Liberty Media Corporation Reports First Quarter 2021 Financial Results

ENGLEWOOD, Colo.–(BUSINESS WIRE)–Liberty Media Corporation (“Liberty Media” or “Liberty”) (NASDAQ: LSXMA, LSXMB, LSXMK, FWONA, FWONK, BATRA, BATRK) today reported first quarter 2021 results. Headlines include(1):

  • Attributed to Liberty SiriusXM Group

    • SiriusXM reported first quarter 2021 financial results

      • First quarter revenue of $2.06 billion; an increase of 5% from prior year period
      • First quarter net income of $219 million; diluted EPS of $0.05, or $0.07, excluding one-time items
      • Adjusted EBITDA(2) of $682 million in the first quarter, up 7% from prior year period
      • SiriusXM self-pay net subscriber additions of 126,000, an increase of 83% year-over-year
      • SiriusXM reiterated 2021 financial and subscriber guidance
    • Liberty Media’s ownership of SiriusXM stood at 77.3% as of April 26th
    • From February 1st through April 30th, Liberty repurchased 2.6 million LSXMA/K shares at an average price per share of $44.70 for total cash consideration of $114 million
  • Attributed to Formula One Group

    • Announced 10-year agreement to host Miami Grand Prix beginning 2022
    • Secured three-year extension for Japanese Grand Prix and two-year extension for Canada Grand Prix
    • FIA, F1 and teams unanimously approved adoption of new Sprint Qualifying at three Grands Prix during 2021 season
    • Renewed multi-year global partnership with DHL as Official Logistics Partner of F1
  • Attributed to Braves Group

    • Braves expanded capacity at Truist Park to 100% beginning May 7th
  • Liberty Media published disclosure aligned with Sustainability Accounting Standards Board (“SASB”) standards

“SiriusXM started the year off strong with growing trial starts and impressively low churn. They continued to repurchase stock and Liberty’s ownership is now over 77%,” said Greg Maffei, Liberty President and CEO. “Formula 1 continues to be nimble in managing its 23-race calendar and has produced some phenomenal racing. The Braves plan to expand to 100% capacity at Truist Park today and are contending in the competitive NL East.”

Discussion of Results

Unless otherwise noted, the following discussion compares financial information for the three months ended March 31, 2021 to the same period in 2020.

LIBERTY SIRIUSXM GROUP – The following table provides the financial results attributed to Liberty SiriusXM Group for the first quarter of 2021. In the first quarter, approximately $7 million of corporate level selling, general and administrative expense (including stock-based compensation expense) was allocated to the Liberty SiriusXM Group.

 

 

1Q20

 

1Q21

 

% Change

 

 

amounts in millions

 

 

 

 

Liberty SiriusXM Group

 

 

 

 

 

 

 

 

 

 

Revenue

 

 

 

 

 

 

 

 

 

 

SiriusXM

 

$

1,952

 

 

$

2,058

 

 

 

5

 

%

Total Liberty SiriusXM Group

 

$

1,952

 

 

$

2,058

 

 

 

5

 

%

Operating Income (Loss)

 

 

 

 

 

 

 

 

 

 

SiriusXM

 

 

451

 

 

 

237

 

 

 

(47

)

%

Corporate and other

 

 

(9

)

 

 

(8

)

 

 

11

 

%

Total Liberty SiriusXM Group

 

$

442

 

 

$

229

 

 

 

(48

)

%

Adjusted OIBDA

 

 

 

 

 

 

 

 

 

 

SiriusXM

 

 

639

 

 

 

682

 

 

 

7

 

%

Corporate and other

 

 

(7

)

 

 

(5

)

 

 

29

 

%

Total Liberty SiriusXM Group

 

$

632

 

 

$

677

 

 

 

7

 

%

 

SiriusXM is a separate publicly traded company and additional information about SiriusXM can be obtained through its website and filings with the Securities and Exchange Commission. SiriusXM reported its stand-alone first quarter results on April 28, 2021. For additional detail on SiriusXM’s financial results for the first quarter, please see SiriusXM’s earnings release posted to its Investor Relations website. For presentation purposes on page one of this release, we include the results of SiriusXM, as reported by SiriusXM, without regard to the purchase accounting adjustments applied by us for purposes of our financial statements. Liberty Media believes the presentation of financial results as reported by SiriusXM is useful to investors as the comparability of those results is best understood in the context of SiriusXM’s historical financial presentation.

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

FORMULA ONE GROUP – The following table provides the financial results attributed to the Formula One Group for the first quarter of 2021. In the first quarter, the Formula One Group incurred approximately $11 million of corporate level selling, general and administrative expense (including stock-based compensation expense).

“The competition on the track has been fierce and sets Formula 1 up for an exciting season,” said Stefano Domenicali, Formula 1 President and CEO. “We are thrilled to welcome Miami to the calendar in 2022, which will attract fans from across the Americas. Additionally, we extended our agreements to race in Japan and Canada, furthering our commitment to grow F1 in these regions. Drive to Survive continues to grow in popularity and we welcome the engagement with new fans.”

 

 

1Q20

 

1Q21

 

 

amounts in millions

Formula One Group

 

 

 

 

 

 

Revenue

 

 

 

 

 

 

Formula 1

 

$

39

 

 

$

180

 

Total Formula One Group

 

$

39

 

 

$

180

 

Operating Loss

 

 

 

 

 

 

Formula 1

 

$

(137

)

 

$

(33

)

Corporate and other

 

 

(15

)

 

 

(14

)

Total Formula One Group

 

$

(152

)

 

$

(47

)

Adjusted OIBDA

 

 

 

 

 

 

Formula 1

 

$

(32

)

 

$

66

 

Corporate and other

 

 

(10

)

 

 

(7

)

Total Formula One Group

 

$

(42

)

 

$

59

 

 

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

F1 Operating Results

 

1Q20

 

1Q21

 

% Change

 

amounts in millions

 

 

 

Primary Formula 1 revenue

$

17

 

 

$

159

 

 

835

 

%

Other Formula 1 revenue

 

22

 

 

 

21

 

 

(5

)

%

Total Formula 1 revenue

$

39

 

 

$

180

 

 

362

 

%

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

 

 

 

 

 

 

 

 

Team payments

 

 

 

 

(44

)

 

NM

 

 

Other cost of Formula 1 revenue

 

(43

)

 

 

(40

)

 

7

 

%

Cost of Formula 1 revenue

$

(43

)

 

$

(84

)

 

(95

)

%

Selling, general and administrative expenses

 

(28

)

 

 

(30

)

 

(7

)

%

Adjusted OIBDA

$

(32

)

 

$

66

 

 

NM

 

 

Stock-based compensation

 

(4

)

 

 

(3

)

 

25

 

%

Depreciation and Amortization

 

(101

)

 

 

(96

)

 

5

 

%

Operating loss

$

(137

)

 

$

(33

)

 

76

 

%

 

 

 

 

 

 

 

 

 

Number of races in period

 

 

 

 

1

 

 

 

 

 

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

During the three months ended March 31, 2021, F1 began reclassifying certain components previously reported in Other F1 revenue into Primary F1 revenue to better align with the way it currently evaluates the business. In addition, broadcasting revenue was renamed media rights revenue. The more significant components that were reclassified into Primary F1 revenue include fees for F1 TV subscriptions, fees for licensing commercial rights for Formula 2 and Formula 3 races, fees for the origination and support of program footage, fees for broadcast rights for Formula 2 and Formula 3 races and fees for advertising rights on Formula 1’s digital platforms. Following the reclassification, Other F1 revenue is primarily comprised of freight and hospitality revenue. $4 million of Other F1 revenue was reclassified as Primary F1 revenue for the three months ended March 31, 2020 to conform to the current period presentation. The impact of the revenue reclassification for the years ended December 31, 2019 and 2020 can be found in Schedule 3 of this press release.

There was one race held in the first quarter of 2021, compared to no races held in the first quarter of 2020 due to the onset of the COVID-19 pandemic. Fan attendance continues to be assessed by relevant government authorities on a race-by-race basis. While decisions are pending for most events, Formula 1 expects fans to be in attendance in varying capacities at certain events in the first half of the 2021 season, with increasing numbers of fans at events as the season progresses.

Primary F1 revenue increased in the first quarter with growth in race promotion, media rights and sponsorship fees. This was primarily due to the recognition of race specific and season-based income with one race held in the first quarter of 2021 compared to no races in the prior year period. In addition, race promotion revenue in the first quarter of 2021 included proceeds from a one-time settlement related to the cancellation of a race originally scheduled to commence in 2020. Media rights fees also benefited from growth in F1 TV subscription revenue.

Other F1 revenue decreased in the first quarter due to lower freight and logistics revenue, partially offset by higher licensing income. Freight and logistics services were provided in 2020 for the Australia Grand Prix, despite the ultimate cancellation of the race, and the associated revenue in 2020 was higher than the freight and logistics revenue associated with the Bahrain Grand Prix held in the first quarter of 2021.

Operating loss decreased and adjusted OIBDA(2) increased in the first quarter. Cost of F1 revenue increased primarily due to the recognition of team payments in the first quarter, as such payments are recognized pro rata with the race calendar and no races were held in the prior year period. Other cost of F1 revenue is largely variable in nature and mostly relates to revenue opportunities. These costs decreased modestly in the first quarter driven by lower freight and digital media product development costs, partially offset by the proportionate recognition of a full year of FIA fees, higher technical costs and elevated event costs driven by ongoing COVID-related protocols. Selling, general and administrative expense increased due to higher personnel cost as no bonus was accrued in the prior year period.

The Liberty SiriusXM Group holds an approximate 2.2% intergroup interest (5.3 million notional shares) in the Formula One Group as of April 30, 2021. These shares are not included in the outstanding share count of Formula One Group in Liberty Media’s most recent Form 10-Q. Assuming the issuance of the shares underlying this intergroup interest, the Formula One Group outstanding share count as of April 30, 2021 would have been 237 million.

The businesses and assets attributed to the Formula One Group consist of Liberty Media’s subsidiary F1, its interest in Liberty Media Acquisition Corporation, other minority investments, including AT&T, and an inter-group interest in the Braves Group.

BRAVES GROUP – The following table provides the financial results attributed to the Braves Group for the first quarter of 2021. In the first quarter, approximately $3 million of corporate level selling, general and administrative expense (including stock-based compensation expense) was allocated to the Braves Group.

 

 

1Q20

 

1Q21

 

 

amounts in millions

Braves Group

 

 

 

 

 

 

Revenue

 

 

 

 

 

 

Corporate and other

 

$

22

 

 

$

16

 

Operating Loss

 

 

 

 

 

 

Corporate and other

 

$

(44

)

 

$

(40

)

Adjusted OIBDA

 

 

 

 

 

 

Corporate and other

 

$

(26

)

 

$

(22

)

 

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

 

1Q20

 

1Q21

 

% Change

 

amounts in millions

 

 

 

Baseball revenue

$

12

 

 

$

7

 

 

(42

)

%

Development revenue

 

10

 

 

 

9

 

 

(10

)

%

Total revenue

 

22

 

 

 

16

 

 

(27

)

%

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

 

 

 

 

 

 

 

 

Other operating expenses

 

(29

)

 

 

(20

)

 

31

 

%

Selling, general and administrative expenses

 

(18

)

 

 

(16

)

 

11

 

%

Adjusted OIBDA

$

(25

)

 

$

(20

)

 

20

 

%

Stock-based compensation

 

(3

)

 

 

(2

)

 

33

 

%

Depreciation and Amortization

 

(15

)

 

 

(15

)

 

 

%

Operating loss

$

(43

)

 

$

(37

)

 

14

 

%

 

 

 

 

 

 

 

 

 

Number of home games in period

 

 

 

 

 

 

 

 

 

Baseball revenue is comprised of (i) ballpark operations (ticket sales, concessions, corporate sales, retail, suites, premium seat fees and postseason), (ii) local broadcast rights and (iii) national broadcast rights, licensing and other shared MLB revenue streams. Development revenue is derived from the Battery Atlanta mixed-use facilities and primarily includes rental income.

In the first quarter, the Braves operated their spring training facility with fans in attendance at 25% capacity. The 2021 regular season began with fans in attendance at 33% capacity for the first home game beginning April 9th, which increased to 50% capacity beginning April 23rd and will further expand to 100% capacity beginning May 7th.

Baseball revenue decreased in the first quarter due to reduced capacity at spring training games and fewer special events held at the ballpark and spring training facility compared to the prior year. The decrease in development revenue was primarily driven by reduced variable rent for certain retail tenants at the mixed-use development, partially offset by increases in rental income from new lease commencements.

Operating loss and adjusted OIBDA loss improved in the first quarter. The revenue decline was more than offset by lower operating expense from reduced capacity at spring training games, personnel costs, scouting related expenses and minor league expenses as a result of the delay of the start of the minor league season. Selling, general and administrative expense decreased due to lower marketing expense and other cost reduction initiatives.

The Formula One Group holds an approximate 11.1% intergroup interest (6.8 million notional shares) and the Liberty SiriusXM Group holds an approximate 3.7% intergroup interest (2.3 million notional shares) in the Braves Group as of April 30, 2021. These shares are not included in the outstanding share count of the Braves Group in Liberty Media’s most recent Form 10-Q. Assuming the issuance of the shares underlying these intergroup interests, the Braves Group outstanding share count as of April 30, 2021 would have been 61 million.

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

Share Repurchases

From February 1, 2021 through April 30, 2021, Liberty SiriusXM Group repurchased approximately 1.7 million Series C Liberty SiriusXM shares (Nasdaq: LSXMK) at an average cost per share of $44.40 for total cash consideration of $74 million and repurchased approximately 878 thousand Series A Liberty SiriusXM shares (Nasdaq: LSXMA) at an average cost per share of $45.26 for total cash consideration of $40 million.

The total remaining repurchase authorization for Liberty Media as of May 1, 2021 is $907 million and can be applied to repurchases of Series A and Series C shares of any of the Liberty Media Corporation tracking stocks.

FOOTNOTES

1)

Liberty Media’s President and CEO, Greg Maffei, will discuss these headlines and other matters on Liberty Media’s earnings conference call that will begin at 10:00 a.m. (E.D.T.) on May 7, 2021. For information regarding how to access the call, please see “Important Notice” later in this document.

2)

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

NOTES

The following financial information with respect to Liberty Media’s equity affiliates and available for sale securities is intended to supplement Liberty Media’s condensed consolidated balance sheet and statement of operations to be included in its Form 10-Q for the period ended March 31, 2021.

Fair Value of Corporate Public Holdings

 

 

 

 

 

 

 

(amounts in millions)

 

12/31/2020

 

3/31/2021

Liberty SiriusXM Group

 

 

 

 

 

 

Live Nation Investment(a)

 

$

5,118

 

$

5,895

iHeart(b)

 

91

 

 

127

Total Liberty SiriusXM Group(c)

 

$

5,209

 

$

6,022

Formula One Group

 

 

 

 

 

 

Public Holdings(d)

 

 

181

 

 

239

Total Formula One Group

 

$

181

 

$

239

Braves Group

 

 

NA

 

 

NA

Total Liberty Media

 

$

5,390

 

$

6,261


a)

Represents the fair value of the equity investment in Live Nation. In accordance with GAAP, Liberty Media accounts for its investment in the equity of Live Nation using the equity method of accounting and includes it in its condensed consolidated balance sheet at $163 million and $60 million as of December 31, 2020 and March 31, 2021, respectively. Includes all shares of Live Nation owned with no adjustment to fair value for the 34.8 million notional shares underlying the call spread held at the Formula One Group, which was valued at approximately $371 million and $384 million as of December 31, 2020 and March 31, 2021, respectively. The call spread was settled in April 2021; see below for additional information.

b)

Includes fair value of iHeart shares and warrants as of December 31, 2020 and iHeart shares as of March 31, 2021, which are included in other long-term assets.

c)

Excludes Braves Group and Formula One Group intergroup interests.

d)

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

Fair Value of Intergroup Assets and Liabilities

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

The Live Nation call spread was issued in connection with the reattribution between Liberty SiriusXM Group and Formula One Group in April 2020. Formula One Group bought from Liberty SiriusXM Group a European call option on 34.8 million Live Nation shares with a strike price of $36.72 (the “Reattribution Price”). Simultaneously, Formula One Group sold to Liberty SiriusXM Group a European call option on 34.8 million Live Nation shares with a strike price of $47.74, a 30% premium to the Reattribution Price. The call spread is included within Other Current Assets and Other Current Liabilities on Liberty Media’s unaudited attributed condensed consolidated balance sheet as of March 31, 2021.

In April 2021, Liberty SiriusXM Group paid $384 million to Formula One Group to settle its obligation under the call spread with respect to the shares of Live Nation.

 

 

Attributed

 

 

as of March 31, 2021

 

 

Liberty

 

 

 

 

 

 

Formula

 

 

SiriusXM

 

Braves

 

One

 

 

Group

 

Group

 

Group

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(amounts in millions)

 

Notional

Shares

 

Value

 

Notional

Shares

 

Value

 

Notional

Shares

 

Value

Braves Group intergroup interests

 

2.3

 

 

$

65

 

 

(9.1

)

 

$

(254

)

 

6.8

 

 

$

189

 

Formula One Group intergroup interest

 

5.3

 

 

$

202

 

 

 

 

 

 

(5.3

)

 

$

(202

)

Live Nation call spread

 

(34.8

)

 

$

(384

)

 

 

 

 

 

34.8

 

 

$

384

 

 

Cash and Debt

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

(amounts in millions)

 

12/31/2020

 

3/31/2021

Cash, Cash Equivalents and Restricted Cash Attributable to:

 

 

 

 

 

 

Liberty SiriusXM Group(a)(b)

 

$

1,008

 

 

$

1,038

 

Formula One Group(c)

 

 

1,684

 

 

 

1,783

 

Braves Group(b)

 

 

185

 

 

 

218

 

Total Consolidated Cash, Cash Equivalents and Restricted Cash (GAAP)

 

$

2,877

 

 

$

3,039

 

 

 

 

 

 

 

 

Debt:

 

 

 

 

 

 

SiriusXM senior notes(d)

 

$

7,750

 

 

$

7,750

 

Pandora convertible senior notes

 

 

193

 

 

 

193

 

1.375% cash convertible notes due 2023(e)

 

 

1,000

 

 

 

1,000

 

2.125% SiriusXM exchangeable senior debentures due 2048(e)

 

 

400

 

 

 

400

 

2.25% Live Nation exchangeable senior debentures due 2048(e)

 

 

385

 

 

 

385

 

2.75% SiriusXM exchangeable senior debentures due 2049(e)

 

 

604

 

 

 

604

 

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

 

 

920

 

 

 

920

 

SiriusXM margin loan

 

 

750

 

 

 

875

 

Live Nation margin loan

 

 

 

 

 

 

Other subsidiary debt(f)

 

 

649

 

 

 

1,023

 

Total Attributed Liberty SiriusXM Group Debt

 

$

12,651

 

 

$

13,150

 

Unamortized discount, fair market value adjustment and deferred loan costs

 

 

349

 

 

 

533

 

Total Attributed Liberty SiriusXM Group Debt (GAAP)

 

$

13,000

 

 

$

13,683

 

 

 

 

 

 

 

 

1% cash convertible notes due 2023(e)

 

 

450

 

 

 

450

 

2.25% AT&T exchangeable senior debentures due 2046(e)

 

 

203

 

 

 

201

 

Formula 1 term loan and revolving credit facility

 

 

2,902

 

 

 

2,902

 

Other corporate level debt

 

 

74

 

 

 

73

 

Total Attributed Formula One Group Debt

 

$

3,629

 

 

$

3,626

 

Fair market value adjustment and deferred loan costs

 

 

130

 

 

 

127

 

Total Attributed Formula One Group Debt (GAAP)

 

$

3,759

 

 

$

3,753

 

 

 

 

 

 

 

 

Atlanta Braves debt

 

 

674

 

 

 

676

 

Total Attributed Braves Group Debt

 

$

674

 

 

$

676

 

Deferred loan costs

 

 

(4

)

 

 

(4

)

Total Attributed Braves Group Debt (GAAP)

 

$

670

 

 

$

672

 

 

 

 

 

 

 

 

Total Liberty Media Corporation Debt (GAAP)

 

$

17,429

 

 

$

18,108

 


a)

Includes $83 million and $67 million of cash, liquid investments and restricted cash held at SiriusXM as of December 31, 2020 and March 31, 2021, respectively.

b)

Includes restricted cash held in reserves pursuant to the terms of various financial obligations.

c)

Includes $265 million and $429 million of cash and liquid investments held at Formula 1 as of December 31, 2020 and March 31, 2021, respectively.

d)

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

e)

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

f)

Includes SiriusXM revolving credit facility.

Liberty Media, SiriusXM, Formula 1 and Braves Holdings are in compliance with their debt covenants as of March 31, 2021.

Total cash, liquid investments and restricted cash attributed to Liberty SiriusXM Group increased $30 million in the first quarter. Cash from operations at SiriusXM and additional borrowings were partially offset by capital expenditures and return of capital at both SiriusXM and Liberty SiriusXM. Included in the cash, liquid investments and restricted cash balance attributed to Liberty SiriusXM Group at March 31, 2021 is $67 million held at SiriusXM. Although SiriusXM is a consolidated subsidiary, it is a separate public company with a significant non-controlling interest, therefore Liberty Media does not have unfettered access to SiriusXM’s cash balances. Liberty SiriusXM Group received $46 million of dividends from SiriusXM during the quarter.

Total debt attributed to Liberty SiriusXM Group increased $499 million during the quarter driven by drawdowns on SiriusXM’s revolving credit facility and additional borrowing under Liberty’s SiriusXM margin loan.

Total cash and liquid investments attributed to the Formula One Group increased $99 million during the quarter primarily due to cash from operations at F1. Total debt at Formula One Group was flat in the quarter.

Total cash, liquid investments and restricted cash attributed to the Braves Group increased $33 million during the quarter driven by cash from operations partially offset by capital expenditures related to the mixed-use development. Total debt attributed to the Braves Group was relatively flat in the quarter as increased borrowing to fund the mixed-use development was offset by partial repayment of Braves ballpark debt.

Contacts

Courtnee Chun (720) 875-5420

Read full story here

Broadcast Newsroom
error: Content is protected !!