Liberty(LLYVK) - 2024 Q4 - Annual Report

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS AND RISK FACTORS This section alerts investors to forward-looking statements in the annual report concerning business plans, strategies, financing, asset recoverability, affiliate performance, and litigation, noting that future results may vary significantly due to economic, competitive, regulatory, geopolitical, cybersecurity, and pandemic factors, as well as tracking stock risks, requiring careful review of Item 1A 'Risk Factors' - Forward-looking statements encompass business, product, and marketing plans, strategies, financing, asset recoverability, affiliate performance, interest and stock price volatility, and legal and tax litigation[17] - Actual results may differ materially due to factors such as tracking stock historical financial information not reflecting independent company performance, financing capacity, debt impact, business popularity, acquisition benefits, economic conditions, management overlap, litigation outcomes, international operation risks, tax policies, information system security, pandemic effects, intellectual property reliance, third-party dependence, talent retention, Live Nation investment impact, F1 agreement termination risks, tax law changes, market expansion challenges, regulatory environment, event cancellations, evolving consumer viewing habits, currency fluctuations, tracking stock structure risks, market confusion, stock price volatility, uneven dividend payments, board conflicts of interest, geopolitical events, and Liberty Live spin-off uncertainties[17][18][21] PART I Item 1. Business Liberty Media Corporation primarily engages in the media and entertainment industry through its subsidiaries and equity investments, with core businesses including Formula 1 motor racing and an equity stake in Live Nation, utilizing a tracking stock structure and undergoing several reorganizations and acquisitions - Liberty Media Corporation primarily operates in the media and entertainment industry through its consolidated subsidiaries Formula 1 and QuintEvents, and equity method affiliate Live Nation[23][45] - The company completed the spin-off of Atlanta Braves Holdings on July 18, 2023, and reclassified its common stock into three tracking stocks: Liberty SiriusXM, Liberty Formula One, and Liberty Live, on August 3, 2023[27][28] - On January 2, 2024, the company acquired QuintEvents for approximately $277 million[30] - On September 9, 2024, the company completed the spin-off of Liberty SiriusXM Holdings, making it an independent public company, and reported it as a discontinued operation[31][32][36] - On March 29, 2024, the company agreed to acquire approximately 86% of Dorna Sports, S.L. for approximately €3 billion, with the transaction currently under a Phase II investigation by the European Commission[38] - On November 13, 2024, the company announced plans to spin off Liberty Live Group, at which point QuintEvents will be reattributed to Liberty Live Group, and the company will no longer use a tracking stock structure[39] General Development of Business This section outlines Liberty Media Corporation's business evolution, including its media and entertainment investments, the introduction and restructuring of tracking stocks, recent spin-offs of Braves Holdings and Liberty SiriusXM Holdings, the 2024 acquisition of QuintEvents, and planned acquisition of Dorna Sports and Liberty Live Group spin-off, all aimed at optimizing company structure and business portfolio - Liberty Media Corporation primarily engages in the media and entertainment industry through its subsidiaries and equity investments, mainly in North America and the United Kingdom[23] - The company completed the spin-off of Atlanta Braves Holdings on July 18, 2023, and reclassified its common stock into Liberty SiriusXM, Liberty Formula One, and Liberty Live tracking stocks on August 3, 2023[27][28] - On January 2, 2024, the company acquired QuintEvents for approximately $277 million[30] - On September 9, 2024, the company completed the spin-off of Liberty SiriusXM Holdings, making it an independent public company, and reported it as a discontinued operation[31][32][36] - On March 29, 2024, the company agreed to acquire approximately 86% of Dorna Sports, S.L. for approximately €3 billion, with the transaction currently under a Phase II investigation by the European Commission[38] - On November 13, 2024, the company announced plans to spin off Liberty Live Group, at which point QuintEvents will be reattributed to Liberty Live Group, and the company will no longer use a tracking stock structure[39] Description of Business This section details Liberty Media Corporation's main businesses, including Formula 1's operational model, revenue streams (race promotion, media rights, sponsorship), and strategic goals, as well as its equity investment in Live Nation's business segments (concerts, ticketing, sponsorship and advertising) and investment terms, with a brief mention of other minority equity investments - Formula 1 holds exclusive commercial rights to the FIA Formula One World Championship, managing its commercial development, with 24 events held in 2024[45] - Formula 1's strategic goals are to expand the global scale and appeal of the World Championship, enhancing financial performance and sporting value by maximizing commercial rights, increasing fan engagement, driving growth in key strategic markets, improving competitive balance, and achieving net-zero emissions by 2030[73][79] - Live Nation is a global leader in live entertainment, with business segments including concerts, ticketing, and sponsorship & advertising[76][77][78][79] - As of December 31, 2024, Liberty holds approximately 30% of Live Nation's outstanding shares and has the right to nominate two directors[81][82] Formula 1 Major Revenue Stream Proportions | Revenue Source | 2024 | 2023 | 2022 | | :------- | :----- | :----- | :----- | | Race Promotion | 29.3% | 29.3% | 28.6% | | Media Rights | 32.8% | 32.2% | 36.4% | | Sponsorship | 18.6% | 18.0% | 16.9% | Regulatory Matters This section discusses the European and national competition law regulations faced by Formula 1, noting that while the company adjusted practices after a 2001 European Commission investigation and received a comfort letter, it must continue to comply with competition law and may face future investigations or challenges, such as the US Department of Justice inquiry into Andretti Formula Racing's application to enter the World Championship - Formula 1's operations and business are subject to European and national competition laws, requiring commercial practices and agreements to comply with competitive market operations[85] - In 2001, the European Commission issued a comfort letter to Formula 1 after an investigation, but comfort letters are not binding, and further enforcement actions may be taken in the future[85] - In August 2024, the U.S. Department of Justice's Antitrust Division initiated an investigation into Formula 1's conduct regarding Andretti Formula Racing's application to enter the World Championship[128] Competition This section analyzes the intense competition faced by Formula 1 and Live Nation, with Formula 1 competing for media rights and advertising revenue against other top global sports events and for audiences against local racing and other entertainment, while Live Nation faces challenges in live music and ticketing from other venues, promoters, ticketing service providers, and emerging technologies - Formula 1 competes for media rights and advertising revenue with top global and regional sports events like the Olympics, FIFA World Cup, UEFA Champions League, and Premier League, as well as for audiences with local motor racing events and other forms of entertainment[86] - Live Nation faces intense competition in the live music industry, including attracting touring artists, ticketing services, and competition from other promoters and venue operators[87][172] - Live Nation's ticketing business faces intense competition from other major national, regional, and local ticketing service providers, as well as challenges from self-ticketing systems and the ticket resale market[173] Human Capital Resources This section describes Liberty Media Corporation's employee situation and human capital management strategies, with approximately 1,184 employees as of December 31, 2024, and a commitment to fostering a diverse, inclusive, and supportive work environment through talent development, diversity, equity, and inclusion initiatives, and competitive compensation and benefits to attract and retain talent - As of December 31, 2024, the company had 84 corporate employees and approximately 1,100 full-time and part-time subsidiary employees[89] - The company invests in employees' personal and professional development by offering tuition reimbursement, career coaching, professional workshops, and memberships[91] - The company is committed to diversity, equity, and inclusion, supporting same-sex partner benefits, paid parental leave, fertility benefits, flexible work arrangements, continuous training, and mentorship for women leaders[92] - Formula 1 promotes diversity in motor racing through engineering scholarship programs and the F1 Academy series (an all-female driver category)[93] - The company and its subsidiaries offer competitive compensation and benefits programs, including salaries, bonuses, equity awards, 401(k) plans, health insurance, paid time off, and employee assistance programs[94] Available Information This section states that Liberty Media Corporation's SEC filings (e.g., 10-K, 10-Q, 8-K) and corporate governance documents (e.g., corporate governance guidelines, code of conduct, committee charters) are freely available on the company's website, and shareholders can also obtain copies by written request - All company SEC filings (10-K, 10-Q, 8-K, and amendments) are available free of charge on the company's website, www.libertymedia.com[95](index=95&type=chunk) - Corporate governance guidelines, business conduct and ethics code, compensation committee charter, nominating and corporate governance committee charter, and audit committee charter are all accessible on the company's website[96] Item 1A. Risk Factors This section details significant risks associated with investing in Liberty Media Corporation's common stock, covering overall company operations, specific business risks for Formula One Group and Liberty Live Group, and unique risks arising from the company's tracking stock capital structure, including financial needs, market popularity, economic conditions, regulatory compliance, cybersecurity threats, geopolitical events, intellectual property protection, increased competition, and uncertainties regarding company spin-off plans - Historical financial information of tracking stocks may not reflect their performance as independent companies[99] - The company may face future capital needs and may not be able to obtain additional financing on acceptable terms[100] - Most of the company's consolidated debt is above the operating subsidiary level, and it may not generate sufficient cash in the future to service its debt and other financial obligations[101] - The success of businesses like Formula 1 and Live Nation depends on their appeal to the public, which is difficult to predict[102] - Economic weakness and uncertainty may reduce consumer demand for the company's products, services, and events[104] - Overlapping directors and management with QVC Group, Liberty Broadband, and TripCo may lead to conflicts of interest[106] - The spin-off of Liberty SiriusXM Holdings could result in significant tax liabilities for the company[109] - Degradation, failure, or misuse of the company's information systems could lead to service interruptions or the improper loss, use, and disclosure of personal and other confidential information, increasing costs, liabilities, or revenue losses[114][115] - Formula 1 and Live Nation may be significantly impacted by public health events such as pandemics[116][117][118] Risks Relating to our Company, as a Whole This section lists risks affecting Liberty Media Corporation as a whole, including that tracking stock financial information may not reflect independent company performance, future financing needs and debt repayment capacity, business reliance on public popularity, acquisition integration risks, economic conditions' impact on consumer demand, potential conflicts of interest from management overlap, litigation outcomes, international operation risks, potential tax liabilities from the Liberty SiriusXM Holdings spin-off, and the potential significant impact of cybersecurity threats and pandemics on business operations and financial condition - Financial information of tracking stocks may not reflect their performance as independent companies[99] - The company may face future capital needs and may not be able to obtain additional financing on acceptable terms[100] - Most of the company's consolidated debt is above the operating subsidiary level, and it may not generate sufficient cash in the future to service its debt and other financial obligations[101] - Business success depends on public popularity, which is difficult to predict[102] - Economic weakness and uncertainty may reduce consumer demand for the company's products, services, and events[104] - Overlapping directors and management with QVC Group, Liberty Broadband, and TripCo may lead to conflicts of interest[106] - The spin-off of Liberty SiriusXM Holdings could result in significant tax liabilities for the company[109] - Degradation, failure, or misuse of the company's information systems could lead to service interruptions or the improper loss, use, and disclosure of personal and other confidential information, increasing costs, liabilities, or revenue losses[114][115] - Formula 1 and Live Nation may be significantly impacted by public health events such as pandemics[116][117][118] Risks Relating to the Formula One Group This section details specific risks faced by the Formula One Group, including declining F1 popularity, termination of the 100-year agreement, team withdrawals, adverse actions by the FIA, competition law enforcement, difficulties in renewing commercial contracts, counterparty credit risk, tax challenges, barriers to new market expansion, changes in advertising and media rights regulations, event cancellations or postponements, accidents and terrorist attacks, emergence of competitors, changes in consumer viewing habits, confidential information breaches, intellectual property infringement, data privacy regulations, and debt covenant restrictions and exchange rate fluctuations - A decline in Formula 1's popularity could significantly and adversely impact the commercial exploitation of its rights[119][120] - Termination of the 100-year agreement could lead to the cessation of Formula 1's operations[121][122] - Teams may terminate their commitment to participate in the World Championship or default and withdraw under certain circumstances[123][124] - The FIA may take actions not in Formula 1's best interest[125] - Formula 1 may face enforcement actions under competition law, such as the U.S. Department of Justice's investigation into Andretti Formula Racing's application to enter the World Championship[126][127][128] - Formula 1 may be unable to renew, replace, or renegotiate race promotion, media rights, or sponsorship contracts on favorable terms[131] - Accidents or terrorist attacks during events could result in uninsured losses, disrupt events, and damage Formula 1's reputation[146][147][148] - Changes in consumer viewing habits and the emergence of new content distribution platforms could adversely affect Formula 1's business[150] - Formula 1's reliance on trademarks, copyrights, and intellectual property, as well as unauthorized digital piracy and illegal live streaming, could lead to revenue losses[153] - Formula 1's debt terms may restrict its financial and operational flexibility[159][162] - Fluctuations in exchange rates between the U.S. dollar and the functional currencies of Formula 1's businesses and counterparties could adversely affect its profitability[163] Risks Relating to the Liberty Live Group This section outlines specific risks faced by the Liberty Live Group, primarily concerning its equity investment in Live Nation, including the company's lack of control over Live Nation's operations, the significant impact of Live Nation's performance on Liberty's net earnings, Live Nation's business sensitivity to public tastes and artist appeal, reliance on key relationships (promoters, artists, customers), intense competition in the live music and ticketing industries, risks to system and infrastructure integrity, data loss or cybersecurity breaches, and intellectual property protection and infringement claims - The company has no right to manage its equity affiliate Live Nation and cannot compel it to operate in a manner favorable to the company[165] - The company's equity investment in Live Nation may significantly impact Liberty's and Liberty Live Group's net earnings[166] - Live Nation's business is highly dependent on public tastes and its ability to attract popular artists, and it may not be able to predict or respond to changes in consumer preferences[167] - Live Nation's business relies on relationships with key promoters, executives, agents, managers, artists, and customers, and any adverse changes could negatively affect its business[169][170][171] - Live Nation faces intense competition in the live music and ticketing industries and may not be able to maintain or increase current revenues[172][173][175] - The success of Live Nation's ticketing business and other operations partly depends on the integrity of its systems and infrastructure, as well as the integrity of affiliated and third-party computer systems, networks, and other communication systems[177][178][179] - Data loss or other cybersecurity vulnerabilities at Live Nation could cause significant damage to its business and operating results, and the processing, storage, use, and disclosure of personal or sensitive information may incur liabilities and additional costs due to government regulations, litigation, and conflicting legal requirements[180][181][182][183][184][185][186][187] - Live Nation may fail to adequately protect its intellectual property or be accused of infringing third-party intellectual property[188][189][190] Risks Relating to the Ownership of Our Common Stock Due to Our Tracking Stock Capitalization This section details the unique risks to common stock holders arising from Liberty Media Corporation's tracking stock capital structure, including holders being common stockholders of the entire company and bearing overall company risks, potential market confusion due to misunderstanding tracking stocks, the board's ability to split, spin off, or reattribute assets without all shareholder votes, making it difficult to assess future prospects based on past performance, the possibility of using one group's assets to pay another's liabilities, market prices not accurately reflecting underlying business performance, high market price volatility, unequal or no dividend payments, potential conflicts of interest, and the capital structure potentially inhibiting or preventing acquisition offers for specific businesses - Holders of Liberty Formula One common stock and Liberty Live common stock are common stockholders of the entire company and thus bear the risks of an investment in the company as a whole[192] - The market may be confused by tracking stocks, mistakenly believing they directly own shares of a specific company or have equity/voting rights[193] - The company may split, spin off, or reattribute assets, liabilities, and businesses of a tracking stock group in a manner that is adverse to some stockholders, and in some cases, not all stockholders may have the right to vote[194][195][196][197] - The board's ability to reattribute businesses, assets, and expenses may make it difficult for investors to evaluate the future prospects of a tracking stock group based on past performance[198] - The company may be required to use assets of one group to pay liabilities of another group[199] - The market prices of Liberty Formula One common stock and Liberty Live common stock may not reflect the performance of the businesses and assets they track[200][202] - The market prices of Liberty Formula One common stock and Liberty Live common stock may be highly volatile and affected by factors that do not affect traditional common stock[203] - The company may not pay dividends equally or at all on Liberty Formula One common stock or Liberty Live common stock[204] - The tracking stock capital structure may create conflicts of interest, and the board may make decisions that are adverse to only some holders of common stock[205][206] - Equity ownership by the company's directors or officers may create or appear to create conflicts of interest[207] - The company's capital structure and the fact that Formula One Group and Liberty Live Group are not independent companies may inhibit or prevent acquisition offers for these businesses and may make it difficult for a third party to acquire the company[223][224][225] Risks Relating to the proposed Liberty Live Split-Off This section discusses risks associated with the proposed Liberty Live Group spin-off, planned for the second half of 2025, noting that the transaction may not be completed on the expected timeline or at all, nor may it achieve the anticipated benefits, and the company expects to incur non-recurring costs and expenses that may not be offset by expected benefits - The company has announced plans to spin off Liberty Live Group in the second half of 2025, but the proposed transaction may not be completed on the expected timeline or at all, nor may it achieve the anticipated benefits[226] - The company expects to incur non-recurring costs and expenses related to the proposed Liberty Live spin-off, and there is no assurance that these costs will be offset by expected benefits[227] Item 1B. Unresolved Staff Comments This section states that the company has no unresolved staff comments - The company has no unresolved staff comments[228] Item 1C. Cybersecurity This section details Liberty Media Corporation's cybersecurity risk management and governance strategies, outlining how the company identifies, assesses, and manages cybersecurity threats through a multidisciplinary team and implements various technical, physical, and organizational measures, including risk assessments, incident detection and response, vulnerability management, disaster recovery plans, data encryption, cybersecurity controls, and employee training, with no material cybersecurity risks identified as of the report date - The company has implemented processes designed to prevent, assess, identify, and manage material risks related to cybersecurity threats[229] - Cybersecurity risks are assessed as part of the enterprise risk assessment and risk management program, designed and evaluated based on the NIST Cybersecurity Framework[231] - The company identifies and assesses cybersecurity risks through various methods, including monitoring the threat landscape, using vulnerability scanning software, analyzing threat reports, conducting threat and vulnerability assessments, utilizing internal and external audits, and performing penetration testing[232] - The company implements and maintains various technical, physical, and organizational measures, processes, and policies to manage and mitigate cybersecurity threat risks, including risk assessments, incident detection and response, vulnerability management, disaster recovery and business continuity plans, data encryption, cybersecurity controls, access controls, physical security, asset management, system monitoring, vendor risk management programs, and employee cybersecurity awareness training[233] - As of the report date, the company has not identified any cybersecurity risks that have materially affected or are reasonably likely to materially affect its business strategy, operating results, or financial condition[236] - The Board of Directors is responsible for risk oversight and has authorized the Audit Committee to assume primary risk oversight responsibilities, including privacy and cybersecurity risks[239] - The company has established a cross-functional Information Security Steering Committee (ISSC) responsible for managing technology and operational risks, including information security, fraud, vendor, data protection and privacy, business continuity and resilience, and cybersecurity risks[241] Item 2. Properties This section describes Liberty Media Corporation's and its subsidiaries' principal properties, including the corporate headquarters in Englewood, Colorado, Formula 1's leased offices and TV production facilities in London and Kent, and land and buildings owned in Las Vegas for the Grand Prix, with management deeming existing facilities sufficient for future business operations - The company owns its corporate headquarters located in Englewood, Colorado[245] - Formula 1 does not own significant properties but leases offices and television production and technical operations facilities in London and Kent[245] - The company owns a parcel of land and buildings adjacent to the Las Vegas Strip for the Las Vegas Grand Prix[245] Item 3. Legal Proceedings This section directs readers to Note 16 of the consolidated financial statements for detailed information regarding the company's legal proceedings - Information regarding the company's legal proceedings can be found in Note 16 to the consolidated financial statements[247] Item 4. Mine Safety Disclosures This section states that mine safety disclosures are not applicable to the company's business - Mine safety disclosures are not applicable[248] PART II Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities This section provides market information for Liberty Media Corporation's tracking stocks, including trading symbols and markets for Series A, B, C Liberty Formula One and Liberty Live common stock, discloses quarterly high and low sales prices for Series B stocks, lists the number of shareholders as of January 31, 2025, states no current intention to pay cash dividends, and notes that while stock repurchase programs were approved in 2019 and 2022 with approximately $1.1 billion available for future repurchases as of December 31, 2024, no common stock repurchases occurred in 2024 and 2023 - Liberty Media Corporation's Series A, B, C Liberty Formula One common stock trades as FWONA/B/K, and Series A, B, C Liberty Live common stock trades as LLYVA/B/K, respectively[251] - As of January 31, 2025, the number of record holders for Liberty Formula One common stock was: Series A 621, Series B 40, Series C 747; for Liberty Live common stock: Series A 568, Series B 37, Series C 754[255] - The company currently does not intend to pay cash dividends[256] - The company's Board of Directors has authorized the repurchase of $2 billion of common stock, with approximately $1.1 billion available for future stock repurchases as of December 31, 2024[258][259] - No repurchases of Series A or Series C Liberty Formula One common stock, or Series A or Series C Liberty Live common stock, were made in 2024 and 2023[259][563] Quarterly High and Low Sales Prices for Series B Liberty Formula One Common Stock | Quarter | High Price (USD) | Low Price (USD) | | :--------- | :------ | :------ | | 2023 | | | | Q1 | $68.02 | $54.31 | | Q2 | $68.00 | $63.00 | | Q3 | $66.00 | $55.00 | | Q4 | $56.02 | $56.02 | | 2024 | | | | Q1 | $65.00 | $60.00 | | Q2 | $66.50 | $58.51 | | Q3 | $72.13 | $63.96 | | Q4 | $85.00 | $69.00 | Quarterly High and Low Sales Prices for Series B Liberty Live Common Stock | Quarter | High Price (USD) | Low Price (USD) | | :--------------------------------- | :------ | :------ | | 2023 | | | | Q3 (First quoted since Aug 4, 2023) | $34.35 | $28.38 | | Q4 | $33.50 | $31.18 | | 2024 | | | | Q1 | $39.00 | $36.00 | | Q2 | $40.00 | $33.50 | | Q3 | $50.00 | $33.30 | | Q4 | $75.25 | $50.00 | Item 6. [Reserved] This section is reserved Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations. This section provides a detailed discussion and analysis of Liberty Media Corporation's financial condition and results of operations as of December 31, 2024, highlighting the company's management of media and entertainment assets through a tracking stock structure, multiple reorganizations and acquisitions, and noting increased consolidated revenue and operating income in 2024, primarily driven by Formula 1's strong performance and QuintEvents' contribution, along with detailed insights into business strategies, other income and expenses, liquidity and capital resources, key accounting estimates, and segment operating results - Liberty Media Corporation holds controlling and non-controlling interests in media and entertainment companies, with Formula 1 as its most significant operating subsidiary and Live Nation as its primary equity investment[263][264] - The company completed the spin-off of Atlanta Braves Holdings in 2023 and restructured its tracking stocks on August 3, 2023, creating the Liberty SiriusXM Group, Formula One Group, and Liberty Live Group[267][268] - On January 2, 2024, the company acquired QuintEvents for a total consideration of approximately $277 million[271] - On September 9, 2024, the company completed the spin-off of Liberty SiriusXM Holdings and reported it as a discontinued operation[272][273] - As of December 31, 2024, the Formula One Group primarily includes Liberty's interests in Formula 1 and QuintEvents, cash, and 2.25% convertible senior notes; the Liberty Live Group primarily includes Liberty's interests in Live Nation, cash, other minority equity investments, 2.375% exchangeable senior debentures, and an undrawn margin loan[275][276] - The company plans to spin off Liberty Live Group in the second half of 2025, reattributing QuintEvents to Liberty Live Group before then, and will no longer use a tracking stock structure[280] Consolidated Operating Results Overview (2024 vs 2023) | Metric | 2024 (million USD) | 2023 (million USD) | Change (million USD) | | :--------------- | :---------------- | :---------------- | :-------------- | | Total Revenue | 3,653 | 3,572 | +81 | | Operating Income | 276 | 255 | +21 | | Adjusted OIBDA | 767 | 691 | +76 | Overview This section outlines Liberty Media Corporation's business structure, emphasizing its media and entertainment investments, particularly Formula 1 and Live Nation, detailing the evolution of its tracking stocks, including the spin-offs of Atlanta Braves Holdings and Liberty SiriusXM Holdings, and the 2023 stock reclassification, while also mentioning the 2024 acquisition of QuintEvents, the planned Dorna Sports acquisition, and the proposed Liberty Live Group spin-off, all aimed at optimizing the company's asset portfolio and capital structure - Liberty Media Corporation holds controlling and non-controlling interests in media and entertainment companies, with Formula 1 as its most significant operating subsidiary and Live Nation as its primary equity investment[263][264] - The company completed the spin-off of Atlanta Braves Holdings in 2023 and restructured its tracking stocks on August 3, 2023, creating the Liberty SiriusXM Group, Formula One Group, and Liberty Live Group[267][268] - On January 2, 2024, the company acquired QuintEvents for a total consideration of approximately $277 million[271] - On September 9, 2024, the company completed the spin-off of Liberty SiriusXM Holdings and reported it as a discontinued operation[272][273] - As of December 31, 2024, the Formula One Group primarily includes Liberty's interests in Formula 1 and QuintEvents, cash, and 2.25% convertible senior notes; the Liberty Live Group primarily includes Liberty's interests in Live Nation, cash, other minority equity investments, 2.375% exchangeable senior debentures, and an undrawn margin loan[275][276] - The company plans to spin off Liberty Live Group in the second half of 2025, reattributing QuintEvents to Liberty Live Group before then, and will no longer use a tracking stock structure[280] Strategies and Challenges of Business Units This section outlines Formula 1's strategic objectives, aiming to further expand the global scale and appeal of the World Championship to enhance its sporting value and financial performance by maximizing commercial rights, increasing fan engagement, driving growth in key strategic markets, improving competitive balance, and achieving net-zero emissions by 2030 - Formula 1's strategic objective is to further expand the global scale and appeal of the World Championship to enhance its overall value as a sport and its financial performance[285] - Key strategies include: maximizing commercial rights value (through race renewals, media rights, F1 TV products, sponsorship revenue, and premium hospitality services), enhancing fan engagement, driving growth in key strategic markets, improving competitive balance and team financial stability, and enhancing environmental and social impact by achieving net-zero emissions by 2030 and introducing 100% advanced sustainable fuels[285] Results of Operations—Consolidated This section provides Liberty Media Corporation's consolidated operating results as of December 31, 2024, showing an $81 million increase in total revenue, primarily from Formula 1 and QuintEvents, a $21 million increase in consolidated operating income due to Formula 1's improved performance and the Atlanta Braves Holdings spin-off, and a $76 million increase in Adjusted OIBDA, also driven by Formula 1, while noting a $73 million goodwill impairment loss for QuintEvents and $32 million in acquisition costs - Revenue growth was primarily driven by increased Formula 1 revenue and QuintEvents revenue, partially offset by reduced revenue due to the Atlanta Braves Holdings spin-off and increased intergroup eliminations[288] - Operating income growth was primarily driven by improved Formula 1 operating performance and the Atlanta Braves Holdings spin-off, partially offset by QuintEvents' operating loss, mainly due to goodwill impairment[289] - In 2024, the company recorded $34 million in stock-based compensation expense, up from $29 million in 2023[290] - QuintEvents recognized a $73 million goodwill impairment loss in 2024, and the company also recorded $32 million in acquisition costs, primarily related to the Dorna acquisition[292] Consolidated Operating Results (2024 vs 2023) | Metric | 2024 (million USD) | 2023 (million USD) | Change (million USD) | | :--------------- | :---------------- | :---------------- | :-------------- | | Total Revenue | 3,653 | 3,572 | +81 | | Operating Income | 276 | 255 | +21 | | Adjusted OIBDA | 767 | 691 | +76 | Other Income and Expense This section analyzes Liberty Media Corporation's other income and expense components as of December 31, 2024, showing an $11 million decrease in consolidated interest expense primarily due to the Braves Group spin-off, an increase in equity in earnings of affiliates to $228 million driven by Live Nation, a net realized and unrealized loss on financial instruments of $383 million mainly from fair value changes in debt and foreign exchange forward contracts, the settlement of intergroup equity unrealized gains/losses in 2023, and an increase in other net income driven by higher interest and dividend income, reduced debt extinguishment losses, and lower tax-related expenses with QVC Group - Consolidated interest expense decreased by $11 million, primarily due to reduced Braves Group interest expense following the Atlanta Braves Holdings spin-off, though Liberty Live Group's interest expense increased due to higher average debt[296] - Equity in earnings of affiliates increased, primarily due to Live Nation's contribution, with its interest reattributed to Liberty Live Group on August 3, 2023[297] - Net realized and unrealized losses on financial instruments were $383 million, primarily due to fair value changes in debt measured at fair value (such as exchangeable debentures) and foreign exchange forward contracts[298] - Net unrealized gains and losses on intergroup equity were settled and terminated as of December 31, 2023[299] - Other net income increased, primarily driven by higher interest and dividend income, reduced losses on debt extinguishment, and lower tax-related expenses with QVC Group, partially offset by increased foreign exchange losses[300] - The company's income tax expense for 2024 was $39 million, with an effective tax rate of 163%, primarily impacted by non-deductible losses and executive compensation[301] Other Income and Expense (2024 vs 2023) | Metric | 2024 (million USD) | 2023 (million USD) | | :--------------------------------- | :---------------- | :---------------- | | Interest Expense | (237) | (248) | | Equity in Earnings of Affiliates | 228 | 157 | | Net Realized and Unrealized Gains (Losses) on Financial Instruments | (383) | (167) | | Net Unrealized Gains (Losses) on Intergroup Equity | — | (68) | | Other, Net | 92 | 46 | Liquidity and Capital Resources This section discusses Liberty Media Corporation's liquidity and capital resources, reporting $2.956 billion in cash and cash equivalents as of December 31, 2024, primarily invested in U.S. Treasury securities and other highly-rated financial instruments, with liquidity sources including cash balances, subsidiary operating cash flows, asset sales, public investment portfolio monetization, debt financing, and equity issuances, noting $205 million used for acquisitions and $77 million for debt repayment in 2024, and $939 million net proceeds from Series C Liberty Formula One common stock issuance, with future cash expected for capital expenditures, new business investments (including the Dorna acquisition), and debt repayment, and existing liquidity deemed sufficient for future needs - As of December 31, 2024, the company had $2.956 billion in cash and cash equivalents, primarily invested in U.S. Treasury securities and other highly-rated financial instruments[302][305] - Sources of liquidity include available cash balances, cash flows from subsidiary operations, net proceeds from asset sales, monetization of public investment portfolios, debt borrowings, and equity issuances[303] - Formula 1's cash is available to Liberty, but subject to restrictive payment (RP) tests under its first lien term loan and revolving credit facility[305] - As of December 31, 2024, Liberty had $400 million available under its margin loan secured by Live Nation stock[305] - In 2024, Liberty primarily used $205 million for acquisitions (net of cash acquired) and $77 million for debt repayment[308] - In 2024, the company received net proceeds of approximately $939 million from the issuance of approximately 12.2 million shares of Series C Liberty Formula One common stock[308] - The company anticipates future cash uses primarily for capital expenditures, new business investments (including the Dorna acquisition), and debt repayment, to be funded through existing cash, the margin loan, and new debt instruments or operating subsidiary dividends[310][311] Cash Flows from Continuing Operations (2024 vs 2023) | Cash Flow Type | 2024 (million USD) | 2023 (million USD) | | :------------------- | :---------------- | :---------------- | | Net Cash from Operating Activities | 553 | 634 | | Net Cash from Investing Activities | (187) | (544) | | Net Cash from Financing Activities | 894 | (285) | Off-Balance Sheet Arrangements and Material Cash Requirements This section discloses Liberty Media Corporation's off-balance sheet arrangements and material cash requirements as of December 31, 2024, with primary cash needs including long-term debt principal and interest payments, operating lease obligations, and short-term leases, totaling $5.836 billion, with the majority ($3.677 billion) due after five years - Long-term debt amounts are presented at face value at maturity and may differ from amounts reported on the consolidated balance sheets[314] - Interest payments are based on outstanding debt and interest rates as of December 31, 2024, assuming existing debt is repaid as scheduled[314] - The company does not recognize lease liabilities for short-term leases, but some short-term leases may span multiple years[314] Material Cash Requirements (as of December 31, 2024) | Item | Total (million USD) | Within 1 Year (million USD) | 2-3 Years (million USD) | 4-5 Years (million USD) | After 5 Years (million USD) | | :----------------- | :-------------- | :--------------- | :--------------- | :--------------- | :--------------- | | Long-Term Debt | 4,058 | 32 | 580 | 580 | 2,866 | | Interest Payments | 1,555 | 170 | 314 | 274 | 797 | | Operating Lease Obligations | 51 | 15 | 12 | 10 | 14 | | Short-Term Leases | 98 | 52 | 32 | 14 | — | | Other Obligations | 74 | 71 | 3 | — | — | | Total Consolidated | 5,836 | 340 | 941 | 878 | 3,677 | Critical Accounting Estimates This section outlines Liberty Media Corporation's critical accounting estimates used in preparing financial statements, primarily non-financial instrument valuation and income tax accounting, with non-financial instrument valuation involving fair value allocation of net tangible and identifiable intangible assets acquired in business combinations, annual recoverability assessments of goodwill and other non-amortizing intangible assets, and recoverability assessments of other long-lived assets upon triggering events, while income tax accounting requires estimating current and deferred tax liabilities and assets, necessitating judgment on future tax impacts, noting a $73 million goodwill impairment loss for QuintEvents in 2024 - The company's critical accounting estimates include non-financial instrument valuation (primarily involving fair value allocation of acquired assets in business combinations, recoverability assessments of goodwill and other non-amortizing intangible assets, and recoverability assessments of other long-lived assets) and income tax accounting[315][316][321] - Non-financial instrument valuation requires a high degree of judgment, including estimates of future cash flows, discount rates, and other assumptions[316] - As of December 31, 2024, Formula 1 had $3.956 billion in goodwill, and the company and other categories had $178 million in goodwill[317] - The company performs recoverability assessments of goodwill and other non-amortizing intangible assets annually in the fourth quarter[318] - In the fourth quarter of 2024, the company performed a quantitative analysis for QuintEvents, recognizing a $73 million goodwill impairment loss due to its estimated fair value being below its carrying value[320] - Income tax accounting requires estimating current and deferred tax liabilities and assets, necessitating judgment on future tax impacts[321] Results of Operations—Businesses This section details the operating results of the Formula One Group, showing Formula 1's total revenue reaching $3.411 billion in 2024, an increase of $189 million year-over-year, primarily driven by growth in race promotion, media rights, and sponsorship revenue, with media rights revenue rising due to contractual growth and increased F1 TV subscriptions, race promotion revenue growing from more events and higher contractual fees, and sponsorship revenue benefiting from new sponsors and existing contract growth, while Formula 1's operating income increased by $100 million to $492 million, driven by revenue growth but partially offset by increased operating costs and selling, general, and administrative expenses - Formula 1 is a global motor racing business holding exclusive commercial rights to the World Championship, with primary revenues from race promotion, media rights, and sponsorship arrangements[322] - The 2024 World Championship included 24 events, compared to 22 events in 2023[323] - Primary Formula 1 revenue increased by $197 million, primarily due to increases in media rights revenue (contractual growth and F1 TV subscription growth), race promotion revenue (increased number of events and higher contractual fees), and sponsorship revenue (new sponsors and growth in existing contracts)[325] - Other Formula 1 revenue decreased by $8 million, primarily due to lower Las Vegas Grand Prix hospitality revenue, partially offset by increased number of events, Paddock Club growth, F1 Experiences licensing fees, F2 new car sales, and freight revenue[327] - Formula 1 cost of revenue increased by $76 million, with team payments increasing by $51 million and other cost of revenue increasing by $25 million[330][331][332] - Selling, general, and administrative expenses increased by $47 million, primarily due to higher personnel, information technology, marketing, legal, and other professional fees, as well as property costs for the full year of Las Vegas Grand Prix Plaza operations[333] - Depreciation and amortization decreased by $34 million, primarily due to reduced amortization expense for certain intangible assets acquired in Liberty's acquisition of Formula 1[334] Formula 1 Operating Results (2024 vs 2023) | Metric | 2024 (million USD) | 2023 (million USD) | | :----------------------- | :---------------- | :---------------- | | Primary Formula 1 Revenue | 2,757 | 2,560 | | Other Formula 1 Revenue | 654 | 662 | | Total Formula 1 Revenue | 3,411 | 3,222 | | Operating Expenses | (2,332) | (2,256) | | Selling, General & Administrative Expenses | (288) | (241) | | Adjusted OIBDA | 791 | 725 | | Stock-Based Compensation Expense | (3) | (3) | | Depreciation and Amortization | (296) | (330) | | Operating Income | 492 | 392 | | Number of Events | 24 | 22 | Item 7A. Quantitative and Qualitative Disclosures About Market Risk This section discloses Liberty Media Corporation's market risks in the normal course of business, primarily interest rate risk and equity price risk, managed by maintaining an appropriate mix of fixed and floating rate debt and utilizing equity collar options and other financial instruments for publicly traded securities, noting $180 million in floating rate debt and $2.728 billion in fixed rate debt as of December 31, 2024, and that the equity investment in Live Nation also faces market risk, with its fair value not reflected on the balance sheet - The company faces interest rate risk and equity price risk, managing interest rate risk by maintaining an appropriate mix of fixed and floating rate debt[337] - The company manages market risk related to publicly traded securities through equity collar options and other financial instruments[338] - The company's equity investment in Live Nation (accounted for using the equity method) is not reflected at fair value on the balance sheet, and its market price fluctuations may indirectly impact the company's financial statements[339] Debt Composition (as of December 31, 2024) | Group | Floating Rate Debt Principal (million USD) | Weighted Average Interest Rate | Fixed Rate Debt Principal (million USD) | Weighted Average Interest Rate | | :--------------- | :-------------------------- | :----------- | :-------------------------- | :----------- | | Formula One Group | 180 | 6.2% | 2,728 | 4.4% | | Liberty Live Group | NA | NA | 1,150 | 2.4% | Item 8. Financial Statements and Supplementary Data. This section states that Liberty Media Corporation's consolidated financial statements begin on page II-24 of this report, and financial statement schedules required by Regulation S-X are presented in Item 15 - Liberty Media Corporation's consolidated financial statements are presented starting on page II-24[340] - Financial statement schedules required by Regulation S-X are presented in Item 15[340] Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. This section states that there are no changes in or disagreements with accountants regarding accounting and financial disclosure - There are no changes in or disagreements with accountants regarding accounting and financial disclosure[341] Item 9A. Controls and Procedures. This section discloses Liberty Media Corporation's disclosure controls and procedures and the effectiveness of internal control as of December 31, 2024, with management assessing both as effective, noting that the company is reviewing internal controls following the 2024 acquisition of QuintEvents, but otherwise, no significant changes to internal controls occurred during the reporting period - As of December 31, 2024, the company's management assessed its disclosure controls and procedures as effective[342][343] - The company's management assessed its internal control over financial reporting as effective as of December 31, 2024[350] - The company is reviewing its internal controls following the acquisition of QuintEvents in 2024, but otherwise, no significant changes to internal controls occurred during the reporting period[345] Item 9B. Other Information. This section discloses that no Rule 10b5-1 trading arrangements or non-Rule 10b5-1 trading arrangements were adopted or terminated by the company's directors or officers during the fiscal quarter ended December 31, 2024 - No Rule 10b5-1 trading arrangements or non-Rule 10b5-1 trading arrangements were adopted or terminated by the company's directors or officers during the fiscal quarter ended December 31, 2024[346] Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections. This section states that disclosure regarding foreign jurisdictions that prevent inspections is not applicable to the company's business - Disclosure regarding foreign jurisdictions that prevent inspections is not applicable[347] MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING This section presents management's report on the effectiveness of Liberty Media Corporation's internal control over financial reporting as of December 31, 2024, with management concluding, based on the COSO framework, that the company's internal control is effective, noting the exclusion of internal controls of QuintEvents, LLC, acquired in the first quarter of 2024, with total assets of $424 million and total revenues of $340 million, from the assessment - Management is responsible for establishing and maintaining adequate internal control over financial reporting for the company[349] - As of December 31, 2024, management assessed the company's internal control over financial reporting as effective[350] - Management excluded the internal controls of QuintEvents, LLC, acquired in the first quarter of 2024, with total assets of $424 million and total revenues of $340 million, from its assessment[350] Report of Independent Registered Public Accounting Firm (Internal Control) KPMG LLP, as the independent registered public accounting firm, issued an unqualified opinion on the effectiveness of Liberty Media Corporation's internal control over financial reporting as of December 31, 2024, based on the COSO framework, noting that its audit excluded the assessment of internal controls of QuintEvents, LLC, acquired in 2024, which had total assets of $424 million and total revenues of $340 million in the consolidated financial statements - KPMG LLP issued an unqualified opinion on the effectiveness of Liberty Media Corporation's internal control over financial reporting as of December 31, 2024[354] - The auditor's audit excluded the assessment of internal controls of QuintEvents, LLC, acquired in 2024, which had total assets of $424 million and total revenues of $340 million in the consolidated financial statements[356] Report of Independent Registered Public Accounting Firm (Consolidated Financial Statements) KPMG LLP issued an unqualified opinion on Liberty Media Corporation's consolidated balance sheets as of December 31, 2024 and 2023, and the related consolidated statements of operations, comprehensive earnings (loss), cash flows, and equity for the three years ended December 31, 2024, noting reliance on Ernst & Young LLP's report for Live Nation Entertainment, Inc.'s financial statements, and identifying the goodwill impairment assessment for the Sirius XM reporting unit as a critical audit matter involving highly subjective judgments on assumptions like revenue growth rates, long-term growth rates, and discount rates - KPMG LLP issued an unqualified opinion on Liberty Media Corporation's consolidated financial statements as of December 31, 2024 and 2023[363] - The auditor's opinion is partly based on Ernst & Young LLP's audit report on the financial statements of Live Nation Entertainment, Inc[365] - The goodwill impairment assessment for the Sirius XM reporting unit was identified as a critical audit matter, involving highly subjective judgments on assumptions such as revenue growth rates, long-term growth rates, and discount rates[369][370] - The company recognized a goodwill impairment loss of $2.819 billion for the Sirius XM reporting unit as of December 31, 2024[369] LIBERTY MEDIA CORPORATION AND SUBSIDIARIES Consolidated Balance Sheets This section presents Liberty Media Corporation's and its subsidiaries' consolidated balance sheets as of December 31, 2024 and 2023, showing total assets of $12.948 billion at year-end 2024, a significant decrease from $41.327 billion at year-end 2023, primarily due to the deconsolidation of assets and liabilities of discontinued operations following the Liberty SiriusXM Holdings spin-off, with cash and cash equivalents increasing to $2.956 billion, total liabilities decreasing to $5.897 billion, and total stockholders' equity decreasing to $7.029 billion - Total assets decreased from $41.327 billion in 2023 to $12.948 billion in 2024, primarily due to the deconsolidation of assets of discontinued operations following the Liberty SiriusXM Holdings spin-off[376] - Total liabilities decreased from $21.882 billion in 2023 to $5.897 billion in 2024, also primarily impacted by discontinued operations[376] Consolidated Balance Sheet Key Data (as of December 31, 2024) | Item | 2024 (million USD) | 2023 (million USD) | | :----------------------- | :---------------- | :---------------- | | Cash and Cash Equivalents | 2,956 | 1,713 | | Current Assets of Discontinued Operations | — | 1,361 | | Investments in Affiliates | 491 | 374 | | Property and Equipment, Net | 810 | 838 | | Goodwill | 4,134 | 3,956 | | Amortizable Intangible Assets, Net | 2,689 | 2,858 | | Deferred Income Tax Assets | 760 | 772 | | Other Assets | 717 | 612 | | Noncurrent Assets of Discontinued Operations | — | 28,540 | | Total Assets | 12,948 | 41,327 | | Accounts Payable and Accrued Liabilities | 648 | 474 | | Current Portion of Debt | 26 | 106 | | Deferred Revenue | 267 | 247 | | Financial Instrument Liabilities | 138 | 8 | | Current Liabilities of Discontinued Operations | — | 3,876 | | Long-Term Debt | 4,522 | 4,117 | | Noncurrent Liabilities of Discontinued Operations | — | 12,834 | | Total Liabilities | 5,897 | 21,882 | | Total Stockholders' Equity | 7,029 | 16,396 | | Total Equity | 7,051 | 19,445 | LIBERTY MEDIA CORPORATION AND SUBSIDIARIES Consolidated Statements Of Operations This section presents Liberty Media Corporation's and its subsidiaries' consolidated statements of operations for the three years ended December 31, 2024, showi