Liberty(FWONA) - 2023 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company reported a strong free cash flow due to Wave 1 and Wave 2 sales, although it may have overstated the true impact of the operating business for Q1 [1] - Liberty SiriusXM Group had attributed cash and liquid investments of approximately $377 million at quarter end, excluding $53 million of cash held directly at SiriusXM [37] - Total Liberty SiriusXM Group attributed principal amount of debt is $13 billion, which includes $9.6 billion directly at the Sirius level [38] Business Line Data and Key Metrics Changes - Live Nation experienced a tremendous quarter with ticketing GTV up 60% and AOi up 53% to $320 million, converting 59% of that AOi into $190 million of free cash flow [33] - Formula One's primary revenue grew with increases across race promotion, media rights, and sponsorship, while other F1 revenue decreased primarily due to easing freight cost inflation [64] - The Braves Group had attributed cash and liquid investments of $215 million at quarter end, excluding $30 million of restricted cash [66] Market Data and Key Metrics Changes - Global audiences for Formula One exceeded 70 million viewers for the first two races of the season, with significant increases in key markets across Europe and North America [45] - The Saudi Arabian Grand Prix broke 1.52 million viewers, marking ESPN's most viewed Grand Prix on record [58] - The Australian Grand Prix welcomed 445,000 fans, up from 420,000 the prior year, marking a new record for the century [46] Company Strategy and Development Direction - The company is focused on capital allocation and is looking for attractive opportunities for cash generation, including the Vegas effort which is expected to generate good returns [118] - Formula One is engaging with fans across platforms and is expanding its sponsorship portfolio, with new partnerships and extensions announced [47][96] - The company aims to enhance the quality of promoters and create unique events that are commercially viable [86] Management's Comments on Operating Environment and Future Outlook - Management sees strong demand in the business despite recession scenarios and expects continued growth with upcoming tours [4] - The company is optimistic about the future of sustainable fuels in motorsport, aligning with EU regulations [49] - Management expressed confidence in the operational improvements and expected positive self-pay net ads in the latter half of the year [56] Other Important Information - The new sprint format in Formula One was unanimously approved by teams and is expected to increase intensity and action across weekends [141] - The company is progressing with the construction of the Paddock Building for the Las Vegas Grand Prix, which is over 60% complete [35] - The F1 Academy was introduced to increase opportunities for female participation in motorsports [142] Q&A Session All Questions and Answers Question: Update on capital allocation at Formula One - Management indicated that the recent term loan trigger provides more flexibility for capital allocation and potential leverage adjustments [7] Question: Comments on the Concorde Agreement renegotiation timing - Management stated that they plan to make a decision on the Concorde Agreement by the end of the year, emphasizing the growth of Formula One [20] Question: Insights on the potential addition of new teams in Formula One - Management noted that there is a process in place to assess interest from potential new teams, with analysis expected to be completed by mid-May [10]