Ladies and gentlemen, thank you for standing by. Welcome to the Liberty Media Corporation 2022 Q2 Earnings Call. As a reminder, this conference is being recorded on August 5. I'd now like to turn the conference over to Courtnee Chun, Chief Portfolio Officer. 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 Liberty Media's most recent Forms 10-K and 10-Q or Liberty Media Acquisition's most recent Forms 10-K and 10-Q filed with the SEC. These forward-looking statements speak only as of the date of this call, and Liberty Media and Liberty Media Acquisition expressly disclaims 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 Liberty Media Acquisition's 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 and SiriusXM including adjusted OIBDA and adjusted EBITDA. The required definitions and reconciliations for Liberty Media and SiriusXM can be found at the end of the earnings press release issued today, which is available on Liberty Media's website.

Good morning. Today on the call besides myself, we'll also have Formula One's President and CEO, Stefano Domenicali; and Liberty's Chief Accounting and Principal Financial Officer, Brian Wendling. So let's begin with Liberty SiriusXM, where we received a $70 million regular dividend from SiriusXM in the second quarter, which was tax-free. We also repurchased $93 million across the LSXMA and K shares from May to July, and a look-through price on SiriusXM of $2.88 per share. We do understand the discount has widened, and it is frustrating. While the decline of LSXM is in line with the overall market, further widening of the discount has been very disappointing. We believe repurchases are an attractive means to capture that discount, but it's becoming clear they are not enough to collapse it on their own. We are focused on this. Potential actions we might consider include reducing debt at LSXM to enable a combination, and not overly leveraging SiriusXM and LSXM; steps to better illuminate the value of our live stake, and other potential actions. I would remind you that Liberty Media and some of our various spun-off entities have a long history of corporate actions to capture discount. Let me turn to SiriusXM itself, which is handling the market challenges well and maintaining their financial guidance despite reduced subscriber guidance due to a weak SAR, which has been well documented for reasons like chip supply issues. They had robust financial results for the second quarter, including revenue up 4%. Churn steady at 1.5% and new and used car penetrations up to 84% and 51%, respectively. We also announced extensions with important automaker partners, including Mazda and Mitsubishi. We made continued progress on our connected TV platforms like Amazon Fire, Android TV, LG, and Roku. We signed a new agreement to fully integrate and launch a SiriusXM audio experience on Xfinity with Comcast, with video to come. Our on-demand music listening in the SiriusXM app is up 41% year-over-year, partly driven by the addition of new, unique, and diverse content. Overall sports listening is up in the app. Our agreement to make SiriusXM the exclusive third-party platform for NFL games is helpful. We also announced an extension with F1 to cover every race on the world championship calendar. Lastly, we're very excited about our continued work in podcasting. Americans listened to audio up 9% last year, podcast audio up 9% last year, and our podcasting and off-platform business revenues were up 50%. We also expanded our agreement with ComScore to release AI-powered podcast audience targeting capabilities. Returning to Live Nation, which announced very strong results. It is clear live events are back on a global scale with yet another quarter of record results versus 2019. AOI is up 50%, free cash flow was up 72%, and that rose to $379 million. At Ticketmaster itself, AOI was up 86%, and the transacted GTV was up 76% again over 2019. Sponsorship AOI was up 81% over 2019, and important new clients included Google, AWS, and Hulu. We had the highest quarterly attendance ever over 33 million fans, and our on-site fan spend growth continues across all venues. We have an outlook for a record 2022 with 100 million concert tickets already sold. Fan attendance is up 13% at operated venues, with almost 30 new venues in the pipeline and the 2023 artist pipeline is the largest we've ever had at this point in the year. Turning to the Formula One Group. F1 continued to see record attendance and viewership in the second quarter. The Austrian Grand Prix was our second sprint event and viewership was up 39% compared to the 2021 Austrian qualifying. We're also benefiting from the return of coverage on CCTV, boosting our audience in China. Similarly, we've had record in-person attendance. Four races this year have had over 300,000 attendees, with incredible demand for the Paddock Club. The Hungarian weekend attendance, for example, with 290,000, was the largest ticketed sporting event in history in Hungary. We've seen strong ticket sales and sell-out demand for the rest of the year and the rest of the calendar as well. The new regulations that were part of the Concorde agreement are succeeding and enabling closer racing and demonstrably more overtaking. We are continuing to pursue trailblazing work around sustainable fuel and regenerative engine development, and we think these will have implications across the entire transportation industry. Turning to our most recent work in Las Vegas, we completed the land purchase at the foreign corporate level. We're excited about the potential for this property. We do expect to have year-round activations on this site, with the main paddock building estimated to be 900 feet long, about the length of three football fields. We're actively working with potential commercial partners to expand our opportunities there. We are building out the F1 team in Vegas across sales, marketing, race operations, and more. We are leveraging local expertise and talent, including the LVCVA and our partners at Live Nation. We continue to explore the specifics on capacity, but our founding partners in Vegas, Caesars, Wynn, and MGM are experiencing incredible demand, and we haven't even announced the formal date. We will obviously share more details on Vegas over time. While some of you are excited, you don't have to wake up early for races over the summer break. We here at Liberty look forward to restarting Formula One at SPA on August 28. Turning to the Braves. They've been playing excellent baseball over the past couple of months. As of today, we're just under a .600 record for the season. Since June 1, we had the best record in baseball, despite a recent loss to the Mets. It's an exciting team, and the World Series halo is still driving fans in Truist Park. Braves' attendance is up 23% compared to an already strong 2019 season. We've had 24 sell-outs to the All-Star break and are trending to roughly 50% sell-out for the year. Tickets, parking, concessions, and concerts at the Roxy are all performing well. We've had 6 All-Stars named this year, the most since 2011, and double the amount from last year. We just signed a 10-year, $212 million extension with Austin Riley, the largest in franchise history, after his outstanding performance this season, including a historic July. I want to congratulate Alex Anthopoulos for the moves he made to strengthen the team before the trade deadline. We remember how well this worked out last year, acquiring Grossman, left field, and Odorizzi, pitcher, both insurance to our lineup, adding also bullpen capacity. We want to congratulate Snitker on his 500th career win after defeating the Phillies last week. Again, we encourage you to tune in to the Mets tonight. We have nothing to report today on LMAC, but we continue to review opportunities and look at the environment, which remains difficult for SPACs as an opportunity for us. I'll now turn it over to Brian for more on our financial results.

Thanks, Greg, and good morning, everyone. At quarter end, Liberty SiriusXM Group had attributed cash, liquid investments, and liquid public debt and equity securities of approximately $368 million, which excludes $126 million of cash held directly at SiriusXM. There's also $1.3 billion of undrawn margin loan capacity at the parent level related to our SiriusXM and Live Nation margin loans. As of August 4, the value of our SiriusXM stock held at Liberty SiriusXM Group was $21.5 billion, and the value of the Live Nation stock was $6.8 billion. We have $2.8 billion in principal amount of debt against these holdings. Total Liberty SiriusXM Group attributed principal amount of debt is $13.7 billion, which includes $10 billion of debt at SiriusXM. Formula One Group had attributed cash, liquid investments, and monetizable public holdings of $1.1 billion at quarter end, which excludes $935 million of cash held directly at Formula One. Total Formula One Group attributed principal amount of debt was $3.2 billion, which includes the $2.9 billion of debt at Formula One, leaving $306 million at the corporate level. During the quarter, we repurchased $146 million face value of 1% cash convertible notes due in 2023 for approximately $240 million, effectively retiring 3.95 million underlying FWONK shares at an average price of $59.88. FWON's $500 million revolver is undrawn, and Formula One leverage at the end of the quarter was 3x. As we discussed last quarter, under the current Concord agreement, team payments now take the form of an entirely variable price fund, which is calculated with reference to a measure of FWON's adjusted EBIT rather than the adjusted EBITDA measure used in previous agreements. Note that our reported F1 depreciation and amortization includes purchase accounting amortization related to the acquisition that is excluded for purposes of the price calculations. We've quantified this purchase accounting amortization in our earnings release to assist in calculations. Additionally, at Formula One, other F1 revenue is running materially higher than the prior year, up about $80 million in the second quarter and $130 million year-to-date compared to 2021. Increased freight and hospitality income accounts for 98% of the quarter-over-quarter increase. Note that the Paddock Club didn't run until July of last year, while year-to-date through the second quarter, FWON has welcomed over 35,000 guests at the 7 events where we've operated our Paddock Club. Other costs of F1 revenue are higher primarily due to these same factors. These costs were up $76 million in the second quarter, approximately 75% of which is due to freight and hospitality cost variances. Finally, at F1, at last year's Investor Day, we included an appendix slide detailing F1's foreign exchange exposure. These percentages are still accurate, with approximately 80% of F1's revenue and cost denominated in U.S. dollars. Finally, in the Braves Group, at quarter end, we had attributed cash and liquid investments of $207 million, which excludes $66 million of restricted cash. Braves Group had attributed principal amount of debt of $602 million. The Atlanta Braves also announced several new construction projects for 2022, a new office building will be constructed known as 5 Ballpark Center that will house the national headquarters for Truist Securities under a 15-year lease. Construction is expected to begin in the second half of 2022. The Braves estimate their cash contribution will be approximately $20 million. The Braves are also working on a new project with Goldenrod Development Company called The Henry, a luxury apartment building. If completed, the Braves would have a minority equity stake in exchange for 2 acres of contributed land, with no additional cash contribution from the Braves. Additionally, the Braves are evaluating a Phase II project to build an adjacent hotel and condominium complex. This is still in the evaluation phase, but would be another minority investment with a modest cash investment. Our real estate projects have performed ahead of our expectations. The battery is generating healthy cash flow, which is partially used to support the operations of and future investments in the battery and partially to support Braves Baseball. Liberty and our consolidated subsidiaries are in compliance with their debt covenants at quarter end.

Thanks, Brian. For the last earnings call, we were in Miami for the inaugural Miami Grand Prix. It was an incredible weekend as Formula One was welcomed to the city with open arms. Celebrities came out in full force and much of the coverage helped in the establishment of Formula One in the U.S. It was wonderful to see so many of you in person. We are now over halfway through the 2022 race season, and we have seen unpredictable outcomes and a lot of wheel-to-wheel racing, especially in the midfield. It is a testament to the new regulation that every team is competitive. Carlos Sainz secured his first F1 career race win at Silverstone, and Lewis Hamilton marked his 300th race start with a second-place finish and first double podium of the season for Mercedes in France. Up front, Max Verstappen currently leads the Drivers Championship over Charles Leclerc of Ferrari, who has shown incredible speed, and the battle between these two is intense. We've seen a fight between McLaren and Alpine, and it's great to see both teams moving forward in the constructors' championship. As we said, Mercedes continues to fight back with Lewis and George on the podium again. This action on the track has drawn significant crowds, with 420,000 attendees at our events, including 400,000 at Silverstone, 300,000 in Austria, 300,000 in Hungary, and 338,000 for Canada. The Paddock Club has experienced record sales, welcoming over 35,000 people across 9 events this year, including record-breaking attendance at Silverstone with 7,500 guests. The TV audience is also tuning in, with the average audience program through France up 9% versus the 2021 season average. We continue to see tremendous growth on all platforms. We were thrilled to announce that the highly popular series 'Drive to Survive' has been renewed for the fifth and sixth seasons. The series is still attracting new fans, and Season 4 broke into the weekly top 10 in 56 countries. We've also reached a renewal agreement with Bandeirantes in Brazil through 2025, which will cover all qualifying sessions and Grands Prix live on a free-to-air basis. Additionally, we secured a strategic partnership with Claro Brazil to be the exclusive distributor of F1 TV Pro in the country. F1 TV Pro offers coverage of every F1 session live on demand, as well as access to all 20 onboard drivers' cameras and teams' radio channels, session replays, highlights, live streaming of every F2, F3, and F4 supercup session, and a library spanning over 2,000 hours of archived and feature programming. The platform was revamped in 2021 and is now more accessible than ever before with the release of the service across multiple platforms, enhancing the viewing experience for Formula One fans around the world. On the racing promotion side, we reached a long-term agreement with Melbourne that will have us racing there through 2035. This new agreement will bring F2 and F3 to the track for the first time ever. We're also thrilled to announce Honda as the title sponsor of the Japanese Grand Prix when we return to Japan in October. We are focused on the calendar for 2023 and expect to have more details early in October. On the sponsorship front, we announced PATRÓN Tequila as the first-ever official tequila partner of the F1 Paddock Club. We are exploring licensing opportunities and partnering with Round Room Studios for the first official exhibition in Formula One history, with detailed venues and ticket sale days to be announced this fall. Furthermore, we extended our agreement with the Memento Group through the 2025 season, which includes authentic certified and licensed F1 memorabilia, and also the right to sell ex-F1 race and show cars. Recently, an auction for the 1990 Leyton House CG901, which placed second in the French Grand Prix, sold for over GBP 500,000. We continue to push towards our net-zero carbon goal by 2030. F1 is developing a 100% sustainable fuel that will be used in Formula One cars from 2026 in line with the introduction of the next-generation hybrid engine. The fuel is designed for both internal combustion engines and hybrids, and it is already in development with support from our key stakeholders, the FIA, Aramco, and our global partners, fuel providers, and F1 piston manufacturers. While racing fuel represents only 0.7% of our emissions, we believe sustainable fuels are where we can have the greatest impact on the global transportation sector. We have already instituted significant changes to create a more sustainable sport, focusing on carbon reduction measures for revenue generation at Formula One events, sharing coverage of induction activities from across our sporting community, and investigating more efficient logistics and travel arrangements. We are also partnering with Banco Santander to amplify the Santander Global Challenge, which incentivizes entrepreneurs to create sustainable solutions for the future. We continue to promote diversity in esports and hosted the F1 Esports Women’s Wildcard Experience Day at the McLaren Technology Center. The Women Wildcard initiative, first launched in 2021, offers a chance for female participants to secure a spot in the F1 Esports Pro Championship later this year. We have also extended our funding commitment to the Formula One Engineering Scholarship Program for underrepresented groups until 2025, continuing our efforts to increase diversity within the sport. While teams and drivers enjoy a well-deserved break, we will continue to capitalize on the growing popularity of F1 and convert this into opportunities to drive the business forward. Avanti tutta, full speed ahead. I will now turn the call back over to Greg. Thank you.

Thank you, Brian and Stefano. Our Annual Investor Day will be Thursday, November 17 in New York. Please save the date. Additional details will be provided soon. We hope to see many of you there. We appreciate your continued support and interest in Liberty Media. With that, operator, I'd like to open the line for questions.

We will first take our question from Ben Swinburne with Morgan Stanley.

Greg, a couple of things on the structural side. I want to ask you about you mentioned separating Live Nation. I think you mentioned in that context with SiriusXM. Maybe just talk about the pros and cons...

Ben, just to be clear, I said, highlight the value. I didn't say separate, but go ahead.

Okay, how do you highlight the value? I will let you answer that as you see fit. Also, we often receive questions about a potential hard spin of the Braves. Could you share your thoughts on the advantages and disadvantages of that idea? Additionally, I wanted to ask you and Stefano about the plans for Las Vegas in the second half of this year regarding staffing and capital expenditure for the track and the Paddock Club. Can you provide some guidance on the investment size as we approach the latter part of the year in preparation for next year's race?

On the structural side, look, we're not here to announce anything today. You'll know when we do. The advantages of our structure have allowed us to have flexibility to move assets around and align things in the most attractive way while managing our taxes efficiently. There are reasons to want to keep things together until we have maximum flexibility. Regarding how we might highlight value, there are ways from spinning to creating another tracker to other kinds of actions we can take. We have obviously decided that none of those would be announced today. The history of Liberty is that we've tended over time to take actions when we believe we could add value. We're monitoring all that for all of our entities. I've given you as much of a non-answer as I can, Ben, but you should look at our history and see that we have taken corporate actions to spin things off. On Vegas, it's a little hard to forecast the CapEx because we're still putting together the programming that we will undertake there. Our goal is to have a facility that is magnificent for the race, but also has ongoing activations even when the race is not underway. You should think we can manage this well within existing capital; it's not going to drain us in any way, nor forestall us from other actions, including investments around SPAC repurchases, debt management, and the like. I don't know if Brian, or Renee, or Stefano want to add anything on the Vegas question.

No, totally good, Greg.

If I can, Greg, just to add that, of course, the CapEx builds and the type program is there, with just almost 16 months in the making, but it's important that we are working very hard in driving the engagement and getting the new city excited about Formula One. We will come back with all the plans in place to ensure we bring F1 to life with the passion that is essential to increase the level of engagement that we expect from Las Vegas.

We'll take our next question from Bryan Kraft with Deutsche Bank.

Greg, also had a structural question. I guess in eliminating or narrowing the NAV discount at LSXM, it sounds like you alluded to an RMT spin merge. I guess, another option would be to distribute SiriusXM shares to Liberty shareholders. The former would make the combined company a Liberty company with the Liberty Board and management. The latter would sort of be an exit from that as a management team. Are both of those on the table? Or do you really want to still control Sirius and be able to use it strategically? And I also want to ask a question on Formula One costs. How should we think about the higher SG&A level this quarter in the context of future quarters? It seems as though there may have been some temporary impacts from legal and advisory fees.

On the first point, I think, Bryan, there's a wide range, all the way from distribution of shares, which would probably not be optimal unless you can somehow get compensated for our controlled position, to other mid-level options, like spinning our DIRECTV shares but maintaining some influence. I don't think there's anything off the table based on what we might do there or our history. I think there's a full range of opportunities, and we will try to do the one that we think maximizes long-term value. On the side of expenses, I'll let others comment as well, but we did have some increased expenses to start up the round in Vegas, including some minor issues. We're not at an elevated level overall.

Yes. This is Brian. I'd say we had some higher personnel and other costs to support the large increase in revenues and higher activities we had in 2022 versus the prior year. There were some minor one-time professional fees that we wouldn't expect to repeat, and I would say, pretty minor Vegas expenses at this point in time.

We'll take our next question from Vijay Jayant with Evercore.

On Formula One, obviously, Greg, the equity is like because there's a contractual nature of the business. But there are numerous macro headwinds with inflation, higher rates. Obviously, you gave some color on the impact of ForEx. Can you help us understand the variability of outcomes given those pressures and how budget and expectations compare to what you expected at the beginning of the year for Formula One's operation?

I think you're right to note the highly contracted nature of the business, which helps manage downside, but of course, there are FX and cost potential downsides. In general, we've seen demand that has outstripped those. While we budget conservatively with contingencies, we've been able to outperform those contingencies. I remain confident in the demand that we have and the strength of the business, on top of the contracted nature to weather most of this. We can't foresee every inflationary impact, but we've been able to navigate through those.

Next up is David Karnovsky with JPMorgan.

Firstly, we've seen in the press the possibility of some auto OEMs entering F1 either on the manufacturer or engine side? What's the potential benefit to Formula One, either from a commercial standpoint or to the product itself? And with other F1 revenue, I know there's a lot of noise in there because of the freight cost, but could you speak to the performance outside of pass-through revenues, particularly areas like Paddock Club or licensing and how that looks relative to the pre-pandemic period?

Regarding the entry of two new OEMs, while it's not for us to disclose specifics, we are in contact with manufacturers and expect to have more information soon. The benefits of having more manufacturers will enhance our credibility, allowing them another route to address mobility concerns while using our technology to achieve carbon neutrality. From a sporting perspective, more manufacturers equate to more competition and excitement. We view this as terrific news and are hopeful for an upcoming announcement. We believe our technological platform for the future is innovative and will be beneficial. We see incredibly high demand for Paddock Club and licensing, contributing positively to our balance sheet. We already have numerous orders despite not having announced the calendar for next year. The attention on our platform is substantial.

In the other F1 category, 98% of the increase is coming from Paddock Club and freight, as previously mentioned. We did not have races last year and weren't traveling as much. Thus, we're seeing significant growth here. Within primary revenue, we're seeing increases across the board, as noted by Stefano.

If you look at some of these things like Paddock Club, we've never seen more demand, and in some cases, promoters are able to increase the size of the Paddock Club areas and manage it at higher numbers with higher prices. A lot of positives there.

Next up is Barton Crockett with Rosenblatt Securities.

The discount at Liberty Sirius versus Sirius is much larger than the discount you would see at Liberty Broadband and Charter. Why do you think that is? Why is there such a disconnect? Does that inform in any way what some of the solutions might be for that?

It's a great question. You could argue the complexity, investor fatigue, and the relative scale of the two entities compared to broadband. Hard to attribute certainty to any of those factors, but they are potential drivers. As I've said, we'll take advantage of that discount. At some point, we'll take action to tighten that discount. In the interim, we're going to buy stock and drive our NAV relative to the underlying NAV up.

If I could ask one more question. I'm interested in your perspective on streaming at this point, particularly as it pertains to baseball. We have direct-to-consumer launches at NESN and Diamond Sports. The Braves are not participating yet. Do you think now is the time to move in and restructure the streaming rights for baseball?

Baseball has a more complicated situation due to the regional sports networks compared to other sports. MLB would love to find a structure for delivering more national rights, which is challenging today. The interest in streaming has been high from companies like Apple, which is promising. The Braves are in a strong position with a large audience in our territory. We're optimistic about future streaming deals and feel good about our product demand.

We'll now move to David Joyce with Barclays.

Could you provide clarification on the structural opportunities? I think you mentioned ATV flexibility. Are there any gating factors regarding the separation of equities, such as prioritizing something with Almac to SPAC?

There are no specific gating factors regarding the separation of equities. I mentioned we'd love to have as much flexibility on ATVs as possible. I think that's one factor. I don't think anything we will do around Almac to SPAC is likely to be impacted by structural changes as it's generally funded by excess cash.

Next up is Jason Bazinet with Citi.

Over the years, you have improved the financials of the Braves and Formula One. Would you describe those as unique opportunities, or do you think you're building a competency that might apply to other potential assets?

I'd like to think credit goes to the teams at the Braves and Formula One for their efforts. They've taken attractive businesses and made them better with strong management. I'm not sure we can take much credit beyond that.

We'll now move to Matthew Harrigan with Benchmark.

Regarding synthetic fuel ventures, there's a report that Porch has something in Chile testing carbon capture synthetic methanol. Have you nailed down a path on the technology and what capital commitment would vaguely go into having a plant?

Stefano, do you want to take the synthetic fuel question?

All these technologies related to carbon capture and others are advancements in this sector. We are pushing the system towards the future effectively. Our investment is not significant as we don't own any CapEx in this area. We are enabling stakeholders in our business to invest heavily at locations where energy demands are substantial for large events.

On Ticketmaster's arrangements with Snapchat and TikTok, we see those as a way to broaden the ticket buying experience. It’s a part of Live Nation's strategy to reach consumers where they are shopping for experiences. We're not viewing this differently than other attempts at ticket distribution; it's simply enhancing our capabilities.

Do you have a secular view on sports team valuations going up, making you want to wait further with the Braves in terms of doing something?

It depends on the facts and circumstances. These have been trophy assets that people want to buy. We have looked at purchasing other sports assets and have been surprised at some prices, but valuations are likely to continue to rise for the right trophy assets.

With that, we'll conclude today's question-and-answer session. I'll now turn the conference back over to the speakers for closing remarks.

Thank you to all our listening audience for your questions and your attention. We appreciate your interest in Liberty Media. Hope to see you next quarter if not sooner. Again, at our November meeting for many of you. Have a great rest of your summer. Thank you.

Thank you. Bye-bye.

With that, we'll conclude today's conference. Thank you, everyone, for your participation. You may now disconnect.