Liberty Media Corporation

Welcome to the Liberty Media Corporation's 2024 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. At that time, if you have a question, please press star 1 on your telephone keypad. As a reminder, this conference will be recorded May 8th. I would now like to turn the call over to Claire Adams, Senior Manager, Investor Relations. Please go ahead.

Good morning. Before we begin, we'd like to remind everyone that this call includes certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual events or results could differ materially due to a number of risks and uncertainties, including those mentioned in the most recent Forms 10-K and 10-Q filed by Liberty Media and Atlanta Brave Holdings with the SEC. These forward-looking statements speak only as of the date of this call, and Liberty Media and Atlanta Brave 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 ODA and adjusted EBITDA. The required definitions and reconciliations for Liberty Media, SiriusXM, and Atlanta Braves Holdings, Schedules 1 through 3, can be found at the end of the earnings press releases issued today, which are available on Liberty Media and Atlanta Braves Holdings' website. Now I'd like to turn the call over to Greg Maffei, Liberty's President and CEO.

Thank you, Claire, and good morning to all. Today speaking on the call, we will also have Formula One's President and CEO, Stefano Domenicali, Liberty's Chief Accounting and Principal Financial Officer, Brian Wendling. Also during Q&A, we will answer questions related to Atlanta Braves Holdings, and Braves Management will be available as well. So beginning with Liberty SiriusXM, the LSXM Siri transaction is progressing well. The regulatory process is on track, and we still expect a close by the early in the third quarter. Turning to SiriusXM itself, it's solid first quarter performance, revenue up 1%, EBITDA up 4%. They are continuing to benefit from cost optimization across the org. They expect self-paying net adds, improvements in the second half, and in fiscal 24 versus 23. They did also on their call reiterate the 2024 guidance. They are maintaining margins while investing to support future growth. Management is focused on a couple of key strategic initiatives, and we've seen some still early but promising metrics on the new act. We continue to move engagement. or lower listening cohorts to higher listening levels. And we've been able to adapt to consumer feedback more quickly utilizing this application. Siri exclusive content continues to attract new customers. James Corden series, which was recently initiated, quickly moved into the top three talk shows. Notably, we're also progressing with the rollout of 360L. There was an expanded Hyundai Genesis Partnership, which will integrate 360L. And adoption of 360L leads to better consumer trends, including higher conversion. Now, turning to Formula One Group. We were thrilled to announce in April the acquisition of MotoGP. I want to reiterate the attractive qualities of this asset, a global league-level sport with incredible racing. For example, across the first four races, we've had 10 riders participate across seven teams reached the podium, and the average time to decide the race winner has been about a second. Monday, the new technical regulations for the sport were announced for the 2027 timeframe. They expect even closer racing and more overtaking utilizing these new technical regs. Attendance at the races is performing very well. For example, the Portuguese GP at Portimao was up 41% versus the prior year. and the Spanish GP at Jerez had the highest attendance since 2015. This sport is awesome, and Liberty has experience to help them hopefully grow the exposure across the world. A couple of deal updates here. We're also progressing on required regulatory filings. We have syndicated the financing commitments and hedged our foreign exchange exposure, and we still expect to close by year-end. Turning now to Act 1. We've had successful races in several key growth markets. We returned to China for the first time since 2019, and the first time with a Chinese driver. It was a sold-out race, and live viewership on CCTV was up 50% versus 2019. Miami was an exciting and very competitive race. I want to congratulate Lando on winning his first GP after 15 podiums. McLaren upgrades are working well. and we expect more competitive racing from that going forward. We continue to see growth in U.S. engagement. Miami was sold out with a new attendance record of 275,000. F1 achieved its largest live U.S. TV audience at 3.1 million, with a peak of 3.6 million. We also had our largest audience for a sprint race since the format was introduced in 2021. We also hosted the second F1 Academy event of the season in Miami. We are excited that we are contributing to and promoting continued momentum in women's sports. We are attracting more diverse audiences that are exciting and relevant to all. At F1 Academy, Instagram followers are 55% female, but also 45% male. Everyone watches women's sports. We recently announced a new docuseries with Netflix and Reese Witherspoon's production company. Hello Sunshine, about F1 Academy, and we look forward to seeing the series grow. Turning now to LBGP, a few updates. We redefined the product ladder to reach a greater range of fan base. We are now integrating the commercial and marketing functions across F1, LGBP, and QUINT more closely to achieve better harmony and cost savings. We think this will allow us to have aligned sponsorship and sales efforts across the org, and as I mentioned, it will be more cost-effective. We kicked off the events business at Grand Prix Plaza in Las Vegas, hosting some exciting brands, including a Super Bowl media party, Autodesk, CrowdStrike, and our own QVC's Age of Possibility. Now, touching briefly on Quint, We closed the acquisition in early January. Some of the first quarter highlights were the 2024 All-Star Game, which was NBA Experience's largest event ever for ticket packages and revenue, and F1 Experience saw solid demand across the first three races of F1, including a sellout across all products in Australia. We do believe there is strategic value in having Quint and F1 under the same roof, The data sharing across companies allows us to know the fan better and improve our touch points, and leveraging Quint's sales and marketing will create efficiencies and leverage the sales process, including at LGDP, as I mentioned. I want to reiterate, we expect Quint to be adjusted to F1. Turning on, touching on Live Nation briefly, global fan demand continues to surge. First quarter revenue was up 21%. and AOI was up 15%. They had a record first quarter for sponsorship, also up 24%. Indicators will point to another record year. Over 85% of the large shows were booked versus 75% at this time in the prior year, and concert ticket sales for arena and amphitheaters are pacing up double-digit levels. We also see continued success in international markets and with the Venue Nation strategies. Ticket sales for the Latin acts were up double digits in the U.S., and at venues, we're opening at least 12 major global venues in the 2024 timeframe, and we have capacity for 8 million additional fans, and we think we can enhance the consumer experience and generate strong returns. Finally, touching on the Braves, off to another great start to the season despite early injuries in a tough Dodgers series last weekend. Great win last night in the ninth inning as usual with us. Strong demand continues. We've seen multiple sellouts already this season. We're trending number four in average attendance per game across MLB, and we have sold 93% of our ticket capacity season to date. We've completed the renovations at Truist Park ahead of the season. There's a new Lexus-level premium boxes. There's an expanded retail facility. floor capacity. We have the gym beam urban decks with bars replicating the length between the pitcher's mat and home plate. And these upgrades are already generating incremental revenue this season. We announced several new sponsors this season early, including Ball Corp and Lexus. And we are creating more inventory around the ballpark, including LED signage. And we are leveraging the demand for renewals on our existing partnerships. The Braves are positioned for another great year on and off the field.