The Liberty SiriusXM Group (NASDAQ:LSXMK) Q1 2024 Earnings Call Transcript

The Liberty SiriusXM Group (NASDAQ:LSXMK) Q1 2024 Earnings Call Transcript May 8, 2024

The Liberty SiriusXM Group isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).

Operator: 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. [Operator Instructions] As a reminder, this conference will be recorded, May 8. I would now like to turn the call over to Clare Adams, Senior Manager, Investor Relations. Please go ahead.

Clare Adams: 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 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 statements 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 website. Now I’d like to turn the call over to Greg Maffei, Liberty’s President and CEO.

Gregory Maffei: Thank you, Clare, 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, had a solid first quarter performance, revenue up 1%, EBITDA up 4%. They are continuing to benefit from cost optimization across the org. They expect to self-pay net adds, improvements in the second half and in fiscal 2024 versus 2023.

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 app. We continue to move engagement for 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, SIRI recently – which was recently initiated, quickly moved into the top three talk shows. Notably, we are 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 across seven teams reach 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 time frame. They expect even closer racing and more overtaking utilizing these new technical rigs. Attendance at the races is performing very well, for example, the Portuguese GP at Portimão was up 41% versus the prior year. And the Spanish GP at Jerez had the highest attendance since 2015.

The sport is awesome, and Liberty has experienced to help them hopefully grow the exposure across the world. A couple of deal updates here. We are 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 F1. 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 the 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 races, 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 contributed to in 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 new documentary series with Netflix and Reese Witherspoon Production Company, Hello Sunshine, about F1 Academy, and we look forward to seeing the series growth.

Turning now to LVGP, 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, LVGP 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, 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 Experiences largest event ever for ticket packages and revenue, and F1 Experiences saw solid demand across the first three races of F1, including a sell-out 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 sales and marketing will create efficiencies and leverage the sales process, including at LVGP, as I mentioned. I want to reiterate, we expect Quint to be adjusted OIBDA accretive to F1. 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 strategy. Ticket sales for the Latin PACs were up double digits in the U.S. And at venues, we are opening at least 12 major global venues in the 2024 time frame, 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 Dodger series last weekend, a great win last night in the ninth inning as usual with us. Strong demand continues. We’ve seen multiple sellouts already this season. We are 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 store capacity. We have the Jim Beam Bourbon Decks with bars replicating the length between the Pitcher’s Mound 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. So with that, I’ll turn it over to you, Brian, for more on our financial results.

Brian Wendling: Thank you, Greg, and good morning. At quarter end, Liberty SiriusXM Group had attributed cash and liquid investments of $64 million, excluding $71 million of cash held at SiriusXM. During the quarter, Liberty SiriusXM paid down $65 million under the SiriusXM margin loan using cash on hand. There’s $1.1 billion of undrawn margin loan capacity related to our SiriusXM margin loan as of quarter end. As of May 7, the value of our SiriusXM stock was $10 billion, and we have $1.2 billion in principal amount of debt against these holdings. Total Liberty SiriusXM Group attributed principal amount of debt is $11.1 billion, which includes $9.3 billion of debt at SiriusXM. Turning to the Formula One Group. At quarter end, Formula One Group had attributed cash, liquid investments and monetizable public holdings of $1.3 billion, which includes $1 billion of cash at Formula One.

Quint acquisition closed in January and was funded with $205 million of Formula One Group cash on hand, net of the Quint cash that was acquired. Total Formula One Group attributed principal amount of debt was $2.9 billion, which includes $2.4 billion of debt at Formula One, leaving $531 million at the corporate level. F1’s $500 million revolver is undrawn and their leverage at quarter end was 1.7x. Looking at the F1 operating business. As we’ve reiterated multiple times, it is best analyzed on an annual basis giving variability in the calendar. With that said, however, I will make some brief remarks on the first quarter. There were three races held in the first quarter compared to two races in the prior year period. F1 recognized an additional race promotion fee this year as well as a higher proportion of season-based income due to three out of 24 races occurring during Q1 2024 compared to two out of 23 in the prior year, which was ahead of the Imola race cancellation in Q2 2023.

Other revenue increased due to the start of the F2 vehicle cycle, which is largely offset within other cost of F1 revenue as well as higher hospitality revenue and freight income. F1 also recognized revenue and costs related to the F1 Academy due to the earlier start of the season compared to last year. Adjusted OIBDA grew alongside revenue in the quarter. Team payments were higher due to the higher pro rata recognition as well as the expectation of increased team payments for the full-year. A reminder that team payments should be analyzed on a full-year basis. The revenue recognized based on the mix of Flyaway and European races impacts how team payments appear as a percentage of pre-team share EBIT when looking on a quarterly basis. As F1 has grown EBIT over the past several years, the percentage payout has shifted, with F1 recognizing a greater proportion of the economic upside as pre-team share EBIT has reached certain thresholds.

We expect to continue to realize leverage on the team payout going forward. To note that the incremental payout percentage on pre-team share EBIT growth recognized in 2023 should not be applied to future growth. Other costs of F1 revenue and SG&A continue to be best viewed as a percent of total revenue for the year. Looking at corporate and other results, which as of this quarter includes the consolidation of Quint, corporate and other revenue includes Quint results and approximately $7 million of rental income related to the Las Vegas Grand Prix Plaza. Corporate and other adjusted OIBDA was a loss of $6 million in the quarter. This includes the rental income, Quint results and other corporate overhead. Note at the start of the year seasonally life for Quint with modest event activity, while the business still incurs ordinary course fixed operating expenses, which largest and most profitable events take place in the second quarter and fourth quarter with the Kentucky Derby in May and larger and more frequent – or an increased quantity of F1 hospitality events held in the fourth quarter.

We expect corporate and other adjusted OIBDA will benefit from rental income and Quint results through the rest of the year. At the Liberty Live Group, there’s attributed cash, liquid investments and monetizable public holdings of $423 million, which includes ETF assets. There’s a $400 million – or there’s $400 million of undrawn margin loan capacity related to our Live Nation margin loan. And as of May 7, the value of our Live Nation stock held at Liberty Live Group was $6.7 billion. We have $1.2 billion in principal amount of debt against these holdings. Liberty and our consolidated subsidiaries are in compliance with their debt covenants at quarter end. And I will turn quickly with that to AVH. There were no regular season home games played in either the first quarter of 2023 or – 2024 or 2023.

Revenue growth primarily reflects higher broadcasting with more away games in the current year help due to the earlier start of the regular season as well as higher game day related revenue from increased demand and attendance at spring training home games. Braves continue to invest in payroll, which is reflected in increased baseball operating costs, and the battery grew revenue 13% and adjusted OIBDA 9% in the quarter. CapEx related to the capital improvement projects completed at Truist Park ahead of the 2024 season will total approximately $15 million across Q4 of 2023 and early 2024. These projects are generating incremental revenue, as Greg said, for the Braves already. And at the battery, the Truist headquarter remains – headquarters project remains on budget and on schedule.

With that, I’ll turn it over to Stefano to discuss Formula One.

Stefano Domenicali: Thanks, Brian. The 2024 season is off to a great start with lots of action on the track and the gaps between the teams across the grid getting closer. While Red Bull and Max Verstappen continue to show their strength, we have seen regular projects from Ferrari, including one and two in Melbourne, showing their ongoing improvement as well as increasing strong performance from McLaren including a great first race win by Lando Norris in Miami in front of a sellout crowd. The battle in the midfield is the closest it has been for many years, and we look forward to this continuing as the season progresses. We have 24 races this year with six Sprints events and are also delighted to have the F1 Academy alongside us at seven F1 events.

The return to China after full-year break was incredible, and it was great to see a sold-out event, with over 200,000 weekend attendees. Interest in the events underline a growing younger fan base in the country, with all our Chinese fans cheering on their home hero Zhou Guanyu. Over 1.5 million viewers watched the race live on CCTV5, far beyond the 1 million when we last visited in 2019. China was also host to our first Sprint of the season, won by Max Verstappen and Red Bull with Lewis Hamilton taking second place. The Sprint continues to deliver great action for our fans, broadcasters, sponsors and promoters. There has been plenty of drivers news of the track at the start of 2024. We have the exciting announcement that Lewis Hamilton will join Ferrari in 2025.

Fernando Alonso has committed to remain with Aston Martin. Hulkenberg will go to Sauber in 2025, and we have yet to see where Carlos Sainz will be next year. This continues to create huge excitement and anticipation for our fans with 10 drivers still left to confirm their seat for the next year. We have seen records being broken for attendances at our races for the start of 2024 and expect very strong figure throughout the season. Bahrain saw record attendance and in Melbourne, we have a huge crowd of 452,000 with last year record attendance of 445,000. We also saw good group of Japan were coming 229,000 fans, up 3% on 2023. Alongside this, we continue to see very strong demands for the Pandora Plus with over 11,000 tickets sold for the first four races of the season, where we operate the Pandora Plus.

We had a sellout in Bahrain and Saudi for the second year running and 2,500 race they get in China compared to just 1,100 when we last race there in 2019. F1 continues to grow our overall engagement and fan bases. We are evolving our view data methodology to ensure we are capturing all our audiences globally and are working with Nielsen to build the model that capture a fuller scope. We had over 70 million cumulative TV viewers for the opening Grand Prix weekend in Bahrain, with 12 million in Germany, thanks to extensive free-to-air coverage on RTL. Through the first three races, we’ve seen particularly strong viewership in growth markets such as China and the Middle East. We now have 79 million total social media followers, up 24% year-on-year, with new followers growth also boosted by the introduction of new platforms like Threads and WhatsApp.

On Instagram, our most popular social platform, 75% of our followers are under 35, 40% are under 25, and 30% of our under 25 followers are female. The U.S. has gained 500,000 new followers in 2024, up to the Chinese Grand Prix, which is up 90% over the follower growth for the same period last year. We also have a year’s worth of forward growth in one week in the Chinese market surrounding the Chinese Grand Prix. In the U.S., we’ve also seen year-on-year growth across other digital platforms. U.S. F1 TV subscribers are up 16%, page view across f1.com, and up to 28% registered users or those who sign up for an account on F1 platforms are up 32%. Globally, unique digital to f1.com and app are up 4% year-on-year with page viewers up 29% and registered users up 28%.

The total number of F1 TV subscribers has seen strong growth, with lower churn rates, and all times high customer satisfaction. Season 6, Drive to Survive premiered February 23. We reached the top 10 on [indiscernible] in over 40 markets and continues to have among the highest completion rates or the numbers of people who watch more than 90% of the series on the platform when compared to both unscripted and scripted content. Production continues for the Apple [thin], which is on pace for the expected release in summer 2025. On the commercial side of the business, we had a very strong first quarter. We had growth across all revenue stream, benefiting from one additional race held compared to last year as well as growth from new sponsorship and media rights agreement and underlying escalators.

We continue to see our business and partners benefiting from growth in overall fandom and the value F1 brings to partners. Especially on our sponsorship last week, we announced the world-leading software provider and digital consultant global has joined as an official partner in a new multiyear agreement. Also, in March, we have announced McDonald’s as regional partner of Formula One in Latin America. This is the first of its kind for F1 in the region as the sport audience continues to grow in Latin America. On media rights, we continue to see strong demand and impressive work by all our broadcasters to bring our support to millions of fans around the world. We recently announced five years renewal with the Viaplay in the Netherlands and across the northern markets.

The deal retains our partnership structure in the region, creating a strong position for our F1 TV Pro product that will continue to generate substantial additional fee. We also announced a new two-year agreement with FanCode that sees the sports streaming platform become the exclusive broadcaster partner to Formula One in India until the end of 2025 season. This is a huge opportunity in a market with a growing fan base, especially among younger and female supporter. Our estimate shows that we have 60 million fans in India, with one in two having started following F1 in the last four years. F1 TV Pro would also remain in market in India. 2024 results are also benefiting from the new beIN SPORT agreement in the Middle East, which we referenced on our fourth quarter earnings call.

We recently announced a subscription free streaming channel FAST, for the fans in the U.S. to watch F1, F2, F3 and F1 Academy race replays and highlights, fully rounds of Classic Grand Prix and popular racing documentaries. The new channel will be distributed for FAST to watch on leading platforms, including Samsung TV Plus, Amazon TV and Pluto TV. In addition to generating revenue, we also expect it to push more fans to both ESPN and F1 TV Pro. We are confident heading into our U.S. media rights renewal for 2026 with strong growth in our U.S. tandem, sports content remaining highly attractive to the broadcasters and newer players continue to beat for sport rights. In addition to the U.S., key media rights renewal up after 2025 season include Latin America, Brazil, Canada and most of Asia, including Japan.

Also on media rights, following its successful first season, F1 Kids will return in 2024. The program is providing to be an effective way to engage children in Formula One in a way that’s accessible and fun for them. So I’m delighted it’s back for a second season. Turning to race promotion. We announced our 2025 race calendar in April for what will be the Formula One 75 anniversary year. We expect to announce details of the 6th 2025 Sprint venues in due course. The calendar feature in 24 races and will commence in Australia on 16 March and conclude in Abu Dhabi on 7 December. We will have just one Saturday night race in Las Vegas as Saudi and Bahrain will return to the traditional Sunday race days. Announcing the calendar earlier than we ever had allowed us to focus on optimizing the schedule for the future years and plan logistics more efficiently for 2025.

It also makes our promoter more sustainable partners by giving them greater certainty around planning their races and other events for next year. There continues to be huge interest and demand for our races around the world, and our focus is to maintain the right strategic balance of location and opportunities while being clear. We currently believe that 2024 race schedule is the optimal number of events. Turning to Vegas. We are looking forward to year two of the race building on success of last year event. LVGP continues to generate great demand on the sponsorship site, both locally and for the sport more broadly. For example, we could not be more excited about our partnership with American Express and their engaging activation on site across the F1 ecosystem as well as their support for F1 Academy.

In March, we enjoyed a successful American Express pre sales to kick off ticket sales for 2024 Vegas race, and we look forward to the continued growth of our partnership. We also continue to see progress on off-track action for fans. Our F1 team racing series got underway recently and continues to provide exciting action for fans and all competitors. F1 Arcade recently opened the first of several planned the U.S. venues in Boston as Arcade six to take advantages F1 continued momentum in the U.S. Boston is off to a strong start and have the great launch in hosting 672 guests with a ton of media coverage. F1 Arcade London saw a 14% increase in attendance this quarter compared to the same period of last year. And the Birmingham Venue is also performing very, very well.

F1 exhibition is now moving to other venues around the world, having opened in Vienna in February in Toronto last week. This follows the successful opening residency in Madrid, where it was Spain biggest selling temporary exhibition of 2023. Turning to sustainability and diversity and inclusion initiatives. In April, we were pleased to publish our first F1 impact report, providing an update on all the world delivered on our journey to net zero by 2030. We are on track to meet our targets. We achieved a 13 reduction through increasing our remote operation using renewable energy in factories, offices and events and from reducing the volume of freight. We have a strong pipeline of action to deliver the remaining 37% reduction target by 2030. On DNI, our first group of students from Formula 1 Engineering Scholarship took placement with the F1 teams.

And by 2025, we’ll have founded the studies of 50 students from the unrepresented groups to undertake the studies in mechanical engineering. F1 Academy started its second season in Saudi and join us for their second event in Miami with exciting racing and great driving across the field. In Miami, American racer Courtney Crone joint the grid as the Wild Card entry in a deal with reigning team champions PREMA Racing and QVC. The F1 Academy series will be shown live in over 160 international territories will be on F1 TV Pro and streamed live on F1 Academy’s social channels. We have also been delighted to announce Charlotte Tilbury, Puma, Tommy Hilfiger, American Express as official partner of the series. We have also launched the F1 Academy Discover Your Drive aimed at giving young female karters the opportunity to get into grass-roots level of our sport.

Its first initiative was launched by Motorsport UK to identify and nurture U.K. karting talent from the age of eight. The number of female participate in age 11, 16 qualified for the British indoor karting championship has more than tripled, and engaging programs will run alongside the all seven F1 academy events in 2024. We are proud of this work and remain very focused on making the sport more open, diverse and sustainable place. 2024 will continue to be an exciting time for our sport, and I’m looking forward to the on-track action and opportunities we have as a business as we continue to go from strength to strength. Avanti tutta, full speed ahead. And now I will turn the call back over to Greg. Bye-bye.

Gregory Maffei: Thanks, Stefano and Brian. And to the listening audience, we appreciate your continued interest in Liberty Media and the Atlanta Braves Holdings. And now operator, I’d like to open the line for questions.

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Q&A Session

Operator: Thank you. At this time we’ll be conducting a question-and-answer session. [Operator Instructions] Our first question comes from Vijay Jayant with Evercore ISI. Please proceed with your question.

Vijay Jayant: Thank you. Good morning. Can you talk about the trajectory of team payments as a percentage of pre-team EBITDA? Over the last couple of years, that’s sort of declined about 300 basis points. I know there’s structures in the splits of the teams that we’re not aware of, but could we assume that kind of operating leverage again in 2024? And then anything you could say about the sponsorship pipeline at Formula One. It seems to be that revenue stream is slowing down a bit. Obviously, we can’t really know what’s happening there? Thanks.

Brian Wendling: Yes, Vijay, this is Brian. I’ll take the team payment one. We’ll try to give you the most information we can here without giving you the full model. But over the past few years, as F1 has grown free team share EBITDA and EBIT under the current Concorde agreement, we’ve moved through various brand bands of pre-team share EBITDA, where the payout to the teams has decreased as a percentage for each band. We’re now at a point where the percentage to the teams is fixed for incremental EBITDA and EBIT through the end of this current Concorde agreement. We do expect to continue to have leverage in the team payments as a percent of pre-team share EBIT this year or adjusted OIBDA on our reported results, but not at that incremental rate that you noted that we saw from 2022 to 2023.

Gregory Maffei: Stefano, do you want to touch on sponsorship?

Stefano Domenicali: Yes. Thank you, Greg. I would say, Vijay, just to talk about our sponsorship pipeline. I would say the situation is very positive because I think that if you just look back just a couple of years ago, we had the only four global sponsors. Now we have 10 global sponsors, a lot of regional partnership, and the pipeline is very strong. And I would say, as you know, we are not giving here any kind of expectation but the situation is very solid. And today, it’s not only a problem of quantity of sponsorship is really related to the quality, and we need to ensure that everyone is investing in Formula One has the right quality in terms of exposure, in terms of experience, in terms of what we can offer. So I would say that’s really a very, very positive trend that we will see together with our partners who believes in Formula One.

Gregory Maffei: If I could just add, I agree with everything Stefano said. I feel very good about where we are recognizing sponsorship revenue for the balance of this year and into 2025, and are working hard at building that pipeline for 2016 and beyond.

Vijay Jayant: Great. Thanks so much.

Operator: Our next question comes from Jeff Wlodarczak with Pivotal Research Group. Please proceed with your question.

Jeffrey Wlodarczak: Good morning. First of all, congrats on Lando winning the Miami GP. It’s always good to get a new face top of the podium. I’ve actually got two questions not related to F1, one on Live Nation wants SIRI. Greg, on Live Nation, you comment on the pending antitrust case against Live Nation? And then also, Greg, you mentioned the car app and seeing some sort of early positive signs when are we going to know if that was successful? Is that sort of a second half thing we should be looking for? And then looking forward, do you feel comfortable, I guess, all else being equal economically that SIRI can get back to positive subscriber growth? Thanks.

Gregory Maffei: App and economic growth. So look, I think on the discussion around Live Nation antitrust issues, the management team led by Joe summarized it well on their call last Thursday. The DOJ investigation appears focused on specific business practices within divisions of the company, not the merger or the business structure. Live doesn’t believe the breakup of Live Nation Ticketmaster would be legally defensible remedy. And beyond that, we’re kind of limited to what was said on that live earnings call if you listen to that. Turning to SIRI. Look, I think it’s early days. We certainly would hope during the balance of this year to see a positive impact and greater learnings from the new app. The way the app is being rolled because of the app as a platform, you’ll see us continue to roll out, at SIRI, new modules and new opportunities, which will help us get benefit.

So I think you’ll see some learnings early and hopefully more growing over time. But the exact timing of those and how the consumer – both how we release them and how the consumer takes them up are still open to question. On economic growth, I do believe that we can start driving. We’ll see better numbers in 2024 versus 2023 on SP&A. And I do think, over time, this app will be critical to helping us grow and getting back to a growth path at Sirius.

Jeffrey Wlodarczak: All right. Thank you.

Gregory Maffei: Thanks, Jeff.

Operator: Our next question comes from David Karnovsky with JPMorgan. Please proceed with your question.

David Karnovsky: Hey. Thanks for the question. For Stefano or Greg, can you talk to F1 TV and how we should think of this as a possible growth driver for media rights this year. I wanted to understand better how the price increases have been received so far along with the new user experience? And then on Quint, I appreciate the commentary and the strategic value to F1, but maybe you can also discuss Quint on a stand-alone basis, the market for premium hospitality? What’s the kind of growth drivers over the long-term? And just for Brian, on this, anything to note on the seasonality for Quint with revenue or margin? Thanks.

Gregory Maffei: All right. Stefano, do you want to start.

Stefano Domenicali: Yes, Greg, if it’s fine for you. Absolutely. I would say, first of all, F1 TV, as we always said, is an additional element to our fans and offer to fans that some of them are very, very expert. They can analyze all the data we’re putting on the screen. And the good thing is that the numbers that we have seen so far are very encouraging because actually, even in Miami, there has been almost a record subscribers that we see. So it’s a very, very important element that is related to the future of the immediate evolution that we want to offer to our customers. We didn’t receive any negative comment on price increase. You may say maybe because it was too low before, that would be a good point, but so far, no one has said anything.

And I would say for us, it’s really relevant to keep up in terms of quality of the product, in terms of content of the product, and this is something that we’ll develop even further with the artificial intelligence that will be – that will play a very important part of our development with our future.

Gregory Maffei: Great. Thank you, Stefano. And I’ll touch briefly on the Quint business drivers and let Brian, as you now, to touch on some seasonality, which I expect his comments will be fairly limited, but I don’t want to cut down. Look, on the drivers of the business, I think there are several. One is, and we mentioned – I mentioned one already. The opportunity to help us be a better sales arm and be more effective for Formula One itself, particularly around LVGP. And you’ve seen us do more integration of that sales arm and utilize their customer knowledge, their customer strengths, the things that they do well to help us sell better, particularly at the high end at LVGP. Another driver of the business, though, is their ability to help other F1 promoters and elements sell their products.

So they work with both teams and promoters, for example, Qatar to help sell tickets to their events, not just our event and to help sell out the things that they do and do ancillary services and ancillary events around the GPs. Third driver is obviously adding new sports and new events. And you’ve seen them grow that and expect that they will continue to do that over time. And hopefully, that’s a place where Liberty may be able to help them open the door to new sports.

Brian Wendling: David, on seasonality, we can’t give you the very specific details, but what I’ll say is that Q1 is probably the lowest quarter for Quint, followed by Q3. Q2 and Q4 really ramp up because you have the Kentucky Derby and you have a lot more of the larger F1 events that Quint participates in. So you’ll see that Q2 and Q4 definitely vary materially from what you see in Q1.

Operator: Our next question comes from Ben Swinburne with Morgan Stanley. Please proceed with your question.

Benjamin Swinburne: Thanks. Good morning. Greg, now that you’ve had at least the public announcement with MotoGP, I’m just wondering if you had any update on opportunities that may have emerged or conversations you’ve had in terms of what you can do with that business now that you’re – all the partners of MotoGP know that Liberty is going to be acquiring most of the company. Anything that you would add from the call you did a couple of months ago? And then, Stefano, I think last quarter, you said sort of conquered agreement. The next one would be something you guys could maybe finish up pretty quickly, not a lot of controversy. I wanted to see if there was an update there, particularly as it relates to Brian’s point about team splits being fixed going forward for this deal, any thoughts on how we might want to think about what that might look like in the next one? Thank you, guys.

Gregory Maffei: Thanks, Ben. So on MotoGP, when we – after the announcement, we had an outpouring of interest from both potential broadcast partners, OEMs, potential sites, all of which are very interesting. Unfortunately, due to the nature of the regulatory process, we will be formulating those amongst ourselves and our plans, but we really can’t reach out and do anything concrete with the MotoGP management team to avoid gun jumping until we have regulatory approval. So we are conjuring plans. We have some really good ideas, I think, I hope, and we hope to get permission to execute on those sooner rather than later.

Stefano Domenicali: On my side, Ben, with regard to the update on [indiscernible] agreement. As we always said, the situation, as you know, very well, this will expire in 2025. Now we are in the process of discussion with the teams. The most important point is to keep the situation as stable as possible. These are the points of discussion. And as you can imagine, we cannot go into detail of it, but as soon as we can, we will share what we can do. As I said, the situation is optimal to keep discussing with the teams with all the relevant part is the best way to finalize everything for a stronger future up to a longer term.

Benjamin Swinburne: Okay. Thank you.

Operator: Our next question comes from Stephen Laszczyk with Goldman Sachs. Please proceed with your question.

Stephen Laszczyk: Hey. Greg, thanks for the questions. Maybe for Greg on F1 media rights, I’m curious if you could talk more about the strategy and some of the renewals you called out? In the release, it looks like you took a bit good bit duration in MENA, maybe align the Nordics with Sky. I know some of the Americas and Asian contracts are up in 2025. Anything more to add to that conversation or that strategy on media rights would be helpful?

Gregory Maffei: Thanks for the question, Stephen. I think in general, on media rights, we’ve been very happy with the renewals and interest we’ve seen. As you noted, some of the good renewals we’ve had that have been very attractive. We continue to see strong demand. And we continue to see – as we talked about F1 TV, we continue to see interesting ways in which F1 TV can be an asset working with our media partners. The U.S. renewal is obviously out ahead. It’s been interesting to watch some of the most recent renewals around either other motor sports or other sports in general in the U.S. And hopefully, those give us some confidence about given where the demand we’ve seen both among broadcasters and the like and the level of interest in races like I’ve obviously mentioned already the Miami one, what that will lead to.

Stephen Laszczyk: Got it. And then just on race promotion, have, I think, 10 races up for renewal over the next two years. Stefano, you called out the 11 interested cities being serious contenders for GPs this past weekend. Could you add a little bit more context just around the supply-demand dynamic you’re seeing right now? And what you think that can mean for things like promotion step-ups, investments in hospitality, fan experience? That would be helpful. Thank you.

Stefano Domenicali: Well, for sure, what we have seen and what we have seen happening in the course of the last years because of the strong demand of our product. And because of the standard, we are, let’s say, asking and work together with our promoters. We have seen everything going up in terms of quality of demand, of course, economical impact for both the promoter and our side. And the strong demand we are receiving just shows really the strategy well. Now the point is to keep the balance between the different continents that are requesting the different Grand Prix. And of course, what is important is to.

Gregory Maffei: I think we may have lost Stefano or maybe we’re off. Operator?

Operator: Checking. Let me – the line is still connected.

Gregory Maffei: So just to check, we are on mute. Is Stefano on mute or is our line is still connected to the greater audience just checking on the logistics?

Operator: Correct. It is, yes.

Gregory Maffei: We’ll assume that we’ll get Stefano back. Maybe we can move to the next question, and we’ll come back and answer and either we’ll try it again without Stefano or we’ll hopefully get Stefano to answer.

Operator: Okay.

Gregory Maffei: Next question. Operator. Thank you.

Operator: Of course. Our next question comes from Barton Crockett with Rosenblatt Securities. Please proceed with your question.

Barton Crockett: Okay. Great. Thanks for taking the questions. I guess I wanted to switch gears a little bit and just get Greg, your thoughts on baseball on the Braves and TV and Diamond Sports, now some question about the viability of the emergence with block out of Comcast. What can you tell us about what the Braves could do if Diamond isn’t viable? And what are your thoughts longer term about what should happen there with the TV rights situation there for the Braves?

Gregory Maffei: Well, I’ll give one cursory comment and then let Derek perhaps if you want to contribute happy have you take over. I think we have some visibility into the Diamond Holdings, not only from our experience with the Braves, but our experience with Charter. And we watch the situation, obviously, very carefully. We have that benefit, as we’ve mentioned before, of an enormously attractive territory, and think we have options in the event that they are unable to complete their successful emergence from Chapter 11. But I’ll let Derek touch on that a little more if he would like.