Liberty Live Holdings, Inc. Q3 FY2024 Earnings Call

Welcome to Liberty Media Corporation's 2024 Third Quarter 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 will be recorded on November 7th. I would now like to turn the call over to Shane Kleinstein, Senior Vice President of Investor Relations. Please go ahead.

Thank you, and 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 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 non-GAAP financial measures for Liberty Media, including adjusted OIBDA. The required definition and reconciliation for Liberty Media 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 Greg Maffei, Liberty's President and CEO.

Thank you. Good morning. Today speaking on the call, we will also have Formula One's President and CEO, Stefano Domenicali, and Liberty's Chief Accounting and Principal Financial Officer, Brian Wendling. So let me start with a couple of corporate updates. As you may recall, we completed the LSXM-Siri merger on the 9th of September. I look forward to remaining involved as Board Chair and a shareholder at Siri, but Liberty's ties are cut. We also announced updates to our voting and governance at Atlanta Braves Holdings, and we are transitioning services directly to the Atlanta team. They held their earnings call yesterday. This is the next step in their evolution as a standalone private company, and I want to thank all the Braves management team for their partnership over the years; it's been so fruitful. Now let me turn to the underlying businesses, beginning with the Formula One group and looking at it from some corporate update perspective. We refinanced the F1 debt. The Term Loan B was refinanced at SOFR plus 200 basis points. We expect to step down to SOFR plus 175 basis points upon the deleveraging post the MotoGP transaction. We raised an incremental $850 million Term Loan B and $150 million Term Loan A commitments to fund that MotoGP transaction. All of that is deal contingent. We also issued 949 million FWONK shares, replacing the equity consideration to the sellers in the transaction, so we'll directly pay them cash. We issued that stock at only a 4% discount to the market price, and it was placed with long-term holders. Those transactions complete the necessary funding for our MotoGP acquisition, and we expect F1 leverage to be between 3.5 to 4 times, assuming a year-end close on that MotoGP deal. The F1 season itself remains highly competitive. Both the constructors' and drivers' championships are coming down to the final races. We've also seen incredible financial performance at Formula One year-to-date, with revenue up 15% and adjusted OIBDA up 21%. We've seen double-digit growth across all of our revenue streams, boosted by two additional races. And we've benefited from new partners signed, contractual uplifts in our contracts, and the performance of F1 TV and our hospitality products. I know we've signed several new commercial agreements, which we begin next year. LVMH and AmEx were introduced to F1 through LVGP in terms of their relationship, but now they've become broader partners with F1. We feel that partners continue to be attracted to the growth of the sport in the U.S. and our younger demographic, which has also grown. Correspondingly, we feel good about the pipeline for commercial activity in 2026. We all look forward to the LVGP in the coming weeks. We expect there will be another great spectacle for fans attending and watching at home. We will have a free daytime fan experience, which will bring energy and welcome local Las Vegas fans to F1. And we expect great entertainment, including Ludacris, Alesso, and OneRepublic. Now let me turn briefly and give you a MotoGP transaction update. We are making progress with the European Commission, which is our only remaining regulatory jurisdictional hurdle, and we continue to expect a year-end close. Looking at the underlying MotoGP business, the Valencia race was canceled due to the tragic flooding in that region. Our thoughts are with the entire community. We give credit to Carmelo and the management team at MotoGP for their quick and thoughtful response. They will pivot since the final race will be in Barcelona. It will be hosted there in solidarity with Valencia. Various initiatives are underway to support relief efforts for Valencia during that weekend. MotoGP racing has continued to be great, with only 24 points separating the title fight participants. Attendance is trending well, with 2.9 million attendees year-to-date, which is a 9% increase on leg-for-leg races. Six races have set all-time attendance records this year. Looking at the business updates, MotoGP extended its rights agreement with FIM, their regulator, until 2060, and they've announced their 2025 MotoGP calendar with 22 races across 18 countries. We look forward to more exciting racing and Liberty's involvement.

Thank you, Greg, and good morning, everyone. The merger of Liberty SiriusXM with SiriusXM closed on September 9th. Please note that SiriusXM Holdings is presented as a discontinued operation in Liberty's consolidated financial statements. Please also note that due to the timing of the Live Nation release of their reported results, as Greg mentioned, Liberty does not expect to file its 10-Q until Tuesday, November 12th. At quarter-end, Formula One Group had attributed cash, liquid investments, and monetizable public holdings to $2.7 billion, which includes $1.4 billion of cash at F1 and $65 million of cash at Quint. Cash balance as of September 30 also includes the proceeds from the previously mentioned FWONK share issuance. The total Formula One Group attributed principal amount of debt was $2.9 billion at quarter-end, which includes $2.4 billion of debt at F1, leaving $530 million at the corporate level. F1's $500 million revolver is undrawn, and their leverage at September 30 was 1.1 times. During the quarter, Liberty entered into additional interest rate swaps, and as of quarter-end, $2.2 billion of the $2.4 billion of F1 debt was at a fixed rate. In September, F1 refinanced its Term Loan B and extended the maturities of its debt facilities. The Term Loan A and revolving credit facility now mature in September 2029, while the Term Loan B matures in September 2031. The margin on F1's Term Loan B was permanently reduced from 2.25% to 2% with a potential to step down to 1.75% if certain leverage is met after the MotoGP acquisition closes. In connection with the refinance, F1 secured incremental funding for the new MotoGP transaction, and all acquisition-related financing is now complete. Remind that we also obtained commitments for an incremental €150 million Term Loan A and an upsized €100 million revolver at Dorna to be entered into subject to the transaction close. Turning to the F1 business, I'll make comments on Q3, but remind you that the business is best analyzed on an annual basis given the impact that both the race count and mix can have on quarterly results. During the third quarter, F1 recognized a lower proportion of season-based income with 7 out of 24 races for 29% occurring during the period compared to 8 out of 22 or 36% in the prior year period. Sponsorship revenue declined due to this lower pro-rata revenue recognition. The recognition of sponsorship income varies based on the mix of races during the quarter, including the allocation of title sponsorship and other race-specific sponsorship packages. To a lesser extent, this also contributed to the decline in sponsorship revenue for the third quarter. This was partially offset by revenue from new partners compared to the prior year period. The decline in pro-rata recognition of media rights revenue was partially offset by contractual fee increases and continued F1 TV growth. Race promotion revenue increased in the third quarter despite one less race being held due to the mix of events year-over-year with Azerbaijan this year compared to Austria and Japan last year. Other revenue increased due to the higher licensing revenue and revenue from third-party events at Grand Prix Plaza. Hospitality and experiences income decreased due to the mix of events in Q3, though note that the Paddock Club is seeing very strong growth year-to-date. Adjusted OIBDA grew in the quarter due to the lower pro-rata recognition of team payments, partially offset by the expectation of increased team payments for the full year over 2023. Team payments represented 62.2% of pre-team adjusted OIBDA year-to-date through Q3 compared to 64.6% in the prior year. Reminder that Q2 and Q3 tend to have the highest percentage payout ratios based on the greater mix of European races. We continue to expect slight leverage on team payments for the full year 2024 relative to our year-to-date payout as a percent of pre-team share OIBDA. It's consistent with the message we communicated on our Q2 call. Other costs of F1 revenue and SG&A should be viewed as a percent of total revenue. Looking at a year-to-date basis, the adjusted OIBDA margin improved from 24.4% to 25.8% through Q3 2024. Looking briefly at corporate and other results in the third quarter, corporate and other revenue was $70 million, which includes Quint results and approximately $7 million of rental income related to the Las Vegas Grand Prix Plaza. Corporate and other adjusted OIBDA loss was $14 million, including Grand Prix Plaza rental income, Quint results, and corporate expenses. Quint's results in the third quarter were primarily driven by F1 experiences across the seven races held. Note that Q3 is a seasonally light quarter for Quint. Turning to the Liberty Live group, there's attributed cash of $388 million. There's $400 million of undrawn marginal loan capacity related to our Live Nation marginal loan. As of November 6, the value of the Live Nation stock held at Liberty Live Group was $8.8 billion. We have $1.2 billion in principal amount of debt against these holdings. In August, Liberty issued a redemption notice for all of its 0.5% Live Nation exchangeable debentures. Approximately $12 million of debentures were redeemed and settled in the third quarter, while the remainder were exchanged by holders in September, settling out in October. The $50 million remaining debentures that settled in October were funded with cash on hand. Liberty and F1 are in compliance with their debt covenants at quarter-end. And with that, I'll turn it over to Stefano to discuss Formula One.

Thanks, Brian. It's been a fantastic season at F1. The competition across the grid is captivating, with excitement in the stands and on the screen. We just completed a triple-header in the Americas with amazing action both on and off the track. We have a three-way battle for the Constructor Championship between McLaren, Ferrari, and Red Bull. Additionally, the Driver's Championship is still alive as we head into the final races between Verstappen and Norris, following three events in Austin, Mexico, and Brazil, in front of huge crowds. It has been great to see the variety of winners this year, which thrills fans and raises excitement for the special season in 2025. Looking at our engagement across the season, 5.8 million fans have attended Grand Prix through Brazil. Attendance is up season-to-date, with sell-out crowds at many races and seven races setting new attendance records, including the British Grand Prix, which welcomed 480,000 fans over the weekend, the largest crowd of the season. In the third quarter, we had massive crowds of over 300,000 at the Hungarian, Belgian, Dutch, and Italian Grand Prix. We've also seen strong attendance in Brazil this season, with attendance increasing across almost all races and four teams sold out. We have been expanding and innovating our hospitality products like the F1 Garage and the Monaco Yacht to continue to provide premium experiences to our fans. Our promoter partners are investing in improved infrastructure and enhanced fan experiences with live entertainment and on-site activations. Better fan experiences benefit the promoters and the broader F1 brand. At Silverstone, Kings of Leon and Stormzy drew crowds on Thursday and Friday evenings. In Singapore, there was a festival-style lineup with over 100 hours of live entertainment in addition to the on-track action, including concerts featuring Kylie Minogue and Lenny Kravitz. In Austin, over 100,000 fans attended Eminem's performance. The sprint races are also successfully drawing incremental audiences, with attendance on Friday of sprint weekends up approximately 30% compared to non-sprint weekends. TV viewership during sprint weekends is also, on average, 10% greater than non-sprint weekends. This content offers incremental benefits for our promoters, broadcast partners, and sponsors with increased exposure. Average viewership for race weekends through Singapore averaged 65 million on linear TV channels, with around 20 million additional viewers on digital channels including YouTube and F1 TV. Viewership on digital channels continues to increase year-over-year. Looking at a few races specifically, the British Grand Prix was the most viewed European race ever in the UK and drew record viewership in the U.S. for the event. F1 TV subscriber growth continued to be robust, with subscribers up 10% year-over-year and particularly strong in the U.S. market. We continue to innovate on digital platforms with creative ways for fans to experience the world of F1 worldwide. This season we introduced video episodes for our F1 Beyond the Grid podcast, and watch time is up over 30% since this format was introduced. Social media followers grew 38% year-over-year to 94 million, partly due to new platform launches like Threads and WhatsApp. Our WhatsApp partnership enables a closer direct relationship with fans through the messaging platform. On the F1 app, we registered 6 million unique users in the third quarter and are seeing continued growth on the platform, contributing to a younger audience and higher engagement. F1 Arcade was thrilled to open its Washington D.C. location on October 13th, the second venue in the U.S. Their opening party on October 9th had nearly 1,000 guests. The D.C. location is hosting various Grand Prix watch parties this season, including one last month for the Austin Grand Prix, and inviting fans for other F1-inspired gatherings like the live recording of the F1 Explained podcast during the Mexican Grand Prix. F1 Arcade is on track to open its Las Vegas location in the third quarter of 2025. The F1 exhibition reached the first stop of its global tour in London, opening on August 23rd with great reviews from visitors, and the location is already seeing incredible demand with 135,000 tickets sold, leading to an extension of the exhibition's stay through the first quarter of 2025. Turning to commercial updates, we have had incredible momentum in 2024, which continues this quarter. Most notably, our new partnership with LVMH for 2025 and an expanded agreement with American Express and Lenovo demonstrates our ability to bring in iconic brands and scale our partnerships into broader and larger deals. LVMH first partnered with Formula One for last year's inaugural Las Vegas Grand Prix with representation primarily from its Vulcan tequila brand. We will now welcome LVMH as a global partner under a groundbreaking 10-year deal beginning in 2025, which will see us partner with their iconic Maison Louis Vuitton, Moet Hennessy, and Tag Heuer. We will provide additional details on specific activations by this brand early next year. American Express initially partnered with F1 in 2023 as a regional sponsor with branding and activation rights in the Americas. Beginning in 2025, we will expand our relationship globally, with American Express becoming an official partner encompassing Australia, Asia, Europe, the Americas, and the Middle East. Similarly, beginning in 2025, Lenovo will transition from an official partner to a global partner. We are also actively adding partnerships in new verticals. Santander joined as our official retail banking partner in a multi-year agreement beginning in 2025, supporting Santander's open bank product, their digital bank, particularly focused on U.S. market expansion. Formula One's success in the U.S. market was a key factor in securing the Santander partnership. Another area of focus gaining momentum is licensing. We announced recent partnerships with both LEGO and Mattel, which will bring the world of F1 into our fans' day-to-day lives and extend our brand to new audiences. The LEGO product range features all F1 teams and engaging content across LEGO digital platforms and facets of the F1 race weekend. Our Mattel partnership kicked off this season with a release of a one-of-a-kind F1 car and a full range of Hot Wheels products that will be released next year. Looking to the rest of the season, we are weeks away from the second Las Vegas Grand Prix. The Las Vegas race has also served as a testbed of innovation that we can leverage across the broader F1 calendar, including opportunities in hospitality, tailored sponsorship, and licensing. Just last week, we announced a first-of-its-kind special merchandise collection for Las Vegas, ranging from a streetwear collaboration with Venus brand to one-of-a-kind Vegas Golden Knights and Raiders 4. Since posting this merchandise collaboration on LVGP social channels, we've gathered over 1.2 million organic impressions with over 93,000 engagements and 86,000 likes. This year's Las Vegas Grand Prix leverages learnings from last year across the whole event, including hospitality, logistics, ticketing, and more. We will continue to test, learn, and innovate in the year ahead. We are proud of our sustainability strategy and continue to make progress throughout the organization on our environmental, social, and governance efforts. In September, we made our first investment in sustainable aviation fuels, working with our partner DHL. These purchases cover approximately 11% of the estimated carbon flight emissions across the 2024 season, and flights powered by sustainable aviation fuels have an estimated 80% reduction in carbon emissions per flight. We look forward to more progress throughout the end of this year and into 2025. In closing, Formula One is in a great position, with strong financial growth and incredible on-track action. The three-way battle for the constructor will come down to the final races. We thank our fans, teams, and partners for their support this record season and look forward to more action to come. Full speed ahead. Now, I will turn the call back over to Greg. Thank you.

Thanks, Stefano and Brian. I want to clear up one thing I might have misspoken regarding our corporate update. The Braves are transitioning to a standalone public company. We look forward to seeing you on Thursday, November 14th, for our Annual Investor Meeting. You can tune in virtually or join us in person at our new location, Jazz at Lincoln Center. If you plan to attend in person, please make sure to register by Monday, November 11th, as there will be no on-site registration. The link to register can be found on our website. John Mueller and I will be hosting our annual Q&A session. If you would like to submit questions in advance, you can email investorday@libertymedia.com. We appreciate your continued interest in Liberty Media. Operator, with that, I'd like to open the line for questions.

Thank you. Our first question comes from David Karnovsky with JP Morgan. Please proceed with your question.

Hey, thanks for the question. First for Greg or Stefano, just on Concord, any potential updates you can provide there on progress, tone of talks, or expected timing? And then a second one for Brian. Just on the team payment accrual in the quarter or even year-to-date, the figures do imply a lower full-year figure relative to what you would give in a Q1 or Q2. I just wanted to see if there's anything specific to call out in your quarter that shifted as far as your assumptions on pre-team profit for the year. Thank you.

Stefano, I'll let you take a first stab at the Concord.

Yeah, thank you, Greg. Thanks, David. I mean, as we said, first of all, it's important to remember that we have still plenty of time under the existing Concord, so there is no urgent rush. Conversations are progressing very well, and as we said before, they are very positive because the ecosystem is very solid at this moment. All the teams at all levels have benefited tremendously from this situation. The financial security for the future and stability that we have today underline what we are preparing. As soon as we have everything ready, we will inform everyone. But as always, we want to do the right thing and consider there's no rush. Everything is progressing well, and we look forward to confirming to you when we can announce something concrete.

I would just add that, to Stefano's point, the most important thing for everybody, including ourselves and the teams, is to get it right. We're progressing at a good pace with the expectation that everyone will sign with smiles on their faces.

Yeah, and David, on the team payments, as you rightly point out, they've come down just a little bit on a per race basis. I think that represents some conservatism towards Vegas, which is really the last remaining uncontracted revenue stream that we have for the year. And it largely reflects typical year-to-year trends that promoters see. So that would be the primary reason.

Thank you.

Our next question comes from the line of Kutgun Maral with Evercore ISI. Please proceed with your question.

Good morning, and thanks for taking the question. Just on Formula One sponsorship, clearly there's a lot of momentum there. You've announced a number of new and expanded agreements. Seems like 2025 is going to be a banner year. Greg, I think you commented that you feel good about the pipeline for commercial activity in 2026 as well. Can you help us just think about how meaningful the sponsorship revenue growth outlook can be in the coming years? Thank you.

I'll take a first cut if it's okay, Stefano.

Yeah, absolutely.

Look, you've seen the announcements here that are mostly related to ‘25. It's unusual; one would not expect to be making announcements yet about ‘26 related deals. But we have a lot of activity around potential sponsorship, licensing, and other activities. It's hard to predict; you are still quite a ways out from those. But I feel good about progress. I don't know if you have anything, Stefano.

No, I would say for sure. And, as always, we need to remember we were just a couple of years ago in terms of quantity and quality of our partnership. Now we have grown significantly in terms of quantity. And of course, now is the time to restructure the deals in terms of global, regional, and official partners, due to the strong interest we have in our market so far. There are surely others that we will explore in the future. The interest that we've been receiving from partners is high, and that will be a leverage point, because through B2B business growth within the relationships we create with all partners, we can generate even more interest in our platform. So, as I said, look back at where we were and observe where we are. I think the future will be very positive again.

Yeah, and one thing I would add, almost more towards David's question, is that the sponsorships we've announced for 2025 are all moving into ‘25. So any expectations we had for those new agreements for 2024 also have that impact on team payments.

Perfect. Thank you.

Thank you. Our next question comes from the line of Stephen Laszczyk with Goldman Sachs. Please proceed with your question.

Hey, great. Thanks for taking the questions. Two on Formula 1, maybe first for Greg on media rights; just curious for your latest thoughts on the sports media rights landscape heading into the U.S. renewal next year and maybe how you're approaching your negotiations with ESPN? And then second for Brian, you mentioned the Las Vegas Grand Prix being the last uncontracted piece of the puzzle here. Just curious if there's anything more you can say on demand for Vegas heading into the final few weeks and any expectations around revenue and profitability for the event this year. Thank you.

Stephen, thanks for the question. I'll start on the media side. As I think is well known, we have a partnership with ESPN that runs to the end of ‘25. It would not be atypical to have some negotiating period with them. I'm obviously not going to disclose the specifics. ESPN has been a great partner. We will look to see what we can do with them, but there's also a lot of other interest from partners, and we'll try and craft the deal that brings both the best economic opportunity for F1 and, more importantly, provides fans the best experience across as much breadth as possible. We're going to balance economics and reach and hopefully come up with the best result for our F1 fans and ourselves.

Thanks, Greg. Maybe we can take a step back and focus on what we've been working on here in year two. Obviously, year one was focused on the quality of the fan experience. Year two has been centered around cost structure and optimizing our product ladder. We expect this to continue going into years three and beyond. We made multiple improvements leading into this year, allowing us to be dynamic in adjusting products and pricing based on real-time feedback from the market. We note that the all-in cost of a Vegas race weekend has aligned with the other U.S. races. We would refer you to the commentary from our hotel partners, Wynn and Caesars, regarding the continued strength of F1. In terms of recent activity, as expected, we are seeing an uptick in traffic and conversion rates around ticket sales, and we anticipate this trend to continue as we approach race weekend. We are benefiting from the very competitive championship this year, and we have seen success with our recent promotional efforts, including the Lewis Hamilton package and special offerings in partnership with our sponsors, Timo and AmEx. There is still room for growth on ticket sales, but we are excited to see year two come together over the next couple of weeks. We remain optimistic regarding the benefits that Vegas will provide to the broader ecosystem of Formula One, including the LVMH deal, American Express, and next year when Greg starts those media discussions.

That's great. Thank you both.

Thank you. Our next question comes from the line of Ben Swinburne with Morgan Stanley. Please proceed with your question.

Thanks. Good morning. I'm not sure, Greg, how much you would be willing to comment, but Live Nation stock has been quite strong the last few months, some of that, I think, in anticipation, correctly, I guess, of the election outcome. What do you think a Republican DOJ means for the range of outcomes for the lawsuit against Live Nation and its ability to navigate that successfully from a shareholder perspective? And then, at the risk of being repetitive regarding team payments, Brian, you've shown over 200 basis points of leverage year-to-date. How are you thinking about the full year versus that? And how much of a swing factor is Las Vegas? Is that a larger-than-normal variable when you consider the full year? Thanks so much.

Ben, it was kind of you to set up and acknowledge that it would be difficult for me to comment. Live Nation continues to prosper as a business, and I believe it serves customers well. There is no basis for the lawsuit, and I don't think that's going to change; their view is not going to change regardless of the administration.

Yeah, on team payments, like we said last quarter, Ben, there will be slight leverage; I think de minimis might have been the words I used when we were at 61.9% at year-to-date Q2, so we're going to stick with that. In terms of Vegas being a swing factor, if you think about our business, most revenues are contracted, and most costs are contracted. The two big swing factors in any given year are the sponsorship go-get and then Vegas ticket sales because they have the highest volatility. As you get closer to the end of the year, you start to gain more clarity on both of those, although Vegas being a last-minute market, as we've pointed out many times, there's still a lot of work to be done as we enter Q4. So it can be a swing factor, but we remain optimistic.

Thanks a lot.

Thank you. Our next question comes from the line of Ryan Cardiff with UBS. Please proceed with your question.

Great. Thank you. Not to look too far ahead, but how are you thinking about the opportunity for race promotion and the race calendar in 2026? Is that a year when we could see new venues added to the calendar, and more broadly, how are you thinking about your positioning for renewals given the elevated attendance you've seen over the past few years? Thanks.

Stefano, do you want to take a cut?

Okay. Thanks, Greg. Of course, 2026 race promotion, as you know, we have Madrid that will be part of the calendar. We have long-term deals on the other side, as you know, that represent the vast majority of our situation today, allowing us to work with them for higher quality to reduce costs and enhance what we want to offer our customers. In 2026 and further beyond, we have some news to share soon regarding the possibility of rotational European Grand Prix and other new options coming later. We have a large demand from new possible venues wanting to participate, and our choice will always be balanced between the economic benefits of the system and the growth of the markets, which can be beneficial for us to grow our business. So it's a situation we are managing well. Thankfully today, we have a quality problem to handle. That was not the case just a couple of years ago.

Great. Thank you.

Thank you. Our next question comes from the line of Bryan Kraft with Deutsche Bank. Please proceed with your question.

Hi. Good morning. Two questions if I could. First, on media rights. Are there major markets in the Americas with media rights contracts coming up for renewal around the same time as the U.S.? Might we consequently see an Americas media rights deal rather than just the U.S. contract this time around? And then, related to that, how has what you value from your U.S. media partner changed since the renewal with ESPN given how streaming has become a more significant part of the business now? And then just separately, on Vegas, perhaps more bluntly, it sounds like promotion revenue is clearly going to be up, but ticket prices may be down. Overall ticket revenue may be down. Is that a fair interpretation of what Renee was going through before? Thank you.

If it's okay, Stefano, I'll take a cut on the media. Look, we would love to find a partner who would take on more markets; that's always interesting and potentially easier for both parties. There are no huge renewals in the Americas that would logically allow it to happen, not to say it couldn't, but I don't see a massive economic swing if we bundled something for all of the Americas. We've had rumors of larger deals and do have regional deals, but I doubt it will work out for the Americas that way in the immediate future where a partner would take it all. As for streaming, obviously we see the rise of streaming, and we've noticed it across several of our businesses. The reality is we have a great streaming product in F1 TV ourselves, which has shown tremendous growth. We would look to consider how a media partner could interact with both linear sides, if they exist, and streaming, and how our F1 TV fits in. Clearly, streaming is going to be a more major component of all sports rights packages moving forward.

Sure, yes, happy to. Just to reiterate, we generally do not give race-specific economics, but regarding your question on ticket revenue, aggregate ticket revenue will be down from what we originally budgeted in Q1. We have also continued to reduce costs from what we budgeted in Q1 throughout the course of 2024. I would say that we're working hard to focus on getting the best profitability we can from Vegas, and again we will refer you to the broader benefit it brings to the F1 ecosystem.

Thank you.

Thank you. Our next question comes from the line of David Joyce with Seaport Research Partners. Please proceed with your question.

Thank you. Two little questions, please. One was just a bit more on the media rights, just given that some of your recent deals have been extended beyond the typical three-year period we've seen. Other sports leagues have done that as well. I wonder how you're thinking about your goals with these upcoming rights deals. The second question is just on the accounting of how you'll be recognizing the F1 movie next year. Thanks.

On the media rights deals, I outlined some of our goals regarding growth, reach, and delivering a great experience for our fans, while also ensuring fair compensation for us. All of those goals remain. We have chosen shorter or longer deals based on where we stand in the market, what our growth has been, and what we want to accomplish. One reason we cut a shorter deal in the U.S. last time was our confidence in our ability to secure a larger renewal down the road. That worked the first time we did a three-year deal. I'm optimistic it will work again. I won't project whether the deal will be shorter or longer; I would note that, particularly if we went with another partner, they would likely prefer a longer deal to allow them some time to grow. Regarding the F1 movie, we've been compensated in 2023 and 2024 for their use of the paddock building and access to certain races. The revenues you would expect going forward will be relatively minimal.

Okay. Thank you.

Our final question comes from the line of Barton Crockett with Rosenblatt Securities. Please proceed with your question.

Okay, great. Thanks for taking the question. I guess a couple if I can. One is turning to Vegas; looking beyond the race, there was hope that the off-season could be monetized at Vegas and help improve the margin profile. I was wondering if you could give us an update on your progress there. Are you doing anything meaningful in the off-season? You mentioned the film; I'm curious if there are other initiatives happening.

Sure. We are working hard to launch year-round business beyond just the event and conference segments. Beginning in late Q1 of 2025, we will focus on educating new fans and bringing them deeper into the sport. Las Vegas is a destination, and we want to leverage that to bring visitors to learn more about Formula One and integrate more into U.S. culture. There will be a carding business and interactive experiences, possibly 3D or 4D offerings, which will include elements of the legacy F1 exhibition type educational experience as well. We will package those experiences to enhance our event and conference space. More will come in the near future, and we hope to provide further details during race week.

And if I could just follow up on sponsorships. With all of these announcements set for 2025, is that correct that it's looking to be a strong year for sponsorship?

Yes, we expect 2025 to be a solid year for sponsorship; you called it accurately.

Thank you. Ladies and gentlemen, our final question this morning comes from the line of Jonathan Navarrete with TD Cowen. Please proceed with your question.

Hey, good morning. Just my question is around the new markets and expansion. Are there plans to expand the race calendar, especially in emerging markets? What is your approach to balancing market expansion while maintaining the exclusivity or allure of Formula 1?

Stefano, do you want to talk about expanding the race calendar? I think I know the answer, but I'll let you take it.

No, thanks, Greg. We believe the balance we have in terms of numbers is the right one. 24 is the balance number that we feel is appropriate to maintain the exclusivity you mentioned. I believe all the propositions that are coming our way allow us the chance to make the best choice for our future. We need to ensure that we do not only follow the pure financial propositions, as these vary from region to region. However, it's up to us to propose to our stakeholders the right choices. Thankfully, we are in a good momentum to make sure our strategy for the future becomes even stronger.

I think that, operator, we are done with the questions, and we're done with the conference today. As I mentioned, we look forward to seeing many of you either virtually or in person next week at our Investor Day. Thank you all for joining and your continued interest in Liberty Media.

Thank you. This concludes today's conference call. You may disconnect your lines at this time. Thank you for your participation.