over time, this app will be critical to helping us grow and getting back to a growth path at Sirius.

Our next question comes from David Karnovsky with JPMorgan.

First Stephano or Greg, can you talk to F1 TV and how we should think of this as a possible growth driver for media rights this year. I wanted to understand better how the price increases have been received so far along with the new user experience? And then on Quint, I appreciate the commentary and the strategic value to F1, but maybe you can also discuss Quint on a stand-alone basis, the market for premium hospitality? What's the kind of growth drivers over the long term? And just for Brian, on this, anything to note on the seasonality for Quint with revenue or margin?

Do you want to start [indiscernible].

Yes, Greg, if it's fine for you. Absolutely. I would say, first of all, F1 TV, as [indiscernible] said, is an additional entertainment fab for our fans and offer to fans that some of them are very, very expert. They can analyze all the data we're putting on the screen. And the good thing is that the numbers that we have seen so far are very encouraging because actually, even in Miami, there has been almost a record subscribers that we see. So it's a very, very important element that is related to the future of the media evolution that we want to offer to our customers. We didn't receive any negative comment on price increase. You may say maybe because it was too low before, that would be a good point, but so far, no one has said anything. And I would say for us, it's really relevant to keep up in terms of quality of the product, in terms of content of the product, and this is something that we'll develop even further with the artificial intelligence that will be -- that will play a very important part of our development with our future.

Great. Thank you, Stefano. And I'll touch briefly on the Quint business drivers and let Brian, as you now, to touch on some seasonality, which I expect his comments will be fairly limited, but I don't want to cut him down. Look, on the drivers of the business, I think there are several. One is, and we mentioned -- I mentioned one already. The opportunity to help us be a better sales arm and be more effective for Formula One itself, particularly around LVGP. And you've seen us do more integration of that sales arm and utilize their customer knowledge, their customer strengths, the things that they do well to help us sell better, particularly at the high end at LVGP. Another driver of the business, though, is their ability to help other F1 promoters and elements sell their products. So they work with both teams and promoters, for example, Qatar to help sell tickets to their events, not just our event and to help sell out the things that they do and do ancillary services and ancillary events around the GPs. Third driver is obviously adding new sports and new events. And you've seen them grow that and expect that they will continue to do that over time. And hopefully, that's a place where Liberty may be able to help them open the door to new sports.

David, on seasonality, we can't give you the very specific details, but what I'll say is that Q1 is probably the lowest quarter for Quint, followed by Q3. Q 2 and Q4 really ramp up because you have the Kentucky Derby and you have a lot more of the larger F1 events that Quint participates in. So you'll see that Q2 and Q4 definitely vary materially from what you see in Q1.

Our next question comes from Ben Swinburne with Morgan Stanley.

Greg, now that you've had at least the public announcement with MotoGP, I'm just wondering if you had any update on opportunities that may have emerged or conversations you've had in terms of what you can do with that business now that you're -- all the partners of MotoGP know that Liberty is going to be acquiring most of the company. Anything that you would add from the call you did a couple of months ago? And then, Stefano, I think last quarter, you said sort of conquered agreement. The next one would be something you guys could maybe finish up pretty quickly, not a lot of controversy. I wanted to see if there was an update there, particularly as it relates to Brian's point about team splits being fixed going forward for this deal, any thoughts on how we might want to think about what that might look like in the next one?

Thanks, Ben. So on MotoGP, when we -- after the announcement, we had an outpouring of interest from both potential broadcast partners, OEMs, potential sites, all of which are very interesting. Unfortunately, due to the nature of the regulatory process, we will be formulating those amongst ourselves and our plans, but we really can't reach out and do anything concrete with the MotoGP management team to avoid gun jumping until we have regulatory approval. So we are conjuring plans. We have some really good ideas, I think, I hope, and we hope to get permission to execute on those sooner rather than later.

On my side, Ben, with regard to the update on [ Coke ] agreement. As we always said, the situation, as you know, very well, this will expire on 2025. Now we are in the process of discussion with the teams. The most important point is to keep the situation as stable as possible. These are the points of discussion. And as you can imagine, we cannot go into details of it, but as soon as we can, we will share what we can do. As I said, the situation is optimal to keep discussing with the teams with all the relevant parts is the best way to finalize everything for a stronger future up to a longer term.

Our next question comes from Stephen Laszczyk with Goldman Sachs.

Maybe for Greg on F1 media rights, I'm curious if you could talk more about the strategy and some of the renewals you called out? In the release, it looks like you took a bit good bit of duration in MENA, maybe align the Nordics with Sky. I know some of the Americas and Asian contracts are up in '25. Anything more to add to that conversation or that strategy on media rights would be helpful.

Thanks for the question, Stephen. I think in general, on media rights, we've been very happy with the renewals and interest we've seen. We -- as you noted, some of the good renewals we've had that have been very attractive. We continue to see strong demand. And we continue to see -- as we talked about F1 TV, we continue to see interesting ways in which F1 TV can be an asset working with our media partners. The U.S. renewal is obviously out ahead. It's been interesting to watch some of the most recent renewals around either other motor sports or other sports in general in the U.S. And hopefully, those give us some confidence about given where the demand we've seen both among broadcasters and the like and the level of interest in races like I've obviously mentioned already the Miami one, what that will lead to.

Got it. And then just on race promotion, have, I think, 10 races up for renewal over the next 2 years. Stefano, you called out the 11 interested cities being serious contenders for GPs this past weekend. Could you add a little bit more context just around the supply-demand dynamic you're seeing right now? And what you think that can mean for things like promotion step-ups, investments in hospitality, fan experience, that would be helpful.

Well, for sure, what we have seen and what we have seen happening in the course of the last years because of the strong demand of our product. And because of the standard, we are, let's say, asking and worked together with our promoters. We have seen everything going up in terms of quality of demand, of course, economical impact for both the promoter and our side. And the strong demand we are seeing just shows really the strategy well. Now the point is to keep the balance between the different continents that are requesting the different Grand Prix. And of course, what is important is to [Technical difficulty].

I think we may have lost Stefano or maybe we're off. Operator?

The line is still connected.

So just to check, is Stefano on mute or is our line is still connected to the greater audience just checking on the logistics?

Correct. It is, yes.

So we'll assume that we'll get Stefano back. Maybe we can move to the next question, and we'll come back and answer and either we'll try it again without Stefano or we'll hopefully get Stefano to answer.

Our next question comes from Barton Crockett with Rosenblatt Securities.

Okay. Great. I guess I wanted to switch gears a little bit and just get Greg, your thoughts on baseball on the Braves and TV and Diamond Sports, now some question about the viability of the emergence with block out of Comcast. What can you tell us about what the Braves could do if Diamond isn't viable? And what are your thoughts longer term about what should happen there with the TV rights situation there for the Braves?

Well, I'll give one cursory comment and then let Derek perhaps if you want to contribute, happy have you take over. I think we have some visibility into the Diamond Holdings, not only from our experience with the Braves, but our experience with Charter. And we watch the situation, obviously, very carefully. We have that benefit, as we've mentioned before, of an enormously attractive territory, and think we have options in the event that they are unable to complete their successful emergence from Chapter 11. But I'll let Derek touch on that a little more if he would like.

Thanks, Greg. Yes, to the first point, obviously, carriage disputes are sort of commonplace, unfortunately, and we don't like the fact that this carriage dispute is going on, we're not a party to it, and we're hoping that Comcast and Bally get together. To Greg's point, we're obviously monitoring the whole bankruptcy proceedings and doing our part to protect our rights. At this point in time, Diamond Bally is fulfilling their terms with us, including full payment. But if the rights come back to us, we are very optimistic. Because, as Greg noted, we have a very large territory, one of the largest in sports. There's huge demand on the team, and we believe there's more optimism than pessimism with the future of Braves' television rights in that marketplace.

That's great. If I could just follow up. I mean, the precedent at some of the other baseball teams has been if they lose their RSN carriage that they're having to move to a lower revenue model where perhaps they get broader exposure on broadcast, but less revenue. It sounds like you don't think that, that's what the Braves would face if they came to it. Am I hearing you correctly?

Yes, I think you are hearing me correctly, partly because the other situations that we've seen around in particular, baseball, the marketplaces are just vastly different. And their situations, I don't think are necessarily analogous to us. We have about 6 states that are in our territory and about 35 million people in that territory. So one way to look at this is, to the extent that we can unlock the opportunity to offer the Braves content to a wider stretch of that territory to more of those 35 million people, we think that the revenue should follow. And we've been modeling that and feel like we're in a good position should those rights come back to us. But again, at this point in time, we're still operating under the terms of the Bally's agreement, and they are as well. So we'll continue that to the extent that, that stays the case.

Our next question comes from Bryan Kraft with Deutsche Bank.

I had one for Greg on Sirius and one on F1 for Stefano if he's back or for Greg. Greg, sorry to ask this question again this quarter, but a lot of people want to know. I know you stated that the Sirius transaction is on track to close in early 3Q. But can you just walk us through the sequence of steps to close and just comment on whether it might -- closing might get pulled into early June. It seems like it could from someone on the outside looking in. And then on F1, I was just wondering if you could talk about what you're seeing in terms of race promotion contract renewals as far as step-ups on renewals and escalators within the contracts. I think pre-COVID race promotion didn't seem like much of a growth opportunity. But with growth in demand over the past few years and improving promoters economics, wondering if you think that race promotion is now more of a growth opportunity over the medium to long term, even outside of Vegas, which is kind of its own thing. And then separately, can you talk about what you've seen with Las Vegas ticket sales since they went on sale in late March?

Well, I'm going to let Renee walk you through the regulatory steps that we anticipate. And then Stefano, I think you're back on so after we'll let you talk about race promotion.

So with regard to the SIRI closing, we're making very good progress with the SEC as well as on the FCC front. And we are still on target. I think as we mentioned earlier this year that we'd be looking to close sometime during the summer.

Stefano, do you want to touch on the rate promotion?

Yes. Yes, I would say following to what I was trying to say before, I don't know whether it was captured, but for Brian information, the race promotions, before COVID, everyone was worried about the fact in terms of revenue stream, this could have been a very [ fatal ]. And actually, the fact that we have a lot of demand, of course, is pushing up also the possibility of having or maximizing in the best way that we can at the racing promotion fees. Connected, of course, that this is, of course, a relevant point, but has to be connected to our strategic development in different markets. So everything is progressing very, very well. And I would say, in the next couple of years, I'm expecting to see and we are expecting to announce also some new venues that could be very attractive to grow the business of Formula One.

So if I could just add to that to Stefano's point. I think for a long time, it was perceived that the growth in promotion would come from incremental races. And we obviously went from 18-or-something up to this 24 level, which is where we do not anticipate growing any more races. But as I think we talked about at the Investor Day back in November, it actually creates a great incentive scarcity to be able to play promoters off against each other and not to try and take advantage of them. But just given the amount of demand we have, both among fans to attend and among promoters to host an event, we've been able to find attractive pricing and good uplifts, and we continue to find new venues and new locations, which find it very attractive given the amount of demand we have and given the opportunities they've seen others pursue. So, so far, so good on promotion, and I do think it continues tremendous growth area. And we'll go back to Renee and let you touch on Vegas tickets.

Sure, Thanks, Greg. We were very happy with the results of our presale with our partner, American Express. But overall, we are seeing a trend towards ticket purchases closer to the event particularly in the U.S. And I would say even more so in Vegas, which is known as the last-minute market. That being said, we are working very hard on our product ladder this year. We have looked to really differentiate those products creating about 10,000 new GA tickets available, which will be very much, I think, appealing to that last-minute market. We have now 3 different zones at tiered pricing. We will have the T-Mobile Sphere Zone continuing to focus on the news and entertainment as well as the racing phenomenon on the Sphere Zone. We have a new entry-level price point in Flamingo, which will have a viewing structure for fans to watch the racing on Cobalt. And then a third new product offering, which is going to be announced very soon, which will focus on viewing in the heart of the DRS zone along Cobalt Straight. This is allowing us to continue to really reach out to those individual consumers and the new F1 fans who want to come and watch really on track, the incredible races we had as well as enjoying the unique Vegas-style entertainment that we'll continue to offer throughout the tracks.

And if I could just follow up on your comments on the SIRI closing. You mentioned very good progress with the SEC. I mean, my understanding is that you had SEC approval already for the proxy, but you have to update basically for the March quarter numbers. So I was just curious as to like what's the timing for updating the filing? And it seemed like that would be sort of a rubber stamp approval from the SEC since they already approved it. And then so you should be able to get to a shareholder vote probably within the next 30 days. I was just looking for a little more color if there's anything that you can share.

Sure. Well, I think we'll be ready to file within the next few weeks now that we've gotten through our quarterly audits. And then I would never say the SEC is going to rubber stamp anything, but we have at least cleared our financial and legal comments, which is great progress. It's hard to say exactly when we'll be ready to close, but I do think we're looking at end of Q2 early Q3 once we get everything in order for the shareholder meeting.

Our next question comes from David Joyce with Seaport Research Partners.

In thinking about the other factors outside of the pre-team share EBIT calculation, are there any other significant expenses that are either straight line or variable? And sort of related to that, with Quint, just wondering how we would be accounting for that with the Quint F1 related revenue? Is that going to be within Formula One, and therefore, in pre-team share EBIT? And then their other events are going to be outside of that. Just wanted to verify that there would be that split of Quint activities that way.

Bryan, do you want to take this?

Yes. So I'll start with the Quint piece first. Yes. So revenue that Formula One generates from Quint related to those ticket sales do flow through the team payment calculation. So those are included just like they've been beforehand. And then on your first question.

Sorry, just to add there, but you're correct, David, that non-FI related events like Kentucky Durbin and all those flow through F1, but not the F1 team. So just...

That's correct. Sorry. And then on your question about straight-line expenses, team payments is really the largest expense that is straight lined. Other things are more along when they're incurred. So think about hospitality when the event actually happens, same with freight, those types of things. Obviously, there's a bunch of fixed expenses related to payroll and the like that are relatively smooth throughout the year, but team payments would be the largest example of a per race kind of amortization.

Our final question is from Matthew Harrigan with Benchmark Company.

My last dangling MLP question might be more for Derek. What's your present view on how the change -- rule changes are fostering interest in the game. I think Greg's next great investment might be a surgical clinic doing Tommy John surgery, if you look at what's coming off the pitch clock changes. Just kind of where are we midstream in terms of what's doing for the popularity of the sport? And are there any downside to what's happening?

They're overwhelmingly popular, but I'll let Derek go ahead. No, I'm going to tee you up. Go ahead, please.

Yes. I mean, I think, obviously, the bulk of the rule changes took place last season. So we saw the results of those and have been able to study all of last season as well as the first part of the season. I think the overwhelming viewpoint from fans, media, players, teams is that the rule changes were successful and have been embraced, and we're excited to continue with those. Primarily, the idea that you're creating a game that is a little bit shorter, a little bit more action inside of that game with some of those changes, including the elimination of the shift, things like that. But as we've seen some of the small little changes that have taken place from last year to this year, some a couple of seconds taken off of the pitch clock is one example, I think it's really hard to correlate those changes to some of the things that you might be seeing and whether it be our pitchers or others. I think that the sample size is just too small and we're going to rely a little bit on MLB to do a full study with the Players Association on that. But I think, overall, I would tell you the rule changes have been from our vantage point, fan's vantage point, very successful and have continued to make a great game even better.

Thank you to our listening audience for all of your questions and your interest in Liberty Media and the Atlanta Braves Holdings. We look forward to speaking with you again next quarter, if not sooner.

This concludes today's conference. You may disconnect your lines at this time, and we thank you for your participation.