Formula One Group

Welcome to the Liberty Media Corporation's 2023 Q3 earnings call. During the presentation, all participants will be in a listen-only mode. Afterwards, we will conduct a question and answer session. At that time, if you have a question, please press star 1 on your telephone. As a reminder, this conference will be recorded November 3rd. I would now like to turn the call over to Shane Kleinstein, Vice President 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. Actual events or results could differ materially due to a number of risks and uncertainties, including those mentioned in the most recent Forms 10-K and 10-Q, followed by Liberty Media with the SEC, and the most recent Form 10-Q and registration statement on Form S-1, followed by Atlanta Braves Holdings with the SEC. These forward-looking statements speak only as of the date of this call. and Liberty Media and Atlanta Braves Holdings expressly disclaim any obligation or undertaking to disseminate any updates or revisions to any forward-looking statement contained herein to reflect any change in Liberty Media or Atlanta Braves Holdings' expectations with regard thereto or any change in events, conditions, or circumstances on which any such statement is based. On today's call, we will discuss certain non-GAAP financial measures for Liberty Media, SiriusXM, and Atlanta Braves Holdings, including adjusted OIBDA and adjusted EBITDA. The required definitions and reconciliations for Liberty Media, SiriusXM, and Atlanta Braves Holdings, Schedules 1 through 3, can be found at the end of the earnings press release issued today, which are available on Liberty Media and Atlanta Braves Holdings websites. Now I'd like to turn the call over to Greg Maffei, Liberty's President and CEO.

Thank you, Shane, and good morning to all. Today speaking in the call, we will also have Formula One's President and CEO, Stefano Domenicale, and Liberty's Chief Accounting and Principal Financial Officer, Brian Wendley. Also, during Q&A, we will be available to answer questions related to the Atlanta Braves holdings and Braves management will be available as well. So beginning with Liberty Series XM, we did propose a combination of LSXM and Siri. The goal is to rationalize the dual corporate structure, create a single share class, and benefit both groups of shareholders. We believe such a combination would lead to enhanced trading dynamics in new series and with increased liquidity, less technical pressure, for example, a smaller short interest, and a higher likelihood of future index inclusion. We will provide updates on this potential transaction only if and when an agreement is reached. So let me turn to Sirius itself. Q3 results demonstrate what management had put forward during the year, that there would be continuous improvement throughout the year. and we saw sequential improvements in self-pay net adds, and we expect a slightly positive back half of the year. Dividend grew 4% versus the prior year and 6% sequentially, and there were $40 million of cost savings that were realized during the third quarter. The dividend was raised 10%. The Board approved that, showing continued confidence in Sirius's cash flow generation capabilities. Sirius also announced an expanded partnership with Ford to make Sirius XM a standard feature in all traditional F1s, beginning with the 2024 model year. That's important because the Ford F-150 has been the best-selling vehicle in the US for over 40 years. Management does remain focused on its strategic objectives, supported by the significant EBITDA and free cash flow generation. you will see a new streaming experience and branded platform announced next Wednesday, the day before our analyst day, by the Sirius management team at their own event. And we believe this new experience will be able to drive engagement and enhance subscriber acquisition and retention. Turning now to the Formula One group. We announced in September our planned acquisition of Quint. Quint is a provider of hospitality inventory and they sell unique experiences to F1, the NBA, for the NBA All-Star Game, the Kentucky Derby and other sporting events. We believe this merger or this purchase will enable us an enhanced partnership with F1 and lead us to expand to other live sporting events. Quint is a high growth asset with EBITDA and cash flow positive capabilities. and currently already are both, but we'll expect we'll grow more over time. Turning to other things at F1, during the quarter in October, we repriced the $1.7 billion of our F1 term loan B, and we tightened the spread there from 300 basis points to 225 basis points. At F1 itself, we see surging popularity, and it continues. We've had continued sellouts in the grandstands and the paddock clubs. We've seen growth in engagement and awareness across social platforms, TV, digital platforms like F1T, social, consumer media, and others. You continue to see new interest in Formula One. For example, we've seen new investors, high-profile investors join at Alpine, Roy McIlroy, Anthony Joshua, and Patrick Mahomes, and that follows Ryan Reynolds' investment in June. This morning, F1, we also announced a five-year extension of our race in Brazil. through 2030. We are excited for the inaugural Vegas race in just under two weeks begin. The pit building is ready. We received a certificate of occupancy to operate for the race. This will be the largest pit building on the F1 calendar. The rooftop deck and wraparound balcony will provide 360-degree views of the track. The temporary structure is in place. The bridges are complete. We are ready to go. This event will offer an unparalleled fan experience. It's going to kick off with an all-star lineup for the opening ceremony Wednesday before the race, which will air on ESPN2. To name a few, there will be Keith Urban, Andrew Day, Jay Balvin, Will.i.am, Journey, and others. We'll also have Netflix hosting its first ever live sporting event, the Netflix Cup. This will be a golf tournament with F1 drivers and PGA Tour players, and it will stream on Netflix live. on the 14th of November at 6 p.m. Eastern Time. The Vegas race is generating record-breaking sponsorship levels with new marquee brands, and these examples include Moet Hennessy, Timo, and Google Chrome. But more importantly, we think the Vegas experience will create commercial opportunities beyond the race itself and accrue to the broader F1 ecosystem. The Amex partnership we recently announced is a great example, and there are more to come. We did incur significant expense in launching year one in Vegas, and that included extra provisions for safety, security, and traffic planning, which was required by local regulators. And we had several non-recurring items, for example, a first-year-only opening ceremony, as I mentioned, and the design and launch of our multi-purpose app and creation of a fan database. We remain highly confident in the increased efficiency to operate there and our growing profitability in years two and beyond, and we remain bullish on the broader value creation at LBGP that far outweighs the increased investment and startup costs. Let me turn now to Liberty Live Group, where we issued new $1.15 billion of 2 and 3-H live exchangeable in September. $918 million of those proceeds were used to repurchase 93% of our existing LYB exchangeable. Looking at the Live Nation itself, another record quarter announced. Looking year-to-date, they've sold 140 million tickets versus 121 million for the full 2022. Revenue was up 36%. AOI was up 33%. They saw strength in all markets, venues, and price points with international leading the way. Year-to-date, concert fans are up 21%, with international fans up 34%. Per-fan profitability is up double digits globally at operated and owned theaters and clubs. And sponsorship has been a tremendous win with a new large deal with MasterCard, driven again by growth in the international concerts platform. Live sees continuing tailwinds into 2024 and beyond. Consumer wallets are continuing to be spent on live experiences. We see untapped potential. in the continuing globalization of lives business. And large venues are showing a pipeline and sponsorship commitments, which are up double digits. Lastly, looking at the Braves, it was an incredible season on field and off the field, even if the playoff run was obviously more disappointing and ended earlier than we had hoped. We finished with the best record in Major League Baseball, 104 wins against 58 losses. 3.2 million tickets were sold, a new record for Truist Park. We won our sixth straight National League East title. The Braves have won the most division titles of any team in baseball since the institution of divisional play in 1969. Braves had strong financial performance. Baseball revenue was up 11% year-to-date from increased ticket demand and attendance, and the battery continue to benefit from increased traffic and rent growth with adjusted EBITDA at the mixed use up 15% in their nine months versus the prior year. And with that, let me turn it over to Brian for some more on our financial results.