Liberty Media Corporation Reports Third Quarter 2022 Financial Results

ENGLEWOOD, Colo.–(BUSINESS WIRE)–Liberty Media Corporation (“Liberty Media” or “Liberty”) (NASDAQ: LSXMA, LSXMB, LSXMK, FWONA, FWONK, BATRA, BATRK) today reported third quarter 2022 results. Headlines include(1):

  • Attributed to Liberty SiriusXM Group

    • SiriusXM reported third quarter 2022 financial results

      • Revenue of $2.28 billion; increase of 4% year-over-year
      • Net income of $247 million; diluted EPS of $0.06
      • Adjusted EBITDA(2) of $720 million
      • SiriusXM announced 10% increase to quarterly dividend; year-to-date capital returns to SiriusXM stockholders of $1.8 billion
      • SiriusXM reiterated full-year financial and subscriber guidance on November 1st
    • Liberty Media’s ownership of SiriusXM was 82.4% as of October 28th
    • Repurchased $210 million aggregate principal amount of 1.375% cash convertible notes due 2023 for $284 million gross consideration

      • Effective cost to Liberty SiriusXM Group of $179 million, net of proceeds received from Formula One Group ($64 million) and Braves Group ($14 million) to settle corresponding portion of intergroup interests and proceeds from settlement of bond hedge and warrant ($27 million)
    • From August 1st through October 31st, Liberty repurchased 276 thousand LSXMK shares at an average price per share of $40.54 for total cash consideration of $11 million
  • Attributed to Formula One Group

    • Announced multiple broadcast extensions, including Sky Sports covering UK and Ireland, Germany and Italy in multi-year agreements, ESPN for US market through 2025, and ServusTV in Austria through 2025
    • Announced 2023 race calendar with renewals of Monaco and Mexico City races until 2025
    • Expanded partnership with AWS as a Global Partner
    • Audi announced F1 entry as new engine supplier in tandem with introduction of next-generation engine regulations in 2026
    • Issued $475 million aggregate principal amount of 2.25% FWONK convertible notes due 2027

      • Repurchased $213 million face value of 1% FWONK cash convertible notes due 2023
    • Liberty Media Acquisition Corporation to hold special meeting of stockholders on November 14, 2022 to approve early unwind and redemption of outstanding public shares
  • Attributed to Braves Group

    • Secured NL East Championship for fifth consecutive season
    • 42 game sellouts and 3.2 million tickets sold for 2022 season, highest ticket sales since 2000

“We congratulate the Atlanta Braves, who won their fifth consecutive NL East Championship and drew record fans for Truist Park. Formula 1 is capitalizing on its popularity, setting new attendance records around the globe and securing important commercial agreements, while Live Nation continues to benefit from consumers prioritizing the thrill of live experiences,” said Greg Maffei, Liberty Media President and CEO. “SiriusXM once again posted solid results and returned $1.8 billion to shareholders year-to-date.”

Discussion of Results

Unless otherwise noted, the following discussion compares financial information for the three months ended September 30, 2022 to the same period in 2021.

LIBERTY SIRIUSXM GROUP – The following table provides the financial results attributed to Liberty SiriusXM Group for the third quarter of 2022. In the third quarter, approximately $10 million of corporate level selling, general and administrative expense (including stock-based compensation expense) was allocated to the Liberty SiriusXM Group.

 

 

 

 

 

 

 

 

 

 

 

 

 

3Q21

 

3Q22

 

% Change

 

 

amounts in millions

 

 

 

 

Liberty SiriusXM Group

 

 

 

 

 

 

 

 

 

 

Revenue

 

 

 

 

 

 

 

 

 

 

SiriusXM

 

$

2,198

 

$

2,280

 

 

4

%

Total Liberty SiriusXM Group

 

$

2,198

 

$

2,280

 

 

4

%

Operating Income (Loss)

 

 

 

 

 

 

 

 

 

 

SiriusXM

 

 

610

 

 

444

 

 

(27)

%

Corporate and other

 

 

(6)

 

 

(10)

 

 

(67)

%

Total Liberty SiriusXM Group

 

$

604

 

$

434

 

 

(28)

%

Adjusted OIBDA

 

 

 

 

 

 

 

 

 

 

SiriusXM

 

 

720

 

 

722

 

 

%

Corporate and other

 

 

(5)

 

 

(9)

 

 

(80)

%

Total Liberty SiriusXM Group

 

$

715

 

$

713

 

 

%

SiriusXM is a separate publicly traded company and additional information about SiriusXM can be obtained through its website and filings with the Securities and Exchange Commission. SiriusXM reported its stand-alone third quarter results on November 1, 2022. For additional detail on SiriusXM’s financial results for the third quarter, please see SiriusXM’s earnings release posted to its Investor Relations website. For presentation purposes on page one of this release, we include the results of SiriusXM, as reported by SiriusXM, without regard to the purchase accounting adjustments applied by us for purposes of our financial statements. Liberty Media believes the presentation of financial results as reported by SiriusXM is useful to investors as the comparability of those results is best understood in the context of SiriusXM’s historical financial presentation.

The businesses and assets attributed to Liberty SiriusXM Group consist primarily of Liberty Media’s interests in SiriusXM, which includes its subsidiary Pandora, and Live Nation.

FORMULA ONE GROUP – The following table provides the financial results attributed to the Formula One Group for the third quarter of 2022. In the third quarter, the Formula One Group incurred approximately $14 million of corporate level selling, general and administrative expense (including stock-based compensation expense).

“Formula 1 is delivering in 2022 across all areas including financial results, engagement with fans and action on the track. We look forward to a strong finish to the season with drivers and teams battling on the track,” said Stefano Domenicali, Formula 1 President and CEO. “We were excited to announce our record-setting 24 race calendar for 2023 which includes the much-anticipated Las Vegas Grand Prix. We also announced significant multi-year broadcast renewals to extend our relationships at attractive rates with ESPN in the US and in 3 key European markets with Sky.”

 

 

 

 

 

 

 

 

 

3Q21

 

3Q22

 

 

amounts in millions

Formula One Group

 

 

 

 

 

 

Revenue

 

 

 

 

 

 

Formula 1

 

$

668

 

 

$

715

 

Total Formula One Group

 

$

668

 

 

$

715

 

Operating Income (Loss)

 

 

 

 

 

 

Formula 1

 

$

80

 

 

$

82

 

Corporate and other

 

 

(12

)

 

 

(18

)

Total Formula One Group

 

$

68

 

 

$

64

 

Adjusted OIBDA

 

 

 

 

 

 

Formula 1

 

$

180

 

 

$

170

 

Corporate and other

 

 

(4

)

 

 

(12

)

Total Formula One Group

 

$

176

 

 

$

158

 

The following table provides the operating results of Formula 1 (“F1”).

F1 Operating Results

 

 

 

 

 

 

 

 

 

 

3Q21

 

3Q22

 

% Change

 

amounts in millions

 

 

 

Primary Formula 1 revenue

$

612

 

$

624

 

2

%

Other Formula 1 revenue

 

56

 

 

91

 

63

%

Total Formula 1 revenue

$

668

 

$

715

 

7

%

Operating expenses (excluding stock-based compensation included below):

 

 

 

 

 

 

 

 

Team payments

 

(338)

 

 

(370)

 

(9)

%

Other cost of Formula 1 revenue

 

(111)

 

 

(124)

 

(12)

%

Cost of Formula 1 revenue

$

(449)

 

$

(494)

 

(10)

%

Selling, general and administrative expenses

 

(39)

 

 

(51)

 

(31)

%

Adjusted OIBDA

$

180

 

$

170

 

(6)

%

Stock-based compensation

 

(4)

 

 

(1)

 

75

%

Depreciation and Amortization(a)

 

(96)

 

 

(87)

 

9

%

Operating income (loss)

$

80

 

$

82

 

2

%

 

 

 

 

 

 

 

 

 

Number of races in period

 

7

 

 

7

 

 

 

__________________________

a)

Includes $90 million and $81 million of amortization related to purchase accounting as of September 30, 2021 and September 30, 2022, respectively, that is excluded from calculations for purposes of team payments.

Primary F1 revenue represents the majority of F1’s revenue and is derived from (i) race promotion revenue, (ii) media rights fees and (iii) sponsorship fees.

There were seven races held in the third quarters of both 2022 and 2021. There are 22 events scheduled for the 2022 race calendar. Throughout 2021 and particularly in the first half of the season, attendance at races was limited due to the pandemic. Restrictions on fan attendance reduced as 2021 progressed, with all races in the second half of the year operating at either full capacity or with fewer restrictions. The Paddock Club resumed normal operations beginning with the Austrian Grand Prix on July 4, 2021. F1’s results in 2022 are not being impacted by capacity limitations, and throughout the first nine months of the 2022 season F1 has seen strong growth in attendance in the grandstands and the Paddock Club.

Primary F1 revenue increased in the third quarter with growth across media rights and sponsorship, partially offset by a decline in race promotion revenue. Race promotion revenue decreased due to lower fees generated from the different mix of events held, with one additional race held outside of Europe in the prior year period. Media rights increased due to growth in F1 TV subscription revenue and increased fees under new and renewed contractual agreements, and sponsorship revenue increased due to the recognition of revenue from new sponsors.

Other F1 revenue increased in the third quarter primarily due to higher hospitality revenue generated from the Paddock Club, which operated at one additional race in the third quarter of 2022 compared to the prior year period and has seen record attendance year-to-date.

Operating income was flat and adjusted OIBDA(2) decreased in the third quarter. Cost of F1 revenue increased compared to the prior year due to the pro rata recognition of increased team payments. Other cost of F1 revenue is largely variable in nature and mostly relates to revenue opportunities. These costs increased in the third quarter driven by the costs of higher hospitality attendance in the Paddock Club and one additional Paddock Club event operated compared to the prior year period. In addition, other cost of F1 revenue grew due to higher commissions and partner servicing costs associated with the Primary F1 revenue streams and higher Formula 2 and Formula 3 related costs. Selling, general and administrative expense increased in the third quarter due to higher personnel and IT costs and increased legal and other advisory fees.

The Liberty SiriusXM Group holds an approximate 1.8% intergroup interest (4.2 million notional shares) in the Formula One Group as of October 31, 2022. These shares are not included in the outstanding share count of Formula One Group in Liberty Media’s most recent Form 10-Q. Assuming the issuance of the shares underlying this intergroup interest, the Formula One Group outstanding share count as of October 31, 2022 would have been 238 million.

The businesses and assets attributed to the Formula One Group consist of Liberty Media’s subsidiary F1, its interest in Liberty Media Acquisition Corporation, other minority investments and an inter-group interest in the Braves Group.

BRAVES GROUP – The following table provides the financial results attributed to the Braves Group for the third quarter of 2022. In the third quarter, approximately $5 million of corporate level selling, general and administrative expense (including stock-based compensation expense) was allocated to the Braves Group.

 

 

 

 

 

 

 

 

 

3Q21

 

3Q22

 

 

amounts in millions

Braves Group

 

 

 

 

 

 

Revenue

 

 

 

 

 

 

Corporate and other

 

$

234

 

$

252

Operating Income

 

 

 

 

 

 

Corporate and other

 

$

30

 

$

8

Adjusted OIBDA

 

 

 

 

 

 

Corporate and other

 

$

55

 

$

38

The following table provides the operating results of Braves Holdings, LLC (“Braves”).

 

 

 

 

 

 

 

 

 

 

3Q21

 

3Q22

 

% Change

 

amounts in millions

 

 

 

Baseball revenue

$

222

 

$

238

 

7

%

Development revenue

 

12

 

 

14

 

17

%

Total revenue

 

234

 

 

252

 

8

%

Operating expenses (excluding stock-based compensation included below):

 

 

 

 

 

 

 

 

Other operating expenses

 

(153)

 

 

(184)

 

(20)

%

Selling, general and administrative expenses

 

(23)

 

 

(27)

 

(17)

%

Adjusted OIBDA

$

58

 

$

41

 

(29)

%

Impairment, restructuring and acquisition costs, net of recoveries

 

 

 

(5)

 

 NM

 

Stock-based compensation

 

(2)

 

 

(2)

 

%

Depreciation and Amortization

 

(21)

 

 

(21)

 

%

Operating income

$

35

 

$

13

 

(63)

%

 

 

 

 

 

 

 

 

 

Number of home games in period

 

34

 

 

38

 

 

 

Baseball revenue is derived from two primary sources: (i) ballpark event revenue (ticket sales, concessions, advertising sponsorships, suites and premium seat fees) and (ii) broadcasting revenue (including national and local broadcast rights). Development revenue is derived from the Battery Atlanta mixed-use facilities and primarily includes rental income.

There were 38 home games played in the third quarter of 2022, compared to 34 games played in the prior year period. A full 162 game schedule was played in 2022.

Baseball revenue increased in the third quarter due to more home games played and increased ticket demand at regular season games, as well as additional special events including concerts held at the ballpark compared to the period year period. Development revenue increased during the third quarter due to a reduction in deferred payment arrangements and increases in rental income from various new lease commencements.

Operating income and adjusted OIBDA decreased in the third quarter. Increased operating costs due to higher player salaries, higher levels of facility and game day expenses driven by more home games and higher attendance and increased expenses under MLB’s revenue sharing plan more than offset revenue growth. Selling, general and administrative expense increased primarily due to increased special event expenses, marketing initiatives and personnel costs.

The Formula One Group holds an approximate 11.1% intergroup interest (6.8 million notional shares) and the Liberty SiriusXM Group holds an approximate 2.9% intergroup interest (1.8 million notional shares) in the Braves Group as of October 31, 2022. These shares are not included in the outstanding share count of the Braves Group in Liberty Media’s most recent Form 10-Q. Assuming the issuance of the shares underlying these intergroup interests, the Braves Group outstanding share count as of October 31, 2022 would have been 61 million.

The businesses and assets attributed to the Braves Group consist primarily of Liberty Media’s subsidiary the Braves, which indirectly owns the Atlanta Braves Major League Baseball Club and certain assets and liabilities associated with the Braves’ ballpark and mixed-use development project.

Share Repurchases

From August 1, 2022 through October 31, 2022, Liberty SiriusXM Group repurchased approximately 276 thousand Series C Liberty SiriusXM shares (Nasdaq: LSXMK) at an average cost per share of $40.54 for total cash consideration of $11 million.

The total remaining repurchase authorization for Liberty Media as of November 1, 2022 is $1.1 billion and can be applied to repurchases of common shares of any of the Liberty Media Corporation tracking stocks.

FOOTNOTES

1)

Liberty Media will discuss these headlines and other matters on Liberty Media’s earnings conference call that will begin at 10:00 a.m. (E.T.) on November 4, 2022. For information regarding how to access the call, please see “Important Notice” later in this document.

2)

For definitions of Adjusted OIBDA (as defined by Liberty Media) and adjusted EBITDA (as defined by SiriusXM) and applicable reconciliations see the accompanying schedules.

NOTES

The following financial information with respect to Liberty Media’s equity affiliates and available for sale securities is intended to supplement Liberty Media’s condensed consolidated balance sheet and statement of operations to be included in its Form 10-Q for the period ended September 30, 2022.

Fair Value of Corporate Public Holdings

 

 

 

 

 

 

 

 

(amounts in millions)

 

6/30/2022

 

9/30/2022

 

Liberty SiriusXM Group

 

 

 

 

 

 

 

Live Nation Investment(a)

 

 

5,751

 

 

5,296

 

Total Liberty SiriusXM Group

 

$

5,751

 

$

5,296

 

Formula One Group

 

 

 

 

 

 

 

Other Monetizable Public Holdings(b)

 

 

106

 

 

108

 

Total Formula One Group

 

$

106

 

$

108

 

Braves Group

 

 

N/A

 

 

N/A

 

Total Liberty Media

 

$

5,857

 

$

5,404

 

__________________________

a)

Represents the fair value of the equity investment in Live Nation. In accordance with GAAP, Liberty Media accounts for its investment in the equity of Live Nation using the equity method of accounting and includes it in its condensed consolidated balance sheet at $112 million and $212 million as of June 30, 2022 and September 30, 2022, respectively.

b)

Represents the carrying value of other public holdings that are accounted for at fair value. Excludes intergroup interests.

Fair Value of Intergroup Assets and Liabilities

The intergroup interests represent quasi-equity interests which are not represented by outstanding shares of common stock; rather, the Formula One Group and Liberty SiriusXM Group have attributed interests in the Braves Group, which are generally stated in terms of a number of shares of Liberty Braves common stock, and the Liberty SiriusXM Group also has an attributed interest in the Formula One Group, which is generally stated in terms of a number of shares of Liberty Formula One common stock. Each reporting period, the notional shares representing the intergroup interests are marked to fair value. The changes in fair value are recorded in the unrealized gain (loss) on the intergroup interest line item in the unaudited attributed condensed consolidated statements of operations. The intergroup interests will remain outstanding until the redemption of the outstanding interests, at the discretion of Liberty Media’s Board of Directors, through transfer of securities, cash and/or other assets from the Braves Group or Formula One Group, respectively, to the respective tracking stock group.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Attributed

 

 

as of September 30, 2022

 

 

Liberty

 

 

 

 

 

 

Formula

 

 

SiriusXM

 

Braves

 

One

 

 

Group

 

Group

 

Group

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(amounts in millions)

 

Notional Shares

 

Value

 

Notional Shares

 

 

Value

 

Notional Shares

 

Value

Braves Group intergroup interests(a)

 

1.8

 

$

51

 

(8.6

)

 

$

(238

)

 

6.8

 

 

$

187

 

Formula One Group intergroup interest(a)

 

4.2

 

$

219

 

 

 

 

 

 

(4.2

)

 

$

(219

)

__________________________

a)

During the three months ended September 30, 2022, Formula One Group paid $64 million and Braves Group paid $14 million to Liberty SiriusXM Group in exchange for the cancellation of 1.1 million notional shares and 0.5 million notional shares, respectively, underlying the portion of their respective inter-group interests held by Liberty SiriusXM Group related to the repurchase of the 1.375% cash convertible notes due 2023.

Cash and Debt

The following presentation is provided to separately identify cash and debt information.

 

 

 

 

 

 

 

(amounts in millions)

 

6/30/2022

 

9/30/2022

Cash and Cash Equivalents Attributable to:

 

 

 

 

 

 

Liberty SiriusXM Group(a)

 

$

494

 

 

$

264

 

Formula One Group(b)

 

 

1,944

 

 

 

2,119

 

Braves Group(c)

 

 

207

 

 

 

159

 

Total Consolidated Cash and Cash Equivalents (GAAP)

 

$

2,645

 

 

$

2,542

 

 

 

 

 

 

 

 

 

 

 

 

 

Debt:

 

 

 

 

 

 

SiriusXM senior notes(d)

 

$

8,750

 

 

$

8,750

 

Pandora convertible senior notes

 

 

193

 

 

 

193

 

1.375% cash convertible notes due 2023(e)

 

 

1,000

 

 

 

790

 

2.125% SiriusXM exchangeable senior debentures due 2048(e)

 

 

387

 

 

 

387

 

2.75% SiriusXM exchangeable senior debentures due 2049(e)

 

 

586

 

 

 

586

 

0.5% Live Nation exchangeable senior debentures due 2050(e)

 

 

920

 

 

 

920

 

SiriusXM margin loan

 

 

875

 

 

 

875

 

Live Nation margin loan

 

 

 

 

 

 

Other subsidiary debt(f)

 

 

1,010

 

 

 

921

 

Total Attributed Liberty SiriusXM Group Debt

 

$

13,721

 

 

$

13,422

 

Unamortized discount, fair market value adjustment and deferred loan costs

 

 

182

 

 

 

92

 

Total Attributed Liberty SiriusXM Group Debt (GAAP)

 

$

13,903

 

 

$

13,514

 

 

 

 

 

 

 

 

1% cash convertible notes due 2023(e)

 

 

240

 

 

 

27

 

2.25% convertible notes due 2027(e)

 

 

 

 

 

475

 

Formula 1 term loan and revolving credit facility

 

 

2,902

 

 

 

2,902

 

Other corporate level debt

 

 

66

 

 

 

65

 

Total Attributed Formula One Group Debt

 

$

3,208

 

 

$

3,469

 

Fair market value adjustment

 

 

172

 

 

 

(16

)

Total Attributed Formula One Group Debt (GAAP)

 

$

3,380

 

 

$

3,453

 

Formula 1 leverage(g)

 

 

3.0x

 

 

 

2.8x

 

 

 

 

 

 

 

 

Atlanta Braves debt

 

 

602

 

 

 

601

 

Total Attributed Braves Group Debt

 

$

602

 

 

$

601

 

Deferred loan costs

 

 

(3

)

 

 

(3

)

Total Attributed Braves Group Debt (GAAP)

 

$

599

 

 

$

598

 

 

 

 

 

 

 

 

Total Liberty Media Corporation Debt (GAAP)

 

$

17,882

 

 

$

17,565

 

__________________________

a)

Includes $126 million and $39 million of cash held at SiriusXM as of June 30, 2022 and September 30, 2022, respectively.

b)

Includes $935 million and $1,115 million of cash held at Formula 1 as of June 30, 2022 and September 30, 2022, respectively.

c)

Excludes restricted cash held in reserves pursuant to the terms of various financial obligations of $66 million and $15 million as of June 30, 2022 and September 30, 2022, respectively.

d)

Outstanding principal amount of Senior Notes with no reduction for the net unamortized discount.

e)

Face amount of the convertible notes and exchangeable debentures with no fair market value adjustment.

f)

Includes SiriusXM revolving credit facility and term loan.

g)

Net debt to covenant OIBDA ratio of F1 operating business as defined in F1’s credit facilities for covenant calculations.

Liberty Media, SiriusXM, Formula 1 and Braves Holdings are in compliance with their debt covenants as of September 30, 2022.

Total cash and cash equivalents attributed to Liberty SiriusXM Group decreased $230 million in the third quarter as cash from operations at SiriusXM and the receipt of cash from the settlement of Braves Group and Formula One intergroup interests described below were more than offset by net debt repayment and return of capital at SiriusXM. Included in the cash and cash equivalents balance attributed to Liberty SiriusXM Group at September 30, 2022 is $39 million held at SiriusXM. Although SiriusXM is a consolidated subsidiary, it is a separate public company with a non-controlling interest, therefore Liberty Media does not have ready access to SiriusXM’s cash balance. Liberty SiriusXM Group received $70 million of dividends from SiriusXM during the quarter.

Total debt attributed to Liberty SiriusXM Group decreased $299 million during the quarter due to net debt repayment at both SiriusXM and Liberty SiriusXM Group. During the third quarter, Liberty SiriusXM Group paid approximately $284 million to repurchase $210 million aggregate principal amount of the 1.375% cash convertible senior notes due 2023. This payment was funded as follows: (i) the receipt of $64 million cash from the Formula One Group in exchange for the cancellation of 1.1 million notional shares underlying a portion on the inter-group interest in the Formula One Group held by Liberty SiriusXM Group, (ii) the receipt of $14 million from the Braves Group in exchange for the cancellation of 0.5 million notional shares underlying a portion of the inter-group interest in the Braves Group held by Liberty SiriusXM Group, and (iii) the receipt of $27 million related to the settlement of the bond hedge and warrants related to the repurchase of the notes. The number and type of notional shares cancelled in the exchange was determined based on the number and type of shares underlying the notes repurchased.

Total cash and cash equivalents attributed to the Formula One Group increased $175 million during the quarter due to cash from operations at F1 and net debt issuance. Total debt at Formula One Group increased $261 million in the third quarter. On August 12, 2022, Liberty issued $475 million aggregate principal amount of 2.25% FWONK convertible notes due 2027. The notes will mature on August 15, 2027, unless earlier redeemed, and have an initial conversion rate of 11.6198 shares of FWONK per $1,000 principal amount of notes, representing an initial conversion price of approximately $86.06 for each share of FWONK. Proceeds from the offering were used in part to repurchase $213 million aggregate principal amount of 1% FWONK cash convertible notes due 2023.

Total cash and cash equivalents attributed to the Braves Group decreased $48 million during the quarter due to cash used in operations primarily due to seasonal working capital changes, as well as debt service, partially offset by the release of restricted cash pursuant to the terms of various financial debt arrangements.

Contacts

Courtnee Chun (720) 875-5420

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