Earnings Call Transcript - BATRA Q3 2020

Operator, Operator

Ladies and gentlemen, thank you for standing by. Welcome to the Liberty Media Corporation 2020 Third Quarter Earnings Call. Today's presentation, all participants will be in a listen-only mode. Afterwards, we will conduct a question-and-answer session. As a reminder, this conference is being recorded, November 5. I would now like to turn the conference over to Courtnee Chun, Chief Portfolio Officer. Please go ahead.

Courtnee Chun, Chief Portfolio Officer

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 our 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 expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained herein to reflect any change in Liberty Media'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, including adjusted OIBDA and adjusted EBITDA. The required definitions and reconciliations for the Liberty Media and SiriusXM Schedules 1 and 2 can be found at the end of the earnings press release issued today, which is available on our website. Please remember to register for our virtual Liberty Investor Meeting on Thursday, November 19. We will cover Liberty Media under TripAdvisor. And Friday, November 20, we'll include Qurate, GCI Liberty, and Liberty Broadband from 11:00 a.m. to 2:00 p.m. Eastern on both days. After the presentations on both days, John Malone and Greg Maffei, along with presenting CEOs will host a Q&A session. Please pre-submit questions by Friday, November 13, to investorday@libertymedia.com. You can find the link to register and all of these details on our homepage. Now I'd like to turn the call over to Greg Maffei, Liberty's President and CEO.

Greg Maffei, President and CEO

Thank you, and good morning. Today, speaking on the call, we will also have Formula One's Chairman and CEO, Chase Carey; and Liberty's Chief Accounting and Principal Financial Officer, Brian Wendling. I'd again like to recognize and thank our management teams and employees that have done such an impressive job managing through this COVID-19 crisis. So I'll start with Liberty SiriusXM, where we restarted share repurchases during the quarter, purchasing $110 million across both LSXMA and K shares from August through October. These discounts stubbornly remain, but we will take advantage of it as we can. And we repurchased SIRI at a look-through price of $3.66 per share. As I said, we expect to continue to take advantage of the discount opportunity. Our ownership as of October 20, at SiriusXM, stood at 74.4%, and we remain focused on getting to an 80% ownership level at SIRI. Looking at SiriusXM itself, like our other subscription businesses, SiriusXM has proved resilient during the COVID crisis. Self-pay net ad subscribers during the quarter were 169,000, and we expect by year-end to be at 90% of our original projections, impressive given the challenges of 2020. New car penetration increased to 78%. And with our recent OEM agreements, I expect penetration to be over 80% in the next few months and even higher in the years to come. During the quarter, SiriusXM returned capital of $544 million, primarily through the repurchase of its own stock. We also announced that Jennifer Witz will become the new CEO in January. Jim Meyer, who's done so admirably, will remain with us as Vice Chairman; and Sean Sullivan joined us as CFO. Jennifer has been with Sirius since 2002 and has a tremendous breadth of experience, including SVP of Finance, Chief Marketing Officer, and President of Sales, Marketing, and Operations. She is the natural successor to Jim, and we all look forward to working with her in her new role. Sean brings also a new perspective and a depth of entertainment industry experience, which we will appreciate. During the quarter, we also completed the acquisition of Stitcher. We've already launched a redesigned podcast app for a more personalized experience. And once again, Sirius increased its full-year guidance. Turning now to Formula One Group. We returned to racing, as you know, beginning in early July and to date, impressively have completed 13 of a planned 17 race season. It's a huge credit to the F1 team, a major feat to accomplish our target of 15 to 18 races. During the quarter, we also reached the signing of our new Concorde Agreement with all 10 teams. This, along with earlier cost cap and regulations should create more parity and a healthier ecosystem. The SiriusXM team was working on the '21 calendar and should set a new bar of races for a number of races. Saudi Arabia has, with our consultation, announced their place on the 2021 calendar falling extensive speculation. And we look forward to a new long-term partnership with them. I want to thank the major accomplishments of Chase Carey for his major accomplishments over the last 4 years. He reset the talent and created a spirit of collaboration in F1 that has changed the collective outlook for the business. Many podcast or cost cap couldn't be achieved, let alone new regulations and new Concorde Agreement of the magnitude that has been accomplished, so full credit to Chase. I'm so pleased that he will stay on and involved as non-executive Chair. I'm also thrilled that Stefano Domenicali will join us as CEO in January. He has a rich history in Formula 1, and his appointment has been met with resounding positive feedback inside and outside the paddock. I'm not going to comment on Live Nation now because it reports later today. But turning to the Braves. It's an amazing season for the Braves. They clinched their third straight NL East title and won the NL Wild Card and NL Division Series. We won 7 games into the NLCS against the eventual World Series winning Dodgers. It was sad to see it end before we got to the World Series, but we are confident that the future is bright for our team. Some other notable accolades include Freddie Freeman receiving a big named player of the year and nationally outstanding player in the 2020 Players Choice awards, being named Baseball America player of the year, and named a finalist for the National League MVP, the winner of which will be announced on November 12. Ronald Acuña Jr. led the NL with an 11.43 add-back ratio to home runs. He also had 19 leadoff home runs in his career. Acuña has the most leadoff home runs through a player's first 3 seasons in history, eclipsing Barry Bonds. Congrats also to Max Fried on the first Golden Glove of his career. A few battery updates: 96% of the battery is open. Since January, we've opened 7 new concepts, representing 100,000 square feet of new capability in retail. The weekly vehicle traffic in October is on par with pre-COVID levels, and year-to-date, we're at 85%. So with that, I'm going to turn it over to Brian for a little more on our financial results.

Brian Wendling, Chief Accounting and Principal Financial Officer

Thanks, Greg, and good morning, everyone. Liberty SiriusXM Group had attributed cash, restricted cash, and liquid investments of $104 million, which excludes $44 million of cash and restricted cash held directly at SiriusXM. We have $870 million of undrawn margin loan capacity at the parent level. The value of the SiriusXM common stock and Live Nation stock held at Liberty SiriusXM as of November 4 was $22 billion. This excludes the value of the Live Nation call spread held at Formula One Group valued at $276 million at quarter end. We have $2.1 billion in principal amount of debt against these holdings. Total Liberty SiriusXM Group attributed principal amount of debt is $11.1 billion, which includes $7.9 billion of debt held directly at SiriusXM. Formula One Group had attributed cash and liquid investments of $1.4 billion, which excludes $139 million of cash held at Formula 1. Total Formula One Group attributed principal amount of debt was $3.6 billion, which includes the $2.9 billion of debt at the F1 level, leaving $730 million at the corporate loan.

Greg Maffei, President and CEO

I don't know where we cut off on Brian Wendling, Chase, you can tell us how far it got off.

Charles Carey, Chairman and CEO of Formula One

Okay. So everybody is on other than Denver people. Okay. I'll continue. Okay. Go ahead.

Greg Maffei, President and CEO

So let's have Brian share a few more sentences. Why don't you begin with the data on the Formula 1 brand, even if it's a bit redundant for some, and then we'll return to Chase afterward.

Brian Wendling, Chief Accounting and Principal Financial Officer

Okay. Hopefully not repetitive, but Formula One Group had attributed cash and liquid investments of $1.4 billion at quarter end, which excludes $139 million of cash at Formula 1. Total Formula One Group attributed principal amount of debt was $3.6 billion, which includes the $2.9 billion of debt held directly at the F1 level, leaving $730 million of debt at the corporate level. And as Chase just pointed out, F1's $500 million revolver is undrawn at 9/30. Lastly, on to the Braves Group. At quarter end, they had attributed cash, liquid investments, and restricted cash of $240 million. And attributed principal amount of debt of $714 million. The Braves amended debt agreements related to the team revolver and ballpark funding during the quarter secured covenant relief through March 31, 2022, and September 30, 2021, respectively. We expect the Braves to be out of compliance at year-end on small mixed-use loan and are working with the counterparty on the necessary waivers. We just note that we previously received a waiver on such covenants through Q3. Now I'll turn it over to Chase to talk about Formula 1.

Charles Carey, Chairman and CEO of Formula One

Okay. All right. Thanks, Brian. We're proud of the way that Formula 1, our teams, and our partners have managed through this year. We have three key priorities to execute once the virus hit us in March: First, to keep our fans engaged with a championship season and other initiatives that maintain the momentum we built coming into 2020 and to do so safely. Second, while mitigating the financial impact from the virus this year, prioritize strong long-term relationships with our commercial partners. And third, enhance the long-term growth of the sport by completing agreements and regulatory changes to strengthen the competition and action on the track. The governance of the sport and the business model for the teams in Formula 1. While we still have four races to go, we believe we're well on our way to achieving our goals. Executing the race schedule safely has been challenging, and our success to date is attributed to the partnership of everybody at Formula 1, the FIA, and our teams. Most do not realize the complexity involved in delivering the Formula 1 2020 competition, which required about 2,500 personnel at the track. In 2020, we will ultimately race in 12 countries, traveling to many locations requiring us to navigate constantly changing regulations on both ends. With the 17-race schedule beginning in early July, we met our goal of a 15 to 18 race calendar. Building this schedule was a bit of a jigsaw puzzle as 13 of our originally planned 22 race locations canceled. We took this as an opportunity to create special interest for fans by adding races where we had not raced in years, if at all. We feel very good about the fan reaction to our season to date. While many sports have struggled with viewership, this year, our viewership is up modestly over last year. To achieve these results in a season with Mercedes dominance and Ferrari struggles, while so many other sports have seen steep declines, is a solid achievement. Our digital growth has been even more dramatic. Formula 1 is the fastest-growing sports league in terms of followers across Facebook, Twitter, Instagram, and YouTube, with a 17% growth rate between March and September. Formula 1 also saw the highest year-on-year growth for social engagement with growth of 70%, which is more than three times higher than its closest competitor. We've had some special moments capped by Lewis Hamilton, becoming a sports lifetime leader in wins with his 92nd victory in Portugal and subsequently winning his 93rd in Emilia, surpassing the previous record of 91 set by Michael Schumacher. Congratulations to Mercedes, setting new boundaries by becoming the only constructor to ever win seven consecutive constructors' titles after Lewis Hamilton's win in Emilia. The Eifel Grand Prix at the Nurburgring marked a return to the podium for Daniel Ricciardo in Renault. A return he submitted with another podium in Emilia. At this race, for the first time in our history, we partnered with YouTube to stream the entire weekend for fans across selected European markets. We look forward to continuing our unique partnership with YouTube as another way to engage our fans. In September, we raced twice in Italy, which produced some outstanding racing. There were multiple red flags and a multi-car collision on a restart in Tuscany; only 12 cars finished, and Alexander Albon got his first podium. Monza produced one of the most thrilling races in years and gave us a snapshot of the future with the youngest podium so far, with Pierre Gasly securing his maiden win, and he was joined on the podium by Carlos Sainz and Lance Stroll. We have to see more of these unpredictable outcomes with the 2022 regulations. The paddock has been a flurry of activity with driver changes. Four-time champion, Sebastian Vettel didn't indeed find a seat with Racing Point. We'll see if other drivers secure seats, such as Sergio Perez and Nico Hulkenberg. Nico doesn't even have a permanent seat this season, yet has scored 10 points. There's heavy speculation about the new driver lineup from Haas. And Netflix has been capturing the drama as they film Season 3 of Drive to Survive. Continuing on the topic of engagement, the 2021 season of our F1 Esports Series presented by Aramco got underway in October with Alfa Romeo claiming the top spot. We're in the middle of a second event right now with racers competing for an industry-leading $750,000 prize pot. We've continued to see tremendous growth with Esports, with over 237,000 participants attempting to qualify this year. We will have eight live broadcasts, double last year, which will be streamed online via F1's official channels on Facebook, YouTube, Twitch, as well as broadcast by international TV partners. With regards to our 2020 results, we recognized early on this was going to be an unprecedented and uniquely challenging year financially. The most significant impact was on our promotion revenues. There were only two of our 13 events to date that have had fans, and those were capped at less than half capacity. Only in Portugal were we able to offer a limited Paddock Club. There are significant impacts on sponsor revenues this year, as some canceled locations have material local sponsors; the fewer number of races reduced title sponsors and general inventory, and the lack of hospitality precluded some elements of sponsor benefits. The virus also made the completion of new sponsorship agreements more difficult. Our television revenue saw the lowest percentage impact among our three primary revenue categories, however, it was still significant. We've reached revised agreements with all but a couple of our material commercial partners for 2020. We approached these agreements with a spirit of partnership. In almost all cases, we could have taken a much firmer position if we simply enforced our contracts as written. Where we believe it best to approach these discussions with a sense of fairness to maintain our momentum. On the cost side, we aggressively reduced costs where possible. Some of our operating costs like freight and travel were naturally reduced with the revised calendar. Other discretionary costs were largely eliminated. On the operating cost level, we implemented furloughs, freezes, and cuts, and expected discretionary compensation. Our prize fund expense to the teams is contractual and will increase as a percentage of revenues. All in all, the financial impact this year is significant, but manageable by both us and the teams and positions us well as we go forward. Our third priority was to implement key initiatives for the long-term growth and health of the sport. We achieved much more than most expected. Key elements include a cost cap on team expenditures to improve competition and the business model for both existing and potential new teams, new technical and sporting regulations for 2022 that will improve action on the track for fans, a five-year agreement with teams to better balance prize fund distribution and provide improved stability in an enhanced sense of partnership, streamline governance structure to better grow and improve support, advance initiatives on both diversity and sustainability, and strengthened our balance sheet to provide both stability and the ability to be opportunistic during this period of continuing uncertainty. We still have much to do and our current focus is our engine. We need to address the costs and performance of the current engine, and we continue to define the path forward for our next engine, which will be a centerpiece for our sustainability goals. We expect to announce the 2021 calendar soon, which will look much like our original 2020 calendar, the March start, early December finish, and a record-setting number of races, including Saudi Arabia, as Greg mentioned. We're planning for events with fans that provide an experience close to normal and expect our games to be honored. In the television area, we have one material market to finalize and are otherwise well-positioned for next year. Likewise, in our sponsorship category, we're finalizing our last renewal and actively engaged in a number of new sponsor opportunities. If the virus does not preempt plans, we expect 2021 will be pretty close to the 2021 we would have originally planned 12 months ago. We'd continued growth in 2019 and the previously expected growth in 2020. That being said, what is obviously not predictable is the virus. But I do believe more strongly than ever that the world will, in due course, combat the virus. And when it does, that live unique global events like Formula 1 will be more popular than ever as people look for the shared experience of sports and our array of partners will have a greater-than-ever need to reengage with fans and consumers. In closing, I want to highlight what I believe is our most important achievement in 2020: the appointment of Stefano Domenicali, as the new CEO of Formula 1, effective January 1. Stefano combines a rich experience and expertise in Formula 1 with the commercial knowledge of leading one of the world's iconic brands, Lamborghini, during the past six years. He is respected throughout the Motorsport and commercial world and will hit the ground running. With that, I'll turn it back to Greg.

Greg Maffei, President and CEO

Great. Thanks, Chase, and thanks, Brian. We hope that you all will join us for our virtual Liberty Investor Meetings on November 19 and November 20. We do appreciate your continued interest in Liberty Media and hope you are all staying safe and healthy. With that, operator, I'd like to open the line for questions.

Operator, Operator

Thank you. And now we take our first question from Bryan Kraft from Deutsche Bank. Please go ahead.

Bryan Kraft, Analyst

Thank you. Good morning. I had two. First, for Chase. Wondering if you could put some context around Honda's decision to leave Formula 1 as an engine supplier. Should we be concerned at all that a shift toward electrification by key teams might impact their future participation in F1? And then, Greg, on the Live Nation side, I saw an experiment that was recently conducted in Germany to test the safety of concertgoers with various safety measures in place. That experiment concluded that there was low transmission risk to concert attendees when certain measures were taken. So I don't know if you had seen this or if Live Nation was involved. But I was just curious if you had seen it or knew anything about it? And if so, if there were any implications for potentially being able to return to concerts earlier? Thanks.

Charles Carey, Chairman and CEO of Formula One

Okay. I guess I would say two things. I mean, on the Honda decision. From my perspective, it was largely driven by challenges, economic challenges at the overall Honda entity. The auto industry in general is having some challenges, and I think Honda clearly is living and struggling with those challenges. So I think that was the core issue. There's no question that their economics around the engine are going to address. But I think Honda's had those pressures exist today, and they had to make some decisions. On the flip side, we actually are getting increasing support and not just from the players that are in the sport, the OEMs that are in the sport. But the OEMs that aren't are actually incredibly enthusiastic about our sustainability future and where we're going with next-generation engines. I don't know if you saw the report from the CEO of Volkswagen a couple of months ago, but it could not have been more positive about where we're going and the importance of us as a platform. So I think as we continue to flush out and put more information out there about our next-generation engine and the sustainability goals, we are actually getting increasing support and interest from both existing partners and potential new partners about the importance of that to their future.

Greg Maffei, President and CEO

Great. Thanks, Chase. Turning to your Live Nation, I'm just a little bit familiar with the German efforts that you mentioned, Bryan. I'd note a couple of things. And I think most of you are aware that 86% of the fans who had concerts postponed because of the COVID virus have said, don't send my money back, I'll wait. And I will go to the concert when you are ready. So demand is there among our customers. Why it's also there? We have artists who want to tour, who you've seen efforts to begin towards like the German thing, but other things as well. And really, some combination of safety measures, and I think there are other experiments like the one you mentioned in Germany, but elsewhere as well. Some combination of safety measures, rapid testing, and eventually a vaccine will bring live concerts back in a big way, with a huge amount of pent-up demand and a huge amount of pent-up supply. So I remain quite bullish. There is a cost still awaiting. Obviously, Live Nation is burning cash flow at rates, but I remain very optimistic about the ultimate total addressable market there, the market, and the ultimate terminal value. In fact, I think in many ways, it could be strengthened because sadly, other players are not as strong as Live Nation, and we will probably be able to take advantage of it, both in terms of our market share and in terms of improved terms with venues, artists, and the like.

Operator, Operator

And we'll take our next question from Vijay Jayant from Evercore.

Vijay Jayant, Analyst

I have a few. So for you Greg, obviously, you talked about a goal of getting to 80% ownership at Sirius. I understand if it's done in a certain way, a noncash, I think, an actual way that we could start to qualify first as an ATB. Can you sort of explain to us what, how that could be done, if I'm correct on that thinking? And is, in the pretty close to 80%, is that something that's relatively imminent? And for Chase, obviously, we haven't really seen the details of the new agreement for the team, but the trade press has suggested that there is a new waterfall agreement and how the teams are going to get paid as the business grows, that grows to deliver better operating leverage to Formula 1 as a company. Any detail on that? And what that could do to profitability going forward would be appreciated?

Greg Maffei, President and CEO

Great. So thanks, Vijay, for the question. So it is possible that it's done in the correct way, we might be able to achieve ATB status, active trader business status for SiriusXM. But that would involve some issuance of shares, it would involve some hopes, and it's not guaranteed that we would still get to being an ATB. The priority there is getting to the ATB because it really allows upon the conclusion of a tax-sharing arrangement with SiriusXM. It allows us to move capital in a tax-free manner up to LSXM. That's really the priority. ATB would be kind of nice icing on the cake, but I would note that we are already approaching ATB status. For example, we already have it at the Braves, and we're approaching it in Formula 1. January of 2022, it will become an ATB. So our flexibility there within Liberty Media is pretty good around ATBs. You can never have enough ATBs, but you're not going to commit on natural acts to try and make this one become an ATB. The priority is to get to ATB.

Brian Wendling, Chief Accounting and Principal Financial Officer

And I guess, and if I understood the question, I assume it's around the Concorde Agreement and the split between us and the teams. If that's the question, we won't go into, I'm not going to go into real details on it. But from a high level, essentially what our premise was, if we can grow the business, we should receive benefits from growing it. If we don't grow the business, it goes the other way. So I think it's an incentive and an ability to allow them to get a bit more of the upside if we can successfully grow it. And I think it's all done with making sure everybody is in a healthier model when you combine the cost cuts together with the revenue distribution; every team should be better off. But what I would guess we believe in success so should Formula 1.

Operator, Operator

And we'll take our next question from Ben Swinburne from Morgan Stanley.

Ben Swinburne, Analyst

Greg, are we going to get a video at the Liberty Investor Day or wipe that out, too?

Greg Maffei, President and CEO

COVID has caused many changes. And you may not have exactly the same thing, but we try not to disappoint. So we will have something for you, don't worry. And I know that was the only question you had to be cared about this. Maybe if there's another way in that business, we'd be happy to try and answer too.

Ben Swinburne, Analyst

Okay. Yes, I wanted to ask you, Greg, going back to the management changes at SiriusXM. I think the market, you've been very positive on Jim. Jim's performance over the years. I think that's a widely held view. The market seems to be, I don't know, reacting with some surprise about Jim's departure, David's departure, Jennifer's elevation. Maybe it was tied to the Howard thing. I don't know. I was just wondering if you could talk a little bit more about you're the Chairman of the Board there. What, if anything, will change at SiriusXM going forward under the new team, if anything, and maybe just spend a little more time there? And then for Chase, hopefully, this will probably be your last earnings call with us, I'm guessing, but I would love to hear from you again if you want to come back. Any update on the Miami plans? If, I think that may be on the to-do list for '22? And if that's likely, do you think you go to 24 races? Like how high on the race count is sort of practical?

Greg Maffei, President and CEO

Yes, I think we were surprised by the market reaction. In hindsight, we should have been more cautious, but the combination of changing both the CEO and CFO at the same time, along with the potential changes involving Howard, created some uncertainty. Jim has been our CEO for eight years and has done an incredible job. However, he has tended to take shorter-term extensions, expressing that he has other interests outside of Sirius, including his passion for racing. This change was a natural evolution for him, and we are fortunate to have him remain as Vice Chairman to continue benefiting from his expertise. He would agree that change can be positive, and having Jennifer step in as CEO, with her extensive experience and long-standing relationship with the company, will bring new perspectives while maintaining some continuity. David, the outgoing CFO, has achieved a lot, but it was time for a transition. Sean, our new CFO, has significant experience in the entertainment industry and will bring valuable insights to the team. As for the speculation surrounding Howard, while we don’t have a signed agreement, it appears likely that he will resign, and I believe this uncertainty has now been alleviated. The market should start to feel more comfortable with the continuity we have in Jim and myself, along with the strong addition of Jennifer and Sean. The business is performing well.

Brian Wendling, Chief Accounting and Principal Financial Officer

We are still actively engaged in Miami and recently spoke with the Dolphin Group leadership. We both agreed that given the recent virus issues and the uncertainty surrounding them, it would be prudent to take a slower approach until we have a clearer understanding of how things will develop. We remain excited about the Miami opportunity, but we believe it is important to proceed with confidence. Our initial events are showing promise, with discussions indicating a strong likelihood of having fans and events that feel normal. While we have enthusiasm, some uncertainty remains. For a new race, we want to ensure a proper launch; therefore, we decided to move slowly until we gain better visibility related to vaccines, treatments, or tests. Expanding in the U.S. is not a short-term endeavor, and it is more important to do it correctly rather than quickly. The virus poses challenges that need to be assessed before moving to the next phase, so we will continue to monitor the broader environment.

Operator, Operator

And we'll take our next question from David Karnovsky from JPMorgan. Please go ahead.

David Karnovsky, Analyst

Hi, thank you. Just on F1. Regarding any contract adjustments or rebates in the broadcasting sponsorship side, would the impact from this be allocated to the quarter based on the proportion of races? Or may there be some factors that behaved in Q3 specifically? And then should we expect any potential adjustments to contracts maybe to be reflected in future years? Or is everything going to be tied up in 2020?

Greg Maffei, President and CEO

Chase, please share your thoughts on what the years have been like, but if you prefer, Brian Wendling could assist with the quarter allocations.

Charles Carey, Chairman and CEO of Formula One

Well, Brian, I'll let you go first, and I'll add.

Brian Wendling, Chief Accounting and Principal Financial Officer

Yes, I think the situation is generally recognized as we have identified it, where the events or event-specific broadcasting sponsorships related to individual races are still allocated as those races occur. While the calendar is different, the principles remain unchanged. I would say that the impacts, when viewed beyond our current situation, are not merely adjustments. We have some elements like ensuring full sponsorship support. However, the challenges we faced this year are not predominantly ones that will carry over into future years. To a great extent, we have addressed these issues this year. One of our main objectives has been to position ourselves well as we move past the pandemic, aiming to return the business to its pre-virus state. Thus, our focus has been on managing short-term changes while protecting the business for the long term. There are some minor adjustments being made, but overall, we have largely dealt with the issues this year.

Operator, Operator

Thank you. And now let's take our next question from Brian Russo from Credit Suisse. Please go ahead.

Brian Russo, Analyst

Thanks for taking the question. So this is in reference to how SiriusXM's capital return may change once Liberty reaches the 80% ownership. Over the summer, the former CFO of Sirius suggested he didn't see management recommending to the Board that the dividend be significantly increased. Obviously, today, the management and the Board look different. But Greg, once you do own 80%, would you recommend that they change the capital return strategy? And if so, how would you make the case that this would be in the best interest of Sirius shareholders? Thanks.

Greg Maffei, President and CEO

Well, thanks for the question. Yeah, I think the Board has seen changing capital strategies over time. We didn't have a dividend before. We had buybacks at various levels. And those will be evaluated in conjunction with management as we go quarter-to-quarter. Obviously, from Liberty's perspective, the dividends are nice because it allows us to go after the discount. But we've also had dividend increases for everybody else, the benefit of everybody else. So I don't think we have a set plan or intent now, and it will be evaluated with management and the Board have done.

Operator, Operator

Thank you. And now we'll take our next question from Brandon Ross from LightShed Partners. Please go ahead.

Brandon Ross, Analyst

Hi, guys. Thanks for taking questions. Maybe this is for Greg or Chase. Wanted to get your perspective on this year's significant decline in sports ratings. You said Formula 1 was an exception to that trend. Maybe why do you think you guys were able to buck the trend? And then what do you think is causing the broader issues? And is there a longer-term concern for you as a sports rights supplier with the Braves and Formula 1?

Greg Maffei, President and CEO

Chase, do you want to take a shot, and then I'll add or you want to do first.

Charles Carey, Chairman and CEO of Formula One

Sure, happy to. Let me provide some perspective on the broader sports industry and our situation. In the broader sports industry, a couple of factors have had an impact. There was a significant overlap of events, such as the NHL and NBA coinciding with baseball and football. This competition among these events for viewers clearly influenced attendance and viewership. If we look at public sentiment, some folks have mentioned the presence of fans, or lack thereof, which does vary by sport. For us, fans are not a major part of the television experience aside from the pre-race and post-race segments. Watching a Formula 1 race on TV without fans means there's no crowd noise or cheering, which are traditionally part of the experience. Thus, while the absence of fans can diminish some of the energy and excitement, I believe the competitive overlap has had a more pronounced effect. Additionally, political issues seeping into sports haven't contributed positively either. While I wouldn’t categorize it as a severe negative, there are certainly fans who wish to enjoy sports as an escape from daily challenges, wanting to simply have a good time with friends while supporting their teams. So, while this hasn’t had a major impact, it hasn’t been helpful. For us specifically, we had a unique situation. Baseball is the only other sport that faced similar interruptions. Other sports resumed after breaks with condensed seasons, but our challenges arose just three days before our season was set to begin in Australia. We managed to launch a season that engaged fans, and through social media and other channels, we built momentum leading into it. Ultimately, if the broader question is whether I’m concerned about the popularity of live events, I actually feel quite the opposite. I believe the world yearns for these experiences and wants to reconnect with them. There is a strong passion for events like ours, and people are eager to participate. Many have speculated about the long-term changes post-virus, and I firmly believe that the popularity of live events will remain untouched; if anything, the absence of these events has created a longing for them. We see this desire reflected in our partners, who are increasingly seeking ways to reengage with fans through the types of events we offer.

Greg Maffei, President and CEO

Brandon, I'll add. I think I agree with a lot of Chase's observations, which I've seen the light of observations. You went from no sports to too much sports out of season, politics distracting both potentially on-court and off-court with the national election, a lot of factors. How much of that's secular? And how much of that is cyclical? How much of these ratings declines are secular or cyclical, it's hard to know. I would note, I won't, you guys have quoted our Chairman about sports being the bundle, the blue the whole bundle, I think that's largely right. And I think sports is probably going to have somewhat of a rebound of how much is secular versus cyclical, hard to know. I would note both of our particular sports products did pretty well. Formula 1 had particularly growth early. What it probably was less competitive just in terms of how much sports was out there. And the Braves had good numbers pretty much all season, partly because we had a good team. And it's, we've had a, over the last several years, I think, 44% growth in TV audience over the last three years, part of that driven by a good team and a new stadium and the like. The longer-term question of how much direct-to-consumer changes the mix is to be seen. We have the benefit at Formula 1 to think of being under monetized on our product compared to many sports. And we have the benefit of the Braves of being in a very large territory relative to moat. So you certainly want to think about the impact of those changes. But in both cases, I feel pretty good about our situation.

Brandon Ross, Analyst

Great. And just because you guys have access to the data and follow international markets probably a little more closely. Have you seen similar trends internationally to what we're seeing in the U.S. with sports viewership?

Greg Maffei, President and CEO

Yes. Chase, I'll let you go first, but then I'll give my sense.

Charles Carey, Chairman and CEO of Formula One

So I guess, I mean, for us, there are probably other factors that are bigger. I mean, actually, then the trends, it's a little tough to sort of differentiate what impacts? Just the question for, are we struggling in this year, has the significant impact in markets, I mean, because I said in the comments, I mean, I think probably one of the things I felt best about is achieving these results with a competition that lacked the drama at the top you have liked and elect an iconic team being as competitive as they have been. And I think to some degree, it's why you need to continue to freshen and find different energy, whether its new tracks or other things to excite. So as I think for us, it's tough to, I think we went through all that pretty well. I, in some degree, because we don't really compete in the same way inside the markets. I don't, I'm not close enough to sort of track what does the Bundesliga do in Germany and what does Serie A do in Italy and what does La Liga do in Spain. So the international market gets so big, broad, and diverse. I probably, the U.S. is a little easier to track just the sport set. And more data, it's, to some degree, we're, it's not as directly relevant for us given that we're a global platform.

Greg Maffei, President and CEO

Yes. I agree with Chase's comments. I doubt in much the same way, you noted that the lack of Ferrari being as competitive as say and we might like, as you probably heard as Middle East from other places. It's also the case when Alonzo was hot, Spain was good.

Operator, Operator

Thank you. And now we take the next question from Zack Silver from B. Riley.

Zachary Silver, Analyst

Great. Thanks for taking the question. Okay. The first is just on, I think, one in the IndyCar teams, Myers Shank, and how the guys have made an investment in their team. Just wondering if you can talk about the rationale for that investment and whether you see an opportunity to work more broadly with the other racing leagues?

Greg Maffei, President and CEO

Yeah. We did make a relatively small investment in Myers Shank. We did that because we are interested in Motorsport. We are lucky enough to own the pinnacle of motorsports, but we think there's a lot of opportunity, particularly in the U.S., to grow both Formula 1 and other sports. And to get a better view, a better understanding of how some of that operates to become a player at one level in IndyCar was attractive to us. And we got an opportunity to invest with a group we respect. And again, not a huge amount of money, but we'll learn something and we'll get better insights.

Zachary Silver, Analyst

Got it. And then one more, if I could. Some of the broadcast deals that you did this year, you either retained or clawed back some of the streaming rights. And for others, there's rights that still sit with the broadcast partners. Can you update us on how you think about the importance of owning those digital rights and why you own them in some markets versus others?

Charles Carey, Chairman and CEO of Formula One

I wouldn't say that broadcasters don't own those rights in many areas. We do have ownership; however, the extent to which we utilize them often depends on agreements with the broadcasters. They are typically cautious about what they view as competing products. In some instances, our relationship is more of a partnership, requiring collaboration with the broadcaster to develop the content. This is essential for us. The over-the-top platform we mentioned earlier is intended to generate revenue from our most passionate fans who seek a rich and immersive experience. We believe this approach benefits both us and the broadcasters, although the dynamics vary. It takes time to navigate these issues. Some progress has been made with more lenient partners. Our primary focus remains on strengthening core relationships. If we can find a way to expand and enhance our digital platform, we will pursue it. However, if obstacles arise, we will explore alternative options. The size of the deal and the various components involved play a significant role in this process. It integrates into the larger relationship framework, and we firmly believe in its long-term importance for our business, especially considering the passionate fanbase we have. We are making strides and do not wish to clash with broadcasters over these issues. Generally, recent renewals have provided us with increased flexibility. The key for us is to continue securing more flexibility to leverage digital rights in a way that aligns with our broadcasters as they adapt to the growing significance of the digital landscape. Monetizing these rights ultimately benefits everyone involved by maximizing consumer value. Overall, we feel positive about the number of deals we've finalized this year, which have granted us greater flexibility, whether working independently or in partnership with broadcasters. We don't aim to revolutionize everything within a year, but we expect to gradually gain more flexibility to explore all available avenues in both traditional and digital platforms for our product.

Greg Maffei, President and CEO

So I think this is our last question, operator.

Operator, Operator

Yes, sir. We're taking the last question from John Tinker from Gabelli.

John Tinker, Analyst

Congratulations on good financials for BATRK. Could you just talk a little about how the CBA wage agreement discussion might go? And how that might affect you going forward?

Greg Maffei, President and CEO

Well, I'm not sure they were great financials because we, like many others in the baseball world, suffered a lot from the lack of in-person fans at events. But I give credit to our management team for making the great adjustments that they did to sustain the business and keep fan interest up. I think the reality is baseball lost a lot of money this year. And unless fans are in the seats next year, it will be a challenging business as well. I'm not really going to comment on CBA negotiations, but the long-term reality must be that if there is not as much revenue coming in, it is likely to put pressure on what teams can pay for players. It just seems like an economic fact. And beyond that, I'm sure that will cause tensions because players want to get paid as much as they can outstandingly, but teams are only going to have X amount of resources. So I think there'll be challenges around that, and we'll see what happens. Thanks all for joining, and we look forward to your continued interest in Liberty Media.

Brian Wendling, Chief Accounting and Principal Financial Officer

Thanks, guys.

Operator, Operator

This concludes today's call. Thank you for your participation. You may now disconnect.