Liberty Broadband Corporation (LBRDK) Q1 2017 Earnings Report, Transcript and Summary

Ladies and gentlemen, thank you for standing by and welcome to the Liberty Media Corporation 2017 First 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 is being recorded, May 9, 2017. I would now like to turn the conference over to Courtnee Chun, Senior Vice President of Investor Relations. Please go ahead.

Thank you. Before we begin, we'd like to remind everyone that this call includes certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements about business strategies, market potential, new service and product launches; the repurchase activity of SiriusXM, the expected benefits and financial performance of the new ballpark for the Atlanta Braves and the associated mixed-use development, the expected benefits of the acquisition of F1, the future financial performance of F1 business, future Formula One races and other matters that are not historical facts. These forward-looking statements involve many risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements, including without limitation the possible changes in market exceptions of new products or services, the ability of our business to attract and retain customers, competitive issues, regulatory issues and the availability of capital on terms acceptable for Liberty Media. 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 statements 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 certain non-GAAP financial measures, including adjusted OIBDA of Liberty Media and adjusted EBITDA of SiriusXM. Required definitions and reconciliations, schedules 1 and 2 can be found at the end of the earnings press release issued today, which is available on our website. This call also may include certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 regarding Liberty Broadband. These forward-looking statements involve many risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. These forward-looking statements speak only as of the date of this call, and Liberty Broadband expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained herein to reflect any change in Liberty Broadband's expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based. Now, I'd like to introduce Greg Maffei, Liberty's President and CEO.

Thank you, Courtnee. Good morning to all of you. Today, speaking on the call, we'll have Liberty's CFO, Mark Carleton, and we are pleased to welcome Formula One's Chairman and CEO, Chase Carey. During the Q&A, we'll be available to answer questions related to Liberty Broadband as well. So starting with the Formula One group, we were very excited to close this acquisition in January and aboard Chase Carey, CEO of Formula One. This season began in March in Melbourne, and we're now four races in and having a great competitive start with three winners in two teams in those four races. We do plan to release the Q4 2016 numbers shortly. They should be coming to you soon. Regarding the potential share sale of the Formula One teams, we have no update now, now but once we have some news, we will let you know. On to the operational highlights, at SiriusXM, they had a very solid quarter. Q1 revenue was up 8% to $1.3 billion and Q1 net income rose 20% to $207 million. Adjusted EBITDA grew 14% to $502 million. Liberty's ownership as of April 25th stood at just under 68%. Live Nation had an outstanding quarter. Revenue was up 19%, operating income was up 20% and adjusted operating income was up 25% at constant currency during the first quarter. They booked over 4000 shows for 2017, up 10% from last year as of the end of April. Concert sales for 2017 were up – for shows were up 25% through April to 46 million tickets. All leading indicators point to another record year in each of Live Nation's businesses. And finally, looking at the Braves; SunTrust Park and the Battery opened April 14th. The team put on a hugely successful opening day. The Battery restaurants were packed, both before the game and well into the night, as the Braves celebrated their victory over the Padres. All revenue fronts exceeded expectations. We saw World Series-type retail in concession numbers. We have now hosted 6 events at the Roxy stage theater, managed by Live Nation, all of which have been a great success. Approximately 150 apartments have been leased out at the Battery as of today, and the performance of our young team is improving on the field. Over at Liberty Broadband, Charter continues the integration of Time Warner and Bright House. This is a massive operational undertaking, and we will always have a few bumps in the road along the way with onetime impacts as we near the first year anniversary of the transaction, but there are many, many positives in our view. We launched Spectrum pricing, packaging and brand to residenters in approximately 98% of the legacy Time Warner and Bright House footprints and that process will be complete by the end of the second quarter. We are confident that the Spectrum rollout will result in revenue and sub growth. We are realizing meaningful cost synergies, leverage is constant at 4x and Charter repurchased nearly $826 million of stock in common units in the first quarter. With that, let me turn over to Mark for a little more on our financial results.

Thanks, Greg. At quarter-end, Liberty SiriusXM Group had attributed cash and liquid investments of $100 million, excluding $230 million of cash held directly at SiriusXM. Sirius spent around $300 million during the first quarter buying back 62 million shares of their common stock and they remain committed to their capital return program of approximately $2 billion a year. The value of the SiriusXM common stock held at Liberty SiriusXM as of May 8th was around $15.5 billion and there is about $250 million in debt against these holdings. Braves Group had attributed cash and liquid investments of $115 million and the Formula One Group had attributed cash and liquid investments of $194 million, excluding $432 million of cash on hand at F1. The Formula One Group holds public market securities with a market value of around $3.1 billion as of May 8th with $2.3 billion of attributed debt against those. At quarter end, Liberty SiriusXM Group had attributed principal amount of debt of $6.3 billion includes $6 billion of debt directly at Sirius. The Braves had about $420 million of debt and Formula One Group had around $6.5 billion, which includes $4.2 billion directly at F1. F1’s total net debt to covenant OIBDA ratio as defined in their credit agreements was approximately 7.4x as of March 31 as compared to a maximum of allowable leverage ratio of around 8.5x. Now while we are comfortable with a 7.5, we have set a target of total net leverage ratio of around 5x to 6x the covenant OIBDA. And in the near term, we will certainly focus our excess cash flows on getting us in the direction of that target leverage ratio. Note these are the leverage ratios for the Formula One business itself, not the Formula One Group. In the first quarter, the Formula One Group incurred around $20 million of SG&A expense, including stock-based comp, which excludes amounts allocated to each of the Liberty SiriusXM and the Braves Group. For the quarter, approximately $9 million of SG&A expense, including stock-based comp was allocated to Liberty SiriusXM group, and around $1 million was allocated to the Braves Group. Now I'm happy to turn it over to Chase Carey to talk specifically about Formula One.

Thanks, Mark. It's been about bit over three months since the change in ownership and management at Formula One. Our primary focus during this time has been on launching the key initiatives that will enable Formula One to begin to realize its true potential value. Our first priority was to build a management team to execute our strategic vision. Ross Brawn and Sean Bratches were hired day one to lead the sporting and commercial sides of our business respectively. Ross and Sean showed of their key executives largely in place by the end of June, with supporting stuff in place by the end of the year. We will remain lean and agile, however the prior organization was essentially finance and legal teams with no commercial or sporting organization. We believe the addition of these organizations will significantly aid in growing and managing the business. We expect to double our London-based team from about 75 to 150 individuals. Support groups outside London, such as broadcast operations and freight will continue largely as they are. On the commercial side of our business, we've engaged with the majority of our key existing promoters, sponsors, and television partners about ways to expand our relationships. We're discussing ways to make our events bigger, broader and more exciting; to provide sponsors a broader range of opportunities to engage and activate their relationships; and enable fans a broader ability to connect with Formula One across the full spectrum of video platforms available with on-screen innovations to create a much richer experience. We've also been actively engaged with potential new promoters or sponsors and media partners. We have been surprised with the breadth and depth of the excitement from potential new partners, who seem truly energized by the changes in Formula One. We've announced a few agreements, for example, next year we'll go to 21 races when we add Germany and France and drop Malaysia, and last week we announced a new television agreement with Canal+ in France. There are also many important areas of growth in profits for us beyond the big three tent poles of TV, sponsors, and races. These other areas include hospitality, merchandizing, special events, gaming and specially produced content for third-party platforms. We're particularly excited about the potential growth of an over-the-top subscription digital platform over the next few years for our most passionate fans. We’re also building tools that did not previously exist like research, databases, digital platforms and marketing capabilities to provide the necessary insights and information to deepen our fan base around the world. We unleashed our drivers, teams, promoters and more on social media, which resulted in three to four fold growth in areas like video engagement on social media. On the motor side of our business, we've also begun to work with the FIA, our regulator, and the teams to take steps to ensure our competition on the track delivers the best fan experience possible. We are addressing the engine, the cost, the rules and other key issues, all with the goal of making the sport the best it can be. As part of the process, we're also revealing the broader race weekend in areas like support races to enhance and improve the experience for fans. It's been a busy few months. The majority of time has been spent engaging with the key partners of Formula One: the FIA teams, promoters, sponsors, broadcasters and, as much as possible, the fans. We feel great about the excitement and support we've received. Without question, Formula One is the pinnacle of global motor sports with a truly unique, enormous, global, passionate fan base. In many ways, it is a sport just waiting to be taken to the next level. We have a lot to do and we're off to a good start with 4 races under our belt attendance up and strong results in TV viewership and digital engagement. We move into the European portion of our season in Barcelona this weekend, where we'll launch a few more things to engage fans. It should be fun. We hope you all tune in. And with that I'll turn it back over to Greg.

Thanks, Chase and Mark and to the listening audience. We appreciate your continued interest in Liberty Media and look forward to seeing you at – many of you at the upcoming conferences. With that operator I would like to open up the floor for questions.

[Operator Instructions] Your first question comes from the line of Jeff Wlodarczak with Pivotal Research.

Good morning, guys. One for Greg and one for Chase. Greg, I’d love to get your opinion on Charter's decision to sign that wireless deal with Comcast yesterday and as part of that do you think signing this deal opens up the possibility of working with Comcast more in the future? I know that you and John [ph] in the past talked about creating a national business brand maybe an alternative to Netflix and then I go on to Chase.

Thanks, Jeff. I think that you know Comcast and Charter working together is natural, its peanut butter and jelly. It is absolutely the case that putting the two largest cable operators to attack consumer opportunities like wireless is going to create meaningful synergies, meaningful opportunities and I think you can rightly point out that if you have success in that area it opens up other things like business services. There are surely challenges around brand, and around how you go at the, attack the problem, but with our combined footprints we have an enormous amount of scale, enormous amount of strength and a marginal opportunity, meaning on the margin opportunity to leverage our networks in an interesting way. So I'm very excited about that and I think it's very positive. And you're right it sets the tone for other potential combinations and other potential opportunities working together. Chase, I think the next one to you.

Yes. Thank you. So Chase your predecessors made a number of changes to the cars for the season, it increase speed materially, made the cars more difficult to drive. I mean, in some way its lot more exciting, but it was at the expense of more dirty air, limited passing. Do you have an opinion on the importance of speed versus encouraging more passing in regards to improving the excitement of the sport? And as part of that I mean, you're obviously going to make more changes to the cars, are the track owners amenable to also investing in track changes to improve the racing? Thanks.

I mean, to some degree a lot of what you're you know, what you're dressing there, it’s probably best - best poised to Ross Brawn. I mean I have used in the sport that the reason for having Ross here is to have somebody who really knows the sport much more intimately honestly than I do. You know, quite simplistically I think action on the track is incredibly important. So I think having the ability to pass is certainly something that we are looking to increase. I think the speed - I think actually having the drivers fight the car you know, has gotten really positive responses. But I think we want to sort of try and have all things we want. You know one create that's we want to create that power, watch drivers fighting in the cars, but want as much action as we can- can get on the track and we're certainly pursuing initiatives to try and enhance that activity and action on the track. I think that - I don't think that improving the tracks to make them more exciting for fans is really that significant an investment. And I think the driver - I think teams recognize the importance of making the sport the best it could be. So I don't actually think cost is a significant deterrent to trying to pursue things to make sure we're doing everything we can to make the racing as exciting as possible.

Thank you.

Your question comes from the line of Bryan Kraft with Deutsche Bank.

Hi. Thanks for taking the question. A couple on Formula One. One, I was wondering if you could provide any color on the broadcast rights renewal with the [indiscernible] France, as far as how much of an increase you secure there and how many years the deal is. And also just curious about how you think we should think about the future of the sport in Asia if I understand it correctly, both Malaysia and Singapore race I think are going to go away. You know is there a big push to replace those races with other more attractive locations in Asia and DC that is a big part of the growth opportunity in the sport? Thanks.

I mean, firstly we are actively engaged on redoing Singapore, so we don’t expect Singapore to go away. We’ve got to reach to do - we've got to reach a deal, but we are actively engaged there and our goal is to continue the race in Singapore. So I guess second question first. We have a lot of interest you know, beyond Singapore, Malaysia you know, really across the world, it’s not just Asia. We have a list of locations that want to add races and in many ways were trying to engage with as many of them as possible, evaluate there in both in markets like Europe that obviously a much more historical markets, as well as opportunities in the Americas and Asia. You know, we want to make sure we understand what each of those opportunities means to us as we go forward. Although in many ways priority one is to make sure we're doing everything we can to make the 21 races we'll have next year as successful as possible. Asia is - like the Americas there are important growth markets for us. We've gotten in Singapore race has been a very successful race for us. We started off in Asia this year and really had record you know, had crowds that were up significantly in China and Australia. So you know good crowds there. I think we've got some momentum, but Asia clearly is a market in general that we expect to grow significantly over time as we go forward. What was the first question?

It was on a renewal with the Canal Plus [ph] and if you could give us a sense of...

Yeah, I don't I don't think we get into specific I don’t get into commenting on specific agreements with parties. We feel good about the renewal and we think it will actually achieve a number of our goals. But it is, you know, that is goals both reach and the growth we were looking to achieve on the revenue side. But I don't think we get into specific comments on individual agreements.

But can I echo, Chase I think that I totally agree, we don't discuss specific terms. But I would say in general the strategy is not to do the longest deals because we're very bullish on our ability to increase the excitement level, the fan interest and the broadcaster interest therefore in the sport. So having actually shorter term agreements with an opportunity to increase our relative position over the next few years is something that we as a strategy, Chase, I don’t know if you want to add on that.

No, I think completely accurate and I think you know it is a sport that we think has got a lot of a lot of potential. We were just starting to market it. We're just starting to engage in you know fans in areas like digital platform. So we think we can create some real momentum and energy over the next couple of years. And you know really believe we will be able to take advantage of that as we go forward with current renewals, as well as the next round of renewals.

One quick follow up on that, Chase you mentioned reach, is there going to be any change not just through this deal, but through your other renewals in the mix of free to air versus pay or are you pretty happy with how those games are being broadcast now?

I think we want to engage with everybody, mean, it's going to vary market by market. It's clearly not going to be a one size fits all. And digital is incredibly important, we were really up non-player in the digital platform. So whether it's free pay or digital you know we want to make sure we're engaging with them all. And we're going to be much more analytical about trying to evaluate and the trade-off between reach and dollars. I think in general you know what is that really expect to gravitate towards the pay in pay platform over time. But we want to make sure we're maintaining the reach. Obviously digital will help maintain some of that reach to the degree we can find the right agreements to marry that with some free over the air. That is something we clearly value. But our goal is really going to be to engage the full spectrum of video platforms, to find the right balance of reach and dollars.

Thank you very much.

Your next question comes from the line of Vijay Jayant with Evercore ISI.

Thanks. Chase, again, you know, given you see the whole spectrum of opportunity across the F1 portfolio, what is the low hanging fruit right now that you sort of focused on. You know the real monetization that were sort of completely [indiscernible] very targeted. And then you know as sort of developed your long-term business plan, in three, five years from now, what do you think. F1 is in terms number of races, the opportunity on sponsorship, I mean, sort of very open ended question, but what do you sort of building to, if you help us think through...

Yeah, I mean, I guess first just the mindset. In many ways I think the sport has not been you know, has been underserved by a perpetual very short term focus. So it really hasn't had a strategic plan in place or an attempt to invest or look where you could be. And one of the things we've been very clear is, we care a lot more where we're going to be in three years than three months. So that doesn't mean we're not doing things in the next three months, but you know, sort of use 2020 as a marker, we think we can really take the business between now and 2020 to another level and I think that's priority one. And obviously there will be steps you know in every place as we go along. Probably some of the lowest hanging fruit is probably an area like sponsorships where really you know we've just taken sort of inbound calls. You know we have a list of categories as long as your arm that we don't sell into. I mean some that you know is really quite surprising we're not in like technology and communications for a sport like ours, that's probably more identify with technology than any. We have half our race sponsors, race type title sponsorships that aren't sold. So sponsorship is an area that this year is pretty baked because we didn't really - the transition didn't occur until less than two months before the season started. But we’d expect to move pretty fast there and there again there's a lot of interest and a lot of categories that we'd certainly move into TV contract all come up at once, but again a little bit as Greg said, you know, we will. Certainly some are coming up and I think we probably actually believe we've got a couple of bites at this just as we continue to market the sport and create more excitement and action around it. And there are - and then there - really it’s a list of opportunities that aren’t sort of like what I call the big three. Some move fast like hospitality, I mean we really today probably only achieve our goals in hospitality or take advantage of the opportunity hospitality and really two or three of our of our events gaining - getting places we’re not in, merchandising, we still - some merchandise like it's 15 years ago. There are a lot of areas that are important to us. I think I mentioned in the early comments OTG that would probably take a little longer to develop, but I think it’s tremendously important area for us as we – if you really think about the fans we have around the world very well-educated fans, wealthy fans and a sport that's so rich in data and information and some really great hardcore fans. So creating a package, a subscription package for the strongest Formula One fans we think is a tremendously important opportunity. There are geographies that you know the clothing are just upside to us. Big countries like China and the US, you know we're really just scratching the surface. And so connecting with those fans, claim [ph] that digital is actually some of the digital connections already have you know indicated the opportunity that exists, it will take time. The US and China are going up the drive business in a year or two. But I think we'll get visibility between now and sort of 2020 to really have a paint a better picture of that opportunity. The race calendar again, our probably first focus is making the 21 races we have as strong as they can be. We talked about them being bigger events and maximizing things like hospitality. The high end customer is clearly more and more important at these live events. So we are we are focused on that. We have not really targeted a number of a races. We know there's an opportunity to add them, but we want to engage more with teams before we get into the specifics. But been tremendously encouraged, I think as I said a couple of minutes ago about the breadth of interest from around the world of locations that want a lot of horse races. So you know on the one hand probably the area of our business that's probably a bit more mature today is the promoters side, but the breadth of interest from players that, from locations that know what it takes to host a Formula One race, I could fill a page with the number of locations that have asked to meet and discuss the opportunity to host a Formula One race. So it is I think it speaks well to our ability to continue to take advantage of the global appetite for this sport and the excitement for this event and as we make the event, as we make the event better and improve the sport on the track, we think all those things just add fuel to each of those initiatives.

Thank you, Chase.

Your next question comes from the line of Ben Swinburne with Morgan Stanley.

Thank you. One for Chase and one for Greg. Chase, one way to maybe help us think about the rate or the timeline for revenue acceleration in the TV side would be to talk through sort of how much of your television rates are up each year. I don't know if there is any way you can help us think about that or I know there are typically multi-year agreements, but any help you might be able to give us on sort of how those agreements are going to roll. I think you've got NBC up at the end of this year for example, there's a Sky renewal in a couple of years, but any rough guidance on thinking through the timing of that business coming up for renewal to think about the top line drivers would be helpful?

I think, I mean, in general the TV programs I think are sort of three to five year type agreements. And I think in the next few years, I think probably I'd say in two to three years we probably have well over half of the TV the agreements coming into some form of renewal. So you know clearly it doesn't all happen. it does happen over a multi-year period though it's not. There are three and four year contracts, it's not that you know, they're not that long.

Got it.

And I think we probably have a fair bit punch to the next few years.

And when you...

By the time you get to two years from now you probably have over half that, maybe a bit over half is what we renew.

And when you're making these agreements like for example the Counsellor's One that's still coming up here this year. What are you doing with OGTV rights for the races? I guess when you think about AN OGT opportunity...

So we're carving out the flexibility to explain, I mean, clearly, and some of the historic agreements that we - the issues we have that navigate around doesn't mean we can't go back and talk to somebody about you know ways to address it in the midst of an agreement. But as we go forward you know the agreements will be structured to much more contemplate. It's a much more complex the ability to make sure we can exploit all our rights. And you know in many ways we think it's good for our television partners, it creates a level of excitement, creates a level of variety of experiences for fans that we think are good. But the bottom line, we will - we are and - we're doing creating that flexibility.

Thank you. And Greg, you've been quite clear over the last several months and quarters about your view on Pandora from a valuation perspective and sort of the back and forth with the company. I was wondering if you could talk a little bit instead about what are the opportunities with Pandora and Sirius together from a synergy perspective. I think there's a big question in the market place even if something did happen. What they really could do, what is the opportunity for the two of them to the extent there is one, do you have any thoughts?

Well, I – I am not sure I want to announce them all on this call or have them all lined up that way. I guess our internal view has been if there's an opportunity in the free space that $17 billion terrestrial radio market, that is Pandora actually under monetizes on a plus hours when you can make a good case that with Geo targeting and other opportunities it has from a technology side it should be able to over index, that has a superior product to many of the other free services and it could do more to attract that opportunity. If you look it’s in the top 10 app, around it’s under monetised, that sort of the basic opportunity. I don't think that capture that opportunity is done as well as they could you know, they are now attacking the subscription side. I think we've been pretty vocal both in Syria about why that's a very tough space in terms of having a series of large bank competitors with strategic interests. So they don't need to monetize in the subscription space. So I think the opportunity is largely what they can do in free, that's where the greatest economic value is, and you know that's an opportunity that I don't think that capitalized on.

Thanks a lot.

Your next questions from the line of Tom Eagan with Telsey Advisors Group.

Great, thank you. Just a question on cable. As you may have seen in the first quarter of 2017 MVPDs last offered subscription [ph] in 50,000 subs, I guess, I was curious for your thoughts on the factors there. How much of that was impacted by the addition of more lively TT services? And then I have a follow up. Thanks.

This is Greg. I think there's clearly A demand for virtual MVPDs both for mobility portability in some cases for the kind of services they have, where consumers who want different kind of bundles, skinnier bundles in general and or in some cases if you're a satellite operator and you can’t afford from a credit perspective to truck roll, install a dish et cetera, it offers an opportunity for you to sell something to the people. So you have a customer relationship. So I think some of that's natural, it fits the diversity of the marketplace.

Then in terms of Sirius, you know they inked the deal the Autolabs, I guess I was curious for your thoughts on what you like about that deal and it have been so few deals over the past couple of years. So were there any deals that the company did not make that you think maybe they should? Thanks.

I'm not sure there is a host of things we should have bought. There's a host of things we didn't buy and I'm pretty happy we didn’t, mostly and around the streaming space. That having been said, in the Telematics area we've done now two deals, they are not exactly align, but they're both looking at the at that space. Our judgment is and Sirius’s judgment, we're together on it that, is that there's an enormous opportunity to Telematics space, cars are going to be transformed how your car communicates and how it's managed is going to be transformed. Sirius has a great platform and a great role with many of the large OEMs and expanding that into incremental services where we can add value both for those OEMs and potentially for other kinds of businesses is attractive. And candidly a less competitive marketplace than a lot of the things that get all the noise around music, where the monetization is poor and the competitors are strong and find other ways to get paid. So the Telematics space is something where Sirius has done really good work, low monetization to date, but we think it's setting the stage for future growth.

Great, thank you.

Your next question comes from the line of Amy Yong with Macquarie.

Thanks. So two questions. So Greg, I think a lot of investors have been concerned about the growth at SiriusXM. You're obviously very happy owners. What excites you and what do you think people are missing. And then for LSXMA, why do you think investors are not giving you the full credit for the NAV and I guess following up on the Pandora question just sort of topics, with KKR involvement and the 30 day window. Do you think that this opens an opportunity that wasn't necessarily there? Thank you.

So on first LSXMA, the Sirius continues to grow. We hear a lot of noise about the destruction and the terminal value and all those, the business continues to grow with secured new OEM relationships to extended OEM relationships, longer and deeper with virtually every car company. We've got obviously the opportunity to use car market which is not nearly penetrated. So we're quite bullish about future sub growth for many years to come. It's a massive cash flow free generator – free cash flow generator rather. It has a leveraged business model, unlike the subscription businesses for example in video and in music subscriptions where each incremental sub gains no leverage because of the nature of the content deals we have. We gain leverage on incremental subs, which is why you've seen the rising EBITDA and free cash flow margins at Sirius that we expect to continue in the years going forward. So there are a host of things to be bullish about. We've dramatically reduced the share count, utilized net free cash flow. What's not to like leverage - growing leverage free cash flow share reduction model our kind of business. On the discount LSXMA, we've talked about this a lot in the past. Discounts exist until we do something to clean them up. You saw through that Adventure's, I suspect someday we'll do something to clean it up by that way at LSXMA. And as far as an opportunity created by the KKR investment, I think the – you have to ask the Pandora board why they did it all, my guess is they needed cash and that's why they put together that pipe. And so I'm not sure if it creates an opportunity or not it speaks to the cash needs of their business.

Got it. Thank you.

Your next question comes from the line of John Tinker with Gabelli.

Thanks. Just following up on your comment on the Liberty ventures and how you need to tie it up with general communications. Does that structure perhaps with Liberty Media as you look at three separate tracking stocks and in particular you sort of have a Live that you highlight is doing well, sort of hanging in form along with perhaps is not best served?

Yeah I'm not sure that, thanks, John. I'm not sure that you know what we did at GCI fits perfectly with the same model, but we'll try and put our clever team to work on something that does. With that you know, the hammer which fits this nail. I think you rightly know Live is doing very well and Live has synergies potentially with multiples of our business and has the synergies around Formula One potentially in the event side, but also has synergies around potentially with SiriusXM, around some of the music content. So it's a high quality problem that there may be synergies with two parts of the business.

If I could soft cut different question on Liberty Braves, did I see correctly that you actually received some cash from the proceeds of selling BAM Tech and can you just talk a little about how we should look to your relationship with MLB which could actually be really quite a valuable part of the team?

Yeah, I don’t think we disclosed or allowed to disclose the amounts that were distributed by MLB for any BAM Tech sale or BAM Tech investment. Look there is a lot of value being created at the MLB level. We understand the value that being the owner of the sport can create our Formula One, well effectively there were 30 owners of the MLB brand and we were a 138th owner through the team. And there is a lot of value be created by the good work that Bob Boehm has done around BAM, both BAM itself and BAM Tech and BAM Tech was just monetized, but also other things that are being done by Rob Manfred [ph] at the MLB level. So I think there is value there, how much and what timeframe it gets distributed or how it's monetized, I think are very unclear, but they're a long - it's a long-term asset that we're a partial owner of.

Thank you.

Your next question comes from the line of Brandon Ross with BTIG.

Hi. Thanks for taking the questions. A couple of follow up on some prior questions. First on Charters Wireless initiative with Comcast. How do you like working together with Comcast, like you are on Wireless versus taking a shot at a merger. While we have a Republican president now? And then a follow up on Pandora, there was $100 million left on the pipe for strategic, would you guys consider investing in that. And then one more question. Amazon has been making a lot of noise in the music space between Echo with streaming service and its expansion into the concert business in ticketing. How do you think about Amazon's competitive direct to both Live Nation and Sirius or conversely the opportunities created by Amazon to focus on the space? Thanks.

That’s a lot of questions Brandon, I'll try and see if I can remember them all. Starting with Amazon.

I am sorry.

That's okay. Amazon is a ridiculously scary company. You know, a company which has a un-ability because of its scale to invest at incredibly low or potentially negative rates of return because they can cross subsidize and the market is willing to suspend disbelief and current profitability for future profitability and it's effectively as you know dominated or controlled by a very smart aggressive long term thinking CEO founder and Jeff. That's a scary formidable combination. And so we're certainly cognizant. We've been in the e-commerce space and seen what they've been able to do in that space. We - I think we have commented for a long time about the power that they have in music, just like others like Apple have in the space that make the music streaming space very scary. So to think about them and ticketing is certainly something that you know is needs to be watched. That having said, both Live and Sirius have differentiating factors that we think are making competitively very strong Live with both its promotion relationships, venue relationships, management relationships, all of the power it has that are differentiated and are a true moat [ph] around its business. And Sirius through its ease of use in the car, its positioned with OEMs. The exclusive content we have, the brand we have all of those have built a moat around its business are almost impenetrable, but we’ll see. But I think we have strong positions that are differentiated from what Amazon is trying to achieve. That having been said, I'll reiterate my first comments. Amazon is a ridiculously scary company. On Pandora, nobody has offered us any investment opportunity. We look at lots of investment opportunities when presented and somebody presented it. We may look at that too. On the first question of Charter, Comcast merger, I go the same way, I don't believe anyone's proposed that. I'm not sure even in the best of circumstances you could imagine that being achieved. But you know, I think our Chairman has imagined the news that it would be very powerful synergies, that's why he's the chairman. I'm not sure that gets through regulators. But again, I'm also not the regulatory lawyer. There are a ton of things as I said earlier on the call, whereas Jeff question, there are a ton of ways in which cooperating, working together with Comcast make unbelievably good business sense and unbelievably good consumer sense offering that we can offer on a national basis or near national basis for consumers. And so I think exploring those in wireless and other areas whether it be business services or home monitoring all sorts of things that we should be doing together. And Liberty is a huge believer in that opportunity and has been a big encourager as much as we can be with both Charter and Comcast.

Thanks for all the answers.

Your next question comes from the line of Barton Crockett with FBR Capital.

Okay. Thanks for taking the question. I was intrigued a little bit about that discussion about the TV renewal cycle at Formula One and I wanted to ask one kind of question related to capital, so a little bit bigger picture for really the pay-TV ecosystem and that is this, as you're going to the cycle of negotiating those deals, to what extent do you think it's reasonable to see an Internet player like Facebook being the lead video offering in particular markets for something like a Formula One? And then more generally, you know, we've seen you know, some of these internet guys start to step up and play around sports. You know over time how much of a threat do you think that is for the TV ecosystem economics in US and globally?

As for Internet guys, we got Chase, why don’t kick off, yes.

Yes. So I mean, there's no question the Internet guys are becoming more active. I think it's probably not quite as clear how big their appetite yet, but certainly the engagements are more serious than they've been. In the very short term it's tough to – rolling anything out, but tough to imagine them being the lead player in the short term. But look we'll engage with everybody. I mean, there are new competitors. So from my perspective their interest is all good. I mean, what you've got now is more players, more ways to package the content. In some ways more opportunities to create content packages for different players. And I think they'll - I think they're only going one way. I mean they have, Greg you know called them the Amazon scary, they're not the only ones you know in that space that have enormous resources. And I think these guys recognize videos a sweet spot. They're all talking about getting into more long form content, including sports content. We actually have a lot of engagement from them on created content, scripted reality shows. So they are in the short term becoming much more aggressive, much more engaged on all sorts of opportunities. It's great opportunity to create content. And I think they'll just be - they'll be a bigger part of our. There's the question of being a bigger part of our world as we go forward.

Next question. I guess I think Chase has covered, so.

Your next question comes from the line of Matthew Harrigan with Wunderlich.

Thank you. Steve Palmer and some other people are really talked the integration of data in the Live broadcasts, [indiscernible] and you could see the stats in the jersey, baseball game I guess you know the feel for the degree of difficulty and a fielding player or something like that. I mean clearly a lot of sports betting implications to say the least. Can you talk about that from the frame of the Braves and from Formula One and then with Formula One you got a lot of guys have been so, like Intel, Qualcomm already you know very big data oriented into the teams like Mercedes and that's just seems like something that's another one of those, you know, as I see - you alluded to briefly another kind of really good laid an opportunity for Formula One for the hardcore fans? Thank you.

Well, Matthew, I think there is obviously an opportunity to integrate information with the linear video stream. The reality is that, that is easier on digital platforms other than television and it's one of the reasons why OTP offerings are attractive, particularly in a data rich environment like baseball or a data rich environment like Formula One. So you know, it really adds on the - the answer that Chase said a minute ago that these digital platforms are going to grow. They are going to fill in interesting opportunities for us in markets and you will be in a slightly [indiscernible] I suspect with traditional broadcast partners.

And the only thing I'd add to it for us on Formula One is, it's really fertile ground for us. I think in many ways our video content I think is professionally done, but hasn't really taken advantage of the opportunities to make it richer. And you know whether it's a two screen or a game engagement, a digital or realistically even just traditional video screens to make it a better experience for consumers. We do a good professional job, but we haven't - and it's such a rich work in terms of data and we haven't really taken advantage of the opportunities that exist for us. And it marries to again a fan base that is incredibly passionate about the sport.

Thanks, Greg. Thanks, Chase.

Your final question comes from the line of Jason Bazinet with Citi.

Just had a question for Mr. Carey, as it relates to the OTT opportunity, I can imagine investors trying to look for analogues in the marketplace to try and size what could be worth. And the one that comes to mind is what WWE has done as a sport with a global brand. Can you just compare and contrast sort of the opportunity that you see for Formula One in vis-à-vis what WWE has done so far?

Yes. I guess, I don’t think WWE, I would carry the comparison too far or you know make it the only comparison. I mean in some ways you look at what leagues like the NFL and NBA have done outside the US with their digital past, whether its SUNDAY TICKET or League Pass that you know if you talk to them they've become incredibly - big part of their story and growing into new markets. So I think it's just that they're actually you know, many ways to look at this. And I do think we're different than the other sports in that we have such - we're truly a global sport. I mean others distribute their content around, but we really do have a global a global fan base. Its early days. I mean you know I think we are very much sort of evaluating what's the right - what's the right content and that clearly, you know, as Greg said it, it’s a much - it is data rich, but it's video rich too. To what degree do you do you consider expanding it beyond sort of the core of course, we are looking to develop sort of more of a feeder series formula three, formula two, formula one opportunity, obviously at our track. If you go to our events we have races beyond the forum - beyond the open you know, the open wheel, open seat and open cockpit race. So there are opportunities to add even more content, make it a home. We are the pinnacle of motor sport. So to what degree you know, or how do you want to - what do you want to let fans connect with through when over the top platform. This early on you know, all we're doing is value and realistically we're sort of dealing at this point with a white board with 100 ideas on it and were getting the research. We didn't really had - we didn't have any research before. So you know, we're getting the tools we need to figure out what connects and what's the right sort of content experience and data experience you want on that. So it's too early for me to sort of take - sort of really define that package. I think it's just something we hope this year to get a good handle on sort of what are the key elements of it. But it's very much a work in progress, but it's an important work in progress. You know because again I guess I've said a couple of times, we think there's a sizeable fan base that's passionate enough that you know that really would relish - that really high quality, in-depth unique look at Formula One and the related things.

That makes sense. Thank you.

I think that's enough for you this morning. Thank you to our listening audience. And as I said we look forward to seeing you at upcoming conferences or maybe even races or baseball games. Have a great day. Thank you operator.

Thanks a lot.

Ladies and gentlemen that does conclude the conference call for today. We thank you for your participation and ask that you please disconnect your line.