Liberty Interactive Corp, Liberty Broadband Corp and Liberty Media Corp at Deutsche Bank Media, Internet and Telecom Conference

Mar 06, 2017 AM EST
FWONA - Liberty Media Corp
Liberty Interactive Corp, Liberty Broadband Corp and Liberty Media Corp at Deutsche Bank Media, Internet and Telecom Conference
Mar 06, 2017 / 09:25PM GMT 

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Corporate Participants
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   *  Gregory Maffei
      Liberty Interactive Corporation - President & CEO

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Conference Call Participants
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   *  Brian Kraft
      Deutsche Bank - Analyst

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Presentation
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 Brian Kraft,  Deutsche Bank - Analyst   [1]
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 All right, thanks everyone for joining us for the final keynote presentation of the day. Actually, I just want to make one announcement before we get started and that's that the reception, the cocktail reception that will follow this keynote has been moved from the Ocean Lawn to the Front Lawn. So if you head toward the front door, it's actually toward the retail area but people direct you. So we hope everyone will join us for a drink or some fresh air after this session out on the front lawn.

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 Gregory Maffei,  Liberty Interactive Corporation - President & CEO   [2]
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 Reduced fresh air.

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 Brian Kraft,  Deutsche Bank - Analyst   [3]
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 All right, so it's my pleasure to introduce Greg Maffei, President and CEO of Liberty Media and Liberty Interactive, (inaudible) of Live Nation, SiriusXM, and Trip Advisor, director of Charter, Zillow, and did I miss any?

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 Gregory Maffei,  Liberty Interactive Corporation - President & CEO   [4]
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 Liberty Broadband.

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 Brian Kraft,  Deutsche Bank - Analyst   [5]
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 Liberty Broadband. Sorry.

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 Gregory Maffei,  Liberty Interactive Corporation - President & CEO   [6]
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 Liberty Interactive.

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 Brian Kraft,  Deutsche Bank - Analyst   [7]
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 No, I got that one.

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 Gregory Maffei,  Liberty Interactive Corporation - President & CEO   [8]
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 Liberty Trip. We got that, okay.

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 Brian Kraft,  Deutsche Bank - Analyst   [9]
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 Yes, all right.

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 Gregory Maffei,  Liberty Interactive Corporation - President & CEO   [10]
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 Running out of things to do.

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 Brian Kraft,  Deutsche Bank - Analyst   [11]
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 Great, why don't we start maybe at a high level view of the Liberty entities and securities under your leaderships. Curious where do you think at this point the greatest market this locations are, whether it's from the perspective of NAV discounts, or in the case of operating companies, discounts to intrinsic value?

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 Gregory Maffei,  Liberty Interactive Corporation - President & CEO   [12]
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 The most obvious is the continuing discount of Liberty Sirius to Sirius. It's based, I guess, on the premise -- I mean we've talked about this, not new news. We've got relatively more reduction of float and repurchases of demand at Sirius relative to the amount of reduction of float at SiriusXM because we're not buying back and Sirius is. And some perspective, we might use the SiriusXM currency -- Liberty SiriusXM currency to suck in the rest of SiriusXM. Don't think we're going to do that. Pretty sure we're not going to do that. We usually aren't irrational economically, or we try to minimize it. And so I don't think we'll do that, but it persists.

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 Brian Kraft,  Deutsche Bank - Analyst   [13]
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 And I mean it sounds like you could be patient with this. Is it a major focus right now?

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 Gregory Maffei,  Liberty Interactive Corporation - President & CEO   [14]
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 I keep getting granted stock options to Liberty Sirius, so it's fine.

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 Brian Kraft,  Deutsche Bank - Analyst   [15]
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 All right. How should we look at the current track or structure at Liberty Media? And I guess what I mean is do you view this as a permanent structure or is an interim step fully rationalizing some of these assets over the long-term through hard spends and other transactions?

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 Gregory Maffei,  Liberty Interactive Corporation - President & CEO   [16]
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 I wouldn't say there's any plan or intent on any of that but our history has been at some point along the way, not necessarily about trackers so much, but when it seemed like an asset would be better traded on its own, get out of our purview, give an opportunity to consolidate or join with others, it would get spun. So that's certainly a potential for any of our assets but it's not our plan to change trackers per se. Trackers have worked pretty well for us.

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 Brian Kraft,  Deutsche Bank - Analyst   [17]
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 And now you've acquired Formula One, which is a fairly large operating company. Are you content at least in the short-term with the asset mix. Or do you still have an appetite to do incremental acquisitions, investments there?

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 Gregory Maffei,  Liberty Interactive Corporation - President & CEO   [18]
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 Oh, yes. We always have an appetite for more, if we could hopefully be clever about it.

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 Brian Kraft,  Deutsche Bank - Analyst   [19]
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 Where would you do more M&A? Where do you have liquidity and capital available?

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 Gregory Maffei,  Liberty Interactive Corporation - President & CEO   [20]
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 Well, I think that we don't have as much capital as we used to. We spent a lot of it, a lot on charter, a bunch on Formula One. I think the reality is we have more borrowing capacity at Sirius. We have more borrowing capacity at Liberty Broadband. We have some borrowing capacity at Ventures, but we have done stock acquisitions in the past. It's not impossible to imagine we would do another. Formula One was a stock acquisition for the bulk of it, right.

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 Brian Kraft,  Deutsche Bank - Analyst   [21]
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 Tax reform seems likely to happen this year or next year. What are the implications from a deal structuring perspective? Does the uncertainty around what the new tax code is going to look like make it difficult for you to make decisions on new investments?

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 Gregory Maffei,  Liberty Interactive Corporation - President & CEO   [22]
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 It certainly does change our perspective and make us think and I'm not as certain as I was that tax reform is going to come in, in the near term. In the sense that I think that the border adjustment tact looks like it got a lot of hair on it with the need to create the continuing resolution, a balanced budget, and offset any tax reforms or tax changes with incremental revenue. I think that's a big fight.

 So how quickly this gets solved, we'll see, and I think that lingering uncertainty has the potential to linger a lot longer than people think. This idea or this suggestion that we'll have this locked up by August, I will take the under.

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 Brian Kraft,  Deutsche Bank - Analyst   [23]
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 Presumably, though, it could get done by next August.

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 Gregory Maffei,  Liberty Interactive Corporation - President & CEO   [24]
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 Yes.

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 Brian Kraft,  Deutsche Bank - Analyst   [25]
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 Midterm. So let's talk about Formula One. So it's your most recent investment, one it sounds like you guys are pretty excited about. Maybe just talk a little bit about, for the audience, your decision to acquire Formula One, what you liked about the business.

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 Gregory Maffei,  Liberty Interactive Corporation - President & CEO   [26]
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 I think Formula One was exciting for us from a bunch of characteristics. First, global franchise in sports that had been, in our judgment, under monetized, and frankly, under managed. Opportunities to enhance its sponsorship and advertising, something like 17 sponsors. We have one person working full-time at sponsorship, two people working part-time. I've used this example before, major league baseball has something like 80 people working in partnerships and 75 sponsors just in the U.S.

 So the opportunity is there. We don't have a technology sponsor despite the fact that three teams are spending $400 million a year plus trying to go four seconds faster than the other guy around a track, all about technology. We don't have a sports drink sponsorship. You have to work hard not to have a Coca-Cola or a Pepsi show up to support you. And so that's an easy one.

 Broadcasting, we've seen the move from free to air to pay in a lot of markets like the UK. That opportunity is going to continue to roll out. We have no digital, even though there's a huge and hardcore fan base and we get tons of video and data that we can exploit and share with them. None of it's done. Gamification, gambling, increasing the number of events. We're going to have 21 races last year, 20 this year, 21 next year. We have the right to go to 25 under the Concord agreement, opportunity to grow the number of races, particularly in markets, which would be positive for growing our sponsorship and just general strength of the brand, like the U.S.

 So all of those are things that have room to grow. This is an exciting franchise that was basically run very successfully many years by Bernie Ecclestone but over the last few years, we've under invested in all the things like social media and building out a full team of strong management and that opportunity I think is being addressed, that challenge is being addressed with Chase, and Ross Brawn, and Sean Bratches. We've really got absolute leaders in the space.

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 Brian Kraft,  Deutsche Bank - Analyst   [27]
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 So the next question I was going to ask are what are the steps you need to take to start realizing these opportunities, particularly in TV and sponsorship? So you still have a management team.

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 Gregory Maffei,  Liberty Interactive Corporation - President & CEO   [28]
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 Management team is first. TV is probably -- it's both longer for three reasons. The first is you need the contracts to roll off in the sort of three to five year contracts, but there's a lot of reasons I think we can be more professional and reap more money out of the broadcasters. But first and foremost, we'd have to make the races more competitive, more interesting, more compelling, more exciting. All those things Ross Brawn is focused on, on the track, Sean Bratches is focused on around the event. That will create more enthusiasm, we believe, we hope, we desire. That will make the broadcast properties only more valuable.

 I think I talked about advertising and sponsorship, just building a group and then really doing the work. The example is used inside Formula One where Heineken is one of our lead sponsors. We do have a good beer sponsorship deal. Heineken came to the table with more data about how many CPMs and where was being shown, and who the audience was for Formula One, and how it affected Heineken that we had. We had underinvested in just simple analytics to be the kind of partner that they needed to be.

 I think we now have a team led by Sean Chase on that side of the house, which is very able to manage that kind of a business, variable to extract more, and be a better partner for our sponsors.

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 Brian Kraft,  Deutsche Bank - Analyst   [29]
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 Sponsorship the biggest near term opportunity?

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 Gregory Maffei,  Liberty Interactive Corporation - President & CEO   [30]
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 I think that's the closest in one. I don't know if that will ultimately be the largest but it's the one you can impact the most quickly.

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 Brian Kraft,  Deutsche Bank - Analyst   [31]
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 And we'll start to see that this year?

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 Gregory Maffei,  Liberty Interactive Corporation - President & CEO   [32]
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 We hope.

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 Brian Kraft,  Deutsche Bank - Analyst   [33]
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 Okay, and also you mentioned about making the sport more competitive. What are some of the things that you're contemplating there? Are you thinking about going back to the bigger engines?

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 Gregory Maffei,  Liberty Interactive Corporation - President & CEO   [34]
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 Yes, there's some things to be done around engines. There's some things to be run on the DRS systems, limiting those. There's things to be done around trying to change some of how people qualify. There's things to be done about more long-term, which are trying to balance out the amount of monies that are received by high and low-end teams. If you think about the NFL, hard salary cap, strength of schedule, draft picks in reverse order to finish -- all of those are things to balance teams. Baseball is sort of in the middle. They have -- you don't have the college drop meaning as much. You have a luxury tax but you don't have a hard salary cap. You have massive differentials in revenue based on regional sports networks. Football has none of that. There's no regional sports networks national franchise, so the money is all the same.

 Baseball is like this, we're over here. Massive differences in spending. Top teams spending $500 million, bottom teams spending $150 million, $100 million. That's created disparity that's hard to address. So try to equalize some of that out, trying to equalize how some of the payments that are made to them, spending a lot of money and time trying to fix to make the race more competitive from the ground up, not only in how the teams are done but how the structure of the teams work.

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 Brian Kraft,  Deutsche Bank - Analyst   [35]
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 How long a period of time do you have to do that over just so you don't introduce too much disruption at once in the sport?

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 Gregory Maffei,  Liberty Interactive Corporation - President & CEO   [36]
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 Well, I think it's going to take several years. Now, the Concord agreement says theoretically you have until 2020 before you change this, but we're already speaking to the teams. Ross Brawn is leading that charge about trying to -- and Ross Brawn is a guy with an enormous amount of reputation, one three world championships for Ferrari and three for Mercedes. He's the Bill Belichick of Formula One, one of the winningest team director around. Got a lot of credibility about how to make the races more competitive and the economics more fair.

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 Brian Kraft,  Deutsche Bank - Analyst   [37]
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 Is growing popularity in the U.S. a core part of the thesis? Or is that kind of an incremental opportunity?

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 Gregory Maffei,  Liberty Interactive Corporation - President & CEO   [38]
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 I think it's a goal. It's not something we baes all our economics on that the U.S. has to work but I think there is upside in the U.S.

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 Brian Kraft,  Deutsche Bank - Analyst   [39]
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 Do you think we'll see some real progress this year on getting an additional race in the U.S.?

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 Gregory Maffei,  Liberty Interactive Corporation - President & CEO   [40]
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 We're in discussions on that. Whether that will be successful, when that will get done, we'll see but we're currently in discussions on that with that goal.

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 Brian Kraft,  Deutsche Bank - Analyst   [41]
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 Okay. I think one of the things you've also mentioned is that the digital opportunity for F1. And I guess just curious on how you think about that. There's obviously a lot of media companies that have pursued a digital strategy and probably haven't seen a whole lot of results at least on the traditional side yet. Some exceptions, maybe like MLB has actually done a lot there.

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 Gregory Maffei,  Liberty Interactive Corporation - President & CEO   [42]
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 MLB has done a ton.

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 Brian Kraft,  Deutsche Bank - Analyst   [43]
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 So just curious how you think about that opportunity and how big that could be, and what it is?

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 Gregory Maffei,  Liberty Interactive Corporation - President & CEO   [44]
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 I think it could be a lot of things. I think it could be both starting with some things like games, which we have no gaming now, no digital games. I think it could be definitely providing incremental OTT services and features. We have a ton of data. We have a ton of video, which we do not distribute or exploit. It's already captured. We do nothing to show it. We do nothing to try and sell it to customers who want it.

 So I think there are a lot of opportunities on top of that.

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 Brian Kraft,  Deutsche Bank - Analyst   [45]
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 There's been some talk of the sport's popularity is declining and obviously, there's some concern around NFL ratings this season. What is the true state of the sport? Is it one that's kind of steady in popularity? Is it one that you think is growing? Is it declining a little bit? And I know you're finding ways to actually make it better and improve it, but --

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 Gregory Maffei,  Liberty Interactive Corporation - President & CEO   [46]
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 I think it's not declining. I think it's flattish but it's somewhat stale. The audience is aging. We're not doing enough to bring in younger viewers and that's part of the challenge. We've done nothing in social media to promote the product. Something that all the leagues work at, all the smart leagues work at now and we do very little.

 Now, we've opened the door. The first step is we released that the drivers can show much more video, which actually got done in the last few days. So it was previously prohibited. We've got to make the sport much more engaging, much more accessible to a younger audience and draw them in.

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 Brian Kraft,  Deutsche Bank - Analyst   [47]
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 And you mentioned the Concord agreement. I don't know if these numbers are accurate but I think it's been reported that the teams in aggregate spent about 2.5 billion euros to sustain themselves and they get about $1 billion in payments from Formula One. How should we think about that in the context of them trying to capture more of the economics of the sport? So at least it looks on paper like in aggregate they're not covering their costs, but I know there's also a marketing and R&D.

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 Gregory Maffei,  Liberty Interactive Corporation - President & CEO   [48]
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 There's huge sponsorship. If you look at Ferrari, they're receiving enormous sponsorship dollars. Mercedes is receiving sponsorship dollars. Red Bull is. All the teams are getting sponsorship dollars. Our goal is to make the bottom teams marginally attractively possible and the top teams quite profitable. The top teams today are involved -- I think are quite very profitable. If you put any economic value on the promotion that they're not only getting paid for but the promotion they're getting for themselves.

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 Brian Kraft,  Deutsche Bank - Analyst   [49]
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 Okay. So you talked about the equity that you've set aside to make available to the teams. Can you talk about how you hope to use the equity ownership to kind of better align the interests?

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 Gregory Maffei,  Liberty Interactive Corporation - President & CEO   [50]
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 Well, I think you rightly noted because of the way we share our revenue with them, they're already effectively owners, right. They receive an enormous amount of money off the top, so they have incentive to see us be successful. We hope to even further align that thought by we bought another $400 million of equity from CBC, the CBC Group for $21.26 a share. Stock was about $34 when I walked in and our goal is to sell it to them for the $21.26 that we paid so they're already deeply in the money and just the further way to provide them an immediate post to NOA, to provide an equity incentive to tie us.

 I think that will be offered to all the teams, but in a practical matter, it's only the three top teams, which probably have the dollars to make that purchase. So it's Red Bull, Ferrari, and Mercedes, who are likely to be owners.

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 Brian Kraft,  Deutsche Bank - Analyst   [51]
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 On the -- I know we talked about the race calendar a little bit, but can you talk about just geographically where you think the biggest opportunity is to optimize the race calendar? Is it more Europe?

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 Gregory Maffei,  Liberty Interactive Corporation - President & CEO   [52]
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 I think there's something in, frankly, most of the comments. We didn't have a race in France. We're getting France back next year. Germany has been in and out. You want to lock down and make sure Germany, one of our core markets, has a race every year. There are races in South America that are potential. Certainly, Argentina, which the economy is recovering. There's an enormous fan base, it's interesting. There's the potential for more races in Asia and then coming back to the U.S., one race in Austin is probably not sufficient. You'd like to see more so we have a race in Montreal, we have a race in Mexico city, a race in Austin. You'd love to see New York, La, Miami, Las Vegas, one or two of those cities.

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 Brian Kraft,  Deutsche Bank - Analyst   [53]
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 And just on the cities, I think there's been some examples of push back from the host cities on the fees. I think [Hockenheim] was one. Also, I think there was some noise around Singapore I think was another. How do you think about this as a risk to the business or are these really anomalous circumstances?

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 Gregory Maffei,  Liberty Interactive Corporation - President & CEO   [54]
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 I think there's a little of each. I think it's our job to do far more to help the promoters be successful. Frankly, Bernie's attitude was how much can I extract from the -- I heard him call them the victims. How much can I extract? How much up front? So we end up with races in places like Baku and Azerbaijan where they paid us a big race fee but it does nothing to build the long-term brand and health of the business.

 Our job is to find partners who pay us well but also help us build a product and it's incumbent upon us to bring best practice. Some of the races, which are considered the most existing, Abu Dhabi, Singapore night race, Mexico City, what's going on well in those races? We need to share that better with the promoters in each of the cities where things are less successful.

 So that's all true. It's both incumbent upon us to help but it's also recognizing a new one, the first thing they're going to do is say, oh, I'm paying too much. So there is some expected noise. We're working on trying to quell that and help them.

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 Brian Kraft,  Deutsche Bank - Analyst   [55]
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 Maybe going back to the TV rights again. I'd be curious as to whether you think some of the tech giants like Facebook, Google, Amazon will bid for sports rights in a meaningful way over the next five years. Or do you think traditional sports will remain the demand of the traditional TV players?

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 Gregory Maffei,  Liberty Interactive Corporation - President & CEO   [56]
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 I don't think that the way we're organized with these 21 countries that those rights are likely to end up being owned in a way. I think they could buy one of them in the next five years. Can't say no but I think they're more likely to be add-ons, tack-ons, things that they would like to do with digital product that might involve games and that some combination that would be interesting. They're more likely to be OTT partners than traditional linear broadcast type partners.

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 Brian Kraft,  Deutsche Bank - Analyst   [57]
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 What about in the U.S.? Do you think that's a possibility in the U.S.? Maybe even just more broadly beyond Formula One? I don't know if you have any thoughts on that.

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 Gregory Maffei,  Liberty Interactive Corporation - President & CEO   [58]
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 I think in the U.S., Formula One is a bad example because we're relatively under monetized but among traditional, I still think we saw a game go on Yahoo, NFL game. Could you see more of that? Yes, but I think it will be mostly experimentation. I think the bulk will still be with traditional linear players in the next five years. There may be some experimentation but the money is -- the cable ecosystem is pretty strong so that has economic incentive.

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 Brian Kraft,  Deutsche Bank - Analyst   [59]
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 How should we think about deployment of cash flow and leverage capacity at Formula One?

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 Gregory Maffei,  Liberty Interactive Corporation - President & CEO   [60]
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 Well, I think you've already seen we took down on a gross basis some of the debt with the refinancing of the first lien. I expect that you'll see us probably do some modest deleveraging over the next year or so at Formula One. I also think you'll see us take out the second lien debt with a bond and then we'll see where the free cash flow goes but it's likely to be applied to return of capital.

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 Brian Kraft,  Deutsche Bank - Analyst   [61]
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 I can't figure out what a natural M&A opportunity would be within Formula One. Is that even a possibility?

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 Gregory Maffei,  Liberty Interactive Corporation - President & CEO   [62]
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 Yes, I think there are things that are interesting. There are other motor related sporting events, there are other kinds of sporting events all could be interesting.

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 Brian Kraft,  Deutsche Bank - Analyst   [63]
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 Some more event oriented.

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 Gregory Maffei,  Liberty Interactive Corporation - President & CEO   [64]
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 I think first starting with motor would be the most natural but there are -- not to say there's nothing else that could work.

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 Brian Kraft,  Deutsche Bank - Analyst   [65]
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 Why don't we talk about SiriusXM a little bit. The Company continues to execute well, growing subs, revenue, expanding margins. How do you view SiriusXM's strategic positioning as we go forward and more and more connectivity into the dashboard as it proliferates?

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 Gregory Maffei,  Liberty Interactive Corporation - President & CEO   [66]
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 I think SiriusXM remains very well positioned. I mean the combination of ease of use, position of the dashboard, differentiated content, brand, all those make it very well positioned strategically going forward and I'm very confident in its future. Obviously, we haven't sold any stock in a long time. We continue to be larger owners through their share repurchase. I remain quite bullish.

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 Brian Kraft,  Deutsche Bank - Analyst   [67]
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 Aside from doing what they're already doing, which is quite impressive on its own, but what do you think the biggest opportunities are in the next five years?

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 Gregory Maffei,  Liberty Interactive Corporation - President & CEO   [68]
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 I think there are a bunch of things. One is the connected vehicle. They're really building out a platform. Their purchase of Agero, the work they've done since -- all are important in building out a platform for a whole bunch of services to car companies that are embedded, not tethered services, but they're embedded. We will be a platform for them and their relationship we've already developed with Toyota, Chrysler, many of the Japanese manufacturers, many of the European manufacturers I think was going to be the next leg and an important leg.

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 Brian Kraft,  Deutsche Bank - Analyst   [69]
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 What do you think of 360L? Do you think that's a game changing product?

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 Gregory Maffei,  Liberty Interactive Corporation - President & CEO   [70]
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 I think 360L is a great game changing product, both because it just solidifies our position with the car companies who are all taking it, but in additional allows us to take the best of satellite and the presence of connectivity in the car with a pull of content. So being push content on via satellite and pulled content via the car connectivity are both interesting.

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 Brian Kraft,  Deutsche Bank - Analyst   [71]
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 How do you think about pricing power at SiriusXM?

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 Gregory Maffei,  Liberty Interactive Corporation - President & CEO   [72]
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 Well, we've been able to pass through a few price increases with very little churn over the last few years. I expect there's an opportunity to do more, with something you're going to do -- moderate. We are already commanding a large price premium and you don't want to push that too far, but when we have push through price increases they've not had an impact on churn in any measurable way.

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 Brian Kraft,  Deutsche Bank - Analyst   [73]
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 How about the legacy Sirius factor? Eventually, that will be freed up. How do you (inaudible) value of that?

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 Gregory Maffei,  Liberty Interactive Corporation - President & CEO   [74]
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 Well, you talked about the changes in the car market and connectivity. If you roll forward 6G, 7G, 8G, whatever -- let's imagine whatever that is and there's a likelihood that all cars will be connected, theoretically with enough bandwidth, the value of our spectrum becomes lessened, less necessary.

 That has a couple of implications. One is perhaps our relatively unique position in the car is reduced. Others are there as well and it's easier to connect other services. A couple things happened. One is we pay quite a lot today to the OEMs, the car manufacturers. Nobody else really does. That's part of the reason why we have the position that we do. You would expect those payments would be reduced, our P&L would be relieved of some of those costs plus that spectrum, half of which we're going to free over the next five years as we merge the Sirius and XM platforms. The rest of that spectrum would free up further uses and has quite a lot of value.

 So while we might lose something competitively in terms of our unique ease of use in the car and our positioning, we would be offset by some reduced costs and a freed up asset, so it's an interesting question.

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 Brian Kraft,  Deutsche Bank - Analyst   [75]
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 You mentioned on your earnings call last week that you and Jim Meyer both think that Pandora is interesting at the right price. What do you find interesting about it and what would you do with it if you were able to acquire it at your preferred price?

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 Gregory Maffei,  Liberty Interactive Corporation - President & CEO   [76]
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 Well, I think it's very interesting that they've been able to get 80 million daily uniques who are using it 20 minutes a day. It's among the five or ten most apps that are used in the U.S. It's relatively under monetized. I'm not sure it's executed as well as it might on the ad opportunity it has. If you look, it arguably has a better mousetrap. You're a car dealer in Marin and you want to geo-locate people who are going to buy cars in Marin County. You're ability to use Pandora to target them is far better than having to advertise in a San Francisco radio station, which broadcasts all the way down into San Jose and into Oakland, East Bay, whatever. Theoretically have a better mousetrap yet they under monetize relative to their listening hours. That's the dream and the opportunity that they should be able to commit a premium and over monetize because of the targeting.

 That's not what's happened to date and you can argue about it. There are things we could do between our -- bringing some of our content to help some of their Pandora plus and maybe even their subscription product that we've been less than enthused about the subscription market in general. The problem is we think the stock is overvalued. We will not pay what it is at the current market price, so I think it's very unlikely we're going to end up buying it and I think we've been pretty crisp about that. Hold it as a stock, float it that we're a buyer at some price at a premium. We're not and there is no distance between Jim Meyer and myself once again. We like the asset, just not at this price. I don't think we're going to end up buying it. We'll see.

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 Brian Kraft,  Deutsche Bank - Analyst   [77]
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 More broadly speaking, how do you think the streaming music part of the market will play out just given how many competitors there are in that space?

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 Gregory Maffei,  Liberty Interactive Corporation - President & CEO   [78]
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 We've been pretty crisp and hopefully consistent in saying, look, there will be a lot of demand for that product but it's a very tough market both with the number of players and the number of players who are in it for other strategic reasons. If I'm Amazon and I'm selling a lot echoes and I'm selling alto of Prime services and getting into a lot of upgrades to buy other things within Prime or just straight purchases on ecommerce, giving away music is pretty easy.

 If I'm Apple and I discount my music service because you're buying iPhones or you're buying other devices, giving away music is pretty easy. You're seeing that in terms of ARPU and the revenue per subscriber that's the pressure and the discounting that's gone on there, let alone what it's bundled with a telecom service as it is in a lot of markets in a lot of cases.

 All those are challenges both in terms of getting units. You're competing with Apple's 800 million credit cards. All those are challenges. On the other side, terrestrial radio lives with a mandated -- congressionally mandated advantage on the cost side in terms of what it pays, zero for performance rights. Pandora lives with a CRB content rights board mandated rate on what it pays for its music. That means that it runs about a -- terrestrial radio between performance rights and the song writing rights pays about 30% of its revenue out. Pandora pays about 50% for what it does, again, mandated by the CRB.

 We, Sirius, pay somewhere around 30% and we have a lot of other content like Howard Stern, like ESPN that's not part of that music system, okay. Go look at what is paid by the subscription service. They're paying 70%, 75% of their revenue out. I don't know how to run an attractive business with a 70%, 75% cost of goods sold just to the cost of the music, particularly in a world where, as I said, you have many competitors, you're seeing pressure on the revenue side, and you're seeing pressure on the cost side. So we think it's a very unattractive business. I'm sure there will be a proliferation of services for people who have deep pockets and reasons to be in it. I'm challenged to see how it becomes an attractive, growing, profitable business. you've seen that with Spotify now hitting 50 million users, still not profitable. Still 50 million subscribers, still not profitable.

------------------------------
 Brian Kraft,  Deutsche Bank - Analyst   [79]
------------------------------
 Now, you've got obviously some investments in the music industry with Sirius and Live Nation. What about going upstream to music publishers? Would that be an attractive place for you to invest if the opportunity presented itself?

------------------------------
 Gregory Maffei,  Liberty Interactive Corporation - President & CEO   [80]
------------------------------
 Publishers are great business. It's usually been the case that publishers get bought by other publishers. There's enormous synergies in tacking one on. Really haven't seen a big one come out standalone for a while. It's an attractive business, but I'm not sure we have enormous synergies for it but it's a very attractive business.

------------------------------
 Brian Kraft,  Deutsche Bank - Analyst   [81]
------------------------------
 Let's talk about Charter. How do you feel about Charter' position today as 5G gains momentum? You have streaming MVPDs entering the market. So you have some incremental competition both in video, which is more immediate and potentially in broadband and also some opportunities that are created by 5G at the same time. I guess how do you think about those opportunities and some of those competitive risks?

------------------------------
 Gregory Maffei,  Liberty Interactive Corporation - President & CEO   [82]
------------------------------
 I think that we have a very strong position in video. We have a very strong position in broadband. We have a business plan with a great management team that makes a ton of sense. We've made ae bunch of money there and we're going to make a bunch more. 5G is a longer term mostly I think an opportunity, not a threat. I think it's going to be a lot longer in the coming than most people think. You don't even have standards for a bunch of it particularly around the mobile space.

 And I think that the presence of our wireline and distributed network that we have is a very great asset generally in the 5G situation. As you see, wireless and wireline players come together to provide 5G. There are fewer wireline players with that reach, with that depth. There's more competition in the wireless side. That side of the business is more attractive, our side, the wireline than the wireless.

------------------------------
 Brian Kraft,  Deutsche Bank - Analyst   [83]
------------------------------
 So with 5G, the value really shifts towards the fixed line network; is that a fair --

------------------------------
 Gregory Maffei,  Liberty Interactive Corporation - President & CEO   [84]
------------------------------
 I think it will put more demand on the wireline side, yes.

------------------------------
 Brian Kraft,  Deutsche Bank - Analyst   [85]
------------------------------
 What do you think on streaming MVPDs. We have Sling in the market for a while now, DIRECTV NOW launched toward the end of last year. Google just announced they're going to launch one. Hulu is coming. Curious on just your view of those services and how successful you think they'll be.

------------------------------
 Gregory Maffei,  Liberty Interactive Corporation - President & CEO   [86]
------------------------------
 I think they'll be demand for those services, but I think it will be fairly fragmented. It's far from a winner take all business it strikes me. If you're someone like DIRECTV, I think it's really a two-edge sword. We used to control DIRECTV and great product in a lot of ways for linear video. A challenge perhaps in other markets. One of the big challenges was you do a truck roll for somebody to put a Dish in, put in several boxes, you're talking about $1,000.

 So the opportunity for who you can sell that to is reduced because of the credit risk. Who can actually -- are you willing to extend $1,000 of credit to if they're not on a contract or if you worry about them breaking the contract.

 So having a product like DIRECTV NOW where you can just stream them even at a very low margin relatively, a product, I think that's something probably rational for AT&T to point the people who can't make their credit rating, are you going to lose them as customers anyway to DIRECTV NOW. Clearly, they're not going to get anything like the kind of margin they go on -- through DIRECTV but maybe there's an opportunity to continue a relationship and upsell them something.

 I think that's really not an enormous threat in the short-term and maybe not even the long-term for the video product that Charter offers. Because it's so strong to have the broadband connection that we have and our margin is increasingly played out on the broadband side.

------------------------------
 Brian Kraft,  Deutsche Bank - Analyst   [87]
------------------------------
 It sounds like you think these products are going to be not premium but more kind of a lower end product, lower to mid-product?

------------------------------
 Gregory Maffei,  Liberty Interactive Corporation - President & CEO   [88]
------------------------------
 I think so. They may be incremental or they may be for people who desire mobility in a particular way and are not fixed, college student, the like. I also think you're going to see them be aggregated among the choices of distributors where people like Charter are likely to be the people who first screen comes up and they offer you the choice of many of these kinds of services.

------------------------------
 Brian Kraft,  Deutsche Bank - Analyst   [89]
------------------------------
 Who do you think increasingly gains share in the premium to the market? Do you think cable gains an increasing share in the premium part of the market?

------------------------------
 Gregory Maffei,  Liberty Interactive Corporation - President & CEO   [90]
------------------------------
 Against satellite, yes, absolutely. Yes. Absolutely.

------------------------------
 Brian Kraft,  Deutsche Bank - Analyst   [91]
------------------------------
 What do you think about the regulatory changes under the new administration and those could mean for Charter? I mean as an investor.

------------------------------
 Gregory Maffei,  Liberty Interactive Corporation - President & CEO   [92]
------------------------------
 Very positive. Levelling the playing field against a lot of the Silicon Valley players. We used to have higher privacy standards for cable companies than for Facebook, for Google and the like. Now more leveled. We had an overbuild requirement that was in our agreement with the SEC to -- that we would build out two million new homes and one of them had to be overbuilding cable companies. Now, we're moved to just saying we need to build out two million new homes. It's not a statement about where that's targeted.

 The opportunity to see a more level playing field around things like net neutrality, around interconnect fees, around usage based pricing, around forbearance of Title 2. All of those are very positive for the cable business.

------------------------------
 Brian Kraft,  Deutsche Bank - Analyst   [93]
------------------------------
 On wireless, how do you think about the pros and cons of entering and scaling wireless organically for Charter versus acquiring an existing carrier?

------------------------------
 Gregory Maffei,  Liberty Interactive Corporation - President & CEO   [94]
------------------------------
 I think I said earlier that Tom had a plan. Tom and the management team at Charter have a plan and they very much believe that plan and I believe that plan is going to do very well for us. Wireless is probably more of an opportunity than a threat but it's one that we're more likely to step into and check out with things like MBNO than do some major purchase of a wireless player, which is a less attractive business than the business we're in, and would mostly be a de-emphasis, de-focusing against the things we're trying to achieve now.

------------------------------
 Brian Kraft,  Deutsche Bank - Analyst   [95]
------------------------------
 Let's talk about the Braves for a couple minutes. We're a month away from Opening Day. You've got a new manager, a new stadium.

------------------------------
 Gregory Maffei,  Liberty Interactive Corporation - President & CEO   [96]
------------------------------
 SunTrust Park.

------------------------------
 Brian Kraft,  Deutsche Bank - Analyst   [97]
------------------------------
 That's the mixed-use development. So what's your outlook for the team this year? What is the new stadium and the real estate mean for the Braves -- for Braves investors?

------------------------------
 Gregory Maffei,  Liberty Interactive Corporation - President & CEO   [98]
------------------------------
 The new stadium should generate substantially more revenue than the prior stadium. We were benefited from the fact that we were -- in building out that stadium, we're on time and on budget and we received substantial funds from Cobb County and the state of Georgia. I think the team this year will be a winner. We're clearly in a rebuilding phase, most observers having us having one of the strongest farm team systems around. It may not be that this is the year we win it all, but we're on a path we think to have an excellent team over the next several years that's going to be enduring, sustaining, and have an attractive cost structure.

 The mixed-use facility and development we have is not fully leased but we expected to do it in phases. Important parts like Comcast taking the office space, like the build out of the music facility we have with Live Nation, all of those are going to be completed this year and are attractive parts to building a full mixed use facility called The Battery that's going to be incremental to the stadium and quite attractive financially.

------------------------------
 Brian Kraft,  Deutsche Bank - Analyst   [99]
------------------------------
 I understand the TV rights are not really up for renewal for many years.

------------------------------
 Gregory Maffei,  Liberty Interactive Corporation - President & CEO   [100]
------------------------------
 2027, but we have seen increases in that over the last years because we were able to reclaim some of our games.

------------------------------
 Brian Kraft,  Deutsche Bank - Analyst   [101]
------------------------------
 Do you think there's any opportunity to renegotiate those early or?

------------------------------
 Gregory Maffei,  Liberty Interactive Corporation - President & CEO   [102]
------------------------------
 No. Beyond what we already did three years ago, no.

------------------------------
 Brian Kraft,  Deutsche Bank - Analyst   [103]
------------------------------
 Okay, so if we think about maybe the long-term value of those, how far under market do you think they are today?

------------------------------
 Gregory Maffei,  Liberty Interactive Corporation - President & CEO   [104]
------------------------------
 Our deal is certainly not the worst. I think there's upside to our deal because we have one of the largest footprints potentially, but it really won't be for a while until we can recognize that. And the real opportunity will build a whole other revenue stream around some kind of an RSN alongside the team.

------------------------------
 Brian Kraft,  Deutsche Bank - Analyst   [105]
------------------------------
 Live Nation continues to benefit from positive secular trends around live performances. They've got a leadership position in artist management, ticketing, concerts. How bullish are you on this point of the business as well as on the stock?

------------------------------
 Gregory Maffei,  Liberty Interactive Corporation - President & CEO   [106]
------------------------------
 I think that the Live Nation management team has done a great job, gained enormous share in the promotion of large scale concerts, but incrementally also accelerated the things we have around technology advantage, the things we have around sponsorship advantage, our ecommerce opportunity, which is related to the technology. All of those things have been accelerating in advance and greater than even the amount we've gained share.

 So you're seeing good performance and I'm bullish going forward.

------------------------------
 Brian Kraft,  Deutsche Bank - Analyst   [107]
------------------------------
 What kind of opportunities do you think you have with Live Nation and Formula One? You've talked before about maybe trying to cross-pollinate a bit there.

------------------------------
 Gregory Maffei,  Liberty Interactive Corporation - President & CEO   [108]
------------------------------
 Yes. Live Nation already helps out with some of our events, for example, the Singapore race and trying to get the best of what they do in terms of making the whole experience stronger, better. I think there's cross-pollination that can definitely help.

------------------------------
 Brian Kraft,  Deutsche Bank - Analyst   [109]
------------------------------
 How do you think long-term about getting to a point of control on Live Nation and ultimately being able to tax efficiently, do something with the asset?

------------------------------
 Gregory Maffei,  Liberty Interactive Corporation - President & CEO   [110]
------------------------------
 Yes, we have some restrictions on our ability to increase our stake above 35% in that asset so it's a little more complicated. But we have a good relationship with Mike Rapino and his team. Very positive. Looking at opportunities, as I said, in Formula One around Sirius. So we'll see what the future holds.

------------------------------
 Brian Kraft,  Deutsche Bank - Analyst   [111]
------------------------------
 Let's talk about QVC. It has been a rough patch of late. How do you think about the business outlook over the next year and the next several years? And how -- are these issues more structural or are they more addressable in the product mix? How are you thinking about that?

------------------------------
 Gregory Maffei,  Liberty Interactive Corporation - President & CEO   [112]
------------------------------
 I think some of them were by category. We saw things like weakness in consumer electronics just because the category didn't have a lot of newness. Some of them were self-inflicted. We didn't execute as well in certain categories. Some of them were in things like hair care. Some of our key vendors like Wen had a series of issues.

 So you can sort of pinpoint about the five categories where we really were slow and figure out how much of it was our own lack of execution and how much of it was external events. We were down about 7% in the bottom of our trough over the last year. We sort of have that for this quarter down about 3.5 run rate. We are going to be hit this quarter with a negative of a note loss of a leap day. Last year was a leap year, one extra day of sales. This year won't have that leap day. That costs about 1.5% of sales. So maybe we're down about 5, but 3.5 on a like for like basis.

 And I think we're going to anniversary some of those negative comps that begin the second quarter, do better. But I also think we'll see the trend line continue to move on the upside.

------------------------------
 Brian Kraft,  Deutsche Bank - Analyst   [113]
------------------------------
 How do you think more broadly about ecommerce? You've been in commerce for a while through QVC as well, some of the other acquisitions you've done. And it seems like where we are now is customers want very broad choice and one stop shopping, i.e. Amazon. QVC is a more curated experience. How do you see the curated experience holding up as we go-forward in that world of one stop shopping?

------------------------------
 Gregory Maffei,  Liberty Interactive Corporation - President & CEO   [114]
------------------------------
 Look, at lot of what goes on at Amazon is things that we have nothing to do with and don?t really fit with us. You want to order something, repeat purchase, you want it back, you know what you want, Amazon is a wonderful. You want to discover, explore, have someone helping you, educate you, that's not the Amazon experience in a lot of cases. Recommendation engine may be interesting but it's not -- doesn't really explain the power of a product. It doesn't also delight people for shopping the way that many consumers, particularly women -- it's about 95%, 90% of our audience -- find the enjoyment in the shopping experience on QVC.

 So I think we're targeting very different things and you can see growth in categories like zulily where people are into discovery, into newness, into fresh items that are being sold and explored to them -- explored for them.

------------------------------
 Brian Kraft,  Deutsche Bank - Analyst   [115]
------------------------------
 How do you deal with millennial women at QVC? I mean is that something you're still trying to crack?

------------------------------
 Gregory Maffei,  Liberty Interactive Corporation - President & CEO   [116]
------------------------------
 I think a better example is clearly, zulily has done very well with millennial women and online, targeting them, understanding what they want, providing freshness or reason to come back every day, we've done very well with that.

------------------------------
 Brian Kraft,  Deutsche Bank - Analyst   [117]
------------------------------
 And what about the evolution of TV and what that means for QVC?

------------------------------
 Gregory Maffei,  Liberty Interactive Corporation - President & CEO   [118]
------------------------------
 When you think about skinny bundles, you think about different kinds of products, QVC is usually a part of that. Why? We are not charging the distributor to carry us. We are paying the distributor to carry us. There's a lot of economic incentive to the distributors to include us in every bundle. So I'm not really worried about that threat.

------------------------------
 Brian Kraft,  Deutsche Bank - Analyst   [119]
------------------------------
 So is QVC on Sling and DIRECTV NOW?

------------------------------
 Gregory Maffei,  Liberty Interactive Corporation - President & CEO   [120]
------------------------------
 It's on a lot of those products. I don't know if it's on DIRECTV NOW but it's on Sling.

------------------------------
 Brian Kraft,  Deutsche Bank - Analyst   [121]
------------------------------
 Okay, interesting.

------------------------------
 Gregory Maffei,  Liberty Interactive Corporation - President & CEO   [122]
------------------------------
 It's on Roku. It's on a bunch of them.

------------------------------
 Brian Kraft,  Deutsche Bank - Analyst   [123]
------------------------------
 Trip Advisor, fundamentals in the stock have been pretty challenged. Instant Book doesn't seem to be working to plug the monetization leak and hotel segment EBITDA margins have come down by about 1,500 basis points over the last four years with further pressure reflected in the 2017 guidance.

 Would this business be better off looking to consolidate the space or should it be owned by a larger entity?

------------------------------
 Gregory Maffei,  Liberty Interactive Corporation - President & CEO   [124]
------------------------------
 Look, I think there -- I've described it crossing the chasm. They're making several bets around IB but there are other bets around trying to make sure we are more purchase focused for the consumer, we have a full inventory of supply. Bringing Expedia on as a supplier behind the scenes is good for us as we've done. Honing both our product and our marketing message to bring those together is interesting. Would potentially another owner of this business see more value in the 375 million unique travel users a month? Perhaps, and I think that to some degree puts a flaw in value.

------------------------------
 Brian Kraft,  Deutsche Bank - Analyst   [125]
------------------------------
 How do you think the OTA industry evolves over the next, say, three to five years?

------------------------------
 Gregory Maffei,  Liberty Interactive Corporation - President & CEO   [126]
------------------------------
 OTA industry? I think you'll see the potential for other players to come into the market. People who are beyond the Priceline, Expedias, the Alibabas potentially, the Amazons. I think if you look at -- Google has extracted quite a lot of value out of the travel business for what it's done with paid inclusion and effective driving free out of the process. I think players like Facebook look and say, we really are not getting our share of travel, which is one of the largest ecommerce categories. We're not getting our share of the value.

 So I think you'll see increased competition but also increased entry in terms of potential consolidation from players like Alibaba, like Facebook, like even potentially Amazon.

==============================
Questions and Answers
------------------------------
 Brian Kraft,  Deutsche Bank - Analyst   [1]
------------------------------
 Why don't we see if there's any questions in the audience? Does anyone want to ask a question? I guess we asked them all. What do you think generally speaking in TMT, where do you think we'll see more consolidation over the next one to two years? It's obviously something that a lot of people are focused on.

------------------------------
 Gregory Maffei,  Liberty Interactive Corporation - President & CEO   [2]
------------------------------
 Obviously, the distribution side has gotten harder, see massive consolidation. Much of it's already occurred. I think you'll see more on the content side but a lot of it is situation specific, this family or that family is happy with their business so they're slow to move. But I think you will see more content consolidation.

------------------------------
 Brian Kraft,  Deutsche Bank - Analyst   [3]
------------------------------
 How would you think about being a seller of Charter if the opportunity arose hypothetically speaking?

------------------------------
 Gregory Maffei,  Liberty Interactive Corporation - President & CEO   [4]
------------------------------
 I'm pretty bullish on Charter. It's got to be a big price and I'm not sure there's a buyer who's ready to pay that price.

------------------------------
 Brian Kraft,  Deutsche Bank - Analyst   [5]
------------------------------
 Okay. All right. Anyone else? Questions? We have one up here. Wait for the mic if you don't mind.

------------------------------
Unidentified Audience Member   [6]
------------------------------
 Thank you. Just with respect to Formula One, could you just tell us what do you see as the key risks to being able to achieve your monetization goals?

------------------------------
 Gregory Maffei,  Liberty Interactive Corporation - President & CEO   [7]
------------------------------
 I think it's probably making sure that there's enough excitement in the race and enough drama to keep the audience interested because that will drive broadcasting, which is still the biggest revenue system and that will also help drive competiveness with the teams and a potential to do things like balance out cost controls and bring in more advertising. Above all, we need an exciting product and a fair product that's equitable in terms of its distribution of rewards.

------------------------------
 Brian Kraft,  Deutsche Bank - Analyst   [8]
------------------------------
 Anyone else in the audience? You've slowly become a sports giant over time with the Braves and now Formula One. Is that an area where you'd like to put more capital to work?

------------------------------
 Gregory Maffei,  Liberty Interactive Corporation - President & CEO   [9]
------------------------------
 At the right price, the right opportunity. I talked about potentially expanding Formula One into other motorsports. That could be interesting, ones where we have synergies, ones where we're starting to get some insights potentially there. There are emerging sports that could be as well, E-Sports and the like that are interesting. I don't see us buying a basketball team or a traditional U.S. opportunity.

------------------------------
 Brian Kraft,  Deutsche Bank - Analyst   [10]
------------------------------
 Do you think -- how do you think about the Eastport opportunity? You mentioned that.

------------------------------
 Gregory Maffei,  Liberty Interactive Corporation - President & CEO   [11]
------------------------------
 I think you look probably not this generation represented here. There's several generations represented here. There's clearly demand and there's people who like watching E-Sports. I don't know about how many of you have kids who are absolutely on this all the time and they're happy to watch other kids play E-Sports. It's a phenomenon that I may not get in terms of personal participation but you can clearly see the demand not only anecdotally but in terms of the numbers.

------------------------------
 Brian Kraft,  Deutsche Bank - Analyst   [12]
------------------------------
 Do you think that structure will evolve or does somebody big need to step in and actually establish that structure?

------------------------------
 Gregory Maffei,  Liberty Interactive Corporation - President & CEO   [13]
------------------------------
 Well, you're already seeing people like Activision do it. You're already seeing people like Electronic Arts do it. They're already trying to build those leagues out and that opportunity and there are other smaller players but some of the big players are too.

------------------------------
 Brian Kraft,  Deutsche Bank - Analyst   [14]
------------------------------
 Question over here.

------------------------------
Unidentified Audience Member   [15]
------------------------------
 Yes, Greg, tell me why I'm wrong about this thesis that I've kind of mentally been stewing around about. As it relates to Charter, you're incredibly bullish and I understand that but when I look what happened with Section 271 relief back in 10 or 15 years ago, when I think about UNEP and what happened there, what we're talking to with virtual MVPDs is probably the nascence of e-tripling. Is there a chance --

------------------------------
 Gregory Maffei,  Liberty Interactive Corporation - President & CEO   [16]
------------------------------
 Probably the nascence of --

------------------------------
 Brian Kraft,  Deutsche Bank - Analyst   [17]
------------------------------
 Just e-tripling. Example, if I have -- if I ultimately go to Hulu Plus or Google via YouTube, or if I use Dish's product and many more that are coming, isn't there the risk that Charter is not getting the video component revenue? But also who needs a landline telephone anymore? Well, what's the risk to the actual business model in terms of it potentially going (inaudible)?

------------------------------
 Gregory Maffei,  Liberty Interactive Corporation - President & CEO   [18]
------------------------------
 The risk to the business model is we have one really good pipe into that and we sell as many products as possible, whether it be broadband, video, VoIP, some form of [MBNO], which is --

------------------------------
Unidentified Audience Member   [19]
------------------------------
 VoIP won't stick.

------------------------------
 Gregory Maffei,  Liberty Interactive Corporation - President & CEO   [20]
------------------------------
 I'm sorry?

------------------------------
Unidentified Audience Member   [21]
------------------------------
 VoIP won't stick.

------------------------------
 Gregory Maffei,  Liberty Interactive Corporation - President & CEO   [22]
------------------------------
 You asked the question. Give me half a chance. I would agree that those products -- our goal is to sell as many of those products as possible and selling as many as possible is a stickiness as much as possible. How we price them and what goes on, I think VoIP will stick as a product if we offer it. Do I think it's a high margin product for us? Absolutely not. It's a relatively low margin product.

 Do I think video is probably a decreased margin product over time? Probably. I think there will always be a premium aspect to our video, which we can offer, which will be interesting. I also think there's a distribution of distributor's product, which is out there. When you turn your first screen on and Charter a Comcast and your ability to check the box and choose I would like to buy these services because we're the billing agent. We have a continuous relationship and customers I don't think are likely to maintain six or eight billion relationships with video subscribers. But they are likely to maintain with their cable company with whom they have their broadband connection and have us be a distributor of those distributors and get paid something.

 All those may say that video margin over time balances out. We lose a little on the video side, though I do expect over the next few years that we will gain video subscribers, not decrease them and I do think over time there is a video distribution of distribution. But VoIP is probably not a high margin product and I agree, maybe video margin over time lessens. I think broadband is still an enormous opportunity. I think MBNO where you're basically -- of the data traffic today that you will have on your own, 75%, 80% is already Wi-Fi driven and I think that will be a huge part of what drives us going forward and an opportunity for us.

 There is a countervailing thing. The more you have those services, the more pressure, the more demand you're going to put on broadband and I think our pipe is pretty compelling and our ability to upgrade it through DOCSIS 3.1, 3.2, et cetera is a very compelling path. Do you buy that?

------------------------------
Unidentified Audience Member   [23]
------------------------------
 I do actually, but last question, why do we keep discussing Pandora?

------------------------------
 Gregory Maffei,  Liberty Interactive Corporation - President & CEO   [24]
------------------------------
 What?

------------------------------
Unidentified Audience Member   [25]
------------------------------
 If we're not interested in Pandora, why does it come up in the conversation?

------------------------------
 Gregory Maffei,  Liberty Interactive Corporation - President & CEO   [26]
------------------------------
 I get asked every time. I would buy Pandora if it were not $13. If you want to sell it for $10, we probably will buy it. They're not selling for $10.

------------------------------
 Brian Kraft,  Deutsche Bank - Analyst   [27]
------------------------------
 All right, that's a great way to end. $10. Offer is made.

------------------------------
 Gregory Maffei,  Liberty Interactive Corporation - President & CEO   [28]
------------------------------
 Thank you.




------------------------------
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