Welcome to the Liberty Media Corporation 2018 Q4 Earnings Call. During the 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 February 28th.

I would now like to turn the conference over to Courtnee Chun, Senior Vice President of Investor Relations. Please go ahead..

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

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

These forward-looking statements speak only as of the date of this call and Liberty Media expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking 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 of Liberty Media and adjusted EBITDA of SiriusXM. The required definitions and reconciliation Schedules 1 and 2 can be found on the end of the earnings press release issued today, which is available on our website.

This call also includes certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 regarding the Liberty TripAdvisor Holdings.

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

These forward-looking statements speak only as of the date of this call and Liberty TripAdvisor Holdings 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 TripAdvisor Holdings’ expectations with regard thereto, or any change in events, conditions or circumstances on which any such statement is based.

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

Thank you, Courtnee. Good morning. Today speaking on the call besides myself, we'll have Liberty CFO, Mark Carleton; and Formula One's Chairman and CEO, Chase Carey. During the Q&A, we will also be available to answer questions related to Liberty TripAdvisor. So starting with Liberty SiriusXM.

During the quarter, we continued our repurchases of Liberty SiriusXM stock and from the period November 1st through January 31st we bought additional $159 million worth. When you look through the discount, we effectively bought SiriusXM stock at a price of $4.09, we consider that pretty attractive.

I would note that the discount NAV between Liberty SiriusXM and SiriusXM, the underlying stock has tightened a few points, but remained stubbornly high. We will continue to take advantage of it. Pro forma for the Pandora transaction and Sirius actions are ownership of SiriusXM stands at about 67%.

Just a moment on iHeart Communications, the bankruptcy plan is have been confirmed by the courts, and we expect it will emerge in the second quarter. Once that happens, Liberty is expected to own just under 5% of the iHeartRadio equity, about $284 million of iHeartRadio debt, which designed to trade at face.

And just a little less Clear Channel Outdoor equity, as there is already a public stub in the Clear Channel Outdoor equity, so we're that much dilution. Looking at the underlying SiriusXM's operating results have had strong full year results.

Record revenue of $5.8 billion, adjusted EBITDA up 6% to $2.2 billion, despite a number of catch-up payments for content and other issues. And we completed the Pandora transaction on February 1st. Turning to Formula One Group. We continue to make great progress in 2018 with fans and other constituents.

490 million unique visitors saw the product across all forms of Formula One programming. We had 4.9 million total spectators at races physically, and we are the fastest-growing major sports brand on social media for the second consecutive year. Note, as we've mentioned several times, this business is hard to compare on a quarterly basis.

In the fourth quarter of 2018 we had five races versus six races in the similar period in 2017. We are very excited to the start of the 2019 season in Melbourne on March 17th. Turning for a moment on Live Nation, we're going to not talk about it, yet on this call because they report later today. So, I encourage you to listen to that call.

Looking to the Braves, we have continued financial strength in our second season at SunTrust Park and the Battery Atlanta. I would note that 2018 included several big positives that benefited our results on the baseball side. That includes a very favorable home games schedule with attractive teams scheduled in Atlanta.

A competitive team with meaningful games into the last month of the season, non-game day special events in the ballpark that trended up including concerts. And importantly winning the NL East, great team performance brought us post season revenue, which we certainly hope it will continue in 2019 , but we don't necessarily budget for.

Battery Atlanta is close to full occupancy and driving very solid returns. Looking at the performance ahead, we're super-excited with the signing of George Donaldson, along with the return of Brian McCann to the Braves. And looking -- we are very much looking forward to the start of the season on March 28th.

We want our team to win the World Series and believe our team has the potential and is on the right path to do so. The management team has our full backing to do, what they believe is right to win.

Over at Liberty TripAdvisor, I'd note we finished a strong 2018 with great results in the fourth quarter, we achieved strong net income and adjusted EBITDA growth. We continued our focus on hotel marketing efficiency, which drove a 700 basis point expansion in the hotel segment in the adjusted EBITDA margin.

We grew revenue and experiences at restaurants by 40%, and remain very excited about this market opportunity. We are projecting double-digit consolidated adjusted EBITDA growth for 2019. With that quick set of comments, I'll turn it over to Mark for more on our financial results..

Thank you, Greg. At quarter end, Liberty SiriusXM Group had attributed cash and liquid investments of $37 million, excluding $54 million of cash held directly at SiriusXM. The value of the SiriusXM common stock held at Liberty SiriusXM as of February 27th, was $19 billion, and we have $1 billion of debt against these holdings as of year-end.

Total Liberty SiriusXM Group attributed principal amount of debt was $7.9 billion, which includes $6.9 billion of debt at SiriusXM. Formula One Group had attributed cash and liquid investments of $130 million, excluding $30 million of cash at F1.

Formula One Group has attributed public market securities with a market value of approximately $4.4 billion, as of February 27th, including the intergroup interest in the Braves Group, and our stake in Live Nation with $2 billion of attributed debt excluding the debt at F1.

Total Formula One group attributed principal amount of debt was $5 billion, which includes $2.9 billion of debt at F1. F1's total net debt to covenant OIBDA ratio, as defined in F1's credit facilities was approximately 7.35 times as of December 31, as compared to a maximum allowable leverage ratio of 8.7 times.

And again, as Greg pointed out with the race calendar income from 21 races was captured in the trailing 12 months ended December 31, 2018 versus 22 races for the period ended September 30, 2018. And the leverage ratio increased accordingly. We set a target total net leverage ratio for Formula One of five to six times bank covenant OIBDA.

Please note these leverage ratios are for the Formula One business, not the Formula One Group. At the Braves Group, we had attributed cash and liquid investments of $107 million, and attributed principal amount of debt of $494 million. And now, I'll turn it over to Chase Carey to discuss Formula One..

Thanks, Mark. I'll briefly discuss our results in 2018 and then focus on our plans for 2019, and beyond. As we've mentioned numerous times, we look at this business on an annual basis, and for the full year revenue was up 2%. Our primary revenue streams were essentially flat for the year. There were a number of one-off items that impacted these results.

In particular, we had two rights holders experienced financial issues and then were also changes in the rates calendar. We also had one contract amendment that provided for an increase in promotion revenue, which was fully offset by a reduction in advertising and sponsorship revenue related to a particular event.

Overall, this amendment was neutral to primary revenue. And looking at adjusted OIBDA, we knew the 2018 would be a year of investment. However, we now have the right organizational structure in place and expect that the majority of future investment will be revenue-generating. Now onto the fan. Over 4 million fans attended the 21 Grand Prix in 2018.

An average of 195,000 spectators for each weekend with race days averaging over 80,000. To put this into context, 70,000 fans were in attendance at the Super Bowl in Atlanta. Not to be outdone, viewers at home also increased engagement with unique global viewers up 10% to 490.2 million.

Note that we changed our viewership methodology to align with industry standard, which measures three consecutive minutes of viewing. The viewership stats were provided for the 2018 season reflect this new methodology, including restating 2017 results for an apples-to-apples comparison.

And for the second year in a row, we were the fastest-growing major sport on social media platforms. We're pleased with this heightened engagement across all platforms. Now onto 2019. The teams are about to finish testing at Barcelona and this month was filled with exciting reveals and new cars and referees.

Driver lineups have changed significantly, which should make for exciting drama on and off the track, the first winter testing session together with the daily review show was available on F1 TV along with the second testing session.

Additionally, the first ever documentary produced by Formula One entitled “Michael Schumacher” The Making of a Legend, is available exclusively to all F1 TV subscribers. Further, on the content front, our Netflix show entitled, “Formula One” drive to survive, will air on March 8th, be sure to check out the trailer, which is online now.

With respect to our F1 TV over-the-top platform, 2019, will in many ways be the true commercial launch of the product. After using 2018 as our beta test, we've strengthened the platform and will have a more fulsome marketing launch we kick off the F1 season next month.

F1 TV has a long-term strategic priority, and we will continue to evolve the platform, enhance the content, and build and distribution opportunities in the coming years. On the distribution front, we most recently signed agreements in the Netherlands and Germany, both markets in which F1 TV is available.

2019 marks the start of our new deal with Sky U.K. the leading subscription sports channel in the U.K. Highlights from Saturday and Sunday race weekends along with the Silverstone Grand Prix will be shown on Channel 4 in the U.K.

Over the past two years, we've signed distribution deals in many of our largest markets in global coverage is largely set for 2019. The race calendar 2019 matches that of 2018 in number and location of races.

Though there still will be quarterly variations in the race count, as already announced Vietnam will join the calendar in 2020 and we're in discussions with numerous other locations that both answer demand in certain markets, while attracting new fans and sponsors.

Again this January, we brought all the promoters to London to meet and share best practices. We continue to believe this is a group that can work collaboratively to the betterment of the brand and fan experience. We plan to hold four fan festivals this year, the first of which will be in Shanghai, which coincides with Formula One's 1000th race.

We will celebrate this milestone in many ways, so stay tuned. We also plan to hold fan festivals in Chicago, Los Angeles and Brazil. We're excited that we expose other audiences in the U.S. to Formula One, after a very successful fan festival in Miami, last October that drew 80,000 spectators.

In Australia, we will host our first ever launch event on March 13th in Melbourne to include all 20 drivers and 10 principals. Our Global partners, Rolex, Emirates, Heineken, DHL and Pirelli, are all supporting the event through a variety of activities.

And further partnership with our sponsors, we will also host special events around races with both AWS and MIT, which will draw a diverse audience and expose them to the many facets of Formula One.

We were also pleased to extend our partnership with Pirelli, as the sole global tire partner through 2023, at the end of last year, and signed a five-year agreement with Cyber 1 earlier this year, as the official cyber security provider for Formula One.

We continue to focus on the product, which is the race and making it the greatest racing spectacle on the planet. As mentioned earlier, the 2019 season will bring a new drivers, new pairs to the teams and many seasoned veterans.

Three drivers were pulled up from Formula Two, Alexander Albon, Lando Norris and George Russell, which proves this is a fertile testing bid for Formula One drivers. We are excited for the 2019 F2 driver Formula Two drivers slate, which includes drivers from China, the U.S., Brazil and from Germany, Mick Schumacher.

As it relates to the race, we're focused on technology and regulations that will improve competition. This includes reducing loss of performance, when cars are in close proximity, designing circuits with more opportunities for overtaking and reviewing how penalties are enforced.

We continue to have discussions to make progress with the teams on a new Concorde Agreement that addresses cost structures, revenue distribution, regulations and governance.

We call this new agreement will impact the 2021 season and beyond, and we are in constructive discussions with all 10 teams to finalize the details and improve the sustainability of the model. We understand the public market, would like to have all the terms as soon as possible.

We're going to take the time necessary and make sure that we get this right or in alignment with our partners. When Liberty bought Formula One, a little over two years ago, we knew that Formula One was a fundamentally strong product and brand, but we knew there would be hard work ahead to turn this into an efficient business.

We now feel we have the right organizational structure in a fortified to core business and can now focus on how we amplify our strengths. But 2019, the drivers of revenue are clear, cost growth will abate and we expect leverage to decline significantly.

We remain firm in our commitment to growing this business and creating value for the long term for the teams, our partners, Formula One, and our shareholders. Now I'll turn the call back over to Greg..

Thank you, Chase and thank you, Mark. I'd like to finish by reiterating the point that Chase just made. We are very pleased with the progress Formula One has made over the last two years. We are confident that tremendous potential still exists.

We realize the hard work and dedication of Chase and his team have put into building out this organization, look forward to seeing the pay-off soon. We are committed to the F1 business. In other news, we have scheduled our Annual Investor Meeting in New York, the Thursday, November 21st. So please mark the date.

Finishing, we continue -- we appreciate your continued interest in Liberty Media. And with that, I'd like to open it up for questions.

Operator?.

Thank you. [Operator Instructions] We will now take our first question from Vijay Jayant of Evercore. Please go ahead sir, your line is now open..

Thank you for Chase.

Chase, just some clarification obviously there are some dollars moving from out of sponsorship to race promotion, if that didn't happen, what was sort of the growth in sponsorship obviously we're expecting that to continue to improve in 2019? And then on the price front, as a percentage of revenue that seem to improve -- increased by about 200 basis points to 69.5% in 2018 from 2017.

Obviously, we thought it was more sort of fixed in some ways, I'm assuming there is some bonus payments and the like, if you can help us understand that? And if I could, one final one is on what I understand is the FIA International Sporting Codes mandate the major technical and sporting regulations to be determined, as part of the Concorde Agreement by the middle of this year.

So, how -- if that is the case, do we expect to get all the commercial and the budget caps and all the other things, you're working on also come together at that time. Thank you..

So I guess on the first one, as it relates to promotion and sponsorship. I think probably the impact of what was moved around, and again, I think I said on the call, it was an aggregate sort of net neutral. And it took down a bit the sponsorship revenue and increased promotion and decreases the sponsorship revenue.

So, without that the sponsor of revenue would have been certainly a few percentage points higher than it was otherwise. And again it's not uncommon in our agreements, where we have sponsorship components, we have hospitality components, we have fee components.

So, quite frankly, we were working with, with sponsors to figure out how do we optimize for both of us the revenue opportunities, but we're pretty revenue neutral on it, in aggregate across those. On the prize front, it's not a bonus.

The primary effect within 2018 was really, how the specifics on the price, when computation deal with some things like withholding taxes.

So we had a long term dispute with the country that actually benefited us, but we account for it in one way, but it flow through the prize funds, where it actually doesn't flow through our and operating profit to us, we get the cash benefit of it, but because it gets computed into -- because it gets factored into the price fund computation, the prize fund reflects the benefit of that.

So, it's is a difference between how that which was essentially the resolution in our favor of a past withholding tax issue in a country and how that flows differently through our P&L, then through the teams P&L -- through the team prize fund.

And that was the primary thing that took it out of made the price fund higher than it would otherwise be on a pro-rata basis against the profit. And there are – there are sort of structures that lead us to want to have things in place by June. I'm not going to put in -- get put in place.

I'm not going to elaborate on specific deadlines for the discussions with teams, they're active. I mean I had a number of meetings this week with teams. So they are quite active. We are trying to, as I said in the opening comments, we want to resolve these things they are for 2021, so clearly you don't.

There is still time there, but I think all of us would like to have a clear visibility to the future. So, we are looking to conclude those as quickly as we can, but it is true that certainly there are components of it that we would -- we would look to have in place by, by June, although we certainly expect to advance things before then..

Thanks so much..

We will now take our next question from Amy Yong of Macquarie. Please go ahead, your line is now open..

Thanks and good morning. I guess now that you've closed or SiriusXM has closed on Pandora. Can you talk about some of the cross collaborative efforts between SiriusXM and Live Nation.

And do you think it makes sense to combine these? And I guess lastly, how do you think of LSXMA, as an acquisition currency?.

Well Amy, I'll take the latter first. I think it's a very poor acquisition currency, given to the trades at a discount to the underlying source of 99.999% of its value or 90, I guess not quite that high 97% of its value or something like that.

So, I wouldn't -- it would be a very unusual set of circumstances, which would cause us to use LSXMA as acquisition currency. On the Sirius and Pandora combinations -- combination and the opportunities, I think they're in a host of areas.

The opportunity to cross promote, the opportunity to have a good, better, best strategy, the opportunity to use Pandora strength in digital advertising to enhance the offerings of Sirius is on the advertising side.

The opportunity to move subscribers from one -- one set whether it be in the home or in the car or elsewhere on mobile to another the opportunity to share content in part or in whole, as a teaser or more completely.

The opportunity to have rationalization on the cost side in several areas in digital, in particular, but just in general in G&A there are places. So I think there are a range of them, and frankly, we are only getting handle on those. Jim Myers has been sending and Dave Greer have been spending a lot of time in Oakland.

The whole senior management team had an off-site yesterday at SiriusXM and topic one is all the things that can be done together and both sets of management's were there, and those sets of managements are increasingly integrated.

So I think some of the things you suggested about bringing them forward together are happening and will have increasingly through 2019, and I think you'll see a series of initiatives in 2019 demonstrating, how we can work together..

Thank you..

Thank you..

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

Thank you. Good morning. Chase, you said in your prepared remarks the growth drivers are clear, I think you're talking about 2019, maybe 2019 and beyond for Formula One and cost pressure should abate.

I don't know if you want to go this far, but should we expect revenue across all the three major streams for primary F1 race promotion, adding sponsorship and broadcast to all grow.

This year and given your point on costs, should we also expect margins to go up?.

First on revenue. We do expect growing, and there are obviously other categories the matter too. So those that means the three big drivers. But certainly areas like hospitality are important. But we expect growth across all not equal by largest growth in television, the race calendars, yeah pretty stable.

So, I think probably the growth will be more modest there, clearly Vietnam coming on a year later. Ads on the promotion front, and in the sponsorship area, we expect ongoing solid growth got a lot of interest in the sponsorship area.

The sponsorship world probably takes a little longer to close the deals than it would have expected a year or two, you got to create more tailored packages and tell the story better and create the research to sell it.

But long winded way of saying yes, we do expect growth across really our primary areas, not equal growth, television growth will be the largest and certainly growth in some of the secondary areas too, like hospitality and events.

And on the cost side, I mean it always a little complicated, because our biggest cost is the team payment, which are more a percentage. So you don't really get any margin, you don't get margin improvement off of the team payments. It's a percentage of the profit.

And so we -- if you, so the other costs are so small against the team payments, the margin and movement is smaller. We do expect some improvement but there are a number of areas, where costs relate to revenues.

If you take hospitality area or freight, which are areas, where we have revenue that's attached to costs, to the degree freight costs go up, freight costs were up significantly in 2018. Now we -- a lot of our freight for third parties that we built through, so there is sort of a -- it is a revenue generating cost increase.

It's not a profit center, but it's a revenue-generating cost increase. Hospitality again is an area, where we have cost against revenues, so revenue go up, cost go up. So there's some places, where in television promotion, in the sort of core areas they are primarily straight through.

Some of the other areas of growth, having more events this year, the MIT events again, they will be -- we'll make money on them, but there's a cost to create them.

So we have some costs that are not large in the context of the overall business, certainly the events are freight sizable cost, but in aggregate, our costs that are not attached or costs like, operating costs, and some of the basic costs will certainly have margin improvement against But we won against the team payments, and we will have some of the areas like hospitality and freight that have some cost against them..

Got it. And I don't know if you or Mark would comment, but when do you expect or should we expect you to get to your leverage target or get to that six times or below to look out over the next couple of years. I think your visibility is fairly healthy..

Yes, I mean....

Yes, I think we're certainly -- go ahead Chase..

You know, go ahead Mark..

No, I think we're certainly aiming toward getting that down under six times this year. We think there is a realistic opportunity to do that. And with -- as we look at the numbers, that's certainly what our target has been and we think we'll get there..

Okay. And then thank you for letting me ask a bunch, but just lastly to Greg.

Any thoughts or interest in spinning the investments out of the flunk tracker obviously if an investor is looking at flunk today, there is a lot of investment and that is more investment equity in there, then there is F1 which is I'm sure suboptimal, you'd probably agree any interest in sort of revisiting the structure here?.

Well, I first note that it's a high quality problem caused mostly by the increase in the value of Live Nation that has caused us to be the case.

And moving it across as we've talked about, the most obvious way would be to and more properly aligned with Sirius over time might be to move it there, but given where LSXMA is trading and probably not attractive. There is debt against it, which would reduce the net equity value.

But the moment I would describe that is probably a worthy goal, but not worse the costs or the friction to get it done at the moment -- maintains, but not at the moment..

Got it. Thanks everybody..

We will now take our next question from Jeff Wlodarczak of Pivotal. Please go ahead, your line is now open..

Good morning. One for Greg and one for Chase.

Greg, can you comment on your potential interest in taking a stake in Universal Music, do you need an ultimate path to control and will that be done through Liberty or SIRI? And then I guess, the same question on Fox Sports Net, and do you think those assets actually gets sold, or Disney sports to spin them out?.

Look, Universal Music if you look at SIRI one of the largest, if not the largest cost, they have is to the content suppliers and understanding how you might had some of those costs is interesting and ownership stake in Universal Music could be interesting. That's really only going to be true on the right terms and conditions.

What we were asked I was asked, would you look at it, of course, we are the huge supplier to us, an important constituent in the music space and we would look. So when Vivendi announced that they were going to potentially seek partners, we certainly would express interest.

It would have to be obviously unspoken don't need to say it, but we will anyway on the right terms and conditions and would we prefer path to control usually in life we do, but we're also it depends on what else is available and what else is offers, and whether that's attractive in the total.

That probably would be done at SIRI but I can't guarantee that we would look and say is it attractive for SIRI, is at attractive for LSXMA, what are our alternatives. You've seen where we've been putting our money on LSXMA. I don't want to note that and you should just further on the LSXMA's investment priorities.

I think I told you, we're going to get three components of iHeart spun out to us, the CCO equity to radio debt, and the radio equity. The first two are probably not things that we're going to hold for the long term if at all, they're just not in our investment portfolio.

CCO maybe a great company for the future, it's probably doesn't fit well with our portfolio. So, you might expect us to utilize some of that cash to do things like to shrink the LSXMA discount or take advantage of it. And as far as the RSNs, it's a set of assets we know well. We understand both their strengths and their weaknesses, which are manifest.

And you have a seller who is forced seller, my understanding is by the terms of their consent decree, which could be modified, they are going to be a seller, not a spinner. But the current consent decree does not allow them, as I understand it to spend good change.

You've got a several large players, including Fox have suggested they are not interested and walk away, the kind of situation we would look at. And we've been rumored to look at and it would be logical that we would look at it.

But we're going to look at it only on the basis that it's attractive for us for the long-term and that we can see reasonable upside given what our clear risks in the distribution of these and then changing MVPD world.

Where that investment would get done, whether it would be done in Batter or whether it would be done in LBRD or somewhere else, really depends on the scope and size and who our partners are, and how that turns out.

But we are approaching them with the appropriate caution and appropriate wide-eye certainty in understanding that we formed a lot of these things with Fox long time ago, we have a lot of history with them and understand those business as well..

Thanks, Greg. And then one for Chase. Chase, is it fair to say under the new potential Concorde Agreement that the revenue share payments percentage of the teams are probably going to be about the same as they are today.

But if you can grow the revenue materially, you'll get a larger share of future revenue?.

I don't think at this point I want to get into sort of speculating on things that are still in active discussion. We certainly expect to grow the business and there's no question.

I mean, we've talked -- like I can go back to the last two years, we've talked about 2017 and 2018 beings sort of building foundations, we expect growth to really start to flow through the business in 2019 and more so in 2020. We've talked about 2020 being the target.

So certainly we are focused on growing the business, we believe there is a lot of growth in it and we expect to start to recognize that, but I don't want to get in speculating on things that are. As this also said many times, I think, we're best off having those discussions private with our partners and when we resolve it, we will address it..

Fair enough. Thank you..

Yes..

We will now take our next question from David Karnovsky of JPMorgan. Please go ahead, your line is now open..

Hi, thank you. Just one for Chase. Regarding contract with the field broadcast rights broker. Can you say what regions discovered? And then can you walk through what happened when the contract terminated? Did you move to agreements directly with your TV partners, and then do those deals restart in 2019 or in 2020? Thank you..

Yes, I'm not going to elaborate too much on by design, did not identify the specifics although probably fair number people can guess, and essentially with a broker a middleman that control our rights to sold it on. So when the broker went broke, the agreements were eliminated as part of the process.

So yes, what we did is, go back and it was, there was a large region and a number of smaller ones. So, we went back engaged, engaged directly with the parties that had been buying through the broker given the timing through, which it happen in some of the circumstances for 2018 it clearly created the consequences and timing of it made adverse to us.

We expect in 2019, while the season is imminent, we are still addressing it, we expect to get to a constructive place that works for us in a better way for 2019 forward and that are actively finalizing some of it's finalized, but we're actively finalizing it now. But when we had to deal with it live with a week's notice or what have you.

Clearly, there was a consequence to us in 2018, but we believe we're in a path to address it and a constructive way for us for the 2019 season..

And then I think Formula One is a few race promotion contracts that are coming up in 2019. Is there any even high level commentary, you can give us, and how you're thinking about those races and then, is there any update you can provide on Miami? Thanks..

I mean up in 2019, which means for the 2020 season, obviously our 2019, the 21 races we have for 2019 are all contracted. So it's -- we have contracts where 2019 is the last season and we have to either create a new agreement go separate ways. And there's nothing really unique to this. That wasn't sure last year.

We had a number of renewals last year, just we had a number of renewals the year before. There are different issues in each one. I think the most positive aspect of that is we have -- we are increasingly encouraged by the breadth of interest of new parties, who want to come in.

And that really is the dynamic that's important for us, is all the supply and demand. We value some of our races are long-term partners, some not quite as long. I think our first approach is, if we can get to a place that works for both of us is to renew races we have -- we're not necessarily always going to be able to get there.

But to make sure we are getting fair value, it's important that we have alternatives in places that provide not just attractive finances, but attractive races, example being Vietnam, we think is going to be an exciting new place to go, fulfills objective of growing in Asia. And it's a win-win for both of us. So it really ticks all the boxes.

We have places really around the world that we'd like to add races, including not just new markets, but some traditional markets like Western Europe. So I think it is engaging with partners, seeing if we can get a place, get to a place that works for us and trying to judge that against the opportunities we have in other markets.

And that is the process we're engaged in now with the renewals for 2020, which won't be different than every year, we always have some three, four, what have you negotiations we have to go through.

And I think as we've gotten a few years under our belt, I think, we increasingly feel pretty good about trajectory of that and the ability to continue to have a healthy business there. And we are looking to -- we've talked about it at, we think there's room to add a bit to the race calendar..

Thank you..

We will now take our next question from John Tinker of Gabelli. Please go ahead, your line is now open..

Hi, thank you. Just following up on Jeff's question on the Fox Sports Net.

One thing I thought a little confusing is can the MLB bid on them, and would it is help likely possible, is it that they could be split up on that, and the Braves could just pick up Fox Sports South rather than the whole package?.

Well, I -- this is Greg. I don't know. Thank you, John for the question. I don't know why MLP could not bid on them. There's no reason I would understand why they would not bid on them and it has been certainly rumor that they are a bidder.

And I can see why MLB would find it attractive to try reconsolidate those rights to give them more flexibility into the future and dealing with over the top and other kinds of bidders.

In that vein, I think there are a couple of reasons, why while these might be cut up, that's unlikely there a bunch of MSNs in the things that make it very hard to unwind the pieces. And secondly, while you can't say for sure.

Look, the power comes from having multiple and giving you leverage vis-a-vis the MVPDs and to the degree that you only had one region as attractive as the Fox South region is, and it may be the most attractive region, among the largest with relatively low rights in general, having one region gives you less leverage and is a less appealing opportunity.

You don't want to say definitively no to anything, but in principle, more is better..

And so quick follow up on the -- you've now sort of set up your -- you're going to spend another couple of hundred million completing out, completing the development.

What time does revenue start to kick in from that on the secular phase?.

Of the Battery?.

Yes..

I think, as we get it leased up I think, we'll see begins of it in 2019 and more meaningfully in 2020..

Thank you..

We could ask Chase to comment on to RSNs, we probably put him into difficult effort. He has a lot of knowledge, but we probably won't put him on the spot..

I'll pass..

Thank you..

We will now take our next question from Barton Crockett of [Indiscernible]. Please go ahead, your line is now open..

Okay, great. Thanks. It's Barton Crockett and I guess a couple of things. One is, your business at Formula One having some substantial kind of obvious European and international exposure. A lot of companies with that type of footprint or seeing impacts from the economy, Brexit in the U.K. and weakness in some other places.

You don't seem to be seeing that but I just want to double check.

Does your business seem to be economically resilient? And if so, could you explain that as kind of the affluent nature of people going to your races and some of the improvements you're making? How do you feel about the economy in terms of what it means for you there?.

Yes, I guess I'd say the economic issues are, I do think we feel pretty immune to them. I mean, Brexit, we've got some logistical issues that are more sort of if you end up and no deal with Brexit, how do we get in and out of Britain with various equipment.

But it's not a financial issue; it's more logistic that we are in a contingency planning for things like that. Yes, I think we are immune. I guess I'd say the reasons, I think, being global, well certainly on European base for a global business and we're unique.

I think those that probably feel at the most are ones that are more commoditized and we're not -- I think it also helps that we're largely a contract business.

So, we're not ones -- if you look at our revenue streams there are some that are -- that are more ongoing hospitality, something like that, but the vast majority of that is long-term and so I think people are less -- parties are less consumed. We are a fairly high -- we are certainly a high demo sports so I think that probably it helps.

We got quality sponsors and the like. So, I think the combination of unique events, long-term agreements, strong demographics and those we deal with. And I think to some degree, upside to our story. I mean we really do feel that we've got some win in our back.

In our focus in the last 24 months has really been as much of that building interest in fans, creating momentum in the business, creating momentum in the sport and then as we now move to monetize that sort of get the story told, create us some momentum. And I think we're seeing that the interest that we experience.

There are some places, not really as much of economy. I mean certainly the sponsorship area again is, if you're not Google or Facebook, if I harder than it was. But actually, we're pretty encouraged by the interest. It's -- but you've got to tell a better story. You've got to have a meat in the bones in the story.

You can't just sell signage on a wall anymore, and you've got to find ways to create unique relationships with them and have the research and data that proves the story out. I think we're doing all those things. So again, I don't -- the economic issues, we really aren't, while we're based in the U.K. We're certainly not a U.K.

company so, so that for the U.K. specific issues, I wouldn't expect it to. But I think certainly Europe is meaningful to us. But I think we feel we're writing above, whatever that noise is for the reasons I said..

That's great. And If I could switch gears for Greg. You pointed out that you guys will have your positions in iHeart plus bankruptcy.

I was wondering if you could update us on your feeling currently strategically about traditional radio? Is that iHeart stake a strategic one, or something that we can characterize as maybe a flyer that didn't work and not so strategic now? And if radio is strategic, why -- is it safe to think that iHeart is really the only play for you there? Or is there a possibility that you would look at others, the space did seem to have a better kind of revenue trajectory in the fourth quarter and into the first quarter.

So I don't know if that factors into your thinking?.

Well I'd like to think that fact into our thinking, why we got into in the first place, not after the fact. But look, I would not characterize it as the flyer that didn't work, that's a little -- we took a position, we made some proposals that could have been interesting to have an investment.

We have a smaller investment now; we'll watch what's going on. The terrestrial radio space is still a scale space. There are clearly challenges for them but also opportunities and iHeart is doing a good job to compared to most radio companies about -- thinking about how to attack that.

And I give credit to Bob Pittman and Rich Bressler for their thinking in that way. The opportunities for us to have synergies across the Sirius, Pandora footprint with iHeart, I think they are still very interesting.

We're very focused at SIRI today on managing the Pandora integration, but both SIRI and Liberty will watch closely what's happening at iHeart. And we'll see. I think being a interested shareholder will be a good thing..

Okay, that's great. Thank you..

And sorry this is other radio I can't say categorically no, but iHeart is the largest scale play and in some ways not only is the leader in scale but the leader in technology and what they're and where they're going. So, that makes them probably, if not the only choice, the first choice..

Okay. That's very helpful. Thank you..

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

Thanks. One for Greg on Liberty Trip, if I could. Based on the filings, it looks like representative of Liberty Expedia was willing to collapse that structure into Expedia essentially at par, maybe a very slight premium.

And wondering if any comment about if that there any read-throughs to your views on the appropriate relative valuation of Liberty Trip versus Trip? Thanks..

Yes, I don't think it speaks to that so much.

If you look at the Liberty Expedia situation that's largely about -- we have a relatively pure play there at Liberty Expedia, the Expedia stock and a large embedded corporate gain that the consummation of that merger, if it occurs would eliminate and would allow our Liberty Expedia shareholders access to the underlying Expedia stock at a premium to the marketplace that they are experiencing today.

Sounds like a good transaction it does not require anybody to sell their Expedia stock instead gives them a more liquids stock at a slightly higher price. Sounds pretty good and eliminates potential future liabilities.

For Expedia, lots of good things eliminates the uncertainty around the overhang, eliminates the uncertainty around the ownership, somewhat being shared today between Barry Gillis control and John Malone's control, also eliminates the condition where you go from a hard control situation to a influence situation where [Indiscernible] would not have as much voting control as Liberty has today.

So all that to say the reasons, why that transaction should get done that have little read through or look through one, what you think about trip. We remain very bullish on trip on its own accord and the things they're doing, but probably not influenced by that transaction..

Great, thank you..

We will now take our next question from Bryan Kraft of Deutsche Bank. Please go ahead, your line is now open..

Hi, good morning. Chase just have one for you on advertising and sponsorship.

Can you help us to understand, I guess, how the revenue growth in 2019 and 2020 will be driven? I'm just curious, is it by adding additional sponsors, or is it increasing the spend among existing sponsors by providing them more inventory and opportunities to engage with fans.

Just trying to get a little more color and better understanding there if you would..

I think more of it comes from adding. I mean, we have been successful in with some of our renewals in adding some expansion to it and as we have more opportunities for them to support things like fan festivals or MIT conferences or e-sports, some of them have stepped up. So, there is some expansion with existing, but I'd say the bigger.

I think we still feel -- we have a lot of the portfolio to fill out. So, I think we expect that to be the bigger component, and offering more opportunities that will be brought on a regional sponsor, we see every regional sponsor, we didn't -- we are going to have regional feeds this year, we didn't have regional feeds to sell before.

So I think as we create more opportunities for more sponsors to step in and sponsor more things, we expect all of that whether it's filling up the portfolio on untapped opportunities, unsold title sponsors on races, unsold global sponsor slots, more opportunities for sponsors to step in.

We expect that growth to come from additional sponsors, although that doesn't mean we're not looking for ways to add to -- add to the -- add opportunities with the existing guys..

And is there a lot of room to add sponsors -- large sponsors from here, or are you still down for now, given the amount of inventory?.

No we have fill in. We have room to -- it's not infinite, but certainly, whether it's global sort of entitlement in there. There are three basic, three primary tiers and then you can create a lot more crafted, once as we create again more capabilities, we can create more unique proposition.

But yes, certainly we have -- we're not -- we're not capacity constrained at some point we may be, but right now we have the opportunity, we have untapped opportunities that we won't run out of certainly in the short -- that we won't run out of in the short term..

Thanks..

We will now take our last question from Jason Bazinet of Citi. Please go ahead, your line is now open..

I just had two questions. I know Mr. Carey encourage us not to look at the quarterly results as indicative of the health of the business. I apologize for asking the quarterly question.

If you have a race that occurs on the first of the last day of a quarter in any given year, does that have any bearing on revenues because I think we're all modeling it, as if that rescues day one of a quarter, it all shows in that quarter?.

Jason, If I let Brian -- Brian Wendling talk about the accounting recognized because….

Any time, you are in to technical accounting, there’s probably somebody better than me to answer it. So, I'll let Brian..

Yes, I mean, it's pretty simple answer, but the answer is that, if the race -- the race occurred on a Sunday and if that Sunday falls into the next quarter, we recognize that in the next quarter. So we recognize all the revenue based on the day of the race..

Okay, very good. And then just a follow up from….

We have some race related revenue, we have some season related revenue, but the race related revenue gets recognized, when the race happen..

Yes..

Okay, thank you. And then just a follow-up for Mr. Maffei. I think the quote was, it is not worth a friction of moving the live stake and some debt over to another track.

Can you just elaborate on what friction you see?.

Yes, Jason, I think I talked earlier about the discount at LSXMA. The most obvious way would be to compensate the FWONK shareholders for the stake, the net -- net of the debt is associated with it.

For the live holding by issuing long stock to them -- excuse me by issuing LSXMA stock to the FWONK shareholders by given the discount that LSXMA trades that to the underlying SXM. I don't think that's a very attractive or fair or appealing to the LSXMA shareholders..

You can do it just any -- you just can do it NAV neutral, where are the equity stake in live plus the debt is sort of the NAV neutral and moved across? What it is? What it is happened, I think…..

I'm not sure how either you got -- you've got to compensate FWONK for the FWONK shareholders in one of two ways that I can think of, either you paid them cash, or you give them equity.

And to the equity, that would be available will be LSXMA, or the other choice would be levering up LSXMA and giving them cash and I think at the moment, we think there are other things that are attractive for LSXMA to do with its fire power..

So, it's third option of the LSXMA equity value married up against some debt that sits at the Formula One Group is not an option. So, in zero NAV transfer of--.

I guess I'm not following because, yes, there is debt exchangeable that we would do, but that still has net equity value. So let's look at the net equity value of the live stake. How my [Indiscernible] we are proposing to pay for with look through value of SIRI or you proposing to pay with market value.

If I'm a FWONK shareholder, I probably don't find look through value to be attractive and if I'm an LSXMA shareholder, I probably don't find market to be very attractive. So I don't know, somebody's docs is going to gored until those numbers balance out better. I don't want to -- I don't want disadvantage either set of shareholders..

I'm just saying if you mark-to-market the Live Nation's stake, whatever that's worth as equity value and you married up with a like amount of debt?.

Again, that has a net equity value the Live Nation take is worth, yes..

Okay..

Yes, the Live Nation stake is were three something and the debt is 1 billion something. So, there's net equity value of two plus, sitting inside of FWONK. I got to pay for it somehow if I move it across and I only think cash or stock. So I don't know how it isn't going somebody's unfair either the FWONK side or the LSXMA side..

Understood. You're smarter than I am, so I trust you. Thank you..

I don't know about that, but I think I got those numbers roughly right..

Yes. Thank you. Thank you today for the questions and the interest in Liberty Media, and we look forward to speaking with you next quarter, if not sooner..

Thanks a lot..

This concludes today's conference call. You may now disconnect..