Ladies and gentlemen, thank you for standing by. Welcome to the Liberty Media Corporation 2020 Third Quarter Earnings Call. Today's presentation, all participants will be in a listen-only mode. Afterwards, we will conduct a question-and-answer session. [Operator Instructions] As a reminder, this conference is being recorded, November 5.

I would now like to turn the conference over to Courtnee Chun, Chief Portfolio Officer. Please go ahead..

Good morning. Before we begin, we'd like to remind everyone that this call includes certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

Actual events or results could differ materially due to a number of risks and uncertainties, including those mentioned in our most recent Forms 10-K and 10-Q filed with the SEC.

These forward-looking statements speak only as of the date of this call, and Liberty Media expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained herein to reflect any change in Liberty Media's expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.

On today's call, we will discuss certain non-GAAP financial measures, including adjusted OIBDA and adjusted EBITDA. The required definitions and reconciliations for the Liberty Media and SiriusXM Schedules 1 and 2 can be found at the end of the earnings press release issued today, which is available on our website.

Please remember to register for our virtual Liberty Investor Meeting on Thursday, November 19. We will cover Liberty Media under TripAdvisor. And Friday, November 20, we'll include Qurate, GCI Liberty, and Liberty Broadband from 11:00 a.m. to 2:00 p.m. Eastern on both days.

After the presentations on both days, John Malone and Greg Maffei, along with presenting CEOs will host a Q&A session. Please pre-submit questions by Friday, November 13, to investorday@libertymedia.com. You can find the link to register and all of these details on our homepage.

Now I'd like to turn the call over to Greg Maffei, Liberty's President, and CEO..

Thank you, and good morning. Today, speaking on the call, we will also have Formula One's Chairman and CEO, Chase Carey; and Liberty's Chief Accounting and Principal Financial Officer, Brian Wendling. I'd again like to recognize and thank our management teams and employees that have done such an impressive job managing through this COVID-19 crisis.

So I'll start with Liberty SiriusXM, where we restarted share repurchases during the quarter, and purchasing $110 million across both LSXMA and K, shares from August through October. These discounts stubbornly remains, but we will take advantage of it as we can. And we repurchased SIRI at a look-through price of $3.66 per share.

As I said, we expect to continue to take advantage of the discount opportunity. Our ownership as of October 20, at SiriusXM, stood at 74.4%, and we remain focused on getting to an 80% ownership level at SIRI. Looking at SiriusXM itself, like our other subscription businesses, SiriusXM has proved resilient during the COVID crisis.

Self-pay net ad subscribers during the quarter were 169,000, and we expect by year-end to be at 90% of our original projections impressive given the challenges of 2020. New car penetration increased to 78%. And with our recent OEM agreements, I expect penetration to be over 80% in the next few months and even higher in the years to come.

During the quarter, SiriusXM returned capital of $544 million, primarily through repurchase of its own stock. We also announced that Jennifer Witz will become the new CEO in January. Jim Meyer, who's done so admirably, will remain with us as Vice Chairman; and Sean Sullivan joined us as CFO.

Jennifer has been with Sirius since 2002 and has a tremendous breadth of experience, including SVP of Finance, Chief Marketing Officer, and President of Sales, Marketing, and Operations. She is the natural successor to Jim, and we all look forward to working with her in her new role.

Sean brings also new perspective and a depth of entertainment industry experience, which we will appreciate. During the quarter, we also completed the acquisition of Stitcher. We've already launched a redesign podcast app for a more personalized experience. And once again, Sirius increased its full year guidance. Turning now to Formula One Group.

We returned to racing, as you know, beginning in early July and to date, impressively have completed 13 of a planned 17 race season. It's a huge credit to the F1 team, a major feat to accomplish our target of 15 to 18 races. During the quarter, we also reached the signing of our new Concorde Agreement with all 10 teams.

This, along with earlier cost cap and regulations should create more parity and a healthier ecosystem. The SiriusXM team was working on the '21 calendar and should set a new bar of races for new, for a number of races. Saudi Arabia has, with our consultation announced their place on the 2021 calendar falling extensive speculation.

And we look forward to a new long-term partnership with them. I want to thank the major accomplishments of Chase Carey for his major accomplishments over the last 4 years. He reset the talent and created a spirit of collaboration in F1 that has changed the collective outlook for the business.

Many podcast or cost cap couldn't be achieved, little on new regulations and new Concorde Agreement of the magnitude that has been accomplished, so full credit to Chase. I'm so pleased that he will stay on and involved as nonexecutive Chair. I'm also thrilled that Stefano Domenicali will join us as CEO in January.

He has a rich history in Formula 1, and his appointment has been met with resounding positive feedback inside and outside the panic. I'm not going to comment on Line Nation now because it reports later today. But turning to the Braves. It's an amazing season from Braves.

They clinched their third straight NL East title and won NL Wild Card and NL Division Series. We won 7 games into the NLCS against the eventual World Series winning Dodgers. It was sad to see it end before we got to the World Series, but we are confident that the future is bright for our team.

Some other notable accolades include Freddie Freeman reserve receiving a big named player of the year, and nationally outstanding player in the 2020 Players Choice awards being named Baseball America player of the year and named a finalist for the National League MVP, the winner of which will be announced on November 12. Ronald Acuña Jr.

led the NL with an 11.43 add back ratio to home runs. He also had a 19 home run, leadoff home runs in his career. Kunis is the most leadoff home runs through, by player's first 3 seasons in history, eclipsing Barry bonds. Congrats also to Max Fried on the first golden glove of his carrier. A few battery updates. 96% of the battery is open.

Since January, we've opened 7 new concepts, representing 100,000 square feet of new capability in retail. And the weekly vehicle traffic in October is on par with pre-COVID levels, and year-to-date, we're at 85%. So with that, I'm going to turn it over to Brian for a little more on our financial results..

Thanks, Greg, and good morning, everyone. Liberty SiriusXM Group had attributed cash, restricted cash, and liquid investments of $104 million, which excludes $44 million of cash and restricted cash held directly at SiriusXM. We have $870 million of undrawn margin loan capacity at the parent level.

The value of the SiriusXM common stock and Live Nation stock held at Liberty SiriusXM as of November 4 was $22 billion. This excludes the value of the Live Nation call spread held at Formula One Group valued at $276 million at quarter end. We have $2.1 billion in principal amount of debt against these holdings.

Total Liberty SiriusXM Group attributed principal amount of debt is $11.1 billion, which includes $7.9 billion of debt held directly at SiriusXM. Formula One Group had attributed cash and liquid investments of $1.4 billion, which excludes $139 million of cash held at Formula 1.

Total Formula One Group attributed principal amount of debt was $3.6 billion, which includes the $2.9 billion of debt at the F1 level, leaving $730 million at the corporate loan. [Technical Difficulty].

[Operator Instructions] Mr.

Carey, would you like to continue until the speaker is filing back in, please?.

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

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

So yes, maybe just talking about cash at the Formula 1, I think, sort of it's finishing up on $500 million. I think it was actually the sentence cutoff F1's revolver, $500 million revolver is undrawn. .

So why don't we let Brian give -- he's got about a few more senses. Why don't you start with the data Formula 1 brand repeat that and we'll even if it's redundant for a few, and then we'll got to Chase after that. .

Okay. Hopefully not repetitive, but Formula One Group had attributed cash and liquid investments $1.4 billion at quarter end, which excludes $139 million of cash at Formula 1.

Total Formula One Group attributed principal amount of debt was $3.6 billion, which includes the $2.9 billion of debt held directly at the F1 level, leaving $730 million of debt at the corporate level. And as Chase just pointed out, F1 $500 million revolver is undrawn at 9/30. Lastly, on to the Braves Group.

At quarter end, they had attributed cash, liquid investments, and restricted cash of $240 million. And attributed principal amount of debt of $714 million. The Braves amended debt agreements related to the team revolver and ballpark funding during the quarter. Secure and covenant relief through March 31, 2022, and September 30, 2021, respectively.

We expect the Braves to be out of compliance at year-end on small mixed-use loan and are working with the counterparty on the necessary waivers. We just note that we previously received a waiver on such covenants through Q3. Now I'll turn it over to Chase to talk about Formula 1. .

First, to keep our fans engaged with a championship season and other initiatives that maintain the momentum we built coming into 2020 and to do so safely. Second, while mitigating the financial impact from the virus this year, prioritize strong long-term relationships with our commercial partners.

And third, enhance the long-term growth of the sport by completing agreements and regulatory changes to strengthen the competition and action on the track. The governance of the sport and the business model for the teams in Formula 1. While we still have four races to go, we believe we're well on our way to achieving our goals.

Executing the race schedule safely has been challenging, and our success to date is attributed to the partnership of everybody at Formula 1, the FIA, and our teams. Most do not realize the complexity involved in delivering the Formula 1 2020 competition, which require about 2,500 personnel at the track.

In 2020, we will ultimately raise in 12 countries. Traveling for many locations requiring us to navigate constantly changing regulations on both ends. With the 17 race schedule beginning in early July, we met our goal of 15 to 18 race calendar.

Building this schedule was a bit of a jigsaw puzzle as 13 of our originally planned 22 race locations canceled. We took this as an opportunity to create special interest for fans by adding races where we had not raised in years, if at all. We feel very good about the fan reaction to our season to date.

While many sports have struggled with viewership, this year, our viewership is up modestly over last year. To achieve these results in a season with Mercedes dominance in Ferrari struggles, while so many other sports have seen steep declines is a solid achievement. Our digital growth has been even more dramatic.

Formula 1 is the fastest-growing sports league in terms of followers across Facebook, Twitter, Instagram, and YouTube, with a 17% growth rate between March and September. Formula 1 also saw the highest year-on-year growth for social engagement with growth of 70%, which is more than 3x higher than its closest competitor.

We've had some special moments capped by Lewis Hamilton, becoming a sports lifetime leader in wins with his 92nd victory in Portugal and subsequently winning his 93rd in Emilia, surpassing the previous record of 91 set by Michael Schumacher.

Congratulations to Mercedes, setting new boundaries by becoming the only constructor to ever win 7 consecutive constructors titles after Lewis Hamilton's win in Emilia. The Eifel Grand Prix at the Nurburgring, mark a return to the podium for Daniel Ricciardo in Renault. A return he submitted with another podium in Emilia.

At this race, for the first time in our history, we partner with YouTube to stream the entire weekend for fans across selected European markets. We look forward to continuing our unique partnership with YouTube as another way to engage our fans. In September, we raced twice in Italy, which produced some outstanding racing.

There were multiple red flags and a multi-car collision on a restart in Tuscany, only 12 cars finished and Alexander Albon got its first podium.

Mons have produced one of those thrilling races in years and gave us a snapshot of the future with the youngest podium so far, with Pierre Gasly securing his made in win, and he was joined in the podium by Carlos Sainz and Lance Stroll. We have to see more of these unpredictable outcomes with the 2022 regulations.

The Paddock has been a flurry of activity with driver changes. 4-time champion, Sebastian Vettel didn't indeed find a seat with racing point. We'll see if other driver secure receipts, such as Sergio Perez and Nico Hulkenberg. Nico doesn't even have a permanent seat this season, yet has scored 10 points.

There's heavy speculation about the new driver lineup from Haas. And Netflix has been capturing the drama as they film Season 3 of Drive to Survive. Continuing on the topic of engagement, the 2021 season of our F1 Esports Series presented by Aramco got underway in October with Alfa Romeo claiming the top spot.

We're in the middle of a second event right now with racers competing for an industry-leading $750,000 price spot. We've continued to see tremendous growth with Esports is over 237,000 participants attempted to qualify this year.

We will have 8 live broadcast, double last year, which will be streamed online via F1's official channels on Facebook, YouTube, Twitch, as well as broadcast by international TV partners. With regards to our 2020 results, we recognized early on this was going to be an unprecedented and uniquely challenging year financially.

The most significant impact was on our promotion revenues. There's only 2 of our 13 events to date have had fans, and those were capped at less than half capacity. And only in Portugal, we'll be able to offer a limited Paddock Club.

There are significant impacts on sponsor revenues this year as some cancel locations have material local sponsors, the fewer number of races reduced title sponsors and general inventory, and the lack of hospitality precluded some elements of sponsor benefits. The virus also made the completion of new sponsorship agreements more difficult.

Our television revenue saw the lowest percentage impact among our 3 primary revenue categories, however, was still significant. We've reached revised agreements with all but a couple of our material commercial partners for 2020. We approached these agreements with a spirit of partnership.

In almost all cases, we could have taken a much firmer position if we simply enforced our contracts as written. Of where we believe it best to approach these discussions with a sense of fairness to maintain our momentum. On the cost side, we aggressively reduced costs where possible.

Some of our operating costs like freight and travel were naturally reduced with the revised calendar. Other discretionary costs were largely eliminated. On the operating cost level, we implemented furloughs, freezes, and cuts, and expected discretionary compensation.

Our price fund expense to the teams is contractual and will increase as a percent of revenues. All in all, the financial impact this year is significant, but manageable by both us and the teams and positions us well as we go forward. Our third priority was to implement key initiatives for the long-term growth and health of sport.

We achieved much more than most expected.

Key elements include a cost cap on team expenditures to improve competition and the business model for both existing and potential new teams, new technical and sporting regulations for 2022 that will improve action on the track for fans, a five-year agreement with teams to better balance price fund distribution and provide improved stability in an enhanced sense of partnership, streamline governance structure to better grow and improve the support, advanced initiatives on both diversity and sustainability, strengthened our balance sheet to provide both stability and the ability to be opportunistic during this period of continuing uncertainty.

We still have much to do and a current focus as our engine. We need to address the costs and performance of the current engine, and we continue to define the path forward for our next engine, which will be a centerpiece for our sustainability goals.

We expect to announce the 2021 calendar soon, which will look much like our original 2020 calendar, the March start, early December finish, and a record-setting number of races, including Saudi Arabia, as Greg mentioned. We're planning for events with fans that provide an experience close to normal and expect our games to be honored.

In the television area, we have one material market to finalize and are otherwise well positioned for next year. Likewise, in our sponsorship category, we're finalizing our last renewal and actively engaged in a number of new sponsor opportunities.

If the virus does not preempt plans, we expect 2021 will be pretty close to the 2021 we would have originally planned 12 months ago. We'd continued growth in 2019 and the previously expected growth in 2020. That being said, what is obviously not predictable is the virus.

But I do believe more strongly than ever is that the world will, in due concrete the virus. And when it does, that live unique global events like Formula 1 will be more popular than ever as people look to the shared experience of sports and our array of partners will have a greater-than-ever need to reengage with fans and consumers.

In closing, I want to highlight what I believe is our most important achievement in 2020. The appointment of Stefano Domenicali, as he new CEO of Formula 1 effective January 1. Stefano combines a rich experience and expertise in Formula 1 with the commercial knowledge of leading one of the world's iconic brands, Lamborghini, during the past 6 years.

It is respected throughout the Motorsport and commercial world and will hit the ground running. With that, I'll turn it back to Greg..

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

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

Thank you. Good morning. I had two. First for Chase.

Wondering if you could put some context around Honda's decision to leave Formula 1 as an engine supplier, should we be concerned at all that a shift toward electrification by key teams might impact their future participation in F1? And then, Greg, on the Live Nation side, I saw an experiment that was recently conducted in Germany to test the safety of Concertgoers with various safety measures in place.

That experiment concluded that there was low transmission risk to concert attendees when certain measures were taken. So I don't know if you had seen this or if Live Nation was involved.

But I was just curious if you had seen it or knew anything about it? And if so, if there were any implications for potentially being able to return to concerts earlier? Thanks. .

Okay. I guess, say two things, I mean, on the Honda decision. And I think, one, it was -- from my perspective largely driven by challenges, economic challenges at the overall Honda entity. So the auto industry in general is having some challenges. And I think Honda clearly is living and struggling with those challenges.

So I think that was the core issue. There's no question their economics around the engine that we're going to address. But I think Honda's had those pressures existed today, and they had to make some decisions.

I think on the flip side, we actually are getting increasing support and not just from the players that are in the sport, the OEMs that are in the sport. But the OEMs that aren't, they're actually incredibly enthusiastic about our sustainability future, where we're going to next-generation engine.

I don't know if you saw the -- whether it was reported couple of months ago from the CEO of Volkswagen. That could have been -- couldn't have been more positive about where we're going and the importance of us as a platform.

So I think as we continue to flush out and put more information out there about our next-generation engine, the sustainability goals, we are actually getting increasing support and interest from both existing partners and potential new partners about the importance of that to their future..

Great. Thanks, Chase. Turning to your Live Nation, I'm just a little bit familiar with the German efforts that you mentioned, Bryan. I'd note a couple of things. And I think most of you are aware, this 86% of the fans who had concerts postponed because of the COVID virus, have said, don't send my money back, I'll wait.

And I will go to the concert when you are ready. So demand is there among our customers. Why it's also there? We have artists who want to tour, who you've seen efforts to begin towards like the German thing, but other things as well.

And really, some combination of safety measures, and I think there are other experiments like the 1 you mentioned in Germany, but elsewhere as well. Some combination of safety measures, rapid testing, and eventually a vaccine will bring live concerts back in a big way, with a huge amount of pent-up demand and a huge amount of pent-up supply.

So I remain quite bullish. There is a cost still weighting. Obviously, Live Nation is burning cash flow at weights, but I remain very optimistic about the ultimate TAM there, the market, and the ultimate terminal value.

In fact, I think in many ways, it could be strengthened because sadly, other players are not as strong as Live Nation, and we will probably be able to take advantage of it, both in terms of our share and in terms of improved terms with venues, artists, and the like..

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

I have few. So for you Greg, obviously, you talked about a goal of getting to 80% of ownership at Sirius. I understand if it's done in a certain way, a noncash, I think, an actual way that we could start of qualify first as in ATB.

Can you sort of explain to us what, how that could be done, if I'm correct on that thinking? And is, in the pretty close to 80%, is that something that's relatively imminent? And for Chase, obviously, we haven't really seen the details of the new agreement for the team, but the trade press has suggested that there is a new waterfall agreement and how the teams are going to get paid as the business grows, that grows to deliver better operating leverage to Formula 1 as a company.

Any detail on that? And what that could do to profitability going forward would be appreciated?.

Great. So thanks, Vijay, for the question. So it is possible that it's done in the correct way, we might be able to achieve ATB status, active trader business status for SiriusXM. But that would involve and some issuance of shares, it would involve some hopes, and it's not guaranteed that we would still get to being an ATB.

The priority they were getting to the ATB because it really allows upon the conclusion of a tax-sharing arrangement with SiriusXM. It allows us to move capital in a tax-free manner up to LSXM. That's really the priority. ATB would be kind of nice icing on the cake, but I would note that we are already approaching ATB status.

For example, we already have it at the Braves, and we're approaching in the Formula 1, January of 2022, it will become an ATB. So our flexibility there within Liberty Media is pretty good around ATBs. You can never have enough ATBs, but you're not going to commit on natural acts to try and make this one become an ATB. The priority is to get to ATB..

And I guess, and if I understood the question, I assume it's around the Concorde Agreement and the split between us and the teams. And if that's the question. We won't go into, I'm not going to go into real details on it. But from a high level, essentially what our premise was, if we can grow the business, we should receive benefits from growing it.

If we don't grow the business, it goes the other way. So I think it's an incentive and an ability to, they get a bit more of the upside if we can successfully grow it. And I think it's all done with making sure everybody is a healthier model when you combine the cost cuts together with the revenue distribution, every team should be better off.

But what I would guess we believe in success so should Formula 1..

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

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

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

Okay. Yes, I wanted to ask you, Greg, going back to the management changes at SiriusXM. I think the market, you've been very positive on Jim. Jim's performance over the years. I think that's a widely held view. The market seems to be, I don't know, react with some surprise about Jim's departure, David's departure, Jennifer's elevation.

Maybe it was tied to the Howard thing. I don't know. I was just wondering if you could talk a little bit more about you're the Chairman of the Board there.

What, if anything, will change at SiriusXM going forward under the new team, if anything, and maybe just spend a little more time there? And then for Chase, hopefully, this will probably be your last earnings call with us, I'm guessing, but I would love to hear from you again if you want to come back.

Any update on the Miami plans? If, I think that may be on the to-do list for '22? And if that's likely, do you think you go to 24 races like how high on the race count is sort of practical?.

Yes. Okay. So Ben, I think we were surprised by the market reaction. And maybe with high insight, we should have been smarter, but the combination of changing out perceived to be changing out the CEO and the CFO at the same time, plus the overhang of potentially was how we're going to sign. But let's put it in context.

Jim is been with us as CEO for 8 years. I love Jim. Jim has done an amazing job. But I'll give, I'll tease him and say, there's always been a little bit of a hambled-like aspect because if you've noticed, he's taken relatively short-term extensions, and he has rightly said I have other interests. I love Sirius. I've done a great job here.

I'm proud of what's been accomplished, but I have other interests, including his racing at Indy and Open Wheel. So I think this was a natural evolution for Jim, and we are likely, or sorry, we are blessed to have him stay on as Vice Chairman and keep the benefit of his expertise. He would also tell you, change is good.

And that having Jennifer and a new CEO come in, somebody who's both been around a long-time, but also has new perspectives will be a positive, tempered by some continuity with himself and myself. So all of those, I think, Jennifer is an absolute natural evolution.

And 18 years experience and has been as close to Jim and around the business as long as anybody and it's elevated roles as anybody. As far as the tenure, David did a lot of great things. David is a very smart guy, very able guy. But with somewhat of a time for natural change there as well with the changing of the guard.

So I think we have in Sean and a very experienced CFO who knows the entertainment business and will be a great addition and add new perspective. And the other overhang as we talked about was the potential to Howard. Lots of people speculating without a lot of reason, but nonetheless, speculating that Howard was not new with SIRI.

You've seen most of the -- obviously, we don't have a signed deal, but you've seen most of the commentary suggest that Howard is likely to resign, and I think that's correct.

I wouldn't -- I want to see the ink on the paper, and I'm sure we'll -- Howard deserves the right to make his own announcement, but most people are forecasting that he's likely to resign. So I think some of that overhang is now been removed.

I think the market is -- it will get very comfortable with the -- both continuity in Jim, and I'd like to thank myself. And see Jennifer for the power that she is. Is Sean for the addition he can be and see us resign Howard and a lot of positive things going forward. The business is doing very well..

Okay. And on Miami, we're still actively engagement and actually did had a conversation with the Dolphin Group leadership a few weeks ago. I think both of us decided that when the virus issues sort of came to the forefront and the uncertainty associated with it.

We were better off going a little slower and trying to get to a place where we had a bit more visibility to how this is going to play out.

So I think we're probably as excited as ever about the opportunity in Miami, but I think we felt the prudent -- I think both felt the prudent path forward was to make sure we're confident, like, and we feel pretty good about next year.

I mean, our early events are all -- it's the ones we probably had the most -- the deepest conversations all seem confident about having fans, and having events that it's not normal feel pretty close to normal. So we're grading great enthusiasm, but there's still uncertainty.

So I think for a new race, we want to launch in the right way, I think we both thought the right thing was to try. And sort of go a little slower until we had a little bit better visibility, whether it's vaccines or treatments or tests or what have you.

And ultimately growing this more in the U.S., as we said all along, it's not a 12-month proposition. It's a longer-term proposition. So I think it's more important. We do it right than fast. And the virus obviously represents challenges until you have a better sense of it so.

So it's certainly, like, we're still engaged, but I think we will continue to sort of monitor the broader environment and see what it makes sense to move to the next phase..

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

Hi, thank you. Just on F1.

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

Chase, why don't you comment on -- so Chase, why don't I let you comment to the degree you'd like on what years have been, but if you want, Brian Wendling might be able to help on the quarter allocations..

Well, Brian, I'll let you. Yes. From account….

You can go first, and I'll add..

Yes. I would say there's a portion that the pro-rata effect of the rate is having 10 races versus the 17 for this quarter. But then obviously, the promoter revenue stream has been impacted by not having fans.

And then since we went down to 17 races, there were also some adjustments the broadcast side and then some sponsor specific adjustments related to specific locations. So what are those recognized as the broadcast revenue, I think the question is, is the broadcast revenue. [indiscernible]..

Yes. I think the thing, yes, I mean, I think it is largely recognized in the way we would have recognized it, which is the events or event specific and the broadcasting sponsorships that are tied to individual races are still spread across to the races as they come.

So I think it's obviously a different calendar, but principles underlying it are the same. And I'd say the impacts when you look beyond our, I can't say there were tweaks or something. I mean, obviously, we have some things like making hole on sponsorship. But largely, the issues we've dealt with for this year.

They're not issues that would predominantly fall into subsequent years. So not completely, but largely, the issues are ones we've taken this year, one of our core adjectives was, I think we said it before. Sort of whether, we believe in 2021, we're pretty well positioned.

But as we get past the virus, and to have the business as we know it was before the virus. So our goal has been to absorb the changes short-term and protect the business as it should be, and it would be in the ordinary course, long term.

So I guess there's none, but that was, there's some tweaks here and there, some things to deal with, but it's by and large issues we've dealt with this year..

Okay.

And then, Chase, I'd be curious to understand the decision on live stream iFL TV, YouTube, this may be an early step to more digital distribution? Or is this more of a one-off experiment with the platform?.

No, look, I mean, there is no question. These digital players are going to be a bigger and bigger part of our future. And so one of our, as you get an increasingly mature broadcast world and a maturing pay world and trillion-dollar digital companies that are getting deeper and deeper into content. They're an incredibly important part of our future.

So we're looking to continue to try and expand those relationships. And we've got a variety of things.

We're in active discussions with all the key players there about various initiatives to expand and build on whether it's the events themselves or things around the events, the library, but that is an area we certainly expect not just long-term, but short-term, to be an increasing area of activity for us.

So it is trying to find places if we could do new things and build and expand those relationships..

And we will take our next question from David Beckel from Berenberg Capital Markets..

Two on F1. First, I was hoping, Chase, you could fill us in on the evolution of the sponsorship talks. Last time you updated, you said that they were progressing nicely.

Has the Concorde Agreement signing really accelerated those talks in anyway? And can you maybe frame what we as investors should be thinking about in terms of growth or specific opportunities next year? And then second question just on F1 operating cash flow for the year.

It's been quite negative, as indicated through the first 9 months, but is there potential in Q4 to see some of that come back such that the operating cash flow outflow will be a little bit less severe than what we're seeing today?.

So on the sponsor front, we, I think as I said in the opening comments, we're finishing off, we're actually in a pretty good place on renewals. And I think we've navigated, the two issues we had to navigate through before getting new ones is obviously adjustments for this year and renewals. We're finalizing the one renewal left.

So I think feel good about that. I think we feel, we've got probably one adjustment to navigate that we're still actively finishing up. So I think we feel we're in a good place. And we've actually had great support from our sponsors.

They've been, I think we really feel, couldn't feel better about the way we're heading into next year with them and the enthusiasm and support. We on the new sponsor front, engaged with a number of key categories that we think are opportunistic. I mean, I think probably it's fair to say that the virus doesn't make those conversations easier.

Obviously, you'd like to sit down, people face-to-face, that's tough to do. You'd like to be able to meet and walk-through. So we are engaging. People are figuring out how to move forward. We feel good about the interest. We'll find out. We'll see in the next in the coming months to what degree we can turn some of these into new relationships.

So I think we feel good about the activity. The uncertainty around virus, probably, again, is certainly not for the short-term. It's something we have to deal with, and I think we have to be smart about how do we deal with people's entities, concerns about what, what's going to be the impact of the virus in the short-term.

Positively, probably some of the areas we're most excited about are probably areas that actually are not, are in places that are not as impacted by the virus as others sort of things like travel and hospitality are much more impacted than tech-driven.

We think we are, we think there are categories that fit our sport that actually have gone, have been pretty strong through the period of the virus. So we're hoping that our goal is to really continue to build sponsorship as well as the others to build on the curve that would have existed from pre-virus.

And obviously, this year is down because of the impact of the virus, but we're looking to get back on the curve that would have been, that we would have anticipated pre-virus. And I don't think our prospect is that different. I mean Ben Pincus who was, came in probably a little awkward link, and he literally almost had the virus hit.

But he's been on the ground, made some changes in the team there. So we've got sort of fresh in organization. And at this point, they're really picking up speed in terms of some of these commitments. So I think we have to continue to battle through the uncertainty around the virus, but I think it's helped by the momentum in the business.

I think people -- from all our partners. The momentum and strength of the business, I think, the momentum this season is that we've been able to maintain in the sport have given people confidence and excited about the future. I mean, operating cash flow, I mean, clearly, it's the second half of the year.

In the first half, we had just costs, so we didn't have revenue. And with most of our players, they -- we deferred payments. So we have a much more the cash flow that will come through. And our expenses are more spread across the year on our end. The expenses will come through.

And to some degree, we probably supported the teams and cash flow on timing of some of the payments and the like. So the cash flow will improve for us as we obviously deal with more operations and are earning money that would have been paid earlier in the year that were deferred until we started racing..

Thank you. And now we're taking our next question is from Brian Russo from Credit Suisse. Please go ahead..

Thanks for taking the question. So this is in reference to how SiriusXM's capital return may change once Liberty reaches the 80% ownership. Over the summer, the former CFO of Sirius suggested he didn't see management recommending to the Board that the dividend be significantly increased. Obviously, today, the management and the Board look different.

But Greg, once you do own 80%, would you recommend that they change the capital return strategy? And if so, how would you make the case that this would be in the best interest of Sirius shareholders? Thanks..

Well, thanks for the question. Yeah, I think the Board has seen changing capital strategies over time. We didn't have a dividend before. We had buybacks at various levels. And those will be evaluated in conjunction with management as we go quarter-to-quarter.

Obviously, from Liberty's perspective, the dividends are nice because it allows us to go after the discount. But we've also had dividend increases for everybody else, the benefit of everybody else. So I don't think we have a set plan or intent now, and it will be evaluated with management and the Board have done..

Appreciate it. Thanks. .

Thank you. .

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

Hi, guys. Thanks for taking questions. Maybe this is for Greg or Chase. Wanted to get your perspective on this year's significant decline in sports ratings. You said Formula 1 was an exception to that trend.

Maybe why do you think you guys were able to buck the trend? And then what do you think is causing the broader issues? And is there a longer-term concern for you as a sports right supplier with the Braves and the Formula 1?.

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

Sure, happy to. So I guess, let me sort of give perspective, I guess, on the 2 issues -- I mean, broader sports industry and us. I think on the broader sports industry, I think, probably a couple of things impacted it.

Some of it was the overlapping of everything coming sort of being spread out, you ended up with the NHL, the NBA on top of baseball, football on top of each other. So I think that the competition of these events with each other for eyeballs, I think, clearly, had a significant impact on the events. And I guess, I'd say that's the biggest.

I mean, if you look at what the public, the public is cited, to some degree, having fans, not fans. I think it varied by sports to what degree it does, I guess, if you look at us, I think one of the benefits we have is fans aren't a big part of our television experience other than the pre-race, the post-race, watching a race on TV without fans.

There's no crowd, there's no noise, there's no cheering. It's not, you don't, those things don't, aren't part of a Formula 1 race. So I think the lack of fans to varying degrees with sports, I think to what you're going to take, does it miss some of the energy, the excitement to passion.

So I think that's probably more, not as bigger factor as the competition. I think the political aspects of, the political issues that are sort of bled into sports. I think have not been a positive.

I don't know how much I'd say it's, it's a negative, but I think for some fans, certainly, their fans that want supports just to be fun, and they want to go to it to escape daily life not be reminded of the challenges of the problems of the world, they want to go and have a good time with their friends and cheer for their team.

And so I think, again, play not as big an impact, but probably not a positive. And I think for us, I think, the fact that we were probably different. I guess, baseball was the one sport like us. I mean the other sports got interrupted in the middle and then came back with a condense sort of conclusion to the season.

The virus affected us literally 3 days before our season started in Australia. I mean we were on the ground in Australia. So we didn't start. We came back with them. We put together a season that we thought could engage and excite fans.

I think we did a good job of keeping fans engaged with social media and other vehicles going into it, so we could build some momentum. I think we benefited from bringing some, bringing momentum into the season. But I think in a nutshell, I think, if the broader question is, do I worry about popularity of live, unique live events.

Actually, I really feel quite strongly the world misses them, the world's, the world really wants to reengage with them. And I think the passion for, whether it's events like ours or other sports events, I think if anything, I think people always pent-up and there's demand that people want to get.

I think it's, people have talked that what are the long-term changes coming out of the virus era. And one of them, I don't, I couldn't believe more strongly is there will not be, will not impact the popularity of live events, I think, if anything. There's an absence of it that is, that people are longing for in.

And I think we see that in our partner, too, that are increasingly looking for ways to reengage with fans and with the type of events that we put on..

Brandon, I'll add. I think I agree with a lot of case observations, which I've seen the lights of observations. You went from no sports to too much sports, out of season, politics distracting both potentially on-court and off-court with the national election, a lot of factors.

How much of that's secular? And how much of that is cyclical? How much of these ratings declines are secular or cyclical, it's hard to know. I would note, I won't, you guys have quoted our Chairman about sports being the bundle, the blue the whole bundle, I think that's largely right.

And I think sports is probably going to have somewhat of a rebound of how much is secular versus cyclical, hard to know. I would know both of our particular sports product did pretty well. Formula 1 had particularly growth early. What it probably was less competitive just in terms of how much sports was out there.

And the Braves had good numbers pretty much all season, partly because we had a good team. And it's, we've had a, over the last several years, I think, 44% growth in TV audience over the last three years, part of that driven by a good team and a new stadium and the like.

The longer-term question of how much direct-to-consumer changes the mix is to be seen. We have the benefit at Formula 1 to think of being under monetized on our product compared to many sports. And we have the benefit of the Braves of being a very large territory relative to moat. So you certainly want to think about the impact of those changes.

But in both cases, I feel pretty good about our situation..

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

with sports viewership?.

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

So I guess, I mean, for us, there are probably other factors that are bigger.

I mean, actually, then the trends, it's a little tough to sort of differentiate what impacts? Just the question for, are we struggling in this year, has the significant impact in markets, I mean, I guess, Italy, first and foremost, but realistically, they're uniquely important team.

I mean, because I said in the comments, I mean, I think probably one of the things I felt best about is achieving these results with a competition that lack the drama at the top you have liked and elect an iconic team being as competitive as they have been.

And I think to some degree, it's why you need to continue to freshen and find different energy, whether its new tracks or other things to excite. So as I think for us, it's tough to, I think we went through all that pretty well. I, in some degree, because we don't really compete in the same way inside the markets.

I don't, I'm not close enough to sort of track what does the Bundesliga do in Germany and what is Syria do in Italy and what is LaLiga do in Spain. So the international market gets so big, broad, and diverse. I probably, the U.S. is a little easier to track just the sport set.

And more data, it's, to some degree, we're, it's not as directly relevant for us given that we're a global platform..

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

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

Great. Thanks for taking the question. Okay. The first is just on, I think, one in the Indycar teams, Myer Shank, and how the guys have made an investment in their team.

Just wondering if you can talk about the rationale for that investment and whether you see an opportunity to work more broadly with the other racing leagues?.

Yeah. We did make a relatively small investment Meyer Shank. We did that because we are interested in Motorsport. We are lucky enough to own the pinnacle of motorsports, but we think there's a lot of opportunity, particularly in the U.S., to grow both Formula 1 and other sports.

And to get a better view, a better understanding of how some of that operates to become a player at one level in IndyCar was attractive to us. And we got an opportunity to invest with a group we respect. And again, not a huge amount of money, but we'll learn something and we'll get better insights..

Got it. And then one more, if I could. Some of the broadcast deals that you did this year, you either retained or clawed back some of the streaming rights. And for others, there's rights still sit with the broadcast partners.

Can you update us on how you think about the importance of owning those digital rights and why you own them in some markets versus others?.

Yeah. I wouldn't say the broadcast, I mean, broadcasters own them probably in more places. We own them, it's a matter of to what degree the way we exploit them is requires agreements with the broadcasters. So they get more -- I think it's always an issue to the broadcasters looking for protection from what they consider competing products.

So I think in someplace, it's more a partnership where we have to work with the broadcaster to develop it. And it really is to yield my deal. I mean it's the over-the-top platform, we said before, for us, is really a way to monetize the most passionate fans who want the deepest and richest experience.

We think that's actually good for us and good for the broadcasters, but they're differing by. So it actually time to work, work through those sorts of things. Some progressors are more relaxed. It -- I think our core relationships are certainly priority one. So I think if we can find a way to do it and expand and build on and build the digital platform.

We do it. If it becomes a real impediment. We'll look for other ways. Some of it ends up being -- how big is the deal? What are the Varian sense that they're moving parts to it. So I think it really becomes a part of the larger relationship directionally. I think we continue to want to believe.

It's a -- it's an important long-term dimension to our business, again, for a sport that has such passionate fans like ours to be able to tap into them. I think we have continued to make headway. So we don't want to go to war with broadcasters over it. I'd say, in general, with the renewals we've done, we find we get increasing flexibility.

And so I think that's more is how do we continue to get more flexibility to exploit this in a way that we can do in a way that works with our broad -- our broadcasters are comfortable with as they grow into a recognition of the digital world is going to be a bigger part of it.

And to the degree we can monetize it there, it benefits all of us, in terms of optimizing the value of a consumer out there. So I think directionally, I think we feel very good.

Almost the number of the deals we've done this year, and I think we get increasing flexibility to exploit in better terms that, whether it's us doing it alone or advanced discussions with broadcasters, where we do it in partnership with them. So it's not one where we want to try and change the world in 12 months.

But I think over time, continue to give us more flexibility to exploit all these avenues, traditional and digital platforms for our product..

So I think this is our last question, operator..

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

Congratulations on good financials for BATRK.

Could you just talk a little about how the CBA wage agreement discussion might go? And how that might affect you going forward?.

Well, I'm not sure they were great financials because we like many others in the baseball world suffered a lot from the lack of in-person fans at events. But I think credit to our management team for making the great adjustments that they did to sustain the business and keep fan interest up.

I think the reality is baseball lost a lot of money this year. And unless fans are in the seats next year, it will be a challenging business as well. I'm not really going to comment on CBA negotiations, but the long-term reality must be that if there is not as much revenue coming in, it is likely to put pressure on what teams can pay for players.

It just seems like an economic fact. And beyond that, and I'm sure that will cause tensions because players want to get paid as much as they can outstandingly, but teams are only going to have X amount of resources. So I think there'll be challenges around that, and we'll see what happens.

Thanks all for joining, and we look forward to your continued interest in Liberty Media..

Thanks, guys..

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