Earnings Call Transcript - BATRA Q1 2024

Operator, Operator

Welcome to the Liberty Media Corporation's 2024 First Quarter Earnings Call. This conference will be recorded on May 8. I will now hand the call over to Clare Adams, Senior Manager of Investor Relations. Please proceed.

Clare Adams, Senior Manager, Investor Relations

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 releases 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.

Gregory Maffei, President and CEO

Thank you, Clare, and good morning everyone. Today, we have Formula One's President and CEO, Stefano Domenicali, and Liberty's Chief Accounting and Principal Financial Officer, Brian Wendling, on the call. During the Q&A, we will address questions related to Atlanta Braves Holdings, with Braves' management also available. Starting with Liberty SiriusXM, the LSXM SIRI transaction is moving forward well. The regulatory process is progressing as expected, and we anticipate closing by early in the third quarter. Regarding SiriusXM, the first-quarter results were solid, showing a 1% increase in revenue and a 4% rise in EBITDA. The company continues to benefit from cost optimization, expecting improvements in net additions and performance in the second half of the year and in fiscal '24 compared to '23. They confirmed their 2024 guidance, maintaining margins while investing for future growth. Management is focusing on key strategic initiatives, and early metrics on the new app look promising. We are moving lower listening cohorts to higher engagement levels and quickly adapting to consumer feedback with this app. Exclusive content continues to draw in new customers, with James Corden's new series quickly becoming one of the top three talk shows. Additionally, we are making progress with the rollout of 360L, which includes a new partnership with Hyundai Genesis that will integrate 360L, leading to better consumer trends and higher conversion rates. Now, shifting to Formula One Group, we were excited to announce in April the acquisition of MotoGP. This asset has attractive features, being a global sport with exceptional racing. In the first four races, ten riders from seven teams reached the podium, with race winners often decided by an average margin of about a second. Technical regulations for the sport were announced for 2027, aiming for even closer racing and more overtakes. Race attendance has been strong; for instance, the Portuguese Grand Prix saw a 41% increase compared to last year, while the Spanish Grand Prix recorded its highest attendance since 2015. The sport is thriving, and Liberty's expertise will hopefully boost its global exposure. We are also making headway on necessary regulatory filings, having secured financing commitments and managed our foreign exchange risk, with plans to close by year-end. Regarding F1, we’ve had successful races in key growth markets. We returned to China for the first time since 2019, featuring a Chinese driver, and it was a sold-out event with a live viewership increase of 50% compared to 2019. The Miami race was competitive and exciting, and I want to congratulate Lando on winning his first Grand Prix after 15 podiums. The updates made by McLaren are proving effective, and we expect increasingly competitive races in the future. Engagement in the U.S. is also growing, with Miami's sold-out event setting a new attendance record of 275,000. F1 drew its largest live U.S. TV audience at 3.1 million, peaking at 3.6 million. We also had the largest audience for a Sprint race since this format started in 2021. Additionally, we hosted the second F1 Academy event of the season in Miami, supporting the momentum of women's sports. We are reaching more diverse audiences, with 55% of F1 Academy's Instagram followers being female. Recently, we announced a new docuseries with Netflix and Reese Witherspoon's Hello Sunshine production company focusing on F1 Academy; we look forward to its growth. Moving on to LVGP, we've redefined the product ladder to engage a broader fan base, integrating commercial and marketing functions across F1 and LVGP for improved harmony and cost savings. This approach is anticipated to streamline sponsorship and sales efforts. We've launched the events business at Grand Prix Plaza in Las Vegas, with exciting brands participating, such as during a Super Bowl media party, Autodesk, CrowdStrike, and our own QVC's Age of Possibility. In terms of Quint, we completed the acquisition in early January. Key highlights from the first quarter included the 2024 All-Star game being NBA Experience's largest event for ticket packages and revenue, along with strong demand for F1 Experiences during the first three races, particularly in Australia. We see strategic value in having Quint and F1 together, as data sharing improves our understanding of fans, enhances touchpoints, and leverages Quint's sales and marketing to create efficiencies. We anticipate Quint will positively contribute to F1's adjusted OIBDA. Touching briefly on Live Nation, global fan demand is rising. First-quarter revenue increased by 21%, and AOI was up 15%. They achieved a record for sponsorship in the first quarter, increasing by 24%. Signs indicate another record year ahead, with over 85% of large shows booked, compared to 75% last year. Concert ticket sales for arenas and amphitheaters are exhibiting double-digit growth. Success is also noted in international markets and with the Venue Nation strategy, where ticket sales for Latin packs saw double-digit increases in the U.S. We're set to open at least 12 major global venues in 2024, capable of accommodating 8 million additional fans, enhancing consumer experience and generating strong returns. Finally, regarding the Braves, the season has started off well despite early injuries and a challenging series against the Dodgers. After a thrilling win last night, demand remains strong with multiple sellouts this season. We rank fourth in average attendance per game across MLB, selling 93% of our ticket capacity so far. We have completed renovations at Truist Park, introducing new premium boxes, expanded retail store capacity, and the Jim Beam Bourbon Deck, which features bars replicating the distance between the pitcher's mound and home plate. These upgrades are contributing to increased revenue this season, along with new sponsors like Ball Corp and Lexus, and we are creating more inventory around the ballpark, including LED signage. We are leveraging the high demand for renewals in our partnerships. The Braves are set for another successful year both on and off the field. Now, I'll turn it over to you, Brian, for further insights into our financial results.

Brian Wendling, CFO

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's 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 year-over-year 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 '24 compared to two out of 23 in the prior year, which was ahead of the Imola race cancellation in Q2 '23. Other revenue increased due to the start of the F2 vehicle cycle, which is largely offset within other costs 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, the incremental payout percentage on pre-team shared 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 live 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 within 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 $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 to AVH. There were no regular season home games played in either the first quarter of '23 or '24. Revenue growth primarily reflects higher broadcasting with more away games in the current year held 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. The 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 '24 season will total approximately $15 million across Q4 of '23 and early '24. These projects are generating incremental revenue, as Greg said, for the Braves already. And at the Battery, the Truist headquarters project remains on budget and on schedule. With that, I'll turn it over to Stefano to discuss Formula One.

Stefano Domenicali, President and CEO, Formula One

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 performances from Ferrari, including 1 and 2 in Melbourne, showing their ongoing improvement, as well as increasingly 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 6 Sprint events and are also delighted to have the F1 Academy alongside us at 7 F1 events. The return to China after a 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 CCTV-5, 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 driver news off 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 attendance at our races for the start of 2024 and expect very strong figures throughout the season. Bahrain saw record race day attendance, and in Melbourne, we had a huge crowd of 452,000 breaking last year's record attendance of 445,000. We also saw good growth in Japan, welcoming 229,000 fans, up 3% on 2023. Alongside this, we continue to see very strong demand for the Paddock Club, with over 11,000 tickets sold for the first 4 races of the season where we operate the Paddock Club. We had a sellout in Bahrain and Saudi for the second year running and 2,500 race-day guests in China compared to just 1,100 when we last raced 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 a model that captures 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 3 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 follower 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 follower growth in 1 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 views across f1.com are up 28%, and registered users or those who sign up for an account on F1 platforms are up 32%. Globally, unique visitors to F1.com and the app are up 4% year-on-year, with page views up 29% and registered users up 28%. The total number of F1 TV subscribers has seen strong growth, with lower churn rates and all-time high customer satisfaction. Season 6 of Drive to Survive premiered on February 23. We reached the top 10 on charts in over 40 markets and continue to have among the highest completion rates - the number 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 show, 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 streams, benefiting from 1 additional race held compared to last year, as well as growth from new sponsorship and media rights agreements 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 has joined as an official partner in a new multiyear agreement. Also in March, we announced McDonald's as a 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. Our estimate shows that we have 60 million fans in India, with one in two having started following F1 in the last 4 years. F1 TV Pro would also remain in the 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 for the fans in the U.S. to watch F1, F2, F3, and F1 Academy race replays and highlights, classic Grand Prix, and popular racing documentaries. The new channel will be distributed 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 bid for sports rights. In addition to the U.S., key media rights renewals post-2025 season include Latin America, Brazil, Canada, and most of Asia, including Japan. 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 six 2025 Sprint venues in due course. The calendar features 24 races and will commence in Australia on March 16 and conclude in Abu Dhabi on December 7. We will have just one Saturday night race in Las Vegas, as Saudi and Bahrain will return to their traditional Sunday race days. Announcing the calendar earlier than we ever had allowed us to focus on optimizing the schedule for future years and plan logistics more efficiently for 2025. It also makes our promoters 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 the '24 race schedule is the optimal number of events. Turning to Vegas. We are looking forward to year 2 of the race, building on the success of last year's event. LVGP continues to generate great demand on the sponsorship side, 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 presales to kick off ticket sales for the 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 Sim 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 U.S. venues in Boston as the arcade seeks to take advantage of F1's continued momentum in the U.S. Boston is off to a strong start and had a 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 last year. And the Birmingham venue is also performing very, very well. The F1 exhibition is now moving to other venues around the world, having opened in Vienna in February and Toronto last week. This follows the successful opening residency in Madrid, where it was Spain's 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 work 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 operations 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 diversity and inclusion, our first group of students from the Formula One engineering scholarship took placement with the F1 teams. By 2025, we'll have funded the studies of 50 students from unrepresented groups to undertake studies in mechanical engineering. The F1 Academy started its second season in Saudi and joined us for their second event in Miami with exciting racing and great driving across the field. In Miami, American racer Courtney Crone joined the grid as the wildcard entry in a deal with reigning team championship PREMA Racing and the 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, and American Express as official partners of the series. We have also launched the F1 Academy Discover Your Drive aimed at young female karters the opportunity to get into the grassroots level of our sport. Its first initiative was launched by MotoSport U.K. to identify and nurture U.K. karting talent from the age of eight. The number of female participants aged 11 to 16 qualified for the British Indoor Karting Championship has more than tripled, and engaging programs will run alongside all seven F1 academy events in 2024. We are proud of this work and remain very focused on making the sport a 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, President and CEO

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.

Operator, Operator

First question comes from Vijay Jayant with Evercore ISI.

Vijay Jayant, Analyst

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 are 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.

Brian Wendling, CFO

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 pre-team share EBITDA and EBIT under the current Concorde Agreement, we've moved through various 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 '22 to '23.

Gregory Maffei, President and CEO

Stefano, do you want to touch on sponsorship?

Stefano Domenicali, President and CEO, Formula One

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 if you just look back a couple of years ago, we had only four global sponsors. Now we have ten global sponsors, a lot of regional partnerships, 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, but it's really related to the quality, and we need to ensure that everyone investing in Formula One has the right quality in terms of exposure, experience, and 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 believe in Formula One.

Gregory Maffei, President and CEO

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 '26 and beyond.

Operator, Operator

Our next question comes from Jeff Wlodarczak with Pivotal Research Group.

Jeffrey Wlodarczak, Analyst

First of all, congrats on Lando, winning in Miami GP. It's always good to get a new face on top of the podium. I've actually got two questions not related to F1, one on Live Nation, one on SIRI. Greg, on Live Nation, can 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?

Gregory Maffei, President and CEO

I think regarding Live Nation and the trust issues, the management team led by Joe summarized the situation well during their call last Thursday. The DOJ investigation seems to focus on specific business practices within certain divisions of the company rather than the merger or business structure. Live Nation does not believe that splitting up Live Nation and Ticketmaster would be a legally viable solution. Additionally, we are limited to the information shared during that earnings call. As for SIRI, I think it's still early. We hope to see some positive impacts and insights from the new app as the year progresses. The way we are rolling out the app will include new modules and opportunities at SIRI, which should provide benefits. I anticipate we will see some initial insights and hopefully more growth over time. However, the exact timing and consumer response to these releases are still uncertain. Regarding economic growth, I believe we can start to drive improvements and expect better numbers in 2024 compared to 2023 on SP&A. Over time, this app will be essential in helping us grow and return to a growth trajectory at Sirius.

Operator, Operator

Our next question comes from David Karnovsky with JPMorgan.

David Karnovsky, Analyst

First, 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?

Gregory Maffei, President and CEO

Do you want to start?

Stefano Domenicali, President and CEO, Formula One

Yes, Greg, if it's fine for you. Absolutely. I would say, first of all, F1 TV, as mentioned, is an additional entertainment fab for our fans and offers 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 was almost a record in subscribers that we see. So it's a very, very important element that is related to the future of the media evolution that we want to offer to our customers. We didn't receive any negative comments on price increases. You may say it was perhaps because it was too low before, but so far, no one has said anything. For us, it's really relevant to keep up in terms of quality of the product and content of the product, and this is something that we'll develop even further with the help of artificial intelligence that will play a very important part of our development going forward.

Gregory Maffei, President and CEO

Thank you, Stefano. I'll briefly discuss the Quint business drivers and then let Brian share his thoughts on seasonality, which I expect will be concise, but I don’t want to limit him. Regarding the business drivers, there are several key factors. One is the opportunity for us to enhance our sales capabilities and be more effective for Formula One, especially in relation to LVGP. We have seen increased integration in that sales area, utilizing their customer insights and strengths to improve our sales performance, particularly at the high end with LVGP. Another important driver is their capacity to assist other F1 promoters in marketing their products. They collaborate with both teams and promoters, such as Qatar, to help sell tickets for various events beyond our own and to support the success of those events along with additional services surrounding the GPs. A third key driver is the addition of new sports and events. They have made progress in this area, and we anticipate continued growth over time, with hope that Liberty can assist in opening doors to new sports.

Brian Wendling, CFO

David, on seasonality, we can't give you 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. You will see that Q2 and Q4 definitely vary materially from what you see in Q1.

Operator, Operator

Our next question comes from Ben Swinburne with Morgan Stanley.

Benjamin Swinburne, Analyst

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 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 that the Concorde 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?

Gregory Maffei, President and CEO

Thanks, Ben. So on MotoGP, after the announcement, we had an outpouring of interest from both potential broadcast partners, OEMs, and 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 jumping the gun until we have regulatory approval. So we are conjuring plans. We have some really good ideas, I think, and we hope to get permission to execute on those sooner rather than later.

Stefano Domenicali, President and CEO, Formula One

On my side, Ben, with regard to the update on the Concorde agreement. As we always said, the situation, as you know very well, will expire in 2025. Now we are in the process of discussions with the teams. The most important point is to keep the situation as stable as possible, these are the points of discussion. As you can imagine, we cannot go into details of it, but as soon as we can, we will share what we can do.

Operator, Operator

Our next question comes from Stephen Laszczyk with Goldman Sachs.

Stephen Laszczyk, Analyst

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 good bit of duration in MENA, maybe align the Nordics with Sky. I know some of the Americas and Asian contracts are up in '25. Anything more to add to that conversation or that strategy on media rights would be helpful.

Gregory Maffei, President and CEO

Thanks for the question, Stephen. Overall, we've been very pleased with the renewals and interest we've encountered regarding media rights. As you pointed out, we've secured some attractive renewals. Demand remains strong, and we see F1 TV as a valuable asset working alongside our media partners. The U.S. renewal is clearly leading the way. It's been fascinating to observe the recent renewals in both motorsports and other sports in the U.S., and we hope they bolster our confidence given the broadcaster demand and interest in races like the Miami event.

Stephen Laszczyk, Analyst

Got it. And then just on race promotion, I think I have 10 races up for renewal over the next 2 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, and fan experience, that would be helpful.

Stefano Domenicali, President and CEO, Formula One

Well, for sure, what we have seen and what we have seen happening in the course of the last years is because of the strong demand for our product. And because of the standard we are, let's say, asking and working together with our promoters, we have seen everything going up in terms of quality of demand, of course, economic impact for both the promoters and our side. The strong demand we are seeing just shows 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 ensure the local promoters are satisfied and able to deliver a great experience for each race.

Gregory Maffei, President and CEO

I think we may have lost Stefano or maybe we're off. Operator?

Operator, Operator

The line is still connected.

Gregory Maffei, President and CEO

So just checking, is Stefano on mute or is our line still connected to the greater audience? Just checking on the logistics.

Operator, Operator

Correct. It is, yes.

Gregory Maffei, President and CEO

So we'll assume that we'll get Stefano back. Maybe we can move to the next question, and we'll come back and answer it, either we'll try it again without Stefano or we'll hopefully get Stefano to answer.

Operator, Operator

Our next question comes from Barton Crockett with Rosenblatt Securities.

Barton Crockett, Analyst

Okay. Great. 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 questions about the viability of the emergence with the 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, President and CEO

Well, I'll give one cursory comment and then let Derek perhaps if you want to contribute, happy to 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.

Derek Schiller, Executive Vice President, Braves

Thanks, Greg. Yes, to the first point, obviously, carriage disputes are sort of commonplace, unfortunately, and we don't like the fact that this carriage dispute is going on; we're not a party to it, and we're hoping that Comcast and Bally get together. To Greg's point, we're obviously monitoring the whole bankruptcy proceedings and doing our part to protect our rights. At this point in time, Diamond Bally is fulfilling their terms with us, including full payment. But if the rights come back to us, we are very optimistic. Because, as Greg noted, we have a very large territory, one of the largest in sports. There's huge demand for the team, and we believe there's more optimism than pessimism regarding the future of Braves' television rights in that marketplace.

Barton Crockett, Analyst

That's great. If I could just follow up. I mean, the precedent at some of the other baseball teams has been if they lose their RSN carriage that they're having to move to a lower revenue model where perhaps they get broader exposure on broadcast, but less revenue. It sounds like you don't think that that's what the Braves would face if they came to it. Am I hearing you correctly?

Derek Schiller, Executive Vice President, Braves

Yes, I think you are hearing me correctly, partly because the other situations that we've seen around, in particular, baseball, the marketplaces are just vastly different. Their situations, I don't think are necessarily analogous to us. We have about six states that are in our territory and about 35 million people in that territory. One way to look at this is that, to the extent that we can unlock the opportunity to offer Braves content to a wider stretch of that territory to more of those 35 million people, we think that the revenue should follow. We have been modeling that and feel like we're in a good position should those rights come back to us. But again, at this point in time, we're still operating under the terms of the Bally's agreement, and they are as well. So we'll continue that to the extent that that stays the case.

Operator, Operator

Our next question comes from Bryan Kraft with Deutsche Bank.

Bryan Kraft, Analyst

I have a question for Greg regarding Sirius and another for Stefano on F1 if he’s available, or it could go to Greg as well. Greg, I apologize for asking this again this quarter, but many people are curious. You mentioned that the Sirius transaction is on track to close in early Q3. Could you outline the steps to completion and clarify if there’s a possibility that it could close as early as June? It appears that might be feasible based on an external perspective. Regarding F1, I’d like to hear your thoughts on race promotion contract renewals, specifically about potential increases and escalators in those contracts. Before COVID, race promotion didn’t seem to offer significant growth potential, but given the increased demand and improved economics for promoters lately, do you believe race promotion has become a more viable growth opportunity for the medium to long term, even beyond Las Vegas, which has its unique situation? Additionally, could you share your observations on Las Vegas ticket sales since they became available in late March?

Gregory Maffei, President and CEO

Well, I'm going to let Renee walk you through the regulatory steps that we anticipate. And then Stefano, I think you're back on, so after we'll let you talk about race promotion.

Renee Wilm, General Counsel

So with regard to the SIRI closing, we're making good progress with the SEC as well as on the FCC front. And we are still on target. I think as we mentioned earlier this year that we'd be looking to close sometime during the summer.

Gregory Maffei, President and CEO

Stefano, do you want to touch on the rate promotion?

Stefano Domenicali, President and CEO, Formula One

Yes. Yes, I would say following to what I was trying to say before, I don't know whether it was captured, but for Brian information, the race promotions, before COVID, everyone was worried about the fact in terms of revenue stream; this could have been a very challenging environment. The fact that we have a lot of demand, of course, is pushing up also the possibility of maximizing in the best way possible the racing promotion fees. Connected, of course, this is a relevant point, but it has to be connected to our strategic development in different markets. So everything is progressing very, very well. I would say, in the next couple of years, I'm expecting to see and we are expecting to announce also some new venues that could be very attractive to grow the business of Formula One.

Gregory Maffei, President and CEO

So if I could just add to that to Stefano's point. I think for a long time, it was perceived that the growth in promotion would come from incremental races. We obviously went from 18-or-something up to this 24 level, which is where we do not anticipate growing any more races. But, as I think we talked about at the Investor Day back in November, it actually creates a great incentive scarcity to be able to play promoters off against each other and not to try and take advantage of them. Just given the amount of demand we have, both among fans to attend and among promoters to host an event, we've been able to find attractive pricing and good uplifts, and we continue to find new venues and new locations, which find it very attractive given the amount of demand we have and the opportunities they have seen others pursue. So, so far, so good on promotion, and I do think it continues to be a tremendous growth area.

Renee Wilm, General Counsel

Sure, thanks, Greg. We were very happy with the results of our presale with our partner, American Express. But overall, we are seeing a trend towards ticket purchases closer to the event, particularly in the U.S. And I would say even more so in Vegas, which is known as the last-minute market. That being said, we are working very hard on our product ladder this year. We have looked to really differentiate those products, creating about 10,000 new GA tickets available, which will be very appealing to that last-minute market. We have three different zones at tiered pricing. We will have the T-Mobile Sphere Zone continuing to focus on news and entertainment, as well as the racing phenomenon in the Sphere Zone. We have a new entry-level price point in Flamingo, which will have a viewing structure for fans to watch the racing on Cobalt. And then a third new product offering, which will be announced very soon, focusing on viewing in the heart of the DRS zone along Cobalt Straight. This is allowing us to continue to reach out to those individual consumers and the new F1 fans who want to come and watch the incredible races we had as well as enjoy the unique Vegas-style entertainment that we'll continue to offer throughout the tracks.

Bryan Kraft, Analyst

And if I could just follow up on your comments on the SIRI closing. You mentioned very good progress with the SEC. I mean, my understanding is that you had SEC approval already for the proxy, but you have to update basically for the March quarter numbers. So I was just curious as to like what's the timing for updating the filing? And it seemed like that would be sort of a rubber stamp approval from the SEC since they already approved it. And then so you should be able to get to a shareholder vote probably within the next 30 days. I was just looking for a little more color if there's anything that you can share.

Renee Wilm, General Counsel

Sure. Well, I think we'll be ready to file within the next few weeks now that we've gotten through our quarterly audits. And I would never say the SEC is going to rubber stamp anything, but we have at least cleared our financial and legal comments, which is great progress. It's hard to say exactly when we'll be ready to close, but I do think we're looking at end of Q2 early Q3 once we have everything in order for the shareholder meeting.

Operator, Operator

Our next question comes from David Joyce with Seaport Research Partners.

David Joyce, Analyst

In thinking about the other factors outside of the pre-team share EBIT calculation, are there any other significant expenses that are either straight line or variable? And sort of related to that, with Quint, just wondering how we would be accounting for that with the Quint F1 related revenue. Is that going to be within Formula One, and therefore, in pre-team share EBIT? And then there are other events going to be outside of that. Just wanted to verify that there would be that split of Quint activities that way.

Gregory Maffei, President and CEO

Brian, do you want to take this?

Brian Wendling, CFO

Yes. So I'll start with the Quint piece first. Yes. So the revenue that Formula One generates from Quint related to those ticket sales does flow through the team payment calculation. So those are included just like they've been before. And then on your first question.

Gregory Maffei, President and CEO

Sorry, just to add there, but you're correct, David, that non-F1 related events like the Kentucky Derby and all those flow through F1, but not the F1 team.

Brian Wendling, CFO

That's correct. Sorry. And then on your question about straight-line expenses, team payments are really the largest expense that is straight-lined. Other things are more along when they're incurred. So think about hospitality when the event actually happens, same with freight, those types of things. Obviously, there's a bunch of fixed expenses related to payroll and the like that are relatively smooth throughout the year, but team payments would be the largest example of a per-race kind of amortization.

Operator, Operator

Our final question is from Matthew Harrigan with Benchmark Company.

Matthew Harrigan, Analyst

My last question might be more for Derek. What's your current perspective on how the changes in regulations are generating interest in the game? I believe Greg's next significant investment could be a surgical clinic specializing in Tommy John surgery, considering the impact of the new pitch clock rules. Where do we currently stand regarding the sport's popularity, and are there any potential drawbacks to these developments?

Gregory Maffei, President and CEO

They're overwhelmingly popular, but I'll let Derek go ahead. No, I'm going to tee you up. Go ahead, please.

Derek Schiller, Executive Vice President, Braves

Yes. I mean, I think, obviously, the bulk of the rule changes took place last season. So we saw the results of those and have been able to study all of last season as well as the first part of the season. I think the overwhelming viewpoint from fans, media, players, and teams is that the rule changes were successful and have been embraced, and we're excited to continue with those. Primarily, the idea that you're creating a game that is a little bit shorter, a little bit more action inside that game with some of those changes, including the elimination of the shift, things like that. But as we've seen some of the small little changes that have taken place from last year to this year, some a couple of seconds taken off the pitch clock is one example. I think it's really hard to correlate those changes to some of the things that you might be seeing and whether it be our pitchers or others. I think that the sample size is just too small, and we're going to rely a little bit on MLB to do a full study with the Players Association on that. But I think, overall, I would tell you the rule changes have been, from our vantage point, fans' vantage point, very successful and have continued to make a great game even better.

Gregory Maffei, President and CEO

Thank you to our listening audience for all of your questions and your interest in Liberty Media and the Atlanta Braves Holdings. We look forward to speaking with you again next quarter, if not sooner.

Operator, Operator

This concludes today's conference. You may disconnect your lines at this time, and we thank you for your participation.