Liberty Media Corp Q2 FY2020 Earnings Call

Ladies and gentlemen, thank you for standing by. Welcome to the Liberty Media Corporation’s 2020 Quarter Two Earnings Call. During the 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, August 10th. I would now like to turn the conference over to Courtnee Chun, Chief Portfolio Officer and Senior Vice President of Investor Relations. Please go ahead.

Thank you. Before we begin, we'd like to remind everyone that this call includes certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual events or results could differ materially due to a number of risks and uncertainties, including those mentioned in our most recent form 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 statement 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 Liberty Media and SiriusXM Schedules one and two can be found at the end of the earnings press release issued today, which is available on our website. Now, I'd like to turn the call over to Liberty President and CEO, Greg Maffei.

Good morning, and thank you, Courtnee. 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. First, I hope you all are healthy and safe and have been enjoying your summer given these challenging circumstances. Second, I'd like to again thank our management teams and employees that have done such an impressive job managing through this COVID-19 crisis. So first looking at Liberty SiriusXM. We completed the previously announced rights offering, it was fully subscribed, generating proceeds of $754 million and we used that money to fully repay the intergroup loan that Liberty SiriusXM had to the Formula One Group. During that period, we paused our share repurchases as we were prohibited from being in the market during the rights offering. We are certainly aware that if this panic remains, we have ample liquidity at LSXM and expect to take full advantage of the discount opportunity. Our ownership at SiriusXM now stands as of July 28th at 72.9%. Sirius also paused its buybacks in Q2 due to market conditions and the depths of the COVID crisis, but recently extended their authorization by $2 billion. We remain very focused on getting to 80% as Sirius. Looking at Sirius itself, like our other subscription businesses, Sirius has proved resilient during the crisis. Subscriber net adds were 254,000 and churn was down 1.6%. During the quarter, we generated over $0.5 billion of free cash flow. We also announced the deal to acquire Stitcher, creating a full service platform for podcast creators, publishers, and advertisers, and also announced a smaller deal Simplecast, with podcast management and analytics platform services. SiriusXM continues to provide innovative programming and launching new apps, including the Beastie Boys, Bob Marley, Coldplay, Queen, you know how much I enjoy Freddie Mercury, and the comedian Jim Gaffigan. With strength and visibility in the business, we offered new 2020 guidance at SiriusXM. Turning briefly to the Formula One Group, and you’ll hear more from Chase in a moment. We returned to racing at the beginning of July and we have now completed five races, and are still targeting a 15 to 18 race season and we continue to move the business forward. We have a new lower cost capital build effect in 2021 and new broadcasting and sponsorship deals. The teams and all of our partners have been doing a tremendous job of returning to the track. Yesterday, we had an exciting race in Silverstone where Red Bull and Max Verstappen executed a great strategy to win, so it’s exciting racing. Turning to Live Nation, their top priority in the recent months has been strengthening the financial position announced in an amendment to the credit agreement, which suspends their leverage covenant until the end of 2021 and provides increased flexibility. They recently reported results last week, still bullish on the future of live events even with the near-term ticket turbulence. They've already sold 19 million tickets over 4,000 concerts and festivals, which are scheduled for 2021. Management expects live events can return to scale in the summer of 2021. On a positive note, 86% of fans opted to keep their ticket for rescheduled shows even if offered refunds. Two-thirds of their fans kept tickets for canceled festivals so they can go to next year's show. Virtual concerts are generating big demand with fans; over 67 million fans engaged in 18,000 virtual concerts globally in the second quarter. We had over 150 performances for a virtual Lollapalooza and we launched socially distanced shows in permitted locations, including New Zealand, France, Denmark, Spain, Germany, and select cities across the U.S. Now turning to the Braves. I'm glad to see that the Braves returned to the field and they’re off to a strong start with an 11-6 record, including seven and two at home, and they won all three series thus far. In series play, they are five in one, which is tied for the most such victories in the majors. We are very sad that our number one pitcher, Mike Soroka, ended the season early with a torn Achilles and we do wish him a speedy recovery. But the Braves still have four former first-round picks in their starting rotation with Max Fried, Sean Newcomb, Kyle Wright, and Touki Toussaint. Early in the year, Markakis opted out of the season but he has since returned and he came back with a bang, hitting a walk-off homer last week in his debut.

Greg, are you on?

While we wait for Greg to return, I will continue on and then hand it over to Chase. Good morning, everyone. At the end of June, we amended the term loan and revolving credit facility at Formula One. The net leverage covenant will not apply until our first testing day for the quarter ending March 31, 2022, providing the business additional flexibility to operate during this uncertain time. Brave Holdings is expected to be out of compliance with certain debt covenants at the end of the quarter. We continue to work with the lenders to obtain waivers and covenant modifications. These discussions are going well and we're optimistic that we will have a favorable resolution by the end of the month. Liberty SiriusXM Group had attributed cash, restricted cash, and liquid investments of $154 million, excluding $1.8 billion of cash and restricted cash all with SiriusXM. We have $870 million of undrawn margin on capacity at the parent level. The value of the SiriusXM common stock and Live Nation stock held at Liberty SiriusXM as of Friday’s close was $22 billion, which excludes the value of the Live Nation call spread, which is held at Formula One Group valued at $210 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 $12.6 billion, which includes $9.4 billion of debt at Liberty SiriusXM. Formula One Group had attributed cash and liquid investments of $1.4 billion, which excludes $324 million of cash at Formula One. Total Formula One Group attributed principal amount of debt was $3.6 billion, which includes the $2.9 billion of debt held directly by Formula One, leaving $733 million at the corporate level. Lastly, for the Braves, we had attributed cash, liquid investments, and restricted cash of $329 million, and attributed debt was $718 million. With that, I'll turn it over to Chase to talk more about Formula One.

Okay, thank you, Brian. And I guess I’ll keep going and wait for Greg to return at some point. We were thrilled to return to racing with the launch of our 2020 season in Austria, the first weekend in July. It was an exciting race that saw a lot of competition in the midfield with action-packed last few laps leading to Lando Norris’s first podium finish. In the five races so far, we've seen Lewis Hamilton fighting for his 7th World Championship. The continued strength and ingenuity of Red Bull, the struggles of Ferrari, and the emergence of McLaren and Racing Point as serious contenders. Our data through the first four races of the season have produced solid viewership growth across the race weekend, especially in key markets like China, and there's tremendous growth on our digital platforms measured in video views, social media interactions and traffic across the websites and app. The drama in the paddock has built this summer as a number of driver changes were announced for 2021. Ferrari decided not to renew four-time World Champion, Sebastian Vettel, and instead signed Carlos Sainz. His open seat at McLaren went to Daniel Ricciardo, which will make for a strong and entertaining pairing with Lando Norris. Renault decided to fill their vacancy with former Champion, Fernando Alonso, and Valtteri Bottas re-signed with Mercedes for 2021. There's continued speculation around Sebastian Vettel, so more to come. Just prior to the start of this season, we launched our 'We Race As One' initiative to tackle the major issues that we as a sport and a society are facing. We used our restart to show that we stand united against racism and are doing more to address inequality and diversity in Formula One, while also taking a moment to thank people around the world for the fortitude they’ve shown against the global COVID-19 pandemic. We will be establishing a task force to listen and identify the right initiatives required to increase diversity and inclusion across Formula One, specifically focused on identifying employment and education opportunities and the required actions to effect change. We're in the process of creating a foundation that will primarily finance internships and apprenticeships within Formula One for underrepresented groups. These efforts build on the ambitious sustainability, diversity, and inclusion strategy set out in November 2019, which set goals of having a net zero carbon footprint by 2030 and ensuring all of our events are sustainable by 2025. Getting back to racing hasn't been an easy feat. I'd like to thank the FIA, our employees, the teams and drivers, our promoter partners, and local authorities. Together, we developed an extensive code of conduct and testing protocols that are being closely followed and have been working well. Our priority has always been to safely transport everyone and to enable those individuals to operate in a safe and secure manner. We've been publishing our testing results each week as we believe it's good to provide this transparency. At Silverstone, we saw firsthand how our safety procedures are robust and effective. Sadly, Sergio Perez tested positive for the virus, but our trace and test procedure handled the situation safely and efficiently with no impact on the race weekend for the wider sport. It shows how far we’ve come since Australia, and it's a testament to the diligent way that we've returned to racing. We have now announced 13 races in the revised calendar and expect to get to between 15 and 18 races in 2020. The newly added three races bring exciting circuits that were not part of the original 2020 calendar. Portimao in Portugal will be a completely new circuit, while we welcome back Imola and Nurburgring that have hosted World Championships in the past. Unfortunately, due to the fluid nature of the ongoing pandemic, it will not be possible for us to race in the Americas this season, but we’ll look forward to being back in 2021. We expect to release the final details of the 2020 calendar in the coming weeks. While we’ve been extremely focused on the 2020 season, we continue to progress the business for the long term. We reached a long-term exclusive rights agreement with Sky Deutschland beginning in 2021. Sky Deutschland will provide fans in Germany with full coverage of every Grand Prix and will include Germany's first 24/7 channel dedicated to Formula One. We also announced agreements in Austria with Servus TV and ORF and in Russia with Match TV. We're in the process of finalizing the last couple of TV deals for 2021. We've also continued to strengthen and expand our commercial partnerships. We believe our planned race calendar of 15 to 18 races will be able to satisfy the vast majority of our contracted sponsorship revenue in 2020. To name a few recent updates, Liqui Moly, the globally renowned vehicle care products expert, upgraded to an official sponsor for the next three years. Adapting to the new reality, we partnered with Zoom to deliver the first-ever Virtual Paddock Club experience. Beginning with the race in Hungary, guests are treated to a range of experiences, and we're working to expand this offering to our global partners and F1 teams. Furthering the fan outreach, we announced a new podcast series, The Spotify Paddock Pass, hosted by Will Buxton, and in these exclusive episodes, he will speak to drivers, team principals and legends of the sport. On the video front and following on the strong results of the first two seasons of the Netflix show, Drive to Survive, the film crews are already at work filming the third season. We're also partnering with YouTube to livestream the Eifel Grand Prix in Nurburgring, Germany. This is the first time fans from select European countries will be able to view the entire Grand Prix weekend for free on the Formula One YouTube channel. Before I return to the track, we took the opportunity to revisit the cost cap of $175 million announced last October. The new cost cap of $145 million will be introduced in 2021 and will further reduce to $140 million in 2022 and $135 million in 2023. This will advance the objective to improve competition and action on the track and at the same time, make the sport a healthier and more attractive business for all. With our return to racing and the revised cost cap, we've moved to finalize discussions around the Concorde Agreement. We've had productive conversations with all constituents and we look forward to completing this agreement in the near future and solidifying the sport for the longer term. We've also been focused on the corporate operations of Formula One. During the second quarter, we furloughed over 50% of our workforce, but we’re pleased to bring back the majority of our employees with our return to racing. We also focused on our balance sheet and announced an amendment to our debt covenants, which provides flexibility until March 31, 2022. These actions, along with a diligent approach to our spending, will enable us to weather this difficult time. Given all the challenges in 2020, we're proud of what we've been able to accomplish and expect to accomplish. We've been in regular contact with the majority of our commercial partners to discuss the reduced race calendar and the expectations that many of our races will not have fans. Clearly, this is going to impact our revenue in multiple areas but it’s still dependent on how the remainder of the year unfolds. We appreciate and value our long-term partners and we expect to resolve any contractual issues in a fair and straightforward manner. We're confident in our plans for 2020 and look forward to 2021 when we think we can return to our prior expectations for Formula One. Now I'll turn the call back to Greg.

Thank you, Chase, and thank you, Brian. Given the ongoing pandemic, we have decided that Liberty's Investor Day will be virtual and will happen over two days, because no one, as much as we love to, should have to be in a video call for that long. On Thursday, November 19th, we will cover Liberty Media and Liberty TripAdvisor, and on Friday, November 20th, we'll include Qurate, GCI Liberty, and Liberty Broadband. We'll run from 11:02 Eastern on both days. More details will be provided on our website, so please mark your calendars. As always, we appreciate your continued interest in Liberty Media and again, hope you all stay safe and healthy. And with that, operator, I'd love to open the floor for questions.

We will now take our first question from Ben Swinburne from Morgan Stanley. Please go ahead, your line is now open.

Chase, could you talk about, I know you're obviously laser focused on 2020. But I’d love to ask you a couple of questions about next season. On the sponsorship front, are you able to give us any sense for how you're thinking about that coming together for next year? I don’t know if you want to be this specific. But I'm trying to figure out if '21 could be higher than 2019, or if the global recession and pressure on corporate spending maybe change the direction of that revenue line? And then secondly, I'm wondering if you're thinking about a later start to the season next year, just because of obviously what’s going on with the virus and sort of continued timelines during vaccination. Just curious if you think that's an option that you guys are exploring yet or if it's too early? And then I just had one for Greg. Greg, you again reemphasized the discount at Liberty SIRI, the buyback. Could you guys buy back any shares between June 16th and whenever you file the 10-Q, that’s where we'll see what the number looks like on the share count front, because it doesn't look like you did and I didn't know if that was because you were boxed out or some other reasons, trying to reconcile the comment with the buyback? Thanks guys.

Let me address the second part of your question first, as it helps set up the first part. We are preparing for the 2021 season to resemble what we would have anticipated at the start of this year. However, it's important to note that we lack clearer insights than anyone else regarding how the virus will evolve. It's been about five months since the onset of the virus, and with our season starting in March, we still have seven months ahead of us. There is plenty of time, and discussions around vaccines, treatments, and testing are expected to progress. Additionally, we operate in 22 countries, each presenting a different set of challenges. Nonetheless, we are planning for 2021 to align with our expectations, likely featuring a 2022 race calendar that starts and ends similarly to our previous calendar. We might adjust it slightly to allow for more space at the beginning and a busier second half. We have built in some flexibility, but any changes will likely be minor rather than a full overhaul. As we move forward, we will have more information and may need to make adjustments. Right now, we are organizing races that welcome fans, and we've kept in close contact with most of our events, although no one has clear visibility on the situation. We have a lot of upcoming sports to observe, such as how the NBA and NHL will handle next season and what European soccer leagues will do as their seasons commence. There are many examples worldwide that we can learn from. Regarding sponsorships, things went relatively quiet during the initial stages of the virus. In the first month or two, people adapted to remote work and different forms of engagement, mainly virtual connections. However, we feel optimistic about our progress in recent months and our current position regarding renewals. Sponsorship remains an area we see significant growth potential. Prior to the virus, we acknowledged that while we hadn't advanced as far as we wished, we still maintained confidence in our growth opportunities, and interest is strong. Thus, we anticipate continued growth, and our foundation appears solid. The renewals we are pursuing have led to positive discussions, and interest from new parties is robust. Although the situation remains fluid, we are confident about our trajectory in the sponsorship landscape and the opportunities that lie ahead.

And Ben, I'm happy to try and answer the other. We were blacked out for most of Q2 during the rights offering and we had our normal course blackouts prior to our earnings. The most of it is disclosed in more detail in the press release, so that I know we just dropped it on you but if you look in that, I think that's outlined.

Our next question will come from Bryan Kraft from Deutsche Bank. Please go ahead, your line is now open.

I want to ask two questions, first on Formula One. Working capital usage has been essentially neutral year-to-date. Do you expect that to change at all in the second half based on what you know at this point in time? And related to that, if the season were to be honestly cut shorter than the 15 to 18 race plan, would you be in a position where you have to refund fees collected for the season already? For example, those from the broadcast rights holders. Just trying to get a sense for what the potential cash need could be relative to the cash need on the balance sheet currently? And then my other question is on the strategic front. Greg, if you were to increase your equity stake in iHeart to something closer to the 50% level that has received antitrust approval. What are the reasons that you'd be doing it through Liberty, Sirius versus SiriusXM? Maybe the pros and cons of those two options? Thank you.

I primarily think about payments we receive from parties. In most cases, we've aligned these payments more closely with the races. Payments that were originally scheduled throughout the race season starting in March have been shifted since the season actually starts in July. While this adjustment doesn't apply to every instance, I believe it covers the majority. This change will definitely have an impact, but the effect on our revenue would be limited, particularly for those who've already paid for races that are now occurring. Regarding working capital, I tend not to delve too deeply into detailed forecasts because there are many variables at play. In the first and second quarters, we had minimal operations, which likely limited our working capital generation. However, as we actively operate the business in the third and fourth quarters, we will generate more working capital. There will be a noticeable impact on our revenue and working capital that would not typically occur in a normal year due to these circumstances. With all these dynamics, predicting liquidations on our balance sheet isn't something I focus on. We manage our payments and receipts more closely, maintaining working capital at a reasonably standard level despite reduced operations.

Yes, I'd like to just add on Chase's comments before I address iHeart. I mean, obviously, one of the reasons we did the reattribution was to put a bulletproof balance sheet in place at Formula One and that’s upheld. I think we've done that. So I echo Chase's points, we're very much focused on getting through 2020 and setting ourselves in place with no matter what happens in 2020 we’re prepared to try and get back to normal course, which will resonate down for 2021. Turning briefly to iHeart. There are some issues there that are worth thinking about for the long-term, which is Sirius a faster growing than iHeart, how much you want to consolidate that? How would you want to account for that? There are a lot of operating synergy potential there. But candidly, given the opportunities we have at SiriusXM, we like iHeart, but we don't feel any rush to do that. We've all noted the discount. We've all noted some of the things that Sirius wants to do about getting to AD. We’ve noted some of the things that Sirius wants to do about potentially in podcasts, those haven't been big and I don't expect they're going to be huge going forward. But the point being there are demands on the cash flow of Sirius and opportunities on the cash flow of Sirius that are interesting. And iHeart is managed by a great team, we like the business. But clearly, advertising is challenged in this environment and we want to watch and see what happens.

Just one follow up on that, Greg. The antitrust approval, I assume that applies to either scenario, whether it would be acquired through Sirius or iHeart up to the 50%. Is that correct?

I think you meant through Liberty Sirius or Sirius. I understand we've treated them as one entity for that purpose.

Our next question will come from David Karnovsky from JP Morgan. Please go ahead, your line is now open.

Just a few for Chase, on the race promotion. In the past, I think you've discussed timing along with the locations that want to hold the Grand Prix. So just wondering if you think the pandemic will impact the willingness of local governments to subsidize and support races, even through the negative because of pressure to finance or maybe to the positive even because of the need to attract tourism in the future? And then just for this season, assuming a limited number of fans are allowed at some races. Can you discuss how this would impact the promoter fee? Would this be prorated based on how much of the venue you're able to fill? Thanks.

In terms of race promotion, discussions that we've had so far extend beyond this year and are not related to 2020. We have planned some individual races, including those in Portugal and Imola. Our long-term calendar is mostly established, though we haven't announced 2021 yet because our focus remains on 2020. We are nearing finalization for 2021, with only a couple of agreements left to complete where the business terms have been settled but payment is still pending. The ongoing pandemic has not impacted these agreements, which were initiated before the crisis and have not faced any negative consequences. In fact, returning to normal and re-energizing our activities seems more significant than the challenges we face. In the short term, everyone is grappling with the duration of the pandemic, but there's a widespread belief that recovery is necessary, and businesses must resume operations, revealing a pent-up demand. Our presence in cities eager to attract visitors is crucial, enhancing the importance of our platforms. Conversations regarding 2021 are fairly positive, although they are still in early stages and not finalized. We're in a position to finalize agreements for next year, and while we aren't actively pursuing agreements for 2022 and beyond, we have held discussions that indicate continued interest in our events. Currently, the focus is on opportunities rather than detailed business terms for future races. This year is unique in many ways, and we expect a very limited number of fans at the initial race, with the potential for gradual increases over time. For later scheduled events, we hope to allow as many fans as possible, although governments are likely to wait until closer to the event to assess the situation. Our agreements vary widely depending on whether we are working with long-term or one-off partners, involving numerous variables. As always, the specifics of our agreements can vary by location.

We'll now take our next question from James Ratcliffe from Evercore. Please go ahead, your line is now open.

One for Greg and one for Chase, if I could. Greg, following on iHeart, if I recall from last November at the Analyst Day, John said something effective you see value in buying things with the momentum and evaluation levels and that there were synergies. And clearly, there will be a lot of synergies if you owned all of iHeart and combined it with SiriusXM. Can you talk about what sort of synergies you could potentially capture on a minority non-controlling stake in iHeart? And then for Chase, around some of the broadcasting rules, not particularly happy with what you've gotten in Germany, Austria, it’s Russia, and I think Scandinavia. As you work to finalize an agreement in Spain, sounds like adding, I’ll call sights to Ferrari and Fernando Alonso coming back should be positive for that. Can you provide any additional commentary on what you’ve been hearing from your broadcast partners over the last few months and how are you viewing the market for sports rights specifically across some of the most important European markets? Thanks.

I’ll start, Chase. Regarding iHeart, while you mentioned that a minority stake could complicate issues around synergies, I don't believe it would make them impossible concerning advertising sales and digital development. There are definitely ways we can collaborate. In fact, we might find opportunities to work together even without an acquisition, although it would be simpler with some shared ownership, and it would be easiest with complete assurance that your point is valid. I noticed John mentioned valuations; they have declined, and the business faces additional challenges as well. We'll consider all of that. Ultimately, we aim for full consolidation, whether that takes more time or isn't something we can achieve immediately. As I mentioned, we're currently pausing on all of it. Go ahead, Chase.

In terms of the broadcast landscape, our multiyear deals mean we are not currently discussing agreements for 2020; the discussions we are hearing are about deals starting in 2021. The virus has not significantly impacted the interest in the sport. Main events continue to hold unique value and this varies by country. Generally, the subscription-based paid side operates differently than ad-supported services. Paid sports services have navigated the absence of live sports, and when they return, it likely reaffirms the importance of these events on sports platforms. In the broadcast world, due to the nature of long-term agreements, there has not been a significant impact on the discussions that would have been ongoing before COVID. While there are some anxieties about the short-term outlook, there is a degree of confidence as increased discussions about home activities highlight the growing importance of screen time.

Our next question comes from Brian Russo from Credit Suisse. Please go ahead, your line is now open.

This one's about SiriusXM. Greg, in one of your past Analyst Days, I think you made a case that the TV and film business has challenges because certain technology companies have entered the space and they're spending more on content, because they have alternative ways to monetize or they're not valued on near-term profits. Seems like a similar case could be made for like spoken word content in the audio space. And I’d love to get your view on why this may or may not be a good analogy, and what the implications could be for Sirius’ content costs? Thanks.

I believe it's a flawed comparison. While there are aspects that might be relevant, let's consider the example of Spotify. They have benefited significantly from the perceived value of their moves in podcasting. There is a foundational level of music all players must offer, along with a range of unique content. SiriusXM possesses a substantial amount of differentiated content, whether it's sports from ESPN, Formula One, NFL, or MLB, as well as business content from CNBC and comedy. This extensive variety is a key reason we've managed to maintain premium pricing, experience growth, and achieve low churn rates compared to other services. I concur with Jim Myers that podcasting will become an intriguing segment of our business, but it will still represent a relatively small portion of overall listening. We're just at the beginning of the podcasting journey. While some exclusive creators have sizable audiences, there's a wealth of high-quality content yet to be introduced to podcasts, and we expect that will change. This transition requires assistance for those creators, which is one of the motivations behind acquiring Stitcher and Simplecast. We see potential in podcasting; however, the market might have reacted too positively to developments in this area. Unlike video, where other monetization strategies are more prevalent, the podcasting landscape has been less varied, and we already have a strong collection of unique content. We'll see how it unfolds.

We'll take our next question from John Tinker from Gabelli and Company. Please go ahead, your line is now open.

Shifting to baseball, could you share your thoughts on the attendance at the stores and restaurants in Battery Park, considering you have some rent deferrals? Additionally, since the build-out has been completed on time, you'll be enjoying a great view of the game next year. You've also sold some rental apartments. How do you view this property within your overall portfolio?

I'll answer the second part and let Brian speak to the first about where we're at the Battery. Look, I think we try and make decisions about uses of capital and how it gets valued. And depending on where we stand, we might or might not, and then the kind of valuation we would get, we might or might not try and liquidate some of the Battery portfolio. Given what's going on in real estate, both office potential and retail potential, I'm not sure that is likely in the near-term. We do get a fully lease-up office space, maybe that will be different. And we are obviously not in a downtown urban corridor, which seems to be the most challenged or where people have questions about the future. We may actually be a beneficiary at some de-densification. We'll see. So I think we'll look and see what kind of lease-up we get, what kind of valuation we get and make a decision on what are alternative uses of the capital. Brian, could you address where we are on some of the runs?

So with the Battery, as Georgia started to open up, the Battery started to open up. They started with takeout at a limited number of venues. They’re almost fully open now. There's in-person dining at quite a few of the venues. They're following various safety protocols to make sure their patrons are safe and everything's clean. The Omni is booking up fairly well, especially those corner rooms that can see into the park, as you might expect, and the Aloft just opened recently. So everything's going pretty well at the Battery.

Our next question comes from Jason Bazinet from Citi. Please go ahead, your line is now open.

I just had a question for Mr. Carey. In general, investors like you as a manager and they like the Formula One asset and they like what you're doing with the asset. You said since inception that you're very focused on the long-term. You're making decisions on long-term value creation, not short-term. And the debate that's emerged is sort of room the summation of all the decisions that you've been made, and sort of manifest themselves and something that's sort of obvious to the buy side in terms of better EBITDA number makes everything better. My question is based on everything that you know and based on that sort of potential reschedule you saw in 2021. Do you think 2021 could be the year, or as you sort of add up all the puts and takes and decisions, because it feels more like a 2022 or 2023 sort of story? Thank you.

At the beginning of this year, we stated that we were following the plan we laid out three years ago, focusing on building a foundation in 2017 and 2018. We communicated that this building process could take a couple of years. We understood the market's expectation to complete the foundation quickly, but the groundwork laid in 2017 and 2018 was essential for long-term success. We made progress in 2019, and our goals for 2020 and 2021 were also significant steps forward. We were on a trajectory aimed at achieving substantial growth, but it's a continuous journey, not something completed in 2023. We initiated new programs, including the introduction of new cars in 2022, with plans for growth in China and the U.S. that require a longer time frame. Early this year, we felt we were on track, and aside from the impacts of the virus, we were set to deliver the long-term growth we envisioned. Unfortunately, the pandemic disrupted our plans. Currently, we're anticipating a 2021 that is similar to what we would have planned before the pandemic. However, planning in this environment is complicated due to uncertainties around fan attendance and other challenges. We believe that the world needs to start returning to a functional state, and we expect that 2021 will get us back to our planned trajectory. Excluding any unexpected pandemic-related issues, we predict that 2021 and 2022 will align closely with the growth curve we anticipated at the start of this year, with 2019 marking a year of growth and 2020 serving as a significant continuation of that growth.

We'll now take our next question from Zack Silver from B. Riley. Please go ahead, your line is now open.

Two on Formula One, the first is if you could talk about how F1 TV Pro fits into some of the more recent broadcast renewals. And also whether you see that as an opportunity for some of the Pay TV partners to be a more meaningful distribution partner for that DTC service. And the second is just on the fly rate of races that began a little later on, they're obviously more demanding from a logistics perspective. If there are any snags, would you be able to pivot back to some of the circuits closer to home, do anything contractually that precludes you from doing that?

First, that's not the case. We haven't announced the last few races and we are exploring options on all fronts. There may be some limitations if something arises last minute and we need to cancel a week before the race, which could pose challenges for adjustment. However, if there is sufficient time, we are building in contingencies from all angles. Regarding F1 TV Pro, this varies by market. Right now, the most crucial aspect for F1 TV Pro is ensuring quality. We experienced a glitch during the first race, but it has functioned well since then, and we feel we are continuously improving the product, focusing on expanding access for consumers. In several areas, we are approaching it more as a partnership, developing ways to enhance the experience for traditional television partners’ customers, with a product aimed at true enthusiasts. This extra layer aims to allow us and our partners to jointly grow and benefit from the success. We are indeed engaging in more discussions on that front. In some places, it operates in additional countries and we continue to run it as a standalone option for traditional television. In many respects, I believe the best short- and long-term opportunities lie in developing it properly with our partners as an added dimension, which will provide us with flexibility in the long-term as our world continues to evolve. The digital side of our business is growing positively, leading to increased viewership and engagement with our offerings. There seems to be no limit to the appetite for our content, and we are seeking ways to enhance and broaden that appeal. All these opportunities in this area are increasingly significant for the sport, particularly regarding how we engage with fans.

Our last question today comes from Kannan Venkateshwar from Barclays. Please go ahead, your line is now open.

So one quick one on Sirius. With the Stitcher acquisition, it seems you have been anchored more to the used car market and the conversion rates have been linked to that. But with the Stitcher acquisition, you now have a brand potentially that can allow Sirius to be coupled to extent from the auto market. That has really opened up opportunities outside the U.S. to a greater extent than has been possible, and has Stitcher potentially an independent brand that can be used in that respect? Thanks.

I think we have been expanding in ways outside the car obviously for a while, looking at the Pandora acquisition. But to your point about being outside the car and outside the U.S., is certainly true with the acquisitions we've made. How much about content will go outside the U.S.? How much is a play recognizing question? In general, the U.S. market, given the ARPUs, is a more attractive market to operate in. So we're cautious about proceeding. We see the benefits of sale outside the U.S. But in general, those markets are in the less attractive markets than the market we're in, partly because of the ARPUs as I mentioned and partly because some of the protections are on the DMCA. So I think we'll approach that cautiously. One of the things I would note is our OEM auto partners in perversity would love to see us be more global because they would love to see its bundled across all markets when they build cars, they are global players. So, we will tiptoe outside the United States. We do have some obviously in Canada and Mexico already. Historically, Pandora was in some of those markets, English-speaking markets outside the U.S., but we will be cautious in doing that, I would say. I think that's our last question for the morning. Thank you very much all for joining. Thank you for your continued interest in Liberty, and we look forward to speaking with you again. And getting a chance to have you participate in the Investor Day, if so, remotely. Thank you very much.

Ladies and gentlemen, this does conclude today's call. Thank you for your participation. You may now disconnect.